Although not uniformly accepted, several appellate courts have made clear that a class cannot be certified if the class definition includes a large number of putative class members who do not have standing to assert the claims at hand. This is an issue that is distinct from whether the named plaintiff has standing as it focuses on the standing of unnamed class members and the scope of the class definition. Yet, courts have taken different views on how this standing issue interplays with the requirements of Rule 23 and how pervasive it must be to prevent class certification.
Previously, the Eleventh Circuit had not squarely addressed the issue in a published decision. However, on November 15, 2019, the Eleventh Circuit issued a decision slated for publication that provides an in-depth analysis of the relationship between Rule 23 and the standing of unnamed class members, Cordoba v. DIRECTV, LLC, 2019 U.S. App. Lexis 34146 (11th Cir. Nov. 15 2019). After finding that the class definition was comprised of consumers who lacked standing to bring claims under the Telephone Consumer Protection Act, the Eleventh Circuit observed that “the more difficult question is what part this plays in the class certification analysis.” The court first indicated that the plaintiff need not prove that all class members have standing in order to certify the proposed class. On the other hand, absent class members’ standing is not irrelevant to the Rule 23 analysis and may, in fact, “be exceedingly relevant.” But rather than being a problem of justiciability (which is the problem that arises when the named plaintiff lacks standing), the Eleventh Circuit held that the standing of unnamed class members (or lack thereof) can pose a “powerful problem under Rule 23(b)(3)’s predominance factor.”
The court expounded that the question of whether there is class-wide proof of liability includes not only the question of violation, but also the question of fact of injury. Indeed, before the district court can award any relief, it must determine whether each member of the class has standing because—class action or not—the judiciary’s role is limited to providing relief to claimants who have suffered an actual harm. Thus, while the existence of some uninjured class members is not per se fatal to certification, it presents an individualized issue that the district court must consider in deciding whether common issues predominate over individualized ones.
In determining whether standing issues preclude predominance, the Eleventh Circuit indicated that there are two key inquiries to consider: (2) how many class members (or what proportion of them) lack standing and (2) how do class members intend to prove whether they have standing. If most class members have standing or there is a plausible straightforward method to sort them out at the back end, then the class might appropriately proceed. If, however, few have standing or if it will be extraordinarily difficult to identify those who do, then these individualized determinations may very well overwhelm any common issues. While the Eleventh Circuit did not draw any bright line rules as to the number of class members who must have standing in order to satisfy predominance, it did indicate that there is a potential problem when many, or “even a majority,” do not have Article III standing.
The Cordoba decision is an important decision that class action litigators should consider when formulating their discovery and litigation strategies. At least in the Eleventh Circuit, there is now much more certainty for defendants as to how the standing of unnamed class members fits into the requirements of Rule 23 and what they must show in order to capitalize on this issue when opposing class certification. Conversely, plaintiffs also have more certainty as to what facts they must establish in order to avoid a standing challenge when advocating for certification. Moreover, given that several appellate courts have not addressed the issue directly or succinctly, the balanced nature of the Cordoba decision may provide persuasive guidance to district courts around the country. For both sides, the decision provides much-needed clarity on the interplay between Rule 23 and Article III standing.