Class Actions Brief Blog

It is black-letter law that a plaintiff must have standing to pursue claims in federal court and that an actual case or controversy must persist at every stage of the litigation, including on appeal. In June, the Fourth Circuit had occasion to consider these principles in Mebane v. GKN Driveline North America, Inc., 177 F.4th 543 (4th Cir. 2026), where the court held that a named plaintiff’s decision to settle his individual claims prevented him from having standing to challenge an adverse class certification ruling on appeal.

James Mebane was an hourly employee at a GKN manufacturing facility in North Carolina. During Mebane’s employment, GKN had policies to round employees’ clock-in and clock-out times and to automatically deduct meal breaks from employees’ time. Mebane and another named plaintiff sued GKN in federal court in North Carolina on behalf of themselves and a putative class of other hourly employees, alleging that GKN’s rounding and automatic deduction policies resulted in hourly employees working uncompensated straight-time and overtime in violation of the Fair Labor Standards Act and North Carolina Wage and Hour Act.

Initially, the district court granted conditional certification of a collective action under the FLSA and class certification of the plaintiffs’ NCWHA claims under Rule 23(b)(3). Eventually, though, GKN moved to decertify both the classes and the conditionally certified collective, arguing that individualized inquiries pervaded the case. The district court agreed with GKN and decertified both the Rule 23(b)(3) classes and FLSA collective action.

Once a class or collective is decertified, the case continues solely on behalf of the individual named plaintiffs in the case. That occurred here, until November 2024 when Mebane and his co-named plaintiff settled their claims. The settlement agreement released “all remaining claims, whether or not raised in the litigation” but expressly preserved the plaintiffs’ “right to appeal this Court’s May 12, 2023 decertification order,” as well as their right to petition for attorneys’ fees and to seek service awards in related cases. Although the plaintiffs petitioned for attorneys’ fees and costs by the deadline set in the settlement agreement, the district court denied the petition without prejudice. The plaintiffs chose not to refile, eliminating a potential remaining concrete interest that might have supported standing.

After executing the settlement, Mebane appealed the decertification order. The Fourth Circuit, however, dismissed the appeal for lack of jurisdiction based on Mebane’s lack of any concrete interest in the litigation (i.e., standing).

Federal courts recognize two concrete interests that a named plaintiff may invoke to establish standing in the class action context. First, the named plaintiff has a concrete interest in his or her substantive claim asserted. Second, a class representative may also assert a distinct procedural right to represent the interests of similarly situated individuals, which can give rise to an interest in shifting the costs of litigation to the remainder of the class. If a named plaintiff loses his or her substantive interest in the case involuntarily (such as by an adverse ruling on the merits of his or her claim), the named plaintiff may nevertheless rely on the second form of concrete interest to establish standing to appeal an adverse certification ruling. But when a named plaintiff voluntarily settles or dismisses the individual claims underlying a request for class certification, the representative interest cannot supply standing because, as the Fourth Circuit held in Rhodes v. E.I. du Pont Nemours & Co., “there is no longer a ‘self-interested party advocating’ for class treatment in the manner necessary to satisfy Article III.” 636 F.3d 88, 100 (4th Cir. 2011).

Applying these principles, the Fourth Circuit held that Mebane’s decision to settle his individual claims left him with no remaining concrete interest in the case to establish standing to pursue his appeal. Thus, the appeal had to be dismissed for lack of jurisdiction.

Mebane argued that he should have standing because his settlement agreement with GKN expressly preserved a right to appeal the decertification order, which he contended gave him some interest in trying to have the decertification order reversed. The Fourth Circuit, however, disagreed, concluding that the focus of whether Mebane had standing was not on the language of his settlement agreement but on the requirements of Article III of the Constitution. As the court explained, echoing its earlier holding in Rhodes, the question was not whether Mebane’s settlement agreement purported to preserve certain rights, but whether the constitutional requirements of Article III were satisfied. Rhodes had “rejected the idea that the language of a plaintiff’s settlement agreement is determinative of that plaintiff’s stake in an appeal,” concluding instead that courts must “focus [their] review on the standing requirements of Article III.” 636 F.3d at 100. In other words, Mebane could not create an otherwise released concrete interest in the case by claiming so in his settlement agreement.

Notably, the Fourth Circuit went further than merely applying Rhodes. The court acknowledged that Rhodes dealt only with Rule 23 class actions and did not address whether a plaintiff who voluntarily dismisses individual claims underlying an FLSA collective action lacks standing to appeal an adverse certification ruling. But it concluded that Rhodes’s logic applies equally in the FLSA collective action context, citing the Third Circuit’s decision in Camesi v. University of Pittsburgh Medical Center, 729 F.3d 239, 247 (3d Cir. 2013). This extension aligns the Fourth Circuit with the Third and Eighth Circuits, see Ruppert v. Principal Life Ins. Co., 705 F.3d 839, 844 (8th Cir. 2013), and resolves an open question that FLSA practitioners should note.

The outcome in Mebane is instructive for class action practitioners on both sides of the “v.” when considering how and whether to resolve class claims. For plaintiffs’ counsel, Mebane reinforces the need of ensuring that at least one named plaintiff remains unsettled before pursuing an appeal of an adverse certification ruling. If all named plaintiffs settle their individual claims, the appellate court will lack jurisdiction to hear the appeal, regardless of what the settlement agreement says about preserving the right to appeal.

For defense counsel, the case highlights a powerful tactical tool. After obtaining a favorable decertification ruling, consider offering individual settlements to all remaining named plaintiffs. Doing so can effectively immunize the district court’s ruling from appellate review by eliminating the only parties with potential standing to appeal.

For all counsel, the case makes clear that parties cannot contract around Article III’s standing requirements. The focus of the standing inquiry is constitutional, not contractual. A settlement clause purporting to preserve the right to appeal will not create standing where the constitutional requirements are not met. This principle should inform how practitioners draft settlement agreements and evaluate the enforceability of appeal-preservation provisions.

Finally, FLSA practitioners should note that the Fourth Circuit has now extended Rhodes’s Rule 23 holding to FLSA collective actions. This brings the Fourth Circuit into alignment with the Third and Eighth Circuits and means that the voluntary-settlement standing bar applies with equal force whether the underlying action sounds in Rule 23 or FLSA.