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Huyer v. Van de Voorde

United States Court of Appeals, Eighth Circuit

February 8, 2017

Edward Huyer; Connie Huyer; Carlos Castro; Hazel P. Navas Plaintiffs - AppelleesWells Fargo & Company; Wells Fargo Bank, N.A. Defendants-Appellees
Rhadiante Van de Voorde Movant - Appellant

          Submitted: January 10, 2017

         Appeal from United States District Court for the Southern District of Iowa - Des Moines

          Before SMITH, GRUENDER, and SHEPHERD, Circuit Judges.


          Rhadiante Van de Voorde appeals the district court's[1] order approving a class action settlement that requires one subgroup of class members to submit proofs of claim before receiving payment. Because Van de Voorde is not a member of this subgroup and suffers no injury from this requirement, we dismiss the appeal for lack of standing.


         In 2008, plaintiffs filed this class action against Wells Fargo & Co. and Wells Fargo Bank, N.A. ("Wells Fargo"). The plaintiffs' claims related to Wells Fargo's practice of automatically ordering and charging fees for property inspections when customers fell behind on their mortgage payments. In 2015, the parties participated in mediation and reached a settlement agreement.

         The settlement agreement provides that Wells Fargo will pay $25, 750, 000 in full settlement of all class claims. The agreement divides the class members into three subgroups: (1) members with active loans ("active"); (2) members whose loans are paid in full ("paid-in-full"); (3) members whose loans ended in a foreclosure sale, short sale, deed in lieu of foreclosure, or charge-off ("post-sale"). Active and paid-in-full class members automatically will receive a cash award from the settlement fund without having to submit a claim. In contrast, post-sale class members must submit a proof of claim in order to obtain a cash award. All class members were allowed to opt-out of the lawsuit.

         The district court preliminarily approved the settlement agreement, and more than 2.7 million notices were sent to class members. Van de Voorde filed a written objection to the agreement. She argued that the named plaintiffs did not adequately represent the class because none of them belonged to the post-sale subgroup and that the resulting agreement was unfair to post-sale class members because they must submit proofs of claim in order to receive an award. To prove that she was a class member, Van de Voorde attached a copy of the class notice she received. The class notice indicates that Van de Voorde is an active or paid-in-full class member.[2]

         After holding a fairness hearing, the district court entered an order granting final class certification and final approval of the settlement. The court addressed Van de Voorde's objection by explaining that "there are valid reasons for requiring post-sale class members to provide actual proof of their claim." Huyer v. Wells Fargo & Co., 314 F.R.D. 621, 627 (S.D. Iowa 2016). The court further noted that the named class representatives adequately represented the class because "the class representatives seek the same type of recovery as the rest of the class members, they are represented by qualified counsel and . . . [they] reached a favorable settlement." Id. at 625. Although Van de Voorde did not formally move to intervene in the case, she now appeals this order and reasserts her previous objection.


         Wells Fargo argues that Van de Voorde lacks standing to appeal because, as an active or paid-in-full member, she is not aggrieved by the aspects of the settlement that she is challenging. "If a litigant lacks Article III standing to bring his claim, then we have no subject matter jurisdiction over the suit." Iowa League of Cities v. EPA., 711 F.3d 844, 869 (8th Cir. 2013). "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 English v. Arizona, 520 U.S. 43, 64 (1997).

          Van de Voorde argues that she has standing to appeal the final approval of the class action settlement as a result of the Supreme Court's decision in Devlin v. Scardelletti, 536 U.S. 1 (2002). Van de Voorde misunderstands Devlin. In Devlin, the Court stated that "class members [must] be allowed to appeal the approval of a settlement when they have objected at the fairness hearing." Id. at 10. Van de Voorde apparently interprets this statement to mean that any class member who objected at the fairness hearing automatically obtains Article III standing to appeal the settlement. However, the Court expressly noted that the issue in Devlin did "not implicate the jurisdiction of the courts under Article III of the Constitution." Id. at 6. Instead, Devlin addressed only the issue of whether an unnamed class member who did not formally intervene in the action "should be considered a 'party' for the purposes of appealing the approval of the settlement, " in light of the general rule that "only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment." Id. at 7 (quotation omitted). Thus, Devlin does not stand for the proposition that the act of objecting to approval of a settlement automatically confers Article III standing upon an unnamed class member. Rather, it held only that failing to intervene in a class action does not by itself prevent an unnamed class member from appealing the settlement. Id. at 14.[3]

         And so, regardless of Devlin, Van de Voorde still must show that she satisfies the standing requirements of Article III. See Delorme v. United States, 354 F.3d 810, 815 (8th Cir. 2004) ("A party invoking federal jurisdiction must establish that he has met the requirements of both constitutional and prudential standing." (citation omitted)). "To show standing under Article III of the U.S. Constitution, a plaintiff must demonstrate (1) injury in fact, (2) a causal connection between that injury and the challenged conduct, and (3) the likelihood that a favorable decision by the court will redress the alleged injury." Iowa League of Cities, 711 F.3d at 869 (quotation omitted). An "injury in fact" is "an invasion of a legally ...

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