SCOTUS May Weigh In'Class Members And Article III Standing

• Published date: 16 September 2022
• Subject Matter: Antitrust/Competition Law, Litigation, Mediation & Arbitration, Antitrust, EU Competition , Class Actions, Trials & Appeals & Compensation
• Law Firm: Winston & Strawn LLP
• Author: Mr Jared R. Kessler, Drew H. Washington and Reid F. Smith

KEY TAKEAWAY:

• The Eleventh Circuit's decision in Drazen v. Pinto deepens the divide among circuit courts regarding treatment of uninjured class members in class actions.
• If the Supreme Court considers and affirms Drazen's holding that class settlements must be limited to class members with standing, fewer class actions may be filed, it could be harder to obtain class certification, and class actions may be less likely to settle early.

On August 19, 2022, we wrote about the Eleventh Circuit's decision in Drazen v. Pinto, which held that a class action settlement agreement may receive final approval only if every class member has standing to recover individual damages. 41 F.4th 1354 (11th Cir. 2022). The case is significant not only because it establishes the standing requirement for absent class members at the settlement stage, but also because it serves as bait for SCOTUS to take up the issue.

Indeed, the Drazen decision joins a host of split decisions from other circuits that have grappled with the issue of uninjured class members and whether that issue is a matter to be addressed at class certification or, later, at the damages phase. Compare Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 669 (9th Cir. 2022) (finding that a class that potentially includes more than a de minimis number of uninjured class members is not precluded from being certified); In re Rail Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619, 624-25 (D.C. Cir. 2019) (endorsing a de minimis rule to meet predominance at the class certification stage); In re Asacol Antitrust Litig., 907 F.3d 42, 58 (1st Cir. 2018) (holding that not every class member is required to demonstrate standing when a class is certified); Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012) (finding that damages class may be certified where not "a great many" members of the class are uninjured); with Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006) ("[N]o class may be certified that contains members lacking Article III standing."); Halvorson v. Auto-Owners Ins. Co., 718 F.3d 773, 779 (8th Cir. 2013) ("a named plaintiff cannot represent a class of persons who lack the ability to bring a suit themselves."); Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 302 (5th Cir. 2003) ("[W]here fact of damage cannot be established for every class member through proof common to the class, the need to establish antitrust liability for individual class members...