California Supreme Court sets low bar for ascertaining membership for a class action
2019 cases affecting auto dealers: Part 5
Noel v. Thrifty Payless, Inc. (2019) 7 Cal. 5th 955
Auto dealers and manufacturers are major operations that send an enormous amount of complex machines into the stream of commerce every day. While this is a lucrative and important business, it can leave its participants vulnerable to a variety of litigation - a primary form being class action lawsuits. Class actions serve as a powerful tool for plaintiffs against even the most wealthy and powerful defendants. However, class actions come with a number of hurdles for plaintiffs to overcome in bringing a case, and a recent California Supreme Court decision just lowered the bar on one of them.
California class action plaintiffs have long been required to demonstrate how the members of their proposed class are ascertainable. In other words, to form a class, a plaintiff must be able to show that he or she can locate the rest of the class members impacted by the lawsuit. This requirement is not borne out of desire to deter class actions; rather it is meant to notify other potential litigants, so that their rights are not affected by a lawsuit they are unaware of, and also to protect defendants from multiple lawsuits over the same issue.
Until this year, the courts have been split on the level of ascertainability that is required to form a class. One view required that the plaintiff show exactly how a class would be realistically defined at the certification stage. For instance, a list of specific class members with contact information. The other, less stringent, jurisprudence required only that a proposed class could be identified by objective criteria when necessary.
The Supreme Court of California ultimately chose the less burdensome path in Noel v. Thrifty Payless, Inc., (2019) 7 Cal. 5th 955. At the heart of this case was whether a $59.99 backyard inflatable pool could actually fit four adults. The packaging suggested that it could, when in reality it was designed to fit about four small children. A false advertising class action ensued, with a potential class of 20,000 plaintiffs, comprised of the purchasers of the pool during the relevant timeframe.
The plaintiff failed to show any evidence as to how he would be able to locate and notify these 20,000 potential class members of the proposed class action. As a result, the trial court denied certification. The Court of Appeal agreed with this decision, finding that the class action had been filed prematurely and that the plaintiff needed to produce a method of identifying the class members prior to certification.
More specifically, the Court of Appeal emphasized that the plaintiff, Noel, had “submitted nothing offering a glimmer of insight into who purchased the pools or how one might find that out…Unless Noel could propose some realistic way of associating names and contact information with the 20,000-plus transactions … there remained a serious due process question in certifying a class action.”
The Supreme Court squarely disagreed with the lower courts’ opinions. In a unanimous decision, the Court found that the ascertainability requirement for class certification is satisfied merely when the class is defined objectively in a way so that “the eventual identification of class members [is] possible.” The Court created a “bright-line rule” that a “plaintiff in a class action need not introduce evidence establishing how notice of the action will be communicated” at the certification stage. The Court reasoned that its decision “protects the due process interests of all parties and absent class members without impairing the efficacy of the class action mechanism.” In particular, the Court was concerned that imposing a more strict ascertainability requirement at the front-end of a class action would impede cases that were “advancing the social good.”
So what does this mean in terms of the requirements for class certification as it pertains to ascertainability? In the Noel case, defining the class as “[a]ll persons who purchased the Ready Set Pool at a Rite Aid store located in California within the four years preceding the date of the filing of this action” was sufficient. As of the Noel decision, in California, all a plaintiff is required to show is that a proposed class can be objectively defined and someday identified. Nothing further.