Bates v. Bankers Life and Casualty, 2/24/17, 9th Cir.
After the district court struck their class allegations, Plaintiffs appealed without first getting permission from the district court or from the Ninth Circuit. Held: Appeal dismissed for lack of jurisdiction.
Bankers Life sells long term health insurance policies to the elderly. Unhappy with how their policies were being administered, Plaintiffs sued Bankers Life asserting individual claims (e.g., breach of contract) as well as various class action claims that policyholders’ claims were being mishandled and benefits were therefore being denied. On Defendant’s motion, the class allegations were stricken. Striking class allegations is the functional equivalent to denying a motion for class certification. Plaintiffs did not ask the district court to certify its order striking class allegations for interlocutory appellate review under 12 U.S.C. 1292(b); nor did plaintiff’s petition for the Ninth Cir.’s permission to appeal under FRCP 23(f). Plaintiff instead relied on FRCP 54(b), the rule concerning judgments.
Pursuant to section 54(b), plaintiff asked the district court to enter final judgment on its decision to strike class allegations, which the court did. That determination would seem to satisfy the prerequisite for appellate jurisdiction – Section 1291 grants appellate jurisdiction over final decisions. The problem is that a judgment is final when it ends the litigation between the parties (plaintiffs still had their individual breach of contract claims), and a district court does not have the discretion to convert a non-final judgment into a final judgment. Finally, while defendant had not raised the issue of lack of appellate jurisdiction with the district court, that didn’t change the result: A defect in jurisdiction can be raised for the first time on appeal.
Can’t Identify Class Members But Want Class Certification — No Problem
Briseno v. ConAgra, 9th Cir., 1/3/17
In some consumer fraud class actions the class is made up of consumers who purchase small ticket items (like groceries). That can make it very difficult to identify and ascertain class members: Consumers probably don’t keep their receipts, and retailers probably don’t have records of who purchased the product. In addition, consumers may forget or even lie about what they purchased. In evaluating whether to certify a class, some courts call this an “administrative feasibility” issue. The question tackled by 9C in this case: Should administrative feasibility problems prevent class certification under Federal Rule 23? Answer: Not even close.
Plaintiffs alleged that defendant advertised Wesson Oil as being “100% Natural” when it actually contains GMOs. The class was defined as those people who purchased the product within 11 states within the statute of limitations of each state. The trial court certified the case. ConAgra appealed, arguing that the case should not have been certified because of the administrative feasibility problems.
9C affirmed the trial court’s grant of certification. The plain language of Rule 23 does not include an “administrative feasibility” factor, nor does it include an “ascertainability” requirement. Apparently, 9C doesn’t even have a definition of “ascertainability.” The prerequisites of class certification are set out in Rule 23(a), which speaks to numerosity, common questions, typicality and adequacy. The language of the Rule is plain. And under principles of statutory construction, listing specifically enumerated prerequisites means the list is exhaustive. Federal courts are not allowed to substitute a rule’s criteria with a standard never adopted.
While 3C uses an administrative feasibility test, the 9th joined other circuits in rejecting 3C’s use of that test and its reasoning.
The 9th explored the Third’s reasoning in detail, and dispelled each of its concerns. For example, 9C noted that the due process rights of absent class members don’t require actual notice; the notice has to be the best practicable under the circumstances. Notice can be ordered through means like publication or the web. While such notice is imperfect, the due process rights of absent class members should be weighed against the fact that the vast majority of them wouldn’t file an action anyway. With respect to the reliability of claims filed, the court believes there is little incentive to commit perjury for such a small amount, and there are various administrative claims tools (the court lists them) to reduce the incidence of fraud.
For 9C, a stand-alone administrative feasibility requirement would graft onto Rule 23 a prerequisite that is not listed, and would place too much emphasis on that concern over other important policy considerations of class litigation — like whether class members had other available alternatives to seek redress in low value consumer cases. To preserve the benefits of class litigation, the perfect cannot become the enemy of the good.