Duane Morris Class Action Review - 2023 - Report - Page 33
In Hyland, et al. v. Navient Corp., 48 F.4th 110 (2d Cir. 2022), the Second Circuit
confronted a similar issue in the context of a non-monetary settlement and reached the
opposite result. The plaintiffs, a group of public servants with loans that the federal
Public Service Loan Forgiveness program did not forgive, filed suit claiming that the
defendant loan service companies misled them regarding their eligibility for the
program. Id. at 115. The parties reached a nationwide non-monetary settlement that
preserved class members’ rights to file individual claims for money damages. Id. at 114.
The district court approved the settlement, and a group of objectors appealed. On
appeal, the objectors argued that because “[s]ome class members were no longer using
the company to service their loans when the class was certified . . . the class as a whole
. . . lacked standing to pursue injunctive relief.” Id. at 117. The Second Circuit rejected
that argument. It held that “[s]tanding is satisfied so long as at least one named plaintiff
can demonstrate the requisite injury.” Id. at 117-18. It reasoned that, because the
plaintiffs alleged that they “continued to rely on [the company] for information about
repaying their student loans,” they plausibly alleged that they “were likely to suffer future
harm.” Id. at 118. The Second Circuit concluded that these allegations were “enough to
confer standing on the entire class” and affirmed the district court’s order. Id. (citing
Amado, et al. v. Andrews, 655 F.3d 89, 99 (2d Cir. 2011) (“In a class action, once
standing is established for a named plaintiff, standing is established for the entire
class.”)).
In Bowerman, et al. v. Field Asset Services, Inc., 39 F.4th 652 (9th Cir. 2022), the Ninth
Circuit considered what happens when the plaintiffs cannot or are not able to define
their class so as to exclude uninjured class members. The plaintiff filed suit on behalf of
a putative class of workers alleging that the defendant misclassified them as
independent contractors rather than employees and, as a result, improperly failed to pay
them overtime and failed to reimburse their business expenses. Id. at 657. The district
court granted class certification, and the Ninth Circuit reversed. The plaintiffs did not
dispute that they lacked common proof that putative class members worked overtime
hours or incurred reimbursable expenses, but argued that, under Ninth Circuit
precedent, “the presence of individualized damages cannot, by itself, defeat class
certification.” Id. at 661-62 (quoting Leyva, et al. v. Medline Industries Inc., 716 F.3d
510, 514 (9th Cir. 2013)). The Ninth Circuit disagreed. It distinguished between “the
calculation of damages and the existence of damages in the first place.” Id. at 662.
Quoting its decision in Castillo, et al. v. Bank Of America, NA, 980 F.3d 723, 730 (9th
Cir. 2020), the Ninth Circuit noted that “if the plaintiffs cannot prove that damages
resulted from the defendant’s conduct, then the plaintiffs cannot establish
predominance.” The Ninth Circuit concluded that the defendant’s liability to any class
member for failing to pay overtime wages or to reimburse business expenses “would
implicate highly individualized inquiries on whether that particular class member ever
worked overtime or ever incurred any ‘necessary’ business expenses” and, under such
circumstances, class certification is improper.
Further contributing to the divergence of case law precedents, in Olean Wholesale
Grocery Cooperative, Inc., et al. v. Bumble Bee Foods, LLC, 31 F.4th 651 (9th Cir.
2022), in an en banc decision, the Ninth Circuit ruled 9 to 2 to uphold an order certifying
a class that potentially included a significant number of uninjured class members. The
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Duane Morris Class Action Review – 2023