Federal courts of appeals have disagreed on whether a named plaintiff in a proposed class action can sue defendants who have not injured that plaintiff but allegedly have injured putative class members. This is not an uncommon scenario. Plaintiffs often attempt to bring putative class actions that are broader than their own claims, suing defendants that did not injure them. The Sixth Circuit recently weighed in on this issue, rejecting the “juridical link” doctrine and holding that a named plaintiff has no standing to sue a defendant that did not injure that plaintiff. This is a thorough opinion that will be useful for defendants on this issue.
In Fox v. Saginaw County, – F.4th –, 2023 WL 3143922 (6th Cir. Apr. 28, 2023), a Michigan County foreclosed on the plaintiff’s property because he failed to pay property taxes. The county sold the property for much more than the amount of back taxes owed but the plaintiff did not receive any of the surplus. In other litigation, this practice has been held to be an unconstitutional taking. (Coincidentally, the U.S. Supreme Court heard oral argument on Friday regarding whether an essentially-identical practice in Minnesota is unconstitutional, with SCOTUSblog reporting that the justices appeared inclined to rule for the homeowner). The plaintiff in this case sued not only the county that had taken his property but also 26 other Michigan counties that allegedly had harmed putative class members in substantially the same manner. The district court certified that entire class, and the Sixth Circuit accepted an interlocutory appeal under Rule 23(f).
The Seventh Circuit has held that under the “juridical link” doctrine a proposed class representative can sue defendants that did not injure the class representative if the class members would have standing and the named plaintiff can otherwise satisfy the requirements for class certification. But the Second and Eighth Circuits have rejected that theory (see my blog post on the Second Circuit decision).
In Fox, the Sixth Circuit addressed this issue thoroughly, rejecting the “juridical link” doctrine as contrary to Supreme Court precedent for three reasons. First, the Supreme Court has generally rejected the notion that standing should be evaluated differently in a putative class action as compared with an individual suit, requiring that named plaintiffs establish a personal, individual injury and generally limiting the scope of any class claims consistent with the named plaintiff’s claim. Second, given that standing must be established at the outset of litigation before a class has been certified, logically standing cannot depend on injuries to putative class members that are not yet parties when the case is brought. Third, the efficiency rationale for the “juridical link” doctrine cannot override the separation-of-powers rationale for Article III standing requirements.
Given the Supreme Court’s decisions looking to historical practice in evaluating standing issues, the Sixth Circuit’s opinion included an interesting discussion of some of the historical predecessors of the modern class action in English courts, including “bills of peace,” whereby, for example, “[t]he named tenants of a manor might represent all of the tenants in a dispute against the manor’s lord over hunting rights on manorial lands.” This did not support the “juridical link” doctrine because no historical evidence was found of “bills of peace in which, say, named tenants sued not just the lord of their own manor on behalf of their cotenants but also the lords of all other manors.”
The Sixth Circuit also noted some problems that might be encountered on remand. While the plaintiff might be able to find 26 other named plaintiffs from the other counties to join him, thereby avoiding the standing problem, he would face other obstacles that the district court had not addressed. Proving the fair market value of every putative class member’s property could potentially overwhelm any common questions. The district court also would have to address whether individualized defenses could be litigated in a manageable way, and how mortgages and other liens would be addressed. If class certification were sought again, the district court would have to “forecast how the parties will conduct the litigation from the certification stage through the trial to the final judgment.”
[View source.]
