The NAM filed an amicus brief urging the U.S. Supreme Court to stem the rising tide of no-injury class action cases—those where plaintiffs’ attorneys leverage a sympathetic plaintiff to be the face of a class that may in fact contain thousands of unharmed individuals. These actions have become a favorite of the plaintiffs’ bar, in part, because of the myriad federal consumer protection statutes authorizing individuals to sue to vindicate statutory rights. In this case, the lead plaintiff suffered injuries—inability to purchase a car and embarrassment in front of family members—related to an alleged violation of a federal credit reporting statute. Rather than sue for his injuries alone, however, the plaintiff filed a class action seeking to represent 8,000+ people, over 6,000 of whom had never had their information shared with a third-party let alone been denied credit. In other words, although all individuals in the class may have suffered a statutory violation, the majority were not concretely harmed. After a trial focused entirely on the lead plaintiff’s idiosyncratic injury, the jury awarded significant damages to the entire class.
The NAM, joined by the Alliance for Automotive Innovation, American Tort Reform Association, and International Association of Defense Counsel, filed an amicus brief urging the Court to issue a clear ruling outlining the scope and factors a trial court must consider in conducting a rigorous, evidence-based analysis of typicality under Rule 23(a)(3). As manufacturers are acutely aware, the presence of thousands of plaintiffs in a class can increase litigation risk and settlement pressure to the point at which defending against the claims becomes unrealistic. Without a strong ruling from the Court, these cases would continue to proliferate across a wide range of federal and state laws, including in emerging and amorphous areas like privacy and cyber security. On June 25, 2021, in a 5-4 decision, the Court reversed the Ninth Circuit by holding that only plaintiffs concretely harmed by a defendant’s statutory violation—here, the roughly 1,800 out of 8,000 plaintiffs in the class who had their credit reports shared with third parties--have standing to sue. By focusing on Article III standing, the Court avoided diving into difficult questions of typicality and instead went to bedrock principles of jurisprudence, with Justice Kavanaugh writing that “under Article III, an injury in law is not an injury in fact.”