Must unnamed class members have standing for a court to certify or enter judgment in a class action? The answer is far from straightforward, as the Supreme Court has not squarely decided the question and circuit courts address this issue in a variety of ways. This GT Advisory analyzes the various approaches to this issue and shows how defendants can use recent cases rejecting class certification where the proposed class included a significant number of uninjured class members.
II. The Varying Approaches to Class Member Standing.
Generally speaking, there are four broad categories into which circuit court cases fall:
- De minimis or “some uninjured”: the potential presence of more than a small number of class members who lack standing may preclude class certification;
- All-or-nothing: all class members must establish standing at some point in the litigation;
- Standing of named plaintiff only: the standing of unnamed class members is irrelevant once standing of the named plaintiff is shown; and
- No definitive decision: courts expressly state that they have not decided the issue.
In cases where monetary damages are sought, most courts decline to analyze the standing of unnamed class members in the pre-certification stage, and instead view the inquiry through the lens of Rule 23. Most circuit courts hold that the presence of more than a de minimis number of uninjured class members at certification stage defeats certification – particularly if there is no plan for weeding out the uninjured. Cases involving “uninjured class members ‘suggest that 5% to 6% constitutes the outer limits of a de minimis number.’” There is, however, no “bright line” or definitive number of uninjured class members allowed.
To further complicate matters, some circuit courts treat different types of cases differently. For example, the Ninth Circuit appears to use each of the first three categories, depending on the remedy sought and the stage of the case. In damages cases, the court takes the de minimis approach at the class certification stage, but then employs the all-or-nothing test at the end of the case by requiring that all class members establish standing before damages may be awarded. In injunctive relief actions, the Ninth Circuit (like other circuit courts) requires only that the named plaintiff establish standing.