3rd Cir. Refines Numerosity: 22 is NOT the New 40

By Annie Dike, Esq.

Twenty-two class members was not enough “strength in numbers” to pass the Third Circuit’s “particularly rigorous” under-40 numerosity review. In a recent opinion, a divided panel of the Third Circuit issued a detailed, arduous scrutiny of numerosity sufficient to warrant class certification finding, essentially, that 15 is too few, and 40 is plenty while offering 6 new-merosity factors district courts should consider before granting class certification.

Although numerosity is the first factor listed in Fed. R. Civ. P. 23 for class certification, it is not the factor that generally attracts the most laborious review. Most class-action lawsuits are built upon a group in the hundreds if not thousands. In these cases, class-action lawyers are used to fighting over commonality and typicality, but the In re: Modafinil Antitrust Litigation opinion will give them clear grounds to fight over numerosity when there are between 15 and 40 class members.

The 22 plaintiffs, direct wholesale purchasers of Provigil (Cephalon’s branded version of the generic modafinil), a medication used to treat sleep disorders, sued Cephalon alleging a monopoly and an antitrust conspiracy between it and four other manufacturers of the generic modafinil. The alleged conspirators entered into reverse-payment settlements whereby an upfront cash incentive is offered to keep competition from generic manufacturers at bay for a set period of time. The plaintiffs claim Cephalon’s payments to competitors were allowing it to reign as “king of the Provigil hill” and name its price for the drug.

So, what was wrong with the modafinil class? Nothing according to the district court, which certified its 22 members. The district court found the numerosity requirement was satisfied because judicial economy was best served in that case by certification as a class action because litigation had reached such a late stage. That was where the Third Circuit took issue, reversed, and remanded. The Third Circuit’s critique of the district court was that it improperly emphasized the stage of the litigation rather than exploring the ability of the 22 class members to prosecute their claims through joinder. The true test of Rule 23(a)(1), is that the class is “so numerous that joinder of all members is impracticable.”

Allowing the late stage of the litigation to satisfy a numerosity requirement, according to Justice Smith, who wrote the majority opinion, would incline all complex, long-lived litigation towards class certification merely because it was complex and required extensive discovery. While Smith noted the text of the Rule offers no numerical requirement, he did etch out a new “particularly rigorous” area of numerical scrutiny: any class greater than 15 but fewer than 40. As this case has so few plaintiffs, a “late stage” argument cannot be sufficient.

To satisfy the requirement of particular rigor, Justice Smith outlined six non-exhaustive factors to be considered in analyzing numerosity: 1) judicial economy; 2) the claimants’ ability and motivation to litigate as joined plaintiffs (a.k.a. “practicality”); 3) the financial resources of class members; 4) the geographic dispersion of class members; 5) the ability to identify future claimants; and 6) whether the claims are for injunctive relief or for damages. The court stressed that the first two factors, judicial economy and practicality, are “of primary importance.” Importantly, practicality refers to the possibility of litigating as joined plaintiffs, not as individuals. Six of the class members have claims of less than $1M, and it might be impractical for them to pursue individual litigation, but that is not the test. As Justice Smith emphasized, the burden lies with the plaintiff to prove that joinder would be impractical.

Another huge strike for the plaintiffs here was the fact that the 3 class members with claims over $1B, comprising 97% of the total value of the case, were unnamed. They would not be subject to individual discovery or the typical burdens of traditional litigation. In all, it appeared to the Third Circuit that the 3 unnamed members were utilizing the class device to their advantage rather than as a practical procedural need. The court stressed class certification should only be awarded where it is proven it will be “substantially more efficient than joinder,” which is usually the case when there are numerous (more than 40) small value or negative claims. That was certainly not the case here.

The takeaway from this opinion is a very detailed, concrete approach to certification of classes with members ranging from 15 to 40 and the “particularly rigorous” hurdles they will need to overcome to obtain certification. In all, class-action plaintiffs’ counsel with classes falling in this numerical 15-40 “gray zone” should take extra measures to prove that joinder is not practicable. The Third Circuit has stressed that this is the plaintiff’s burden. The plaintiff may show either that the claims are small or negative value, that the cost of litigating them individually may outweigh the potential benefit, or that the case is so complex or the plaintiffs spread so far apart that judicial economy will be accomplished if discovery is consolidated.

Have you ever had a similar, 15-40-member “big claims” class certified or denied? Tell us about it.



As a former trial and litigation attorney, Annie Dike has a keen eye for expert evidentiary issues and a clear voice for practical solutions.  Annie is a published author of both fiction, non-fiction, and a comprehensive legal practitioner's guide to hourly billing published by LexisNexis. Annie graduated from the University of Alabama School of Law cum laude.  While in law school, she served as Vice President of both the Bench and Bar Legal Honor Society and the Farrah Law Society and was a member of the Alabama Trial Advocacy Competition Team as well as Lead Articles Editor of The Journal of the Legal Profession.  Ms. Dike has published articles in The Alabama Lawyer and DRI MedLaw Update and has spoken on numerous legal issues at various conferences nationwide.

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