2021 was a busy year in class actions. State and federal courts across the country grappled with thousands of different class action lawsuits ranging from consumer protection, to employment discrimination, to COVID-19-related cases.
Within this influx of class action lawsuits, there were key developments in class action law that affected these lawsuits in 2021 and may continue to have an impact in years to come. This article addresses just a handful of these developments.
I. Article III Standing in Class Action Lawsuits
On June 25, 2021, the Supreme Court issued what may be a landmark decision in TransUnion v. Ramirez, 141 S. Ct. 2190 (2021). The Court held that to participate in a class action and recover damages, all class members must have standing. In other words, each class member must suffer a “concrete harm” or injury-in-fact to participate in the class action and recover damages. The Court not only confirmed that a mere statutory violation, without actual harm, is insufficient, but also that the risk of future harm is generally insufficient to confer standing—because the injury has not happened yet.
Ramirez was an important case for class action defendants. It potentially significantly limits the potential exposure that a business may face from a class action lawsuit—especially class actions involving technical statutory violations or even cases involving data breaches. The result may be that in cases where it is difficult for a court to determine whether a class member suffered an actual injury, such as whether each individual class member’s data was taken in a data breach, class sizes may be limited.
II. COVID-19 Business Interruption Class Actions
COVID-19 affected almost every area of the law in 2021. Class actions were no exception. On August 19, 2021, in a first of its kind ruling, a federal court granted class certification to a statewide class of Virginia businesses in a COVID-19 insurance recovery class action. The Court granted class certification to a class of at least 111 Virginia businesses that submitted insurance claims to State Farm for pandemic related business losses. The losses stemmed from the COVID-19 restrictions put in place in Virginia that required many recreational businesses to close—and then only permitted them to reopen at limited capacity with strict guidelines in place.
State Farm immediately appealed the ruling to the Fourth Circuit Court of Appeals, which reversed the lower court’s ruling and remanded because the trial court granted class certification sua sponte rather than in response to a motion. The case, and the issue of class certification, remains pending. While numerous circuits ruled in favor of insurance companies in similar types of cases in 2021, it will be important to see if the court again decides to grant class certification, which could impact other class actions and potentially result in significant exposure in this area.
III. A Flood of COVID-19 Workplace Class Actions
Employers faced unprecedented challenges throughout 2021 related to the ongoing COVID-19 pandemic. The thousands of class action lawsuits filed against employers from everything related to vaccine mandates, to wage and hour violations and layoffs, to potential virus exposure itself just added to the difficulties employers currently face. It is unclear how many of these lawsuits will be successful (i.e., it may be difficult for plaintiffs to prove causation in a virus exposure class action) or how many will be filed. However, these lawsuits will not go away and could be a significant source of litigation in 2022. Therefore, employers must be prepared both for COVID-19-related class actions and lawsuits filed by individual customers or employees as they conduct their day-to-day business in the next year.