Second Circuit Rejects “Novel” Argument That Putative Class Action Plaintiff Has Article III Standing to Sue “Juridically Linked” Defendants Who Did Not Cause Her Any “Injury-In-Fact”

In Mahon v. Ticor Title Ins. Co., the Second Circuit held that a putative class action plaintiff must allege that each defendant injured her to satisfy Article III’s standing requirement. In so holding, the court explained that a putative class action plaintiff cannot use FED. R. CIV. P. 23’s “juridical link” doctrine to bootstrap the alleged injuries of absent, would-be class members and create Article III standing where none otherwise exists.

The plaintiff in Mahon sued three title insurance companies, each a wholly-owned subsidiary of the same parent company. Plaintiff purported to represent a putative class comprised of those who purchased title insurance from any of the defendants and qualified for — but did not receive — a discounted rate for title insurance, asserting that the three sister companies “coordinated” their rate schedules and “operate[d] in the same manner with respect to overcharging Connecticut borrowers . . . .” But plaintiff based her alleged injury-in-fact only on the conduct of the defendant from which she purchased title insurance. Though plaintiff had no dealings with the other insurers, she alleged that they were proper defendants since they are “juridically linked” to the defendant that injured her.

The juridical link doctrine, which has its provenance in jurisprudence concerning class certification pursuant to Rule 23, recognizes two scenarios where a putative class action plaintiff may be able to prosecute a class action against defendants that did not injure the plaintiff: (1) “situations in which all injuries are the result of a conspiracy or concerted schemes between the defendants at whose hands the class suffered injury,” and (2) “instances in which all defendants are juridically related in a manner that suggests a single resolution of the dispute would be expeditious.” La Mar v. H & B Novelty & Loan Co. 

The Second Circuit concluded that Rule 23’s juridical link doctrine cannot confer standing since it is distinct from, and analytically subordinate to, the Article III standing inquiry. Put simply, “[a] federal rule cannot alter a constitutional requirement.” The Second Circuit distinguished Ortiz v. Fibreboard Corp., where the United States Supreme Court stated that “class certification issues are . . . logically antecedent to Article III concerns . . . .,” explaining that the Ortiz holding was not “a general directive regarding the order in which a court should treat class certification and Article III standing in every class action.” Instead, Ortiz applied only “when resolution of class certification obviates the need to decide issues of Article III standing” — such as when class certification issues are dispositive of the case. Consequently, the Second Circuit concluded that, even where a plaintiff seeks to invoke the juridical link doctrine, it is inappropriate to consider the injuries suffered by the class as a whole in resolving the Article III inquiry.

Notably, in a concurring opinion Judge Peter W. Hall rejected the notion that the Article III inquiry and Rule 23’s juridical link doctrine are “wholly independent,” observing that, “while it is true that the mere invocation of the juridical link doctrine cannot bestow Article III standing that otherwise would be lacking, there will be cases in which the presence of a juridical link will suggest that Article III is also satisfied” — for example, where third-party standing is proper to protect a public interest.

Except perhaps in the discrete situations discussed in the concurring opinion, Mahon makes clear that the putative class representative that must establish injury-in-fact at the hands of all defendants. That the putative class may have suffered injuries as a result of the conduct of defendants with whom plaintiff had no dealings is unavailing to plaintiff and is grounds for dismissing such defendants.

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