Courts Must Evaluate Unnamed Class Members‘ Standing before Class Certification

Courts coping with overbroad class definitions that include uninjured class members have produced a cacophony of opinions. A first question often addressed in these opinions is whether the problem is one of Article III standing or of meeting Rule 23’s class certification requirements, or both. Senior Judge Stanley Marcus’ opinion for the Eleventh Circuit in Cordoba v. DirecTV, LLC, 2019 WL 6044305 (Nov. 15, 2019), represents the court’s first in-depth attempt to tackle the issues.

Cordoba was a Telephone Consumer Protection Act action brought by plaintiff claiming that he had received telemarketing calls from DirecTV that violated the statute. Specifically, the allegation was that DirecTV had failed to maintain a list of individuals who asked not to receive calls—a so-called internal do-not-call list required by an FCC implementing regulation. Cordoba alleged that DirecTV failed to maintain this list and continued to call individuals who asked not to be contacted. A class of all persons who received more than one telemarketing call on behalf of DirecTV while it failed to maintain an internal do-not-call list was certified by District Judge Mark Cohen (N.D. Ga.). The Eleventh Circuit granted DirecTV’s petition for interlocutory review under Rule 23(f).

The Eleventh Circuit vacated class certification because the unnamed members of the would-be class who did not ask DirecTV to stop calling them—and so would not have been on the list even if it had been maintained—were not injured by the failure to maintain the list. This was so even though the class representative had Article III standing. As the court put it, “the fact that many, perhaps most, members of the class may lack standing is extremely important to the class certification decision.”

In the case of a Rule 23(b)(3) class, the individualized inquiry necessary to determine whether each class member asked the telemarketer to stop calling would preclude a finding of the requisite predominance of common issues over individual issues. “The essential point . . . is that at some time in the course of the litigation the district court will have to determine whether each of the absent class members has standing before they could be granted any relief. That is an individualized issue . . . .” Would-be class members who did not ask to be put on the no-call list lack standing  due to their failure to establish that their injuries are traceable to the challenged action of the defendant. Even though the receipt of a single phone call was enough to establish the requisite injury, according to the court, it was not enough to establish traceability. The court distinguished its recent holding in Salcedo v. Hanna, 936 F.3d 1162 (11th Cir. 2019), in which a single unlawful text message was held to be insufficient to establish injury, based on the relatively greater intrusiveness of a phone call.

Wherever it appears that a large portion of a proposed class may lack standing, the court held that a district court must consider, before certification under Rule 23(b)(3), whether individualized issues of standing will predominate over common issues. The mere possibility of standing problems for a few class members, the court noted, would not necessarily preclude class certification; the court could decide to deal with that problem later on in the proceeding, before it awarded any relief. “But there is a meaningful difference between a class with a few members who might not have suffered an injury traceable to the defendants and a class with potentially many more, even a majority, who do not have Article III standing.” The court noted that a blanket rule precluding class certification if any individuals in the class lack standing would likely run the risk of promoting so-called “fail-safe” classes, in which membership is defined on the basis of having a meritorious claim. This practice, universally recognized as improper, is no remedy for an overbroad class.

Since there was nothing in the record to allow determination on appeal of the makeup of the internal do-not-call list class, the court remanded the case for further proceedings.

Cordoba is the latest fallout from the Supreme Court’s 2016 decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540. The Eleventh Circuit granted rehearing en banc on October 4, 2019 in another such case, Muransky v. Godiva Chocolatier, Inc., 905 F.3d 1200 (11th Cir. 2018).

Posted by Tom Byrne.

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