The Puzzle of Class Actions with Uninjured Members
33 Pages Posted: 21 Apr 2013 Last revised: 18 Jul 2014
Date Written: April 1, 2014
A puzzle has developed regarding class action doctrine. Courts in a number of important recent decisions have reaffirmed that classes may satisfy the predominance standard under Fed. R. Civ. P. 23(b)(3) and be certified even if they contain members who have not suffered cognizable injury. This Article takes as a point of departure the assumption that certifying classes with uninjured members reflects a proper interpretation of Rule 23. It explores the implications of such a rule for three doctrines: standing, due process, and the Rules Enabling Act.
Each of these doctrines gives rise to questions. For instance, why doesn’t standing doctrine require that all class members suffer a legally cognizable injury? How can it be that due process rights — of named plaintiffs, absent class members, or defendants — are not violated if a class includes members who would have no basis for recovering in individual litigation? Why doesn’t litigating on behalf of uninjured absent class members modify substantive rights in violation of the Rules Enabling Act?
The answer to these questions may vary depending, in part, on the manner in which class proceedings will resolve the claims of the class members. For instance, litigating common issues on behalf of a class may not be objectionable, even if some of the class members’ claims lack merit for individual reasons and their claims ultimately fail when the court addresses those individual issues. A more challenging situation arises if the entire case is resolved on an classwide basis — including an award of a classwide recovery — and uninjured class members are among those permitted to obtain relief.
In addressing standing, due process, and the Rules Enabling Act in these contexts, this Article seeks both to clarify the relevant doctrines and to apply them in the class setting. While the analysis requires some care, we can offer a brief summary of our main conclusions. First, as to standing, some courts have suggested that only a named plaintiff needs to have standing to pursue class claims and others have indicated that all members of a potential class must have standing. The Article attempts to reconcile these apparently conflicting positions, explaining that the precedents make sense if only a named plaintiff must make an individualized showing in support of its claims whereas absent class members need merely be in the group who could potentially have viable claims.
Second, as to due process rights, the Article argues that critics of class action doctrine have adopted an overly rigid approach, one incompatible with the flexible cost-benefit analysis integral to the due process standard. Appropriate balancing, this Article suggests, leads to the conclusion that, in some cases, neither certification of classes containing uninjured members nor awarding of classwide recoveries to those classes after trial deprives any litigants of the process they are due.
Finally, the Article contends that the Supreme Court’s recent decision in Shady Grove undermines the argument that certification of a class with uninjured members violates the Rules Enabling Act. Shady Grove appears to have held that as long as a Federal Rule of Civil Procedure addresses only the means by which claims are litigated, it does not violate the Rules Enabling Act, even if it has a significant effect on substantive rights. Merely including uninjured persons in a class — and even resolving common issues on their behalf — would seem to fit within this rule. On other hand, the Article notes that the permissibility under the Rules Enabling Act of classwide recoveries — ones that may lead to compensation of uninjured members — may depend on how Shady Grove is interpreted and then offers some suggestions for how to frame the relevant analysis.
Keywords: class action, civil procedure, FRCP 23, Federal Rule of Civil Procedure 23, standing, due process, Rules Enabling Act, class certification, Shady Grove
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