After a company called LLR improperly charged sales taxes to customers residing in jurisdictions that do not impose them, a lawsuit was filed, and LLR refunded the charges to affected customers, but not interest. Van then filed a putative class action alleging that LLR failed to compensate her and other putative class members for the full amount of their damages. LLR moved to dismiss the complaint for lack of Article III standing, arguing that Van could not establish an injury-in-fact, because LLR had fully refunded the tax charges and her claim for interest alone was insufficient to establish standing. The district court granted the motion to dismiss – on a ground that LLR had not argued (and that LLR does not defend on appeal) – i.e., that $3.76 “is too little to support Article III standing.”
On appeal, the Ninth Circuit reversed.
Initially, the Court rejected the district court’s finding that $3.76 is “too little” to support standing, as the loss of even a small amount of money is ordinarily considered an “injury” for Article III purposes.
The Court then rejected the defendant’s argument that the lost time value of money alone is too speculative to support Article III standing. Precedent firmly establishes that “tort victims should be compensated for loss of use of money – though either an award of damages or the payment of prejudgment interest,” and the Court further noted that, “under the common law tort remedies of replevin and conversion, damages for loss of use are the norm.”
Finally, the Court adds, with respect to remand: “we close by addressing … LLR’s fallback argument that Van has failed to adequately allege injury because, to have standing based on the time value of money, ‘a plaintiff must make specific allegations regarding how it would have earned interest on the money but for the defendant’s wrongful conduct.’ This argument misstates Van’s claimed injury. Van does not assert that she is injured because she lost interest income. She asserts that she is injured because she lost the use of her money. Consistent with our opinion here, although the former injury may be speculative, the latter injury is actual, concrete, and particularized. Interest is simply a way of measuring and remedying Van’s injury, not the injury itself.”
Van v. LLR, Inc., 962 F.3d 1160 (9th Cir. 2020).
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