This post completes my coverage of last Friday’s order list, which began here.
Standing is one of those arguments that only an appellate lawyer could really love. It’s apparent that both sides of Friday’s opinion in DaimlerChrysler v. Inman , No. 03-1189 (majority dissent), have expressed equal measures of affection for the principle. They just disagree about what standing is.
In this case, three putative class representatives sued DaimlerChrysler over defective seatbelts. These three plaintiffs had not yet been physically injured by a seatbelt failure. Instead, they argued that the fact that the products were defective was itself a breach of warranty. They sought relief including the value of replacement seatbelts and the loss of use of their vehicles while the seatbelts were replaced.
The district court certified a nationwide class action, after which DaimlerChrysler appealed under a statute permitting interlocutory appeal of a class certification. The court of appeals reversed that certification and remanded. Nonetheless, DaimlerChyrsler filed a petition for review seeking additional relief — dismissal of the entire action for want of standing.
A five-Justice majority of the Court held that the plaintiffs lacked standing because
DaimlerChrysler argues that the claimed injury is so hypothetical, so iffy, that the plaintiffs do not have standing to assert it and the court does not have jurisdiction to hear it. The issue is important because courts must not decide hypothetical claims. Practically speaking, the timing is important, because a disagreement over $2,400 is one thing and a disagreement over $8 billion is quite another.
DaimlerChrysler … argues that whatever the plaintiffsâ€™ causes of action may require, they have not suffered the kind of injury to give them standing to invoke the trial courtâ€™s subject-matter jurisdiction. If there is no injury sufficient for jurisdiction, surely there is no injury sufficient for a cause of action. But if the plaintiffs have no standing, the trial court has no more jurisdiction to deny their claims than it does to grant them. Without jurisdiction, the trial court should not render judgment that the plaintiffs take nothing; it should simply dismiss the case.
Here, according to the plaintiffs themselves, DaimlerChrysler received only fifty complaints from ten million vehicle owners and lessees over ten years â€” five per year, one for every 200,000 owners and lessees. By comparison, in Cole, GM received 306 reports in two years, one for every 732 owners and lessees. In any event, evidence of such complaints cannot prove defect.
The four-Justice dissent, penned by Chief Justice Jefferson, disagreed with the approach of the majority:
Today the Court inverts traditional standing doctrine, focusing not on the party but on the issues to be adjudicated. …
Absent a full record, in which the claimâ€™s contours can be thoroughly vetted, I am not prepared to say the plaintiffsâ€™ claims of economic injury are conclusively unsound. …
Moreover, crafting new standing rules creates a host of problems, not the least of which involves collateral attacks on judgments. Without standing, a court lacks subject matter jurisdiction to hear the case. … Because â€œa judgment will never be considered final if the court lacked subject-matter jurisdiction,â€ … the Courtâ€™s holding â€œopens the way to making judgments vulnerable to delayed attack for a variety of irregularities that perhaps better ought to be sealed in a judgment.â€ … Additionally, by holding that standing requires the plaintiff to establish the validity of its claim, and because standing may be raised for the first time on appeal, a class-action defendant couldâ€”on interlocutory appeal of a certification orderâ€”seek dispositive rulings on all of the plaintiffsâ€™ claims, even without first asking the trial court to determine the merits of the claims and absent any sort of evidentiary record. Defendants who lose at trial may now, under the guise of standing, raise affirmative defenses that were never pleaded in, or considered by, the trial court.
Proposals to modify class action procedure present serious questions of policy. Standing is different. It implicates a courtâ€™s fundamental power to adjudicate a claim, rather than an assessment of whether the claim will ultimately succeed. Today, the Court conducts an extraordinary and unworkable reading of both pleading and precedent to conclude that the plaintiffs â€œlack[s] standing because [their] claim of injury is too slight for a court to afford redress.â€ We have never before stretched the doctrine this far.
The big question for practitioners is whether the Court’s discussion of standing applies equally outside of the class-action context. In a passage that has been noted elsewhere, the Chief Justice’s dissent suggested that the majority’s “opinion reveals a visceral distaste for class actions.” Some of the majority’s reasoning also seems to hinge on the heightened stakes that flow from having a class action. There is some possibility that the Court may decline to extend the same strict standing requirements to conventional litigation, although it is not immediately clear what constitutional line would support such a distinction.
In the class-action context, it’s easy to imagine a savvy lawyer arguing that a prior adverse judgment — even a prior settlement — does not preclude a new suit because the theory of the prior case did not satisfy this new standing requirement and, thus, the prior judgment is a nullity.
Time may tell. It seems equally likely that this case will effectively become limited to its facts. The majority does not spell out how “iffy” a plaintiff’s claims must be to fail to plead standing — it’s not clear where such a numerical threshold might fall. Without a crisp test, future defendants (or perhaps plaintiffs seeking to avoid adverse judgments) will be reduced to drawing statistical comparisons with the facts of this case. And, as those facts illustrate, it is very hard to express constitutional requirements in statistical terms.