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The Third Circuit Court of Appeals affirmed an order of the District Court. The District Court denied class certification to a group of plaintiffs who were challenging the marketing practices of Synapse Group, a wholly owned subsidiary of Time Inc. Synapse is the largest marketer of magazine subscriptions in the United States.
The Third Circuit ruled that none of the appellants were current Synapse customers and lacked standing to seek the remedy they were pursuing on behalf of the class.
The appellants initially brought several claims under the federal Electronic Fund Transfer Act and Unordered Merchandise Statute, as well as claims under multi-state consumer fraud statutes challenging the legitimacy of Synapse's marketing practices such as the adequacy of their disclosures, continuity programs, and cancel/save procedures.
The plaintiffs initially failed to gain certification under Rule 23(b)(3) damages class and amended their complaint for certification under an injunctive relief class.
They were denied class certification by the district court and obtained an interlocutory appeal to challenge the certification denial.
In addressing the Article III standing issue, the Third Circuit noted that as former customers, there could be no standing for the appellants, as they could not show a real and immediate likelihood of future injury through Synapse's conduct.
While the appellants claimed that they were reasonably likely to be fooled into becoming customers again, the projections were too speculative to show immediate threat of future injury.
The court noted that while such was a possibility, "the law accords people the dignity of assuming that they act rationally, in light of the information they possess."