New Jersey court rejects ascertainabilty requirement for class actions

Daniels v. Hollister Co., — A.3d —-, 2014 WL 8808428, No.
A–3629–13T3 (N.J. Super. Ct. App. Div. May 13, 2015)
Of interest
because it’s a state court within the Third Circuit rejecting that circuit’s
view of “ascertainability” in class actions. 
In fact, the court holds, ascertainability “must play no role in considering the certification
of a low-value consumer class action” (emphasis added).  This is a class action about gift cards.
In New Jersey, in the context of consumer transactions,
“class actions should be liberally allowed … under circumstances that would
make individual actions uneconomical to pursue.” This policy furthers the
creation of an “even playing field” for small claims.  In this case, “over $3,000,000 worth of $25
gift cards were voided,” and “numerosity, commonality, typicality, and adequacy
of representation” were concededly present.
Hollister argued that certifying the class violated due
process because it wouldn’t be able to test class members; absent class members
couldn’t opt out; and the preclusive effect of any judgment would be unknowable
and unenforceable.  But pre-certification
ascertainability wasn’t a condition for certification, as long as the contours
of the class were clearly defined. Ascertainability wasn’t a requirement of the
New Jersey cases, and “federal experimentation with the ascertainability
doctrine seems far from over and, indeed, this doctrinal wave may have broken
before ever cresting.”  Even the Third
Circuit seems unsettled on the issue. 
The concerns expressed by Judge Ambro’s dissent in Carrera (adopting the requirement) and Judge Rendell’s concurrence
in Byrd (limiting the requirement)
were more in tune with New Jersey class action policy.  The whole point of the class action mechanism
is to aggregate claims to make them easier to bring—or bringable at all. “[W]hen
the concept of ascertainability is applied inflexibly it becomes a device that
serves to burden or eliminate nascent class actions without providing any
societal benefit.”  The equitable roots
of the class action mechanism shouldn’t be overlooked.
Ascertainability was “particularly misguided when applied to
a case where any difficulties encountered in identifying class members are a
consequence of a defendant’s own acts or omissions.”  After all, if Hollister had obtained the
identities of consumers when giving out $25 gift cards, it wouldn’t have an
ascertainability problem.  Ultimately,
ascertainability didn’t help the fair and efficient administration of
justice.  “[T]he Third Circuit’s
experiences suggest the doctrine is practically unworkable in application and
is being exploited by defendants in unsuitable cases to evade liability.”
Even if ascertainability were relevant, it wouldn’t pose an
obstacle to class certification, but would only be a matter for claims
administration. Any future identification problems could be overcome with some
ingenuity.  Members in possession of
cancelled gift cards should probably not need to do anything other than present
the card.  Members who discarded a gift
card “because they were told that the cards expired or had been voided” “may
need to show more, perhaps through submission of an affidavit; it has not been
shown, however, how such a process unfairly hampers the defense.”
Though there were legitimate concerns about the preclusive
effect of a judgment when class membership is uncertain, those concerns were
outweighed by the benefits provided by class status, at least in low value
consumer class actions.

from Blogger

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