Today’s round-up takes a look at the potential impact on class-action litigation of some recently proposed amendments to the Federal Rules of Civil Procedure, and continues our exploration of what type of injury it takes to sustain a data-breach class action.

Proposed Guidance for Determining Whether Class Action Settlements are “Fair, Reasonable, and Adequate”:  The Committee on Rules of Practice and Procedure of the Judicial Conference of the United States focused on class actions in its latest round of proposed amendments to the Federal Rules of Civil Procedure.   Most notably, the Committee proposed a list of factors for courts to consider when determining whether to approve a class settlement.  Rule 23(e)(2)’s “fair, reasonable, and adequate” standard would still govern, but the revised rules would direct courts to consider four targeted questions: whether class counsel and the class representative adequately represented the class, whether the settlement was negotiated at arm’s length, whether the relief afforded to the class is adequate, and whether class members are treated equitably relative to each other.    In a nod to modern methods of communication, the Committee also proposed an amendment to Rule 23(c)(2) to permit email notification of opt-out rights to class members for classes certified under Rule 23(b)(3).

For Data-Breach Class Actions, the Spoils of the Heist Matter:   A case could be made that 2016 is the year of the data-breach class action—we’ve certainly devoted substantial attention to the subject here.  This month’s ruling in Attias v. Carefirst, Inc. adds another weapon to defense practitioners’ arsenal on the issue of whether a data breach alone is a sufficient injury to support a claim.  The U.S. District Court for the District of Columbia granted the defendant health insurer’s motion to dismiss on the grounds that the complaint failed to allege any concrete harm caused by a June 2014  data breach compromising the personal information of over a million policyholders.  Notably, the complaint did not allege the data stolen in the breach included social security, credit card, or financial account numbers.  The court thus held the plaintiffs had failed to identify a “substantial risk” that the stolen data would be misused in a harmful manner, and deemed their argument that they faced an increased risk of future identity theft “too speculative” to support federal standing.

Ninth Circuit to Take a Close Look at Denial of Certification based on Inadequacy of Class Counsel:  Rule 23(a)’s adequacy requirement is dual-pronged—while most adequacy-based attacks on certification focus on the class representatives themselves, Rule 23(a)(4) also demands adequate representation by class counsel.  The Ninth Circuit Court of Appeals recently granted permission for a Rule 23(f) appeal of the district court’s order denying class certification on this basis.  The opinion permitting the appeal is expectedly brief, but includes a notable instruction to the parties:  “In addition to all the other issues the parties may wish to raise in this appeal, the parties shall brief the issue of whether the district court should have considered less drastic alternatives before denying class certification based on concerns with the vigor of class counsel’s representation.”   The appellate briefing and the Ninth Circuit’s ultimate decision will likely provide a temperature check on how high (or, rather, low) the bar is set for denying certification based on inadequate representation of counsel.

Some Hurdles to Pursuing False Advertising Claims on a Class-wide Basis:  Speaking of temperature checks, Nest Labs Inc. recently defeated a bid for class certification for claims arising out of representations of increased energy savings made in connection with the sale of Wi-Fi-enabled thermostats.  The U.S. District Court for the Northern District of California held the plaintiff could not show commonality because many putative class members were subject to an arbitration clause and class action waiver, and many others purchased thermostats in packaging that did not contain the purported misrepresentations.  The court also held the named plaintiff was neither a typical nor adequate class representative because he disabled many of the thermostat’s energy-saving features, and prior to doing so, often reaped energy savings consistent with the defendant’s representations.  The court also denied certification on the grounds that common issues did not predominate under Rule 23(b), noting that the plaintiff sought to certify a nationwide class, and the consumer protection statues of the 50 states varied significantly.