Class actions are a means for aggregating claims that are too small to incentivize individual litigation. Enabling compensation is one clear benefit of class actions, but aggregate litigation also serves a consonant public purpose of deterring unlawful conduct. By making small claims economically feasible to litigate, class actions enlist private attorneys as law enforcement agents. However, where claims are frivolous and damages are high, these cases create coercive settlement pressure.1×1. See, e.g., In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1298 (7th Cir. 1995) (Posner, J.).
In part to filter out classes that are unlikely to succeed on the merits, courts must conduct a “rigorous analysis” of Rule 23(a)’s prerequisites before certifying a class.2×2. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011); id. at 350–51. Plaintiffs must demonstrate that a class (1) is sufficiently numerous so that joinder is impracticable, and (2) raises a common question of law or fact; and that the representative (3) alleges claims that are typical of class claims, and (4) can adequately represent the class.3×3. Fed. R. Civ. P. 23(a). In monetary-damage actions, Rule 23(b)(3) additionally requires that class-wide common issues predominate over individual issues.4×4. Id. at 23(b)(3). But some courts impose an additional prerequisite that does not appear in the text of Rule 23. Under the Third Circuit’s version of “administrative feasibility” doctrine, plaintiffs must propose a reliable means for ascertaining the identity of all class members before the class can be certified.5×5. See, e.g., Carrera v. Bayer Corp., 727 F.3d 300, 305–07 (3d Cir. 2013). Because most individuals who purchase inexpensive products in stores do not keep itemized receipts and cannot prove their purchase, this requirement typically prevents those consumers from becoming certified as a class. Recently, in Briseno v. ConAgra Foods, Inc.,6×6. 844 F.3d 1121 (9th Cir. 2017). the Ninth Circuit declined to adopt administrative feasibility as a standalone requirement for class certification.7×7. Id. at 1126. This requirement is sometimes referred to as “ascertainability,” but that term refers to a broader concept that includes other, less disputed requirements. Id. at 1124 n.3. See generally 1 William B. Rubenstein, Newberg on Class Actions § 3:1 (5th ed. 2016). Although Briseno deftly analyzed a number of important arguments against administrative feasibility, it did not consider a fundamental problem with that doctrine: no realistic alternative to consumer class actions could effectively replicate their role as a law enforcement mechanism. For this reason, a standalone administrative feasibility requirement would seriously undermine much of consumer protection law and render some potential defendants judgment-proof when they cause a small amount of harm to a large number of people.
Briseno is a consumer class action. ConAgra Foods manufactured and sold Wesson Oils, a brand of cooking oil it advertised as “100% Natural.”8×8. In re ConAgra Foods Inc., 908 F. Supp. 2d 1090, 1095 (C.D. Cal. 2012). However, ConAgra allegedly made Wesson Oils with genetically modified organisms, which might not qualify as natural.9×9. Id. Robert Briseño filed one of eleven class actions against ConAgra alleging it had deceived consumers into believing Wesson was 100% natural.10×10. See In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 939 (C.D. Cal. 2015). In 2011, the Judicial Panel on Multidistrict Litigation consolidated the actions before Judge Morrow of the U.S. District Court for the Central District of California.11×11. See In re Wesson Oil Mktg. & Sales Practices Litig., 818 F. Supp. 2d 1383 (J.P.M.L. 2011). Under the laws of eleven states, the buyers alleged violation of consumer protection statutes, breach of express and implied warranties, and unjust enrichment.12×12. In re ConAgra Foods, 90 F. Supp. 3d at 939–40. After the court dismissed some of these claims in 2012, the action proceeded through discovery, and in 2014, Briseño moved for class certification.13×13. See id. at 938–39.
ConAgra, citing the Third Circuit case Carrera v. Bayer Corp.,14×14. 727 F.3d 300 (3d Cir. 2013). argued against class certification because Briseño could not present an administratively feasible means for ascertaining who had bought Wesson Oil during the class period.15×15. Defendant ConAgra Foods, Inc.’s Memorandum of Points and Authorities in Opposition to Plaintiffs’ Amended Motion for Class Certification at 25–26, In re ConAgra Foods, 90 F. Supp. 3d 919 (No. 2:11-cv-05379-MMM-AGR). The Third Circuit’s doctrine, which has caused a deep circuit split,16×16. The Fourth Circuit cited the Third Circuit’s doctrine in finding a putative class presented too many “administrative barrier[s]” to merit certification. See EQT Prod. Co. v. Adair, 764 F.3d 347, 358–60 (4th Cir. 2014). The Second and Eleventh Circuits have applied the doctrine in unpublished opinions. Leyse v. Lifetime Entm’t Servs., LLC, Nos. 16-1133-cv, 16-1425-cv, 2017 WL 659894, at *2 (2d Cir. Feb. 15, 2017); Karhu v. Vital Pharm., Inc., 621 F. App’x 945, 947–49 (11th Cir. 2015). However, the Sixth, Seventh, and Eighth Circuits have held that plaintiffs need not prove administrative feasibility at class certification. See Rikos v. Procter & Gamble Co., 799 F.3d 497, 525 (6th Cir. 2015); Mullins v. Direct Dig., LLC, 795 F.3d 654, 658 (7th Cir. 2015); Sandusky Wellness Ctr., LLC v. Medtox Sci., Inc., 821 F.3d 992, 995–96 (8th Cir. 2016). The Third Circuit has arguably cabined its doctrine in recent cases. See Briseno, 844 F.3d at 1127 n.6. is rooted in three principles. First, the administrative feasibility requirement “eliminates serious administrative burdens . . . by insisting on the easy identification of class members.”17×17. Carrera, 727 F.3d at 305 (quoting Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 593 (3d Cir. 2012)). It also “protects absent class members by facilitating the best notice practicable.”18×18. Id. at 305–06 (quoting Marcus, 687 F.3d at 593). Finally, “it protects defendants by ensuring that those persons who will be bound by the final judgment are clearly identifiable.”19×19. Id. at 306 (quoting Marcus, 687 F.3d at 593).
The district court rejected ConAgra’s position and held that proof of administrative feasibility is unnecessary for class certification.20×20. In re ConAgra Foods, 90 F. Supp. 3d at 970–71. It emphasized that “ConAgra’s argument would effectively prohibit class actions involving low priced consumer goods.”21×21. Id. at 970 (quoting Order Denying Plaintiffs’ Motion for Class Certification: Granting in Part and Denying in Part Defendant’s Motion to Strike at 39, In re ConAgra Foods, 90 F. Supp. 3d 919 (No. 2:11-cv-05379-MMM-AGR)). The court found the remaining Rule 23 requirements were satisfied and certified the class under Rule 23(b)(3).22×22. Id. at 1035–36. Separately, the district court declined to certify an injunctive relief class under Rule 23(b)(2), finding plaintiffs could not satisfy Article III standing. Id.
The Ninth Circuit affirmed.23×23. Briseno, 844 F.3d at 1123. The court joined the Sixth, Seventh, and Eighth Circuits in rejecting the Third Circuit’s doctrine.24×24. Id. at 1123. Writing for the panel, Judge Friedland25×25. Judge Friedland was joined by Judges Fletcher and Christen. held that Rule 23 does not require or permit an administrative feasibility analysis.26×26. Briseno, 844 F.3d at 1123.
The panel focused entirely on administrative feasibility, noting the issue was one of first impression in the Ninth Circuit.27×27. Id. at 1124–25. In a separate memorandum opinion, the panel affirmed the district court’s decision with respect to ConAgra’s remaining challenges. See Briseno v. ConAgra Foods, Inc., No. 15-55727, 2017 WL 53421 (9th Cir. Jan. 3, 2017). It first examined the text of Rule 23 and found that because its four prerequisites to certification do not include administrative feasibility, courts should presume the enumerated prerequisites “constitute an exhaustive list.”28×28. Briseno, 844 F.3d at 1125.
The panel next assessed and rejected the Third Circuit’s three rationales for including administrative feasibility as a standalone requirement.29×29. Id. at 1127–32. Considering its first rationale, the panel reasoned that the need to mitigate administrative burdens was already captured by Rule 23(b)(3)(D), which requires that courts weigh “the likely difficulties in managing a class action.”30×30. Id. at 1127–28 (quoting Fed. R. Civ. P. 23(b)(3)(D)). The court also noted that a heightened standard would “conflict with the well-settled presumption that courts should not refuse to certify a class merely on the basis of manageability concerns,” id. at 1128 (quoting Mullins v. Direct Dig., LLC, 795 F.3d 654, 663 (7th Cir. 2015)), and would leave plaintiffs without a realistic alternative in low-value consumer class actions like the case at hand, id. To the Third Circuit’s second point, the panel found that concerns about protecting absent class members by ensuring individual notice were misguided, because Rule 23(c)(2)(B) does not require actual, individual notice, but merely the “best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.”31×31. Id. at 1128–29 (quoting Fed. R. Civ. P. 23(c)(2)(B)). The panel similarly observed that “the Due Process Clause does not require actual, individual notice in all cases.” Id. at 1129. The panel also found the risk that fraudulent claim submissions would dilute a common fund to be nominal, because the claiming rates for consumer class actions are as low as ten to fifteen percent, and because individuals would be unlikely to perjure themselves by submitting false affidavits for small claims.32×32. Id. at 1130. Responding to the Third Circuit’s final point, the court found that defendants’ due process rights are sufficiently protected by existing procedures.33×33. Id. at 1131–32. The panel rejected Carrera’s assumption that defendants lack the opportunity to challenge fraudulent claims and highlighted the numerous means for mounting such challenges at the claims-administration stage.34×34. Id. The court also noted that, in circumstances where aggregate liability is known, a defendant’s due process rights are not implicated because total liability is not affected by the identification of absent class members. Id. at 1132.
Briseno is well reasoned and persuasive. Neither due process nor Rule 23 requires administrative feasibility,35×35. Addressing Carrera’s argument about defendants’ due process rights, the Seventh Circuit noted that even though “a defendant has a due process right not to pay in excess of its liability and to present individualized defenses . . . [i]t does not follow that a defendant has a due process right to a cost-effective procedure for challenging every individual claim to class membership.” See Mullins, 795 F.3d at 669 (citing Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2309 (2013) (finding similar procedural rights unavailable under antitrust law)). and the doctrine frustrates, rather than safeguards, the interests of absent class members. A freestanding administrative feasibility requirement would substitute a remote possibility of claim dilution with the complete certainty of recovering nothing where claims are too small to bring individually.36×36. See Briseno, 844 F.3d at 1129.
However, the panel missed an opportunity to consider the wider harm this doctrine would cause. By barring cases like Briseño’s, administrative feasibility would frustrate the deterrent value of consumer class actions. The Seventh Circuit has mentioned this problem,37×37. See Mullins, 795 F.3d at 668. but no court has given serious attention to how the inadequacy of alternative enforcement mechanisms would seriously undermine much of consumer protection law if administrative feasibility were a required component of class certification. Because courts and lawmakers are continuing to debate the merits of the Third Circuit’s doctrine,38×38. See sources cited infra notes 68–70. this implication of administrative feasibility deserves attention.
Rule 23(b)(3)’s core purpose is to enable the aggregation of small claims.39×39. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)). Where recovery amounts to a few dollars per person, as in many consumer-rights cases, the filing fee alone would exceed the damages award, and plaintiffs’ attorneys, who typically work on contingent fees, would have no reason to litigate individual actions for trivial losses. Judge Posner has observed that “[t]he realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”40×40. Carnegie v. Household Int’l, Inc., 376 F.3d 656, 661 (7th Cir. 2004) (emphasis omitted).
While remunerating class members is an obvious benefit of claim aggregation, class actions, like all tort actions, simultaneously serve a parallel purpose: they deter potential defendants from misconduct.41×41. See Rubenstein, supra note 7, § 1:8 (“[C]lass actions deter misconduct by harnessing private attorneys general to assist in the enforcement of important public policies.”); see also Hughes v. Kore of Indiana Enter., Inc., 731 F.3d 672, 677 (7th Cir. 2013) (Posner, J.) (“But even when as in this case the aggregate claim . . . is meager, [class] treatment will often be appropriate. A class action, like litigation in general, has a deterrent as well as a compensatory objective.”); Geoffrey C. Shaw, Note, Class Ascertainability, 124 Yale L.J. 2354, 2389 (2015). Claim aggregation creates an incentive for attorneys to litigate actions that would otherwise be grossly unprofitable. In doing so, these lawyers act as private attorneys general, uncovering and prosecuting illegal conduct on behalf of the public interest.42×42. See William B. Rubenstein, On What a “Private Attorney General” Is — and Why It Matters, 57 Vand. L. Rev. 2129, 2167–68 (2004); see also id. at 2159–61. By enlisting private attorneys to enforce consumer protection laws and offering a mechanism for disgorging liable parties of wrongful revenues, class actions encourage more cautious and transparent behavior.43×43. See Hughes, 731 F.3d at 677–78 (“[T]he damages sought by the class, and, probably more important, the attorney’s fee that the court will award if the class prevails, will make the suit a wake-up call for Kore and so have a deterrent effect on future violations of the Electronic Funds Transfer Act by Kore and others. . . . [A] judgment would remind Kore to take greater care in the future to comply with federal law, however irksome compliance may seem.” Id. at 678.).
Many view deterring misconduct as more important than compensating class members with small claims.44×44. See, e.g., Stephen Berry, Ending Substance’s Indenture to Procedure: The Imperative for Comprehensive Revision of the Class Damage Action, 80 Colum. L. Rev. 299, 300 (1980). Some believe deterrence is the only legitimate rationale for certain class actions.45×45. See Myriam Gilles & Gary B. Friedman, Exploding the Class Action Agency Costs Myth: The Social Utility of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103, 104–05 (2006) (“In reality, there is generally no legitimate utilitarian reason to care whether class members with small claims get compensated at all.” Id. at 105.). Consider Briseno itself: there may be little reason to care whether class members recover the tiny amounts they each claim to have lost, but disgorging ConAgra of potentially millions of dollars in wrongful revenues has a clear benefit of deterring fraud. Had the panel required proof of administrative feasibility, the class could not have been certified in light of the reality that consumers rarely keep itemized grocery receipts and would have no other means of proving their purchase.46×46. See Briseno, 844 F.3d at 1125. The deterrent benefits would vanish, because “[w]ithout the class action mechanism, corporations . . . [would be] free to engage in false advertising, overcharging, and a variety of other wrongs without consequence.”47×47. Byrd v. Aaron’s Inc., 784 F.3d 154, 176 (3d Cir. 2015) (Rendell, J., concurring).
If an administrative feasibility requirement were to foreclose many consumer class actions, alternative enforcement mechanisms, such as public enforcement actions or parens patriae litigation, would be unlikely to replicate their deterrent effect. Part of the reason Congress encourages class actions is that federal and state entities often lack the resources or the incentive to bring their own enforcement proceedings.48×48. See Rubenstein, supra note 42, at 2149–50, 2150 n.75; see also Reiter v. Sonotone Corp., 442 U.S. 330, 344 (1979) (noting in the antitrust context that “Congress created [a] treble-damages remedy . . . precisely for the purpose of encouraging private challenges to antitrust violations. These private suits provide a significant supplement to the limited resources available to the Department of Justice for enforcing the antitrust laws and deterring violations.”). This dynamic is especially salient for consumer protection litigation. Private attorneys have clear financial incentives to investigate potential consumer fraud, but government entities have limited funding and may be unable to make the same investments.49×49. See, e.g., Michael L. Rustad, Commentary, Smoke Signals from Private Attorneys General in Mega Social Policy Cases, 51 DePaul L. Rev. 511, 517 (2001) (“Given that the states lack the financial and legal resources to litigate against the powerful tobacco companies, the trial lawyer’s role has a continuing vitality. Private attorneys, acting as private attorneys general under the contingency fee system, made [a] historic tobacco settlement possible.”). For example, the Food and Drug Administration has not defined “natural” for food-labeling purposes because of “resource limitations and other agency priorities” and instead polices mislabeling with ad hoc warning letters.50×50. Sarah Valenzuela, Note, Tracing the Evolution of Food Fraud Litigation: Adopting an Ascertainability Standard That Is “Natural,” 34 Rev. Litig. 609, 618 (2015) (quoting Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definition of Terms; Definitions of Nutrient Content Claims for the Fat, Fatty Acid, and Cholesterol Content of Food, 58 Fed. Reg. 2302, 2407 (Jan. 6, 1993)). Certain statutes acknowledge similar difficulties by incentivizing citizen suits,51×51. See Rubenstein, supra note 42, at 2152 & nn.87–89; see also 31 U.S.C. § 3730(b) (2012) (enabling qui tam suits for fraud against the federal government). and public enforcers occasionally bring actions in response to misconduct uncovered by private attorneys.52×52. Rubenstein, supra note 42, at 2152–53 (citing Rustad, supra note 49, at 518). While public enforcement actions also lead to private “piggyback” actions, these are most often antitrust and securities actions, rather than consumer or mass tort actions. See id. at 2150, 2152–53. This resource problem is so stark that “attorneys general sometimes hire private counsel to litigate state cases on a contingency basis.”53×53. Margaret H. Lemos, Aggregate Litigation Goes Public: Representative Suits by State Attorneys General, 126 Harv. L. Rev. 486, 524 (2012).
But funding is only the tip of the iceberg. A major difference between public and private enforcers in the aggregate-consumer context is that private firms collect a percentage of a class’s recovery — around thirty percent in some “all natural” labeling cases54×54. See, e.g., Larsen v. Trader Joe’s Co., No. 11-cv-05188-WHO, 2014 WL 3404531, at *1 (N.D. Cal. July 11, 2014) (awarding twenty-eight percent of a settlement fund); Pappas v. Naked Juice Co. of Glendora, Inc., No. LA CV11-08276 JAK (PLAx), 2014 WL 12382279, at *13 (C.D. Cal. Jan. 2, 2014) (awarding twenty-eight percent of a settlement fund). — while government lawyers face no prospect of personal financial gain from this litigation. A government entity might view an adequate but less-than-optimal settlement as an acceptable outcome, particularly where litigation can last for over a decade and require significant investment and opportunity costs that public enforcers may be unable to bear.55×55. See Lemos, supra note 53, at 523. By contrast, at least to a certain extent,56×56. See John C. Coffee, Jr., Understanding the Plaintiff’s Attorney: The Implications of Economic Theory for Private Enforcement of Law Through Class and Derivative Actions, 86 Colum. L. Rev. 669, 687 (1986) (describing limitations of this principle). a private attorney who will earn a percentage of the recovery has a direct incentive to fight for a higher settlement and consequently to deter corporate misconduct.
Some of these problems may seem particular to unelected officials whose priorities are subject to institutional demands, rather than the direct demands of the consumer public. But even state attorneys general who must stand for reelection might not feel public pressure to zealously pursue enforcement actions where they have less costly and more lucrative means for garnering voter approval. For an attorney general, prosecuting a high-profile criminal action could be a much quicker and cheaper endeavor that yields an equal or greater amount of public support. The federal Speedy Trial Act57×57. 18 U.S.C. §§ 3152–3156, 3161–3174 (2012). and similar state statutes58×58. See, e.g., N.Y. Crim. Proc. Law § 30.30 (McKinney 2006). require that criminal trials begin no more than a few months after defendants are charged or first appear in court.59×59. See, e.g., 18 U.S.C. § 3161(c)(1) (seventy days). Briseno, by contrast, has been in court for almost six years.60×60. See In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 937 (C.D. Cal. 2015). Although a large recovery would make for a nice talking point, it might amount to very little per constituent if distributed,61×61. See Lemos, supra note 53, at 516, 521. and pushing for a higher recovery — perhaps a few dollars more per claimant, though tens of millions to the defendant in some cases — might not be worth the cost. But to a private attorney who keeps a percentage of the recovery, that extra effort could yield millions more in attorney’s fees.
Government entities face a number of institutional challenges in enforcing consumer rights, and these challenges would be exacerbated if they bore this burden alone. Elected officials may be captured by their donors and be unlikely to prosecute them.62×62. See id. at 514. Recent media reports have detailed how lobbyists, including food-industry lobbyists, have halted state enforcement actions.63×63. See, e.g., Eric Lipton, Lobbyists, Bearing Gifts, Pursue Attorneys General, N.Y. Times (Oct. 28, 2014), https://www.nytimes.com/2014/10/29/us/lobbyists-bearing-gifts-pursue-attorneys-general.html?_r=0 [https://perma.cc/9FBL-RJHY] (“Attorneys general are now the object of aggressive pursuit by lobbyists and lawyers who use campaign contributions, personal appeals at lavish corporate-sponsored conferences and other means to push them to drop investigations, change policies, negotiate favorable settlements or pressure federal regulators . . . .”). But also troubling is the possibility that state attorneys general, as public officials, might be conflicted in balancing their duty to protect the public with the danger of harming corporations who employ many of those citizens.64×64. See Lemos, supra note 53, at 513–14; Margaret H. Lemos, State Enforcement of Federal Law, 86 N.Y.U. L. Rev. 698, 729 & n.143 (2011). These conflicts exist in today’s enforcement actions, and government litigation can be a highly effective means for punishing corporate wrongdoing.65×65. See, e.g., Jack Ewing & Hiroko Tabuchi, Volkswagen Set to Plead Guilty and to Pay U.S. $4.3 Billion in Deal, N.Y. Times (Jan. 10, 2017), www.nytimes.com/2017/01/10/business/volkswagen-diesel-settlement.html [https://perma.cc/AT4S-6JYH]. But eradicating private enforcement of many small-claims consumer class actions would offer potential defendants “a considerably stronger incentive to lobby against public enforcement efforts or to seek to curtail funds to public enforcement agencies.”66×66. John C. Coffee, Jr., Rescuing the Private Attorney General: Why the Model of the Lawyer as Bounty Hunter Is Not Working, 42 Md. L. Rev. 215, 227 (1983).
Congress has specifically chosen class actions as a means for enforcing consumer protection laws,67×67. See Myriam Gilles, Class Dismissed: Contemporary Judicial Hostility to Small-Claims Consumer Class Actions, 59 DePaul L. Rev. 305, 305–06 (2010). and no alternative could readily replace them. A freestanding administrative feasibility requirement would be a startling step further than prior measures for mitigating coercive settlements. As federal courts,68×68. Not long after Briseno was decided, the Second Circuit issued an unpublished opinion affirming a denial of class certification on administrative feasibility grounds. See Leyse v. Lifetime Entm’t Servs., LLC, Nos. 16-1133-cv, 16-1425-cv, 2017 WL 659894 (2d Cir. Feb. 15, 2017). Congress,69×69. On March 9, 2017, the U.S. House of Representatives passed H.R. 985, which would effectively codify Carrera. See H.R. 985, 115th Cong. § 1718(a) (2017). and the Federal Rules Advisory Committee70×70. The Committee expressly declined to adopt an administrative feasibility requirement in a recent set of proposed amendments to Rule 23. See Memorandum from Hon. Jeffrey S. Sutton, Chair, Comm. on Rules of Practice & Procedure, to Hon. John D. Bates, Chair, Advisory Comm. on Civil Rules 10 (May 12, 2016), http://www.uscourts.gov/sites/default/files/2016-05-12-civil_rules_report_to_the_standing_committee_0.pdf [https://perma.cc/6HAV-LAQW]. continue debating this doctrine, the stakes for stating the full case against it are high. Grafting an administrative feasibility requirement onto Rule 23 would eliminate a large subset of consumer class actions and disturb the important and inimitable role they play in protecting consumer rights.