Sixth Circuit Rejects “Juridical Link” Doctrine to Extend Class Standing to Defendant Who Did Not Injure the Named Plaintiff, Splitting with Seventh Circuit

In Fox v. Saginaw Cnty., Mich., No. 11-1265 (6th Cir. Apr. 28, 2023), the Sixth Circuit holds that even in a putative Fed. R. Civ. P. 23 class action, a representative plaintiff only has standing to sue the entities that injured them. It rejects the “juridical link” doctrine adopted by the Seventh Circuit in Payton v. Cnty. of Kane, 308 F.3d 673 (7th Cir. 2002), that “allows a named plaintiff in a putative class action to sue defendants who have not injured the plaintiff if these defendants have injured absent class members.”

“When a Michigan county forecloses on a property because its owner has failed to pay property taxes, Michigan law permits the county to obtain ownership of the property outright—even if its value exceeds the taxes owed. That fate befell Thomas Fox. After he racked up some $3,000 in unpaid taxes, Gratiot County took his land. He valued the property at over $50,000, and the county treasurer sold it for over $25,000. But Fox did not see any of the surplus . . . . Fox thus filed a class action against Gratiot County on behalf of himself and similar landowners. But Fox did not stop there. He also sued 26 other counties that did not injure him, arguing that they engaged in the same conduct against other delinquent taxpayers. The district court certified a class, holding that Fox had standing to sue these other counties under the juridical link doctrine.”

The district court certified the class. “The court recognized that Fox’s efforts to certify a class faced standing and discovery obstacles separate from Rule 23’s normal requirements. To begin with, Fox sought to certify a class of landowners from dozens of Counties that had not injured him, so he lacked standing to sue them under traditional principles . . . . The court overcame this problem using the ‘juridical link doctrine’ . . . . It reasoned that Fox could sue all 27 Counties because they had all kept surplus proceeds pursuant to the Act and because the class members had all suffered the same type of injury.”

In a Fed. R. Civ. P. 23(f) interlocutory appeal, the Sixth Circuit vacates and remands, specifically disaffirming the “juridical link” doctrine.

“If Fox had brought an individual suit, he would lack standing to sue most of the Counties under this test. Undoubtedly, when Fox’s property was foreclosed on and his equitable title taken, he suffered ‘tangible harms’ that satisfy Article III’s injury element . . . . But a plaintiff who meets the ‘actual-injury requirement’ does not thereby obtain a license to sue anyone over anything . . . . The plaintiff must show that the injury is “fairly traceable” to the defendant . . . . And Fox can trace his injury only to Gratiot County; he does not attempt to connect it to the other Counties.”

The panel observes that the Seventh Circuit has approved the “juridical link” doctrine, while the Second Circuit has rejected it. The panel sides with the Second Circuit, holding that it is more faithful to Supreme Court standing authority.

First, and most obviously, the Court has held that its usual three-part test for standing applies with full force in the class-action context . . . . [He] cannot rely on the claim that the other Counties harmed the ‘members of the class’ that he seeks to represent.”

Second, aside from Fox’s mistaken reliance on the class members’ injuries, his theory conflicts with Supreme Court precedent identifying the critical time for standing. Plaintiffs must have standing ‘at the outset of the litigation’ . . . . Here, Fox undisputedly lacked standing as to the 26 non-Gratiot Counties when he sued.”

Third, Fox’s theory conflicts with more general principles. The Court’s three-part standing test represents the ‘irreducible constitutional minimum’ to assert a case or controversy in federal court . . . . In conflict with these principles, the juridical link doctrine creates an “efficiency” exception to standing . . . . But efficiency cannot trump the separation of powers.”

Also, considering the doctrine through the lens of history, such standing to sue did not exist in common law. “As should be evident from our description of bills of peace, a live dispute existed between the named plaintiffs (say, tenants or creditors) and the defendant or defendants they sued (say, a lord or debtor). Or, as Professor [Zechariah] Chafee summarized things, bills of peace involved ‘several persons (conveniently called the multitude) on one side of a controversy, and one person (whom we may call the adversary) on the other side’ . . . . Despite Fox’s effort to sue 26 other Counties, he identifies no bills of peace in which, say, named tenants sued not just the lord of their own manor on behalf of their cotenants but also the lords of all other manors on behalf of unrelated tenants. The bills instead are analogous to a suit against only Gratiot County on behalf of Fox and other landowners that this County harmed . . . . Fox has not identified any historical analog that shows that his broader class action was ‘traditionally amenable to’ judicial resolution.’”

Thus the panel vacates and remands to consider whether any class may be certified in this case, though it skeptically notes that may be difficult to establish predominance, especially in the light of unique defenses against the different property owners.

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