Third Circuit Denies Rehearing of Class Certification Denial In Class Ascertainability Case

Class Action

On May 2, the U.S. Court of Appeals for the Third Circuit denied a petition for rehearing en banc in Carrera v. Bayer, 727 F.3d 300 (3d Cir. 2013), a closely-watched case on class ascertainability. Last year, a three-judge panel of the Third Circuit reversed a district court’s certification of a Rule 23(b)(3) class, holding that plaintiffs must present far better evidence of class member ascertainability to achieve certification than “[a] party’s assurance to the court that it intends or plans to meet the requirements [of Rule 23].” 727 F. 3d at 306, quoting In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305, 318 (3d Cir. 2008). The plaintiff in the case proposed to ascertain members of a class of purchasers of defendant’s over-the-counter drug product through company sales records that plaintiff assumed (with some support) existed. The district court certified the class, holding although the company lacked records to identify purchasers, class members could be ascertained through loyalty card records, online sales, or affidavits of class members attesting they purchased the product and stating the amount they purchased. Reversing class certification, the three-judge panel rejected plaintiff’s proposal to allow absent class members to self-identify by affidavit. In a 9-4 ruling, the full Third Circuit refused to re-hear the case but the four dissenters criticized the denial. Although Carrera is technically binding only on the federal courts of Pennsylvania, New Jersey, and Delaware, the decision may have broad national impact in that the original appeals decision was already being cited in courts across the country.  The end result may be that (i) in the absence of adequate defendant records, class action plaintiffs must take far more significant pre-certification discovery, including subpoenas to third parties, to prove in some detail that records provide the data needed to ascertain class members; and (ii) courts are far less likely to accept class actions or settlements thereof that rely on affidavits alone to prove class membership.