Crystal Byrd v. Aaron's Inc , 784 F.3d 154 ( 2015 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 14-3050
_____________
CRYSTAL BYRD; BRIAN BYRD, Individually, and on
Behalf of all Similarly Situated Persons,
Appellants
v.
AARON’S INC; ASPEN WAY ENTERPRISES INC,
d/b/a Aaron’s Sales and Leasing, A Franchisee of
Aaron’s Inc.;
DESIGNERWARE LLC; AH & H LEASING LLC,
d/b/a Aaron’s Sales and Leasing, a Franchisee of
Aaron’s, Inc.;
AMG ENTERPRISES GROUP LLC, d/b/a Aaron’s
Sales and Leasing,
a Franchisee of Aaron’s, Inc.; ARONA CORPORATION
d/b/a Aaron’s Sales
and Leasing, a Franchisee of Aaron’s, Inc.; BEAR
RENTAL PURCHASE LTD,
d/b/a Aaron’s Sales and Leasing, a Franchisee of
Aaron’s, Inc.;
BOXER ENTERPRISE INC, d/b/a Aaron’s Sales and
Leasing,
a Franchisee of Aaron’s, Inc.; CIRCLE CITY
RENTALS, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.; CMH LEASING
PARTNERS, LLC,
d/b/a Aaron’s Sales and Leasing, a Franchisee of
Aaron’s, Inc.;
CRAM LEASING, INC., d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
DC SALES AND LEASE INC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
DIRIGO LEASING INC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
DPR ALASKA LLC, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
DPR COLORADO LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
DW3 LLC, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
DWC VENTURES LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
FAIRWAY LEASING LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
FIVE STAR FINANCIALS LLC, d/b/a Aaron’s Sales
and Leasing, a Franchisee of Aaron’s, Inc.;
FT GOT THREE LLC, d/b/a Aaron’s Sales and Leasing,
a Franchisee of Aaron’s, Inc.;
GNS & ASSOCIATES INC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
2
GREAT AMERICAN RENT TO OWN INC, d/b/a
Aaron’s Sales and Leasing, a Franchisee of Aaron’s, Inc.;
GREEN RIVER CORP, d/b/a Aaron’s Sales and Leasing,
a Franchisee of Aaron’s, Inc.;
HANSON HOLDING CO, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
HONEY HARBOR INVESTMENTS LLC, d/b/a
Aaron’s Sales and Leasing, a Franchisee of Aaron’s, Inc.;
HOWARD RENTS LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
HPH INVESTMENTS LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
J&L BEACH ENTERPRISES INC, d/b/a Aaron’s Sales
and Leasing, a Franchisee of Aaron’s, Inc.;
J.R. RENTS, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
J.M. DARDEN AND CO, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
JENFOUR LLC, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
JENKINS RENTAL LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
KFJ ENTERPRISES LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
LIFESTYLE FURNITURE LEASING, d/b/a Aaron’s
Sales and Leasing, a Franchisee of Aaron’s, Inc.;
LTL INVESTMENTS LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
MADISON CAPITAL INVESTMENTS INC, d/b/a
3
Aaron’s Sales and Leasing, a Franchisee of Aaron’s, Inc.;
MKW INVESTMENTS INC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
NO THREE PUTTS ENTERPRISES LLC, d/b/a Aaron’s
Sales and Leasing, a Franchisee of Aaron’s, Inc.;
NW FREEDOM CORP, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
POMONA LANE PARTNERS LLC, d/b/a Aaron’s Sales
and Leasing, a Franchisee of Aaron’s, Inc.;
R & DOUBLE K LLC, d/b/a Aaron’s Sales and Leasing,
a Franchisee of Aaron’s, Inc.;
REBCO INVESTMENTS LLC, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
REX NEAL INC, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
ROYAL RENTS INC, d/b/a Aaron’s Sales and Leasing,
a Franchisee of Aaron’s, Inc.;
ROYAL ROCKET RETAIL LLC, d/b/a Aaron’s Sales
and Leasing, a Franchisee of Aaron’s, Inc.;
SHINING STAR, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
SHOWCASE HOME FURNISHINGS INC, d/b/a
Aaron’s Sales and Leasing, a Franchisee of Aaron’s, Inc.;
SULTAN FINANCIAL CORP, d/b/a Aaron’s Sales and
Leasing, a Franchisee of Aaron’s, Inc.;
TANGLEWOOD MANAGEMENT LLC, d/b/a Aaron’s
Sales and Leasing, a Franchisee of Aaron’s, Inc.;
TDS FOODS INC, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
4
TUR INC, d/b/a Aaron’s Sales and Leasing, a Franchisee
of Aaron’s, Inc.;
WATERSHED DEVELOPMENT CORP, d/b/a Aaron’s
Sales and Leasing, a Franchisee of Aaron’s, Inc.;
WGC LLC, d/b/a Aaron’s Sales and Leasing, a
Franchisee of Aaron’s, Inc.;
JOHN DOES (1-45) AARON’S FRANCHISEES
_____________
On Appeal from the United States District Court
for the Western District of Pennsylvania
District Court No. 1-11-cv-00101
District Judge: The Honorable Cathy Bissoon
Argued on January 23, 2015
Before: RENDELL, SMITH, and KRAUSE,
Circuit Judges
(Filed: April 16, 2015)
Leonard A. Davis, Esq.
Andrea S. Hirsch, Esq.
Herman Gerel
230 Peachtree Street
Suite 2260
Atlanta, GA 30303
5
R. Daniel Fleck, Esq.
Mel C. Orchard, Esq.
G. Bryan Ulmer, III, Esq.
The Spence Law Firm
15 South Jackson Street
P.O. Box 548
Jackson, WY 83001
Matthew C. Gaughan, Esq.
Arnold Levin, Esq.
Frederick S. Longer, Esq. [ARGUED]
Levin, Fishbein, Sedran & Berman
510 Walnut Street
Suite 500
Philadelphia, PA 19106
Michelle A. Parfitt, Esq.
Christopher V. Tisi, Esq.
Ashcraft & Gerel
2000 L Street, N.W.
Washington, DC 20036
John H. Robinson, Esq.
Jamieson & Robinson
215 South Grant Street
Casper, WY 82601
Counsel for Appellants
6
Kristine M. Brown, Esq. [ARGUED]
William H. Jordan, Esq.
Thomas C. Pryor, Esq.
Jason D. Rosenberg, Esq.
Alston & Bird
1201 West Peachtree Street
One Atlantic Center
Atlanta, GA 30309
Neal R. Devlin, Esq.
Richard A. Lanzillo, Esq.
Knox, McLaughlin, Gornall & Sennett
120 West Tenth Street
Erie, PA 16501
Steven E. Bizar, Esq.
Landon Y. Jones, Esq.
Buchanan Ingersoll & Rooney
50 South 16th Street
Two Liberty Place, Suite 3200
Philadelphia, PA 19102
Mark R. Lane, Esq.
Donald J. McCormick, Esq.
Dell, Moser, Lane & Loughney
112 Washington Place
Two Chatham Center, Suite 1500
Pittsburgh, PA 15219
7
Timothy N. Lillwitz, Esq.
Todd A. Strother, Esq.
Bradshaw Fowler Proctor & Fairgrave
801 Grand Avenue
Suite 3700
Des Moines, IA 50309
Michael E. Begley, Esq.
Michele L. Braukmann, Esq.
Ross W. McLinden, Esq.
Moulton Bellingham
27 North 27th Street
Crown Plaza, Suite 1900
Billings, MT 59103
James A. McGovern, Esq.
Anthony J. Williott, Esq. [ARGUED]
Marshall, Dennehey, Warner, Coleman
& Goggin
600 Grant Street
2900 U.S. Steel Tower
Pittsburgh, PA 15219
Brian M. Mancos, Esq.
Burns White
106 Isabella Street
Four Northshore Center
Pittsburgh, PA 15212
Counsel for Appellees
8
________________
OPINION
________________
SMITH, Circuit Judge.
Plaintiffs Crystal and Brian Byrd bring this
interlocutory appeal under Rule 23(f) of the Federal
Rules of Civil Procedure. The Byrds brought a putative
class action against Aaron’s, Inc. and its franchisee store
Aspen Way Enterprises, Inc. (collectively “Defendants”),
who they allege violated the Electronic Communications
Privacy Act of 1986 (“ECPA”), 18 U.S.C. § 2511.
Concluding that the Byrds’ proposed classes were not
ascertainable, the District Court denied their motion for
class certification. Because the District Court erred in
applying our ascertainability precedent, we will reverse
and remand.
I.
Aaron’s operates company-owned stores and also
oversees independently-owned franchise stores that sell
and lease residential and office furniture, consumer
electronics, home appliances, and accessories. On July
30, 2010, Crystal Byrd entered into a lease agreement to
rent a laptop computer from Aspen Way, an Aaron’s
franchisee. Although Ms. Byrd asserts that she made full
payments according to that agreement, on December 22,
9
2010, an agent of Aspen Way came to the Byrds’ home
to repossess the laptop on the grounds that the lease
payments had not been made. The agent allegedly
presented a screenshot of a poker website Mr. Byrd had
visited as well as a picture taken of him by the laptop’s
camera as he played. The Byrds were troubled and
surprised by what they considered a significant and
unauthorized invasion of their privacy.
Aspen Way obtained the picture and screenshot
through spyware—a type of computer software—
designed by DesignerWare, LLC and named “PC Rental
Agent.” This spyware had an optional function called
“Detective Mode,” which could collect screenshots,
keystrokes, and webcam images from the computer and
its users. Between November 16, 2010 and
December 20, 2010, the Byrds alleged that this spyware
secretly accessed their laptop 347 times on eleven
different days.1 In total, “the computers of 895
1
The spyware allegedly captured a wide array of
personal information: “credit and debit card numbers,
expiration dates, security codes, pin numbers, passwords,
social security numbers, birth dates, identity of children
and the children’s personal school records, tax returns,
personal health information, employment records, bank
account records, email addresses, login credentials,
answers to security questions and private
communications with health care providers, therapists,
10
customers across the country . . . [had] surveillance
conducted through the Detective Mode function of PC
Rental Agent.” Byrd v. Aaron’s, Inc., No. CIV.A. 11-
101E, 2014 WL 1316055, at *2 (W.D. Pa. Mar. 31,
2014).
The Byrds’ operative class-action complaint
asserts claims against Aaron’s, Aspen Way, more than 50
other independent Aaron’s franchisees, and
2
DesignerWare, LLC. The complaint alleges violations
attorneys, and other confidants.” The record also reveals
what appear to be screenshots of adult-oriented and
active webcam transmissions and conversations of an
intimate nature.
The spyware, as described in the Byrds’ complaint,
was Orwellian-like in that it guaranteed that “[t]here was
of course no way of knowing whether you were being
watched at any given moment,” George Orwell, 1984, at
3 (Signet Classics 1950), because Aspen Way’s corporate
intranet (and Aaron’s corporate server by proxy)
apparently activated the PC Rental Agent’s Detective
Mode “whenever they wanted to.” Id.
2
On March 20, 2012, the District Court issued an
order noting that DesignerWare filed for bankruptcy in
the U.S. Bankruptcy Court for the Western District of
Pennsylvania. Accordingly, the District Court ordered
that no action be taken against DesignerWare and that the
case be administratively closed as to that defendant.
11
of and conspiracy to violate the ECPA, common law
invasion of privacy, and aiding and abetting. On
Defendants’ motion to dismiss, the District Court
dismissed the claims against all Aaron’s franchisees other
than Aspen Way for lack of standing and also all claims
for common law invasion of privacy, conspiracy, and
aiding and abetting. Thus, the Byrds’ remaining claims,
and those of the class, are against Aaron’s and Aspen
Way for direct liability under the ECPA.
In the meantime, the Byrds moved to certify the
class under Federal Rules of Civil Procedure 23(b)(2)
and 23(b)(3), in which the Byrds provided two proposed
classes and one alternative proposed class.3 In briefing
3
In the motion for class certification, the Byrds
proposed the following classes:
Class I (against Aaron’s Inc. for direct liability
under ECPA) –
All persons residing in the United
States, who have purchased, leased, rented
or rented to own, Aaron’s computers and
individuals who used said computers whose
personal information, electronic
communications and/or images were
intercepted, used, disclosed, accessed,
monitored and/or transmitted via PC Rental
Agent or other devices or software without
the customers [sic] authorization.
12
Class II (against Aaron’s Inc., Aspen Way, and all
other Franchisee Defendants for direct liability under
ECPA, invasion of privacy, conspiracy, and aiding and
abetting) –
All customers of the Aaron’s
Defendants who reside in the United States,
who have purchased, leased, rented or rented
to own, Aaron’s computers and individuals
who used said computers whose personal
information, electronic communications
and/or images were intercepted, used,
disclosed, accessed, monitored and/or
transmitted by the Aaron’s Defendants via
PC Rental Agent or other devices or
software without the customers [sic]
authorization.
Byrd, 2014 WL 1316055, at *4. The Byrds also set forth
an alternative class definition for Class II as:
Class II (against Aaron’s Inc., and Aspen Way for
direct liability under the ECPA, invasion of privacy,
conspiracy, and aiding and abetting (under Wyoming
law)) –
All persons residing in the United
States, who have purchased, leased, rented
or rented to own, Aaron’s computers from
Aspen Way Enterprises, Inc., d/b/a Aarons
Sales and Leasing, and individual[s] who
13
the motion, the Byrds proposed the following alternative
class definitions:
Class I – All persons who leased and/or
purchased one or more computers from
Aaron’s, Inc., and their household members,
on whose computers DesignerWare’s
Detective Mode was installed and activated
without such person’s consent on or after
January 1, 2007.
Class II – All persons who leased and/or
used said computers whose personal
information, electronic communications
and/or images were intercepted, used,
disclosed, accessed, monitored and/or
transmitted by Aspen Way and/or Aaron’s
via PC Rental Agent or other devices or
software without the customers [sic]
authorization.
Id. It is worth noting that the Byrds’ revised
proposed class definitions did not expressly require
an electronic communication to be “intercepted,”
although that is a necessary element in
successfully proving their ECPA claims. See 18
U.S.C. §§ 2511, 2520(a).
14
purchased one or more computers from
Aaron’s, Inc. or an Aaron’s, Inc. franchisee,
and their household members, on whose
computers DesignerWare’s Detective Mode
was installed and activated without such
person’s consent on or after January 1, 2007.
Byrd, 2014 WL 1316055, at *5.
The Magistrate Judge recommended denying the
Byrds’ motion for certification because the proposed
classes were not ascertainable. Regarding owner and
lessee class members, the Magistrate Judge concluded
that the proposed classes were underinclusive because
they did “not encompass all those individuals whose
information [was] surreptitiously gathered by Aaron’s
franchisees.” Id. The Magistrate Judge also determined
that the classes were “overly broad” because not “every
computer upon which Detective Mode was activated will
state a claim under the ECPA for the interception of an
electronic communication.” Id. Regarding “household
members,” the Magistrate Judge took issue with the fact
that the Byrds did not define the phrase. Id. Further,
although the Byrds stated that the identity of household
members could be gleaned from “public records,” the
Magistrate Judge, citing to Carrera v. Bayer Corp., 727
F.3d 300, 306, 308 (3d Cir. 2013), reasoned that “[i]t
[was] not enough to propose a method by which this
information may be obtained.” Byrd, 2014 WL 1316055,
at *5. The District Court adopted the Report and
15
Recommendation as the opinion of the court over the
Byrds’ objections. The Byrds timely appealed.
II.
The District Court had federal question jurisdiction
under 28 U.S.C. § 1331. We have jurisdiction under 28
U.S.C. § 1292(e) and Federal Rule of Civil
Procedure 23(f). “We review a class certification order
for abuse of discretion, which occurs if the district
court’s decision rests upon a clearly erroneous finding of
fact, an errant conclusion of law or an improper
application of law to fact.” Grandalski v. Quest
Diagnostics Inc., 767 F.3d 175, 179 (3d Cir. 2014)
(quoting Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349,
354 (3d Cir. 2013)) (internal quotation marks omitted).
We review de novo a legal standard applied by a district
court. Carrera, 727 F.3d at 305.
III.
The central question in this appeal is whether the
District Court erred in determining that the Byrds’
proposed classes were not ascertainable. Because the
District Court confused ascertainability with other
relevant inquiries under Rule 23, we conclude it abused
its discretion and will vacate and remand.
Before discussing these errors, however, we
believe it is necessary to address the scope and source of
16
the ascertainability requirement that our cases have
articulated. Our ascertainability decisions have been
consistent and reflect a relatively simple requirement.
Yet there has been apparent confusion in the invocation
and application of ascertainability in this Circuit.
(Whether that is because, for example, the courts of
appeals have discussed ascertainability in varying and
distinct ways,4 or the ascertainability requirement is
4
For example, some of our sister courts of appeals
have interspersed their analysis of ascertainability, or
“identifiability,” with explicit Rule 23 requirements. See,
e.g., Colo. Cross Disability Coal. v. Abercrombie &
Fitch Co., 765 F.3d 1205, 1215 (10th Cir. 2014)
(discussing ascertainability and numerosity
simultaneously); Romberio v. Unumprovident Corp., 385
F. App’x 423, 431 (6th Cir. 2009) (unpublished)
(discussing ascertainability but reversing class
certification based on lack of typicality); In re Initial
Pub. Offerings Sec. Litig., 471 F.3d 24, 44-45 (2d Cir.
2006) (discussing ascertainability and predominance
simultaneously, although noting they are separate
inquiries), decision clarified on denial of reh’g sub nom.
In re Initial Pub. Offering Sec. Litig., 483 F.3d 70 (2d
Cir. 2007); Oshana v. Coca-Cola Co., 472 F.3d 506, 514
(7th Cir. 2006) (discussing identifiability—the Seventh
Circuit’s approximation of the “ascertainability”
standard—in conjunction with the typicality
requirement).
17
Conversely, others have framed ascertainability as
requiring that there be an “objective standard” to
determine whether class members are included in or
excluded from the class without reference to any
particular portion of Rule 23. See, e.g., EQT Prod. Co. v.
Adair, 764 F.3d 347, 358–60 (4th Cir. 2014) (explaining
the Fourth Circuit’s implicit “readily identifiable”
requirement for a proposed class is the same as our
Circuit’s “ascertainability” requirement, without
discussing the source of the standard); In re Deepwater
Horizon, 739 F.3d 790, 821 (5th Cir. 2014) (requiring a
class to be “adequately defined and clearly ascertainable”
(citation and internal quotation marks omitted)), cert.
denied sub nom. BP Exploration & Prod. Inc. v. Lake
Eugenie Land & Dev., Inc., 135 S. Ct. 754 (2014);
Matamoros v. Starbucks Corp., 699 F.3d 129, 139 (1st
Cir. 2012) (discussing only that the “presence of such an
objective criterion overcomes the claim that the class is
unascertainable”); Little v. T-Mobile USA, Inc., 691 F.3d
1302, 1308 (11th Cir. 2012) (mentioning ascertainability
but ruling under Rule 23(b)(3)’s predominance standard);
Oshana, 472 F.3d at 513–14 (applying an
“identifiab[ility]” standard without discussing the source
of the rule); Shook v. El Paso Cnty., 386 F.3d 963, 972
(10th Cir. 2004) (noting an “identifiability” requirement
for 23(b)(3) classes but declining to apply the standard to
a Rule 23(b)(2) class).
18
implicit rather than explicit in Rule 23,5 we need not
Even the citations we relied upon in Marcus v.
BMW of North America, LLC, to discuss the policy
rationales behind ascertainability, 687 F.3d 583, 593 (3d
Cir. 2012), failed to address squarely the undergirding for
this implicit requirement. See, e.g., Xavier v. Philip
Morris USA, Inc., 787 F. Supp. 2d 1075, 1089 (N.D. Cal.
2011) (relying in part on our decision in Newton v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d
154, 191–93 (3d Cir. 2001), which in fact analyzed a
proposed class under Rule 23(b)(3) and the superiority
requirement); Sanneman v. Chrysler Corp., 191 F.R.D.
441, 446 & n.9 (E.D. Pa. 2000) (blending the issue of
ascertainability with class definition and cross-
referencing a later discussion on predominance and
superiority); Federal Judicial Center, Manual for
Complex Litigation § 21.222 (4th ed. 2004) (citing to
Rule 23(c)(2)’s requirement that class members in a Rule
23(b)(3) action receive the “best notice practicable”).
5
Ascertainability is an “essential prerequisite,” or
an implied requirement, of Rule 23, “at least with respect
to actions under Rule 23(b)(3).” Marcus, 687 F.3d
at 592–93. Marcus identified “important objectives,” id.
at 593, or policy rationales, supporting the
ascertainability requirement. These included removing
administrative burdens that were “incongruous with the
efficiencies expected in a class action,” providing the
best notice practicable under Rule 23(c)(2) in a
19
say.) Not surprisingly, defendants in class actions have
seized upon this lack of precision by invoking the
ascertainability requirement with increasing frequency in
order to defeat class certification.6
We seek here to dispel any confusion. The source
Rule 23(b)(3) action, and protecting defendants by
ensuring that those persons ultimately bound by the final
judgment could be clearly identified. Id. at 593. Our
opinion in Carrera expanded on some of the concerns
addressed in Marcus, specifically relating to a
defendant’s “due process right to challenge the proof
used to demonstrate class membership.” 727 F.3d at 307.
6
See, e.g., Class Action Reporter, Courts
Scrutinize Class Certification “Ascertainability,” Vol.
17, Feb. 6, 2015, (explaining that “courts across the
country are increasingly scrutinizing ‘ascertainability’ at
the class certification stage”); Melody E. Akhavan,
Ascertainability Challenge Is Viable Weapon for
Defense, Law360, Nov. 26, 2014,
http://www.law360.com/articles/599335/ascertainability-
challenge-is-viable-weapon-for-defense (“Courts’ focus
on ascertainability has become an increasingly useful tool
for defendants fighting class certification.”); Alida Kass,
Third Circuit Case Could Limit Consumer Class Actions,
N.J. Law Journal, June 25, 2014 (“[T]he Third Circuit
will be a fertile ground for exploring the boundaries of
ascertainability.”).
20
of, or basis for, the ascertainability requirement as to a
Rule 23(b)(3) class is grounded in the nature of the class-
action device itself. In endeavoring to further explain
this concept, we adhere to the precise boundaries of
ascertainability previously iterated in the quartet of cases
we discuss below. The ascertainability requirement as to
a Rule 23(b)(3) class is consistent with the general
understanding that the class-action device deviates from
the normal course of litigation in large part to achieve
judicial economy. See Comcast, 133 S. Ct. at 1432
(discussing generally the nature of the class-action
device). Ascertainability functions as a necessary
prerequisite (or implicit requirement) because it allows a
trial court effectively to evaluate the explicit
requirements of Rule 23. In other words, the independent
ascertainability inquiry ensures that a proposed class will
actually function as a class. This understanding of the
source of the ascertainability requirement takes a
forward-looking view of the administration of the Rule
23(b)(3) class-action device in practice.
A.
The class-action device is an exception to the rule
that litigation is usually “‘conducted by and on behalf of
the individual named parties only.’” Comcast Corp. v.
Behrend, 133 S. Ct. 1426, 1432 (2013) (quoting Califano
v. Yamasaki, 442 U.S. 682, 700–01 (1979)).
Accordingly, the party proposing class-action
certification bears the burden of affirmatively
21
demonstrating by a preponderance of the evidence her
compliance with the requirements of Rule 23. Id. And a
court evaluating a motion for class certification is
obligated to probe behind the pleadings when necessary
and conduct a “rigorous analysis” in order to determine
whether the Rule 23 certification requirements are
satisfied. Id.; In re Hydrogen Peroxide Antitrust Litig.,
552 F.3d 305, 309 (3d Cir. 2008), as amended (Jan. 16,
2009). A plaintiff seeking certification of a Rule
23(b)(3) class must prove by a preponderance of the
evidence that the class is ascertainable.7 Hayes, 725 F.3d
at 354. The rigorous analysis requirement applies
equally to the ascertainability inquiry. Carrera, 727 F.3d
at 306.
The ascertainability inquiry is two-fold, requiring a
plaintiff to show that: (1) the class is “defined with
reference to objective criteria”; and (2) there is “a reliable
7
In Shelton v. Bledsoe, we held that
ascertainability is not a requisite of a Rule 23(b)(2) class.
775 F.3d 554, 559–63 (3d Cir. 2015). The Byrds sought
certification of their proposed classes under both Rule
23(b)(2) and Rule 23(b)(3). Lacking the benefit of our
Shelton decision, the District Court denied certification
without distinguishing between Rule 23(b)(2) and
Rule 23(b)(3). Accordingly, the District Court on
remand should also consider whether the classes may be
separately certified under Rule 23(b)(2).
22
and administratively feasible mechanism for determining
whether putative class members fall within the class
definition.” Id. at 355 (citing Marcus v. BMW of N. Am.,
LLC, 687 F.3d 583, 593–94 (3d Cir. 2012)). The
ascertainability requirement consists of nothing more
than these two inquiries. And it does not mean that a
plaintiff must be able to identify all class members at
class certification—instead, a plaintiff need only show
that “class members can be identified.” Carrera, 727
F.3d at 308 n.2 (emphasis added). This preliminary
analysis dovetails with, but is separate from,
Rule 23(c)(1)(B)’s requirement that the class-certification
order include “(1) a readily discernible, clear, and precise
statement of the parameters defining the class or classes
to be certified, and (2) a readily discernible, clear, and
complete list of the claims, issues or defenses to be
treated on a class basis.” Wachtel ex rel. Jesse v.
Guardian Life Ins. Co. of Am., 453 F.3d 179, 187–88 (3d
Cir. 2006).
We have on four occasions addressed the
requirement that a Rule 23(b)(3) class be “ascertainable”
in order to be certified. Our quartet of cases began with
Marcus v. BMW of North America, LLC, in which we
adopted this implicit ascertainability requirement. 687
F.3d at 592–94. We explained, “If class members are
impossible to identify without extensive and
individualized fact-finding or ‘mini-trials,’ then a class
action is inappropriate.” Id. at 593. We concluded that
23
the proposed class “raise[d] serious ascertainability
issues,” largely because the plaintiffs could not identify
cars with the allegedly defective run-flat tires. Id. at 593.
The defendants did not maintain records that would
demonstrate whether a putative class member’s run-flat
tires “‘ha[d] gone flat and been replaced,’ as the class
definition require[d],” and the plaintiffs had not proposed
“a reliable, administratively feasible alternative” to
identify class members. Id. at 594.
Shortly thereafter, in Hayes v. Wal-Mart Stores,
Inc., we straightforwardly applied the ascertainability
rule established by Marcus and remanded the case to the
district court to apply Marcus’s standard and to allow the
plaintiffs to “offer some reliable and administratively
feasible alternative that would permit the court to
determine” whether the class was ascertainable. 725
F.3d at 355. That same month, we decided Carrera v.
Bayer Corp., an appeal involving the proposed
certification of a “class of consumers who purchased
Bayer’s One-A-Day WeightSmart diet supplement in
Florida.” 727 F.3d at 303. To prove ascertainability, the
plaintiff proposed using retailer records and class
member affidavits attesting to purchases of the diet
supplement. Id. at 308. Although we opined that retail
records “may be a perfectly acceptable method of
proving class membership,” we noted that the plaintiff’s
proposed retail records did not identify a single purchaser
of the Bayer diet supplement. Id. at 308–09. We
24
therefore rejected the proposed methods of proving
ascertainability.
As to the use of affidavits, we began by explaining
that in Marcus, “[w]e cautioned ‘against approving a
method that would amount to no more than ascertaining
by potential class members’ say so.’” Id. at 306 (quoting
Marcus, 687 F.3d at 594). We rejected the plaintiff’s
proposed methodology to screen out false affidavits
because the plaintiff’s expert declaration did not establish
that the “affidavits will be reliable” or “propose a model
for screening claims.” Id. at 311. Remarkably, even the
named plaintiff could not recall whether he had
purchased the diet supplement. Id. at 311 n.9.
We were careful to specify in Carrera that
“[a]lthough some evidence used to satisfy
ascertainability, such as corporate records, will actually
identify class members at the certification stage,
ascertainability only requires the plaintiff to show that
class members can be identified.” Id. at 308 n.2
(emphasis added). Accordingly, there is no records
requirement. Carrera stands for the proposition that a
party cannot merely provide assurances to the district
court that it will later meet Rule 23’s requirements. Id.
at 306. Nor may a party “merely propose a method of
ascertaining a class without any evidentiary support that
the method will be successful.” Id. at 306, 307, 311.
25
Following the Marcus-Hayes-Carrera trilogy, we
again considered the issue of ascertainability in
Grandalski v. Quest Diagnostics Inc., 767 F.3d at 184–
85. There we affirmed the denial of certification of a
Rule 23(b)(3) class on predominance grounds, but noted
that the district court also erred in denying certification
based on ascertainability. Id. at 184–85. We concluded
that the district court’s analysis “conflated
ascertainability with the predominance inquiry.” Id.
at 184. The predominance and ascertainability inquiries
are distinct, we explained, because “‘the ascertainability
requirement focuses on whether individuals fitting the
class definition may be identified without resort to mini-
trials, whereas the predominance requirement focuses on
whether essential elements of the class’s claims can be
proven at trial with common, as opposed to
individualized, evidence.’” Id. (quoting Hayes, 725 F.3d
at 359).
Ascertainability is closely tied to the other relevant
preliminary inquiry we addressed in Marcus, 687 F.3d at
592, that plaintiffs provide a proper class definition, Fed.
R. Civ. P. 23(c)(1)(B). A trial court also needs a class to
be “defined with reference to objective criteria” and
some assurance that there can be “a reliable and
administratively feasible mechanism for determining
whether putative class members fall within the class
definition,” Hayes, 725 F.3d at 355, in order to rigorously
analyze the explicit Rule 23(a) and (b) certification
26
requirements, Comcast, 133 S. Ct. at 1432. When
combined with the separate class-definition requirement
from Wachtel, that a class-certification order contain “a
readily discernible, clear, and precise statement of the
parameters defining the class or classes to be certified,”
453 F.3d at 187–88, district courts have the necessary
tools to determine whether “a party seeking to maintain a
class action” can “‘affirmatively demonstrate his
compliance’ with Rule 23.” See Comcast, 133 S. Ct.
at 1432 (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S.
Ct. 2541, 2551, 180 L. Ed. 2d 374 (2011)).
And after certification, a trial court is tasked with
providing “the best notice that is practicable” to the class
members under Rule 23(c)(2)(B), “‘including individual
notice to all class members who can be identified through
reasonable effort.’” Larson v. AT & T Mobility LLC, 687
F.3d 109, 123 (3d Cir. 2012) (quoting Fed. R. Civ. P.
23(c)(2)(B)). We are “stringent in enforcing th[at]
individual notice requirement.” Id. at 126. The separate
ascertainability requirement ensures that class members
can be identified after certification, Carrera, 727 F.3d at
308 n.2, and therefore better prepares a district court to
“direct to class members the best notice that is
practicable under the circumstances,” Fed. R. Civ. P.
27
23(c)(2)(B); see also Larson, 687 F.3d at 117 n.10, 123–
31 (applying the Rule 23(c)(2)(B) requirement).8
The ascertainability inquiry is narrow. If
defendants intend to challenge ascertainability, they must
be exacting in their analysis and not infuse the
ascertainability inquiry with other class-certification
requirements. As we said in Carrera, “ascertainability
only requires the plaintiff to show that class members can
be identified.” 727 F.3d at 308 n.2. This inquiry will not
8
An additional post-certification concern relates to
the argument by some that the class-action device fails in
its purpose if a judgment or settlement cannot be
executed without resulting in a largely cy pres fund.
E.g., Marek v. Lane, 134 S. Ct. 8, 9 (2013) (Roberts, C.J.,
statement respecting denial of certiorari) (noting
“fundamental concerns surrounding the use of [cy pres]
remedies in class action litigation”); In re Baby Prods.
Antitrust Litig., 708 F.3d 163, 172–74 (3d Cir. 2013)
(upholding limited use of cy pres distributions but
cautioning against largely cy pres funds). Although we
need not address the propriety of cy pres funds in this
case, we do note that the risk of a cy pres fund is reduced,
even if not entirely removed, when a court has
affirmatively concluded that there is “a reliable and
administratively feasible mechanism for determining
whether putative class members fall within the class
definition.” See Hayes, 725 F.3d at 355.
28
be relevant in every case and is independent from the
other requirements of Rule 23.
B.
With this explanation of ascertainability in mind,
we will reverse the District Court for four reasons. First,
the District Court abused its discretion by misstating the
rule governing ascertainability. Second, the District
Court engrafted an “underinclusive” requirement that is
foreign to our ascertainability standard. Third, the
District Court made an errant conclusion of law in
finding that an “overly broad” class was not
ascertainable. And fourth, the District Court improperly
applied the legal principles from Carrera to the issue of
whether “household members” could be ascertainable.
1.
The District Court misstated the law governing
ascertainability by conflating our standards governing
class definition with the ascertainability requirement.
The District Court prefaced its discussion with the
section header “Ascertainability and Defining the Class.”
The District Court then stated the following as the
applicable legal standard:
“As an ‘essential prerequisite’ to the Rule 23
analysis, the Court must consider 1) whether
there is a precisely defined class and
29
2) whether the named Plaintiffs are members
of the class. Marcus v. BMW of North
America, 687 F.3d 583, 596 (3d Cir. 2012) .
. . . At the first step of the analysis,
determining whether there is a precisely
defined class entails two separate and
important elements: ‘first, the class must be
defined with reference to objective criteria’
and ‘second, there must be a reliable and
administratively feasible mechanism for
determining whether putative class members
fall within the class definition.’ Hayes v.
Wal-Mart Stores, Inc., 725 F.3d 349, 355
(3d Cir. 2013).”
Byrd, 2014 WL 1316055, at *3.
Although the District Court is correct that the class
definition requirements are applicable to a class-
certification order, Wachtel, 453 F.3d at 187–88, and that
class definition is a valid preliminary consideration,
Marcus, 687 F.3d at 591–92, it was not the reason the
District Court denied class certification. What the
District Court described as the two requirements for a
“precisely defined class” was in fact the inquiry relevant
to the ascertainability standard. See Hayes, 725 F.3d
at 355. In blending the issue of ascertainability with that
of class definition (which Marcus took pains to address
as separate preliminary inquiries that preceded the Rule
23 analysis, 687 F.3d at 591–94), the District Court erred.
30
Also troubling is the District Court’s discussion of
class membership. Byrd, 2014 WL 1316055, at *3, *6
n.8. The question of “whether the named Plaintiffs are
members of the class” has nothing to do with either the
requirements of a class definition, Wachtel, 453 F.3d at
187–88, or the ascertainability standard, Marcus, 687
F.3d at 592–94. In fact, the District Court’s citation to
Marcus on this point related to its discussion of
numerosity—not class definition or ascertainability. See
Byrd, 2014 WL 1316055, at *3 (citing Marcus, 687 F.3d
at 596 (discussing numerosity)). And although the
District Court generally cited to Hayes, in that case we
addressed “membership” not as relating to
ascertainability and only with regard to whether the
named plaintiff had Article III standing to sue as a class
representative. See Hayes, 725 F.3d at 360–61. In sum,
we conclude that the District Court should have applied
nothing more or less than the ascertainability test that has
been consistently laid out by this Court.
2.
The District Court also abused its discretion in
determining that the proposed classes were not
ascertainable because they were underinclusive. The
District Court reasoned that although the records
provided by Aaron’s “may reveal the computers upon
which Detective Mode was activated and the
owner/lessee of that computer,” the Byrds did “not
provide an administratively feasible way to determine
31
whose information was surreptitiously gathered.” Byrd,
2014 WL 1316055, at *5. For this reason, the District
Court explained, the proposed “class definition [did] not
encompass all those individuals whose information ha[d]
been surreptitiously gathered by Aaron’s franchisees.”
Id. But the District Court was looking to an old, no-
longer-operative class definition, see supra, n.3, because
the Byrds had redefined the proposed classes by
eliminating the requirement that a class member’s
information was “intercepted” or “surreptitiously
gathered.”9 Thus, the District Court’s analysis was not
germane to the Byrds’ proposed class definitions or the
relevant bases for class membership.
9
The ECPA permits any person to bring a civil
action “whose wire, oral, or electronic communication is
intercepted, disclosed, or intentionally used in violation
of this chapter.” 18 U.S.C. § 2520(a); see also id. §
2511. The Byrds’ operative complaint alleges that the
PC Rental Agent “allows its installer (here, the rent-to-
own store) to remotely and surreptitiously build and
activate the ‘Detective Mode’ function on the laptop over
the Internet and through the Aaron’s Inc. and
DesignerWare websites.” Byrd, 2014 WL 1316055, at
*2. The relevant statutory terms were discussed because
the District Court observed that “not all information
gathered surreptitiously will constitute an ‘interception’
of the ‘contents’ of an ‘electronic communication’” by
the PC Rental Agent. Id.
32
Defendants contend that “underinclusiveness” was
an appropriate consideration in support of the denial of
class certification. They rely on a district court decision,
Bright v. Asset Acceptance, LLC, 292 F.R.D. 190, 197
(D.N.J. 2013), to support their argument. But “whether
the defined class specifies a particular group that was
harmed during a particular time frame, in a particular
location, in a particular way,” Bright, 292 F.R.D. at 197
(emphasis added), is not included in our ascertainability
test. Further, requiring such specificity may be
unworkable in some cases and approaches requiring a
fail-safe class. See Messner v. Northshore Univ.
HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012)
(explaining that a fail-safe class is “one that is defined so
that whether a person qualifies as a member depends on
whether the person has a valid claim”). Defining the
class “in terms of the legal injury,” In re Nexium
Antitrust Litig., 777 F.3d at 22, is not the same as
requiring the class to be defined “with reference to
objective criteria.” See Hayes, 725 F.3d at 355.
We decline to engraft an “underinclusivity”
standard onto the ascertainability requirement.
Individuals who are injured by a defendant but are
excluded from a class are simply not bound by the
outcome of that particular action. Cf., e.g., Taylor v.
Sturgell, 553 U.S. 880, 884, 894 (2008) (“Representative
suits with preclusive effect on nonparties include
properly conducted class actions.”); United States v.
33
Mendoza, 464 U.S. 154, 158 n.3 (1984) (“Under res
judicata, a final judgment on the merits bars further
claims by parties or their privies on the same cause of
action.”). In the context of ascertainability, we have only
mentioned “underinclusivity” with regard to whether the
records used to establish ascertainability were sufficient,
see Hayes, 725 F.3d at 355 (citing Marcus, 687 F.3d at
594), not whether there are injured parties that could also
be included in the class. Requiring a putative class to
include all individuals who may have been harmed by a
particular defendant could also severely undermine the
named class representative’s ability to present typical
claims (Fed. R. Civ. P. 23(a)(3)) and adequately
represent the interests of the class (Fed. R. Civ.
P. 23(a)(4)). The ascertainability standard is neither
designed nor intended to force all potential plaintiffs who
may have been harmed in different ways by a particular
defendant to be included in the class in order for the class
to be certified.
3.
Similarly, the District Court also abused its
discretion in determining that the proposed classes were
not ascertainable because they were “overly broad.” The
District Court concluded that “more problematic for
Plaintiffs is the fact that the alternative definitions are
overly broad” because “[n]ot every computer upon which
Detective Mode was activated will state a claim under the
ECPA for the interception of electronic communication.”
34
Byrd, 2014 WL 1316055, at *5. There was, again, no
reference to our ascertainability precedent or that of any
other court.
Defendants also rely on Bright for the proposition
that a class is not “ascertainable if it is decoupled from
the underlying allegations of harm rendering it . . .
overbroad.” See Bright, 292 F.R.D. at 197. They also
cite myriad cases from other district courts and courts of
appeals to justify the consideration of overbreadth in our
ascertainability standard. Such applications of the
ascertainability standard fuel the precise mistake we
attempted to correct in Grandalski v. Quest Diagnostics
Inc.—that is, injecting the explicit requirements of Rule
23 into the ascertainability standard without actually
analyzing those requirements under the correct portion of
Rule 23. See 767 F.3d at 184 n.5 (“Predominance and
ascertainability are separate issues.”). And at oral
argument, Defendants conceded that the District Court’s
analysis regarding overbreadth was really identifying a
potential predominance problem.
Defendants’ reliance on authority outside this
Circuit does nothing to bolster their argument. For
example, they extensively discuss Oshana v. Coca-Cola
Co., 472 F.3d 506 (7th Cir. 2006), to support the
proposition that an overbroad class is not ascertainable.
In Oshana, the Seventh Circuit considered whether a
class consisting of “all Illinois purchasers of fountain
Diet Coke from March 12, 1999 forward” was certifiable
35
under Rule 23. Id. at 509. The Court required that in
addition to satisfying the Rule 23(a) and (b)
requirements, a “plaintiff must also show . . . that the
class is indeed identifiable as a class.” Id. at 513.
Reasoning that the proposed class could “include
millions who were not deceived and thus have no
grievance under the [Illinois Consumer Fraud and
Deceptive Practices Act],” the Seventh Circuit affirmed
the district court’s determination that the proposed class
was “not sufficiently definite to warrant class
certification.” Id. at 513–14.
The “definiteness” standard from Oshana is
distinguishable from our Circuit’s ascertainability
requirement. The standard applied in the Seventh Circuit
is based on the premise that because “[i]t is axiomatic
that for a class action to be certified a ‘class’ must exist,”
Simer v. Rios, 661 F.2d 655, 669 (7th Cir. 1981), a class
definition must be definite enough for the class to be
ascertained, Alliance to End Repression v. Rochford, 565
F.2d 975, 977 (7th Cir. 1977). In short, the class must be
“indeed identifiable as a class.” Oshana, 472 F.3d at
513. A class may be indefinite where “the relevant
criteria for class membership [is] unknown.” Jamie S. v.
Milwaukee Pub. Sch., 668 F.3d 481, 495 (7th Cir. 2012).
Although this doctrine is similar to the parameters laid
out in our ascertainability cases, it blends together our
Circuit’s ascertainability and class definition
requirements. Compare Oshana, 472 F.3d at 513, with
36
Hayes, 725 F.3d at 355, and Wachtel, 453 F.3d at 187–
88. As we made patent in Marcus, we address class
definition and ascertainability as separate inquiries. 687
F.3d at 591–94.
Defendants also argue that a proposed class is
overbroad “where putative class members lack standing
or have not been injured.” Defendants’ argument
conflates the issues of ascertainability, overbreadth (or
predominance), and Article III standing. We have
explained that the issue of standing is separate from the
requirements of Rule 23. See, e.g., Holmes v. Pension
Plan of Bethlehem Steel Corp., 213 F.3d 124, 135 (3d
Cir. 2000) (“In addition to the requirements expressly
enumerated in Rule 23, class actions are also subject to
more generally applicable rules such as those governing
standing and mootness.”). To the extent Defendants
meant to challenge any potential differences between the
proposed class representatives and unnamed class
members, such differences should be considered within
the rubric of the relevant Rule 23 requirements—such as
adequacy, typicality, commonality, or predominance.
See Grandalski, 767 F.3d at 184–85; see also Holmes,
213 F.3d at 137–38 (discussing an “overbroad” class as
requiring individual determinations that fail to satisfy
Rule 23(b)(3)’s predominance requirement). Conversely,
if Defendants intended to argue that all putative class
members must have standing, such challenges should be
squarely raised and decided by the District Court.
37
Because the District Court has yet to conduct a rigorous
analysis of the Rule 23 requirements, we decline to
address these issues in the first instance.
The Byrds’ proposed classes consisting of
“owners” and “lessees” are ascertainable. There are
“objective records” that can “readily identify” these class
members, cf. Grandalski, 767 F.3d at 184 n.5, because,
as explained by the District Court, “Aaron’s own records
reveal the computers upon which Detective Mode was
activated, as well as the full identity of the customer who
leased or purchased each of those computers.” Byrd,
2014 WL 1316055, at *5. The District Court’s
conclusion to the contrary was an abuse of discretion.
4.
The District Court again abused its discretion in
determining that “household members” were not
ascertainable. The District Court concluded that the
inclusion of the phrase “household members” in the
Byrds’ revised class definitions was vague and not
ascertainable. In the Byrds’ reply brief on the motion for
class-action certification, they asserted in a footnote that
“[h]ousehold members can easily be objectively verified
through personal and public records. And their usage of
the owner/lessee’s computers can also be easily
objectively established.” The Magistrate Judge
recommended denying class certification because the
Byrds did not define “household members” or prove by a
38
preponderance of the evidence how “‘household
members’ can be verified through personal and public
records.”
In their objections to the Magistrate Judge’s
Report and Recommendation, the Byrds argued that they
intended “the plain meaning of ‘household members.’”
On appeal, the Byrds continue to argue that they intended
the plain meaning of “household members” to be “all of
the people, related or unrelated, who occupy a housing
unit.” By way of example, the Byrds cite to multiple
definitions used in government documents for census,
taxation, and immigration purposes. With these
definitions, they contend that the simple act of
confirming membership would mean matching addresses
in public records with that of an owner or lessee that had
already been identified.
The “household members” of owners or lessees are
ascertainable. Although the government documents cited
by the Byrds do contain slight variations on the definition
of a household member (as noted by Defendants), the
Byrds presented the District Court with various ways in
which “household members” could be defined and how
relevant records could be used to verify the identity of
household members. Because the District Court
summarily adopted the Magistrate Judge’s Report and
Recommendation, and no oral argument was held on the
class-certification motion, we are left to wonder why the
District Court determined that the Byrds’ explanation in
39
their objections to the Report and Recommendation was
inadequate.
The parties also dispute whether the phrase
“household members” is often used in class definitions.
Although it is true that the phrase “household members”
has been used in other class definitions,10 we decline the
invitation categorically to conclude that the use of this
phrase will always have sufficient precision in the
ascertainability context. The inquiry in any given case
should be whether a class is “defined with reference to
10
See, e.g., Ortiz, 527 U.S. at 827 n.5 (reversing
the approval of an asbestos settlement class that
happened to include “household member” in the class
definition); Amchem Prods., Inc., 521 U.S. at 602
(analyzing the validity of a class that included
“household members” on grounds other than
ascertainability); Georgine v. Amchem Prods., Inc., 83
F.3d 610, 619 & n.3, 633 (3d Cir. 1996) (including in the
class “occupational exposure of a spouse or household
member to asbestos, or to asbestos-containing products”),
aff’d sub nom. Amchem Prods., Inc. v. Windsor, 521 U.S.
591 (1997); In re Flonase Antitrust Litig., 291 F.R.D. 93,
108 (E.D. Pa. 2013) (settlement class definition that
included “household members”), appeal dismissed (July
25, 2013); Carlough v. Amchem Prods., Inc., 158 F.R.D.
314, 319 (E.D. Pa. 1993) (using a similar definition as
Georgine).
40
objective criteria” and whether there is a “reliable and
administratively feasible mechanism for determining
whether putative class members fall within the class
definition.” Hayes, 725 F.3d at 355. Whether a class is
ascertainable is dependent on the nature of the claims at
issue. But as used here, “household members” is a
phrase that is easily defined and not, as Defendants
argue, inherently vague.
We also conclude that Defendants’ and the District
Court’s reliance on Carrera is misplaced. In Carrera,
we concluded that the plaintiffs’ proposed reliance on
affidavits alone, without any objective records to identify
class members or a method to weed out unreliable
affidavits, could not satisfy the ascertainability
requirement. 727 F.3d at 311. Here the Byrds presented
the District Court with multiple definitions of class
members and simply argued that a form similar to those
provided could be used to identify household members.
This is a far cry from an unverifiable affidavit, or the
absence of any methodology that can be used later to
ascertain class members. See id. at 310–11.
The Byrds’ proposed method to ascertain
“household members” is neither administratively
infeasible nor a violation of Defendants’ due process
rights. Because the location of household members is
already known (a shared address with one of the 895
owners and lessees identified by the Byrds), there are
unlikely to be “serious administrative burdens that are
41
incongruous with the efficiencies expected in a class
action.” Marcus, 687 F.3d at 593 (citation and internal
quotation marks omitted). There will always be some
level of inquiry required to verify that a person is a
member of a class; for example, a person’s statement that
she owned or leased an Aspen Way computer would
eventually require anyone charged with administering the
fund resulting from a successful class action to ensure
that person is actually among the 895 customers
identified by the Byrds. Such a process of identification
does not require a “‘mini-trial,’” nor does it amount to
“‘individualized fact-finding,’” Carrera, 727 F.3d at 307
(quoting Marcus, 687 F.3d at 594), and indeed must be
done in most successful class actions.
Certainly, Carrera does not suggest that no level
of inquiry as to the identity of class members can ever be
undertaken. If that were the case, no Rule 23(b)(3) class
could ever be certified. We are not alone in concluding
that “the size of a potential class and the need to review
individual files to identify its members are not reasons to
deny class certification.” See Young v. Nationwide Mut.
Ins. Co., 693 F.3d 532, 539–40 (6th Cir. 2012)
(collecting cases). To hold otherwise would seriously
undermine the purpose of a Rule 23(b)(3) class to
aggregate and vindicate meritorious individual claims in
an efficient manner. Fed. R. Civ. P. Rule 23(b)(3) 1966
advisory committee’s notes (Rule 23(b)(3) “achieve[s]
economies of time, effort, and expense, and promote[s]
42
uniformity of decision as to persons similarly situated,
without sacrificing procedural fairness or bringing about
other undesirable results.”).
As to Defendants’ contention that their due process
rights would be violated, Carrera counsels that this due
process right relates to the ability to “challenge the proof
used to demonstrate class membership.” 727 F.3d at 307.
Here, the Byrds are not relying solely on unverified
affidavits to establish ascertainability. See id. at 307–08;
Hayes, 725 F.3d at 356 (reasoning that a class is not
ascertainable where “the only proof of class membership
[was] the say-so of putative class members”). Any form
used to indicate a household member’s status in the
putative class must be reconciled with the 895 known
class members or some additional public records.
Defendants are not foreclosed from challenging the
evidence the Byrds propose to use.
In sum, the District Court erred in its application of
Carrera and in concluding that the phrase “household
members” was inherently vague.
C.
In light of the errors discussed above, we will
remand to the District Court to consider the remaining
Rule 23 certification requirements in the first instance.
At oral argument and in their briefs, Defendants urged us
to read the District Court’s ruling as one on
43
predominance, independently review the record in this
case, and conclude that the Byrds’ proposed classes fail
to satisfy Rule 23(b)(3)’s predominance requirement.
Defendants contend that the elements of an ECPA claim,
particularly that each plaintiff must show the interception
of the “contents” of an “electronic communication,”
create insurmountable barriers to proving predominance.
See 18 U.S.C. § 2511(1)(a), (c), (d). Formidable though
these barriers may be, they are not for us to address in the
first instance.
Beginning in General Telephone Co. of Southwest
v. Falcon, 457 U.S. 147, 160–161 (1982), through its
recent decision in Comcast Corp. v. Behrend, 133 S. Ct.
at 1432, the Supreme Court has repeatedly emphasized
the need for a district court to conduct a rigorous analysis
of the evidence in support of certification under Rule 23.
“By their nature, interlocutory appeals are disruptive,
time-consuming, and expensive”; thus, it makes sense to
allow the “district court an opportunity to fine-tune its
class certification order . . . rather than opening the door
too widely to interlocutory appellate review.” Waste
Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 294–95
(1st Cir. 2000) (exercising discretionary authority under
Rule 23(f) in order to give a district court “a better sense
as to which aspects of the class certification decision
might reasonably be open to subsequent
reconsideration”). This is consistent with the narrow, yet
flexible, set of considerations we address in granting a
44
Rule 23(f) petition. See Newton v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 259 F.3d 154, 164–65 (3d Cir.
2001); see also In re Nat’l Football League Players
Concussion Injury Litig., 775 F.3d 570, 578 n.9 (3d Cir.
2014). We best exercise appellate review when the dust
has settled and a district court has fully considered a
motion for class-action certification.
What is more, a close reading of Defendants’
response briefs demonstrates how they continue to
conflate ascertainability with the other relevant
requirements of Rule 23. We write again to emphasize
that at class certification, Rule 23’s explicit requirements
go beyond and are separate from the ascertainability
inquiry. Precise analysis of relevant Rule 23
requirements will always be necessary. We therefore
decline to go beyond the scope of the District Court’s
opinion.
V.
The District Court erred both in relying on an
errant conclusion of law and improperly applying law to
fact. Accordingly, we will reverse and remand for
further consideration in light of this opinion.
45
RENDELL, Circuit Judge, concurring:
I agree with the majority that, under our current
jurisprudence, the class members here are clearly
ascertainable. Indeed, as Judge Smith points out, “Aaron’s
own records reveal the computers upon which Detective
Mode was activated, as well as the full identity of the
customer who leased or purchased each of those computers.”
(Maj. Op. at 37) (quoting Byrd v. Aaron’s, Inc., No. 11-cv-
101, 2014 WL 1316055, at *5 (W.D. Pa. Mar. 31, 2014)). It
is hard to argue otherwise, and I do not. However, I do
suggest that the lengths to which the majority goes in its
attempt to clarify what our requirement of ascertainability
means, and to explain how this implicit requirement fits in the
class certification calculus, indicate that the time has come to
do away with this newly created aspect of Rule 23 in the
Third Circuit. Our heightened ascertainability requirement
defies clarification. Additionally, it narrows the availability
of class actions in a way that the drafters of Rule 23 could not
have intended.
Historically, the ascertainability inquiry related to
whether the court will be able to determine who fits within
the class definition for purposes of award or settlement
distribution and the preclusion of the relitigation of claims.1
It is a test that scrutinizes the class definition, and properly
1
See Manual for Complex Litigation (Fourth) § 21.222
(2004) (“An identifiable class exists if its members can be
ascertained by reference to objective criteria.”); Joseph M.
McLaughlin, McLaughlin on Class Actions § 4:2 (11th ed.
2014) (“[C]lass members need to be able to determine with
certainty from a class notice whether they are in the class. . . .
If the class definition is amorphous, persons may not
recognize that they are in the class, and thus may be deprived
of the opportunity to object or opt out.”); 5 James Wm.
Moore et al., Moore’s Federal Practice ¶ 23.21[1] (3d ed.
1999) (noting that a class must be “susceptible to precise
definition”).
2
so.2 But this is now only the first element of our two-part test
for ascertainability. Marcus v. BMW of N. Am., LLC, 687
F.3d 583, 594 (3d Cir. 2012); see also Hayes v. Wal-Mart
Stores, Inc., 725 F.3d 349, 355 (3d Cir. 2013) (“The class
must be defined with reference to objective criteria.”).
2
Courts have found classes to be ascertainable when the class
definition is sufficiently specific. Compare Parkinson v.
Hyundai Motor Am., 258 F.R.D. 580, 593 (C.D. Cal. 2008)
(holding that prospective plaintiffs are capable of determining
whether they were class members because class definition
included purchasers of a certain vehicle who paid for the
replacement of a certain part in a certain time period), and
Bynum v. District of Columbia, 214 F.R.D. 27, 31-32 (D.D.C.
2003) (holding that prospective class members are capable of
identifying themselves based on the dates of their
incarceration included in the class definition), and Pigford v.
Gickman, 182 F.R.D. 341, 346 (D.D.C. 1998) (holding that
class members are capable of identifying themselves based on
whether they had applied for participation in a USDA federal
farm program during the specified dates), with In re Copper
Antitrust Litig., 196 F.R.D. 348, 350-51, 358-60 (W.D. Wis.
2000) (refusing to certify class of “[a]ll copper or metals
dealers . . . that purchased physical copper” during a specified
time period “at prices expressly related to LME or Comex
copper future prices” because the class definition fell “far
short of communicating to copper purchasers what they need
to know to decide whether they are in or outside the proposed
class,” in that the definition failed to explain the terms
“copper or metals dealers,” “physical copper,” and “expressly
related to”).
3
In 2012 we adopted a second element, namely,
requiring district courts to make certain that there is “a
reliable, administratively feasible” method of determining
who fits into the class, thereby imposing a heightened
evidentiary burden. Marcus, 687 F.3d at 594. We have
precluded class certification unless there can be objective
proof—beyond mere affidavits—that someone is actually a
class member. Id.; accord Carrera v. Bayer Corp., 727 F.3d
300, 308-12 (3d Cir. 2013). This concept has gained traction
in recent years.3 I submit that this “business record” or
3
Several courts have denied class certification on
ascertainability grounds similar to our current ascertainability
test. See, e.g., Randolph v. J.M. Smucker Co., 303 F.R.D.
679, 689 (S.D. Fla. 2014) (denying certification of class suing
defendant for mislabeling product as “All Natural” in
violation of Florida’s deceptive advertising law because
potential class members were unlikely to remember if they
bought a product with such a label); In re Skelaxin
(Metaxalone) Antitrust Litig., 299 F.R.D. 555, 572 (E.D.
Tenn. 2014) (denying certification of class suing drug
manufacturer for violating antitrust laws because plaintiffs
did not propose feasible model for screening fraudulent
claims); Brey Corp. v. LQ Mgmt. LLC, No. 11-cv-718, 2014
WL 943445, at *1 (D. Md. Jan. 30, 2014) (denying
certification of class suing defendant for violating antitrust
laws because ascertaining who belongs in the class would
require individualized fact-finding).
4
“paper trail” requirement is ill-advised.4 In most low-value
consumer class actions, prospective class members are
unlikely to have documentary proof of purchase, because very
few people keep receipts from drug stores or grocery stores.
This should not be the reason to deny certification of a class.5
As Judge Ambro’s dissent from the denial of the petition for
rehearing en banc in Carrera noted, “[w]here a defendant’s
lack of records . . . make it more difficult to ascertain the
members of an otherwise objectively verifiable low-value
class, the consumers who make up that class should not be
made to suffer.” Carrera v. Bayer Corp., No. 12-2621, 2014
WL 3887938, at *3 (3d Cir. May 2, 2014) (Ambro, J.
dissenting).
Records are not the only way to prove that someone is
4
While the majority cites a footnote in Carrera as standing
for the proposition that we have no “records requirement,” the
class in Carrera failed the ascertainability test because there
were no records from which the class members could be
ascertained with certainty. (Maj. Op. at 25 (citing Carrera,
727 F.3d at 308. n.2)).
5
See, e.g., McCrary v. Elations Co., LLC, No. 13-cv-242,
2014 WL 1779243, at *8 (C.D. Cal. Jan. 13, 2014) (“It
appears that pursuant to Carerra [sic] in any case where the
consumer does not have a verifiable record of its purchase,
such as a receipt, and the manufacturer or seller does not keep
a record of buyers, Carerra [sic] prohibits certification of the
class.”); Ries v. Ariz. Beverages USA LLC, 287 F.R.D. 523,
535 (N.D. Cal. 2012) (warning that, if lack of receipts dooms
certification, “there would be no such thing as a consumer
class action” in cases concerning false or deceptive labeling
of small-value items).
5
in a class. It is the trial judge’s province to determine what
proof may be required at the claims submission and claims
administration stage. It is up to the judge overseeing the class
action to decide what she will accept as proof when
approving the claim form. Could not the judge decide that, in
addition to an individual’s “say so” that he is a member of the
class, the claimant needs to submit an affidavit from another
household member or from his doctor corroborating his
assertion that he did, in fact, take Bayer aspirin? Is that not
permissible and appropriate? Yet, we foreclose this process
at the outset of the case by requiring that plaintiffs conjure up
all the ways that they might find the evidence sufficient to
approve someone as a class member.
This puts the class action cart before the horse and
confuses the class certification process, as this case makes
manifest. The irony of this result is that it thwarts “[t]he
policy at the very core of the class action mechanism,” i.e.,
“to overcome the problem that small recoveries do not
provide the incentive for any individual to bring a solo action
prosecuting his or her rights.” Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru
Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)). Indeed,
“[a] class action solves this problem by aggregating the
relatively paltry potential recoveries into something worth
someone’s (usually an attorney’s) labor.” Id. We have
effectively thwarted small-value consumer class actions by
defining ascertainability in such a way that consumer classes
will necessarily fail to satisfy for lack of adequate
6
substantiation.6 Consumers now need to keep a receipt or a
can, bottle, tube, or wrapper of the offending consumer items
in order to succeed in bringing a class action.
6
Small-value consumer class actions certified by district
courts nationwide would not pass muster in our Circuit
because of our heightened ascertainability requirement. See,
e.g., Hughes v. Kore of Ind. Enter., Inc., 731 F.3d 672, 675
(7th Cir. 2013) (reversing district court’s order decertifying
class of consumers who brought action against owners of
automatic teller machines for failing to post notice on
machines that they charged fee for use despite difficulty in
determining which plaintiffs would have been deceived by
lack of notice); Ebin v. Kangadis Food Inc., 297 F.R.D. 561,
567 (S.D.N.Y. 2014) (certifying class of consumers who
claimed defendant placed misleading “All Natural” label on
olive oil bottles even though plaintiffs were unlikely to have
retained receipts or packaging proving membership in class);
Boundas v. Abercrombie & Fitch Stores, Inc., 280 F.R.D.
408, 417 (N.D. Ill. 2012) (certifying class of plaintiffs who
possessed promotional gift cards stating “No expiration date”
that were voided by defendant or told that the cards had
expired or been voided and thrown away cards even though
some class members would only be able to claim class
membership through affidavit); see also Lilly v. Jamba Juice
Co., No. 13-cv-2998, 2014 WL 4652283, at *4 (N.D. Cal.
Sept. 18, 2014) (certifying class of consumers who purchased
frozen smoothie kits containing label “All Natural” where
product allegedly contained various artificial ingredients and
where consumers did not necessarily have proof of purchase);
Allen v. Hylands, Inc., 300 F.R.D. 643, 658-59, 672 (C.D.
Cal. 2014) (certifying class of plaintiffs who purchased
homeopathic products where packaging contained alleged
7
The policy rationales that we cite in support of our
expanded ascertainability requirement are relatively weak
when compared to the significant policy justifications that
motivate the class action mechanism. We have noted three
rationales for our ascertainability requirement: (1) eliminating
administrative burdens “incongruous” with the efficiencies of
a class action, (2) protecting absent class members’ rights to
opt out by facilitating the best notice practicable, and (3)
protecting the due process rights of defendants to challenge
plaintiffs’ proffered evidence of harm. Marcus, 687 F.3d at
593.
misrepresentations even though class members would have to
self-identify without corroborating evidence); Forcellati v.
Hylands, Inc., No. 12-1983, 2014 WL 1410264, at *5, *13
(C.D. Cal. Apr. 9, 2014) (certifying class of plaintiffs who
purchased children’s cold or flu products within a prescribed
time frame despite purchasers’ lack of proof of purchase and
defendants’ lack of records identifying consumers who
purchased their products via retail intermediaries); McCrary,
2014 WL 1779243, at *7-8 (certifying class of purchasers of
dietary joint supplement containing allegedly deceptive label
despite plaintiffs’ lack of proof of purchase); Astiana v. Kashi
Co., 291 F.R.D. 493, 500 (S.D. Cal. 2013) (certifying class of
consumers who purchased cereal and snack products labeled
as “All Natural” or “Nothing Artificial” but which allegedly
contained synthetic ingredients in violation of various false
advertising laws even though plaintiffs unlikely to have
retained receipts or containers); Ries, 287 F.R.D. at 535
(certifying class of consumers who purchased iced tea with
“natural” on label despite plaintiffs’ lack of proofs of
purchase, finding self-identification sufficient for
ascertainability).
8
Eliminating “administrative burdens” really means
short-circuiting the claims process by assuming that when
individuals file claims, they burden the court. But claims
administration is part of every class action. Imposing a proof-
of-purchase requirement does nothing to ensure the
manageability of a class or the “efficiencies” of the class
action mechanism; rather, it obstructs certification by
assuming that hypothetical roadblocks will exist at the claims
administration stage of the proceedings.7
Denying class certification due to concerns about
providing notice to class members makes little sense. Rule 23
requires the “best notice that is practicable under the
circumstances” to potential class members after a class has
been certified.8 Potential difficulties in providing
individualized notice to all class members should not be a
reason to deny certification of a class. As the Supreme Court
noted in Phillips Petroleum Co. v. Shutts, due process is
satisfied when notice is “reasonably calculated” to reach the
defined class. 472 U.S. 797, 812 (1985). The question is not
whether every class member will receive actual individual
notice, but whether class members can be notified of their
opt-out rights consistent with due process. See Dusenbery v.
United States, 534 U.S. 161 (2002) (holding that due process
did not require actual notice to federal prisoner of his right to
contest civil forfeiture, but rather, due process must be
7
See Carnegie v. Household Int’l, Inc., 376 F.3d 656, 661
(7th Cir. 2004) (“[T]here is a big difference from the
standpoint of manageability between the liability and remedy
phases of a class action.”).
8
Fed. R. Civ. P. 23(c)(2)(B).
9
“reasonably calculated” to apprise a party of the pendency of
an action).9
The concerns regarding the due process rights of
defendants are unwarranted as well, because there is no
evidence that, in small-claims class actions, fabricated claims
impose a significant harm on defendants. The chances that
someone would, under penalty of perjury, sign a false
affidavit stating that he or she bought Bayer aspirin for the
sake of receiving a windfall of $1.59 are far-fetched at best.
On the other hand, while most injured individuals will find
that it is not worth the effort to claim the few dollars in
damages that the class action can provide, in the aggregate,
this sum is significant enough to deter corporate misconduct.
Our ascertainability doctrine, by focusing on making
absolutely certain that compensation is distributed only to
those individuals who were actually harmed, has ignored an
equally important policy objective of class actions: deterring
and punishing corporate wrongdoing. As Judge Posner,
writing for the Court of Appeals for the Seventh Circuit,
stated in Hughes v. Kore of Indiana Enterprises, Inc., “when
what is small is not the aggregate but the individual claim . . .
that’s the type of case in which class action treatment is most
needful. . . . A class action, like litigation in general, has a
deterrent as well as a compensatory objective.” 731 F.3d 672,
677 (7th Cir. 2013). The rigorous application of the
ascertainability requirement translates into impunity for
9
See also Girsh v. Jepson, 521 F.2d 153, 159 n.12 (3d Cir.
1975) (“We do not mean to indicate that individual notice
must be given in all cases.”). Furthermore, Rule 23 requires
courts to provide the best practicable notice after a class has
been certified. See Fed. R. Civ. P. 23(c)(2)(B).
10
corporate defendants who have harmed large numbers of
consumers in relatively modest increments.10 Without the
class action mechanism, corporations selling small-value
items for which it is unlikely that consumers would keep
receipts are free to engage in false advertising, overcharging,
and a variety of other wrongs without consequence.
The concerns about defendants’ due process rights are
also overblown because damages liability under Rule 23 is
determined in the aggregate: courts determine the extent of a
defendant’s monetary liability to the entire class. Therefore,
whether an individual can establish membership in that class
does not affect the rights of defendants not to pay in excess of
their liability. Carrera’s concern that allowing undeserving
individuals to claim damages will dilute deserving class
10
As one court has noted,
[a]dopting the Carrera approach would have
significant negative ramifications for the ability
to obtain redress for consumer injuries. Few
people retain receipts for low-priced goods,
since there is little possibility they will need to
later verify that they made the purchase. Yet it
is precisely in circumstances like these, where
the injury to any individual consumer is small,
but the cumulative injury to consumers as a
group is substantial, that the class action
mechanism provides one of its most important
social benefits.
Lilly, 2014 WL 4652283, at *4 (citing Eisen v. Carlisle &
Jacquelin, 417 U.S. 156, 161 (1974)).
11
members’ recoveries is unrealistic in modern day class action
practice, and it makes little sense when used to justify the
wholesale dooming of the small-value class action such that
no injured plaintiff can recover at all. Moreover, this is an
issue to be dealt with in the implementation of a class action
settlement, not in conjunction with ascertaining the class for
purposes of certification. Concerns about claims processing
should not be used to scuttle these types of class actions
altogether.
The policy concerns animating our ascertainability
doctrine boil down to ensuring that there is a surefire way to
get damages into the hands of only those individuals who we
can be 100% certain have suffered injury, and out of the
hands of those who may not have. However, by disabling
plaintiffs from bringing small-value claims as a class, we
have ensured that other policy goals of class actions—
compensation of at least some of the injured and deterrence of
wrongdoing, for example—have been lost. In small-claims
class actions like Carrera, the real choice for courts is
between compensating a few of the injured, on the one hand,
versus compensating none while allowing corporate
malfeasance to go unchecked, on the other. As such, where
there are small-value claims, class actions offer the only
means for achieving individual redress. As the Supreme
Court stated in Eisen, when individual damages are so low,
“[e]conomic reality dictates that petitioner’s suit proceed as a
class action or not at all.” 417 U.S. at 161. The concern that
we are defeating what is at the “core” of what the class action
was designed to accomplish is very real. As Judge Rakoff
noted in certifying a class over objections regarding
ascertainability based on receipts or documentation:
12
[T]he class action device, at its very core, is
designed for cases like this where a large
number of consumers have been defrauded but
no one consumer has suffered an injury
sufficiently large as to justify bringing an
individual lawsuit. Against this background, the
ascertainability difficulties, while formidable,
should not be made into a device for defeating
the action.
Ebin v. Kangadis Food Inc., 297 F.R.D. 561, 567 (S.D.N.Y.
2014). While a rigorous insistence on a proof-of-purchase
requirement, which our heightened ascertainability
jurisprudence has imposed, keeps damages from the
uninjured, it does an equally effective job of keeping damages
from the truly injured as well, and “it does so with brutal
efficiency.”11
Therefore, while I concur in the judgment, I suggest
that it is time to retreat from our heightened ascertainability
requirement in favor of following the historical meaning of
ascertainability under Rule 23. I would therefore reverse the
District Court’s ruling, and hold that (1) hereafter, our
ascertainability analysis will focus on class definition only,
and (2) the District Court’s analysis regarding the second
prong of our ascertainability test was unnecessary. We thus
would instruct the District Court to proceed to determine
whether the class can be certified under the traditional
mandates of Rule 23. Until we revisit this issue as a full
11
Myriam Gilles, Class Dismissed: Contemporary Judicial
Hostility to Small-Claims Consumer Class Actions, 59
DePaul L. Rev. 305, 308 (2010).
13
Court or it is addressed by the Supreme Court or the Advisory
Committee on Civil Rules, we will continue to administer the
ascertainability requirement in a way that contravenes the
purpose of Rule 23 and, in my view, disserves the public.
14