Class Certification Denied in Chipotle “All Natural” Case Where Class Unascertainable from Chipotle’s Records

A recent decision in the Central District of California reflects the growing trend among federal courts to deny class certification where the class is not ascertainable from the defendants’ records.

Last week, U.S. District Court Judge Dale Fischer denied class certification in Alan Hernandez v. Chipotle Mexican Grill, Inc., Case No. 12-05543 DSF (C.D. Dec. 2, 2013), an “all-natural” suit against Chipotle. The plaintiff alleged that Chipotle’s in-store signs and menus falsely advertised its meats as “naturally raised” when, in fact, many Chipotle restaurants served conventionally raised meats at various times throughout the proposed class period. The plaintiff also contended that Chipotle’s point-of-purchase (POP) signs, which publicized supply shortages of naturally raised meats, insufficiently informed customers that certain stores served conventionally raised meats.

In denying class certification, Judge Fischer found that common questions did not predominate over individual issues and that there was no way to determine class membership in a reliable or administratively feasible manner:

Purchase Records: First, Judge Fischer found that the court would need to individually resolve key questions regarding consumers’ purchases of contested meats. Because “the alleged misconduct took place only with regard to varying products at varying locations within limited time frames,” the court would need to individually assess “when a class member ate at Chipotle, the exact location where he ate, and which meat (if any) he ate . . .” to determine the appropriateness of his class membership. Moreover, because the “dispute concern[ed] a low price transaction that neither class members nor Chipotle maintain[ed] specific records of or could be expected to recall,” it would be impossible to prove whether any given individual was a member of the class. These difficult factual questions demonstrated that individual issues predominated over common questions and that the class was not readily ascertainable.

POP Signs: Second, Judge Fischer also found that the court could not determine on a classwide basis which class members were exposed to Chipotle’s allegedly insufficient POP signs. The court would instead have to assess individually whether each proposed member saw the POP sign, and, if not, why he or she did not see it—either because of Chipotle’s negligence, the class member’s negligence, or because the sign was not there. Such an inquiry only further demonstrated the predominance of individual issues that rendered the class unascertainable.

Class Action Not Superior: Finally, individual liability issues demonstrated that a class action was not a fair or efficient mechanism to adjudicate the plaintiff’s claims. Judge Fischer was specifically concerned that the claims administration process would not appropriately compensate class members. Given the complicated process of filing a claim, the court was concerned that potential claimants would either lie, incorrectly fill out a claim form or not even bother:

“Money would [therefore] be given out basically at random to people who may or may not actually be entitled to restitution. This is unfair both to legitimate class members and to Chipotle,” the Court concluded.

Takeaway: Judge Fischer’s denial of class certification suggests that federal courts are imposing a greater threshold than in the past to prove that a class is ascertainable. Indeed, the Third Circuit recently denied class certification on these grounds, finding that the plaintiff’s proposed use of third-party retail records and class members’ affidavits did not provide a reliable or administratively feasible method to prove class membership. See Carrera v. Bayer Corp., 727 F.3d 300, 308 (3d Cir. 2013); see also Red v. Kraft Foods, Inc., No. CV 10-1028-GW (AGRX), 2012 WL 8019257 at *5-6 (C.D. Cal. Apr. 12, 2012) (finding that putative class members’ lack of receipts presented a “significant legal and practical hurdle” in ascertaining class membership); Weiner v. Snapple Beverage Corp., No. 07 CIV. 8742 DLC, 2010 WL 3119452 at *13 (S.D.N.Y. Aug. 5, 2010) (finding class unascertainable where plaintiffs failed to demonstrate that “putative class members will have retained a receipt, bottle label, or any other concrete documentation of their purchases” of product with contested “All Natural” label).

Defendants whose businesses do not readily store identifiable customer information and/or permit identification of class members exposed to alleged misconduct may find these cases to be a welcome trend in defending against class actions.