Class Actions Brief Blog

In earlier posts, we’ve discussed a hotly debated topic in class-action law: ascertainability. One of those posts described a case where a procedural hiccup denied the North Carolina Supreme Court a chance to address this issue. We expressed hope at the time that the Supreme Court would soon have another chance to bring clarity to North Carolina law on ascertainability. The Court recently got that chance and took it.

As we’ve discussed before, the ascertainability requirement reflects a straightforward point: For a court to certify a class, it must be able to identify the class members. Rule 23 of the Federal Rules of Civil Procedure doesn’t state this point expressly. But federal courts have found the point to be implicit in multiple parts of the rule. For example, when Rule 23 requires a court to give notice to class members, the court can do so only if it knows who the class members are. Likewise, for a court to decide under Rule 23(a) whether a class is sufficiently numerous or whether issues are common to the class, the court must be able to determine who is in the class and who isn’t.

For these reasons, federal courts widely agree that a class must be ascertainable. But courts have parted ways on just how burdensome this ascertainability requirement is.

Some courts hold that ascertainability requires only that a class be defined in objective terms. Under this approach, for example, a class of persons who bought a certain product is ascertainable because the class definition is objective. In contrast, a class of persons who regret buying a certain product isn’t ascertainable, because class membership is subjective.

Other courts go further, holding that ascertainability requires that the identification of class members also be administratively feasible. Under this approach, for instance, if a class consists of persons who bought a certain car, and if a car dealer’s records identify those persons, the class is ascertainable. But if the class consists of persons who bought a pack of gum, and if records of those purchases are spotty or nonexistent, identifying the class members might require a series of mini-trials with testimony from each purported gum buyer. Courts hold that this identification method is infeasible, so the class isn’t ascertainable.

Historically, the North Carolina Supreme Court had alluded to an ascertainability requirement, but hadn’t expressly adopted it. Nor had the Court taken sides on the above debate over the meaning of ascertainability. In its recent decision in Armistead v. County of Carteret, the Supreme Court did both: It held that North Carolina law requires ascertainability, and it sided with the courts that interpret ascertainability to require administrative feasibility.

The Supreme Court began its analysis in Armistead by holding that ascertainability is “a prerequisite for class certification” under North Carolina law. The Court also discussed the basis for this requirement. Like the federal rule, North Carolina’s Rule 23 doesn’t mention ascertainability expressly. But the Supreme Court held that an ascertainability requirement stems from the need for notice. North Carolina law requires that class members receive notice of a class action, and a court can’t provide notice to class members without identifying them.

The Supreme Court next held that, for a class to be ascertainable, there must be a “feasible, objective way” to identify the class members. This requirement is not met, the Court held, if the identification process would require mini-trials for each purported member of the class. The Court reasoned that those mini-trials would clash with another class-certification requirement: the need for class-wide issues to predominate over individualized ones.

The Court then used the case before it to illustrate the feasibility requirement. The Court first held that the trial court in Armistead had correctly denied certification of one proposed class: Carteret County residents who were charged for the right to use the county’s waste-disposal sites, but who never actually used those sites. Identifying the members of this class would have required individualized discovery and testimony on whether each purported class member used the waste-disposal sites. Because that identification process would have been infeasible, the Court held that this class wasn’t ascertainable.

The Court next held that, in contrast, the trial court correctly granted certification of another proposed class: residents who paid private companies to collect their waste, but who were still charged for the right to use the county’s disposal sites. The county’s records identified the persons who paid the county’s charges, and the private companies’ records identified their customers. Thus, taken together, these records allowed the class members to be identified in a feasible way.

The Supreme Court did stress that the county had the right to assert individualized challenges to the accuracy of the companies’ records. But the number of companies at issue was small, so the Court concluded that any such challenges could be resolved efficiently, without overwhelming class-wide issues.

In sum, Armistead clarifies multiple key points for class actions in North Carolina courts:

• North Carolina law requires ascertainability for class actions.
• Ascertainability requires a feasible, objective way to identify class members.
• One feasible, objective way to identify class members is through the records of a small number of companies.
• If the identification process instead would require individualized inquiries that would predominate over class-wide issues, the class is not ascertainable, and certification should be denied.

Finally, as these points show, the Supreme Court gave content to the ascertainability requirement by linking it to the predominance requirement. So, one way to understand Armistead is to clarify that the identification of class members is an issue that needs to be considered in a predominance analysis. We’ll see whether this understanding takes hold going forward. Either way, Armistead makes clear that in future class actions in North Carolina courts, plaintiffs will need to offer feasible, objective ways to identify the members of their proposed classes.