912 F.3d 1104
8th Cir.2019Background
- Ria Schumacher filed a putative class action alleging three FCRA violations against SC Data Center; defendant removed to federal court.
- Parties reached a tentative settlement in May 2016 during mediation; four days later, the Supreme Court decided Spokeo v. Robins.
- In July 2016, SC Data Center moved to dismiss for lack of Article III standing in light of Spokeo.
- The district court denied the standing motion, reasoning standing to sue was irrelevant to enforcement of the settlement agreement, and ordered Rule 23(e) approval of the settlement.
- The district court approved the class settlement; SC Data Center appealed, arguing the court should have decided standing before approving the settlement.
- The Eighth Circuit agreed that a court must resolve Article III standing before approving a class settlement, vacated the approval, and remanded for a standing determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court must decide Article III standing before approving a class settlement | Schumacher: Standing to pursue the FCRA claims is irrelevant to enforcing the parties' settlement agreement. | SC Data Center: Court must resolve subject-matter jurisdiction (standing) first because approval is a judicial act requiring Article III power. | Court: Standing must be assessed first; approval was vacated and case remanded. |
| Whether a post-agreement change in law (Spokeo) allows a defendant to escape a settlement or avoids readdressing standing | Schumacher: Ehrheart prevents a party from escaping a settlement simply because a change in law would benefit it. | SC Data Center: Spokeo implicated Article III and required reassessment of standing despite the prior agreement. | Court: Ehrheart inapposite; Spokeo concerns Article III jurisdiction and thus does not bar reassessing standing before enforcement. |
Key Cases Cited
- Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928 (8th Cir.) (standing is jurisdictional and must be decided first)
- Arizonans for Official English v. Arizona, 520 U.S. 43 (1997) (actual controversy must exist at all stages of litigation)
- Preiser v. Newkirk, 422 U.S. 395 (1975) (case-or-controversy requirement endures through review)
- Robertson v. Allied Sols., LLC, 902 F.3d 690 (7th Cir.) (court lacks power to approve class settlement absent Article III jurisdiction)
- Ehrheart v. Verizon Wireless, 609 F.3d 590 (3d Cir.) (party may not avoid settlement solely due to a favorable change in substantive law)
- Spokeo v. Robins, 136 S. Ct. 1540 (2016) (clarified Article III standing requires a concrete and particularized injury)
- Dutta v. State Farm Mut. Auto. Ins. Co., 895 F.3d 1166 (9th Cir.) (post-Spokeo standing analysis approach)
- Long v. Se. Pa. Transp. Auth., 903 F.3d 312 (3d Cir.) (post-Spokeo standing approach)