RLC Urges Supreme Court to Clarify Limits on Class Actions

Our latest amicus brief asks the Supreme Court to decide whether a court may certify a damages class that includes individuals who suffered no injury.

A ten-cent bottle fee may seem like an unlikely vehicle for resolving a major question of class-action law. But the dispute in Kroger v. Solano illustrates a problem retailers face regularly: a proposed class can include people who were affected in very different ways, including some who were not harmed at all.

The plaintiffs in this case allege that Fred Meyer, a subsidiary of Kroger, improperly charged customers a ten-cent bottle fee under Oregon law. Fred Meyer, however, refunded more than 1,200 of the challenged charges before the operative complaint was filed. Those customers were nevertheless included in a certified class, even though all parties agree that the refunds eliminated the financial injury on which their claims depended.

We filed an amicus brief urging the Supreme Court to review that decision and answer a basic question: Should a court be able to certify a class for damages before determining whether those included in it were actually injured?

Why This Issue Matters in Retail

The issue carries significant practical consequences for retailers. Class certification often serves as a major turning point in litigation because it substantially increases potential exposure and defense costs. Allowing uninjured individuals into a class can artificially inflate the size of the case, magnify settlement pressure, and increase litigation expenses for businesses.

Retail class actions often turn on individual purchasing experiences. A claim involving product advertising may depend on whether a customer saw the challenged statement before making a purchase. A pricing claim may depend on what information the customer received or what the customer expected to buy. A fee claim may depend on whether the fee was refunded. These are factual differences that determine whether an individual was injured at all.

The recordkeeping challenge is also particularly important for brick-and-mortar retailers. A company may know how many products it sold or how many refunds it issued without having records that connect every transaction to an identified customer. When a class is defined too broadly, the retailer may then have to undertake an expensive individual review to disprove claims by people who should not have been included in the first place.  

This is not an argument against legitimate class actions or recovery by injured individuals. It is an argument that the class should be defined around people who have claims. Class certification should not be used to create settlement leverage based on potential damages owed to individuals who suffered no injury.

The Constitutional and Class-Certification Problems

Our brief advances two principal arguments.

First, Article III limits federal courts to actual cases and controversies. A person seeking damages must have suffered a concrete injury. Because certification is the point at which a court first exercises authority over the claims of absent class members, we argue that standing must be addressed then, not postponed until the distribution of damages.  

Second, a class containing uninjured members cannot satisfy Federal Rule 23’s requirements for a damages class. The rule requires common issues to predominate over individual ones. But if determining injury requires a customer-by-customer investigation, that individualized question is not peripheral. It is central to deciding who has a claim.  

This case demonstrates the point. Fred Meyer was not required to maintain records identifying each customer who received a bottle-fee refund. Determining who was refunded would therefore require individualized investigation. Certifying the class first does not make that problem disappear. It shifts the burden and cost of solving it to a later stage, after certification has already increased the pressure on the defendant to settle the case.

Why the Supreme Court Should Take This Case

Federal appellate courts disagree about whether a damages class may include uninjured members. The Supreme Court has not yet provided a definitive answer, but this case offers a direct opportunity to do so. We are asking the Court to grant review and establish a clear rule: before certifying a class seeking damages, courts must determine that the class is limited to people who suffered an injury. That rule would preserve valid claims while ensuring that class-action exposure reflects the claims actually before the court.