Why Do Class Action Lawsuits Get Dismissed?

Here at ClassAction.org, we spend a lot of time writing about new class action lawsuits and settlements that affect consumers. But what you might not know is that we spend just as much time updating our news stories when there’s a new development in a case. More often than not, these updates are about a lawsuit being dismissed.

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Truth is, most class actions end up either settled or dismissed. (Some end up in arbitration, but that’s another matter entirely.) When a class action lawsuit gets dismissed, it’s generally because the case has fallen short of what many don’t realize is an extremely high (and nuanced) bar that a set of allegations has to clear in order for a class action to survive. Often, a defendant will ask that a case be tossed by way of filing what’s called a “motion to dismiss.”

Although we’ve touched on what it means when a class action is dismissed, the reasons why these cases get tossed range from pretty straight forward to densely complicated.

Here are some, but certainly not all, of the reasons why a proposed class action might be dismissed.

Why might a class action lawsuit be dismissed?

Quick examples . . .

Now, some more explanation . . .

Although the reasons why class action cases get dismissed tend to be as varied and unique as the leaves on a tree, there are a few common legal terms that effectively root the more nuanced justifications for dismissal or deficiencies that a judge might say are enough to throw a lawsuit off course.

Below, we’ve gone into a little more detail on some frequent terminology one might see in a judge’s order of dismissal.

Lack of standing – Put simply, “standing” boils down to whether a plaintiff has the right to sue a particular defendant. To satisfy this requirement, a plaintiff must sufficiently allege they suffered an actual, concrete and particularized harm; that the defendant is responsible for that harm; and that intervention by the court is likely to make the consumer whole again (or close enough to it). If a plaintiff fails to check any of these boxes, a judge may dismiss the suit for lack of standing.

Failure to state a claim – If a judge tosses a case over a plaintiff’s failure to state a claim, the long and short of it is that the consumer failed to establish a “cause of action,” or a set of facts that, if true, are sufficient enough to justify the plaintiff’s filing of the lawsuit.  

In December 2020, the judge overseeing the case dismissed the matter for failure to state a claim. Ultimately, the judge found that no contract or binding agreement existed between the companies and the plaintiff, meaning a claim for breach of contract could not be brought. Further hurting the plaintiff’s cause, the judge pointed out, was that full refunds had been given to those who attempted to purchase the collectible “War of the Spark Mythic Edition” card set through Hasbro’s eBay store. Because consumers suffered no economic harm, they couldn’t bring a claim for breach of contract or negligent misrepresentation. 

Lack of jurisdiction – Broadly, jurisdiction is a court’s power to hear a specific kind of legal dispute and issue an order on the matter. The court must have jurisdiction over the subject matter of the dispute and be able to make decisions affecting the parties being sued.

A case may be dismissed if the court finds that it does not have the power to rule on a dispute between a plaintiff and defendant. This is called a lack of “subject matter jurisdiction,” of which there is more than one kind. For instance, a proposed class action might be dismissed for lack of subject matter jurisdiction if the plaintiff fails to establish that the “amount in controversy” – that is, what’s at stake in the suit – is less than the $5 million threshold set by the federal Class Action Fairness Act.

A case may also be dismissed if the court finds that it does not have the power to make decisions that affect the defendant personally. For instance, you might not be able to sue in Florida if, say, the defendant’s alleged wrongdoing happened in and primarily affected the citizens of New York. This is called a lack of “personal jurisdiction.”

Voluntary dismissal – A plaintiff may choose to voluntarily dismiss their suit for any number of reasons. For instance, the attorneys might want to refile the case in another court, or the suit might have been dropped given another lawsuit was filed over similar claims. Other times, a class action might be voluntarily dismissed if the defendant decides to settle the case on an individual basis with the plaintiff. The attorneys may also decide not to continue to pursue the case if, for instance, they get dissuaded by a development in the litigation.

Federal preemption – In a case where a plaintiff is alleging a company has violated a state law, but a federal law conflicts with the state statute, the federal law will take precedent over, or “preempt,” the state one and potentially warrant dismissal.

Statute of limitations has expired – A statute of limitations is essentially a time limit in which a lawsuit must be filed. Often, the statute of limitations for a particular lawsuit will depend on a number of factors, including the laws that were allegedly broken, where the injury occurred and more. It is possible for a proposed class action to be dismissed—such as this one here—if a judge finds that the plaintiff failed to file their lawsuit within the statute of limitations.

Case remanded to arbitration – For certain lawsuits, the question exists as to whether the plaintiff and proposed class members agreed to the defendant’s arbitration provision, which can usually be found in a company’s terms and conditions. Courts generally find these arbitration provisions enforceable and will send a case to arbitration if it’s believed proposed class members more than likely signed away their legal right to sue a company when they initially signed on to use its service or product. When a case is sent to arbitration, the court has the discretion to either stay (i.e., put on hold) the case or dismiss it.

On this page, we’ve tried to provide a broad overview of why a proposed class action suit might be dismissed. Ultimately, the reason (or reasons) why a judge might dismiss a class action lawsuit are typically far from general, however, and it all comes down to the nature of the allegations, how they’re presented and how the attorneys handle the case, to name only a few factors. The bar for a proposed class action to survive multiple dismissal attempts is ultimately a high one. 

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