In a unanimous decision that will make it easier for plaintiffs in California state courts to obtain class certification, the California Supreme Court ruled that the ascertainability requirement for certification of class actions filed under the State’s class action rule or its Consumer Legal Remedies Act (CLRA) does not incorporate a requirement for the representative plaintiff to supply evidence showing how class members would be individually identified.

In Noel v. Thrifty Payless, Inc., the plaintiff filed a putative class action in state court on behalf of retail purchasers of an inflatable outdoor pool sold in packaging that allegedly misled buyers about the pool’s size. In addition to asserting a CLRA claim, the plaintiff alleged claims under California's Unfair Competition Law and the state’s false advertising law. In opposing the plaintiff’s motion for class certification, the defendant argued that to show an ascertainable class, it was the plaintiff’s burden to introduce evidence showing how members of the putative class could be identified so they could be provided with notice of the case.

The trial court denied the certification motion, ruling that such evidence was needed for the court to determine whether the proposed class is ascertainable. The Court of Appeal found no abuse of discretion in the denial of class certification because, in its view, the plaintiff’s failure to provide any means for identifying class members was a legitimate basis for the trial court to determine that the ascertainability requirement was not satisfied.

The Supreme Court granted review to clarify “what the ascertainability requirement for class certification involves.” The plaintiff had sought class certification pursuant to Section 382 of the California Code of Civil Procedure, which provides a general authorization for class actions, and Section 1761 of the state’s Civil Code, which governs CLRA class actions. The Supreme Court observed that it has identified ascertainability as an essential element for Section 382 class actions and that while it has not specifically done so for class certification under the CLRA, the Courts of Appeal have routinely imposed an ascertainability requirement on CLRA plaintiffs.

After an extensive review of its own and Courts of Appeal precedent on ascertainability under state law as well as federal court precedent on ascertainability under Rule 23 of the Federal Rules of Civil Procedure, the Supreme Court concluded that an ascertainable class is one defined “in terms of objective characteristics and common transactional facts” that make “the ultimate identification of class members possible when that identification becomes necessary.” According to the Supreme Court, the ascertainability requirement does not incorporate the additional evidentiary burden imposed on the plaintiff by the trial court. Based on its analysis of due process considerations, the Supreme Court determined that its ascertainability standard “protects the due process interests of all parties and absent class members without impairing the efficacy of the class action mechanism.” The Court stated that “due process does not dictate that certification of a putative plaintiff class invariably must depend on all absent class members being sent (much less receiving) individual notice of the action.”

Applying its standard, the Supreme Court ruled that the trial court erred in finding that the plaintiff’s proposed class was not ascertainable. The plaintiff had defined the proposed class as “all persons who had purchased [a particular brand pool at one of the defendant’s stores] located in California within the four years preceding the date of the filing of this action.” The Supreme Court found this definition to be “neither vague nor subjective.” It concluded that a class member “could appreciate from this definition whether he or she is included within it, and thus be in a position to take appropriate steps to protect his or her interests.” It also concluded that the definition “makes the res judicata consequences of a judgment clear, creating no ambiguity as to who will and will not be bound by the outcome.”

The Supreme Court noted its view of the ascertainability requirement did not prohibit a court, when deciding whether to certify a class, from considering the question of notice to absent class members. It observed that arguments and evidence relating to that question could show that another requirement for class certification aside from ascertainability had not been met (e.g. that a class action would be unmanageable or would not be superior to the alternatives). It also commented that the plaintiff’s failure to supply evidence associated with the identification of class members might have supported a refusal to certify a class on grounds other than ascertainability. 

The Supreme Court’s decision is likely to lead to class certification of cases in California where notice simply cannot be sent to individual class members because their identities are unknown. In such cases, notice instead will be provided by publication, television, radio, the internet, or distribution “through a trade or professional association, union, or public interest group.”

While the trial court denied the plaintiff’s class certification motion in its entirety on ascertainability grounds, it also denied certification of the proposed CLRA class on the basis that common issues did not predominate because of the need to prove reliance as to each class member. The Supreme Court indicated that because it had not addressed this aspect of the trial court’s ruling, overturning the trial court’s ascertainability determination would not, by itself, make a CLRA class viable. It also noted that the trial court’s third reason for denying class certification, that a class action would not be superior to the alternatives, was “ambiguous in its scope” because the court did not specify whether this conclusion applied only to the CLRA class or to the entire action. Due to these open issues, the Supreme Court reversed the Court of Appeal and remanded the case to the Court of Appeal with directions to remand to the trial court for further proceedings consistent with the Supreme Court’s decision.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs).


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