Sandusky Wellness Center, Llc v. Medtox Scientific, Inc.: the Eighth Circuit Joins the Ascertainability Standard Conversation

• Publication year: 2022

50 Creighton L. Rev. 155. SANDUSKY WELLNESS CENTER, LLC V. MEDTOX SCIENTIFIC, INC.: THE EIGHTH CIRCUIT JOINS THE ASCERTAINABILITY STANDARD CONVERSATION

SANDUSKY WELLNESS CENTER, LLC V. MEDTOX SCIENTIFIC, INC.: THE EIGHTH CIRCUIT JOINS THE ASCERTAINABILITY STANDARD CONVERSATION

Rhys J. Williams-'18

I. INTRODUCTION

Rule 23 of the Federal Rules of Civil Procedure ("Rule 23")(fn1) governs class action certification.(fn2) The prerequisites of class action certification are numerosity, commonality, typicality, and adequacy of representation.(fn3) When confronted with the issue of class certification, the United States Supreme Court stated that courts must rigorously apply the requirements of Rule 23.(fn4) In recent decades, many circuits of the United States Court of Appeals have recognized that in addition to the express requirements of Rule 23, there is an implied requirement that a proposed class must be ascertainable.(fn5) While this threshold of ascertainability is generally recognized by the circuit courts, there is a current divide regarding the precise definition or requirements of ascertainability.(fn6)

In Sandusky Wellness Center, LLC v. Medtox Scientific, Inc.,(fn7) the United States Court of Appeals for the Eighth Circuit pronounced that in order to certify a class, courts must adhere to the strict requirements of Rule 23, which includes a requirement that classes must be sufficiently defined and clearly ascertainable.(fn8) The plaintiffs in Sandusky brought a class action lawsuit against a toxicology lab after receiving unsolicited advertisements to their fax machines.(fn9) The Eighth Circuit reversed the United States District Court for the District of Minnesota's denial of class certification after determining the class was ascertainable and satisfied the requirements of Rule 23.(fn10)

This Note will discuss the Eighth Circuit's standard of ascertainability and the issues that accompany it.(fn11) First, this Note will present the facts and holding of Sandusky.(fn12) Next, this Note will discuss the origins and evolution of Rules 23(a) and 23(b)(3).(fn13) The United States Supreme Court's precedent regarding class certification will then be discussed.(fn14) This Note will also survey the recent circuit split on the meaning of ascertainability.(fn15) Finally, this Note will argue the Eighth Circuit's standard of determining ascertainability is too vague and creates the risk of district courts impermissibly inquiring on the merits of a case at the class certification stage.(fn16)

II. FACTS AND HOLDING

In Sandusky Wellness Center, LLC v. Medtox Scientific, Inc.,(fn17) the United States Court of Appeals for the Eighth Circuit reversed the United States District Court for the District of Minnesota's denial of class certification.(fn18) Sandusky Wellness Clinic ("Sandusky") brought a putative class action lawsuit under the Telephone Consumer Protection Act ("TCPA")(fn19) against Medtox Scientific Incorporated ("Medtox") after receiving unsolicited faxes advertising Medtox's lead testing services.(fn20) Medtox amassed a contact list of 4,210 fax numbers and successfully sent advertisements to 3,256 numbers, including Sandusky.(fn21) Medtox initially received Sandusky Wellness Center's fax number from a health insurance company that obtained the clinic's number from Dr. Bruce Montgomery, who worked at the clinic once a week.(fn22) The owner of the clinic, Dr. Gregg D. Winnestaffer, was not the listed contact for the clinic.(fn23) After receiving the unsolicited fax that did not contain a proper opt-out provision, as required by the TCPA, Sandusky's legal counsel filed a class action lawsuit.(fn24) Sandusky prayed for five hundred dollars in statutory damages and a permanent injunction against Medtox.(fn25)

The proposed class was defined as (1) all individuals who, up to four years before filing the action, (2) were sent faxes regarding Medtox's lead testing services, and (3) that did not contain a proper opt-out notice.(fn26) Medtox initially moved to dismiss the case, arguing that a class action was not appropriate to adjudicate the matter.(fn27) The district court denied certification of the class after determining that the class was not ascertainable.(fn28) The primary support for the district court's denial of class certification was the amount of individualized inquiry that would be required to determine who the recipients of Medtox's unsolicited faxes were.(fn29) In addition to the denial of class certification, the district court granted Medtox's motion to dismiss in part.(fn30)

After the denial of class certification, both parties moved for summary judgment.(fn31) After determining that a settlement offer by Medtox mooted Sandusky's claim, the district court denied Sandusky's motion, but granted Medtox's motion for summary judgment.(fn32) Medtox offered $3,500 and promised to never send unsolicited faxes to each plaintiff as a settlement.(fn33) Because the settlement offer exceeded the five hundred dollars initially sought and the promise would accord the equitable relief sought, the district court granted Medtox's motion for summary judgment.(fn34) Sandusky appealed the denial of class certification and the ruling on the summary judgment motion to the Eighth Circuit.(fn35)

The Eighth Circuit first recognized that many circuit courts have noted Rule 23 contains an implied ascertainability requirement in addition to the explicit requirements.(fn36) The implied ascertainability standard recognized by a number of circuit courts is that a proposed class must be readily identifiable.(fn37) The court acknowledged that while there is a general recognition of an ascertainability requirement, there is a current circuit split on the precise definition of ascertainability.(fn38) Explaining the split in the circuits, the Eighth Circuit discussed the opposing notions of ascertainability developed by the United States Court of Appeals for the Third Circuit and the United States Court of Appeals for the Seventh Circuit.(fn39) The Eighth Circuit outlined the Third Circuit's elevated two-part ascertainability test, but noted how the Seventh Circuit rejected that approach.(fn40) The Third Circuit's test requires that a class must be defined in reference to objective criteria and there must be an accurate and administratively practical method for determining who the class members are.(fn41) In contrast, the Seventh Circuit only applies the explicit requirements of Rule 23 without any additional analysis to determine ascertainability.(fn42) After explaining the reasoning utilized by other circuits, the Eighth Circuit stated the ascertainability requirement is evaluated using a rigorous analysis of Rule 23, which includes a requirement that a class be sufficiently defined and clearly ascertainable.(fn43)

After announcing the standard of analysis to determine the ascertainability of a class, the court highlighted the presence of fax logs as a means to objectively measure the proposed plaintiff class.(fn44) The Eighth Circuit viewed fax logs, which display the numbers that received a fax from a sender, as a starting point to ascertain the proposed class of unsolicited Medtox fax advertisement recipients.(fn45) The Eighth Circuit rejected Medtox's argument that because the fax logs only contained numbers and not names, the class could not be adequately measured.(fn46) In support of this argument, the court noted that the TCPA defines recipient not as the machines that received the fax, but as the individual or entity who receives the fax.(fn47) To connect the TCPA's definition of recipient to fax machines receiving unsolicited faxes, the court looked to individuals who subscribed to the fax machines.(fn48) Because each fax machine contained information of its owner or lessee, individuals who either owned or leased the fax machine could be objectively ascertained.(fn49) The court noted that even though the subscriber to the fax machine may not have been the intended or actual recipient of the unsolicited fax, the logs containing the fax numbers of those who received unsolicited advertisements made the class clearly ascertainable.(fn50) The Eighth Circuit viewed the presence of fax logs, which could be connected to individual subscribers, as objective indicators that could measure Sandusky's proposed class.(fn51) As a result of such objective indicators to measure a class, the Eighth Circuit determined its ascertainability requirement-that a class be sufficiently defined and clearly ascertainable-was satisfied.(fn52)

Determining that Sandusky's proposed class was sufficiently defined and clearly ascertainable, the court then overruled the district court's decision that the proposed class failed to satisfy the commonality and predominance requirements of Rules 23(a)(2) and 23(b)(3).(fn53) The possibility that unsolicited faxes sent by Medtox may have violated the TCPA was sufficient to determine that a common question of law predominated over the entire class.(fn54) Additionally, whether individuals actually received unsolicited faxes was also a question of fact found to satisfy the commonality and predominance requirements of Rules 23(a)(2) and 23(b)(3).(fn55) In determining that the proposed class was ascertainable and the requirements of Rule 23 satisfied, the Eighth Circuit reversed the district court's denial of class certification, vacated the judgment for Medtox, and remanded the case to the district...