November 03, 2020 Top Story

A Loss of $3.76 Is Sufficient for Standing

Class action moves forward based on temporary loss of use of money

By Christopher G. Binns

A loss of less than $4 can provide standing to bring a consumer class action lawsuit. A federal appellate court revived a class action that the trial court had dismissed for lack of concrete injury, holding that the named plaintiff’s temporary inability to have and use $3.76 is, in fact, a concrete injury sufficient to confer Article III standing. ABA Section of Litigation leaders agree with the outcome of the case, but caution that it should not be viewed as a bright-line rule on the amount of damages sufficient to support other, similar lawsuits.

The injury was loss of use of money, not lost interest income, which amounted to less than $4.

The injury was loss of use of money, not lost interest income, which amounted to less than $4.

Credit: sx70 | iStockphoto by Getty Images

The Loss of Use of Money Is a Concrete Injury

In Van v. LLR, Inc., the named plaintiff Katie Van filed suit on behalf of LLR, Inc., customers in Alaska, alleging improper sales tax charges. LLR had refunded Van the $531.25 in taxes she paid, but Van alleged that the refunded sales tax failed to account her inability to use the $531.25, and was thus damaged by LLR’s failure to account for the $3.76 in interest that had accumulated. The U.S. District Court for the District of Alaska dismissed the case on the basis that $3.76 “is too little to support Article III standing.”

The U.S. Court of Appeals for the Ninth Circuit reversed the district court. Relying on precedent from the Seventh Circuit and Eleventh Circuit, the Ninth Circuit held that the lost time value of money—even temporarily, and even for a small amount—is not too speculative an injury to support Article III standing. The court explained that its decision reflects the well-established principle that tort victims should be compensated for the loss of use of money by an award of damages or prejudgment interest.

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