Back when Bexis was still at Dechert, we put up a cautionary post called “CAFA Not With Standing.” In that post we cautioned against using constitutional standing as a defense to class actions with questionable and attenuated damages claims. Remember CAFA, we pointed out. The damages sought in state-court class actions need to support federal Article III standing, or else defendants won’t be able to keep the actions in federal court.
Well, yesterday the court in Bouldry v. C.R. Bard, Inc., No. 12-80951-CIV, slip op. (S.D. Fla. Dec. 18, 2012), addressed precisely the situation discussed in that post. Fortunately, our side won, and the class action stayed in federal court, where there are plenty of other arguments against its validity.
First, we have to point out that Reed Smith was involved in the Bouldry case, so we can’t say as much as we’d like. We’ll have to stick to the legal propositions. As for the facts, all we can say is that the Bouldry opinion should be applicable to other attenuated injury class actions, regardless of the product or conduct involved.
Bouldry involved a state class action in Florida alleging that a medical device had a higher risk of failure than it should. The class consisted of people who had not suffered any failure. There are good arguments that this sort of at-risk damages are not recoverable under most states’ laws − see our no injury scorecard, and in particular the Shiley heart valve cases from the late 1980s and early 1990s, which addressed similar allegations. Hint: the defendant won almost all of them.Continue Reading At Risk Claims Sufficient To Support Federal CAFA Jurisdiction