By: Michael Jacobsen
Seyfarth Synopsis: As reported here, to mark the two-year anniversary of TransUnion LLC v. Ramirez (“TransUnion”), the Workplace Class Action blog is examining how each of the federal Circuit Courts have applied this significant ruling on standing from the U.S. Supreme Court (see also here). After serving a pair of district court rulings as an appetizer, the blog moves on now to the main course with the following rulings from the First, Second, Third, and Fourth Circuits that employers should read and consider, as these developments will drive how companies defend complex litigation in these jurisdictions.
TransUnion at a Glance
As a refresher, in TransUnion, the Supreme Court reinforced that Article III standing requires a “concrete harm,” even when there is a statutory violation, and that “an injury in law is not an injury in fact.” As Justice Kavanaugh put it pithily: “No concrete harm, no standing.” Also applicable here, the Supreme Court held that plaintiffs must demonstrate standing with respect to each claim asserted and each form of relief they seek (e.g., injunctive relief and damages).
The First Circuit’s Analysis
Webb v. Injured Workers Pharmacy, LLC
Webb picks up where we left off in our last posting on TransUnion, in the data breach context. In Webb, the plaintiffs brought a putative class action against the defendant home-delivery pharmacy service (“IWP”) in the U.S. District Court for the District of Massachusetts after learning that their personally-identifying information (“PII”) was compromised in a data breach that IWP suffered. The district court granted IWP’s motion to dismiss for lack of standing.
The Court’s Decision
Just days after TransUnion’s second anniversary, the U.S. Court of Appeals for the First Circuit affirmed the district court’s ruling in part. On the one hand, the court held that the plaintiffs plausibly demonstrated standing to seek damages, including by alleging lost time spent taking protective measures that otherwise would have been put to some productive use. However, the First Circuit also noted TransUnion’s teaching that plaintiffs “must demonstrate standing for each claim that they press and for each form of relief that they seek.” As a silver lining for the defense, the court held that the plaintiffs lacked standing to pursue injunctive relief because their requested injunctions were not likely to redress their alleged injuries, e.g., an injunction requiring IWP to improve its cybersecurity systems could not protect the plaintiffs from future misuse of their PII by the individuals who they alleged already possessed it.
The Second Circuit’s Analysis
Calcano v. Swarovski North America Limited
In Calcano, visually impaired plaintiffs sued various stores under the Americans with Disabilities Act (“ADA”) for failing to carry Braille gift cards. The plaintiffs alleged they lived near the stores, had been customers in the past, and intended to purchase gift cards in the future. Nonetheless, the U.S. District Court for the Southern District of New York dismissed the plaintiffs’ claims for lack of standing.
The Court’s Decision
The Second Circuit affirmed the district court. The court acknowledged its prior holdings that an ADA plaintiff has suffered an injury in fact when it is reasonable to infer that the plaintiff intended to return to the subject location based on the frequency of the plaintiff’s prior visits and the proximity of the defendant’s business to the plaintiff’s home. However, the court also made clear that conclusory allegations of intent to return and proximity are not enough in light of TransUnion’s holdings that plaintiffs must establish a “material risk of future harm” that is “sufficiently imminent and substantial” to pursue forward-looking injunctive relief. Among other deficiencies that Seyfarth’s ADA Title III blog discussed in more detail here, the court explained that the plaintiffs’ allegations simply “parrot[ed]” the court’s prior holdings outlining categories of information that could support a reasonable inference. The Second Circuit deemed these allegations to be nothing more than legal conclusions couched as factual allegations and ruled that they did not raise a reasonable inference of injury.
The Third Circuit’s Analysis
Oxenberg v. Secretary United States Department Of Health & Human Services
In Oxenberg, the plaintiffs submitted Medicare claims for therapy offered by Novocure, Inc. that were denied. Per the Medicare “mulligan,” if a claim is denied but neither the supplier nor the beneficiary had reason to know that the treatment would not be covered, Medicare would bear the cost. If there was reason to know, the supplier bears the cost instead. The decisions denying the claims held Novocure responsible for the cost on this basis. However, the plaintiffs still received the treatment. When the plaintiffs sued, the U.S. District Court for the Eastern District of Pennsylvania dismissed the complaint on standing grounds.
The Court’s Decision
The U.S. Court of Appeals for the Third Circuit affirmed. Although their claims were denied, the court held that the plaintiffs suffered no tangible injury as a result, noting they still received treatment at no cost. The plaintiffs argued that they sustained statutory injuries through the loss of their “mulligan” and entitlement to have Medicare pay for their treatment. Quoting TransUnion, however, the Third Circuit countered that although Congress may “elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law,” its “creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide” whether plaintiffs have standing.
The Fourth Circuit’s Analysis
John And Jane Parents 1 v. Montgomery County Board Of Education
In John And Jane Parents 1, the Montgomery County Board of Education (“Board”) adopted gender identity guidelines permitting schools to develop gender support plans for students. The guidelines authorized schools to withhold information about the plans from parents who were deemed to be unsupportive. The plaintiff parents alleged the guidelines usurped their right to raise their children. The U.S. District Court for the District of Maryland granted the Board’s motion to dismiss the plaintiffs’ claims, although it did not consider standing.
The Court’s Decision
Nonetheless, in its ruling just weeks ago, the U.S. Court of Appeals for the Fourth Circuit announced that this case “begins and ends with standing.” The court noted the principles underscored in TransUnion that courts do not “adjudicate hypothetical or abstract disputes” or “possess a roving commission to publicly opine on every legal question” and held that the plaintiffs had not alleged the type of injury required to show standing. Noting that the plaintiffs did not allege that their children had gender support plans, were transgender, or were struggling with issues of gender identity, the court concluded that the plaintiffs failed to allege facts that the schools had any information about their children that was being withheld or that there was a substantial risk that information would be withheld in the future.
Implications For Employers
Each of these cases featured multiple plaintiffs, but only one of them was a class action. None of them took place in the workplace. Nevertheless, the types of issues they feature are familiar, and they offer useful nuggets for defendants. Among other things, Webb reinforces the importance of analyzing plaintiffs’ standing as to each claim and request for relief asserted. Calcano and John And Jane Parents 1 showcase deficient pleading as to standing requirements. And Oxenberg highlights that plaintiffs do not satisfy the injury-in-fact requirement simply by way of their statutory rights. Employers who find themselves defending against complex litigation in one of these circuits should be aware of these holdings.