This article was first published in Mealey's Litigation Report: Class Actions. It is reprinted here with permission.
[Editor’s Note: David N. Anthony and Timothy St. George are partners and H. Scott Kelly is an associate at Troutman Pepper. They are based in the firm’s Richmond, Virginia office and have national litigation practices focused on class actions, financial services litigation, and complex consumer litigation. Any commentary or opinions do not reflect the opinions of Troutman Pepper or LexisNexis®, Mealey Publications. Copyright © 2020 by David N. Anthony, Timothy St. George and H. Scott Kelly. Responses are welcome.]
I. Introduction
Colloquially known as the ‘‘Rocket Docket,’’ the Eastern District of Virginia (‘‘EDVA’’) has been the speediest federal court for civil trials since 2008, according to the annual data compiled by the Administrative Office of the United States Courts.[1] In the twelve-month period ending in March 2019, the EDVA (which includes courts in Alexandria, Newport News, Norfolk, and Richmond) handled 2,359 civil cases, averaging 13.4 months from filing to disposition for cases that terminated after reaching trial (rather than before or during pretrial).[2] In comparison, the neighboring District of Maryland and the Western District of Virginia averaged 30.1 and 20.8 months, respectively, for civil cases terminating in or during trial. Nationally, the slowest federal districts averaged 52.8 and 72.9 months from filing to disposition for civil cases that terminated after reaching trial.[3]
Media coverage of the EDVA inevitably highlights the speed at which civil cases go to trial.[4] Less publicized is the fact that the district also remains popular for class action lawsuits, no doubt in part because of the speed with which the district disposes of its cases. Attorneys seeking to file in the EDVA would benefit from paying close attention to where the Fourth Circuit stands on various issues surrounding class certification. This article surveys the current stance of the Fourth Circuit with regard to several questions that are central to strategizing class certification arguments: class representative and class member standing; ascertainability and typicality; the determination of statutory damages; and the application of the U.S. Supreme Court’s decision in Bristol-Myers Squibb to class action suits.
II. An Overview of Two Standing Issues in Class Actions
Class Representative Standing After Spokeo
Class action plaintiffs benefit from federal statutes (such as the Fair Credit Reporting Act, ‘‘FCRA’’)[5] that provide statutory damages as an alternative to actual damages. Statutory damages relieve the plaintiff of the burden of proving any actual damages, which would entail a more fact-intensive and costly inquiry. By avoiding discussion of actual damages, however, plaintiffs may create problems with the threshold question of constitutional standing. As in any other context, courts may only hear cases if the plaintiff can assert a case or controversy such that Article III of the Constitution is satisfied. In the context of a class action claim, the named plaintiff – if not every member of the putative class – must be able to satisfy standing.[6] The question in class actions when the plaintiff does not intend to demonstrate actual harm becomes: May a plaintiff satisfactorily demonstrate injury-in-fact by claiming only that the defendant violated a statutorily-determined right? For example, if a plaintiff alleges that a consumer reporting agency willfully failed to ‘‘follow reasonable procedures to assure maximum possible accuracy of consumer reports’’ as required under the FCRA, but can demonstrate no actual, real-world harm, has he or she satisfactorily demonstrated injury-in-fact? In Spokeo, Inc. v. Robins[7] the U.S. Supreme Court said otherwise: a plaintiffmay not rely on a statutorily granted right absent a demonstration of ‘‘de facto’’ real world harm.[8]
Prior to Spokeo, courts reasoned that a defendant’s violation of a statute such as the FCRA[9] that provided for statutory damages without proof of concrete injury was sufficient to satisfy the injury-in-fact element of standing. In fact, the Ninth Circuit followed precisely that approach in its assessment of the Spokeo case, concluding that plaintiff Robins’ allegation of a violation of his statutory rights, combined with his personal interest in the handling of his credit information, constituted an injury-in-fact.[10] The Supreme Court, however, held that the Ninth Circuit’s analysis was incomplete because it ‘‘elided’’ the injury-in-fact inquiry and failed to address the concreteness of Robins’ injury, as opposed to its particularity. Justice Alito’s majority opinion instead determined that an assertion of a procedural violation, if ‘‘divorced from any concrete harm,’’ would not be a sufficient pleading to satisfy injury-in-fact.[11]
Although the Court did not rule on whether Robins’ allegations constituted an injury-in-fact and instead remanded the case to the Ninth Circuit for further consideration (after which the case settled privately), the implications of the case are clear. Plaintiffs may no longer satisfy Article III standing by alleging a statutory violation without also showing some kind of concrete (i.e., ‘‘de facto’’) harm or injury. Instead, courts need to consider ‘‘whether the particular procedural violations alleged in [each] case entail a degree of risk sufficient to meet the concreteness requirement.’’[12]
Still, because the Supreme Court did not rule directly on whether a plaintiff might have standing based only on a technical statutory violation, lower courts remained free to adopt a relatively broad reading of Spokeo. Rather than reading Spokeo as restricting the injury-in-fact inquiry to ‘‘real’’ harms, the judges of the EDVA have focused on the two principles Justice Alito put forward as guidance in determining whether the alleged violation constituted a sufficiently tangible injury. As Justice Alito put it, both ‘‘history and the judgment of Congress play important roles’’ in that determination.[13] Thus, a plaintiff may be able to demonstrate injury-in-fact, even for a intangible, technical violation of a statute, if either 1) the statute in question was strengthening or replacing a right found in common law,[14] or 2) Congress, in enacting the statute, intended to protect against the kind of harm the plaintiff alleges.[15]
The EDVA (and many others) originally interpreted these principles liberally to encompass most, if not all, of the statutory violations that came before them. For example, in Thomas v. FTSUSA, LLC[16] Judge Payne of the Richmond Division concluded that a plaintiff’s allegation that an employer failed to provide disclosure and obtain written consent before obtaining a consumer report constituted a substantive, not merely a technical or procedural, violation. Thus, the allegation was a concrete and particularized injury for the purposes of standing.[17] Judge Payne reasoned that certain types of acts may cause harm in and of themselves, so courts must carefully consider the factual context before declining to hear cases alleging only an invasion of statutorily-created rights.[18] Because plaintiff Thomas claimed that he was denied the right to specific information due to him under the FCRA, he had alleged a concrete informational injury. Such an injury was sufficient to demonstrate standing because it involved an invasion of the plaintiff’s privacy, a common law right.[19] Judge Payne concluded: ‘‘Spokeo did not change the basic requirements of standing.’’[20] Other decisionsout of the EDVA followed the same interpretation, declining to dismiss for lack of standing when plaintiffs alleged any sort of invasion of their right of privacy, even if that right stemmed from technical statutory provisions in the FCRA.[21]
Recently, two decisions from the Fourth Circuit have further defined the boundaries of Justice Alito’s guiding principles. In 2017, the Fourth Circuit decided Dreher v. Experian Information Solutions, Inc[22] where the plaintiff asserted various claims under the FCRA, alleging that defendant Experian caused him an informational injury by denying him access to specific information to which he was entitled under the statute.
Dreher alleged that Experian failed to inform him that the holder of one particular credit line (which was fraudulently opened in his name) had changed. Failure to truthfully disclose the sources of credit information was held to be a violation of the FCRA (which ‘‘states that a consumer agency ‘shall, upon request . . . clearly and accurately disclose to the consumer . . . the sources of the information [in the consumer’s file at the time of the request.]’’’).[23] Judge Thacker’s opinion reiterated the major points of Spokeo in finding that plaintiff Dreher had failed to demonstrate a concrete injury. While intangible injuries including informational injuries may constitute an injury-in-fact for standing purposes, ‘‘a statutory violation alone does not create a concrete informational injury sufficient to support standing.’’[24] Turning to the first of Justice Alito’s guiding principles, Judge Thacker found no common law analogue to Dreher’s claim.[25] As to the second principle, Judge Thacker found persuasive a case from the D.C. Circuit finding ‘‘a plaintiff suffers a concrete informational injury where he is denied access to information required to be disclosed by statute, and he suffers, by being denied access to that information, the type of harm Congress sought to prevent by requiring disclosure.’’[26] Because Dreher alleged merely ‘‘a statutory violation divorced from any real world effect,’’[27] he lacked standing, and the case was remanded with orders to dismiss on jurisdictional grounds.
Following Dreher, the landscape in the Fourth Circuit changed with regard to interpretations of Spokeo. In Gathers v. CAB Collection,[28] for example...
