Many of the abuses in the class action system come when courts forget that class actions involve clients rather than attorneys acting as free-roaming consumer-protection vigilantes. The Third Circuit did not make this mistake in McNair v. Synapse Group, decided March 6.
Charles McNair bought a magazine subscription through Synapse Group, which uses the business model of a low introductory rate and an automatic renewal. He alleged that the defendant used sneaky mechanisms to hide the automatic renewals and that this violated consumer fraud laws, and asked for class certification for prospective injunctive relief to change Synapse's business practices. Synapse argued that the plaintiffs did not have standing to seek prospective injunctive relief, because they had no risk of future injury, as they were already aware of the alleged "fraudulent" practices. The Third Circuit agreed:
Perhaps [plaintiffs] may accept a Synapse offer in the future, but, speaking generally, the law accords people the dignity of assuming that they act rationally, in light of the information they possess. ... If Appellants' suggestion is that they may not be able to help themselves when confronted with a really good subscription offer, they have still not provided a basis for standing. Pleading a lack of self-restraint may elicit sympathy but it will not typically invoke the jurisdiction of a federal court.
All too often, I see class actions alleging harms for past injury settled for future injunctive relief that does class members no good unless they do repeat business with the defendant. These settlements are effectively zero-dollar coupons: class members are no better or worse off than non-class members, and have not been compensated for their past injury. Courts need to reject the idea that future injunctive relief is compensation for past injury, and McNair reminds us that class representatives are not situated to bring claims seeking future injunctive relief as protection against consumer fraud. Andrew Trask has good coverage and commentary.
Disclosure: I have a case pending before a panel including Judge Jordan, who decided McNair.