This case arose from an incident where a database of patient information maintained by Charleston Area Medical Center (“CAMC”) was accidentally placed on the internet. The database contained the names, contact details, Social Security numbers, dates of birth, and basic respiratory care information of approximately 3,655 patients, and this information could be found on the internet using certain searches. The Petitioners here--Plaintiffs in the underlying case—were CAMC patients whose information was contained in the database and subsequently placed on the internet. These individuals initiated a lawsuit in the Circuit Court of Kanawha County, on behalf of themselves, and others whose information was placed at risk of exposure from the database, in which they asserted claims for the breach of confidentiality, invasion of privacy, and negligence. The Plaintiffs sought class certification pursuant to Rule 23 of the West Virginia Rules of Civil Procedure, which governs the procedural requirements for class action lawsuits.
The Honorable Judge Stucky of the Circuit Court of Kanawha County denied the Plaintiffs’ motion for class certification. The circuit court held that, as an initial matter, the Plaintiffs lacked the standing to bring the lawsuit, finding that they had not suffered any concrete and particularized injury-in-fact. The circuit court also found that the Plaintiffs had not met their burden to prove all four elements required under Rule 23, and refused to certify the class. Finally, the circuit court found that the Plaintiffs failed to meet the requirements of commonality and typicality, as set forth in Rule 23(a), and the predominance of common issues of law or fact, as set forth in Rule 23(b).
The Plaintiffs appealed the order denying class certification.
Did the circuit court err in denying class certification?
As an initial matter, the West Virginia Supreme Court of Appeals addressed whether the Plaintiffs had standing to bring the lawsuit in the first place. “Standing” is defined under West Virginia law as “a party’s right to make a legal claim or seek judicial enforcement of a right or duty.” Three elements must be found for a party to have standing to bring a legal claim. The first is that the party must have suffered an “injury-in-fact,” or a violation of a right that is recognized by the law, and the violation must have resulted in some harm that is both “concrete and particularized” and also “actual or imminent, and not conjectural or hypothetical.” The second element requires that the injury-in-fact be caused by the conduct forming the basis of the lawsuit. Finally, the injury-in-fact must be one that can be redressed by a court order in favor of the harmed party. That is to say, standing requires the party to have suffered a real harm caused by the violation of that party’s legal rights, which may be remedied by the courts.
The Supreme Court found that the Circuit Court of Kanawha County erred when it held that the Plaintiffs lacked standing. The circuit court found that the risk of future identity theft was not an injury-in-fact. While the Supreme Court agreed with this finding, the Court recognized that the Plaintiffs also brought claims for breach of confidentiality and invasion of privacy, both of which involve legal interests which are concrete, particularized, and actual, and violations of which may be remedied by an order of the court. Thus, Plaintiffs did have standing to bring their lawsuit.
After determining that the Plaintiffs had standing, the Supreme Court addressed whether the circuit court erred in denying class certification. Because the Plaintiffs were the party seeking to have the class certified, the burden was upon them to produce evidence which would show that a class action would be proper.
West Virginia Rule of Civil Procedure 23 requires that the party seeking class certification show the existence of four elements. These elements are (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. Where the party seeking certification shows the existence of these elements, class certification should be granted, though the court retains the power to decertify the class at a later time if it is shown to be proper. The law of class certification in the state of West Virginia is governed by a case called In re West Virginia Rezulin Litigation, 214 W.Va. 52, 585 S.E.2d 52 (2003), otherwise known as Rezulin. This case sets forth, it detail, the standards that the court shall apply when considering whether to certify a class action lawsuit. In deciding this appeal, the Supreme Court stressed that the law set forth in Rezulin is controlling with respect to issues of class certification, and analyzed the issues on appeal within the legal framework provided by the Rezulin decision.
With respect to the commonality requirement, the Supreme Court found that all Plaintiffs brought claims which were based on the same legal theories of breach of confidentiality and invasion of privacy. Recognizing that the commonality requirement is a low threshold, under Rezulin, the Court held that the common questions at issue in this matter affected all, or a substantial number, of the class members, and the circuit court erred in finding that Plaintiffs failed to meet the commonality requirement.
The typicality requirement requires that the parties seeking to represent the class, i.e., the Plaintiffs here, have claims or defenses that are the same as the claims or defenses of all the class members. Under Rezulin, this is met where the representative party’s claim or defense arises from the same event, practice, or course of conduct that gives rises to the class members’ claims or defenses. Here, the Supreme Court found that all class members’ claims arose out of the same, singular incident, the disclosure of their personal information to the internet. As such, the circuit court erred in finding that the requirement of typicality was not met.
Finally, the Court considered whether the circuit court erred in finding that individual issues regarding damages, causation, and adequate remedies would predominate over common questions of law or fact. The Supreme Court rejected this finding, quoting Rezulin extensively and finding that adjudication of the common issues presented important and desirable advantages over deciding each class member’s claim individually. The Supreme Court found all class members to be in the same position, and that all common questions predominated over any individuals ones.
This case makes it crystal clear that Rezulin remains good law and continues to control the decision-making processes with respect to granting class certification. The Supreme Court reaffirmed Rezulin step-by-step, and even went so far as to include a plain language statement that both the circuit court and the Defendants were wrong in contending that the Supreme Court had in any way modified its holdings in Rezulin. This case makes clear that courts should reject any argument that runs afoul of Rezulin’s guidance on class certification, and indicates that parties opposing class certification should refrain from attempting to make any argument that Rezulin is on its way out.