The District of New Jersey’s recent decision in In re Paulsboro Derailment Cases, No. 13-784 (D.N.J. Aug. 20, 2014), demonstrates the increasing importance of the implied requirement of ascertainability and provides guidance on how a putative class does and does not satisfy the requirement.

In In re Paulsboro, the court denied class certification to individuals and businesses seeking reimbursement for alleged non-medical expenses sustained as a result of a train derailment in Paulsboro, New Jersey, in November 2012. The train derailment caused toxic chemicals to be released into the air and many people living in the area were told to evacuate their homes or to “shelter in place” by remaining in their homes with their windows and doors sealed until the airborne chemicals were cleared from the area. [1] Several residents filed putative class actions seeking to certify two sub-classes: (1) individuals who resided in the evacuation zone and had unreimbursed non-medical expenses or income loss as a result of the train derailment; and (2) businesses physically located in the evacuation zone that suffered income losses as a result of the train derailment. [2]

With respect to the business sub-class, the court held that the proposed class failed to satisfy the ascertainability requirement. The court looked to recent Third Circuit decisions that emphasized the need for a proposed class to be objectively ascertainable “without extensive and individualized fact-finding or mini-trials.” [3] The purpose of the ascertainability requirement is to “eliminate[] administrative burdens,” “protect[] absent class members,” and “protect[] defendants by clearly identifying those who will be bound by the final judgment.” [4] The recent Third Circuit decisions established that merely submitting affidavits from potential class members is neither sufficient, nor is plaintiff’s burden to show ascertainability lessened if the defendant fails to keep adequate records identifying the members of the potential class. [5] Because the proposed class definition required the business to be physically located within the derailment zone and to have suffered a loss of income as a result of the derailment, the court found that substantial individualized fact finding is required to determine whether a business fell within the class. [6] Although the plaintiffs were able to provide a list of businesses with mailing addresses in the defined zone, there was no administratively feasible method to determine whether those businesses had physical locations in the necessary geographical zone or whether the businesses suffered income loss as a result of the derailment. [7] The court rejected the plaintiffs’ attempt to establish feasibility through an affidavit from their expert who claimed that class membership would “require very minimum verification, including operating status, which will take place during the claims administration process.” [8] The court relied on the recent line of Third Circuit cases requiring plaintiffs to show that “the class is currently and readily ascertainable based on the objective criteria” in order to satisfy the ascertainability requirement. [9] According to the court, plaintiffs’ expert confused the damages determination, which is completed during the claims administration process, with the ascertainability requirement, “which is a showing that a potential class member meets the class definition in the first place.” [10] Thus, because plaintiffs failed to propose a readily ascertainable class, the court denied class certification as to the business sub-class.

As to the individual sub-class, although it ultimately denied class certification, the court found that the ascertainability requirement was satisfied. The court determined that the geographical limits placed on the individual sub-class made the class ascertainable because the individuals could be “ascertained through public records such as tax and census records.” [11] The court also found that individuals would be readily ascertainable because they could be asked “a single question to determine whether they are entitled to relief” [12] – that is, whether the individuals incurred expenses or lost income as a result of the evacuation or shelter orders. The court determined that the need for this type of limited fact-finding did not render the class unascertainable. The court nevertheless denied class certification because the sub-class was not sufficiently numerous to warrant the creation of a class action. Although plaintiffs alleged there were over 600 potential members of the class, the court found that several of the potential class members could not be included in the class because they had either already settled with the defendants or had instituted their own actions. The court also found that the plaintiffs failed to offer any evidence of how many of the remaining potential class members actually sustained unreimbursed medical expenses. Without “concrete evidence of numerosity,” the plaintiffs could not fulfill the numerosity requirement and, therefore, could not be certified as a class. [13]

The court’s decision to deny class certification to both the individual and business sub-classes is a reminder that courts are required to engage in a rigorous analysis of Rule 23’s requirements, as well as the threshold ascertainability requirement, prior to certifying a class. 

Notes:
[1] In re Paulsboro Derailment Cases, No. 13-784 (RBK/KMW), at 3-4 (D.N.J. Aug. 20, 2014).

[2] Id. at 8.

[3] Id. at 8-9 (citing Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013); Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 593 (3d Cir. 2012)).

[4] Id. at 9.

[5] Id. at 9-10.

[6] Id. at 12.

[7] Id. at 13.

[8] Id. at 14.

[9] Id. at 14 (quoting Carrera, 727 F.3d at 306) (emphasis in original).

[10] Id.

[11] Id. at 11.

[12] Id.

[13] Id. at 19.