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Ascertainability Not Required in 23(b)(2) Class Action, Says Court

By Catherine M. Chiccine, Litigation News Associate Editor – January 20, 2017

A federal appellate court determined that ascertainability is not required for class actions filed under Federal Rule of Civil Procedure 23(b)(2). Rule 23(b)(2) requires the class to seek a single injunction that will act as one remedy for all and, as such, the unnamed class members do not need to be ascertained, reasoned the U.S. Court of Appeals for the Sixth Circuit. The ruling follows a number of similar decisions issued in other federal circuits.

Court Affirms Ruling Certifying 23(b)(2) Class Despite Lack of Ascertainability
In Cole v. City of Memphis, the plaintiff brought a class action in the U.S. District Court for the Western District of Tennessee, alleging that the city's practice of sweeping the popular Beale Street entertainment district for possible criminals at 3:00 a.m. on weekend nights violated his and the class members' right to intrastate travel. Under Federal Rule of Civil Procedure 23(b)(2), the plaintiff sought a class-action remedy enjoining the city from conducting such sweeps. The district court certified the Rule 23(b)(2) class. After a jury verdict in the plaintiff's favor, the court entered an order enjoining the city from sweeping Beale Street.

The city appealed, arguing that it was error for the district court to certify a Rule 23(b)(2) class when the precise class members were not ascertainable. The Sixth Circuit Court of Appeals affirmed the district court's ruling, stating that ascertainability was not a requirement to certify a Rule 23(b)(2) class.

Nature of Relief in 23(b)(2) Claim Is Driving Factor in Court's Ruling
In affirming the district court's judgment, the Sixth Circuit placed emphasis on the nature of relief sought in a 23(b)(2) class. A 23(b)(2) class seeks a single injunction or declaratory judgment against the defendant, while a (b)(3) class seeks monetary relief for the plaintiff and absent class members. Ascertainability is required in 23(b)(3) actions. However, because a (b)(2) class is focused on a remedy obtained by one member that will naturally affect the others, the identities of the class members are less critical in a (b)(2) action than in a (b)(3) action, the court said. In other words, the relief sought was one remedy—an injunction against the city—and provided the sole remedy necessary to protect the affected class members.

The court also noted the lack of a notice and opt-out requirement in a (b)(2) class action as opposed to a (b)(3) action, which requires the absent class members be provided with notice of the class action and the opportunity to opt out of the class and avoid the collateral estoppel effect of a judgment against them. The requirement that each class member be able to be ascertained is tied to this need. "Since notice is not required for a 23(b)(2) class, the practical efficiencies that come with knowing the precise membership of the class are non-existent," the Sixth Circuit reasoned. "Likewise, without notice and an opportunity to opt out, absent (b)(2) class members would not be estopped by a final judgment for the defense," it added.

In affirming the district court's ruling, the Sixth Circuit noted that three other circuits—the First, Third, and Tenth—have ruled that ascertainability is not required to certify Rule 23(b)(2) actions. It also placed emphasis on the Advisory Committee's 1966 notes regarding Rule 23(b)(2).

Ruling Is Correct from a Practical Standpoint
"To understand the Sixth Circuit's ruling, attorneys must understand the relief sought in (b)(2) versus (b)(3) classes," explains Janet C. Evans, Minneapolis, MN, cochair of the ABA Section of Litigation's Rule 23 Subcommittee of the Class Actions & Derivative Suits Committee. "In a (b)(2) class, the relief that is typically provided is injunctive or declaratory relief, while in a (b)(3) class, the relief that is awarded is monetary," she says. "A class member may decide to opt out of a (b)(3) class because it wants to sue on its own and doesn't want the imposition of a final judgement. A (b)(2) class action is a very different dynamic because the court is ordering a defendant to do or not do something," she adds. "If the fundamental relief that the lawsuit is seeking is to change a defendant's future conduct, ascertainability is much less meaningful than in a compensatory context because you do not need to determine each person that was harmed," she concludes.

"In a 23(b)(3) class, you might have a different damage number for each person, so they may be need to be treated differently," says Matthew T. Heffner, Chicago, IL, cochair of the Rule 23 Subcommittee of the Section of Litigation's Class Action and Derivative Suits Committee. "In a (b)(2) class the remedy is a single injunction—one remedy for all—so you don't need to go looking for every single class member," he adds.

Section leaders note that this ruling provides an important reminder for class action attorneys. "When looking at the class definition and the litigation, always make sure the class definition is consistent with the remedy, and those must also sync with the subsection of 23(b) under which the parties are litigating," says Heffner. "It's when those things get out of sync that attorneys run into ascertainability, standing, or other issues," he adds.

Keywords: FRCP 23, Rule 23, Rule (23)(b)(2), Rule 23(b)(3), class action, certification, ascertainability, certification requirements

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