On July 22, 2015, in Neale v. Volvo Cars of North America, the US Court of Appeals for the Third Circuit held that unnamed, putative class members in a class action lawsuit do not need to establish Article III standing to sue for class certification. Rather, only the class representatives need to show that they have standing (No. 14-1540, (3d Cir. July 22, 2015)). This highlights a circuit disagreement on whether unnamed members of a class must establish Article III standing, and leaves open the possibility that the US Supreme Court may settle the issue in Tyson Foods, Inc. v. Bouaphakeo, a case which raises this question and was recently granted certiorari (No. 14-1146, (S. Ct. June 8, 2015)).

The named plaintiffs in this action filed suit on behalf of themselves and a nationwide class of current and former Volvo owners and lessees, alleging a uniform design defect with several vehicles made by Volvo. The district court denied nationwide class certification but granted statewide class certification for groups of plaintiffs residing in various different states. Volvo appealed the class certifications, arguing in part that putative members of the class have not suffered any injury and therefore lacked Article III standing.

The Third Circuit upheld the district court's decision. In a lengthy opinion that examined the history of group litigation from medieval England to the present day, the court determined that putative class members do not need to establish Article III standing. Rather, the "cases or controversies" requirement of Article III is satisfied so long as a class representative has standing. The court further opined that "[r]equring individual standing of all class members would eviscerate the representative nature of the class action. It would also fail to recognize that the certified class is treated as a legally distinct entity even though the outcome of such an action is binding on the class."

The Third Circuit's decision highlights a circuit disagreement on the matter. The US Courts of Appeals for the First, Fifth and Tenth Circuits have each used similar reasoning to reach the same conclusion that members of a putative class do not need to show Article III standing. However, decisions from the US Courts of Appeals for the Second, Eighth, Ninth and DC Circuits are less supportive. Opinions in these circuits indicate that all members of a class must have Article III standing, although additional case law on this point from these circuits is scant.

Litigators in the Third Circuit should be aware that unnamed, putative members in a class action lawsuit do not need to establish Article III standing. Litigators should also be aware of the circuit split surrounding this question and of the Supreme Court's Tyson Foods case, which has the potential to settle this dividing question. Practical Law will continue to monitor any developments in this area.

For Practical Law resources on class actions, see Practice Note, Non-statutory Grounds for Challenging Class Actions: Standing and Ascertainability and the Class Action Toolkit.