Monday, February 8, 2021

FYI: 11th Cir Holds "Administrative Feasibility" Not Required for Class Certification

The U.S. Court of Appeals for the Eleventh Circuit recently vacated a trial court order denying certification of a class of similarly situated owners of allegedly defective refrigerators for claims against its manufacturer.

 

In so ruling, the Eleventh Circuit held that although administrative feasibility is relevant to whether a proposed class may proceed under Rule 23(b)(3), it is not a prerequisite to certification of a putative class. 

 

A copy of the opinion is available at:  Link to Opinion

 

The manufacturer and seller ("Manufacturer") of gas-absorption refrigerators for use in RVs initiated limited recalls in 2006 and 2008 after identifying a defect that it estimated affected .01% of the recalled refrigerators.

 

18 owners of the Manufacturer's refrigerators (the "Class Representative Consumers") file a putative class action lawsuit contending that the defect was more significant and widespread, affecting almost every refrigerator sold between 1997 and 2016, and that the Manufacturer knew of, but concealed these facts.  The Class Representatives alleged that the Manufacturer violated the Magnuson-Moss Warranty Act and various state laws, and subsequently moved to certify a class under Rule 23(b)(3) of all customers who purchased the Manufacturer's refrigerators in certain states since 1997.

 

At the class-certification stage, the Manufacturer disputed the Class Representative Consumers' contention that the proposed class met Rule 23's ascertainability requirement, because they provided no evidence that their proposed method of identification would be workable. 

 

The trial court agreed, citing the Eleventh Circuit's unpublished opinion in Karhu v. Vital Pharms., Inc., 621 F. App'x 945, 947–48 (11th Cir. 2015) that administrative feasibility is an element of the ascertainability requirement, and denied class certification and dismissed the action without prejudice on the basis that the denial of certification divested it of subject matter jurisdiction under the Class Action Fairness Act.  The Class Representative Consumers appealed.

 

On appeal, the Eleventh Circuit first addressed the Manufacturer's argument that the court should not reach the merits because the Class Representative Consumers either invited error as to the role of administrative feasibility or forfeited their challenge to that alleged requirement.  See United States v. Brannan, 562 F.3d 1300, 1306 (11th Cir. 2009) (Court may not review an error if the "party induce[d] or invite[d] the district court into making [that] error."); Blue Martini Kendall, LLC v. Miami Dade County, 816 F.3d 1343, 1349 (11th Cir. 2016) (Court will not consider an issue that could have been raised before the trial court but is not raised until appeal). 

 

The Appellate Court determined that the doctrines of invited error and forfeiture did not apply because the Class Representative Consumers did not concede that administrative feasibility is a requirement for class certification in the trial court.  Moreover, the Appellate Court held, this issue was properly preserved for appeal because the motion for class certification cited case law authority to support the proposition that their class is ascertainable, which coupled with their argument that objective criteria made the class ascertainable, should have put the trial court on notice that the necessity of proving administrative feasibility was in dispute. Cf. Clark v. Wainwright, 701 F.2d 895, 897 (11th Cir. 1983).

 

Next, the Eleventh Circuit reviewed whether or not administrative feasibility under Rule 23(b)(3) is a prerequisite for certification, an issue the court identified as a "hotly contested" between its sister circuits. 

 

The Eleventh Circuit previously stated that it was an implied prerequisite of Rule 23 -- that is, class representatives bear the burden to establish that their proposed class is "adequately defined and clearly ascertainable," and they must satisfy this requirement before the trial court can consider whether the class satisfies the enumerated prerequisites of Rule 23(a).  Little v. T-Mobile USA, Inc., 691 F.3d 1302 (11th Cir. 2012). 

 

Traditionally, class definition and ascertainability were one inquiry (DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir. 1970)), but the Third Circuit applied a heighted standard that proof of ascertainability encompasses both the definition of a class and its administrative feasibility, requiring putative class representatives to prove that the identification of class members will be "a manageable process that does not require much, if any, individual factual inquiry."  Byrd v. Aaron's Inc., 784 F.3d 154, 163 (3d Cir. 2015); Carrera v. Bayer Corp., 727 F.3d 300, 307–08 (3d Cir. 2013). 

 

The First and Fourth Circuits adopted this requirement of proof of administrative feasibility as a prerequisite for certification, while this approach is rejected in the Second, Sixth, Seventh, Eighth and Ninth Circuit.  The Eleventh Circuit acknowledged that it has addressed this issue only in unpublished decisions applying the Third Circuit's heightened standard, but that these do not bind it as precedent.  11th Cir. R. 36-2.

 

Addressing the issue here, the Eleventh Circuit concluded that its precedent does not establish administrative feasibility as a requirement for class certification. The Court reasoned that while a trial court must determine that a proposed class is "adequately defined and clearly ascertainable" before it may consider whether the requirements of Rule 23(a) are satisfied (Little, 691 F.3d at 1304), because membership can be capable of determination without being capable of convenient termination, administrative feasibility is not an inherent aspect of ascertainability. 

 

Moreover, the Appellate Court concluded that neither the text of Rule 23(a) nor 23(b) require proof of administrative feasibility.  Administrative feasibility does not follow from the text of Rule 23(a) because it does not bear on the ability of a district court to consider the enumerated elements of that subsection unlike traditional ascertainability—a plaintiff proves it after certification by explaining how the district court can locate the remainder of the class after certification by proving that the proposed process will be manageable. 

 

Nor does a requirement of administrative feasibility follow from Rule 23(b), according to the Eleventh Circuit.  Rule 23(b)(3)(D) instructs the trial court, in deciding whether "a class action [would be] superior to other available methods for fairly and efficiently adjudicating the controversy," to consider "the likely difficulties in managing a class action," but in the Eleventh Circuit's view it does not permit trial courts to make administrative feasibility a requirement. 

 

Instead, the Eleventh Circuit held, the manageability inquiry focuses on whether a class action "will create relatively more management problems than any of the alternatives," not whether it will create manageability problems in an absolute sense. Klay v. Humana, Inc., 382 F.3d 1241, 1273 (11th Cir. 2004), abrogated in part on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008). Thus, the Court reasoned, administrative difficulties in class member identification or otherwise do not alone doom a motion for certification.

 

Lastly, the Eleventh Circuit concluded that even if the trial court's decision to deny class certification was correct, dismissal was inappropriate, because "federal jurisdiction under the Class Action Fairness Act does not depend on certification," such that a trial court retains jurisdiction even after it denies certification. Wright Transp., Inc. v. Pilot Corp., 841 F.3d 1266, 1271 (11th Cir. 2016).

 

For these reasons, the trial court's dismissal and denial of certification was vacated and remanded for further proceedings.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
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