Opinion ID: 184135
Heading Depth: 2
Heading Rank: 1

Heading: Standing: Leave to Amend to Add Securities Fraud Claims

Text: Although neither party has disputed Plaintiffs' standing to appeal the district court's denial of leave to amend the complaint, we have an independent duty to examine our own jurisdiction. Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271, 1274 (10th Cir.2001). Thus, we raise the issue sua sponte. The standing Article III requires must be met by persons seeking appellate review, just as it must be met by persons appearing in courts of first instance. Arizonans for Official Engl. v. Arizona, 520 U.S. 43, 64, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997) (citing Diamond v. Charles, 476 U.S. 54, 62, 106 S.Ct. 1697, 90 L.Ed.2d 48 (1986)). Therefore, [t]o have standing [on appeal], one must be aggrieved by the order from which appeal is taken. Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d 849, 854 (10th Cir.1993) (citation omitted); Sabido Valdivia v. Gonzales, 423 F.3d 1144, 1147 (10th Cir.2005); accord Tachiona v. United States, 386 F.3d 205, 211 (2d Cir.2004). Just like litigants generally cannot bring suit to vindicate the rights of others, see RMA Ventures Cal. v. SunAmerica Life Ins. Co., 576 F.3d 1070, 1073 (10th Cir. 2009), parties generally do not have standing to appeal in order to protect the rights of third parties. See Howard v. Mail-Well Envelope Co., 150 F.3d 1227, 1230 (10th Cir.1998) (citation omitted). Machella v. Cardenas, 653 F.2d 923 (5th Cir.1981), is particularly relevant here. In that case, Mr. Machella brought a putative class action against the Small Business Administration concerning loan forgiveness in a federal disaster relief program. Machella, 653 F.2d at 925. Before a class was certified, Mr. Machella attempted to amend his complaint to add a third party, Shirley Shaw, as a party plaintiff. Id. at 927. The district court denied leave to amend and eventually dismissed the case. Id. On appeal, Mr. Machella sought review of both the district court's decision on the merits and its refusal to grant leave to amend the complaint. Id. at 925, 927. The Fifth Circuit dismissed the second issue for lack of jurisdiction. Id. at 927. The court held that Mr. Machella was not aggrieved by the court's denial of leave to amendthe only person aggrieved was the potential new plaintiff, who did not appeal the order. Id. Therefore, Mr. Machella did not have standing to appeal the issue, and the court did not have jurisdiction to consider it. Id. Our case is indistinguishable. Robert Thomas, Carolyn Ising, and Jay Stout sought leave to amend the class-action complaint in order to add named plaintiffs who had standing to assert securities fraud claims. JA 33. It is undisputed that neither Amanda nor Robert Thomasthe only Plaintiffs-Appellants before ushave standing to bring securities fraud claims. The district court denied the motion, but permitted Amanda Thomas to be added as a plaintiff to assert her IAA claims. Id. at 133-34. Amanda and Robert Thomas then filed the TAC, in which they asserted all the claims they had standing to assertthe IAA claims that form the basis of the second issue on appeal. Accordingly, Robert and Amanda Thomas were not aggrieved by the district court's order and do not have standing to challenge it on appeal. It makes no difference that this lawsuit is styled as a putative class action. Prior to class certification, the named plaintiffs' failure to maintain a live case or controversy is fatal to the case as a wholethat unnamed plaintiffs might have a case or controversy is irrelevant. See Clark v. State Farm Mut. Auto. Ins. Co., 590 F.3d 1134, 1138 (10th Cir.2009); accord Machella, 653 F.2d at 927. As discussed above, the Thomases were not aggrieved by the district court order and their appeal constitutes an attempt to protect the rights of third parties. They have no standing to do so, see Uselton, 9 F.3d at 854, and we dismiss that part of the appeal without considering the merits. We do have jurisdiction over Plaintiffs' appeal from the grant of summary judgment under 28 U.S.C. § 1291 and consider that next.