Clarifying Ascertainability and Consumer Remedies in “Short-Change” Class Actions

Introduction

In Bridget McMahon and James Rice v. Chipotle Mexican Grill, Inc., Nos. 24-1883 & 24-2042 (3d Cir. June 6, 2025), the Third Circuit addressed two principal issues arising from customer complaints that Chipotle cashiers, during the COVID-19 coin shortage, failed to tender the correct amount of coin change:

• Whether the putative class of cash-paying customers who received less change than owed is “ascertainable” under Federal Rule of Civil Procedure 23(b)(3); and
• Whether plaintiffs’ individual claims—conversion, misappropriation, breach of contract, violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), and unjust enrichment—survived summary judgment.

Appellants James Rice and Bridget McMahon (collectively, “Plaintiffs”) sought class certification on behalf of all Pennsylvania cash-paying customers short-changed by Chipotle during the pandemic. After the district court denied class certification for lack of a reliable, objective mechanism to identify all such customers, it granted summary judgment to Chipotle on all individual claims. On appeal, the Third Circuit affirmed the certification denial, reversed summary judgment on breach of contract and UTPCPL (catchall) claims, and dismissed as moot Chipotle’s cross-appeal of the expert-exclusion ruling.

Summary of the Judgment

The Third Circuit’s decision can be distilled into three core holdings:

1. Class Certification (Rule 23): The court affirmed the district court’s denial of class certification for failure to satisfy the ascertainability requirement. Although the class definition (“all cash-paying customers who received less change than owed”) was objectively stated, no administratively feasible, reliable method existed to identify every member without individualized “mini-trials.” Surveillance footage and transaction data could not distinguish between an intentional rounding benefit to the customer and a rounding down that short-changed them. Affidavits from putative members could not be corroborated against objective records.
2. Summary Judgment – Tort and Quasi-Contractual Claims: The court affirmed summary judgment for Chipotle on Plaintiffs’ misappropriation and conversion claims under Pennsylvania’s gist-of-the-action doctrine (purely contractual wrongs cannot be recast as torts). It also affirmed that unjust enrichment is unavailable where an express contract governs the transaction.
3. Summary Judgment – Breach of Contract and UTPCPL: The Third Circuit reversed summary judgment on two claims:
   • Breach of Contract: A jury could find Rice did not waive his right to correct change when he challenged the cashier’s instructions and tendered payment. His questioning of the cashier did not constitute an express or implied waiver of the original payment terms.
   • UTPCPL Catchall Provision (§ 201-2(4)(xxi)): A reasonable jury could conclude that Chipotle’s undisclosed policy of withholding coins created a likelihood of confusion or misunderstanding and that Rice justifiably relied on the cashier’s silence and his receipt to his financial detriment. The false-advertising provision (§ 201-2(4)(ix)), however, failed for lack of evidence that Rice relied on advertised prices when ordering.

Chipotle’s cross-appeal of the district court’s refusal to exclude the plaintiffs’ expert was mooted by the affirmance of the certification denial.

Analysis

1. Precedents Cited

• Marcus v. BMW of N. Am., LLC (687 F.3d 583): Established that ascertainability requires an objectively defined class and a reliable, administratively feasible identification method.
• Byrd v. Aaron’s, Inc. (784 F.3d 154): Clarified that the district court must conduct a “rigorous analysis” of ascertainability and that plaintiffs need only show that members “can be identified,” not that they have actually been identified.
• Kelly v. RealPage, Inc. (47 F.4th 202): Rejected rejecting classes solely for requiring review of voluminous individual records—but affirmed that a class is unascertainable where no objective records track the relevant harm.
• Ramsay v. Nat’l Bd. of Med. Exam’rs (968 F.3d 251): Upheld factual findings supporting the district court’s ascertainability determination where the record failed to evidence precise customer‐specific short-change data.
• Bruno v. Erie Ins. Co. (106 A.3d 48): Articulated Pennsylvania’s gist-of-the-action doctrine, distinguishing tort duties from contractual duties.
• SodexoMAGIC, LLC v. Drexel Univ. (24 F.4th 183): Confirmed that contractual promises cannot underpin tort claims absent an independent, non-contractual duty.
• Den-Tal-Ez, Inc. v. Siemens Cap. Corp. (566 A.2d 1214): Discussed express and implied waivers under Pennsylvania law.
• Gregg v. Ameriprise Fin., Inc. (245 A.3d 637) & Weinberg v. Sun Co. (777 A.2d 442): Defined reliance and “justifiable reliance” elements under the UTPCPL, including the catchall provision for deceptive conduct.

2. Legal Reasoning

The court’s reasoning proceeded in two main stages:

a) Ascertainability under Rule 23(b)(3)

Plaintiffs bore the burden of proving by a preponderance that:

1. The class is defined by objective criteria (a cash purchaser who got less change than owed); and
2. There exists a reliable, administratively feasible method to identify all members.

Although Chipotle’s electronic records identified cash transactions, they did not record the precise amount of change actually handed to each customer. Video footage could not distinguish rounding‐up (beneficial to customers) from rounding‐down (harmful). Affidavits could not be authenticated against objective data, making individualized mini-trials inevitable. The court concluded no workable formula existed to identify every short-changed customer, thus affirming the district court’s discretion under Byrd and Marcus.

b) Summary Judgment on Individual Claims

• Gist-of-the-Action Doctrine: Plaintiffs’ conversion and misappropriation theories collapsed into pure contract disputes. Absent an independent tort duty (such as premises safety in Bruno), these claims failed as a matter of law.
• Unjust Enrichment: Inapplicable because an express contract (receipt plus payment terms) governed the transaction.
• Breach of Contract: Chipotle argued that Rice’s acceptance of partial change and food constituted an implied waiver. The Third Circuit held that a jury could find Rice only temporarily accepted the cashier’s explanation, preserving his right to full contract performance, and did not knowingly waive the coin portion of his change.
• UTPCPL Claims:
  • False Advertising (§ 201-2(4)(ix)): Rice never consulted posted prices and thus could not prove reliance on advertised prices.
  • Catchall Deceptive Conduct (§ 201-2(4)(xxi)): A jury could find that Chipotle’s undisclosed policy and the cashier’s misleading silence created confusion, and that Rice justifiably relied on the transaction representations to his detriment.

3. Impact

This decision is significant for litigants and lower courts in several respects:

• It underscores the exacting “ascertainability” standard under Rule 23(b)(3)—not merely large-scale record review, but the existence of objective records that track the alleged harm without individualized inquiry.
• It reaffirms Pennsylvania’s gist-of-the-action doctrine, preventing “tort-inflation” of purely contractual wrongs.
• It illustrates circumstances under which consumers may press UTPCPL claims based on deceptive transaction practices—even absent reliance on advertising.
• It signals that fact‐intensive defenses (waiver, reliance) often present genuine issues unsuitable for summary disposition.

4. Complex Concepts Simplified

Ascertainability

A class must be defined by clear, objective criteria, and there must be a straightforward way (without mini-trials) to identify every member from existing data or records.

Gist-of-the-Action Doctrine

Torts protect broad social duties; contract law enforces specific promises. If the duty breached arises solely from a contract, the claim sounds in contract, not tort.

UTPCPL Catchall Provision (§ 201-2(4)(xxi))

An umbrella anti-deception rule covering any conduct likely to confuse consumers—even if it does not fit within enumerated unfair practices.

Summary Judgment Standard

Granted only if no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law.

Waiver (Express vs. Implied)

An express waiver is a clear, knowing relinquishment of a right. An implied waiver may be inferred from conduct that accepts an altered agreement with full knowledge of rights being forgone.

Conclusion

The Third Circuit’s ruling in McMahon & Rice v. Chipotle Mexican Grill sharpens the contours of class ascertainability, affirming that Rule 23(b)(3) demands not only a clear class definition but also an administratively feasible identification method based on objective data. It confirms that tort claims cannot supplant contractual disputes (gist-of-the-action) and illustrates how ordinary transaction practices can trigger Pennsylvania’s broad UTPCPL protections. For practitioners, the case highlights the importance of transactional record-keeping and the challenges of certifying classes in the absence of precise, easily queried data.