Second Circuit Clarifies Ascertainability Rule, Rejecting "Heightened" Standard Of Administrative Feasibility

The Second Circuit recently rejected the "heightened" ascertainability requirement under Rule 23(b)(3), turning aside a challenge to a district court's certification of a securities fraud class action. Instead, the court chose to follow the Sixth, Eighth, and Ninth Circuits by adopting an ascertainability standard that only requires "that a class be defined using objective criteria that establish a membership with definite boundaries."

A district court certified two classes in the securities fraud case: one for claims based on the Exchange Act and one for claims based upon the Securities Act. Because the relevant debt securities were not traded on any U.S. exchange, putative class members could only assert claims if they acquired their securities in "domestic transactions." On appeal of the certification order, the defendants argued the classes failed to satisfy Rule 23's implicit "ascertainability" requirement (along with predominance) because putative class members