Daniels v. Hollister Co., --- A.3d ----, 2014 WL 8808428, No. A–3629–13T3 (N.J. Super. Ct. App. Div. May 13, 2015)
Of interest because it’s a state court within the Third Circuit rejecting that circuit’s view of “ascertainability” in class actions. In fact, the court holds, ascertainability “must play no role in considering the certification of a low-value consumer class action” (emphasis added). This is a class action about gift cards.
In New Jersey, in the context of consumer transactions, “class actions should be liberally allowed ... under circumstances that would make individual actions uneconomical to pursue.” This policy furthers the creation of an “even playing field” for small claims. In this case, “over $3,000,000 worth of $25 gift cards were voided,” and “numerosity, commonality, typicality, and adequacy of representation” were concededly present.
Hollister argued that certifying the class violated due process because it wouldn’t be able to test class members; absent class members couldn’t opt out; and the preclusive effect of any judgment would be unknowable and unenforceable. But pre-certification ascertainability wasn’t a condition for certification, as long as the contours of the class were clearly defined. Ascertainability wasn’t a requirement of the New Jersey cases, and “federal experimentation with the ascertainability doctrine seems far from over and, indeed, this doctrinal wave may have broken before ever cresting.” Even the Third Circuit seems unsettled on the issue. The concerns expressed by Judge Ambro’s dissent in Carrera (adopting the requirement) and Judge Rendell’s concurrence in Byrd (limiting the requirement) were more in tune with New Jersey class action policy. The whole point of the class action mechanism is to aggregate claims to make them easier to bring—or bringable at all. “[W]hen the concept of ascertainability is applied inflexibly it becomes a device that serves to burden or eliminate nascent class actions without providing any societal benefit.” The equitable roots of the class action mechanism shouldn’t be overlooked.
Ascertainability was “particularly misguided when applied to a case where any difficulties encountered in identifying class members are a consequence of a defendant’s own acts or omissions.” After all, if Hollister had obtained the identities of consumers when giving out $25 gift cards, it wouldn’t have an ascertainability problem. Ultimately, ascertainability didn’t help the fair and efficient administration of justice. “[T]he Third Circuit’s experiences suggest the doctrine is practically unworkable in application and is being exploited by defendants in unsuitable cases to evade liability.”
Even if ascertainability were relevant, it wouldn’t pose an obstacle to class certification, but would only be a matter for claims administration. Any future identification problems could be overcome with some ingenuity. Members in possession of cancelled gift cards should probably not need to do anything other than present the card. Members who discarded a gift card “because they were told that the cards expired or had been voided” “may need to show more, perhaps through submission of an affidavit; it has not been shown, however, how such a process unfairly hampers the defense.”
Though there were legitimate concerns about the preclusive effect of a judgment when class membership is uncertain, those concerns were outweighed by the benefits provided by class status, at least in low value consumer class actions.