Recently, the Ninth Circuit joined its sister circuit, the Eleventh, in vacating class settlements on standing grounds. In Harvey v. Morgan Stanley Smith Barney LLC, the court vacated the district court’s approval of the settlement agreement and remanded with instructions that the district court assess each individual class member for sufficient injury.
The litigation involved claims that the defendant had violated California’s Private Attorneys General Act (PAGA) by requiring employees to incur business expenses without reimbursement. The Ninth Circuit found that the certified class was not limited to those employees who has incurred unreimbursed business expenses: “We lack assurance that every class member who would receive damages under the settlement agreement suffered an actual injury from [the defendant’s] alleged Labor Code violations.”
As we posted earlier this month, the Eleventh Circuit in Drazen and Godaddy.com, LLC v. Pinto raised the issue of subject matter jurisdiction sua sponte before decertifying a TCPA class settlement. The district court had decided that the Eleventh Circuit’s 2019 decision in Cordoba v. DIRECTV, LLC meant that only the named plaintiffs need standing. The district court also noted that unnamed class members who fell short of the Eleventh Circuit’s standing requirements might still have standing in other circuits. Therefore, the district court approved the class settlement. Relying on the U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez, the Eleventh Circuit concluded that to recover individual damages, all plaintiffs within the class definition — named or unnamed — must have standing. The Eleventh Circuit also rejected the district court’s approach to nationwide class standing, holding that a jurisdiction cannot “check our Article III requirements at the door” and must apply its own standing precedents to all class members regardless of the law of their domicile. The plaintiffs-appellees in Drazen filed a petition, requesting an en banc rehearing regarding the question of whether a person who receives a single text message in violation of the TCPA has Article III standing.