The U.S. Court of Appeals for the District of Columbia Circuit recently dismissed an appeal in the case of Lewis v. Becerra, Secretary of the United States Department of Health and Human Services (HHS). The appellants sought to challenge the district court’s denial of class certification despite having won their individual claims for Medicare reimbursement. The court dismissed the appeal for lack of Article III standing, emphasizing that the appellants did not demonstrate a concrete, individual injury from the denial of class certification.

The appellants, both diabetics and Medicare beneficiaries, sought reimbursement for continuous glucose monitors (CGMs) and related supplies. Initially, the Centers for Medicare & Medicaid Services, which administers Medicare for HHS, denied their claims, but subsequent guidance in 2022 reversed this position. Despite their victory, the appellants appealed the district court’s earlier denial of their motion for class certification. They aimed to represent a class of individuals whose claims for CGM coverage were denied since December 13, 2012, regardless of whether these individuals had exhausted administrative remedies or timely sought judicial review.

The D.C. Circuit focused on whether the appellants had standing to appeal the denial of class certification. The court reiterated the principles of Article III standing, which require a concrete and particularized injury that is fairly traceable to the judgment below and likely to be redressed by a favorable ruling on appeal.

The court distinguished this case from Deposit Guaranty National Bank v. Roper, where the Supreme Court allowed prevailing plaintiffs to appeal a denial of class certification due to a continuing economic stake in the litigation. In contrast, the appellants in this case did not allege any continuing individual injury, such as a financial interest in cost or fee shifting. Instead, they argued that their desire to serve as class representatives constituted a sufficient injury. The court held that the mere desire to serve as class representatives does not constitute a concrete Article III injury. Without a personal stake, such as a financial interest, the appellants’ grievance was deemed too generalized to support standing.

The D.C. Circuit also addressed a conflicting decision from the Second Circuit. In Jin v. Shanghai Original, Inc., the Second Circuit held that a prevailing plaintiff could appeal a decision to decertify a class regardless of whether he had any continuing, concrete individual injury. The court in Jin interpreted Roper to hold that a “narrow fee-shifting interest” was sufficient to establish appellate standing but not necessary. Instead, the Second Circuit based its decision primarily on U.S. Parole Commission v. Geraghty, where the Supreme Court held that a prisoner could appeal a denial of class certification even after his release had mooted his individual claim.

The D.C. Circuit respectfully disagreed with the Second Circuit’s interpretation noting that Geraghty did not hold that the interest in serving as a “private attorney general” to protect the interests of others is a traditional Article III stake. Rather, Geraghty acknowledged that a legally cognizable interest in the traditional sense rarely exists with respect to the class certification claim. The D.C. Circuit emphasized that Geraghty confirms that an interest in serving as a class representative is not a traditional Article III interest and that Roper — not Geraghty — is the directly controlling precedent for assessing whether plaintiffs who have prevailed on the merits may appeal a denial of class certification.

Finally, the court acknowledged the appellants’ policy arguments suggesting that denying standing might disincentivize lawyers from representing plaintiffs with small claims. However, it concluded that such policy concerns do not override the constitutional requirements of Article III standing.

Our Take:

The applicability of the court’s decision to other types of class actions is unknown. On the one hand, under this decision, a consumer who completely wins on an individual claim has no standing to appeal a denial of class certification. On the other hand, the decision may be limited because the plaintiff expressly asserted no standing based on any economic argument, and instead claimed standing based on a desire to be a class representative.