California SCt rejects record-keeping ascertainability requirement

Noel v. Thrifty Payless, Inc., --- P.3d ----, 2019 WL 3403895, S246490 (Cal. Jul. 29, 2019)

Noel brought a putative class action on behalf of retail purchasers of an inflatable outdoor pool sold in packaging that allegedly misled buyers about the pool’s size, asserting the usual California claims (UCL, FAL, CLRA). The district court found that the proposed class wasn’t ascertainable, and the court of appeals agreed. Here, the California Supreme Court rejects an ascertainability requirement that would require good written records, either from the seller or the purchasers, of purchases.  The proposed class definition here was sufficiently ascertainable, in that it defined the class “in terms of objective characteristics and common transactional facts” that make “the ultimate identification of class members possible when that identification becomes necessary.”  This standard was satisfied here, where the class definition would allow class members to self-identify.

The facts: the package image indicates that the pool can handily accommodate several adults when inflated and filled:

A pool holding five people with plenty of room between them

Here’s the actual pool, as inflated and filled:

 

a pool that holds three children

Rite Aid sold over 20 thousand of these pools in California during the class period (nearly 2500 were returned), making nearly $950,000 in revenue.

The court surveyed its own decisions, those of the California courts, and federal courts on ascertainability to derive its standard.  In general, the concerns for proper definition and identification of class members are well addressed by the usual certification standards, which consider both the costs and benefits of the class action device, while ascertainability pulls a few considerations out into a vacuum.  So, for example, the court of appeals here worried that “[i]f the identities of absent class members cannot be ascertained, … it is unfair to bind them by the judicial proceeding.” But certification of a class requires the provision of the best practicable notice; due process doesn’t invariably require individual notice to absent class members. A heightened ascertainability requirement demanding the ability to provide individual notice would be “pyrrhic,” since it conflicts with the point of class actions for aggregating low-value claims. Nor is a heightened ascertainability requirement “necessary to protect the due process interests of class action defendants by protecting them from bogus claims and disproportionate liability.… There is no suggestion that, if the plaintiff class ultimately prevails, Rite Aid will face any onslaught of spurious claims, much less a bevy that could not be weeded out through a competent claims administration process. Also, because it is known how many pools were sold and not returned, and how much in revenue Rite Aid earned from these sales, the overall body of claims has a functional ceiling that further marginalizes any prospect of exaggerated liability.”

Using objective facts (rather than class members’ subjective states of mind) to define the class thus makes it ascertainable.  This puts members of the class on sufficient notice, and supplies “a concrete basis for determining who will and will not be bound by (or benefit from) any judgment,” making res judicata determinations possible.   The court also pointed out that “premising ascertainability on the existence of official records capable of being used to identify class members might, in some situations, incentivize potential class action defendants to destroy or refuse to maintain useful records that could provide a basis for class treatment.”

The appropriate form of notice to satisfy due process could be worked out as part of the broader certification process/assessment of manageability. “[G]iven the modest amount at stake (the pool having retailed for $59.99), the odds that any class member will bring a duplicative individual action in the future are effectively zero. Thus the true choice in this case is not between a single class action challenging the packaging of the Ready Set Pool and multiple individual actions pressing similar claims; it is between a class action and no lawsuits being brought at all. Under the circumstances, due process may not demand personal notice to individual class members, and to build a contrary assumption into the ascertainability requirement would be a mistake.”

Thus, the trial court abused its discretion when it determined that the class proposed by plaintiff wasn’t ascertainable. The proposed definition, “All persons who purchased the Ready Set Pool at a Rite Aid store located in California within the four years preceding the date of the filing of this action,” was neither vague nor subjective.