Recently, I had the privilege of moderating a panel in Boston discussing hot topics in class actions. We had a terrific group of panelists, including three (besides myself) who represent defendants in class actions and one who represents plaintiffs. This imbalance was attributable to the nature of the organization sponsoring the program as a business-oriented legal foundation.
We spent about half of our time discussing the First Circuit’s controversial decision in In re Nexium Antitrust Litigation, the subject of some of our most recent posts in this blog, including its relevance to the determination of whether a class satisfies the implied requirement of ascertainability. Little did we know that the Third Circuit was about to issue its decision in Byrd v. Aaron’s Inc., in which the court extensively reviewed the ascertainability requirement and reversed a district court’s misapplication of it. I learned about the decision later that day, when the plaintiff’s lawyer on our panel sent the rest of us an email touting it as a reaffirmation of some of the points he had made during the program. Since then, plaintiffs’ counsel in a case I recently argued and which is currently under advisement submitted the Byrd decision to the court as further support for his motion.
While I understand the plaintiff bar’s impulse to publicize a decision in which a district court was reversed for having denied class certification on ascertainability grounds, Byrd does not represent a change in the law and is hardly a victory for their team. Rather, in Byrd the Third Circuit simply restated the principles underlying its recent series of ascertainability decisions, and corrected a district judge who had adopted (without hearing) a magistrate judge’s recommendation that apparently had confused ascertainability with other class certification requirements.
The court in Byrd reaffirmed its prior holdings that a plaintiff seeking class certification has the burden of establishing that membership in the putative class can be ascertained, and that this requires the plaintiff to make two showings: 1) that the class is defined by objective criteria, and 2) that there is a reliable and administratively feasible way for determining whether putative class members fall within the class definition. Plaintiffs often attempt to limit the showing to the first part of this two-part test, but the Third Circuit, like other courts, has made it clear that the administrative feasibility standard is also a necessary component of a plaintiff’s burden.
The Third Circuit held that the district court got it wrong, not because the ascertainability standard does not apply or because of any disagreement with its recent decisions, but only because the district court conflated ascertainability with other issues, such as the under-inclusiveness of the class definition (which the appellate court held is not a barrier to class certification), or the definition’s over-breadth (which can be fatal). The Third Circuit observed that there were both available corporate records and public records from which membership in the relatively small putative class could readily be ascertained, and that the district court’s focus on other issues was misdirected.
This is a far cry from the sort of retrenchment that plaintiffs’ lawyers would like us to believe the case represents. If anything, Byrd reaffirms the importance of the ascertainability requirement in class certification determinations and the need for courts to include it in their rigorous analysis when applying Rule 23.