Written By: Brian J. Murray
So today’s report from the front on class actions involves a subject that can be crucially important to class certification, but until recently was rarely litigated: ascertainability. A week ago, Judge Chang from here in the Northern District of Illinois published a tour de force rejecting a defendant’s non-ascertainability arguments in Ploss as Trustee for Harry Ploss Trust DTD 8/16/1993 v. Kraft Foods Group. For anyone practicing in the class actions space – especially here in Northern Illinois – this is absolutely worth a read.
A little background. This was a case about alleged manipulation in the wheat futures market. Kraft apparently bought $90 million in wheat futures, then refused to liquidate its long position and stopped buying wheat in the cash market. Suffice to say, this caused various traders to lose money. A lawsuit ensued. And plaintiffs sought to certify a class around the Commodity Exchange Act, the Sherman Act, and unjust enrichment.
The court walked through the various preliminary elements of Rule 23 and found them satisfied. Ho hum. But then it got to ascertainability – and that’s where things got interesting. The court started uncontroversially enough: a class must be ascertainable, meaning it must be defined clearly and based on objective criteria. That is, it has to identify a particular group, harmed during a particular time frame, in a particular location, in a particular way. So far, so good. But then the court got to Kraft’s non-ascertainability arguments. And stuff got real.
First, Kraft argued non-ascertainability because the proposed class included intraday and hedging traders. The court was unimpressed. Just because some class members might lose does not preclude ascertainability. Rather, there is a difference between a class including members who could not have been harmed at all, and those who ultimately were not harmed. The former, but not the latter, can preclude certification. Since this case involved the former, this argument was dispatched.
Next, Kraft argued that it would be impossible to identify class members. Again, a non-starter. Said the court: at this stage, the plaintiff is not required to demonstrate that there is a reliable and administratively feasible way to identify all who fall within the class definition. Rather, ascertainability depends on the adequacy of the class definition itself. That’s actually a pretty controversial statement – the Third Circuit, for example, has suggested otherwise. But this is Illinois, so, so much for that.
Last, Kraft argued for date restrictions on the class period. But again, it was shut down: the class period, the court said, is unrelated to the Rule 23 requirements. That sort of thing is appropriate for a motion for summary judgment or trial – not class certification.
Bottom line: ascertainablity was established. And we learned a lot along the way. Class action litigators would be wise to keep these principles in mind as they litigate class certification, if for no other reason that they could more profitably use pages for something else!
That’s today’s update. Stay tuned for more as they become available. I’m a class action consultant; I teach class actions at the University of Chicago and have litigated them for 20 years. Could your team use some help?
Rathje Woodward advises clients on a broad range of litigation matters, including class action defense. If you have any questions about how the matters in this article may impact your business, contact Brian J. Murray or Timothy D. Elliott at 630-668-8500. Our online contact form may be found here.
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