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Ninth Circuit Holds That Rule 23 Does Not Require an “Administratively Feasible” Method of Determining Class Membership

Supreme Court 35719-0001By Alexander M. Smith

In its first published opinion of 2017, the U.S. Court of Appeals for the Ninth Circuit held that Federal Rule of Civil Procedure 23 does not include a freestanding requirement of “an administratively feasible way to determine who is in the class.”  The Ninth Circuit’s decision further deepens a split between the First, Second, Third, and Fourth Circuits, which have imposed a freestanding “ascertainability”[1] requirement as a prerequisite for class certification, and the Sixth, Seventh, Eighth, and Ninth Circuits, which have held that Rule 23 does not impose either an “ascertainability” or “administrative feasibility” requirement separate from the requirements of Rule 23(a) or Rule 23(b)(3).  Compare In re Nexium Antitrust Litig., 777 F.3d 9 (1st Cir. 2015), Brecher v. Republic of Argentina, 806 F.3d 22 (2d Cir. 2015),  Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013), and EQT Prod. Co. v. Adair, 764 F.3d 347 (4th Cir. 2014) with Rikos v. Procter & Gamble Co., 799 F.3d 497 (6th Cir. 2015), Mullins v. Direct Digital LLC, 795 F.3d 654 (7th Cir. 2015), and Sandusky Wellness Ctr. LLC v. Medtox Sci. Inc., 821 F.3d 992 (8th Cir. 2016).


ConAgra produces Wesson-brand cooking oil, which is labeled “100% Natural.”  Plaintiffs filed putative class actions in eleven states alleging that alleged that the term “100% Natural” was false and misleading because Wesson oils are extracted from bioengineered crops and are therefore not “natural.”  Those cases were consolidated into a single case in the United States District Court for the Central District of California, and the plaintiffs sought to certify a set of classes consisting of all residents of California, Colorado, Florida, Illinois, Indiana, Nebraska, New York, Ohio, Oregon, South Dakota, or Texas who purchased Wesson cooking oils within the class period.  ConAgra opposed class certification on the basis, among others, that “there would be no administratively feasible way to identify members of the proposed classes because consumers would not be able to reliably identify themselves as class members.”   The district court certified the class notwithstanding ConAgra’s objections.

ConAgra filed an interlocutory appeal of the class certification order under Rule 23(f). The Ninth Circuit affirmed.  Its principal opinion focused exclusively on whether Rule 23 imposes a freestanding “administrative feasibility” requirement.  It also addressed ConAgra’s remaining arguments in an unpublished memorandum disposition. 

The Ninth Circuit’s Principal Opinion

The Ninth Circuit’s principal opinion begins by addressing the text of Rule 23.  It notes that Rule 23(a) is titled “Prerequisites” and sets forth an enumerated list of criteria that a class must satisfy to be certified.  Applying the canon of expressio unius est exclusio alterius, the court reasoned that this enumeration implied the deliberate exclusion of other criteria, including “administrative feasibility.”  The court found additional support for this conclusion in Rule 23(b)(3), which states that “matters pertinent to these findings include” the enumerated factors.  In other words, if the drafters of Rule 23 “had intended to create a non-exhaustive list in Rule 23(a),” the court reasoned, “it would have used similar language.”  Further, because Rule 23(b)(3) requires courts to consider “the likely difficulties in managing a class action,” the court explained, a separate requirement of administrative feasibility would be largely superfluous.

The Ninth Circuit then acknowledged that the Third Circuit has imposed a separate administrative feasibility requirement, but noted that it had justified this requirement “not through the text of Rule 23 but rather as a necessary tool to ensure that the ‘class will actually function as a class.’”  The Ninth Circuit distilled three policy rationales from the Third Circuit’s case law—“mitigating administrative burdens,” “safeguarding the interests of absent and bona fide class members,” and “protecting the due process rights of defendants”—and addressed each one individually.

Administrative Burdens.  The Ninth Circuit noted that there was no need for a separate “administrative feasibility” requirement to account for the administrative burdens associated with trying a class action because “Rule 23(b)(3) already contains a specific, enumerated mechanism to achieve that goal:  the manageability criterion of the superiority requirement.”  The court also found that the imposition of a separate “administrative feasibility” requirement would be at odds with the “well-settled presumption” that courts should not decline to certify a class solely on the basis of manageability concerns.  Finally, the court noted that a standalone “administrative feasibility” requirement would be inconsistent with Rule 23(b)(3) to the extent it would require courts to consider in a vacuum whether a class action is “administratively feasible,” as opposed to considering whether it is superior to other alternatives. 

Protecting Class Members.  The Ninth Circuit rejected concerns that courts cannot provide notice to individual class members without an administratively feasible way of determining class membership as misplaced, because neither Rule 23 nor the Due Process Clause requires actual, individual notice to class members.  The court also downplayed concerns about fraudulent claims or dilution of class members’ recovery in light of the low value of individual recoveries in consumer class actions and “consistently low participation rates.”  The Ninth Circuit also reasoned that this requirement would actually harm class members in consumer class actions:  because most consumers “do not keep receipts or other records of low-cost purchases,” it explained, an administrative feasibility requirement akin to the Third Circuit’s would bar certification of most consumer class actions and effectively deny those consumers any recovery at all.

Due Process Concerns.  Finally, the Ninth Circuit held that there was no need for an administrative feasibility requirement to protect the due process rights of defendants to “dispute whether class members really bought the product or used the service at issue.”  It emphasized that defendants already can—and do—mount such challenges as to class representatives, and it noted that defendants have similar opportunities to challenge the claims of absent class members if and when they file claims.  Furthermore, the court noted that where the aggregate liability of a defendant can be calculated without reference to individual class members’ claims (e.g., by calculating a price premium for each unit sold during the class period and multiplying that by the total number of units sold), the identity of individual class members is not relevant to the defendant’s liability.  Accordingly, the court concluded, the possibility that a defendant cannot identify individual class members absent an “administrative feasibility” requirement does not pose a meaningful threat to its due process rights.

The Ninth Circuit’s Memorandum Disposition

The Ninth Circuit rejected ConAgra’s remaining arguments in a separate, unpublished memorandum disposition.  The court noted that ConAgra challenged the district court’s findings as to typicality, predominance, and superiority and affirmed the district court on all three issues:

  • First, while ConAgra argued that the class representatives were atypical to the extent they actually relied on the “100% Natural” representation, the court held that this did not defeat a finding of typicality because “none of the certified claims require a showing of actual reliance with respect to absent class members.”
  • Second, the court affirmed the district court’s finding of predominance.  It found that the district court did not clearly err in finding that common issues predominated with respect to materiality because a reasonable consumer would consider the “100% Natural” label material and “understand it to mean GMO-free.”  Likewise, it held that the district court did not clearly err in finding that the plaintiffs’ compound hedonic regression/conjoint analysis model appropriately tracked their theory of liability.
  • Finally, the court held that the district court did not clearly err in finding that a class action was a superior method of managing the litigation, even though the case involved “eleven statewide classes involving various state-law claims.” 

Briseno v. ConAgra Foods, Inc. (9th Cir. 2017)

 [1] Although the Ninth Circuit declined to use the term “ascertainability,” other courts have used this term to address the question of whether Rule 23 requires an administratively feasible method to ascertain the membership of a putative class.  See, e.g., Nexium, 88 F.3d at 19 (“[T]he definition of the class must be ‘definite,’ that is, the standards must allow the class members to be ascertainable.”); Brecher, 806 F.3d at 24 (“[W]e have recognized an ‘implied requirement of ascertainability’ in Rule 23 . . . .”) (citation omitted); EQT Prod., 764 F.3d at 358 (noting that “[o]ur sister circuits have described this rule as an ‘ascertainability’ requirement”).