The Supreme Court of Appeals of West Virginia recently decided a class certification matter that suggests trial courts must undertake a closer examination of the requirements for certifying class actions in West Virginia state courts.
In State ex rel. W. Va. University Hospitals–East, Inc. v. Hammer, patients sued several West Virginia hospitals after an employee stole medical records to aid her friend’s identity theft scheme. The trial court certified a class of over 7,000 patients, representing every medical record accessed by the employee, and a subclass of 109 individuals whose information was actually in possession of the employee’s accomplice. The hospitals then filed a petition for writ of prohibition, seeking to prevent the enforcement of the class certification order.
The Supreme Court of Appeals first held that a would-be class action plaintiff bears the burden of establishing standing as to each claim. The Court explained that the patient whose information was accessed, but not found in possession of the employee’s accomplice, lacked standing because she did not suffer an injury-in-fact. The Court distinguished prior cases involving wholly unauthorized access to confidential information and rejected the argument that the hospital employee’s authorized access of confidential patient information for legitimate hospital purposes became wrongful when she considered whether to divulge the data. As to the patient whose information was not only accessed, but also stolen, the injury-in-fact requirement was satisfied.
Next, the Court analyzed the certification of the subclass of patients whose information was actually stolen. Here, the Court focused on the typicality requirement of Rule 23(a)(3) of the West Virginia Rules of Civil Procedure, which requires that claims of the representative be “typical of the claims or defenses of the class.” The Court concluded that the trial court had failed to conduct the required “thorough analysis” of the typicality requirement because it did not consider the class representative’s individual circumstances as they related to the claims he asserted and the class he represented. The Court pointed to the lack of evidence that the employee had actually accessed the class representative’s information. The Court thus prohibited the trial court from enforcing the order granting class certification.
This decision clarifies the approach that courts must take when determining class certification. Parties seeking class certification should be aware that certification will not be granted unless a thorough analysis is done under the typicality requirement. This will require courts to do an in-depth review of the particular circumstances in which class certification is sought. This decision further emphasizes that certification will not be freely given unless evidence proves the existence of an injury-in-fact.
This decision serves as a reminder of the importance in challenging class certification that is inappropriately sought and serves as a warning to those who attempt class certification without an injury-in-fact.
If you have any questions about this new ruling or how it might affect your business, please contact the authors of this alert.