Eleventh Circuit Rejects Administrative Feasibility as a Requirement for Class ActionsCan a plaintiff represent a class without showing that there’s a feasible way to identify the absent class members? In its recent decision in Cherry v. Dometic Corp., the Eleventh Circuit has become the latest circuit to answer that question with a “maybe.” Although the court noted that the “feasibility” of identifying absent class members was relevant to the “superiority” and “manageability” considerations of Rule 23(b)(3), the court rejected the argument that proving that absent class members could be identified in an “administratively feasible” manner was a prerequisite to class certification. In so holding, the court departed from at least three of its own unpublished decisions from the 2010s that previously held that “administrative feasibility” was a part of the “ascertainability” analysis.

Cherry is just the latest case to grapple with Rule 23’s sometimes slippery ascertainability requirement. Although the term does not show up in the text of the rule, it is now well settled that classes must be “ascertainable” to be certified. As the Eleventh Circuit noted in Cherry, the text includes “what is implicit.”

But courts have diverged on precisely what it means to be ascertainable. Most courts agree that, at a minimum, ascertainability requires that the class be defined according to objective, determinable criteria. In other words, membership in the class must be objectively capable of determination. So, no classes of “attractive people” or “nature lovers.”

In a significant minority of circuits, ascertainability also requires a showing that there is an administratively feasible way to identify the absent class members. In other words, the plaintiff has to show that identifying class members is a “manageable process” without much, if any, individual inquiry. This has been the rule in the First, Third, and Fourth Circuits, and, until Cherry, was also the rule in the Eleventh, at least by virtue of unpublished decisions.

The core holding of Cherry is that administrative feasibility is not part of the ascertainability analysis at all, and is not, by itself, a requirement for class certification. The Eleventh Circuit’s reasoning started by looking to its prior reported cases, which had required plaintiffs to prove that their class is “adequately defined and clearly ascertainable.” But the court, for the first time, took a generous approach to what “clearly ascertainable” means: “A class is ‘clearly ascertainable’ if we are certain that its membership is ‘capable of being’ determined.” To emphasize the point, the court continued: “[M]embership can be capable of determination without being capable of convenient determination.” Instead of a part of ascertainability, the Eleventh Circuit views administrative feasibility as a component of the manageability prong of Rule 23(b)(3).

This decision makes class certification easier and makes class litigation more difficult for defendants. If the Eleventh Circuit means that ascertainability is purely a rhetorical exercise to determine whether a class definition is capable of being ascertained, then defining a class could be reduced to a game of words. A needle can be found in a haystack, after all, and the difficulties in doing so could be reduced to mere administrative hurdles.

Doubly confusing is the Eleventh Circuit’s refusal to engage with the practicalities imbedded throughout the text of Rule 23. Indeed, the court was willing to write out the requirement that a class be “adequately defined” as a redundant doublet. But, in Wal-Mart Stores, Inc. v. Dukes, the United States Supreme Court emphasized that interpretation of Rule 23 should focus on practical realities: “What matters to class certification … is not the raising of common ‘questions’—even in droves—but rather, the capacity of a class-wide proceeding to generate common answers apt to drive the resolution of the litigation.” The Cherry opinion lightheartedly dismisses how inconvenient identifying members might be, but somebody must deal with administrative headaches. District courts should be allowed to consider those headaches when determining whether to certify a class in the first place, although we aren’t sure the Eleventh Circuit was saying otherwise.

In fact, two considerations mitigate the effects of Cherry. First, the problems of administrative feasibility do not go away just because those problems are not part of the ascertainability analysis.  Those same real and practical problems can be recast as part of commonality, predominance, and superiority — to say nothing of manageability. If class members cannot be found without undue individualized inquiries, the need for those inquiries will affect the whole class analysis.  Moreover, district courts are unlikely to exercise their discretion to certify a class when doing so will mire the courts in an unmanageable slop.

Second, we suspect that the Eleventh Circuit had its eye on another practical reality — namely, that very few class actions go to trial and nearly all of them settle if certified. Viewed through the lens of settlement, administrative feasibility falls away completely because manageability is irrelevant to certifying a class for settlement purposes. Thus, while Cherry may make class certification easier for plaintiffs, it certainly makes settlement easier.

We continue to watch the development of ascertainability doctrine closely. Cherry highlights an existing split between the circuits on this issue, and the deepening doctrinal disagreements invite the Supreme Court to bring clarity.

No Worse for Butter: Ninth Circuit Says Popcorn’s “Secret” Ingredient Does Not Confer Article III StandingThe Ninth Circuit recently determined that the mere presence of artificial trans fats in popcorn (i.e., the “butter” in butter flavored popcorn) does not create an injury that confers Article III standing.

In McGee v. S-L Snacks National, a consumer brought a putative class action alleging economic and physical injuries caused by the inclusion of artificial trans fats as an ingredient in Pop Secret. The plaintiff alleged that she purchased Pop Secret at least once every two to three months over the past decade, assuming it contained only “heart-healthy” ingredients. According to the plaintiff, Pop Secret’s manufacturer engaged in unfair practices, created a nuisance, and breached the warranty of merchantability by including artificial trans fats in its product.

The defendant moved to dismiss for lack of Article III standing, asserting that it’s not an injury to eat ingredients that are clearly disclosed on the nutrition label. The plaintiff countered that she had plausibly alleged injury from her consumption of Pop Secret in three ways. First, she claimed an economic injury equal to the amount she paid for Pop Secret because she believed she was purchasing a product that was safe for consumption, when, according to the plaintiff, Pop Secret was not fit for consumption and had no value. Second, the plaintiff alleged that consuming nearly half a pound of trans fats from Pop Secret caused her immediate physical injuries. Third, the plaintiff alleged that her consumption of Pop Secret increased her risk of future injury. The district court disagreed and granted the defendant’s motion to dismiss.

The Ninth Circuit affirmed and held that none of the plaintiff’s theories plausibly alleged an injury in fact sufficient to confer Article III standing.

Economic Injury. The plaintiff advanced two theories on appeal to support her alleged economic injuries: (1) a “benefit of the bargain” theory; and (2) an overpayment theory. As to the benefit of the bargain theory, the plaintiff claimed she purchased Pop Secret because she thought it was a safe, lawful product. But she urged that the presence of artificial trans fats deprived her of the benefit of her bargain. The Ninth Circuit found this argument unpersuasive, as it rested on the plaintiff’s blind wishes, not the disclosed facts. Although the plaintiff may have assumed that her popcorn contained only heart-healthy ingredients, the labeling on the product disclosed the inclusion of artificial trans fats. In other words, to the extent the plaintiff lost a “benefit,” the court found it was not part of the bargain to begin with.

The plaintiff’s overpayment theory fared no better. The key to success on an overpayment theory of economic injury is the defendant’s false representations or deceptive conduct. The court concluded that the plaintiff failed to allege that she paid more for the Pop Secret than it was worth due to the defendant’s deceptive conduct, as the presence of artificial trans fats was disclosed on the nutrition label.

Present and Future Physical Injury. The plaintiff’s alleged present physical injuries were too speculative to support standing, even at the initial pleading stage. The plaintiff alleged that consuming nearly half a pound of trans fats from Pop Secret over the past decade caused her physical injury. However, the court was skeptical of the plaintiff’s claimed injuries: she did not allege that she visited a doctor or sought any form of medical treatment for her ailments. Rather, her argument rested on the assumption that any consumption of artificial trans fats over the course of a decade invariably results in some form of physical injury. This “consumption assumption” was too speculative to confer standing.

Finally, the Ninth Circuit held that the plaintiff failed to allege an actionable future physical injury. As with the plaintiff’s present physical injury argument, the court was not persuaded that the plaintiff’s limited consumption of Pop Secret placed her at substantial risk of future physical injuries.

McGee is not a landmark class action case, but it joins the Subway footlong case, the Tito’s Vodka “old fashioned still” cases and any number of other food marketing class actions that serve as reminders that class actions about foods are common and frequently meritless.  In the meantime, consumers should read nutrition labels and enjoy buttery popcorn at their peril.

Competing Duties and Courts: 11th Circuit Clarifies Procedures and Counsel Duties in Competing Class ActionsThe 11th Circuit recently addressed the issue of competing or overlapping class actions, which often create problems for both the plaintiffs’ counsel and the defense. In Medical and Chiropractic Clinic, Inc. v. Oppenheim, the 11th Circuit clarified what duties class counsel owes to class representatives and the correct forum for asserting challenges by competing class counsel.

Oppenheim is part of a series of class actions that related to the Tampa Bay Buccaneers’ advertising practices. In brief, the AW Firm filed the original Cin-Q class action, but mediation stalled because one of their lead attorneys refused to settle for less than $99 million. A different attorney, David Oppenheim, took over the role of “closer.” Despite this switch, mediation still failed, and the AW Firm moved for class certification.

A week later, the Bock Firm recruited Oppenheim to join it. When Oppenheim left the AW Firm, he believed that he would continue to work with the AW Firm on the Cin-Q class action and took information about the action with him to the Bock Firm. (Oppenheim’s former firm also accused him of sharing inside knowledge of the Cin-Q litigation with his new firm).

With Oppenheim on board, the Bock Firm filed a competing class action, Technology Training Associates, and reached a proposed settlement with the Buccaneers. That case reached the 11th Circuit in Technology Training Associates, Inc. v. Buccaneers Limited Partnership after the district court denied the Cin-Q plaintiffs’ motion to intervene. Relying on the compelling evidence of a “reverse auction” facilitated by Oppenheim’s inside knowledge, the 11th Circuit held that intervention was proper.

Just prior to the filing of the motion for preliminary approval of the Technology Training Associates settlement, however, one of the class representatives from the Cin-Q class action, the Medical and Chiropractic Clinic, Inc. (M&C), sued Oppenheim and the Bock Firm, claiming that Oppenheim breached the fiduciary duties owed to M&C as the class representative and that the Bock Firm aided and abetted that breach. M&C sought both monetary damages and an injunction preventing the Bock Firm from further participating in these class actions against the Buccaneers. The district court held that Oppenheim did not owe an individual fiduciary duty to M&C and granted summary judgment in favor of Oppenheim and the Bock Firm. M&C appealed.

Two Key Decisions

The 11th Circuit decided two issues. It first affirmed that the class counsel does not owe any individual fiduciary duty to the class representative:

“[o]ne cardinal rule defines the scope of counsel’s ethical obligations in class actions: class counsel owes a duty to the class as a whole and not to any individual member of the class” (Oppenheim, 2020 WL 7038400, at *6).

And an “important corollary stems from this principle: class counsel does not owe a particular duty to any group comprised of class members, such as class representatives, distinct from the duty owed to the class.”

“If courts required class counsel to give special ethical considerations to class representatives (or any other subset of the class), the remaining class members would necessarily receive reduced ethical considerations in comparison.”

If counsel had to choose some class members’ interests over others, class actions could splinter, leading to costly litigation between class members.

The second principle from this decision is of even greater practical interest to class action defendants: The 11th Circuit affirmed that the court where the proposed settlement is pending alone has authority to make decisions about the settlement.

Specifically, the 11th Circuit held that “M&C’s filing of this suit in state court against Oppenheim and the Bock Firm strikes us as an attempt to end run around the [Technology Training Associates] court, which was solely responsible for making all Rule 23 determinations related to the Bock Firm’s requests to certify a class and approve a class settlement.” The 11th Circuit explained that “Rule 23 makes clear that the district court in which a class action is filed operates as a gatekeeper. It is that court, and that court alone, that has the task of deciding a number of Rule 23 questions, including whether to certify a class, whether to appoint class counsel, and whether to approve a proposed class settlement.” Although M&C and the AW Firm intervened in the Technology Training Associates action as well, the 11th Circuit made clear that the earlier filing of the lawsuit to enjoin the Bock Firm’s participation was “wholly inappropriate.” The court where the class action settlement is reached “is the only forum in which such a challenge should have been launched—certainly not a different court.”

Importance for Competing Class Actions

Oppenheim is important for competing class actions in the 11th Circuit. Under Oppenheim, the only court that can evaluate competing class counsel’s right to represent the class is the court where the settlement is. By channeling disputes to the court presiding over the settlement, Oppenheim aims to consolidate disputes in the court most familiar with the settlement, and to discourage disappointed parties (and their lawyers) from shopping for friendly forums to seek injunctions or damages. This case will hopefully reverse a trend in recent years where competing class counsel attempt to use the court where their own case is pending to obtain a ruling allowing them to interfere with their competition. Oppenheim’s ruling about class counsel’s duties may have fewer practical effects, but it remains important, especially when viewed alongside the recent Johnson opinion that forbids incentive payments to class representatives. Any attempt to treat class representatives and class members differently will receive heightened scrutiny in the 11th Circuit, and the court has been serious about requiring class counsel to show the same loyalty to the named class representative as to the absent class member.