Third Circuit Clarifies Apparent Confusion Regarding Rule 23(b)(3) Ascertainability Requirement

In Byrd v. Aaron’s Inc., the United States Court of Appeals for the Third Circuit added to, and clarified, its “quartet” of ascertainability cases to resolve the “apparent confusion in the invocation and application of ascertainability in this Circuit.” The plaintiffs in Byrd brought a class action claiming violations of the Electronic Communications Privacy Act of 1986 because laptop computers had “spyware” installed, which had captured a wide array of personal information from the users including photographs and screenshots of websites visited. Adopting the recommendation of the Magistrate Judge, the District Court denied class certification for failure to establish ascertainability, finding that the proposed classes were both “underinclusive” (i.e., did not include all individuals whose information was gathered) and overinclusive (not every computer user had data intercepted), and that it was insufficient to propose that “household members” be identified by public records. “Because the District Court confused ascertainability with other relevant inquiries under Rule 23,” it “erred in determining that the Byrds’ proposed classes were not ascertainable.”

The panel first emphasized that the ascertainability inquiry requires a plaintiff to show only that “(1) the class is ‘defined with reference to objective criteria’; and (2) there is ‘a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.’” The Third Circuit reiterated that “[t]he ascertainability requirement consists of nothing more than these two inquiries.” In addition, ascertainablity “does not mean that a plaintiff must be able to identify all class members at class certification—instead, a plaintiff need only show that ‘class members can be identified.’”

The Byrd Court reviewed its four prior ascertainability decisions, first noting that in Marcus v. BMW of North America, LLC, it adopted the implicit ascertainability requirement and determined that a class action is not appropriate if class members can only be identified through “mini-trials.” The proposed class in Marcus “‘raise[d] serious ascertainability issues,’ largely because the plaintiffs could not identify cars with the allegedly defective run-flat tires.” Next, in Hayes v. Wal-Mart Stores, Inc., the Third Circuit remanded to the district court with instructions “to apply Marcus’s standard and to allow the plaintiffs to ‘offer some reliable and administratively feasible alternative’” for identifying class members. Next, in Carrera v. Bayer Corp., the Court rejected the plaintiffs’ proposed methodology for proving ascertainability by submitting affidavits from class members. The panel held that “a party cannot merely provide assurances to the district court that it will later meet Rule 23’s requirements” and cannot “‘merely propose a method of ascertaining a class without any evidentiary support that the method will be successful.’” Lastly, in Grandalski v. Quest Diagnostics Inc., although the Third Circuit affirmed denial of certification on predominance grounds, it noted that the district court had erred in its ascertainability analysis by improperly “‘conflat[ing] ascertainability with the predominance inquiry’” (“‘the ascertainability requirement focuses on whether individuals fitting the class definition may be identified without resort to mini-trials, whereas the predominance requirement focuses on whether essential elements of the class’s claims can be proven at trial with common, as opposed to individualized, evidence’”).

Essentially, the Byrd Court rejected the notion that ascertainability included determining if the class definition was underinclusive, holding that “[t]he ascertainability standard is neither designed nor intended to force all potential plaintiffs who may have been harmed in different ways by a particular defendant to be included in the class in order for the class to be certified.” The class was ascertainable because the defendants’ own records revealed the computers on which the spyware was activated as well as the identity of the customers who purchased or leased each computer.

From a class action defense perspective, the result of this now leading case on ascertainability is clear—“[i]f defendants intend to challenge ascertainability, they must be exacting in their analysis and not infuse the ascertainability inquiry with other class-certification requirements.” The Byrd opinion might be viewed as attempting to rein in the ascertainability analysis and confirm that this Circuit’s ascertainability standard is articulated with the four walls of Marcus, Hayes, Carrera, and Grandalski. Further noteworthy is a separate concurring opinion suggesting that “it is time to retreat from [the] heightened ascertainability requirement” and that the ascertainability analysis should “focus on class definition only.” However, this heightened ascertainability requirement remains the current state of the law following Byrd.

Michael R. McDonald is a Director in the Gibbons Business & Commercial Litigation Department.
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