In individual litigation, a plaintiff files a lawsuit on his or her own behalf and can only bring legal claims under the laws of states with a connection to the harm suffered or the defendant’s illegal conduct. But in a class action lawsuit, a plaintiff may seek to represent consumers, investors, or others affected by the defendant’s conduct from all over the country. Recent court decisions have provided much-needed guidance on whether a class action plaintiff, who is representing others, can pursue state law claims that he or she would not be able to pursue in an individual lawsuit.
What Is Standing?
A consumer who believes a company has done something wrong does not automatically have a right to sue that company. Under Article III of the United States Constitution, a plaintiff must have what is called standing to pursue a legal claim.
For most plaintiffs, standing is relatively easy to show. In a nutshell, standing means the plaintiff suffered harm that can be traced to the defendant’s alleged violations and redressed by a court judgment.
In a non-class action, an individual plaintiff will only have standing to pursue claims under the laws of certain states, usually the state in which the dispute arose, the plaintiff resides, or the alleged misconduct occurred. A plaintiff who lives in California and bought a defective product in California from a California company cannot, for example, sue that company under New York law. In all likelihood, that plaintiff can only sue under California law.
What Is a Class Action?
Unlike an individual lawsuit, a class action lawsuit under Federal Rule of Civil Procedure 23 allows a plaintiff to represent other persons—known as class members—while also pursuing an individual claim. And when, as often happens, the class members live all across the country, the plaintiff likely does not have individual standing to pursue legal claims in all of those states.
This leads to a question on which courts have disagreed: can a class action plaintiff pursue claims under the laws of states in which the plaintiff would not individually have standing? In other words, could the California plaintiff mentioned above file a class action lawsuit and assert claims on behalf of New York class members under New York law in addition to pursuing her own claims under California law?
Recent Decisions Concerning Standing in Class Action Cases
Some courts that had addressed this question concluded that nothing in Rule 23 changes the fact that a plaintiff can only pursue claims for which he or she individually has standing.
But a recent trend of decisions has gone in the opposite direction, acknowledging the representative nature of class litigation and allowing plaintiffs to pursue claims that any class member would have standing to pursue. This trend picked up steam in July of 2018 with the Second Circuit Court of Appeals’ decision in Langan v. Johnson & Johnson Consumer Companies.
Heidi Langan was a Connecticut resident who filed a class action lawsuit against Johnson & Johnson for deceptive product labeling. Ms. Langan sued Johnson & Johnson not only under Connecticut law but also under the laws of twenty other states. The Second Circuit concluded that Ms. Langan had standing under Connecticut law, and that the question of whether she could pursue claims in the other twenty states was not a question of standing, but rather of whether she could fairly represent the interests of the class members from those states. That issue, the court said, should be addressed at a later stage of the case and did not prevent Ms. Langan from pursuing those claims at the start of the litigation.
Several courts have already followed the Langan decision. In In re Generic Pharmaceuticals Pricing Antitrust Litigation—in which Girard Sharp serves on the Plaintiffs’ Steering Committee—U.S. District Judge Cynthia Rufe of the Eastern District of Pennsylvania held that it was “both proper and more efficient to consider whether [class plaintiffs] may pursue their claims on behalf of the unnamed class members in the context of the class certification analysis,” instead of through an Article III standing analysis.
We expect this trend to continue, and for courts to continue rejecting defendants’ attempts to use the concept of standing to limit class action plaintiffs’ ability to represent the interests of everyone who was harmed by a defendant’s bad conduct.
Our Commitment to Excellence
Girard Sharp LLP represents consumers, investors, and institutions in class actions and other complex litigation nationwide. Our class action lawyers have obtained multimillion-dollar recoveries for victims of unfair and deceptive practices in antitrust, financial fraud, and consumer protection matters against some of the country’s largest corporations, including JPMorgan Chase, John Hancock, Raymond James, Yahoo, and Sears. Girard Sharp LLP has earned top tier rankings from U.S. News and World Report for Securities and Class Action Litigation and was selected as a 2018 Elite Trial Lawyers finalist by the National Law Journal.