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Early ruling sets boundaries for class action, citing the importance of standing and avoiding “extensive discovery costs and delay”
March 13 2014. By Peter Breslauer, via lexology.comA recent decision of the United States District Court for the Western District of Pennsylvania dismissed, as a threshold question of jurisdiction, a plaintiff’s allegation seeking a nationwide class, because the plaintiff personally had standing to sue only under the law of the state where the financial services in question were provided to her. Lauren v. PNC Bank, N.A., No. 2:13-cv-762, 2014 WL 123099 (W.D. Pa. Jan. 14, 2014) (opinion here). In so limiting the potential class, the court, writing without benefit of binding Third Circuit precedent, adopted the standing analysis of the Eastern District of Pennsylvania inIn re Wellbutrin XL Antitrust Litig., 260 F.R.D. 143 (E.D. Pa. 2009) (opinion here), which similarly dismissed nationwide class allegations and limited the potential class to persons in the states where the named plaintiffs lived. The standing question was resolved before any proceedings on the plaintiff’s request to certify a nationwide class, because, as the court explained, to do otherwise “would trigger extensive discovery costs and delay” that could be avoided if it were determined that plaintiff lacked standing to sue. In Lauren, the plaintiff alleged that defendants, PNC Bank, Assurant, and American Security Insurance Company, “force-placed” hazard insurance on persons with residential mortgages or lines of credit with PNC. Plaintiff asserted claims against PNC for breach of the implied covenant of good faith and fair dealing, breach of the mortgage agreement, breach of fiduciary duty/misappropriation of escrow funds, and violation of the Ohio Consumer Sales Practices Act. Plaintiff asserted claims against Assurant and ASIC for unjust enrichment and aiding and abetting breach of fiduciary duty. After preliminary motion practice, the only claim remaining against ASIC was for unjust enrichment. ASIC then moved to dismiss the nationwide class allegations on grounds that the court lacked subject-matter jurisdiction over unjust enrichment claims asserted under the laws of every state. The court granted ASIC’s motion, and limited the potential class on the unjust-enrichment claim to persons who, like plaintiff, had claims under Ohio law. The court began by noting that “[t]here is no binding Third Circuit precedent directly on point.” It then “conclude[d] that Lauren lacks standing to assert unjust enrichment claims based on the laws of states other than Ohio.” 2014 WL 123099, at *1. Relying principally on the Wellbutrin opinion, the court noted that the “Supreme Court has held that the requirement that a named plaintiff have standing is no different in the class action context,” and that “standing must be analyzed on a claim-by-claim and state-by-state basis.” Id. (citing Wellbutrin, 260 F.R.D. at 152). It quoted Wellbutrin, 260 F.R.D. at 152, as follows: A named plaintiff whose injuries have no causal relation to, or cannot be redressed by, the legal basis for a claim does not have standing to assert that claim. For example, a plaintiff whose injuries have no causal relation to Pennsylvania, or for whom the laws of Pennsylvania cannot provide redress, has no standing to assert a claim under Pennsylvania law, although it may have standing under the law of another state. Moree here