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).
Eleventh Circuit Updates Its Article III Standing Analysis
This blog previously covered the Eleventh Circuit’s July 2022 decision in Drazen v. Pinto, which held that all class members must have Article III standing in order to receive individual damages in a class settlement. 41 F.4th 1354 (11th Cir. 2022). Because the law in the Eleventh Circuit at the time held that a
Eleventh Circuit Holds Having Payment Information Posted to Dark Web Establishes Standing in Data Breach Case, Remands Class Certification Order
Last week, the Eleventh Circuit reversed in part and remanded an order certifying a class in a case arising from a data breach of Chili’s restaurants, Green-Cooper v. Brinker International, Inc., No. 21-13146, 2023 WL 4446420 (11th Cir. July 11, 2023). The opinion clarifies the Eleventh Circuit’s view of when data breaches give rise to Article III standing.
“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.
Sixth Circuit Rejects Juridical Link Exception to Standing in Class Actions
The Sixth Circuit recently vacated a class certification order in a decision that may make it easier for defendants to defeat putative class actions where a named plaintiff asserts standing based on the injuries of absent class members. Under the “juridical link doctrine,” a named plaintiff may bring a class action against defendants who did not injure them so long as the absent members of the proposed class would have standing to sue those defendants. In vacating a district court order that certified a class based on this doctrine, the Sixth Circuit joined the Second Circuit in rejecting the doctrine and holding that named plaintiffs in a putative class action must have standing to sue every defendant at the time of filing.
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Eleventh Circuit Analyzes Article III Standing in Class Action Settlement Context
The Eleventh Circuit recently addressed two aspects of Article III standing relevant to class action settlements: the standing of a class member to object, and the standing of class representatives to seek injunctive relief—and thus whether such injunctive relief should be given any weight as part of the approval process.
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D.D.C.’s Application of TransUnion Echoes the Importance of Actual Injury to Class Certification
In Attias v. CareFirst, Inc., 15-cv-00882-CRC (D.D.C. Mar. 28, 2023), the court’s application of TransUnion v. Ramirez, 141 S. Ct. 2190 (2021), reinforced that inclusion of uninjured class members in the class definition can defeat certification. In CareFirst, Plaintiffs alleged that the data breach that CareFirst, Inc. (“CareFirst”), a health insurance company, suffered in 2014 exposed the plaintiffs to increased risk of fraud and identity theft. Plaintiffs claimed they had to spend time and money on services such as credit and identity theft monitoring programs. They sought to represent classes that included all CareFirst customers in certain states whose personal information was impacted by the breach, regardless of whether those customers incurred additional expenses as a result of the breach.
Eleventh Circuit to Reconsider Standing Decisions
The Eleventh Circuit is poised to reconsider recent standing decisions favorable for defendants seeking to invoke Article III’s standing requirements to defeat class certification.
At issue is the Eleventh Circuit’s July 2022 decision in Drazen v. Pinto, holding that (i) all class members must have Article III standing in order to receive individual damages (whether through a settlement or otherwise), and (ii) the standing determination is decided under Eleventh Circuit law, even where certain class members do not reside within the Eleventh Circuit’s geographic boundaries and may have standing under other circuit precedent. 41 F.4th 1354, 1360–61 (11th Cir. 2022). The dispute in Drazen arose in the context of the Telephone Consumer Protection Act (“TCPA”), and addressed both unwanted phone calls and text messages. While a settlement in Drazen was pending, the Eleventh Circuit held in Salcedo v. Hanna, 936 F.3d 1162, 1168 (11th Cir. 2019), that, contrary to precedent in other circuits, a single unwanted text message was not sufficient to give rise to Article III standing under the TCPA. Because the panel was bound by Salcedo, and because the proposed class definition in the Drazen settlement included individuals whose sole harm was an unwanted text message, those individuals did not have standing. The panel therefore vacated the district court’s approval of the settlement.
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Losing Less than a Penny Suffices for Standing for Class Certification, the Ninth Circuit Rules
The Ninth Circuit recently held that a class could be certified with class members who lost less than a penny of interest. But it also held that where some class members may have lost nothing at all, the district court must take a hard look at whether the predominance requirement has been met.
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.