Frank Cruz-Alvarez is a Partner with Shook, Hardy & Bacon L.L.P. in the firm’s Miami, FL office, and Stephanie Moran is an Associate in the firm’s Miami, LF office. Mr. Cruz-Alvarez is the WLF Legal Pulse’s Featured Expert Contributor on Civil Justice/Class Actions.
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The U.S. Court of Appeals for the Eleventh Circuit recently decided Cherry v. Dometic Corp., No. 19-13242, 2021 WL 346121 (11th Cir. Feb. 2, 2020), holding that administrative feasibility is not a requirement for class certification under Federal Rule of Civil Procedure 23. Not only did the Eleventh Circuit walk back on a previous non-binding, unpublished decision, see Karhu v. Vital Pharms., Inc., 621 F. App’x 945 (11th Cir. 2015), but it further contributed to an already existing circuit split, joining the Second, Sixth, Seventh, Eighth, and Ninth Circuits in rejecting the requirement of administrative feasibility. See In re Petrobras Sec., 862 F.3d 250 (2d Cir. 2017); Rikos v. Procter & Gamble Co., 799 F.3d 497 (6th Cir. 2015); Mullins v. Direct Digit., LLC, 795 F.3d 654 (7th Cir. 2015); Sandusky Wellness Ctr., LLC v. Medtox Sci., Inc., 821 F.3d 992, (8th Cir. 2016); Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017).
In Cherry, the named plaintiffs brought a class action lawsuit against Dometic Corporation (“Dometic”)—a manufacturer of refrigerators for recreational vehicles, like RVs. Cherry, 2021 WL 346121, at *1. The plaintiffs alleged that Dometic violated the Magnunson-Moss Warranty Act and various state laws when it sold refrigerators with a defect that created a risk of chemical leakage and fire. Id. In 2006 and 2008, Dometic issued a recall on its refrigerators, estimating the recall affected about one hundredth of one percent of the refrigerators sold. Id. The plaintiffs disagreed and asserted that the defect was more widespread than Dometic was admitting; they claimed the defect affected almost every refrigerator sold between 1997 and 2016. Id. The plaintiffs sought class certification under Rule 23(b)(3), proposing a class “of all persons who purchased in select states certain models of Dometic refrigerators that were built since 1997.” Id.
For a class to be certified, it must first meet the requirements of Rule 23(a)—numerosity, commonality, typicality, and adequacy. Fed. R. Civ. P. 23(a). After the district court determines that a class satisfies the Rule 23(a) requirements, it turns to Rule 23(b) and assesses the proposed class type—here, Rule 23(b)(3). Rule 23(b)(3) requires “the court [to] find that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). When making these findings, the district court considers: (1) the interests of the class members; (2) “the extent and nature of any litigation concerning the controversy already begun by or against class members;” (3) the desirability concentrating the litigation; and (4) “the likely difficulties in managing a class action.” Fed. R. Civ. P. 23(b)(3)(A)–(D).
In support of their motion for class certification, the plaintiffs argued that the class was ascertainable and that class identification was administratively feasible because the class could “be readily identified through Dometic’s sales and warranty registration records, DMV records and if necessary, through affidavits.” Papasan v. Dometic Corp., No. 16-22482, 2019 WL 3317750, at *5 (S.D. Fla. July 24, 2019). In response, Dometic asserted that its records would not be helpful in identifying potential class members because the majority of refrigerators sold by Dometic are sold to RV dealers and manufacturers and not direct to consumers, which meant Dometic had no record of sales made by the dealers or manufacturers. Id. Additionally, Dometic cited to the fact that for its previous recalls, it “sent 3 million recall notices for a recall population of only approximately 1.6 million because of [its] inability to identify refrigerator owners.” Id. at *6. The district court agreed with Dometic and denied class certification because the plaintiffs failed to prove administrative feasibility. Id. The district court then dismissed the action without prejudice based on its determination that the denial of class certification deprived it of subject matter jurisdiction under the Class Action Fairness Act (“CAFA”). Id.
Following denial of class certification and dismissal, the plaintiffs appealed to the Eleventh Circuit. See Cherry, 2021 WL 346121, at *1. On appeal, the main issue was whether plaintiffs seeking class certification must prove “an administratively feasible method to identify absent class members as a precondition for certification of a class under [Rule 23].” Id.
First, the court considered Rule 23(a) and the implied requirement of ascertainability. Id. at *3 (citing Little v. T-Mobile USA, Inc., 691 F.3d 1302, 1304 (11th Cir. 2012)). The court began by explaining the requirement of ascertainability, stating that a class that is adequately defined allows the court to ascertain who falls within the class. Id. The crux of this issue, however, was whether included within the requirement of ascertainabiity is the requirement that a class be administratively feasible. Disagreeing with the First, Third, and Fourth Circuits, the Eleventh Circuit found administrative feasibility is not a requirement, nor even part of the inquiry, for ascertainability. Id. at *4. The court reasoned that for the purposes of Rule 23(a), “neither foreknowledge of a method of identification nor confirmation of its manageability says anything about the qualifications of the putative class representatives, the practicability of joinder of all members, or the existence of common questions of law or fact.” Id.
Next, the court considered administrative feasibility and the role it plays in the consideration of class certification under Rule 23(b)(3). Id. at *5. As with Rule 23(a), the court found that administrative feasibility is not a requirement of Rule 23(b)(3). Id. However, the court held that administrative feasibility is a factor to be weighed against the other considerations of Rule 23(b)(3). Id. Unlike Rule 23(a), which requires each enumerated factor to be met, Rule 23(b)(3) requires a balancing test. Compare Fed. R. Civ. P. 23(a), with Fed. R. Civ. P. 23(b)(3). According to the court, it is because of this required balancing test that under Rule 23(b)(3) district courts are not permitted “to make administrative feasibility a requirement,” but they may consider it. Cherry, 2021 WL 346121, at *5. Although the court found administrative feasibility to only be a part of the balancing test of Rule 23(b)(3), the court did state that if class management appears to be difficult, the court has the discretion to later decertify a class. Id.
Finally, the court addressed the district court’s dismissal for lack of subject matter jurisdiction. Id. at *6. The court found dismissal, even with the denial of class certification, to be inappropriate because “‘federal jurisdiction under [CAFA] does not depend on certification,’ so a district court retains jurisdiction even after it denies certification.” Id. (quoting Wright Transp., Inc. v. Pilot Corp., 841 F.3d 1266, 1271 (11th Cir. 2016)). As a result, the court remanded the case to the district court. Id.
In Cherry, not only did the court change course from a prior—albeit unpublished decision—it has aligned itself with the Second, Sixth, Seventh, Eighth, and Ninth Circuits, all of which are historically friendlier forums for class actions. The court’s decision appears to be an invitation for broader and ill-defined class actions in the future, which is inconsistent with the recent class action jurisprudence of the court. Is Cherry a change in course, or an anomaly? Only time will tell.