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March 9, 2015Download PDF

No Room for the Third Circuit's Ascertainability Requirement under New Jersey's Class Action Rules

In Carrera v. Bayer, 727 F.3d 300 (3d Cir. 2013), the Third Circuit set a new bar for class certification under Rule 23 of the Federal Rules of Civil Procedure: classes may not be certified unless individual class members can be identified. This requirement that class members be identifiable—also known as the ascertainabilityrequirement—has become “a subject of much discussion” and has not only left judges on the Third Circuit at odds on the issue, but even has the Rule 23 Subcommittee to the Advisory Committee on Civil Rules waffling on what its place in the federal rules should be.  (Compare the Subcommittee’s October 2014 report wherein consideration of the requirement “warrant[s] making the effort” with its December 2014 report wherein the Subcommittee shifts the inquiry: “[I]s there both reason and opportunity to address [ascertainability] by new rule text?”). 

Yet, despite the appearance of “ascertainability” in opinions across the country, the term remains absent in reported opinions in New Jersey.  Since “ascertainability” first gained prominence in Third Circuit lexicon, no reported case in New Jersey has cited Carrera or its precursor Marcus v. BMW, 687 F.3d 583 (3d Cir. 2012), to discuss the ascertainability requirement. 

Although New Jersey appellate courts have yet to chime in, it is worth noting that requiring class members to be identifiable prior to class certification does not seem to fit in New Jersey class action law.  As first recognized in Gallano v. Running, 139 N.J. Super. 239 (Law Div. 1976), certif. denied, 75 N.J. 600 (1978), nowhere in New Jersey’s class certification requirements do the Court Rules require every class member to be identified—or even identifiable—by name.

Second, the New Jersey Court Rules provide courts with a mechanism for adjudicating claims on a class wide basis when class members cannot be readily identified.  Rule 4:32-2(c) expressly permits a court to “confer benefits upon a fluid class, whose members may be, but need not have been members of the class in suit.”  The Rule authorizes courts to certify a class even where it would be highly impracticable, if not impossible, to distribute the judgment, including in situations where class members cannot be identified feasibly.  In the only reported case addressing Rule 4:32-2(c), the Appellate Division in Muise v GPU, Inc., 371 N.J. Super. 13 (App. Div. 2004), recognized that the Rule applies in situations where original class members cannot be located because it ensures that a culpable class action defendant cannot “‘walk[] away from the litigation scot-free’” simply because the class members cannot be identified by name. 

The Supreme Court’s concern with culpable defendants effectively being conferred immunity is one ingrained in New Jersey’s class action jurisprudence.  In Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88 (2007), the Court recognized that “[w]hen one inflicts minor harm across a dispersed population, the defendant is, as a practical matter, immune from liability unless a class is certified . . . .  This Court, therefore, has been hesitant to provide defendants procedural shelter through a restrictive reading of the class-action rule.” 

The Court’s concern has guided its decision in the context of consumer class actions.  In Lee v. Carter-Reed Co., LLC, 203 N.J. 496 (2010), the Court warned that at times valid consumer fraud claims could go “unredressed,” because the perpetrator of that fraud could wield enormous economic power.  In addressing its worry, the Court recognized that class actions grant vulnerable class members “access to the courthouse.” In fact, in Lee, the Court ordered that a class be certified in a false-advertising case involving small cash purchases of over-the-counter diet pills bought from third party retailers even though potential class members were not individually identifiable.  (By comparison, Carrera was a consumer class action claiming deceptive labeling of a Bayer diet supplement.). 

Fluid recovery’s place in New Jersey class action law, and the absence of any ascertainability requirement, squares with New Jersey class action precedent that requires Rule 4:32-1, et seq., to be liberally construed to allow class actions to proceed:

New Jersey courts, as well as federal courts construing the federal class action rule after which our rule is modelled [sic], have consistently held that the class action rule should be liberally construed.  Delgozzo v. Kenny, 226 N.J. Super. 169, 179, (App. Div. 1993) (collecting cases); see also Varacallo v. Mass. Mut. Life Ins. Co., 332 N.J. Super. 31, 45 (App. Div. 2000) (holding, in consumer context, that “class actions should be liberally allowed . . . under circumstances that would make individual actions uneconomical to pursue”).  Accordingly, a class action “should lie unless it is clearly infeasible.”  Riley v. New Rapids Carpet Ctr., 61 N.J. 218, 225 (1972); see also Esplin v. Hirschi, 402 F.2d 94, 99 (10th Cir. 1968) (“[I]f there is to be an error made, let it be in favor and not against the maintenance of the class action.”), cert. denied, 394 U.S. 928 (1969).

Iliadis, 191 N.J. at 103 (“[sic]” original) (emphasis added).  For further reading on New Jersey’s liberally construed class action law, check out Philip Stephen Fuoco & Joseph A. Osefchen’s “Leveling the Playing Field in the Garden State: A Guide to New Jersey Class Action Case Law,” 37 Rutgers L. J. 399 (2006).