Duane Morris Class Action Review - 2023 - Report - Page 317
settlement offer that is 75 percent less than the total alleged loss to class members
largely because of the presence of foreign purchasers.” Id. at *26.
Procedural requirements of standing are also pertinent in class actions. In 2022, the
Second and Eleventh Circuits analyzed how the Article III standing requirements should
be applied in the specific context of class-wide settlements.
In Hyland, et al. v. Navient Corp., 48 F.4th 110 (2d Cir. 2022), the Second Circuit
affirmed the district court’s certification order for a Rule 23(b)(2) injunctive relief
settlement class and held that class standing was satisfied even though some class
members no longer had any relationship with the defendant. The plaintiffs, a group of
public servants whose loans were not forgiven through the federal Public Service Loan
Forgiveness program, alleged that the defendant loan service companies misled them
regarding their eligibility for the program. Id. at 115. The parties agreed to a nationwide
non-monetary settlement class while also preserving class members’ rights to file
individual claims for money damages. Id. at 114. In return, the defendants agreed to
changes in their business practices and funded a cy pres award of $2.25 million to
establish a loan counseling non-profit organization. Id. at 116. The district court
approved the settlement and several class members objected. On appeal to the Second
Circuit, the objectors argued that because some class members were no longer using
the company to service their loans when the class was certified, the class as a whole
lacked standing to pursue injunctive relief. Id. at 117. The Second Circuit rejected this
argument. It determined that standing “is satisfied so long as at least one named plaintiff
can demonstrate the requisite injury.” Id. at 117-18. The Second Circuit noted that the
named plaintiffs alleged they “were likely to suffer future harm” because they continued
to rely on the defendant “for information about repaying their student loans,” and at least
six of them still had a relationship with the company. Id. at 118. The Second Circuit
ruled that in the injunctive relief context, these allegations were enough to confer
standing on the entire class.
In another leading case on standing issues, the Eleventh Circuit vacated approval of
class action settlement in Drazen, et al. v. Pinto, 41 F.4th 1354 (11th Cir. 2022). It found
that approval of class certification and settlement pursuant to Rule 23(e) requires that
every member of the class have Article III standing. Plaintiff alleged that Godaddy.com
violated the Telephone Consumer Protection Act (TCPA) by calling and texting plaintiff
through a prohibited automatic telephone dialing system. The initial case from the
Southern District of Alabama was consolidated with two cases filed in the District of
Arizona, one by Jason Bennett and the other by John Herrick. The three class
representatives purported to represent a class of “persons within the United States who
received a call or text message to his or her cellular telephone from defendant. . . ” Id. at
1356. Plaintiff Herrick had received a single text message from defendant. The parties’
proposed settlement made available $35 million for the class and its counsel. The
district court held that class representative Herrick must be excluded from the class
definition under prior case law of the Eleventh Circuit holding that receipt of a single
unwanted text message was not a sufficiently concrete injury to give rise to Article III
standing. The district court also concluded that, as to absent class members that may
have received only one text message, they comprised only seven percent of the class
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Duane Morris Class Action Review – 2023
