February 05, 2021 Practice Points

N.J. District Court Holds That Article III Standing Requirements Are Not Relaxed in MDL Class Actions

Claims for lack of Article III standing were dismissed because the named plaintiffs improperly brought state claims in states where plaintiffs neither lived nor were injured.

By Neeckaun Irani and Shireen Leung

A recent decision by a New Jersey District Judge in In re Valsartan, held that the plaintiffs failed to satisfy their burden of establishing Article III standing because they improperly brought state claims in states where the named plaintiffs neither lived nor were injured.

By way of background, defendants are manufacturers of a generic blood pressure medication that was found to be contaminated with probable human carcinogens. Following an investigation by the FDA and a litany of voluntary recalls, consumers filed numerous class action complaints claiming the generic drugs they purchased were not therapeutically equivalent to the non-generic brand-name form of the drug. In the MDL, plaintiffs filed an economic damages complaint, a medical monitoring complaint, and claims under the laws of all 50 states.

The defendant-manufacturers sought dismissal of the claims of certain plaintiffs on the grounds that they lacked Article III standing. Specifically, plaintiffs asserted state-specific claims under the laws of all 50 states, the District of Columbia, and Puerto Rico. Yet, according to the defendants, the named plaintiffs resided in just 21 states and failed to allege that they resided in or suffered an injury in the remaining 31 other states and territories. Emphasizing that “standing is not dispensed in gross,” the court held that named plaintiffs cannot bring multistate claims if they neither reside in nor allege that they suffered an injury in those states.

In rendering its decision, the court rejected the plaintiffs’ reliance on the Third Circuit’s decision in Mielo v. Steak’n Shake Operations, 897 F.3d 467, 474 (3d Cir. 2018). Unlike the Valsartan named plaintiffs, the court found the Mielo plaintiffs asserted claims under a federal statute, the Americans with Disabilities Act. While courts have found plaintiffs can assert federal claims on behalf of a nationwide case, the court found the named plaintiffs in Valsartan raised no federal cause of action and instead raised state statutory or common law claims.

The outcome in In re Valsartan demonstrates that parties who seek to bring multistate law claims in the Third Circuit should ensure that the named plaintiffs reside or were injured in those states. Although both the MDL and class actions provide mechanisms for efficiently addressing a large number of claims at once, plaintiffs still must adequately allege Article III standing.

Neeckaun Irani and Shireen Leung are associates with Weil, Gotshal & Manges LLP in Silicon Valley, California.

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