Last Friday, the NAM filed an amicus brief in the 1st Circuit asking the court to affirm dismissal of a putative class action where the proposed class members sustained no concrete harm. In this case, Xavier, et al. v. Evenflo Co., Inc., et al., the class alleged a purely economic injury—that they would not have purchased defendant’s booster seat or would have paid less for it had they known about the seat’s purported safety risks for children weighing under a certain amount. But each member of the proposed class received the full benefit of the bargain: they paid for a booster seat, they received a booster seat, and they used the booster seat without suffering any harm. Accordingly, the District of Massachusetts dismissed the claims for failing to allege a cognizable injury. The instant appeal followed.
As NAM’s brief explains, no-injury class actions can wreak havoc on the judicial system. They often lead to prolonged litigation, vacuous settlements that provide no real benefits to the
class, and outcomes inconsistent with product liability and other substantive areas
of law. Despite the U.S. Supreme Court’s recent holding in TransUnion v. Ramirez—"under Article III, an injury in law is not an injury in fact,”— class counsel around the country continue to bring cases under inventive damage theories, suggesting that the discovery of a potential defect or an alleged misrepresentation, even if it never caused physical harm, created a theoretical risk of harm and an undefined economic loss for the entire class based on that unrealized risk. Here, the district court properly applied the law and dismissed the claims because the plaintiffs made no showing in their pleadings that they suffered any real-world harm. The 1st Circuit should affirm that ruling to rein in abusive class actions and ensure that judicial resources are spent on claims involving actual injuries.
Unfortunately, on November 23, 2022, the 1st Circuit held that the plaintiffs have standing to seek monetary relief and remanded the case for further proceedings.