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October 1, 2015 by Kyle A. ShambergDownload PDF


Looking Out For the Little Claim: Mullins v. Direct Digital and Consumer Class ActionsKyle A. Shamberg

Consumers seeking to pursue small-individual, large-aggregate class actions have been confronted time and again with the dreaded “A” word: Ascertainability. Not that the word itself is imposing or even unfair; all it means is that, for a class action to be appropriate, there needs to be a reasonable way of figuring out who fits within the definition of the class and who doesn’t based on some sort of objective criteria. For example, “people who purchased Product X between January 2011 and January 2014” would work, whereas “people who think Product X is really cool” would not. Seems fairly straightforward, right?

Yet some courts, particularly in the last few years, have stretched this ascertainability requirement beyond its logical function, requiring consumers not only to define an ascertainable class but to set out, at a fairly early stage, precise method for identifying the exact individuals who make up the class. 

In a consumer class action, the prototypical method would be through receipts documenting the purchase of a certain product. The problem, of course, is that most consumers don’t hold on to receipts for years after making a relatively small purchase, and defendants do not maintain records of everyone who purchases their products. This “heightened ascertainability” standard, then, has the practical impact of entirely eliminating the class action as a means of protecting consumers in cases where any one individual’s damages might be small but the class as a whole has suffered damages adding up to tens of millions of dollars. A corporation that understands this would know it could reap a windfall by fraudulently marketing or defectively designing a small-ticket consumer good while essentially being immunized from any liability (because who is going to bring an individual lawsuit over a $10 item?). 

Enter Mullins v. Direct Digital LLC. In Mullins, the Seventh Circuit recognized the troubling implications of the heightened ascertainability requirement, noting that it can (and has) been used to “erect a nearly insurmountable hurdle at the class certification stage in situations where a class action is the only viable way to pursue valid but small individual claims.” The court rejected the approach, holding that courts should not “let a quest for perfect treatment of one issue become a reason to deny class certification and with it the hope of any effective relief at all.”

Mullins was a consumer fraud class action brought against the manufacturer of Instaflex Joint Support alleging that there was no scientific support for claims regarding the product’s ability to relieve joint discomfort. The trial court granted the plaintiffs’ motion to certify a class composed of consumers “who purchased Instaflex within the applicable statute of limitations in the respective Class States for personal use until the date notice is disseminated.” After Direct Digital appealed the ruling, the Seventh Circuit upheld it. 

As discussed above, and in light of the traditional understanding of what it means for a class to be “ascertainable,” the appellate court placed the emphasis squarely on the adequacy of the class definition without reference to whether class members could actually be identified through reliable methods at that point. The Seventh Circuit limited so-called “unascertainable” classes to three types of situations: (1) classes that are defined too vaguely to satisfy the “clear definition” component; (2) classes that are defined by subjective criteria, i.e., a person’s state of mind, so as to fail the objectivity requirement; and (3) so-called “fail-safe” classes, in which class membership depends upon prevailing on the merits of the cause of action asserted by the plaintiffs. 

Now, logically speaking, there still must be some ultimate method to identify class members, and the court did not ignore this. In the simple case, when class members’ names and addresses are known or knowable with reasonable effort, notice can be accomplished through first-class mail. However, even when this is not possible (as was the case in Mullins), the Seventh Circuit recognized that “courts may use alternative means such as notice through third parties, paid advertising, and/or posting in places frequented by class members, all without offending due process.” This is a sensible approach that does not allow the inherent imperfections in class member identification to eliminate any chance of relief for all class members in these kinds of cases.

While the Mullins decision is a major win for consumers, it is certainly not the end of the road. The consumer class action continues to take fire from conservative courts and well-funded special interest groups. But it’s good to know the Seventh Circuit, at least, is looking out for the little guy.