One of the first significant class action appellate decisions of 2017 was issued this week. In Briseno v. ConAgra Foods, Inc., No. 15-55727 (9th Cir. Jan. 3, 2017), the Ninth Circuit held that Rule 23 does not require that it be “administratively feasible” to identify class members in order for a class to be certified. The opinion is worth reading not only on that important point but also because it discusses a number of key issues that are hotly contested in class certification proceedings. In extensive dicta, the Ninth Circuit suggests approaches to conducting class litigation that defendants will undoubtedly need to challenge strongly in future cases.

The case alleged that Wesson cooking oils are improperly labeled as “100% Natural,” similar to numerous class actions challenging similar labels on food products. Given that consumers do not usually maintain records of what cooking oils they purchased, when they bought them or what was on the label, the defendant challenged whether the proposed class was sufficiently ascertainable or identifiable.

The Ninth Circuit held that there was no such “administratively feasible” requirement, agreeing with the Sixth and Seventh Circuits and disagreeing with the Second and Third Circuits on this point, likely increasing the chances of Supreme Court review. The Ninth Circuit focused on the absence of any “administratively feasible” requirement in the text of Rule 23, although Rule 23 presumes that there is a “class” and the members of the “class” must be identifiable for various purposes, including, for example, notice and the opportunity to opt out (under Rule 23(b)(3)), discovery (if the court permits discovery from the class), and the enforceability of any judgment. The Ninth Circuit recognized that these issues will bear on manageability and other class certification requirements, but concluded they are not a separate, independent requirement.

The court also suggested, in dicta, various approaches that might be taken in some cases to get around these problems if the district court otherwise finds class certification appropriate – such as notifying a difficult-to-identify class by publication and a website, conducting a trial for purposes of determining some type of vague aggregate liability, then asking class members to submit affidavits and claim forms (which the Ninth Circuit suggested might have a 10-15% response rate), and then (unless the defendant at some point agrees to a settlement) conducting what could be many thousands of individual trials on what the court describes as “damages,” but would actually focus on whether there is any liability to the class member.

Here are a few thoughts I had on Briseno, with a focus on how defendants can defend class actions in the Ninth Circuit and other circuits that have rejected an “administratively feasible” type of ascertainability requirement:

  • Other Ways to Challenge Class Definitions: There are lots of ways to challenge the class definition in addition to whether the class is administratively feasible. In many instances, the proposed class is overbroad and includes persons who have no injury and no standing. The proposed class may be so vague that putative class members would not be able to readily determine whether they are part of it, or a court may have difficulty determining at trial, or in a post-trial claim procedure or in enforcing a final judgment, who is in the class. The proposed class also might be an improper fail-safe class, where the only people who are in the class as defined would be automatically entitled to relief.
  • Manageability: The Ninth Circuit concluded that imposing a separate “administrative feasibility” requirement would render the manageability requirement superfluous, and that such concerns should be addressed in the context of manageability, with a cost-benefit type analysis. (Slip op. at 13-14.) To effectively press the case on manageability, defendants may want to focus on any notice plan and trial plan provided in Plaintiffs’ motion for class certification, or the absence of such a plan. Defendants might also demonstrate affirmatively what problems would be presented in giving notice, and provide some detail on how they would intend to try the defense case with individualized evidence.
  • Rules Enabling Act: The Rules Enabling Act is something that I think defendants should be increasingly focusing on. This may be what defendants should really urge the Supreme Court to address, even more than ascertainability. The Ninth Circuit recognized that, under the Rules Enabling Act, the parties must have the same rights in a class proceeding that they have in an individual suit. The Supreme Court made clear last year that it would “violate[s] the Rules Enabling Act [to] giv[e] plaintiffs and defendants different rights in a class proceeding than they could have asserted in an individual action.” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1048 (2016). In Briseno, the Ninth Circuit noted that “in litigating class certification, ConAgra took discovery of the class representatives, challenged whether they bought Wesson oil products, attacked their credibility, and disputed whether they relied on the label at issue.” (Slip op. at 20.) Under the Rules Enabling Act and Tyson Foods, a defendant can make a strong argument that it should have the right to do all of these things with respect to each member of the putative class. The Ninth Circuit suggested that ConAgra could do this in individual damages proceedings after liability is established. But these issues are not merely damages issues. They go to whether there is any liability at all to the putative class member — if they did not buy the product, they are not credible or they did not rely on the label. There is no question that the defendant would be entitled to take discovery on and try those issues in an individual case. It seems to contravene the Rules Enabling Act for a court to severely limit those rights simply because it wants to hear the proceeding as a class action. The Ninth Circuit’s suggestion in a footnote that a court can allow “limited discovery from absent class members” (Slip op. at fn. 10) seems clearly insufficient. How can a defendant adequately determine credibility or reliance, for example, without deposing each individual class member?

Ultimately, a defendant faced with the type of class proceeding that the Ninth Circuit suggested in its extensive dicta may need to take the position that it will try thousands (or tens or hundreds of thousands, or more) of individual claims in the “damages” proceedings, will insist on a jury trial for each one (under the Seventh Amendment), and will seek to take pre-trial discovery in each and every one of those (and for a court to distribute any money cy pres to people who do not come forward would be contrary to due process). If that type of proceeding is what Rule 23 actually provides for, as the Ninth Circuit’s dictum seems to suggest, then a district court would have to figure out how it can actually conduct that many trials.