The class-action complaint, filed in the Eastern District of Pennsylvania last week against Philadelphia, Mayor Cherelle L. Parker, the Philadelphia Parking Authority, and PPA officials, takes issue with the wording of violation notices because the notices say the registered owner of the car is liable to pay the fine. “Noticeably absent” from the notices, the lawsuit says, is that car owners can dispute a citation if they didn’t drive the car.

“People don’t even know that they have a defense because the tickets are misleading,” said Kyle Garabedian, an attorney with Kang Haggerty who represents the car owners.

The due process violations alleged in the complaint raise concerns that the programs issue misleading tickets as a way to “generate a massive amount of money,” Garabedian said.

To join or learn more about this class action lawsuit, please contact Kang Haggerty today for more information.

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In the January 23, 2024 edition of The Legal Intelligencer, Edward Kang wrote, “Collective David Against Corporate Goliaths: Named Plaintiffs’ Standing in Antitrust Class Actions.”

Class action cases make it possible for consumers to band together and defend their interests collectively in cases where it might be impractical to defend them individually. Recently, many legal scholars claimed that the cascade of legislative and judicial reforms has hobbled antitrust class actions, making them harder to plead, certify and litigate. However, class actions continue to be the mainstay of antitrust enforcement, exceeding government actions by more than 25 to one. Between 2005 and 2020, the number of judicial approvals of settlements grew, on average, 10.31% every year; the number of approved settlements exceeding $100 million increased three-fold between 2012 and 2020.

Antitrust claims can successfully navigate last decade’s reforms. As market concentration intensifies, especially in the technology sector, it is crucial for class counsel to adequately represent plaintiffs and bring antitrust class actions to safeguard their rights. Practitioners should be aware of what legal claims are more likely to successfully clear the main procedural hurdles, one such being the issue of standing.

Article III Standing and Class Certification

Often perceived as one of the rising barricades at the procedural gates for an antitrust class action lawsuit, the issue of standing is receiving increasing focus. It is common for a small group of named plaintiffs to start antitrust class actions, alleging that a widespread monopoly has raised prices for a particular product, affecting downstream purchasers throughout the country. An interesting issue arises in class action cases asserting claims under a variety of similar state laws, of whether standing principles—which govern who gets to sue, and for what causes—require that there be a named plaintiff with a purchase or transaction in each of the states whose laws are at issue. The threshold question of standing in such cases typically comes to the forefront during motions to dismiss when defendants seek dismissal of claims in states where no named plaintiff has made a purchase or conducted a transaction.

The standing doctrine arises from the Article III limitation that federal courts may only decide cases and controversies. To meet the constitutional requirements, a plaintiff must show that he suffered an injury-in-fact; that there is a causal connection between the injury and the challenged action of the defendant; and that the injury may be redressed by a favorable decision. In class action cases, the standing inquiry focuses on the class representatives. To bring a class action claim, plaintiffs must certify the class by satisfying the requirements of Federal Rule of Civil Procedure 23. This includes the requirements outlined in Rule 23(a), such as numerosity, typicality, commonality, and adequacy, in addition to fulfilling at least one of the subsections under Rule 23(b). A majority of antitrust class actions are initiated under Rule 23(b)(3), which introduces two additional requirements: superiority and predominance. Between 2005 and 2020, courts granted the largest number of class certifications in the U.S. Courts of Appeal for the Second, Third and Ninth Circuits. In other jurisdictions, the odds of class certification drop from 49.9% to an average of 37.5%.

The Circuit Split on the Issue

Courts have split on the question of whether named plaintiffs have Article III standing to represent a class asserting claims in states where they had no transaction and thus suffered no injury-in-fact. The First, Second, Fourth, and Sixth Circuits have addressed this precise issue. Among them, the majority found that if the named plaintiffs can establish Article III standing for their state law claims, the issue of their ability to represent absent class members, whose claims are based on other states’ laws, becomes a matter of adhering to the criteria outlined in Rule 23.

In In re Asacol, 907 F.3d 42 (1st Cir. 2018), the First Circuit considered the issue as one of representative standing: “Courts generally focus not on whether the putative representative independently satisfies Article III standing, but rather on whether that party qualifies under the applicable law as a representative of the one who does have standing.” Thus, the court held that there was no requirement that the named plaintiff’s claims be identical to the claims of each class member, and that the “Article III focus in class actions” is on the named plaintiffs’ incentives to adequately litigate the class members’ claims, which is a question to be decided under Rule 23.

Similarly, in Langan, the Second Circuit found that class actions brought under Rule 23 result in efficiencies of cost, time, and judicial resources. Further, the court reasoned that “it rarely happens that the circumstances surrounding one plaintiff’s claim end up being identical to the claims of another putative class member let alone all of the others.” See Langan v. Johnson & Johnson Consumer, 897 F.3d 88 (2d Cir. 2018). Thus, the court held that “as long as the named plaintiffs have standing to sue the named defendants, any concern about whether it is proper to include out-of-state, nonparty class members with claims subject to different state laws is a question of predominance under Rule 23(b)(3), not a question of ‘adjudicatory competence’ under Article III.”

In Mayor, the Fourth Circuit similarly held that the ability of a named plaintiff to bring claims on behalf of a class implicated statutory standing, not constitutional standing. See Mayor & City Council of Balt. v. Actelion Pharmaceuticals, 995 F.3d 123 (4th Cir. 2021). The court found that the claims that plaintiffs made on behalf of the class members in states where the plaintiffs did not make a purchase should not be stricken. Rather, those claims should be analyzed in the context of Rule 23: whether the named plaintiffs’ claims raise “questions of law or fact common to the class,” are typical, or raise predominance problems. See Mayor & City Council of Balt. v. Actelion Pharmaceuticals, 995 F.3d 123 (4th Cir. 2021).

The Sixth Circuit disagrees. In Fox, the Sixth Circuit rejected the lower court’s class certification, reasoning that because the named plaintiff lacked standing to file an individual lawsuit against all defendants, he could not gain standing to bring claims against all defendants by invoking Rule 23 and filing a class action. See Fox v. Saginaw County, Michigan, 67 F.4th 284, 296 (6th Cir. 2023).

While the issue may be settled in the above-mentioned circuits, district courts’ views vary widely. How the courts frame the issue might predict the outcome. Courts that permit plaintiffs to pursue state law claims from jurisdictions where they did not allege injury-in-fact view the named plaintiffs as asserting claims solely under their own state laws. Simultaneously, they seek to represent absent class members whose claims arise under similar state laws. As the court articulated in In re Bayer, whether the named plaintiffs have standing to bring suit under each of the state laws alleged was “immaterial” because they were not bringing those claims on their own behalf but are solely seeking to represent other similarly situated consumers in those states. See In re Bayer Combination Aspirin Products Marketing & Sales Practices Litigation, 701 F. Supp. 2d 356 (E.D.N.Y. 2010). In contrast, when courts view the named plaintiffs themselves as asserting claims under multiple state laws, they tend to find that named plaintiffs are mandated to have facially valid claims in all the states.

The Takeaways

Despite the challenges associated with litigating the issue of standing, practitioners can successfully navigate through this obstacle by employing sound legal strategies. In light of the decisions in Asacol, Langan, and Mayor, class counsel’s arguments against the necessity of named plaintiffs’ constitutional standing in each state are likely to be taken more seriously. Plaintiffs are more likely to succeed in their arguments if they present the issue as one where the named plaintiffs are solely seeking to represent other similarly situated consumers in states where the named plaintiffs did not suffer an injury. This strategic framing may enhance the viability of their claims and influence the court’s interpretation of the standing requirements in the context of class actions.

Edward T. Kang is the managing member of Kang Haggerty. He devotes the majority of his practice to business litigation and other litigation involving business entities. Contact him at ekang@kanghaggerty.com.

Reprinted with permission from the January 23, 2024 edition of “The Legal Intelligencer” © 2024 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.

The complaint filed on behalf of certain City of Bridgeton property owners alleged New Jersey State civil rights violations stemming from the misuse of the municipal code as a source of illegal revenue generation by charging excessive fines and fees for code violations involving vacant and abandoned properties.

The complaint alleged New Jersey State civil rights violations stemming from the illegal delegation of municipal code enforcement to a third party who received a thirty percent commission of the fines and fees collected under the offending municipal ordinance.

“We are pleased to have successfully settled this class action lawsuit on behalf of these property owners in the City of Bridgeton,” said Kang Haggerty member Daniel D. Haggerty. “This was a blatant misuse of the municipal court system that violated these property owners’ civil rights.”

On November 10, 2022, the Honorable James Swift of the Superior Court of New Jersey approved the class-wide settlement in the matter of PCIII REO LLC, et al. vs. City of Bridgeton, et al., Superior Court of New Jersey, Cumberland County, Docket No. CUM-L-584-19.

During the litigation of this class action, the City of Bridgeton repealed the offending ordinance and has ceased relying on third-party actors to enforce its municipal code. The settlement agreement further provides for approximately forty percent of the alleged illegally collected fines and fees to be returned to plaintiff class members on a pro-rata basis.

For more information, call (215) 525-5850, or e-mail info@LawKHF.com.

Further complicating the issue, due to their substantial academic and athletic responsibilities, student-athletes generally do not have enough time to hold a job if they wanted one. Yet despite their colleges profiting hand-over-fist from these student-athletes’ talent and hard work, the student-athletes, in turn, are not even allowed to earn commissions on jersey sales (indeed, sales of jerseys with prominent players’ names on them are prohibited), or even to sign autographs for a few bucks. In fact, only recently – after star basketball player, Shabazz Napier, stated he sometimes went to bed hungry – did the National Collegiate Athletic Association (“NCAA”) change its meal program rule, which now allows student-athletes unlimited meals, as opposed to only three a day.

In light of the foregoing (and much more), on March 17, 2014, four student-athletes filed a class-action antitrust lawsuit in the U.S. District Court for the District of New Jersey (Trenton) against the NCAA for “illegally restraining competition for the services of players.” Legalese aside, this claim is about whether or not student-athletes should be paid for their services. Jeffrey Kessler, the attorney who filed the lawsuit, likened the NCAA’s policy – that student-athletes only receive tuition, room, and board for their services – to a price-fixing agreement. (Price-fixing is where would-be competitors agree to operate under a set arrangement in order to control a particular market, and is typically illegal.)

Kessler hopes to appeal to the public by demonizing universities as money-hungry entities that generate billions of dollars at the expense of student-athletes, while the student-athletes themselves are sometimes forced to go to bed hungry. Further, many NCAA conferences have multimillion-dollar television contracts with major networks, and some even have their own networks (e.g., Pac-12 Network). Kessler also points out that in a majority of states, a public university’s head football or basketball coach is its highest paid state employee. When college athletics takes financial precedent over other state positions that one could argue are significantly more important to the public than a coach, it is even more puzzling that athletes are prohibited from earning their fair share.

Kessler’s experience includes handling a number of significant sports-related matters such as McNeil, et al. v. NFL, et al., which struck down a number of free agency restrictions under antitrust laws. In another high profile NFL case, he was instrumental in ending the 2011 NFL Lockout.

In the current action, Kessler is representing Martin Jenkins, J.J. Moore, Bill Tyndall, and Kevin Perry, who have all played basketball or football at a number of large universities such as Rutgers University and Clemson University. Specific conferences named in the suit (in addition to the NCAA) are the “Big 5” money making conferences (often known as the BCS Conferences in college football), which includes the Southeastern Conference, Big 10 Conference, Big 12 Conference, Pacific 12 Conference, and Atlantic Coast Conference.

What may strike some as odd is that the plaintiffs are not seeking guaranteed salary compensation, as many would undoubtedly hope for. Instead, the suit seeks to permit universities the option to pay athletes as if they were university employees. Many have argued that it would be impossible to pay athletes in less popular sports, which often lose colleges money every year. According to Kessler, however, schools would most likely only begin to engage in payment negotiations with regard to profitable sports (i.e., basketball and football).
The plaintiffs do not lose sight of the fact that scholarships are a valid reward for student-athletes. It is not their intent in seeking additional compensation that athletic scholarships lose any merit. It is difficult, however, to look past the greediness of universities (and the NCAA), as they participate in a multibillion-dollar industry in which the main employees (students) receive no actual monetary payment for their services.

Many experts perceive the ability to pay student-athletes as an excellent way to delineate between those who are at college for both an education and athletics, and those who are simply preparing for a professional career in a sports. One solution could be for teams to seek endorsement deals with local vendors, thereby rewarding players who will never play past their collegiate careers. With no readily apparent answer, this lawsuit should at least get the ball rolling toward a resolution.