By: Ara Jabagchourian
The Daily Journal
July 30, 2019
In the matter of Noel v. Thrifty Payless, Inc., Chief Justice Cantil-Sakauye authored a unanimous decision by the California Supreme Court holding that no evidentiary requirement exists at the class certification stage to demonstrate how individual class members will be identified. The decision reverses a published First Appellate District decision holding that evidence is needed to meet the ascertainability requirement of Civil Procedure Code section 382 so that proper notice is given to the class.
Noel involved an action against Rite Aid drugstores and its sale of an inflatable outdoor pool. A photograph on the packaging of the pool shows it fitting several adults comfortably. When it is actually inflated, it is much smaller. The plaintiff moved to certify 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.”
Based on arguments raised by Rite Aid, the trial court denied class certification. In doing so, the court stated that “[w]hile the court might reasonably infer that the class . . .could be ascertained based on common business practices and record keeping, [p]laintiff has presented no evidence on this subject.”
Finding no abuse of discretion, the First Appellate District upheld the lower courts denial of class certification. The appellate court stated that the problem with class certification motion was based on “class counsel’s premature filing of the motion without first conducting sufficient discovery to meet its burden of demonstrating there are means of identifying members of the putative class so that they might be notified of the pendency of the litigation.” The court emphasized that although the class representative did not need to identify the 20,000 individuals who bought the pools, his failure to come up with any means to identify them was fatal to the motion to certify the class.
The California Supreme Court took up the matter to clarify what is involved in assessing the ascertainability requirement for class certification. The Noel Court starts its analysis by stating that the functions of ascertainability is best served by regarding a class ascertainable when it is defined “in terms of objective characteristics and common transactional facts” that make “the ultimate identification of class members possible when identification becomes necessary.”
The Noel Court then reviewed several California decisions on the issue of ascertainability, noting that neither the Supreme Court nor the Courts of Appeal have been as “pellucid in explaining what this requirement entails.” Having gone through the holdings of several decision that discuss ascertainability, the Noel Court noted that there was no consensus among the Courts of Appeal as to what was required.
However, the Noel Court noted that two basic views had developed. The first view focuses on the proposed class definition itself and is set forth in the case of Bartold v. Glendale Federal Bank. This view holds that a “class is ascertainable if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself or herself as having the right to recover based on the description.”
The second view of ascertainability entails a “more exacting inquiry.” This view seeks an examination into (1) the class definition; (2) the size of the class; and (3) the means of identifying the class members. Citing to the appellate decision Rose v. City of Hayward, this view has also been characterized as having to show “[c]lass members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records.”
The Noel Court noted that the language from Rose could be understood as “specifying a sufficient, as opposed to a necessary, basis for finding an ascertainable class”. However, the Noel Court found that some appellate courts have gone further than Rose, requiring class plaintiffs make a specific factual or evidentiary showing in order to establish an ascertainable class.
By requiring such an evidentiary showing, class certification is defeated in a variety of situations. These include insufficient evidence to make a showing, expected complexities in the provision of notice, distinguishing class members from nonmembers, or cause to make a class proceeding unmanageable.
The court of appeal in Noel was concerned about due process of absent class members not receiving notice in applying the stricter standard of ascertainability. The Supreme Court noted that actual notice is not a requirement of class certification. Both under California’s rules, as well as Federal law, the standard is the best notice that is practicable under the circumstances. When address or contact information of class members is not available, courts may use alternative means to get the notice out, which will not offend the principle of due process.
The Noel Court took a pragmatic approach to the issue of due process and notice. The court noted that “impossible or impractical obstacles cannot be justified” in constructing a Due Process Clause analysis. Quoting Daar v. Yellow Cab, a case involving payments made by taxi cab customers, even those who paid cash, the court disavowed any “necessity of identifying the individual members of such class as a prerequisite to a class suit. If the existence of an ascertainable class has been shown, there is no need to identify its individual members in order to bind all members by the judgment.”
The Noel Court set out a “bright line rule” for purposes of establishing ascertainability: “a representative plaintiff in a class action need not introduce evidence establishing how notice of the action will be communicated to individual class members in order to show an ascertainable class.” The Noel Court also set forth a practical implication of such a broad ruling in the case. It noted that given the modest amount at stake ($59.99), “the odds that any class member will bring a duplicative individual action in the future is effectively zero.” The choice is not between a class action and multiple individual actions challenging the packaging of the pool, but “between a class action and no lawsuits being brought at all.”
The Noel decision halts and reverses what was effectively a chipping away of consumer class actions, which was allowing violators of substantive consumer protection laws to avoid accountability. Given the bright line test set forth in Noel, the cases requiring the stricter second view of ascertainability have now been completely overturned in California.