Seventh Circuit Addresses Attempt by Plaintiff to Seek Remand on Spokeo-Standing Grounds

by: Colin E. Flora

     Today, we look back to a prognostication I made twice—once in a post for the Hoosier Litigation Blog and the other for Litigation Commentary & Review: Can overzealous challenges to Article III standing lead to foreclosing defendants’ abilities to remove cases from state to federal court? The catalyst for returning to the topic is the Seventh Circuit’s recent decision Bryant v. Compass Group USA, Inc., in which the court addressed an unusual challenge to standing in so much as it involved “a role reversal” that saw the plaintiff argue a lack of standing in order to support remand to state court. In addressing the Bryant decision, we will also take a look at the same court’s 2018 opinion in Collier v. SP Plus Corp.

     Before diving into Bryant, we pause to briefly mention another recent noteworthy decisions from a federal appellate court. In Pillars v. GM LLC, the Second Circuit joined with decisions from the Fourth, Sixth, Seventh, and Eighth Circuits to conclude “that in order for a statement to constitute a judicial admission it must not only be a formal statement of fact but must also be intentional, clear, and unambiguous.” Applying that standard, the Pillars court ruled that a statement in a superseded agreement errantly appended to a notice of removal did not bind the defendant company who attached the agreement.

     Returning to Collier and Bryant, we must first examine the boom in defense attorneys challenging standing. The origin for that recent trend was the Supreme Court’s ruling in Spokeo, Inc. v. Robins. The petition for certiorari identified the question presented as: “Whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.” The Court, however, resolved the matter on narrower grounds than were sought: leaving the determination of whether a statutory violation may be vindicated to whether the injury being redressed is a concrete or merely procedural harm.

     Shortly after Spokeo, eager defense counsel around the nation began filing challenges to standing. Indeed, I faced and overcame precisely such a challenge in Wilkes v. CareSource Management Group Co. The problem with such tactics was that it quickly became clear to keen observers that it was poised to create scenarios in which defendants who preferred adjudication in federal courts as opposed to state courts were closing the doors on themselves to the U.S. District Courts. The reasons for that are because defense counsel were overlooking the party on whom the burden to show subject-matter jurisdiction rested and because many state Constitutions do not. That burden rests on the party who has chosen the forum. When cases have been filed in state court and then removed to federal court, the burden rests on the removing defendant. And, unlike cases initially filed in federal court, when an action has been removed to federal court from state court and later determined to be beyond the jurisdiction of the federal tribunal, the remedy is to remand the case to state court.

     That incongruity led some lawyers—me included—to seek remand once a removing defendant raised a challenge to standing. Based upon the district court opinions that had addressed the issue—compare Davis Neurology v. DoctorDirectory.com, LLCwith Macon County v. Merscorp, Inc.—it became clear that so long as the plaintiff never stepped in to become champion of jurisdiction, the proper remedy was remand.

     The issue first reached the Seventh Circuit in Collier. There, both the plaintiff and the defendant affirmatively asserted that there was no standing. Notably, as the Northern District of Illinois recognized, “Plaintiff does not have to take a position on the standing issue while Defendant does, because Defendant bears the burden of establishing jurisdiction in this Court.” The dispute, however, was what result should follow. The defendant insisted that the proper result was dismissal with prejudice; the plaintiff, of course, argued the result should be remand. With no champion of standing and with the complaint failing to demonstrate concrete harm, the Seventh Circuit followed its established precedent and ordered the case remanded to state court.

     That now brings us to Bryant. Unlike Collier and the other cases we’ve discussed, the removing defendant was a champion for standing in Bryant. The plaintiff, however, became a staunch opponent to standing in seeking remand. The district court agreed with the plaintiff. But, on appeal, the Seventh Circuit agreed only in part. Because the defendant argued in favor of standing, the court considered whether concrete harm was alleged for each claim. In the end, the court found sufficient harm for one claim but not the other. Accordingly, remand of the case was denied—because there was a viable claim that could be pursued in federal court—and the other claim was dismissed for lack of jurisdiction. Assuming that the claim would remain timely or otherwise be saved by a journey’s account statute, the plaintiff should be able to pursue the dismissed claim in state court while also pursuing its other claim in federal court. Whether claim splittingpresents a challenge to doing so, is a matter for another day.

     Join us again next time for further discussion of developments in the law.

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*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.

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