Class certification denied over dealership prize mailer

The North Carolina Supreme Court held that a proposed consumer class action arising from a dealership promotional mailer could not be certified because the class was not ascertainable and identifying class members would require individualized inquiries that overwhelmed common issues.

The case arose from a 2018 marketing campaign in which the defendants mailed promotional flyers advertising a sales event and the opportunity to win prizes, including a new vehicle or $20,000 in cash. The plaintiffs alleged that the scratch-off portion of the mailers falsely suggested that recipients had won a top prize, prompting them to call a hotline and visit the dealership, only to receive a $2 cash prize. The plaintiffs asserted claims including breach of contract and unfair and deceptive trade practices on behalf of a proposed class.

This was the second time the dispute reached the Supreme Court. In an earlier appeal, the court vacated a class certification order because the trial court used inconsistent class definitions. On remand, the trial court redefined the class as individuals who received the mailer, called the promotional hotline and visited the dealership to claim a prize. The Supreme Court found the revised order still contained inconsistencies, noting that one named plaintiff remained a class representative even though the trial court found that her grandmother, rather than the plaintiff herself, had called the hotline.

The court also addressed whether the proposed class was ascertainable. The defendants produced records showing that approximately 50,000 households received the mailer, 2,118 individuals called the hotline and 927 people visited the dealership during the promotional period. However, no records identified which callers later visited the dealership. As a result, the court concluded there was no objective and administratively feasible method to determine class membership.

The court explained that identifying class members would require potential claimants to self-identify and would necessitate extensive individualized fact-finding to determine whether they met the class definition. Such a process would result in numerous mini-trials and defeat the predominance requirement for class certification. The court left open the possibility that discovery-related issues could be raised on remand.

The 11 page opinion is Surgeon v. TKO Shelby LLC, Lawyers Weekly No. 010-015-26.