The Sixth Circuit recently vacated a class certification order in a decision that may make it easier for defendants to defeat putative class actions where a named plaintiff asserts standing based on the injuries of absent class members. Under the “juridical link doctrine,” a named plaintiff may bring a class action against defendants who did not injure them so long as the absent members of the proposed class would have standing to sue those defendants. In vacating a district court order that certified a class based on this doctrine, the Sixth Circuit joined the Second Circuit in rejecting the doctrine and holding that named plaintiffs in a putative class action must have standing to sue every defendant at the time of filing.
In Fox v. Saginaw County, a Michigan landowner alleged that a county government violated both the U.S. and Michigan Constitutions when it foreclosed on his property for failure to pay property tax and retained proceeds of the sale in excess of the amount owed. 2023 WL 3143922, at *1 (6th Cir. Apr. 28, 2023). He filed a putative class action on behalf of property owners in that county and 26 other Michigan counties that allegedly kept surplus proceeds from tax foreclosure sales. Id.
The trial court certified a class of landowners across all 27 counties, even though only one of the counties was alleged to have injured the named plaintiff. Id. at 3. In doing so, the trial court relied on the juridical link doctrine, which creates an “exception to the ordinary standing rule . . . [when] all defendants are juridically related in a manner that suggests a single resolution of the dispute would be expeditious.” Fox v. Cnty. of Saginaw, 2020 WL 6118487, at *5 (E.D. Mich. Oct. 16, 2020), vacated and remanded sub nom. Fox, 2023 WL 3143922. The doctrine has been adopted by the Seventh Circuit, but rejected by the Second Circuit. Fox, 2023 WL 3143922, at *6 (citing Payton v. Cnty. of Kane, 308 F.3d 673, 678-82 (7th Cir. 2002) and Mahon v. Ticor Title Ins. Co., 683 F.3d 59, 63-66 (2d Cir. 2012)).
The district court reasoned that by adopting a uniform policy to retain excess proceeds from tax foreclosure sales, the Michigan counties “bec[a]me so juridically linked to one another that Plaintiff has standing against each of them to the same extent that he has standing against” the county that seized his property. Fox, 2020 WL 6118487, at *6. The court then found that the proposed class satisfied each of Rule 23’s requirements. Id. at 7-11.
The Sixth Circuit disagreed. In vacating the district court’s decision, the Sixth Circuit held that the juridical link doctrine conflicts with Supreme Court precedent on standing in three ways. Fox, 2023 WL 3143922, at *6. First, a named plaintiff seeking to represent a putative class must allege an injury that they personally incurred, and cannot “piggyback off the injuries suffered by other, unidentified members of the class.” Id. Thus, the named plaintiff in Fox could not “rely on the claim that the other Counties harmed the members of the class that he seeks to represent” to establish standing. Id.
Second, the Sixth Circuit found the juridical link doctrine to be at odds with the requirement that plaintiffs have standing “at the outset of the litigation” in order for a court to retain subject matter jurisdiction. Id. at 7. By “allow[ing] a class certification decision to create standing against defendants that did not injure the named plaintiff[,]” the doctrine impermissibly “changes the time when standing matters” from the filing of the suit to the class certification decision. Id.
Third, the Sixth Circuit ruled that the juridical link doctrine—which was based on dicta from a Ninth Circuit opinion about streamlining class action litigation—could not overcome the Supreme Court’s instruction that standing is the “irreducible constitutional minimum” to assert a claim in federal court. Id. (citing La Mar v. H & B Novelty & Loan Co., 489 F.2d 461, 466 (9th Cir. 1973) and Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). Because the juridical link doctrine conflicted with the Supreme Court’s standing jurisprudence and lacked historical support, the Sixth Circuit held that the plaintiff did not have standing to represent the putative class and vacated the class certification order. Id. at 13. The Sixth Circuit then remanded the case to the district court for further proceedings. Id.
The Sixth Circuit’s ruling confirms that standing is a threshold inquiry that precedes class certification, and that a named plaintiff must allege injuries from each and every defendant at the outset in order to establish standing.