Article III and Rule 23: Do We Stand Together or All on Our Own?

Carlton Fields
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Carlton Fields

On December 16, 2020, the Supreme Court granted certiorari in TransUnion LLC v. Ramirez to review the Ninth Circuit’s decision in Ramirez v. TransUnion LLC. Specifically, the Supreme Court granted certiorari for the following question:

Whether either Article III or Rule 23 permits a damages class action where the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered.

The Supreme Court’s certiorari grant is a significant moment in class action jurisprudence. The question of Article III standing for absent class members is a knot that courts have been trying to sort out over the last several years.

On one end, the Second Circuit has held that “no class may be certified that contains members lacking Article III standing.” Accordingly, district courts in the Second Circuit routinely examine Article III standing of absent class members as part of the class certification analysis. See, e.g., Kempner v. Town of Greenwich, 249 F.R.D. 15, 17 (D. Conn. 2008) (Hall, J.) (“Before addressing the class certification rule, the court finds that the proposed class cannot be certified because it contains members who do not have standing under Article III of the Constitution.”); Tomassini v. FCA US LLC, 326 F.R.D. 375, 386 (N.D.N.Y. 2018) (D’Agostino, J.) (“Where a plaintiff’s class definition includes a significant number of individuals who do not have standing, a court must deny the motion for class certification.”); Calvo v. City of N.Y., No. 1:14-cv-07246, 2018 WL 1633565, at *2 (S.D.N.Y. Apr. 2, 2018) (Caproni, J.) (“Ultimately, the Article III standing inquiry must be examined through the prism of the class definition; in this Circuit, a class cannot be certified if any person captured within the class definition lacks Article III standing.”).

District courts in the Second Circuit have even denied class action settlements where the settlement class contained individuals who lacked Article III standing. See, e.g., Lackawanna Chiropractic P.C. v. Tivity Health Support, LLC, No. 1:18-cv-00649, 2020 WL 4692464, at *3 (W.D.N.Y. July 7, 2020) (McCarthy, M.J.) (rejecting the plaintiff’s argument that “the presence of a de minimis number of uninjured class members is permissible at class certification” and finding that “[a]pproval of the proposed settlement would exceed the court’s jurisdiction, by authorizing payments to those who have not been injured”).

Likewise, in In re Asacol Antitrust Litigation, the First Circuit reversed an order granting class certification, holding that “this is a case in which any class member may be uninjured, and there are apparently thousands who in fact suffered no injury. The need to identify those individuals will predominate.” The First Circuit went on to discuss the difficulties with identifying a manageable claim process that allows the defendant to preserve its Seventh Amendment right to a jury trial on contested issues, as opposed to a claim administrator’s review.

And in In re Rail Freight Fuel Surcharge Antitrust Litigation, the D.C. Circuit vacated certification of a class because the plaintiffs had failed to “show that they can prove, through common evidence, that all class members were in fact injured by the alleged conspiracy.”

Some other circuits have held that absent class members are not required to have Article III standing. See, e.g., Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 367 (3d Cir. 2015) (concluding that “requiring Article III standing of absent class members is inconsistent with the nature of an action under Rule 23”); DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1198 (10th Cir. 2010) (holding that “Rule 23’s certification requirements neither require all class members to suffer harm or threat of immediate harm nor Named Plaintiffs to prove class members have suffered such harm”); Kohen v. Pac. Inv. Mgmt. Co., 571 F.3d 672, 676 (7th Cir. 2009) (“[A] class will often include persons who have not been injured by the defendant’s conduct. … Such a possibility or indeed inevitability does not preclude class certification.”).

Nonetheless, even courts in those circuits that do not require that absent class members have standing often still consider the issue of individualized injury when deciding a motion for class certification, particularly on the issue of predominance. See Neale, 794 F.3d at 368–69.

As for where the law stands in the Eleventh Circuit, within the last five years, some district courts have stated that “only [the named plaintiff] needs to establish standing.” Gross v. Advanced Disposal Servs., Inc., No. 8:17-cv-01920, 2018 WL 8415876, *4 (M.D. Fla. Dec. 10, 2018) (Honeywell, J.); Etzel v. Hooters of Am., LLC, 223 F. Supp. 3d 1306, 1313–14 (N.D. Ga. 2016) (May, J.) (concluding that the plaintiff does not have to show that each member of the putative class would have an injury in fact); Mohamed v. Am. Motor Co., 320 F.R.D. 301, 310 n.3 (S.D. Fla. 2017) (Cooke, J.) (rejecting the defendant’s “contention that absent class members must have Article III standing”).

However, since the Gross, Etzel, and Mohamed decisions were issued, the Eleventh Circuit weighed in on this important issue and held that “whether absent class members can establish standing may be exceedingly relevant to the class certification analysis required by Federal Rule of Civil Procedure 23.”

Specifically, in the published Cordoba decision,¹ the Eleventh Circuit held that Article III standing must be determined as to each individual class member before any relief can be awarded. In reaching that conclusion, the Eleventh Circuit observed that “unnamed class members’ standing poses a powerful problem under Rule 23(b)(3)’s predominance factor” and, after surveying the case law, added that “[t]his problem will necessarily arise here because at some point before it can award any relief, the district court will have to determine whether each member of the class has standing.” See also id. at 1274 (“The essential point, however, is that at some time in the course of the litigation the district court will have to determine whether each of the absent class members has standing before they could be granted any relief. That is an individualized issue.”).

The import of Cordoba is that, in the Eleventh Circuit, a district court must, at some point, evaluate each class member’s standing on an individualized basis. This aspect of Cordoba has since been applied by several Florida district courts to deny class certification. See, e.g., New Concept Dental v. Dental Res. Sys., Inc., No. 0:17-cv-61411, 2020 WL 3303064, at *10 (S.D. Fla. Mar. 3, 2020) (Marra, J.) (citing Cordoba, “recogniz[ing] potential standing impediments, as to absent class members,” and finding that the “Plaintiff is unable to show what proportion of the putative class members suffered an injury ‘fairly traceable’ to [the Defendant’s] conduct … and hence is unable to show that the issue of standing will involve common questions of fact as opposed to individualized determinations”); Ohio State Troopers Ass’n, Inc. v. Point Blank Enters., Inc., No. 0:18-cv-63130, 2020 WL 5667766, at *8–9 (S.D. Fla. Aug. 24, 2020) (Ruiz, J.) (analyzing standing under Cordoba and noting that “a class should not be certified if it is apparent that it contains agreat many persons who have suffered no injury at the hands of the defendant”).

One way or the other, the Supreme Court’s upcoming decision in TransUnion should shed light as to whether the Second Circuit’s categorical approach will control or if the rule will call for some less rigid standard, at least at the class certification stage.


¹In Gross, the court relied on the Eleventh Circuit’s unpublished opinion in Venerus v. Avis Budget Car Rental, LLC, in which the court stated that “[t]o the extent the district court relied on Article III standing to decline to certify the class, this was error.” This aspect of the unpublished Venerus decision appears at odds with the published holding issued the next year in Cordoba stating that the standing of unnamed class members should be part of the Rule 23 predominance analysis.

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