Putative Class Member Standing as a Prerequisite for Certification

On June 25, 2021, the Supreme Court issued its much-anticipated 5–4 ruling in TransUnion LLC v. Ramirez, No. 20-297. In a 27-page opinion by Justice Kavanaugh, the Court reversed the Ninth Circuit’s decision upholding the certification of a class of consumers whom the credit reporting agency TransUnion had mistakenly labeled as potential terrorists and drug traffickers. Of these consumers, only a fraction had their misleading credit reports provided to third parties. Therefore, only that portion of the class had, by the Court’s analysis, established a concrete harm sufficient to confer constitutional standing.

Notwithstanding the Court’s reversal, there was a fundamental point on which the Ninth Circuit and Supreme Court were in complete agreement. Underpinning its decision below, the Ninth Circuit declared: “[W]e hold that every member of a class certified under Rule 23 must satisfy the basic requirements of Article III standing at the final stage of a money damages suit when class members are to be awarded individual monetary damages.” Ramirez v. TransUnion LLC, 951 F.3d 1008, 1017 (9th Cir. 2020). In the abstract, the Supreme Court agreed: “Every class member must have Article III standing in order to recover individual damages.” TransUnion, No. 20-297, slip op. at 15 (citing Tyson Foods, Inc. v. Bouaphakeo, 577 U. S. 442, 466 (2016) (Roberts, C.J., concurring)).

Despite this agreement in theory, the Supreme Court ultimately overruled the lower decision in application, finding that the vast majority of the certified class had not met the requirements of Article III standing to recover monetary damages. The unique posture of TransUnion when it reached the Supreme Court shaped the scope of its holding; before the Supreme Court considered the questions raised, a jury had determined liability and reached a damages award. Therefore, TransUnion’s appeal concerned the post-trial distribution of damages to class members and did not directly address the class certification process under Rule 23 of the Federal Rules of Civil Procedure. On that issue, the Court remanded for further proceedings: “On remand, the Ninth Circuit may consider in the first instance whether class certification is appropriate in light of our conclusion about standing.” TransUnion, No. 20-297, slip op. at 27. This further consideration was necessary because, as Justice Kavanaugh explained, “We do not here address the distinct question whether every class member must demonstrate standing before a court certifies a class. See, e.g., Cordoba v. DIRECTV, LLC, 942 F. 3d 1259, 1277 (CA11 2019).” TransUnion, No. 20-297, slip op. at 15 n.4.

In light of this footnote, all federal courts are now in the position of the Ninth Circuit on remand and must determine whether class certification under Rule 23 is appropriate if, under the rubric for standing set forth in TransUnion, a proposed class includes putative members who do not satisfy the requirements of Article III.

A number of circuit courts have already answered this question based on the Court’s prior guidance, and one might expect that the Court’s holding in TransUnion will further solidify, rather than resolve, the growing split on this question. Circuit court decisions on this issue that date before TransUnion were based on the Court’s earlier guidance in Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), and Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). To be more precise concerning the circuit split that ensued, these decisions fell more along a spectrum than a sharp dividing line. The chart below represents this spectrum, and the discussion that follows provides an overview of the circuit court decisions that form the range of holdings on the question of whether the standing of putative class members is a prerequisite to Rule 23 certification. These are the decisions that each circuit must now revisit in light of TransUnion.