Lead Opinion
Vital Pharmaceuticals, Inc. (“VPX”) markets'a dietary supplement called VPX Meltdown Fat Incinerator (“Meltdown”), which it advertises for fat loss. Adam Karhu purchased the supplement in reliance on Meltdown’s advertising. Karhu brought class-action suit, alleging that Meltdown’s advertising is false, insofar as Meltdown does not aid fat loss.
Karhu moved to certify class of nationwide Meltdown purchasers as well as a subclass of New York purchasers. Certification is governed by Federal Rule of Civil Procedure 23. Under Rule 23, certification is proper where the proposed classes satisfy an implicit ascertainability requirement, the four requirements listed in Rule 23(a), and the requirements listed in any of .Rule 23(b)(1), (2), or (3). Little v. T-Mobile USA Inc.,
Karhu appeals. He claims that the district court erred to hold that (1) neither proposed class satisfied the ascertainability requirement, and (2) the New York subclass failed to satisfy Rule 23(b)(3)’s requirements. We hold that the district court’s ascertainability decision was proper. We therefore affirm without reaching the district court’s Rule 23(b)(3) decision.
I. BACKGROUND
A. -Legal Framework for the Ascer-tainability Requirement
“The burden of establishing the[ requirements of certification under Rule 23] is on the plaintiff who seeks to certify the suit as a class action.” Heaven v. Trust Co. Bank,
In the past, this court has stated that a class is not ascertainable unless the class definition contains objective criteria that allow for class members to be identified in an administratively feasible way. Bussey v. Macon Cnty. Greyhound Park, Inc.,
B. The District Court’s Order Denying Karhu’s Motion for Class Certification
Invoking these rules, the district court denied Karhu’s motion for class certification, holding that Karhu had failed to establish that his proposed classes were ascertainable. Although Karhu’s class definitions contained objective criteria, Karhu “ha[d] failed to propose a realistic method of identifying the individuals who purchased Meltdown.” Karhu had proposed that the court use VPX’s “sales data,” but VPX sold primarily to “distributors and retailers,” such that VPX’s records could not be used to determine “the identities of most [class] members.”
The court also considered, apparently of its own accord, whether allowing class members to come forward and identify themselves through sales receipts or affi
The district court also rejected the affidavit-based method. The court had several concerns. If, on the one hand, “affidavits of Meltdown purchases [were accepted] without verification,” VPX would be deprived “of its due process rights to challenge the claims of each putative class member.” “On the other hand, allowing VPX to contest each affidavit would require a series of mini-trials” to determine class membership, which would not be administratively feasible. Moreover, “[u]sing affidavits to determine class membership would also invite fraudulent submissions and could dilute the recovery of genuine class members.”
C. Karhu’s Motion to Alter or Amend the Order Denying Class Certification, and the District Court’s Order Denying Karhu’s Motion
Karhu moved to alter or amend the order denying certification pursuant to Rule 23(c)(1)(C). Karhu argued, inter alia, that new evidence showed that VPX sold Meltdown primarily to third-party retailers, such that class members could be identified by subpoenaing records from retailers. According to Karhu, proposing that class members could be identified using the records of third-party retailers was sufficient to satisfy the aseertainability requirement.
The district court denied Karhu’s motion for reconsideration. The court reasoned that Karhu’s subpoena-based method was not predicated on new evidence at all: Ka-rhu had come up with the method by examining VPX’s sales data, which had been available to Karhu well before he moved for class certification. Therefore, the district court would not accept such a description as grounds for reconsideration.
II. DISCUSSION
Karhu appeals, claiming, inter alia, that the district court abused its discretion in the order denying class certification by holding that Karhu had failed to establish that his proposed classes were ascertainable.
As noted, the plaintiff seeking certification bears the burden of establishing the requirements of Rule 23, including aseer-tainability. Heaven,
A plaintiff cannot establish ascertainability simply by asserting that class members can be identified using the defendant’s records; the plaintiff must also establish that the records are in fact useful for identification purposes, and that identification will be administratively feasible. See Stalley,
Similarly, a plaintiff cannot satisfy the ascertainability requirement by proposing that class members self-identify (such as through affidavits) without first establishing that self-identification is administratively feasible and not otherwise problematic. See Fisher v. Ciba Specialty Chems. Corp.,
In light of these standards, the district court’s ascertainability holding was not an abuse of discretion. Karhu’s proposal to identify class members using VPX’s “sales data” was incomplete, insofar as Karhu did not explain how the data would aid class-member identification. Nor was any potential identification procedure obvious: VPX’s sales data identified mostly third-party retailers, not class members. Karhu did not explain to the court that it envisioned a three-step identification process: (1) Use the sales data to identify third-party retailers, (2) subpoena the retailers for their records, and.(3) use those records to identify class members. Therefore, the district court acted within its discretion when it rejected Karhu’s proposal to identify class members via VPX’s “sales data.”
The district court likewise acted within its discretion when it rejected identification via affidavit. Because Karhu had not himself proposed an affidavit-based method, he necessarily had not established how the potential problems with such a method would be avoided. Without a specific proposal as to how identification via affidavit would successfully operate, the district court had no basis to accept the method. We therefore uphold the district court’s ascertainability holding in full.
Karhu’s arguments that we construe the ascertainability requirement too strictly do not convince. For example, Karhu is incorrect that a strict ascertainability requirement conflicts with Klay v. Humana, Inc.,
Not so. Klay addressed manageability concerns that a court might face after class members have already been identified — for example, concerns about whether particular class members are entitled to relief in light of individualized reliance, causation, and damages issues. Id. at 1273. Aseer-tainability, by contrast, addresses whether class members can be identified at all, at least in any administratively feasible (or manageable) way. Put differently, the manageability concern at the heart of the ascertainability requirement is prior to, hence more fundamental than, the manageability concern addressed in Klay. Klay therefore presents no bar to our holding.
Karhu is also incorrect that a strict as-certainability requirement will eradicate small-dollar class-action claims. Karhu argues that small-dollar plaintiffs will not be able to propose an administratively feasible method by which class members can be identified. Karhu’s own briefing illustrates why his fear is unfounded. According to. Karhu, his counsel has before succeeded in proposing administratively feasible identification methods. For example, in In re Scotts EZ Seed Litig., No. 12-cv-4727 (S.D.N.Y. Jun. 15, 2012), plaintiffs established that many purchasers of EZ Seed could be identified by subpoenaing third-party retailor Wal-Mart for its customer records (and in fact did so subpoena Wal-Mart). The district court later held that Karhu had satisfied the ascer-tainability requirement. In re Scotts EZ Seed Litig.,
Relatedly, Karhu might have satisfied the ascertainability requirement in this very case. In his motion to alter or amend the order denying class certification, Karhu explained that VPX sold Meltdown primarily to third-party retailers, and proposed identifying class members by subpoenaing the retailers for their records. The district court took no issue with the abstract principle that a plaintiff could satisfy the ascertainability requirement by proposing a subpoena-based method for identifying class members. Rather, the district court held only that Karhu should have proposed the method in his class-certification papers, instead of only upon moving to alter or amend. Had Karhu done so, he might well have satisfied the ascertainability requirement before the district court.
In sum, a plaintiff establishes Rule 23’s implicit ascertainability requirement by proposing an administratively feasible method by which class members can be identified. In this case, Karhu’s bare proposal that the district court ascertain class members through VPX’s “sales data” was insufficient to satisfy the ascertainability requirement.
Because we uphold the district court’s ascertainability decision, we affirm without reaching the district court’s Rule 23(b)(3) decision.
AFFIRMED.
Notes
. Karhu had not argued for certification pursuant to Rule 23(b)(1).
. A district court's denial of class certification is reviewed for an abuse of discretion. Little,
. Karhu argues that defendants have no due-process right against unverified self-identification when total liability will be established at trial, and will not change depending on the number of claims actually made. Because defendants' total liability will not be affected, it should not matter to them whether or not they are defrauded.
This argument has no force. As the Carrera court explained, a defendant's due-process right against unverified self-identification is not only about total liability: It is also about ensuring finality of judgment. Carrera,
. We do not address whether self-identification-based ascertainment might also implicate the interests of absent class members in cases where total liability will be established at trial. See Carrera, 727 F.3d at 310 (“It is unfair to absent class members if there is a significant likelihood their recovery will be diluted by fraudulent or inaccurate claims.”).
. A plaintiff might establish that self-identification-based ascertainment is administratively feasible and otherwise unproblematic by proposing a case-specific and demonstrably reliable method for screening each self-identification. See Carrera,
. We do not address the question of what, precisely, Karhu would need to produce in order to establish that the records of third-party retailers could be used to identify class members in an administratively feasible manner. In this regard, we express no opinion as to whether the Carrera court set an appropriate bar for subpoena- or third-party-retailer based ascertainment. See Carrera,
Concurrence Opinion
concurring:
The vehicle of the class action was intended to “vindicate] ... the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.” Amchem Prods., Inc. v. Windsor,
I.
Vital Pharmaceuticals, Inc. (VPX) is a Florida corporation that manufactures, advertises, and sells a dietary supplement, modestly^ named “VPX Meltdown Fat Incinerator” (Meltdown). VPX advertises, also modestly, that Meltdown “burns fat for 6 + hours” by causing a “29% thermo-genic increase” and a “56% increase in fat utilization.” Adam Karhu, a New York resident who purchased Meltdown, sued VPX, claiming that Meltdown is not effective for this advertised purpose.
Mr. Karhu filed his suit as a class action. He moved pursuant to Federal Rule of Civil Procedure 23(b)(3) for certification of a class defined as “all persons in the United States who purchased Meltdown from April 4, 2008 to date” as well as a subclass of “all Class members who purchased the product in New York.” He asserted claims on behalf of the nationwide class for (1) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-12; (2) breach of express warranty; (3) unjust enrichment; and (4) violation of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201-13. He also asserted a claim on behalf of only the New York subclass for violations of New York General Business Law § 349.
The District Court denied Mr. Karhu’s request for class certification primarily because it concluded that the members of Mr. Karhu’s proposed classes were not ascertainable. First, although Mr. Karhu suggested that VPX’s “sales data would allow the Court to identify members,” the District Court found that “VPX ... makes the bulk of its sales to distributors and retailers and sells directly to consumers relatively infrequently.” Thus, VPX would not have a record of most class members. Further, because a bottle of Meltdown is “a relatively small purchase, ... purchasers are less likely to retain receipts or other records” to show they have purchased Meltdown. Finally, the Court refused to “trust individuals to identify themselves as class members through the submission of affidavits.” Doing so would “deprive VPX of its due process rights to challenge the claims of each putative class
II.
A plaintiff seeking class certification must demonstrate that his claim meets the express requirements of Rule 28(a): (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy. See Fed.R.Civ.P. 23(a)(1) — (4). However, courts have also read Rule 23 to contain an implicit, unwritten requirement: that a proposed class be “adequately defined and clearly ascertainable.” Little v. T-Mobile USA, Inc.,
Historically, courts analyzing ascertaina-bility have required something quite narrow. “Ascertainability has traditionally been defined as the existence of a class whose members can be identified by reference to objective criteria in the class definition.” Daniel Luks, Ascertainability in the Third Circuit: Name That Class Member, 82 Fordham L. Rev. 2359, 2369 (2014). The leading class action treatise similarly notes that “courts essentially focus on the question of whether the class can be ascertained by objective criteria.” Newberg on Class Actions § 3.3 (5th ed.); see also McBean v. City of New York,
Our Court’s approval of the class in Fitzpatrick v. General Mills, Inc.,
III.
The record here indicates that Mr. Ka-rhu could have made a good case for the ascertainably of his proposed class based on consumer affidavits.
Second, courts have evaluated the “the likelihood of a potential class member being able to accurately identify themselves as a purchaser of the allegedly deceptive product.” Randolph v. J.M. Smucker Co.,
I would combine the reasoning of these courts. Looking to the two factors — (1) the value of each class member’s claim, and (2) the likelihood that potential class members could accurately identify themselves — I conclude that Mr. Karhu likely could have shown aseertainability. First, a bottle of Meltdown costs around $23, a small amount not likely to invite fraudulent claims. Second, Mr. Karhu notes that “Meltdown is a unique product in name, function, and appearance.” This is in contrast to Randolph, where there were a number of versions of Crisco on the market, and only some were being challenged. This record includes no evidence that consumers would be unable to recall whether they are class members. A class composed of purchasers of Meltdown for a certain period of time could therefore be ascertainable.
Unfortunately for the putative class, Mr. Karhu failed to argue this point in his class-certification motion. As the majority notes, Mr. Karhu, did “not established how the usual problems with [affidavits] would be avoided.” Panel Op. 10. Mr. Karhu, it says, failed to offer a “specific proposal as to how identification via affidavit would successfully operate.” Id. In fact, the District Court apparently considered the self-identification argument “of its own accord” below. Id. at 4. As I’ve said, I believe that self-identification would probably be a sufficient means of ascertaining a class of purchasers of a product like Meltdown. In any event, I read today’s majority opinion narrowly. Mr. Karhu simply did not adequately argue his class was ascertainable before the District Court. Class representatives in future cases may more clearly explain to district courts how affidavits will reliably show class membership based on the two factors I noted above, and I expect that district courts will closely' consider those arguments.
To hold otherwise — rejecting affidavits as a legitimate means of class identification in every case — would make it considerably more difficult for consumers to bring class-action claims on small-dollar products where consumers and companies are unlikely to keep or retain records of purchases. These include most low-cost products typically sold in corner stores or vending machines — products like chewing gum, bottled soft drinks, or cigarettes — all of which are routinely bought with cash. But claims like these are precisely the ones that the mechanism of the class-action device was designed to foster. See Ebin v. Kangadis Food Inc.,
VI.
The record here has led me to conclude that although Mr. Karhu failed to properly argue that affidavits were sufficient to show ascertainability in his class-certification motions to the District Court, he had a strong case to make. When timely presented, I would hold that affidavits are a sufficient means of identification for purchasers of a cheap, unique product like Meltdown. I concur in the judgment.
. I agree with the majority that Mr. Karhu forfeited his argument that he could identify purchasers of Meltdown through third-party sales records, since he raised this argument for the first time in his motion for reconsideration.
. The cases the majority cites rule on facts different from those here. In Fisher v. Ciba Specialty Chemicals Corp.,