Does an Association Formed to Maintain a Lawsuit Have Standing to Sue?

I recently came across an interesting issue in my practice – whether a tenants association, developed for the purpose of filing suit on behalf of commercial real estate tenants has standing to sue.

Case law, in California, suggests that the determination focuses on whether the lawsuit is a representative action or an actual class actions. It has been suggested that although all class suits are representative in nature, not all representative suits are class actions Tenants Assn. of Park Santa Anita v. Southers (1990) 222 Cal. App. 3d, 1293, 1299, Residents of Beverly Glen, Inc. v. City of Los Angeles (1973) 34 CAl. App. 3d. 117, 129.

Courts, however, have not clearly defined the nature of the distinction between class actions and other representative actions. Residents of Beverly Glen, Inc. v. City of Los Angeles (1973) 34 Cal. App. 3d 117, 128. In particular, the distinction is particularly important for actions by associations.  These actions differ from ordinary class actions because the association is not a representative member of the class, rather it is an entity specifically formed to represent the interests of the class. Indeed, they have been called ”class actions on behalf of a self-defined class.” Salton City Etc. Owners Assn. v. M. Penn Phillips Co. (1977) 75 Cal. App. 3d 184, 188.

These cases often give rise to issues of the association’s standing to sue. However, California case law reveals that such associations have been found to have standing to bring a representative action despite not meeting the standards for a class representative.