Duane Morris Class Action Review - 2023 - Report - Page 263
D.
Article III Standing Issues In Class Actions
In 2022, courts continued to assess whether named plaintiffs adequately alleged Article
III standing to bring a variety of claims filed as class actions. In large part, these rulings
analyzed the types of claims that constitute a concrete Article III injury under Spokeo,
Inc. v. Robins, et al., 578 U.S. 330 (2016), and TransUnion LLC. v. Ramirez, et al., 141
S. Ct. 2190, 2200 (2021). The concept continues to serve as a powerful defense in
class action litigation.
In Schumacher, et al. v. SC Data Center, Inc., 33 F.4th 504 (8th Cir. 2022), the Eighth
Circuit held that the named plaintiff in a putative class action failed to sufficiently allege
Article III standing based on a prospective employer’s purported failure to comply with
several technical requirements of the Fair Credit Reporting Act (FCRA). Siding with the
Ninth Circuit – and disagreeing with the Third and Seventh Circuits – the Eighth Circuit
held that the prospective employer’s failure to provide the plaintiff with a copy of her
consumer report before denying her employment did not qualify as an “injury in fact”
sufficient to confer Article III standing. Id. at 510-12. Although the Eighth Circuit noted
that the employer’s failure to provide the report deprived the plaintiff of an opportunity to
explain prior convictions that had led to her denial of employment, it held that the FCRA
did not provide a right to explain an accurate consumer report. Id. at 511-12. In addition,
the Eighth Circuit held that even though the employer violated the FCRA by providing
an improper disclosure form, that was only a “technical violation” of the statute that did
not harm the plaintiff. Id. at 512-13. Finally, the Eighth Circuit ruled that the plaintiff
lacked standing to challenge any alleged search of a sex-offender database without her
authorization, since the plaintiff pled that it caused a mere “invasion of privacy,” which
was not a sufficiently concrete harm. Id. at 514.
The Seventh Circuit also addressed standing issues in 2022 in Pierre, et al. v. Midland
Credit Management, Inc., 29 F.4th 934 (7th Cir. 2022), where it held that efforts to
collect on a time-barred debt did not constitute injury for Article III standing. The plaintiff
in Pierre had defaulted on a credit card and was sued by the debt purchaser, but the
collection lawsuit was subsequently dismissed. After the statute of limitations had run on
the debt collection, the defendant sent the plaintiff a letter seeking payment of the debt
at a discount, while acknowledging that the plaintiff could not be sued over the debt
because of its age. The plaintiff claimed that the letter violated the Fair Debt Collection
Practices Act (FDCPA) because it falsely represented the character of the debt. The
Seventh Circuit remanded with instructions to dismiss for lack of subject-matter
jurisdiction because the plaintiff had not shown an Article III injury. The Seventh Circuit
held that the plaintiff “didn’t make a payment, promise to do so, or otherwise act to her
detriment in response to anything in or omitted from the letter.” Id. at 939. Nor did
psychological harm, such as the claimed “confusion” and “worry” arising from the letter,
rise to a concrete injury. Id. Instead, at most, the defendant’s letter created “a risk” of
injury – which the Seventh Circuit determined was “not enough to establish an Article III
injury in a suit for money damages.” Id. at 936 (citing TransUnion, 141 S. Ct. at 221011).
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Duane Morris Class Action Review – 2023
