Although a class action complaint may foreshadow years of litigation filled with thousands of plaintiffs and millions of dollars in potential damages and costs, there are several early motions that, if successful, may drastically reduce the scope of the case in terms of the size of the class and the number of claims at issue. Some of these early motions overlap with the early motions available in single plaintiff cases, but there are additional early motion practice tools available to defendants in class action cases.
This article (which focuses on challenges to standing and venue) is the first in a two-part series that discusses how early motions used in single plaintiff cases differ in the class action context, as well as the extra early motion practice tools available in the class action context. The second article will cover motions to dismiss and/or strike class claims and motions for early denial of class certification.
Challenges to Standing Under a Rule 12(b)(1) Motion
Just as an employer may file a Rule 12(b)(1) motion to challenge a plaintiff’s standing to bring a case in the single plaintiff context, an employer may file a Rule 12(b)(1) motion to challenge an individual’s standing to act as a named plaintiff in a class action suit. A standing challenge most often arises in a class context when a named plaintiff lacks standing to seek particular relief (such as a former employee seeking injunctive relief) or standing to bring certain claims (such as an employee whose claims are time barred).
In any case (whether involving a single plaintiff or a putative class), standing is a jurisdictional requirement—i.e., if a plaintiff lacks standing, a court cannot hear the case. To have standing under the U.S. Constitution, a plaintiff must show that he or she suffered a concrete and actual injury that is traceable to the defendant and that the injury will likely be redressed by a favorable decision of the court. The injury cannot be hypothetical, and whether a decision will redress the injury cannot be speculative. To seek injunctive or declaratory relief, a plaintiff also must show that he or she is likely to be injured by the challenged policy or practice in the future.
The recent U.S. Supreme Court decision in Wal-Mart Stores, Inc. v. Dukes addressed a challenge to standing in the class action context. The case involved a class action brought by current and former Wal-Mart employees on behalf of current and former employees. The plaintiffs sought, among other things, injunctive and declaratory relief. The Court explained that in the class action context, former employees have no claim for injunctive or declaratory relief. Compare Ellis v. Costco Wholesale Corp., 657 F.3d 970, 978-79 (9th Cir. 2011) (one named plaintiff was a current employee and had standing to seek injunctive relief), with Chen-Oster v. Goldman, Sachs & Co., 2012 WL 2912741, *5-7 (S.D.N.Y. July 17, 2012) (applying Dukes to strike class claims for lack of standing under Rule 23(b)(2) where no plaintiff was currently employed by Goldman).
A subsequent argument related to standing is that if a named plaintiff lacks standing to bring a certain claim, such individual is not able to adequately represent the class for that claim because one requirement of class certification is that the representative parties will fairly and adequately protect the interests of the class. In Ellis v. Costco Wholesale Corp., the Ninth Circuit Court of Appeals held that former employees do not have standing to seek injunctive relief and “would not share an interest with class members whose primary goal is to obtain injunctive relief” and thus would “not adequately protect the interests of the class as a whole.
In sum, the constitutional standing requirement applies equally to class actions, and all named plaintiffs and putative class members must have standing. Such early motion practice tools may prove useful in eliminating possible named plaintiffs (and thus reducing the scope of a potential class) or possible claims for litigation.
Challenges to Venue Under a Rule 12(b)(3) Motion
A court similarly must have venue over each claim raised in a putative class action, and for each plaintiff who has raised such a claim. Accordingly, as with a single plaintiff case, a Rule 12(b)(3) motion for improper venue may be a helpful tool in pruning the claims and/or scope of a large class action.
When evaluating whether to challenge venue, an employer must first look to the statute under which each claim is brought to determine if the statute has a specific venue provision. For instance, Title VII and the Employee Retirement Income Security Act (ERISA) both contain specific venue provisions. See Johnson v. Payless Drug Stores Nw., Inc., 950 F.2d 586 (9th Cir. 1991) (Title VII); Cawley v. Advocacy Alliance, 2012 WL 707001 (E.D. Pa. Mar. 6, 2012) (ERISA). Further, many courts apply Title VII’s venue provision to claims brought under the Americans with Disabilities Act (ADA). See Schmidt v. Delta Airlines, Inc., 1999 WL 179469 (E.D. La. Mar. 31, 1999). In contrast, there is no specific venue provision for the Age Discrimination in Employment Act (ADEA), the Fair Labor Standards Act (FLSA), or the Family and Medical Leave Act (FMLA). See Myers v. Gibson, 2007 WL 1953443 (N.D. Tex. July 2, 2007) (ADEA); Smith v. Burlington N. Santa Fe Ry. Co., Inc., 2006 WL 3192545 (D. Kan. Nov. 1, 2006) (FLSA); Cawley, 2012 WL 707001 (FMLA).
When a plaintiff brings one or more claims under a statute with a specific venue provision, most jurisdictions will apply that specific venue provision to all claims brought by that same plaintiff. In other words, most jurisdictions hold that a specific venue provision trumps general venue requirements.
In opposition to an employer’s attempt to apply a specific venue provision to all claims brought by a particular plaintiff, the plaintiff may attempt to assert the principle of “pendent venue,” but such arguments will likely fail. Pendent venue is the theory by which a federal court may hear a claim as to which venue is lacking if the claim arises out of a common nucleus of operative fact with a claim as to which the court does have venue. However, as noted, most federal courts are reluctant to apply that concept to negate the specific venue provisions of a statute. See Bartel v. Fed. Aviation Admin., 617 F. Supp. 190 (D.D.C. 1985) (“In enacting the special Title VII venue statute Congress deliberately sought to limit the venues in which Title VII actions might be brought. Under such circumstances, the Court lacks the authority to ignore the congressional intent to limit venue by finding pendent venue.”); Cook v. UBS Financial Services, Inc., 2006 WL 760284 (S.D.N.Y. Mar. 21, 2006).
The practical import of filing a Rule 12(b)(3) motion is that an employer may be able to have all of the claims for certain plaintiffs transferred to other courts that actually have venue over all of the plaintiffs’ claims. If the transferred plaintiff is from another business unit or geography than the remaining named plaintiffs, the original putative class may become smaller in scope. Similarly, if the transferred plaintiff is the only named plaintiff for certain claims in the putative class action, there will be fewer claims to litigate in the original lawsuit. Whether this strategy makes sense depends on the circumstances of the employer and the perceived circumstances of the plaintiffs, such as where the employer has resources to litigate in multiple courts, but the plaintiffs do not.