August 7, 2020

Plaintiffs Dismiss COBRA Class Action After Court Recommends Denial of Class Certification

Holland & Knight Alert
Lindsey R. Camp


  • Federal Magistrate Judge Jonathan Goodman of the U.S. District Court for the Southern District of Florida recommended that a motion for class certification be denied for lack of standing when the named plaintiffs could show only a technical, procedural violation of COBRA's notice requirements and failed to demonstrate any concrete or particularized injury.
  • The Report and Recommendation also concluded that even if the named plaintiffs had shown the requisite injury, they failed to demonstrate that any such injury was related to the deficient COBRA notice.
  • In addition, although the named plaintiffs satisfied the adequacy requirement for class certification, they failed to satisfy the typicality requirements and also could not overcome the lack of standing.
  • The plaintiffs voluntarily dismissed the case, with prejudice, after the magistrate judge's ruling.

In Bryant v. Wal-Mart Stores, Inc., three former Walmart employees moved to certify a class against the retailer, alleging that they were injured by Walmart's allegedly defective notices under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132(c)(1), as amended by the Consolidated Omnibus Budget Reconciliation Act (COBRA). The plaintiffs asserted that the COBRA election notices they received were deficient because they purportedly did not include information required by the U.S. Department of Labor's (DOL) Model COBRA notices, such as the plan administrator's name, address and telephone number. Plaintiffs sought to certify two classes: 1) all participants and beneficiaries in the health plan who were sent a COBRA notice and who did not elect continuation coverage, and 2) an identical class but involving COBRA notices sent within a different date range.

Issue of Standing

Earlier in the case, the district judge had addressed the issue of standing in denying Walmart's motion to dismiss, finding that the complaint's allegations, taken as true at the pleading stage, sufficiently alleged standing. However, for purposes of class certification, the court stated that it is required to address evidence and facts established in the record to determine if the plaintiffs demonstrate irreducible constitutional requirement of standing, which requires: 1) a concrete and particularized injury-in-fact, 2) that is fairly traceable to the defendant's conduct and 3) that can be redressed by a favorable court decision. Of primary importance is the first element: if a plaintiff cannot show it has suffered actual harm, the plaintiff has no standing.

Considering Class Certification

In considering the plaintiffs' motion for class certification, the Magistrate Judge analyzed each plaintiff's standing. The first named plaintiff, Jamie Bryant, separated from Walmart and received the COBRA election notice shortly thereafter. She stated that she understood its contents and evaluated whether COBRA was an appropriate option for her coverage. Bryant ultimately decided to obtain coverage by adding herself and her children to her domestic partner's health insurance plan. Under that plan, her premiums cost approximately one-fourth as much as the COBRA premiums would have cost, and her coverage was retroactive to her separation date, so there was no lapse in coverage. Despite those facts, Bryant alleged that she suffered actual harm by paying higher insurance premiums under her partner's benefit plan than she would have paid under her plan prior to the cessation of her employment. Bryant also claimed that her daughter had to forego surgery because of the deficient notice. However, her daughter did not have the surgery until two years later, well after Bryant had secured coverage through her domestic partner's plan.

The next named plaintiff, Dawn Smith, allegedly incurred more than $1,000 in medical bills, but nevertheless testified that she knew she could not afford COBRA, knew she would not elect coverage through COBRA and did not even read the COBRA election notice. The third named plaintiff, Curtis Baker, likewise testified that he knew he could not afford coverage through COBRA, knew he would not be electing COBRA coverage, and did not have any medical expenses or other direct injury from the defective notice.

For Bryant, the court found that the evidence did not support her allegations of injury, as she faced no lapse in coverage (and knew she would face no lapse in coverage), was paying much lower premiums than she would have paid under COBRA (even if more than she had previously paid under her prior employer's benefit plan), and had produced no evidence of delayed medical care or unpaid medical expenses as a result of the alleged deficiencies in the COBRA election notice. Thus, the court found that she did not suffer injury sufficient to demonstrate standing. Similarly, the court determined that Smith and Baker also failed to demonstrate standing as both Smith and Baker stated they knew they would not elect COBRA coverage due to its cost, and both admitted that they never read the allegedly deficient COBRA election notice. Thus, the court determined that any injuries the plaintiff allegedly suffered did not flow from the alleged deficiencies in the COBRA election notice.

Addressing "Information Injury" Theory

In addition to actual harm, the plaintiffs in this case, as in other COBRA actions recently filed in the federal courts, attempted to satisfy the requirements of standing by asserting that they suffered an "information injury." The court briefly addressed a theory of informational standing. Under this theory, plaintiffs allege they suffered an injury sufficient to confer them with standing to bring suit under COBRA because, according to plaintiffs, COBRA created a right to receive certain information and the fact that such information was not provided in a matter that strictly complied with the relevant DOL regulations, plaintiffs suffered an information injury. The court rejected this argument, explaining that even assuming the COBRA election form violated a federal regulation, this alone did not generate Article III standing. The court explained that a plaintiff does not automatically satisfy the injury-in-fact requirement simply because a statute grants him or her the right to receive information. Instead, Article III standing requires a concrete injury even in the context of a statutory violation. Thus, the court reiterated holdings from the U.S. Supreme Court and the U.S. Court of Appeals for the Eleventh Circuit, finding that no standing exists where plaintiffs have alleged only a bare procedural or technical injury.

Report and Recommendation

Because the three named plaintiffs lacked standing, Federal Magistrate Judge Jonathan Goodman of the U.S. District Court for the Southern District of Florida wrote in his Report and Recommendation that the district judge deny the motion for class certification. Then, the court remarked that, although unnecessary, it would briefly analyze the most relevant class certification requirements: typicality and adequacy. It first determined that plaintiffs failed to meet the typicality requirement, noting that the three named plaintiffs were part of only one of the two proposed classes. It also determined that the three plaintiffs would adequately represent the class because they had no conflicts of interest and had sufficient knowledge of the case. Still, meeting any certification requirements could not compensate for the lack of standing.


Following the magistrate judge's recommendation and report, plaintiffs dismissed their claims with prejudice. As a result, the magistrate judge's report stands unchallenged.

If you have any questions regarding the court's decision or ERISA, please contact the authors or another member of Holland & Knight's ERISA Litigation Team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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