Adam v. Barone, 41 F.4th 230 (3d Cir. 2022). [Disclosure: I am one of the counsel for the successful plaintiff in this case]. Here is how Judge Smith began his opinion for the Third Circuit today in this putative consumer class action case:
“Cindy Adam was charged nearly $100 for what she believed were free samples of beauty products. After complaining about the charge, she was offered the chance to return the items so that she might obtain a refund. Adam refused and eventually filed this lawsuit. The United States District Court for the District of New Jersey dismissed her complaint, concluding that she lacked standing because she refused Defendants’ offer of a refund in the ordinary course of business. We disagree. We will thus reverse the District Court’s order and remand with instructions.”
The Third Circuit went through “the familiar inquiry” into standing to reach its conclusion. “To establish Article III standing, a plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.”
Judge Smith noted that “[f]inancial harm is a classic and paradigmatic form of injury in fact,” so much so that the court has “explained that where a plaintiff alleges financial harm, standing is often assumed without discussion.” Plaintiff had injury in fact since she “has not been made whole; she has neither received a refund nor accepted any alternative to a refund.”
The District Court’s contrary conclusion relied on Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349 (3d Cir. 2013). There, however, the plaintiff was made whole when the defendant made him whole. Thus, there was no injury there, unlike here.
The financial harm to plaintiff was “fairly traceable” to defendants because their conduct was a “but for” cause of the harm. Though defendants claimed that plaintiff herself was a but for cause (as noted above, she declined to return the products she got in exchange for a refund), plaintiff’s allegations sufficed for standing at this stage.
Finally, plaintiff’s injury “is likely to be redressed by a favorable judicial decision.” Judge Smith observed the obvious: “courts routinely provide redress for financial harms.” Thus, it was error to dismiss her claims for lack of standing, and the Third Circuit reversed and remanded for further proceedings.