Recent years have seen some upheaval in the lower courts on whether classes may be certified when they include members who lack actual injury. So far, however, the Supreme Court has declined to address this issue, thus increasing uncertainty and risks for litigants.
Class action cases are often brought pursuant to Rule 23(b)(3), which requires that district courts find “questions of law or fact common to class members predominate over any questions affecting only individual members.” This “predominance” inquiry is designed to ensure that class members’ claims are sufficiently similar to justify class treatment. When a proposed class includes persons who have not been injured by the challenged conduct, however, individual issues may preclude establishing that common issues predominate as required by Rule 23(b)(3).
Courts considering the certification of Rule 23(b)(3) classes have recently issued opinions that reflect a developing conflict over whether classes may be certified when they include members who have not been injured. Some circuit courts have explained that classes cannot be certified when they include uninjured members. See, e.g., In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244, 252 (D.C. Cir. 2013) (“plaintiffs must also show that they can prove, through common evidence, that all class members were in fact injured by the alleged conspiracy”), Denney v. Deutsche Bank AG, 443 F.3d 253, 263-64 (2d Cir. 2006) (“no class may be certified that contains members lacking Article III standing”) and New Motor Vehicles Canadian Export Litig., 522 F.3d 6, 28 (1st Cir. 2008) (holding certification required proof that “each member of the class was in fact injured”).
In contrast, other circuit courts have held that a class may be certified even though some members are not injured. See, e.g., Torres v. Mercer Canyons Inc., 835 F. 3d 1125, 1136 (9th Cir. 2016) (“a well-defined class may inevitably contain some individuals who have suffered no harm as a result of a defendant’s unlawful conduct”), In re Nexium Antitrust Litig., 777 F.3d 9, 14 (1st Cir. 2015) (“We conclude that class certification is permissible even if the class includes a de minimis number of uninjured parties”) and Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 757 (7th Cir. 2014) (“If the court thought that no class can be certified until proof exists that every member has been harmed, it was wrong”). While these divergent opinions may be explained by underlying factual differences, the courts stating that plaintiffs must show “all members” were injured (Rail Freight, 725 F.3d at 252) appear at odds with the courts explaining that the presence of uninjured members does not preclude certification (Suchanek, 764 F.3d at 757).
The Supreme Court has declined during recent terms to address whether Rule 23(b)(3) classes may include uninjured members. In 2015, the Court accepted a petition that asked “whether a class may be certified if it contains ‘members who were not injured and have no legal right to any damages’” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1049 (2016) (citation omitted). But the petitioners later dropped that question, and the Court did not address it. See id. And, two months ago, the Court declined to accept another petition that raised the same issue. Thus, the confusion regarding class certification injury standards remains unresolved.
A consequence of this confusion is the possibility of increased forum shopping, as plaintiffs may try to shift cases into jurisdictions that permit certification of classes that include uninjured members. Class action defendants in turn may want to steer class cases into circuits that require proof that each member of the class was in fact injured, such as including venue and choice of law provisions in contracts or more focused efforts to move, transfer or consolidate cases to another venue. The value of forum selection in this environment can be significant. As Tyson Foods’ petition to the Supreme Court argued, the case would not have been certified – and the defendant would not be facing damages exposure – if the case had been litigated in circuits that did not permit certification of classes with uninjured members.