Recently, the Ninth Circuit joined its sister circuit, the Eleventh, in vacating class settlements on standing grounds. In Harvey v. Morgan Stanley Smith Barney LLC, the court vacated the district court’s approval of the settlement agreement and remanded with instructions that the district court assess each individual class member for sufficient injury.

The litigation involved claims that the defendant had violated California’s Private Attorneys General Act (PAGA) by requiring employees to incur business expenses without reimbursement. The Ninth Circuit found that the certified class was not limited to those employees who has incurred unreimbursed business expenses: “We lack assurance that every class member who would receive damages under the settlement agreement suffered an actual injury from [the defendant’s] alleged Labor Code violations.”

As we posted earlier this month, the Eleventh Circuit in Drazen and Godaddy.com, LLC v. Pinto raised the issue of subject matter jurisdiction sua sponte before decertifying a TCPA class settlement. The district court had decided that the Eleventh Circuit’s 2019 decision in Cordoba v. DIRECTV, LLC meant that only the named plaintiffs need standing. The district court also noted that unnamed class members who fell short of the Eleventh Circuit’s standing requirements might still have standing in other circuits. Therefore, the district court approved the class settlement. Relying on the U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez, the Eleventh Circuit concluded that to recover individual damages, all plaintiffs within the class definition — named or unnamed — must have standing. The Eleventh Circuit also rejected the district court’s approach to nationwide class standing, holding that a jurisdiction cannot “check our Article III requirements at the door” and must apply its own standing precedents to all class members regardless of the law of their domicile. The plaintiffs-appellees in Drazen filed a petition, requesting an en banc rehearing regarding the question of whether a person who receives a single text message in violation of the TCPA has Article III standing.

Photo of Alan D. Wingfield Alan D. Wingfield

Alan Wingfield helps consumer-facing clients navigate compliance, litigation and regulatory risks posed by the complex web of state and federal consumer protection laws. He is a trusted advisor and tireless advocate, helping clients develop practical compliance and dispute-resolution strategies.

Photo of Cindy D. Hanson Cindy D. Hanson

Consumer finance clients trust Cindy’s experience and skill to resolve their most challenging cases. Focused on class action defense, Cindy has handled numerous FCRA cases and is the point of contact for consumer protection defense.

Photo of Ronald I. Raether, Jr. Ronald I. Raether, Jr.

Ron leads the firm’s Privacy + Cyber team. Drawing from nearly 30 years of experience, he provides comprehensive services to companies in all aspects of privacy, security, data use, and risk mitigation. Clients rely on his in-depth understanding of technology and its application

Ron leads the firm’s Privacy + Cyber team. Drawing from nearly 30 years of experience, he provides comprehensive services to companies in all aspects of privacy, security, data use, and risk mitigation. Clients rely on his in-depth understanding of technology and its application to their business to solve their most important challenges — from implementation and strategy to litigation and incident response. Ron and his team have redefined the boundaries of typical law firm privacy and cyber services in offering a 360 degree approach to tackling information governance issues. Their holistic services include drafting and implementing bespoke privacy programs, program implementation, licensing, financing and M&A transactions, incident response, privacy and cyber litigation, regulatory investigations, and enforcement experience.

Photo of David N. Anthony David N. Anthony

David Anthony handles litigation against consumer financial services businesses and other highly regulated companies across the United States. He is a strategic thinker who balances his extensive litigation experience with practical business advice to solve companies’ hardest problems.