City Select Auto Sales v. BMW Bank of North America, Inc., No. 15-3931 (3d Cir. August 16, 2017): An Important Consumer Win on Ascertainability.

Yesterday, in a precedential opinion the Third Circuit continued its limitation of the ascertainability requirement as applied to consumer class actions.  The Circuit’s opinion in City Select is important as it not only limits the broad application of ascertainability as applied by some Courts, it also reflects that Defendants arguing that a class is not ascertainable should be required to turn over information in its possession about potential class members prior to the certification of a putative class.  Importantly the Circuit also noted that ascertainability did not constitute a per se ban on the use of class members’ affidavits to determine class membership.


City Select is a putative class action alleging that the consumer financing division of BMW and its contractor sent junk faxes to independent automobile dealerships advertising the availability of BMW bank services in providing loans to potential car buyers.  Plaintiff moved to certify a class defined as


All auto dealerships that were included in the Creditsmarts database on or before December 27, 2012, with fax numbers identified in the database who were sent one or more telephone facsimile messages between November 20, 2012 and January 1, 2013, that advertised the commercial availability of property, goods or services offered by “BMW Bank of North America.”


During class cert discovery Plaintiff sought to compel the production of the database that was used to send the junk faxes.  The database was not preserved as of December 2012 but was preserved as of February 2014.  Plaintiff claimed that class members could be identified through the database by determining who was added to the database before December 2012 and who had fax numbers listed in the database. Their motion to compel the production of the database however was denied.  The District Court denied class cert solely on the basis that the class was not ascertainable because there was no “administratively feasible means of determining whether putative class members fell within the class definition….The Court concluded that ‘even though Plaintiff may be able to identify the potential universe of fax recipients, there is no objective way of determining which customers were actually sent the BMW fax”.  Plaintiff took a R. 23(f) interlocutory appeal, which the Third Circuit granted and vacated the denial of class cert.


The Court vacated and remanded for two reasons:


(1) “our ascertainability precedents do not categorically preclude affidavits from potential class members in combination with the…database, from satisfying the ascertainability standard”; and


(2) “Because the…database was not produced during discovery, plaintiff was denied the opportunity to demonstrate whether a reliable, administratively feasible method of ascertaining the class exists based, in whole or in part, on that database.


The Court noted that since the proposed class was limited to dealerships in the database, the policy concerns in Marcus, Hayes and Carrera were not implicated as there was a way to give notice to everyone, preserving their right to opt out and preserving the ability to determine who was bound by a final judgment as any dealership not in the database would not be bound by any judgment.   The Court also held “Plaintiff need not, at the class certification stage, demonstrate that a single record, or set of records, conclusively establishes class membership.”  The Court further held that the data base identified a limited set of potential claimants, and “[t]he only factual inquiry required to determine class membership is whether a particular dealership in the database received the BMW fax on one of the dates in question.  Answering this factual question of identification through affidavits or other available records does not necessarily require individualized fact-finding that would be ‘administratively infeasible’ or ‘a violation of Defendants’ due process rights.'”


Judge Fuentes also wrote a strong concurring opinion “because this case highlights the unnecessary burden on low-value consumer class actions created by our circuit’s adoption of a second ascertainability standard”[1].  Judge Fuentes went on to say that the ascertainability requirement “undermines the ‘very core’ of cases that the class action device was designed to bring to court: cases where many consumers have been injured, but none have suffered enough to make individual actions possible.  In those cases, as in this case, the realistic options are collective action or not redress for grievances at all.”  Judge Fuentes continued “We should join the Second, Sixth, Seventh, and Ninth Circuits in rejecting our added ascertainability requirement.  We should return to our original interpretation of ascertainability under Rule 23, and require only that a class be defined in reference to objective criteria. I agree with Judge Rendell in her critique that “[u]ntil we revisit this issue as a full Court or it is addressed by the Supreme Court or the Advisory Committee on Civil Rules, we will continue to administer the ascertainability requirement in a way that contravenes the purpose of Rule 23 and, in my view, disserves the public.” (referencing Judge Rendell’s opinion in Byrd v. Aaron’s, Inc., 784 F. 3d 154 (3d Cir. 2015)).


The City Select opinion constitutes another important step towards a return to fairness in the class certification standards applied to small value consumer class actions.

[1] Judge Fuentes identifies the first ascertainability requirement as the requirement that a class be defined with reference to objective criteria, with the second ascertainability requirement being the standard announced in Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012), which requires a plaintiff to show a reliable, administratively feasible mechanism to identify class members in order to certify a class.

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