In its first conference since the death of Justice Antonin Scalia, the U.S. Supreme Court declined to hear an important Seventh Circuit case that emphatically rejected a ''heightened'' standard for ascertaining class members in federal class actions. The denial of certiorari is particularly notable because a clear circuit split exists regarding the burden on plaintiffs to show that the members of a putative class can be identified.

This issue has particular importance for class actions involving small-dollar consumer products, where class members are difficult to ascertain. In denying certiorari in Direct Digital LLC v. Mullins, the Court has bypassed the opportunity to resolve the deepening circuit split, leaving the status quo intact—and foreclosing the possibility of a split decision given the vacancy left by Justice Scalia's death.

Mullins, previously discussed here, involved the alleged false and misleading labeling and advertising of an over-the-counter joint supplement. The defendant had insufficient records to identify who purchased the product in retail locations, and consumers were unlikely to have kept their receipts. The defendant argued that class certification should have been denied because the plaintiff failed to show a ''reliable and administratively feasible'' way to determine class membership. However, the district court granted class certification.

The Seventh Circuit acknowledged that it was difficult to ascertain who was in the class, and expressed concerns as to administrative inconvenience, unfairness to absent class members, dilution of the recovery by fraudulent claims, and the defendant's due process rights. These concerns matched those previously voiced by other circuit courts. In particular, the Third Circuit denied certification in a similar consumer product case, holding that there must be a ''reliable, administratively feasible method to determine class membership,'' and that affidavits regarding purchases were not sufficient to establish class membership (as discussed here). On the contrary, the Seventh Circuit affirmed class certification, concluding that ascertainability concerns are outweighed by the risk of failing to afford a meaningful remedy to consumers in low-dollar consumer cases. In the Seventh Circuit's words, ''only a lunatic or a fanatic'' would litigate the claim individually. The Seventh Circuit expressly rejected the Third Circuit's ''ascertainability test'' as a ''misread[ing] of Rule 23.''

On this issue, the Sixth Circuit is in line with the Seventh Circuit, while the First, Fourth, and 11th Circuits have expressed views more closely aligned with those of the Third Circuit.  Briefing is now complete in a case pending before the Ninth Circuit, raising the  ''ascertainability" issue.

Although the Supreme Court, as is customary, issued no explanation for why it denied certiorari in Mullins, Justice Scalia’s absence may have played a part. Indeed, the landscape for class actions in federal court has changed dramatically since 2010, primarily due to opinions authored by Justice Scalia. In four cases with five-justice majorities, Justice Scalia wrote for a divided Court that upheld contractual waivers of class arbitration; questioned class-wide damages models; and required a strict interpretation of what constitutes common questions of law and fact sufficient to maintain a class action under Rule 23. It may be that the eight justices will be reluctant to grant certiorari in cases that are likely to closely divide the Court on ideological grounds, as class actions often do, until Justice Scalia's replacement is confirmed.

Ballard Spahr’s Class Action Litigation and Product Liability and Mass Tort groups have substantial experience defending class actions and litigating issues of ascertainability.

Copyright © 2016 by Ballard Spahr LLP.
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