Of Big Fish and Small Pools: Corporations Try to Avoid Accountability by Raising Burden of Proof on Consumers
Class actions are the procedural device wrongdoing corporations love to hate. When a company harms a lot of consumers by a single illegal act—say, by selling dog food tainted with euthanasia drugs or by charging outrageous interest rates on payday loans—class actions are often the only way victims can hold the corporation accountable.
That’s because the damages that any one person could recover in those cases are often too small to support individual litigation, even though the wrongdoing is serious, sometimes harming millions. Class actions fill this accountability gap, allowing injured and defrauded consumers to come together to hold corporate Goliaths liable.
Unhappy with the power of the class-action device, corporate America is doing everything it can to take that power away from consumers. One class action-killing tactic that’s gained some traction in the courts is arguing that a class action can’t go forward unless every member of the class can be identified, or “ascertained,” based on official records. That argument cuts at the heart of class actions, because it can destroy any case where (for example) consumers paid with cash and didn’t keep their receipts—a common occurrence.
One federal appeals court actually bought this argument several years back, but that decision has since been rejected by five federal courts of appeals, who recognize that such an “ascertainability” requirement could be fatal to consumer class actions.
But the “records requirement” issue is now front and center at the California Supreme Court in Noel v. Thrifty Payless Inc. (dba Rite Aid), a case involving a fraudulently mislabeled product that Rite Aid sold to thousands of California consumers. Rite Aid got the trial court to throw out a class action against it because the class members’ identities couldn’t be proven based on Rite Aids own records, even though Rite Aid’s records do show how many of the products were sold and for how much.
Public Justice, along with Emergent Law of San Francisco, is fighting to get that opinion reversed. We just filed our opening brief with the California Supreme Court on behalf of the plaintiff, arguing that Rite Aid’s bid for immunity should be rejected as contrary to California class action law and policy. And, because California’s class action rules are similar to Federal Rule 23, the case has relevance to class actions nationwide.
This case involves exactly the sort of wrongdoing the class-action device was designed to address. The plaintiff here purchased an inflatable backyard pool for $60 at a Rite Aid store for his grandchildren to play in at a Fourth of July family barbecue, only to discover that the pool was half the size depicted on the products packaging. He brought a class action against the drugstore seeking repayment of the purchase price, on behalf of himself and the 20,000 other California consumers who bought the same product from Rite Aid.
The class was defined in clear, objective terms that would’ve made it easy for class members to identify themselves as entitled to relief—which is all that class certification usually requires. But the trial court threw the case out on the ground that the plaintiff failed to show a means of identifying the class members from official records – a standard that would make many consumer class actions impossible to bring.
Public Justice is committed to protecting consumer rights in California— and nationwide. The class-action device is the single most important tool for consumers to make sure that companies don’t lie, cheat, or steal. Hopefully the California Supreme Court will agree. If it does, Rite Aid and corporations everywhere will have to think twice before deciding to sacrifice consumers on the altar of profit.