On July 22, 2015, the U.S. Court of Appeals for the Third Circuit ruled that a Rule 23(b)(3) plaintiff class action satisfies the Article III standing requirement that plaintiffs demonstrate an “injury in fact” so long as a named class representative meets that requirement. Under the ruling, a certified Rule 23(b)(3) class may include unnamed class members who cannot demonstrate that they have suffered an injury in fact. However, this new ruling makes clear that litigation classes may be certified without a showing that the unnamed class members satisfy the Article III injury in fact requirement. The ruling also provides a much expanded supporting rationale for its holding.
In essence, the Third Circuit reasoned that once a named class representative has demonstrated Article III standing, the issue of who can be included in the class description becomes one of compliance with Rule 23 provisions, not whether unnamed class members can independently demonstrate Article III standing. The Third Circuit previously issued a similar ruling in an appeal involving certification of a settlement class. In reaching its recent ruling, the court conducted a detailed, historical review of the types of group and representative litigation that Article III has empowered federal courts to consider. Based on this review, it concluded that the class action device treats individuals within a class definition as members of a group rather than as legally distinct persons. As a result, the court held that only the named plaintiffs are individuals seeking to invoke the court’s jurisdiction, and only the named plaintiffs are held accountable for satisfying the Article III standing requirement. Unnamed class members included in the class definition have representative standing and must only satisfy Rule 23 requirements.
Underlying the Third Circuit’s decision is a belief that Rule 23 requirements generally will be sufficient to ensure that properly formulated Rule 23 classes include only individuals who have suffered an injury in fact. The court noted that Rule 23 requires named class representatives, who themselves must meet Article III standing requirements, to possess similar interests and suffer similar injuries as unnamed class members. In the view of the Third Circuit, this will serve much the same interest as subjecting unnamed class members to Article III standing scrutiny. However, in practice, Rule 23 has not always proven sufficient to eliminate class members who have avoided any injury in fact.
The final word on this issue may come from the United States Supreme Court during its October 2015 term. The Supreme Court has granted a petition for a writ of certiorari in a case from the U.S. Court of Appeals for the Eighth Circuit that includes this issue as one of the two questions presented. When decided, theTyson Foods decision may decide once and for all whether Rule 23(b)(3) classes or collective actions under the Fair Labor Standards Act may include members who cannot demonstrate an “injury in fact” sufficient to independently satisfy Article III standing requirements and, if so, under what circumstances such classes may include uninjured individuals.