Recent decisions have recognized that class members must have Article III standing. Most often, that includes a showing that all members in a putative settlement class have suffered a concrete injury. Counsel must pay attention to this as several federal Courts of Appeals have recently shown their willingness to raise the issue sua sponte and reverse and remand a class settlement approved by a trial court.
On June 27, 2022, the Eleventh Circuit reversed the final approval of a class settlement based on allegations that GoDaddy.com, LLC violated the Telephone Consumer Protection Act of 1991 by marketing to consumers through an automatic telephone dialing system. Drazen v. Pinto, 41 F.4th 1354, 2022 WL 296347 (11th Cir. 2022). The settlement allowed class members to obtain either $35 in cash or a $150 GoDaddy voucher. Initially, the class was defined to include “All persons within the United States who received a call or text message to his or her cellular telephone from Defendant from November 4, 2014 through December 31, 2016.” The district court ordered the parties to brief the application of Eleventh Circuit precedent that had found that a single unwanted text message was insufficient for Article III standing. Thereafter, the district court held that only the named plaintiffs required standing and granted approval after the named plaintiff, who had only received a single text message, was removed. A class member, however, objected to the attorney fees award, arguing that the GoDaddy voucher constituted a coupon under the Class Action Fairness Act and therefore the attorney fee award should have been subjected to greater scrutiny. Significantly, while the parties did not raise standing on the appeal, the Eleventh Circuit explained that “even at the settlement stage of a class action, we must assure ourselves that we have Article III standing at every stage of the litigation.” The Eleventh Circuit reversed and remanded because the defined class could have included individuals receiving a single unwanted text message who did not have a concrete injury, and thus lacked Article III standing, and the settlement class definition did not consider how they could be excluded under Eleventh Circuit precedent. On remand, the parties were directed to redefine the settlement class in a way that would satisfy such standing for all class members.
