Consumer Finance Litigation

Although courts across the country agree that “a plaintiff class should not be certified unless membership therein is ‘adequately defined and clearly ascertainable,’” the extent of what a plaintiff must provide to satisfy this “implicit requirement” to certification varies among circuit courts.  See Ocwen Loan Servicing, LLC v. Belcher, No. 18-90011, 2018 WL 3198552, at *3 (11th Cir. June 29, 2018) (citations omitted).  For example, some circuit courts have construed the requirement to “mean[] a plaintiff must demonstrate an ‘administratively feasible’ method for determining class membership over and above Rule 23’s express requirements,” whereas others have declined “to adopt a heightened ascertainability requirement,” finding that “[n]othing in Rule 23 mentions or implies it,” and that “creating one would upset the careful balance of competing interests codified in the explicit requirements of Rule 23.”  See id.; compare In re Petrobras Sec., 862 F.3d 250, 265 (2d Cir. 2017) (declining to adopt a “heightened ascertainability theory that requires a showing of administrative feasibility at the class certification stage”), and Rikos v. Procter & Gamble Co., 799 F.3d 497, 524-25 (6th Cir. 2015) (same), and Mullins v. Direct Digital, LLC, 795 F.3d 654, 672 (7th Cir. 2015) (same), with Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 355 (3d Cir. 2013) (determining that “there must be a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition,” and so “‘[i]f class members are impossible to identify without extensive and individualized fact-finding or ‘mini-trials,’ then a class action is inappropriate’”) (citations omitted).

But while circuit courts will likely continue to dispute whether (and to what degree) “administrative feasibility” should be assessed when applying the ascertainability requirement, other aspects of the requirement are applied in a more uniform fashion.  In particular, essentially “[a]ll courts” — even those applying the “‘weak’ version of ascertainability” — agree that a putative class “must be defined clearly” and with reference to “objective criteria” to determine membership, “rather than by, for example, a class member’s state of mind” or “in terms of success on the merits.”  E.g., Mullins, 795 F.3d at 657, 659; see also William B. Rubenstein, 1 Newberg on Class Actions § 3:3 (5th ed. 2015).

Just last week Chief United States District Judge Philip A. Brimmer relied almost exclusively on a lack of “objective criteria” in denying certification of a nationwide class alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (the “TCPA”), despite also recognizing that the members of the proposed class not only could be readily ascertained, but actually already had been, both by name and cell phone number.  See Order at 5-9, Rivera v. Exeter Finance Corp., No. 1:15-cv-1057-PAB-MEH (D. Colo. Mar. 31, 2019) (Brimmer, J.), ECF No. 206 (hereinafter the “Rivera Order”).

Initially, the plaintiff in Rivera had attempted to certify a nationwide TCPA class consisting of individuals with a cell phone number that the defendant, Exeter Finance Corp. (“Exeter”), had called “in an attempt to reach a prior subscriber” of the number (i.e. a “reassigned number” class).  See Rivera Order at 3.  The district court denied the motion because the plaintiff “was not a member of the proposed class” (Exeter had never called him “in an attempt to reach a prior subscriber”), but granted the plaintiff leave to refile the motion, believing it was “‘appropriate for plaintiff to make a second attempt to propose an ‘ascertainable class . . . .’”  See id. (citations omitted).  The plaintiff filed his second motion for class certification approximately nine months later, but this time did not seek to certify the same kind of “reassigned number” class as in his initial motion.  See id. at 3-4.  Instead, the plaintiff described how he had conducted an extensive “reanalysis” of his proposed class “to ensure that the Class does not include individuals Exeter had consent to call,” and “at the end of this process . . . was left with a list of 482 cellular phone subscribers,” and specifically “482 names, addresses, and phone numbers,” which he characterized as “indisputably ascertainable” because “individuals are either on the list or they are not.”  See id. at 4; (see also Pl.’s Second Mot. for Class Certification at 3, 6-9, Rivera v. Exeter Finance Corp., No. 1:15-cv-1057-PAB-MEH (D. Colo. Nov. 30, 2017), ECF No. 159 (arguing that “[d]efining the class in this manner ensures that it is ascertainable,” and that “the Class could not be more clearly defined”)).

In ruling on the motion, the district court agreed that “plaintiff is technically correct that his list provides a criterion to determine whether an individual is a member of the proposed class, and the class can, therefore, be ‘ascertained’ by reference to that list,” but ultimately denied the motion.  See Rivera Order at 6-7.  In particular, Chief Judge Brimmer acknowledged that “Plaintiff’s theory of class definition is novel” and that the court had been unable to find a case “where a proposed class has simply been defined based on a list of people created by the named plaintiff,” but took issue with the fact that “a person’s inclusion on a list created by plaintiff is not a characteristic of that person or otherwise the type of objective criterion that is typically used to define a class.”  Id. at 7.  The court noted that, “[i]n effect, plaintiff seeks to represent, and to have his counsel appointed class counsel for, a list of people that plaintiff has identified,” and further “seeks to do so through an opt-out class action pursuant to Fed. R. Civ. P. 23(b)(3), without first securing the listed individuals’ consent to be so represented.”  Id.  In addition, the court also found “there is reason to doubt the reliability of plaintiff’s identification of the individuals on his list” (including because at least one putative class member “never received an actionable call from defendant”), which the court said “is not a reason to deny certification,” but still “raises doubts in these circumstances, where the plaintiff seeks to define the class by the names of individuals on a list he has created.”  Id. at 7-8.  More specifically, the court cautioned that “it calls into question plaintiff’s arguments that the steps he has taken since his first certification motion was denied, which include subjective determinations about who should be included on the list, have resulted in a list that defines an appropriate class.”  Id. at 8.  In the end, Chief Judge Brimmer emphasized that “the only characteristic that [the plaintiff] asserts the potential class members share is that their names appear on a list he created,” which the court simply did not agree was enough to satisfy the ascertainability requirement under any recognized standard, as — inevitably — it proposed a class that “cannot be ‘ascertained by reference to objective criteria.’”  See id. at 7, 9 (citation omitted).

While the decision in Rivera is noteworthy for several reasons, the case is primarily a stark reminder of what a plaintiff must provide to satisfy Rule 23’s implicit requirement that a class be “adequately defined and clearly ascertainable.”  It is, of course, essential that the class be defined with enough precision to enable membership to be readily determined (and challenged), and to preserve a defendant’s due process right to raise individual defenses to each class member’s claims, but the ability to identify particular class members does not displace a plaintiff’s obligation to define the class by reference to “objective criteria.”   After all, the “principal purpose” of Rule 23 class actions is to achieve “efficiency and economy of litigation,” see Am. Pipe & Const. Co. v. Utah, 414 U.S. 538, 553 (1974), something the Rivera court at least implicitly recognized is not served by giving plaintiffs (and their counsel) carte blanche to aggregate claims of individuals who are united by little more than a subjective determination to include them on the same class list.