Structuring a Settlement After Asserting Class Members Did Not Suffer Any Concrete Injury

R. Locke Beatty of McGuireWoods writes:

Frequently, a class action complaint will set forth an elaborate theory of why the defendant’s actions were negligent or wrongful, but fall short when trying to identify how that conduct has harmed the class members.  This kind of complaint invites a motion to dismiss on the grounds that the plaintiff has failed to demonstrate constitutional standing by identifying a “concrete, particularized, and actual or imminent” injury traceable to the defendant’s actions.

When these motions are successful, it’s a great day for the defense, but court dockets are littered with denied (or simply undecided) Rule 12(b)(6) motions challenging a plaintiff’s constitutional standing.  In those cases, negotiating a settlement may become the most prudent course of action.  And at that point, that motion to dismiss brief that you stayed up late drafting last spring can become an obstacle to structuring a lasting settlement in autumn—particularly when there’s a shortage of claimants who can sufficiently document damages to obtain relief from a compensatory settlement fund.

So how do parties structure a settlement that will avoid the objectors’ wrath after the defendant is already on record arguing that the class members haven’t suffered any real injury?

Read more on Lexology, but if you’re a consumer advocate, you may not be happy with the suggestions and may want to continue working to get courts to recognize standing even when “concrete injury” hasn’t been demonstrated. The time spent protecting yourself and worry should count.

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