Back when Bexis was still at Dechert, we put up acautionary post called “CAFA Not With Standing.” In that post we cautioned againstusing constitutional standing as a defense to class actions with questionableand attenuated damages claims. RememberCAFA, we pointed out. The damages soughtin state-court class actions need to support federal Article III standing, orelse defendants won’t be able to keep the actions in federal court.
Well, yesterday the court in Bouldry v. C.R.Bard, Inc., No. 12-80951-CIV, slip op. (S.D. Fla. Dec. 18, 2012), addressed precisely the situation discussed in thatpost. Fortunately, our side won, and theclass action stayed in federal court, where there are plenty of other argumentsagainst its validity.
First, we have to point out that ReedSmith wasinvolved in the Bouldry case, so we can’t say as much as we’d like. We’ll have to stick to the legal propositions. As for the facts, all we can say is that the Bouldryopinion should be applicable to other attenuated injury class actions, regardlessof the product or conduct involved.
Bouldry involved a state class action inFlorida alleging that a medical device had a higher risk of failure than itshould. The class consisted of peoplewho had not suffered any failure. Thereare good arguments that this sort of at-risk damages are not recoverable undermost states’ laws − see our no injury scorecard, and in particular the Shiley heart valve cases from the late 1980s and early1990s, which addressed similar allegations. Hint: the defendant won almostall of them.
Defendant removed Bouldry under CAFA. Plaintiffs sought remand by alleging that atrisk claims didn’t constitute “injury in fact” under Article III of the U.S.Constitution, and thus there was no standing to support the exercise of federaljurisdiction under CAFA. Bouldry,slip op. at 2. In so doing, plaintiffsin Bouldry advanced precisely the argument we worried about in ourearlier CAFA post.
The court concluded that claims for risk of futureinjury satisfied the constitutional “injury in fact” requirement, regardless ofwhether such damages were recoverable under state law. Id. at 4-5 (citing Pisciotta v. Old Nationall Bancorp, 499F.3d 629, 634 (7th Cir. 2007); Central Delta Water Agency v. United States,306 F.3d 938, 947-48 (9th Cir. 2002); and Friends of the Earth, Inc. v.Gaston Copper Recycling Corp., 204 F.3d 149, 160 (4th Cir. 2000) (enbanc)). The court also cited medicalmonitoring cases that reached the same conclusion about alleged risk of futureharm. Bouldry, slip op. at 5(citing Sutton v. St. Jude Medical S.C., Inc., 419 F.3d 568, 574-75 (6thCir. 2005); In re Paoli Railroad Yard PCB Litigation, 916 F.2d 829, 861(3d Cir. 1990); In re Welding Fume Products Liability Litigation, 245 F.R.D.279, 287 n.37 (N.D. Ohio 2007); and Carlough v. Amchem Products, Inc.,834 F. Supp. 1437, 1452 (E.D. Pa. 1993)).
Essentially, even if the claim may fail as a matterof substantive law for lack of cognizable injury, constitutional standing toadjudicate damages-related (and all other) arguments will exist as long as theplaintiff “has “a sufficient stake in a justiciable controversy.” Bouldry, slip op. at 6 (citing Floridacases).
Finally, to the extent that plaintiffs alleged intheir complaint that they did not have standing under Article III, thoseallegations were conclusions of law that could be ignored under TwIqbal. Bouldry, slip op. at 7-8.
For all of these reasons, the court held that,under CAFA, the damages allegations were sufficient to support removal tofederal court. We believe this to be thefirst time this standing issue has been resolved in the specific CAFA context,so anyone facing similar no-injury or at-risk class actions may want to take alook.
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