Ninth Circuit Eases Consumer Class Action Restrictions
The United States Ninth Circuit Court of Appeals began 2017 by helping all consumers in California and its other states and territories (Hawaii, Alaska, Washington, Oregon, Arizona, Nevada, Montana, Idaho and Guam). In Briseno v. ConAgra Foods, Inc., ___ F.3d ___ (9th Cir. Jan. 3, 2017), the Ninth Circuit affirmed class certification for consumers in 11 states challenging ConAgra’s 100% Natural food label on Wesson-brand cooking oils as fake and misleading since they are made from bioengineered ingredients (genetically modified organisms (GMOs)). In its decision, the Ninth Circuit not only handed consumers a victory, but eliminated a barrier consumers face when seeking to have a class action certified. In other words, class certification involves asking for a court to recognize there is enough information that a company has engaged in some form of wrongdoing against all the purchasers of a product.
Ascertainability (also referred to as administrative feasibility) is a longtime standard requiring class representatives to demonstrate a reliable way to identify all the absent class members. As the Ninth Circuit explained in its 24 page decision, ascertainability is not a written element of Rule 23 of the Federal Rules of Civil Procedure and as such is not a requirement of this rule which has a numerous elements and requirements already. Instead, ascertainability has evolved into a standard as a result of various case decisions over the years. Unlike many other countries that have only statutory laws to follow, laws in the U.S. derive from statutory laws and are constantly re-written by case decisions in courts across the states and in the federal courts called judicial precedent. Companies and their lawyers try to kill class action lawsuits by arguing, as ConAgra and its lawyers did here, that “because consumers would not be able to identify themselves as class members” then no class should be certified. The Ninth Circuit and the lower federal district court disagreed with ConAgra.
In its wisdom, the Ninth Circuit recognized, ascertainability is an impossible standard to meet for purchasers of small consumer goods as most consumers will not have receipts for these items such as Wesson cooking oils nor will consumers typically remember when and where they bought it. “Class actions involving inexpensive consumer goods in particular would likely fail at the outset if administrative feasibility were a freestanding prerequisite to certification.” The Ninth Circuit further reasoned that:
Such cases typically involve low-cost products and, as a result, recoveries [are] too small to incentive individual litigation. At the same time, an administrative feasibility requirement like that imposed by the Third Circuit would likely bar such actions because consumers generally do not keep receipts or other records of low-cost purchases. Practically speaking, a separate administrative feasibility requirement would protect a purely theoretical interest of absent class members at the expense of any possible recovery for all class members – in precisely those cases that depend most on the class mechanism.
The Ninth Circuit agreed with the lower district court that “[a]t the certification stage, it was sufficient that the class was defined by an objective criterion: whether class members purchased Wesson oil during the class period.” Interestingly, the Court rebuffed ConAgra’s argument that without an ascertainability requirement then people who did not buy Wesson oils could submit claims. The Court questioned such logic asking “[w]hy would a consumer risk perjury charges and spend the time and effort to submit a false claim for a de minimis monetary recovery?”
The Ninth Circuit explained that, “[w]e have never interpreted Rule 23 to require such a showing, and like the Sixth, Seventh, and Eighth Circuits, we decline to do so now.” And it further explained that Rule 23 already addresses any policy concerns that pushed other courts to adopt an ascertainability standard, “and do so without undermining the balance of interests struck by the Supreme Court, Congress, and the other contributors to the Rule.” The Ninth Circuit also drew upon the United States Supreme Court for support stating that “Supreme Court precedent also counsels in favor of hewing closely to the text of Rule 23.” “In Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), the Court … warned that ‘[t]he text of a rule thus proposed and reviewed limits judicial inventiveness’ and admonished that ‘[c]ourts are not free to amend a rule outside the process Congress ordered.’” As it stands now, unless the decision is appealed to the United States Supreme Court or a request for reconsideration is successful, ascertainability is no longer required for cases brought in California federal courts or other federal courts in the Ninth Circuit.
In an unpublished portion of the opinion, the Court addressed ConAgra’s other class certification arguments saying plaintiff Robert Briseno’s claims against ConAgra differed from those of the absent class members so he was not a typical representative of the absent class members. ConAgra also argued that individual issues predominated over class issues, and that a class action was not a superior form of litigation since there are problems with a class action progressing in 11 states. The Ninth Circuit rejected all of ConAgra’s arguments and addressed each one in turn. In short, the Court said Mr. Briseno’s declaration was sufficient to allege reliance on the “100% Natural” label and it is only necessary under the law to show reliance for Mr. Briseno – it does not matter what the absent class members relied upon. The damages model proffered by Mr. Briseno and the proposed class followed their liability theory and is sufficient for class certification purposes. The Court also determined that the laws in the 11 states raise common issues as the lower court determined and thus a class action is manageable, and that the case could be successfully adjudicated by being severed into 11 classes if necessary.
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About Barbara Rohr
Barbara Rohr is a Partner in Faruqi & Faruqi’s Los Angeles office. Ms. Rohr focuses her practice on consumer class actions, representing plaintiffs in a variety of consumer fraud and false advertising cases. Please feel free to contact Ms. Rohr regarding any questions concerning this blog post or any questions related to Faruqi & Faruqi, LLP’s practice areas.
The opinions expressed are those of the author and do not necessarily reflect the views of this firm or its clients. This blog post is for general informational purposes only and is not intended to be and should not be taken as legal advice.