Court Opinion

ID: 4445905
Source: CourtListenerOpinion
Date Created: 2019-10-10 20:00:21.376864+00
Date Added: 2024-06-11T13:42:28.662418
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                                Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                        File Name: 19a0262p.06

                     UNITED STATES COURT OF APPEALS
                                     FOR THE SIXTH CIRCUIT

 KENNETH CHAPMAN, JESSICA VENNEL, JASON                     ┐
 JACKSON, and EDWINA PINON, on behalf of themselves         │
 and all others similarly situated,                         │
                                    Plaintiffs-Appellees,   │
                                                            │
                                                            >     Nos. 18-3847/3866
        v.                                                  │
                                                            │
                                                            │
 TRISTAR PRODUCTS, INC.,                                    │
                                    Defendant-Appellee,     │
                                                            │
 STATE OF      ARIZONA     and     ARIZONA   ATTORNEY       │
 GENERAL,                                                   │
                                                            │
                      Proposed Intervenors-Appellants.
                                                            ┘

                          Appeal from the United States District Court
                         for the Northern District of Ohio at Cleveland.
                       No. 1:16-cv-01114—James S. Gwin, District Judge.

                                      Argued: August 6, 2019

                                 Decided and Filed: October 10, 2019

                     Before: ROGERS, BUSH and LARSEN, Circuit Judges.
                                   _________________

                                             COUNSEL

ARGUED: Oramel H. (O.H.) Skinner, OFFICE OF THE ARIZONA ATTORNEY GENERAL,
Phoenix, Arizona, for Appellants. Gregory F. Coleman, GREG COLEMAN LAW PC,
Knoxville, Tennessee, for Class Appellees. Stephen R. Robinson, TRISTAR PRODUCTS,
INC., Wyomissing, Pennsylvania, for Appellee Tristar. James Burnham, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Federal Amicus Curiae. ON BRIEF:
Oramel H. (O.H.) Skinner, Drew C. Ensign, OFFICE OF THE ARIZONA ATTORNEY
GENERAL, Phoenix, Arizona, for Appellants. Gregory F. Coleman, Adam A. Edwards, Mark
E. Silvey, GREG COLEMAN LAW PC, Knoxville, Tennessee, Drew Legando,
LANDSKRONER GRIECO MERRIMAN, LLC, Cleveland, Ohio, for Class Appellees. Stephen
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R. Robinson, TRISTAR PRODUCTS, INC., Wyomissing, Pennsylvania, for Appellee Tristar.
James Burnham, Kendrack D. Lewis, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Federal Amicus Curiae. Theodore H. Frank, HAMILTON LINCOLN
LAW INSTITUTE, Washington, D.C., for Amicus Curiae.

                                        _________________

                                             OPINION
                                        _________________

       JOHN K. BUSH, Circuit Judge. The Arizona Attorney General believes the plaintiff
class got a bad deal in settling this products liability lawsuit over allegedly defective pressure
cookers.   The settlement agreement, entered after one day of trial, included an award of
approximately $2 million in fees and expenses for class counsel, and substantially less than
that—primarily in the form of coupons—for the class members. The Attorney General, on
behalf of his office and the State of Arizona (collectively “Arizona”), objected in the district
court to the terms of the settlement, arguing that it was lopsided and should be rejected. Arizona
also moved to intervene below. The district court denied the motion on the ground that Arizona
did not have Article III standing to intervene and then approved the settlement. We agree with
the district court that Arizona does not have standing. Therefore, we DISMISS Arizona’s appeal
for want of jurisdiction.
                                                  I.

       Plaintiffs brought this class action in May 2016, alleging that certain pressure cookers
that defendant, Tristar Products, Inc. (“Tristar”), manufactures had defective lids. Allegedly, the
lids could come open while the cookers were in use, which exposed the user to possible injury
from the hot, pressurized contents of the cooker spilling out onto the user. After discovery and
motions practice, some of the class claims were dismissed, but most survived. The district court
did not certify a nationwide class, but instead certified three separate state classes for trial: Ohio,
Pennsylvania, and Colorado.

       After further motions practice, trial began on July 10, 2017. By the end of the first day of
trial, things were not going well for plaintiffs. According to the district court, “after a significant
amount of testimony on the first day of trial, it was not obvious either that a defect existed or that
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the defect made Tristar’s pressure cookers worthless.” R. 156, PageID 3684. During a recess on
the first day of trial, both sides agreed to a settlement of the case with a nationwide class. The
parties agreed to the principal amount of the settlement but, with Tristar’s agreement not to
dispute an award at or below $2.5 million, deferred determination of the size of the attorneys’ fee
award. Although the negotiations successfully concluded after the trial began, discussion had
been in the works for several weeks; in fact, the magistrate judge in the case had mediated
several negotiation sessions in the weeks leading up to trial.

       The agreed-to settlement allowed class members to receive a coupon for purchase of a
different Tristar product and a warranty extension, provided they watched a safety video. The
district court calculated that the value of the coupons and warranty extensions in the settlement
was $1,020,985.1 The district court also approved an award of attorneys’ fees in the amount of
$1,980,382.59.

       On July 12, the district court held a fairness hearing to determine if the settlement was
fair and acceptable. It was not until the fairness hearing that Arizona made its first appearance in
the case, arguing as amicus, along with United States Department of Justice (“DOJ”) also as
amicus, that the settlement was unfair to the plaintiff class. Their objections stemmed from the
division of settlement funds between the principal settlement and class counsel attorneys’ fees.
Arizona and DOJ argued that a fair settlement would see a higher proportion of the funds going
to the class members rather than to class counsel. None of the class, however, ever joined in
either Arizona or DOJ’s objections to the settlement.

       Amici’s arguments against the settlement did not prevail at the fairness hearing. The
district court indicated that it would approve the settlement, albeit with some modifications.
Before the court issued its opinion and order on the matter, however, Arizona sought to officially
intervene for purposes of appeal under either Rule 24(a) (intervention as of right) or Rule 24(b)
(permissive intervention) of the Federal Rules of Civil Procedure. In the alternative, Arizona
asked the court to recognize it as an objector to the settlement. The district court rejected each of
Arizona’s requests for lack of Article III standing. Arizona now appeals, seeking reversal of the

       1Arizona   disputes this valuation, arguing that it is too high.
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district court’s decision on the motion to intervene as well as reversal of the district court’s
decision to accept the settlement.

                                                II.

       Before we may address Arizona’s substantive arguments, we must determine whether
Arizona has standing.

       We begin with first principles. Our federal Constitution creates a republican government
of three co-equal branches, each of which possesses only limited power. The judicial power is
particularly limited to cases and controversies before the Supreme Court and such inferior courts
as Congress may create. U.S. Const. art. III, §§ 1–2. This jurisdictional limitation requires,
among other things, that a party wishing to litigate a dispute before a federal court demonstrate
standing. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 559–60 (1992) (explaining that “the core
component of standing is an essential and unchanging part of the case-or-controversy
requirement of Article III”). The standing requirement prevents federal courts from issuing
advisory opinions. “Article III of the U.S. Constitution does not authorize federal courts to
decide theoretical questions.” Hegy v. Demers & Adams, 882 F.3d 616, 620 (6th Cir. 2018).
The prohibition on advisory opinions, in turn, is an important element in the separation of lawful
powers between the governmental branches of our republic. “When the federal judicial power is
invoked to pass upon the validity of actions by the Legislative and Executive Branches of the
Government, the rule against advisory opinions implements the separation of powers prescribed
by the Constitution and confines federal courts to the role assigned them by Article III.” Flast v.
Cohen, 392 U.S. 83, 96 (1968).

       Although Congress may by statute define the jurisdiction of the federal courts, our
jurisdiction can never extend beyond the outer limits set by Article III. “[B]y the express terms
of the Constitution, the exercise of the judicial power is limited to ‘cases’ and ‘controversies.’
Beyond this it does not extend, and unless it is asserted in a case or controversy within the
meaning of the Constitution, the power to exercise it is nowhere conferred.” Muskrat v. United
States, 219 U.S. 346, 356 (1911). The Article III limit on our jurisdiction is important because,
if we were to render an advisory opinion, it would be a constitutional violation that is un-
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redressable. Accordingly, we are required in every case to determine—sua sponte if the parties
do not raise the issue—whether we are authorized by Article III to adjudicate the dispute. See
Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011) (“[F]ederal courts have an
independent obligation to ensure that they do not exceed the scope of their jurisdiction, and
therefore they must raise and decide jurisdictional questions that the parties either overlook or
elect not to press.”). We may not decide the merits of a claim for relief unless some party
pressing the claim has standing to bring it. See Town of Chester v. Laroe Estates, Inc., 137 S. Ct.
1645, 1650–51 (2017).

       Arizona moved to intervene either permissively or as of right under Rule 24.
“An intervenor need not have the same standing necessary to initiate a lawsuit in order to
intervene in an existing district court suit where the plaintiff has standing,” Associated Builders
& Contractors v. Perry, 16 F.3d 688, 690 (6th Cir. 1994), at least where the intervenor does not
“seek[] additional relief beyond that which the plaintiff requests,” Laroe Estates, 137 S. Ct. at
1651. But intervenors must establish Article III standing if they wish to appeal the outcome of a
lawsuit. We have recognized that “an intervenor, by right or permission, normally has the right
to appeal an adverse final judgment by a trial court, just as any other party can. However, as any
other party, an intervenor seeking to appeal must have standing under Article III of the
Constitution . . . . The standing requirement may therefore bar an appeal . . . .” Perry, 16 F.3d at
690 (citation omitted).    Thus, before we can consider any argument that Arizona makes
concerning this litigation, we must determine whether Arizona has standing to bring this appeal.
If it does not, we must dismiss the appeal.

       To demonstrate standing a party must show an “injury in fact” that is (1) both “concrete
and particularized” and “actual or imminent, not conjectural or hypothetical,” (2) “fairly
traceable to the challenged action of the defendant,” and (3) redressable by a favorable decision
of the court. Lujan, 504 U.S. at 560–61 (cleaned up). The party seeking jurisdiction before a
federal court bears the burden of showing these elements. Id. at 561; accord Durham v. Martin,
905 F.3d 432, 433–34 (6th Cir. 2018). Here, Arizona was not a party to the litigation but sought
to intervene in order to unwind the parties’ settlement agreement. Our inquiry turns on whether
Arizona has an “injury in fact” to support standing.
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        Arizona offers three theories of injury. Arizona argues that it has standing (1) under the
doctrine of parens patriae, (2) under § 1715 of the Class Action Fairness Act, 28 U.S.C. § 1715,
and (3) because it has a participatory interest as a “repeat player.” Each basis was rejected by the
district court’s ruling, which we review de novo. See Smith v. Jefferson Cty. Bd. of Sch.
Comm’rs, 641 F.3d 197, 205 (6th Cir. 2011).

A.      Standing under Parens Patriae

        Parens patriae, which literally means “parent of the country,” began as a common-law
doctrine that allowed the sovereign (originally the King, later state governments) to assume legal
responsibility (including the right to sue or defend suits) over those who are legally incapable of
protecting their own rights. Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel., Barez, 458 U.S.
592, 600 (1982). In its original common-law formulation, parens patriae was essentially a form
of third-person standing that allowed the sovereign to legally step into the shoes of individual
citizens. Id. The modern doctrine, however, is not nearly so broad. To assert standing under
parens patriae today, a State “must assert an injury to what has been characterized as a ‘quasi-
sovereign’ interest.” Id. at 601. Although “quasi-sovereign” interests are not easily definable,
they are those types of interests possessed by a State that fall between its sovereign interests and
its proprietary or private interests. Id. at 601–02. There is no formal definition of a quasi-
sovereign interest, and this determination can only be made on case-by-case basis. Id. at 606–07.
However, there are some guideposts in determining whether a state has a quasi-sovereign
interest.

        To assert parens patriae “the State must articulate an interest apart from the interests of
particular private parties . . . [;] the State must be more than a nominal party.” Id. at 607. This is
in direct contrast to the common-law conception of this doctrine, which allows the sovereign to
intervene solely to vindicate the rights of private parties. “Interests of private parties are
obviously not in themselves sovereign interests, and they do not become such simply by virtue of
the State’s aiding in their achievement. In such situations, the State is no more than a nominal
party.” Id. at 602. By contrast, a state has a quasi-sovereign interest “in the health and well-
being—both physical and economic—of its residents in general.” Id. at 607. Additionally, states
have quasi-sovereign interests “in not being discriminatorily denied [their] rightful status within
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the federal system.” Id. In determining whether a sufficiently high proportion of the citizenry of
a state face harm to their health and well-being to justify standing under parens patriae, the best
indication is whether the State would, if it could, address the issue “through its sovereign law-
making powers.” Id.

       Arizona argues that it satisfies parens patriae because it is acting on behalf of its citizens
(the members of the nationwide settlement class who are Arizona citizens) and that it has
attempted to address this type of settlement—which it argues is unfair—through legislation. The
law-making exercises that Arizona cites are: (1) “ethics laws limiting the maximum fees that
attorneys may charge,” (2) Arizona’s version of Federal Rule of Civil Procedure 23, which
“requires a settlement to be fair, reasonable, and adequate for consumers,” and (3) a statutory
“prohibition on ‘deceptive or unfair act[s] or practice[s]’ in connection with the provision of
services, which is applicable to contingency fees.” Appellant Br. at 18 (citing Ariz. S. Ct. R. 42;
Ariz. R. Civ. P. 23(e)(2); Ariz. Rev. Stat. §§ 44-1521(5), 1522(A)).

       Appellees (i.e., the plaintiff class and Tristar) offer several reasons why Arizona cannot
establish parens patriae standing. We find those reasons persuasive. Two of Arizona’s three
proffered “law-making” examples are not products of the legislative branch at all but rather rules
promulgated by the Arizona Supreme Court: one is an ethical rule, and another is a procedural
rule. Additionally, Arizona’s consumer fraud statute, while it is undoubtedly both an exercise of
sovereign law-making power and an example of an initiative to protect the economic health and
well-being of Arizona citizens, seems an inapt example in this context. At the fairness hearing,
Arizona specifically disclaimed any objection to the proposed settlement on the grounds of fraud
or collusion. Thus, it is not entirely certain that Arizona’s sovereign law-making processes have
touched on the issues to which Arizona objects. Therefore, the only objections that Arizona can
make are indistinguishable from the objections which individual Arizonans might raise. As
Appellees correctly point out, under Snapp, such claims would make Arizona “merely a nominal
party” and would not give rise to any quasi-sovereign interests.

       Snapp provides that “[a]lthough more must be alleged than injury to an identifiable group
of individual residents, the indirect effects of the injury must be considered as well in
determining whether the State has alleged injury to a sufficiently substantial segment of its
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population.” 458 U.S. at 607. Here, the only injury alleged is injury to an identifiable group of
Arizonans (class members in the instant litigation) and Arizona has not fleshed out the indirect
effects of this alleged injury on Arizona as a whole. Therefore, Arizona has not shown any
imperiled quasi-sovereign interests and does not have standing under parens patriae.

B.      Standing under CAFA

        Arizona also argues that it has standing under the Class Action Fairness Act (“CAFA”).
But CAFA does not create a right of action for state attorneys general; thus, we need not consider
here the reach of the principle that Congress may “elevat[e] to the status of legally cognizable
injuries concrete, de facto injuries that were previously inadequate in law.” Lujan, 504 U.S. at
578.

        Under CAFA, participants in a class-action settlement are required to notify the attorneys
general of any states of which at least one class member is a citizen of the terms of the
settlement. 28 U.S.C. § 1715(b). According to Arizona, the legislative history of CAFA makes
clear that this notification of state attorneys general is to give the attorneys general the
opportunity, if they so desire, to intervene in the litigation. Appellant Br. at 21 (citing S. Rep.
109-14, at 32 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 32 (noting that the notice provision
“is designed to ensure that a responsible state and/or federal official . . . is in a position to react if
the settlement appears unfair to some or all class members”)).               Arizona asserts that this
legislative history, coupled with the fact that state attorneys general have in some instances
intervened in class action settlements, demonstrates that CAFA gives standing to intervene.

        “But ‘we do not resort to legislative history to cloud a statutory text that is clear.’”
United States v. Banyan, 933 F.3d 548, 553 (6th Cir. 2019) (quoting Ratzlaf v. United States,
510 U.S. 135, 147–48 (1994)). Turning our attention to the text, it is true that § 1715 requires
parties to notify state attorneys general of proposed settlements and mandates that final approval
of settlements “may not be issued earlier than 90 days after the later of the dates on which the
appropriate Federal official and the appropriate State official are served with the notice.”
28 U.S.C. § 1715(d). However, § 1715 also states that “[n]othing in this section shall be
construed to expand the authority of, or impose any obligations, duties, or responsibilities upon,
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Federal or State officials.” Id. § 1715(f). Notwithstanding what Arizona attempts to glean from
the legislative history of § 1715, the statute’s plain text clearly forecloses Arizona’s argument.

C.     Standing under Participatory Interests

       Finally, Arizona asserts that it has standing because it has “participate[d] regularly in
class action settlement proceedings to protect Arizona consumers and ensure statutory
compliance.”    Appellant Br. at 24.      In addition to participating in class action settlement
proceedings, the Arizona Attorney General’s office has “submitted comment letters to federal
agencies” and “produced a steady stream of briefs speaking against imbalanced settlements in
cases across the country.” Id. Arizona cites Michigan State AFL-CIO v. Miller, 103 F.3d 1240
(6th Cir. 1997) to support the proposition that being a “repeat player” in class action settlements
gives Arizona standing in this case.

       Arizona’s reliance on Miller is inapposite.           Miller concerned what constitutes a
“substantial legal interest” under Fed. R. Civ. P. 24(a) for the purposes of intervention as of
right. 103 F.3d at 1245. Under our caselaw, the substantial-legal-interest requirement under
Fed. R. Civ. P. 24(a) is a lower threshold to meet than the injury-in-fact requirement of Article
III standing. See id. (noting that “an intervenor need not have the same standing necessary to
initiate a lawsuit”). Thus even if we were to find that Arizona has a substantial legal interest
under Miller, that would not mean that it had suffered an injury in fact for Article III standing
purposes.

       Arizona’s regular participation in class action lawsuits establishes at most a “mere
interest in [the] problem” of unfair class action settlements, which “is not . . . sufficient to confer
standing.” Greater Cincinnati Coalition for the Homeless v. City of Cincinnati, 56 F.3d 710, 716
(6th Cir. 1995) (citing Sierra Club v. Morton, 405 U.S. 727, 739 (1972)). In appealing to this
interest, Arizona does not claim that Tristar has caused it any concrete, particularized harm. The
only “injury” Arizona experiences as a “repeat player in similar class action proceedings,”
Appellant Br. at 29, is an outcome that is contrary to its own policy views. But “Article III
standing ‘is not to be placed in the hands of concerned bystanders, who will use it simply as a
vehicle for the vindication of value interests.’” Hollingsworth v. Perry, 570 U.S. 693, 707
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(2013) (quoting Diamond v. Charles, 476 U.S. 54, 62 (1986)). Accordingly, harm to Arizona’s
“participatory interests” is not an injury in fact sufficient to create standing under Article III.

                                                  III.

        Because Arizona’s arguments concerning parens patriae, CAFA, and participatory
interests fail, Arizona has not met its burden to demonstrate standing. Because Arizona has no
standing to bring this appeal, we are barred by Article III from determining the merits of
Arizona’s appeal. We therefore DISMISS this appeal for want of jurisdiction.