United States: California Appellate Court Upholds Denial Of Class Certification On Ascertainability Grounds

On December 4, 2017, a panel of the California Court of Appeal unanimously affirmed a trial court's denial of class certification for alleged violations of California's unfair competition, consumer protection, and false advertising laws. In so doing, the court upheld the lower court's conclusions that the proposed class for Plaintiff's UCL and FAL claims was not ascertainable and that common questions did not predominate among class members for the CLRA claim.

Case background. Plaintiff James Noel alleged that an inflatable kid's swimming pool purchased at Defendant's drugstore was smaller than it appeared on the pool's packaging box. The box also displayed the pool's dimensions, which Noel did not contend were inaccurate. He sued the drugstore on behalf of all consumers who had purchased the pool, claiming violations of California's unfair competition, consumer protection, and false advertising laws.

The trial court denied Noel's motion for class certification, finding that the proposed class for the UCL and FAL claims was not ascertainable because Noel failed to establish that the other purchasers of the pool could be identified. The court further concluded that common questions did not predominate as to the CLRA claim. The court reasoned that some members of the class may not have relied on the picture of the pool on the packaging box but instead looked to the advertised pool dimensions. This prevented the questions of reliance and causation from being litigated on a classwide basis.

Absent class members not ascertainable under UCL and FAL classes. On appeal, Noel insisted the proposed class was ascertainable because his class definition was clear: "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." But the court explained that the class definition was "beside the point"; the problem was that Noel adduced no evidence of records through which to identify class members, as required by Sotelo v. Medianews Group, Inc., 207 Cal. App. 4th 639 (2012). "While Noel was not required to actually identify the 20,000-plus individuals who bought pools," the panel explained, "his failure to come up with any means of identifying them was a legitimate basis for denying class certification." The court attributed this failure to Noel's premature filing of the class certification motion without first taking sufficient discovery to learn what records could be used to identify the purchasers.

The court recognized that its reasoning existed in tension with another recent Court of Appeal decision, Aguirre v. Amscan Holdings, Inc., 234 Cal.App.4th 1290 (2015). According to the court, Aguirre held that a class plaintiff need not establish a means of identifying absent class members at the class certification stage; rather, the method for identifying class members need only be set forth at the remedial stage when it becomes necessary to prove class membership or damages. The court disagreed with Aguirre: "To ignore the issue of identifying class members for notice purposes gives short shrift to due process considerations in play at the certification stage." While recognizing that some class actions must ultimately dispense with personal notice, the court preferred a "more pragmatic and flexible approach" to class certification that leaves the trial court discretion to determine whether a method for identifying absent class members must be established during class certification proceedings.

Common issues did not predominate for CLRA class. Noel next argued that the trial court erred in finding that class issues did not predominate over individual issues for the CLRA claim. In affirming the trial court's denial of class certification, the Court of Appeal explained that Noel had to establish that the misrepresentation would have been material to any reasonable person; otherwise, the issues of reliance and causation would vary among consumers and thus would not be subject to common proof. The court found reasonable the trial court's conclusion that some consumers may have relied on the advertised dimensions instead of on the pictures on the pool's packaging.

Denial of a continuance. At the class certification hearing, Noel's counsel requested the opportunity to conduct further discovery so that he could more fully develop facts to support his motion. On appeal, Noel argued the trial court erred in denying his request, citing the general rule that continuances should be liberally granted. The court rejected this argument, succinctly explaining that "Noel's counsel was in control of the litigation; no one forced him to file a premature class certification motion."

Takeaways. The Court of Appeal summarized the case's takeaway: "What occurred here provides an object lesson in the risks of brushing the issue [of ascertainability] aside in connection with class certification and leaving it to be addressed at the conclusion of the proceedings." A plaintiff who fails to take sufficient discovery prior to moving for class certification may be unable to show how absent class members can be identified.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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