A federal appeals court judge called on his colleagues on Monday to step into a growing class action debate that has reached the U.S. Supreme Court.
On a 2-1 vote the U.S. Court of Appeals for the First Circuit declined to take up an interlocutory appeal to overturn class certification in a class action brought over the labeling of Dial Corp.’s antibacterial soap. But in a dissent, Judge William Kayatta warned his colleagues that the court’s recent precedent over how class members could be identified was destined to result in “further mischief” that could challenge the constitutional rights of defendants. The dispute, referred to in the class action bar as “ascertainability,” is particularly important in a growing number of cases involving cheap goods for which most consumers don’t have receipts — such as Dial’s antibacterial soap.
“Sooner or later, this court will have to wrestle with the issues raised by the district court’s approach,” which was based on the First Circuit’s 2015 decision In re Nexium Antitrust Litigation, from which Kayatta also dissented. In that ruling, the majority concluded that individual affidavits were adequate to identify class members at the certification stage. But such “say-so” affidavits, Kayatta wrote in Monday’s decision, “will eventually eliminate requirements of Rule 23(b)(3) and turn courts into claims administrators who pay no heed to the guarantees of the Seventh Amendment.”
Paul Clement, a partner at Kirkland & Ellis in Washington, D.C., who represents Dial, did not immediately respond to a request seeking comment.
Lucy Karl, a shareholder at Shaheen & Gordon in Concord, New Hampshire, an attorney for the plaintiffs, declined to comment.
The ruling is the latest to delve into the ascertainability dispute. The Third, Second, Fourth and Eleventh circuits have imposed a high hurdle in concluding that plaintiffs had to come up with an administratively feasible plan to identify class members, striking fear in the plaintiffs bar over the survival of class actions involving consumer goods.
Earlier this year, the Ninth Circuit, joining with the Sixth and Seventh circuits, took a more lenient approach when it ruled in Briseño v. ConAgra Foods that plaintiffs could use affidavits in which class members could attest to their harm from the purchase. The Ninth Circuit case alleged that the “100% Natural” labels on Wesson cooking oils were false and misleading.
On April 10, ConAgra petitioned the Supreme Court to overturn the Ninth Circuit’s decision. In a June 16 response, plaintiffs cited U.S. District Judge Steven McAuliffe’s certification decision in the Dial litigation.
On March 27, McAuliffe, a New Hampshire federal judge, certified subclasses of consumers in six states who purchased bottles of Dial Complete Foaming Antibacterial Hand Wash during the past 16 years that had labels making claims such as “Kills 99.99% of Germs.”
“Here, the method of proof on which plaintiffs intend to rely — after-the-fact consumer affidavits asking people to recall which hand soap and what quantity they bought going back 16 years — was inherently unreliable and far from administratively feasible absent myriad mini-trials,” Clement wrote in his petition for interlocutory appeal of McAuliffe’s order. “Yet the district court brushed aside Dial’s objections based on an unsupportable interpretation of this court’s decision in Nexium.”
But Nexium, he wrote, involved affidavits about whether consumers would have bought a generic product that hadn’t been available. The Dial cases, in contrast, pertain to products they actually purchased, he wrote.
Karl, the plaintiffs’ attorney, countered that Dial was attempting to interject a higher standard on ascertainability set forth in the First Circuit’s Nexium decision.
“Dial’s demand — that it be able to ask claimants whether they really purchased Dial Complete before receiving their share of any recovery prior to a class determination of liability and aggregate damages — turns the entire purpose of class litigation on its head and was expressly rejected by this circuit in Nexium.”