Beware Jurisdictional Challenges in Class Actions, Stamps Warns

Shook Associate Britta Stamps has authored an article for DRI's For the Defense focusing jurisdictional challenges in class action litigation. Objectors to class settlements, Stamps explains, "have recently found great success raising jurisdictional arguments on appeal. Despite all the possible jurisdictional arguments that defendants can raise in many class actions, they rarely raise these issues. Yet, even if defendants strategically want to settle a case early without fully litigating such issues, they should beware of objectors who can wreak havoc on the settlement process by raising standing, ripeness, or mootness arguments."

Stamps offers examples, including decisions from the Eleventh and Ninth Circuits, in which the appeals courts examined jurisdictional arguments after a settlement was reached. "While much ink has been spilled litigating issues of commonality, typicality, predominance, and the like, the true 'make or break' issues often lie in jurisdictional arguments," Stamps concludes. "The Ninth and Eleventh Circuits are not alone in handing down recent decisions, striking class action determinations based on jurisdictional issues. So, before defendants rush to settle a case in an attempt to save legal fees, they would be wise to scrutinize any potential jurisdictional issues that an objector could raise at a final approval hearing or on appeal."