In a recent published decision, the Fifth Circuit declined to articulate a rule for the “order and depth in which” it “grapples with constitutional standing and the Rule 23 inquiry.” Chavez v. Plan Benefit Services, Inc., __ F.4th __, No. 22-50368, 2023 WL 5160393 (5th Cir. Aug. 11, 2023). The court concluded that the plaintiffs—three employees who participated in health and retirement plans administered by the defendants—had standing to sue on behalf of absent class members who participated in thousands of different benefits plans administered by the defendants. The court went on to affirm the district court’s certification of two classes, each under both Rules 23(b)(1)(B) and 23(b)(3).
“Money-Back Guarantee” Deprived Plaintiff of Standing to Bring a False Labeling Class Action
In recent years, sellers of consumer products have faced countless class action lawsuits alleging that their products are misleadingly advertised. Many motions to dismiss often turn on whether the product’s advertising is misleading to a reasonable consumer. But in Valiente v. Publix Super Markets, Inc., 2023 U.S. Dist. LEXIS 91089 (S.D. Fla. May 24, 2023), the court took a different tack, dismissing a false advertising claim on Article III standing grounds because the defendant’s “money-back guarantee” effectively mooted the plaintiff’s claim for monetary damages.
Fourth Circuit Remands Class Action to State Court After Plaintiff Questions His Own Standing
A procedural violation of a state’s privacy statute is not alone enough to establish Article III standing—a plaintiff must suffer a concrete injury, such as an increased risk of identity theft. The Fourth Circuit’s decision in O’Leary v. TrustedID, Inc., 2023 WL 2125996 (4th Cir. Feb. 21, 2023) confirms this—but also illustrates how Article III standing is a two-edged sword that may allow a plaintiff to defeat a defendant’s attempt to remove a case to federal court.
The plaintiff in O’Leary filed a class action against TrustedID in South Carolina state court for allegedly violating South Carolina’s Financial Identity Fraud and Identity Theft Protection Act, S.C. Code Ann. § 37-20-180. The statute prohibits requiring consumers to use six or more digits of their Social Security numbers to access a website without also requiring some other authentication measure. The plaintiff alleged that TrustedID’s website required him to provide six digits of his Social Security number and did not have any other safety precautions, such as a password requirement.