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On January 24, 2025, the Supreme Court granted certiorari in Laboratory Corporation of America Holdings v. Davis, a case addressing class action requirements. At its crux, the review considers whether a federal court may certify a class action under Rule 23(b)(3) when some class members do not meet Article III standing requirements.
In other words, this petition questions whether circuit courts should approve class action lawsuits when some of the plaintiffs in the group may not have proven their legal right to sue.
The Article III standing requirements state that a person can sue in federal court only if they were harmed and have a real stake in the case. But circuit courts handle class action eligibility differently—some allow uninjured members to remain in the class and others bar such cases.
The defense for Labcorp v. Davis petitioned for this certiorari, but its influence is expected to impact class action decisions across the lower courts.
Labcorp’s Petition Challenging Class Requirements
A losing party may petition for certiorari with the Supreme Court to appeal a lower court decision. Labcorp’s petition was granted because of the significant legal questions surrounding Article III standing requirements.
The plaintiffs suing Labcorp alleged that the company’s injurious behavior meets Article III requirements because the check-in self-serve kiosks were not accessible to the blind, violating the Americans with Disabilities Act (ADA) and California’s Unruh Act.
Labcorp challenged the class definition because they allege many members never used, wanted to use, or intended to use the kiosks, thus never sustaining an Article III injury. The petition sets the stage to review whether the class members must have suffered a legally recognized ‘injury’ to remain in the lawsuit or if the ADA violation applies to everyone because the facilities were inaccessible to all members, regardless of their interactions with the kiosks.
Circuit Courts’ Stances on Permissibility of Uninjured Class Members
In TransUnion v. Ramirez in 2021, the Supreme Court ruled that Article III does not give federal courts the power to relieve uninjured plaintiffs, class action or not. But this decision came after the case’s final judgment, past when a class action would be certified. Since TransUnion didn’t directly address procedures during certification, lower courts introduced conflicting interpretations of Article III.
Labcorp argued just that in its petition for certiorari, citing this three-way split for circuit courts:
- Ninth Circuit permits certifications even when more than a de minimis number of class members lack Article III standing, though it doesn’t put a number to this substantial headcount.
- Seventh and Eleventh agree with the Ninth but hold that the number of uninjured class members would need to be fewer than a ‘great many’ or ‘large portion’ of the certified class.
- Second and Eighth Circuits have barred certification in cases with class members without Article III standing.
- D.C. and First Circuits allowed certification if the number of uninjured members is de minimis, or trivial.
The Impact of Class Action Lawsuit Requirements on Defendants
Defendants in class action lawsuits argue that when uninjured members remain in a class, it inflates the issue and can drive up potential liability. The court certified the proposed class in Labcorp v. Davis because all class members potentially encountered inaccessible kiosks, whether or not they experienced injury. Labcorp argues that holding to this will expose the company to nearly half a billion dollars in yearly damages.
Though an ADA violation spurred the Supreme Court’s certiorari, the review will likely challenge many other class actions, especially complicated false advertising cases. Tightening Article III standing requirements grants those facing class action lawsuits additional defenses to challenge certifications and limit businesses’ legal exposure.
How Article III Changes May Affect Plaintiffs
Plaintiffs and legal counsel will face substantial hurdles if the Supreme Court ruling tightens standards for Article III injuries. This will increase evidentiary burdens and require significant investments by counsel before cases even reach the certification stage. Vetting claimants and winnowing plaintiffs before certification may make cases cost-prohibitive, leaving the public without recourse for harm caused by negligent companies.
The Supreme Court’s decision should resolve the conflict in Labcorp v. Davis, and we hope this examination will offer clarity to courts applying TransUnion. The merits briefing is set to conclude in April 2025, with a decision possible in June. Bell Legal Group will follow the decision closely. Watch our legal news feed for updates on this pivotal ruling.