Many thanks to the multiple readers who emailed me about a new federal standing decision, Webb v. Carter's, Inc., ___ F.R.D. ___, 2011 WL 343961, 2011 U.S. Dist. LEXIS 12597 (C.D. Cal. Feb. 3, 2011).
In Webb, District Judge Gary Allen Feess of the Central District of California held that in federal court, all class members must meet Article III's standing requirements:
Before considering whether Plaintiffs' proposed classes meet the requirements of Federal Rule of Civil Procedure 23, the Court must determine whether the members of the proposed class have Article III standing. Although there is no controlling authority requiring absent class members, as opposed to the named plaintiffs, to satisfy Article III's standing requirements, the Court is persuaded by authority indicating that they must. In Burdick v. Union Security Insurance Co., Judge Collins concluded that absent class members, like the class representatives, must have standing. Burdick v. Union Sec. Ins. Co., 2009 WL 4798873, *3 (C.D.Cal. Dec.9, 2009). In reaching this conclusion, Judge Collins pointed to the Supreme Court's decision in Reno v. Catholic Social Services, Inc., 509 U.S. 43, 113 S.Ct. 2485, 125 L.Ed.2d 38 (1993), which allows the federal courts to exercise jurisdiction over the claims of class members only if those claims are ripe. Id. at *3. Judge Collins also pointed to other cases indicating that classes should be defined so as to exclude members lacking standing. Id. at *4 (citing Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir.2006); O'Neill v. Gourmet Sys. of Minn., Inc., 219 F.R.D. 445, 451-52 (W.D.Wis.2002); Sanders v. Apple, Inc., 2009 WL 150950, at *10 (N.D.Cal.2009)). Finally, Judge Collins noted that requiring class members to have standing comports with the Supreme Court's admonition to be “mindful that Rule 23's requirements must be interpreted in keeping with Article III constraints.” Id. (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 612-13, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)).
The Court acknowledges that a leading treatise, Newberg on Class Actions, indicates that absent class members need not make a showing of standing. Newberg on Class Actions § 2:7. This treatise, however, also suggests that members of a proper class will necessarily have standing, because the class representative's claims must be “typical” of those of the class.
Further, contrary to Plaintiffs' contention, the California Supreme Court's decision in In re Tobacco II, 46 Cal.4th 298, 93 Cal.Rptr.3d 559, 207 P.3d 20 (Cal.2009), does not establish that absent class members in a federal class action need not have Article III standing. In that case, the California Supreme Court considered the effect of Proposition 64, a voter initiative that amended the UCL to allow private suit only by a plaintiff “who has suffered injury in fact and has lost money or property as a result of ... unfair competition.” Id. at 25. Previously, the UCL had allowed suit by any private party. The court considered whether that new requirement applied only to the named plaintiff or also to all absent class members. Id. at 25. The court concluded, based on the language of the initiative, that only the named plaintiff needed to show such an injury in fact. Id. Individuals could remain part of the class even if they had suffered no injury in fact. Id. at 35. That case, however, was in state court and did not address federal courts' standing requirements. Before the enactment of Proposition 64, uninjured plaintiffs could bring UCL claims in state court, but not federal court. See, e.g., Seibels Bruce Group, Inc. v. R.J. Reynolds Tobacco Co., No. C-99-0593 MHP, 1999 WL 760527 at *6 (N.D. Cal. Sept.21, 1999) (holding that plaintiff did not have standing to assert UCL claim in federal court because it did not establish a distinct and palpable injury); Boyle v. MTV Networks, Inc., 766 F.Supp. 809, 817-18 (N.D. Cal. 1991) (noting that case involving private-party UCL claim could not be removed as it would result in lack of standing). Tobacco II established that Proposition 64 changes this for named plaintiffs, but not for absent class members. It did not, and could not, hold that uninjured parties could be class members in a class action brought in federal court, despite their lack of Article III standing. Tobacco II therefore does not persuade the Court that a class action can proceed even where class members lack Article III standing.
Id. at *6 (emphasis in original).