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1 Page 1 of 7 Search Advanced Search Take a Free Trial Sign In Sign In Take a Free Trial Sign In Advanced Search Close Law360 In-Depth Law360 UK Adv. Search & Platform Tools Browse all sections Banking Bankruptcy Class Action Competition Employment Energy Insurance Intellectual Property Product Liability Securities Rankings Law360's MVPs Glass Ceiling Report Global 20 Law Diversity Snapshot Practice Group Partner Rankings Practice Groups of the Year Pro Bono Firms of the Year

2 Page 2 of 7 Rising Stars Trial Aces Site Menu Join the Law360 team Search legal jobs Learn more about Law360 Read testimonials Contact Law360 Sign up for our newsletters Site Map Help The Road To 60 Votes: Confirming Neil Gorsuch Follow Law360's up-to-the-minute coverage. Learning The Limits (And Irony) Of Spokeo By Roger Perlstadt and Jay Edelson, Edelson PC Law360, New York (December 12, 2016, 11:35 AM EST) -- A federal district court last Wednesday provided an important lesson to the defense bar on the limits of trying to use the U.S. Supreme Court s recent Spokeo decision to escape class actions. In Mocek v. AllSaints USA Limited,[1] not only did the court deny the defendant s Spokeo motion to dismiss for lack of Article III standing, it ordered the defendant to pay the plaintiff nearly $60,000 in attorneys fees. The suit began when the plaintiff Barbara Mocek alleged that she received a receipt from clothing store AllSaints that failed to truncate enough digits of her credit card number as required by the Fair and Accurate Credit Transactions Act.[2] Aware that the law surrounding Article III standing for plaintiffs pursuing FACTA truncation cases was unsettled in the wake of Spokeo, she filed her claim in Illinois state court. The defendant removed the case to federal court, and shortly thereafter filed a motion to dismiss for, among other things, lack of Article III standing under Spokeo. Roger Perlstadt Mocek responded with a motion for remand, arguing that in light of its assertion that Article III standing was lacking, AllSaints had failed to meet its burden as the removing party of establishing federal jurisdiction. The court Jay Edelson agreed, remanding the case to state court and denying the defendant s motion to dismiss as moot. In addition, however, the court ordered AllSaints to pay all of the attorneys fees Mocek incurred in federal court under 28 U.S.C. 1447(c). Noting that it should have been obvious to [the] defendant that, with neither side arguing in support of federal jurisdiction, the only possible result was remand, the court had no trouble concluding that [the] defendant lacked an objectively reasonable basis for seeking removal. [3] We hope that this ruling will go a long way towards correcting a misunderstanding of Spokeo s impact shared at least in our experience by many members of the defense bar. There appears to

3 Page 3 of 7 be a widespread belief that a plaintiff s lack of a concrete injury under Spokeo means that the plaintiff cannot pursue her claim. But failing to satisfy Article III s concreteness requirement simply means that a plaintiff cannot pursue her claim in federal court. Given that states are free to and many explicitly do adopt standing requirements different from Article III s requirements, Spokeo has nothing to say about the justiciability of cases in state court. Indeed, the court in Mocek expressly refused to perform a Spokeo analysis of the plaintiff s FACTA claims, noting that [state] doctrines of standing and ripeness are the business of the [state] courts, and it is not for us to venture how the case would there be resolved. [4] In other words, [the] plaintiff s ability to satisfy Spokeo does not determine whether she may proceed with her suit in state court. [5] Spokeo and Article III standing more generally is about where claims can be brought, not whether claims can be brought. Which leads to the great irony of Spokeo. Conceiving the narrowing of Article III standing as a way to stop what it termed no injury statutory damages class actions, the defense bar pushed its argument all the way to the Supreme Court. But Spokeo s arguable narrowing of Article III standing doesn t make cases go away, it just keeps them out of federal court. And this (perhaps unintended) consequence of Spokeo runs contrary to one of the defense bar s other causes célèbres: the Class Action Fairness Act. A little over a decade ago, the defense bar spent immense time and energy passing CAFA in order to get more class actions into federal court and away from what it perceived to be plaintiff-friendly state courts. But by making Article III standing more difficult to establish in certain statutory damages cases, Spokeo simply pushes those class actions back to state court. Defendants confronted with class actions filed in state court thus face a dilemma. They can proceed in the supposedly unfriendly state court, or they can try to remove the case to federal court. But as Mocek aptly illustrates, removal is not without its risks. A removing defendant cannot assert Spokeo as a defense; if the plaintiff lacks Article III standing (and the court thus lacks jurisdiction) remand back to state court not dismissal is the only remedy.[6] And filing a motion to dismiss under Spokeo after removing the case to federal court risks being slapped with an order to pay the plaintiff s attorneys fees. But even refraining from arguing a lack of Article III standing under Spokeo may not be enough. As the party seeking a federal forum, a removing defendant has the burden of establishing federal jurisdiction. Thus if the plaintiff or the court sua sponte raises the question of standing, the defendant will be placed in the awkward position of having to argue that the plaintiff suffered a concrete injury in fact. And if the defendant fails to successfully do so, the case ends up back in state court, again with the defendant potentially on the hook for the plaintiff s fees. Note that the awkwardness does not extend to plaintiffs. As the Mocek court held, federal courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum. [7] Thus, a plaintiff in a removed case simply has to raise the standing issue; she does not have to argue that she lacks an Article III concrete injury in fact. Mocek is a powerful reminder that lack of a concrete injury in fact is an argument about jurisdiction, not about merits. Consequently, as the court there explained, defendants cannot have it both ways by removing a class action to federal court and immediately seeking to get rid of it on Spokeo grounds.[8] Furthermore, in light of federal courts ability and willingness to award fees against defendants for improper removal, failure to understand this lesson can be quite literally costly.

4 Page 4 of 7 DISCLOSURE: Edelson PC represents the plaintiffs in both Mocek v. AllSaints USA Limited and Robins v. Spokeo Inc. Roger Perlstadt is a partner and Jay Edelson is founder and CEO at Edelson PC in Chicago. The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. [1] No. 16 C 8484 (N.D. Ill. Dec. 7, 2016). [2] 15 U.S.C. 1681c(g). [3] Mocek, slip op. at 9-10 (quoting Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)). [4] Id. at 7-8 (quoting Smith v. Wisc. Dep t of Agric., Trade & Consumer Prot., 23 F.3d 1134, 1137 (7th Cir. 1994)). [5] Id. at 3. [6] 28 U.S.C. 1447(c) ( If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. ). [7] Mocek, slip op. at 5 (internal quotations omitted). [8] Id. at 9. View comments Law360: Get Ahead of the Curve from Law360 01:25 Add to Briefcase Printable Version Rights/Reprints Editorial Contacts Related

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