The Eleventh Circuit recently decertified a TCPA settlement class because the class definition included members who could never have Article III standing under Eleventh Circuit precedent. Drazen v. Pinto, — F.4th –, No. 21-10199, 2022 WL 2963470, at *4-7 (11th Cir. July 27, 2022). The court applied the U.S. Supreme Court’s holding in TransUnion LLC v. Ramirez and ruled that all members of a Rule 23(e) settlement class must have Article III standing to recover damages. Id. at *5-6 (citing TransUnion, 141 S. Ct. 2190, 2208 (2021)). The Drazen court expressly rejected the proposition that plaintiffs with no standing in the Eleventh Circuit could be part of a nationwide class, even if they may have standing in another circuit. Id. As of the date of publication, Drazen is the first and only decision from a federal appellate court that analyzes TCPA claims under the TransUnion rubric. Although the impact of Drazen outside of the Eleventh Circuit remains unclear, the case demonstrates how courts may analyze Article III standing issues in TCPA class actions going forward.
As readers of this blog are aware, the U.S. Supreme Court issued its decision in TransUnion, LLC v. Ramirez last summer. The decision reaffirmed that plaintiffs must demonstrate a “concrete harm” to establish Article III standing to sue in federal court. TransUnion, 141 S. Ct. at 2200. Moreover, in footnote 4 of the TransUnion decision, the Court explicitly stated that it was not addressing the “distinct question whether every class member must demonstrate standing before a court certifies a class.” Id. at 2208 n.4.
The Eleventh Circuit recently addressed this outstanding question in Drazen. See Drazen, 2022 WL 2963470, at *4-7. The Drazen plaintiffs filed a putative nationwide class action complaint against GoDaddy.com LLC (“GoDaddy”) alleging that GoDaddy violated the TCPA when it supposedly called and texted plaintiffs to market its services and products using an ATDS. Id. at *1. The parties agreed to a nationwide class settlement and the district court certified a settlement class defined to include “[a]ll persons” who received texts and calls from defendant during the class period. Id. at *1-2. The class definition included members who received only a single text or call. Id. The district court acknowledged that the scope of the settlement class was problematic because it included individuals who received only a single text message, and under existing Eleventh Circuit precedent, such individuals do not have Article III standing to assert TCPA claims. Id. at *2, 5 (citing Salcedo v. Hanna, 936 F.3d 1162, 1168 (11th Cir. 2019)). Additionally, Eleventh Circuit case law does not clearly address whether individuals who receive one call from a TCPA defendant have Article III standing. Id. at *2. However, the district court held that the class definition was permissible because “only the named plaintiff must have standing.” Id. at *5 (citation omitted). Moreover, the district court noted that this was a “nationwide class action” and determined that the class members in question “might have standing in another circuit” even if they did not have standing under Eleventh Circuit law. Id. (citation omitted). An objector appealed the certification decision on unrelated grounds and the Eleventh Circuit raised the issue of Article III standing sua sponte. See id. at *4.
The Eleventh Circuit rejected the district court’s reasoning and held that under TransUnion “when a class seeks certification for the sole purpose of a damages settlement under Rule 23(e), the class definition must be limited to those individuals who have Article III standing.” Id. at *5 (citing TransUnion, 141 S. Ct. at 2208). The court further reasoned that “[i]f every plaintiff within the class definition in . . . TransUnion had to have Article III standing to recover damages after trial, logically so too must be the case with a court-approved class action settlement.” Id. The court rejected the proposition that plaintiffs with no standing in the Eleventh Circuit could be a part of the nationwide class because they may have standing in another circuit. Id. at *6. The court held that “[a]ny class definition that includes members who would never have standing under [Eleventh Circuit] precedent is a class definition that cannot stand.” Id. The Eleventh Circuit vacated the settlement class certification and remanded the case to the district court with orders to redefine the class “with the benefit of TransUnion.” Id. at *7. The court also asked the parties to address whether a plaintiff’s receipt of a single phone call in violation of the TCPA is sufficient to confer Article III standing under TransUnion because the issue remains unsettled under existing Eleventh Circuit precedent. Id.
A few weeks after the Eleventh Circuit ruling, the Drazen plaintiffs petitioned the Eleventh Circuit for en banc review to address its previous ruling that individuals who receive just one text message do not have standing to sue. Plaintiffs argue that the other federal appellate courts that have addressed this issue have held that recipients of one text do have standing to sue. As of the date of publication, the Eleventh Circuit has not yet ruled on the petition. We will monitor the results of the petition.
Following the TransUnion decision, Article III standing has once again become a hotly contested issue in consumer class actions. TCPA litigants should take note of the Drazen holding and its potential impact on Article III standing issues in the class action context going forward.
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