Article III Standing and Rule 23(b)(3) Certification: Emerging Litigation Trends

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Article III Standing and Rule 23(b)(3) Certification: Emerging Litigation Trends Strategies for Plaintiff and Defense Counsel to Pursue or Challenge Certification WEDNESDAY, DECEMBER 18, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Jeffrey A. Leon, Partner, Complex Litigation Group, Highland Park, Ill. Daniel R. Karon, Partner, Goldman Scarlato Karon & Penny, Cleveland Sabrina H. Strong, Partner, O Melveny & Myers, Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 I Saw her Standing There. Understanding Standing in Class Actions Strafford Webinars December 18, 2013 Daniel R. Karon Goldman Scarlato Karon & Penny, P.C. Jeffrey A. Leon Complex Litigation Group, LLC Sabrina H. Strong O Melveny & Myers LLP

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7 Introduction to Article III Standing A. Constitutional requirements 1. Injury-in-Fact Plaintiff must have suffered actual or threatened injury as the result of defendant s alleged illegal conduct that s concrete and particularized and actual or imminent, not conjectural or hypothetical 7

8 Introduction to Article III Standing 2. Traceability or Causation Plaintiff s alleged injury must be traceable to challenged action Indirect injury OK if traceable to defendants acts or omissions Plaintiff must show some causal connection between injury and defendant s conduct. 8

9 Introduction to Article III Standing 3. Redressability Established when favorable decision would amount to significant increase in likelihood that plaintiff would obtain relief that directly redresses the injury suffered. 9

10 Introduction to Article III Standing B. Prudential requirements 1. Generalized Grievances Standing not warranted for generalized grievances shared by many Understood to be job of other governmental institutions, like Congress 10

11 Introduction to Article III Standing 2. Third-Party Standing Litigants must assert their own legal rights and interests and can t rest claim on the legal rights or interests of third parties. 11

12 Introduction to Statutory Standing Steel Co. v. Citizens for a Better Env t, 523 U.S. 83 (1998) 12

13 Introduction to Statutory Standing Steel Co. v. Citizens for a Better Env t, 523 U.S. 83 (1998) - Court can t decide merits-based or cause-of-action questions first (e.g., does statute allow damages for violations) (Rule 12(b)(6) question) although, the merits inquiry [such as whether cause of action exists] and the statutory standing inquiry often overlap. - Article III standing - as opposed to statutory standing has nothing to do with the text of the statute relied upon. - Because unlike Article III standing, statutory standing involves whether plaintiff comes within zone of interests for which the cause of action is available. 13

14 Introduction to Statutory Standing Plaintiff s claimed redressable injuries: Plaintiff s right to know about [toxic chemical] releases and [Plaintiff s] interests in protecting and improving the environment and the health of its members have been, are being, and will be adversely affected by [Defendant s] actions in failing to provide timely and required information under EPCRA. But the Court considered Plaintiff s claimed injury unredressable: Having found that none of the relief sought by [Plaintiff] would likely remedy its alleged injury in fact, we must conclude that [Plaintiff] lacks standing to maintain this suit, and that we and the lower courts lack jurisdiction to entertain it. 14

15 But wait... 15

16 Introduction to Statutory Standing Stevens concurrence in judgment: Question: Does the EPCRA confer[] federal jurisdiction over citizen suits for wholly past violations? Answer: [T]he Court should answer the statutory question first. Moreover, because the EPCRA, properly construed, does not confer jurisdiction over citizen suits for wholly past violations, the Court should leave the constitutional question for another day. 16

17 Introduction to Statutory Standing [If the EPCRA] authorizes citizen suits for wholly past violations, the district court has jurisdiction over these actions; if it does not, the court lacks jurisdiction. The Court s inquiry as to standing must begin with a determination of whether the statute in question authorizes review at the behest of the plaintiff. The Court should turn[] to the constitutional standing question only after determining that standing exist[s] under the statute. [G]iven a choice between two jurisdictional questions one statutory and the other constitutional the Court has the power to answer the statutory question first. [A]nd if no right of action exists, questions of standing and jurisdiction become immaterial. 17

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19 Standing challenge #1 Manifestation of injury to plaintiff (i.e., does injury-in-fact to plaintiff exist?) 19

20 Standing Challenge #1 Manifestation of Injury standing doesn t exist In re Barnes & Noble Pin Pad Litig., No. 12-cv-8617, 2013 WL , at *3 (N.D. Ill. Sept ) Nothing in the Complaint indicates Plaintiffs have suffered either a certainly impending injury or a substantial risk of an injury, and therefore, the increased risk is insufficient to establish standing. DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 305, 307 (Tex. 2008) [P]laintiffs could accidentally unlatch their Gen-3 seatbelt buckles and subject themselves to harm, though that has never happened.... ( Ripeness issue here?) 20 [T]he rights of ten million vehicle owners and lessees across the United States should not be adjudicated in an action brought by three plaintiffs who cannot show more than the merest possibility of injury to themselves.

21 21 But...

22 I Standing Challenge #1 Premium-Price Theory May Overcome No-Manifestation-of-Injury Argument In re Hydroxycut Mktg. & Sales Practices Litig., 801 F. Supp. 2d 993, 1002 (S.D. Cal. 2011) [T]he injury to Plaintiffs occurred at the time they purchased the Hydroxycut products and did not receive the benefit of their bargain. Plaintiffs have lost the money they paid for the product and have alleged an economic injury. In re Whirlpool Corp. Front Loading Washer Prods. Liability Litig., 722 F.3d 838, 856 (6th Cir. 2013) If defective design is ultimately proved, all class members have experienced injury as a result of the decreased value of the product purchased. (notably, opinion doesn t discuss standing) 22

23 Standing Challenge #2 May plaintiffs counsel include states where class representatives don t reside? 23

24 Standing Challenge #2 Yes In re Processed Egg Prods. Antitrust Litig., 851 F. Supp. 2d 867, (E.D. Pa. 2012) An Article III standing inquiry simply does not require considering the elements of a state claim as jurisdictional prerequisites. To inject the condition that Plaintiffs must satisfy certain elements of the state antitrust claims into a constitutional standing analysis would result in an impermissible out-of-the-box merits inquiry. Sullivan v. DB Investments, Inc., 667 F.3d 273, 307, 347 (3d Cir. 2011) [S]tatutory standing is simply another element of proof for an antitrust claim, rather than a predicate for asserting a claim in the first place. Dissent: [O]ne must actually have a legal claim before getting in line for a legal recovery. 24

25 Standing Challenge #2 No In re Wellbutrin XL Antitrust Litig., 260 F.R.D. 143, 158 (E.D. Pa. 2009) The plaintiffs' argument that they have general Article III standing is insufficient to establish standing with respect to particular claims. The Court finds that the plaintiffs have standing to assert claims only under the laws of those states where the plaintiffs are located or their members reside. In re Terazosin Hydrochloride Antitrust Litig., 160 F. Supp. 2d 1365, 1371 (S.D. Fla. 2001) [E]ach claim must be analyzed separately, and a claim cannot be asserted on behalf of a class unless at least one named plaintiff has suffered the injury that gives rise to that claim.... Analyzing each of [plaintiffs ] state law claims separately, it is clear that no named plaintiff suffered an injury giving rise to an antitrust claim in [the states where neither any plaintiff resides nor purchased Terazosin]. 25

26 Standing Challenge #3 May class representatives assert claims with respect to products that they haven t bought? 26

27 Standing Challenge #3 Before we answer... Courts consider this question different ways: Standing issue Class-certification issue 27

28 Standing Challenge #3 Is there standing? Yes Anderson v. Jamba Juice Co., 888 F. Supp. 2d 1000, 1005 (N.D. Cal. 2012) The critical inquiry is whether the products purchased versus not purchased are substantially similar. Here, all claims were based on All Natural label but had different flavors. Court denied motion to dismiss for lack of standing. Lanovaz v. Twinings N. Am., Inc., No. C , 2013 WL , *3 (N.D. Cal. May 23, 2013) Because the claims for 51 of the varieties of tea are based upon the exact same label describing the same product, camellia sinensis, the court finds that Lanovaz has standing to sue on behalf of the purchasers of these teas and thus denies Twinings motion with respect to these products. Red tea, on the other hand, is made from a different plant and is thus a significantly different product. 28

29 Standing Challenge #3 Is there standing? No Miller v. Ghirardelli Chocolate Co., 912 F. Supp. 2d 861, (N.D. Cal. 2012) [P]laintiff may have standing to assert claims for unnamed class members based on products he or she did not purchase so long as the products and alleged misrepresentations are substantially similar, and here, the products were not substantially similar. Johns v. Bayer Corp., No. 09-CV-1935, 2010 WL , at *5 (S.D. Cal. Feb. 9, 2010) [Plaintiff] cannot expand the scope of his claims to include a product he did not purchase or advertisements relating to a product that he did not rely upon. The statutory standing requirements of the UCL and CLRA are narrowly prescribed and do not permit such generalized allegations. Plaintiff, therefore, has standing under the UCL and CLRA to pursue his claim regarding [the] product [he purchased] and the 29 representations contained on that product; but he lacks standing to pursue any other alleged claim under the UCL or CLRA.

30 Standing Challenge #3 Class-certification issue standing exists Aguilar v. Boulder Brands, Inc., No. 12-cv-01862, 2013 WL , at *3 (S.D. Cal. June 10, 2013) Plaintiff s ability to represent class members injured by similar products should be analyzed under Rule 23, not on a motion to dismiss. Forcellati v. Hyland s, Inc., 876 F. Supp. 2d 1155, 1161 (C.D. Cal. 2012) [W]e agree with the numerous recent decisions that have concluded that Defendants argument is better taken under the lens of typicality or adequacy of representation, rather than standing. 30

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32 Does Article III standing exist when plaintiff, aware of an alleged misrepresentation, is pursuing only injunctive relief? 32

33 Does Article III standing exist when plaintiff, aware of an alleged misrepresentation, is pursuing only injunctive relief? No No threat of future harm means no standing Campion v. Old Republic Home Protection Co., 861 F. Supp. 2d 1139 (S.D. Cal. 2012) Even if plaintiff were to purchase another home-warranty plan from defendant, he now has knowledge of defendant s alleged misconduct. 33 Castagnola v. Hewlett-Packard Co., No. 11-cv-05772, 2012 WL (N.D. Cal. June 13, 2012) Defendant allegedly deceived consumers into enrolling in a feebased website membership. No standing because plaintiffs were now aware of this conduct.

34 Does Article III standing exist when plaintiff, aware of an alleged misrepresentation, is pursuing only injunctive relief? Yes No would thwart the consumer-protection laws Ries v. Arizona Beverages USA, No RS, 2012 WL (N.D. Cal. Nov. 27, 2012) Plaintiff would not be able to rely on future representations that the drink is natural, which is the kind of harm that California s consumerprotection statutes are designed to redress. Koehler v. Litehouse, Inc., No. 12-cv-04055, 2012 WL (N.D. Cal. Dec. 13, 2012) Court finds that injunctive relief is proper; otherwise, consumers would be unable to obtain relief under consumer protection laws. 34

35 Questions? Comments? Compliments? 35

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37 Thank you! Daniel R. Karon (216) Jeffrey A. Leon (847) Sabrina H. Strong (213)