Many plaintiffs’ lawyers seek to define classes as broadly as possible in order to raise the stakes—and potential settlement value—of a case. These sweeping class definitions often include putative class members who would lack standing to bring their claims individually because they have not personally been injured by the alleged wrongdoing. But as the Supreme Court has reiterated, standing is not optional for plaintiffs in federal courts: Under Article III of the Constitution, federal courts lack jurisdiction unless the plaintiff has “suffered an ‘injury in fact’” that is “fairly…traceable to the challenged action of the defendant” and that likely “will be ‘redressed by a favorable decision,’” (Lujan v. Defenders of Wildlife). Defendants therefore should consider opposing class certification on the grounds that the proposed class may contain absent class members who would lack standing on their own.
The Article III standing argument may be most useful when plaintiffs pursue class actions under state laws that arguably have more lax standing requirements than the Constitution would impose. For instance, in Avritt v. Reliastar Life Insurance Co., plaintiffs sued under California’s Unfair Competition Law, arguing that, under the California Supreme Court’s decision in In re Tobacco II Cases, they need not show reliance or injury for each member of the class as a matter of the state law governing standing. The 8th Circuit rejected this position, stating that “to the extent that [a court] holds that a single injured plaintiff may bring a class action on behalf of a group of individuals who may not have had a cause of action themselves”—because those absent class members may not have relied on an alleged misrepresentation, or because they were not actually injured—“it is inconsistent with the doctrine of standing as applied by federal courts.” The court further explained that “the mere existence of a state cause of action [does] not provide the plaintiff with standing to bring a lawsuit in federal court.”
In response, plaintiffs’ counsel often argue that Article III standing requirements apply only to the named plaintiff and not to absent class members, and rely on a few decisions containing statements to that effect. For example, in Stearns v. Ticketmaster Corp., the 9th Circuit reiterated its position that, for purposes of Article III justiciability, “‘in a class action, standing is satisfied if at least one named plaintiff meets the requirements,’” (quoting Bates v. United Parcel Serv., Inc.).
And the 7th Circuit stated in Kohen v. Pacific Investment Management Co. that the “possibility or indeed inevitability” that “a class will often include persons who have not been injured by the defendant’s conduct . . . does not preclude class certification” on the ground that the court lacks jurisdiction under Article III. But plaintiffs exaggerate the breadth of these decisions. Although the 7th and 9th Circuits may doubt that Article III ousts courts of jurisdiction over the claims of uninjured putative class members, those courts do not necessarily endorse certification of these class actions. To the contrary, courts often rely on Federal Rule of Civil Procedure 23—rather than the Constitution—to deny certification. For example, in Kohen itself the 7th Circuit stated that “if the [class] definition is so broad that it sweeps within it persons who could not have been injured by the defendant’s conduct, it is too broad,” and declared that “a class should not be certified if it is apparent that it contains a great many persons who have suffered no injury at the hands of the defendant.”