The Roundup is a monthly publication that covers the previous month’s notable class action decisions from federal appellate courts, as well as notable Supreme Court cert petitions related to class actions.
Third Circuit
Barclift v. Keystone Credit Services, LLC – This decision concerns a putative class action asserting claims under the Fair Debt Collection Practices Act (FDCPA). The named plaintiff alleged that the defendant debt collector violated the FDCPA by sharing her information with a third-party mailing vendor that sent collection notices to debtors for the defendant. The Third Circuit joined the Seventh, Tenth, and Eleventh Circuits in holding that a plaintiff does not suffer a concrete injury when a debt collector shares his or her information with a third-party mailing vendor, and thus does not have standing to bring suit in federal court on that basis. Judge Freeman’s panel majority opinion provides a helpful overview of how circuit courts have been interpreting and applying the Supreme Court’s TransUnion decision. Judge Matey’s dissent registers his agreement with Justice Thomas (who dissented in TransUnion), Judge Newsom of the Eleventh Circuit, and others who have argued that current standing doctrine is incompatible with originalism, as well as his disagreement with the majority regarding how TransUnion should be applied in this case.
Seventh Circuit
Mullen v. Butler – The district court granted summary judgment in favor of the defendants but also imposed Rule 11 sanctions on the defendants and their counsel. The defendants argued on appeal that the district court abused its discretion both by sanctioning them and their counsel and by declining to sanction the named plaintiff. The Seventh Circuit concluded that the district court did not abuse its discretion in either respect. This decision illustrates three cautionary reminders: first, defendants and their counsel should avoid communicating with class members in any way that could be construed as interfering with the class notice process; second, defense counsel should avoid direct communication with class members for the additional reason that class members are represented parties; and third, counsel cannot rely on her client(s) to appeal a sanctions order against her on her behalf, she must appeal such an order herself.
Eleventh Circuit
Smith v. Miorelli – The Eleventh Circuit reminds us in this case that plaintiffs in putative class actions must not only have standing at all stages of litigation, they must also have standing to assert every claim. The court vacated approval of a class settlement that included injunctive relief because it held that the plaintiffs had not alleged any future harm, only past harm. Thus, the court held, they lacked standing to seek injunctive relief to prevent future harm. The plaintiffs in the consolidated cases had alleged that a sunglass manufacturer had not honored a lifetime warranty to repair sunglass at no or nominal cost. Each plaintiff had sunglasses needing repair and was charged between $11.95 and $105.18 for repairs. They sued under the federal Magnuson-Moss Warranty Act and Florida’s Deceptive and Unfair Trade Practices Act. The district court approved a class settlement as fair and awarded class counsel $8 million in attorneys’ fees based on the $32 million value of all the relief, including $27.2 million in vouchers and $5 million for injunctive relief. None of the plaintiffs, however, alleged any future harm, let alone future harm that was real and immediate, as required for injunctive relief. The Eleventh Circuit sent the case back to the district court to do over.
Supreme Court
Erie Indemnity Co. v. Erie Insurance Exchange – The Supreme Court denied this cert petition, which was covered in last month’s edition of the Roundup. The petitioner had asked the Court to resolve what it described as a circuit split about whether certain procedural changes in a newly filed complaint can defeat federal jurisdiction under the Class Action Fairness Act.
