On Friday, the U.S. Court of Appeals for the Second Circuit, in In re Petrobras Securities, issued an important ruling rejecting a “heightened” ascertainability requirement for class certification. This decision comes as the Supreme Court is being asked to hear this same legal question in a case arising out of the Ninth Circuit. Petrobas shows that any disagreement between the circuits on this issue has grown stale, and Supreme Court review is unlikely.
In Petrobas, the Second Circuit was urged to adopt a rule “under which any proposed class must be ‘administratively feasible,’ over and above the evident requirements that a class be ‘definite’ and ‘defined by objective criteria,’ and separate from Rule 23(b)(3)’s requirements of predominance and superiority.” Slip op. at 28. The court, however, declined to adopt this requirement, because not only was it not required by Rule 23, it was incompatible with this rule. Id. at 35-40. Instead, ascertainability in the Second Circuit is less demanding, requiring only “that a class be defined using objective criteria that establish a membership with definite boundaries.” Id. at 28.
Many in the defense bar understood Second Circuit law differently. For example, the recent cert petition filed by defendants in Conagra Brands, Inc. v. Briseno, No. 16-1221, at 14 & n.5, describes Brecher v. Republic of Argentina, 806 F.3d 22 (2d Cir. 2015), as having adopted a rule of administrative feasibility demanding that class certification be denied if identifying plaintiffs would require mini-trials. But the Petrobas court concluded this misreads Brecher:
[W]e reached our decision in Brecher by asking whether the class was defined by objective criteria that made the class’s membership sufficiently definite, not whether the class was administratively feasible. See, e.g., id. at 26 (“The lack of a defined class period . . . makes the modified class insufficiently definite as a matter of law.” (emphasis added)). The opinion’s language about “administrative feasibility” and “mini‐hearings” was not strictly part of the holding, and was not intended to create an independent element of the ascertainability test; rather, that language conveyed the purpose underlying the operative requirements of definiteness and objectivity. That is, a class must be “sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member”; a class must be “defined by objective criteria” so that it will not be necessary to hold “a mini‐hearing on the merits of each case.” Id. at 24 (emphasis added) (citations
Petrobas, slip op. at 33-34.
Given Petrobas‘ clarification of Second Circuit law as being consistent with the “growing consensus” against imposing heightened ascertainability standards at class certification, id. at 30, Supreme Court review in Briseno seems ever more unlikely. Instead, the Supreme Court may deny review, which many would see as a clear signal that the Court expects the Third Circuit to revisit its outlier position.