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In an (uninjured) class of their own: Supreme Court to consider standing limitations on class certification

2/25/25

By: Cameron N. Regnery

Class actions can subject companies to daunting financial exposure. Unlike standard lawsuits brought by single individuals, class actions are brought by representatives seeking to litigate on behalf of a broader “class” of aggrieved persons. In order to pursue a class action, those representatives must obtain “certification” of the class under Federal Rule of Civil Procedure 23. Once the court certifies the class, the case changes dramatically. A lawsuit that may have originally involved just two individual representatives seeking only a few thousand dollars can balloon into a class action involving two thousand individuals seeking a few million dollars. 

The decision of whether to certify a class is therefore of monumental importance. Certification often prompts dramatic changes in litigation strategy, as well as in the prospect of settlement. For these reasons, denial of certification is often the best (and sometimes only) method for escaping burdensome class action lawsuits. To this end, the Supreme Court’s forthcoming decision in LabCorp v. Davis1 may provide a powerful arrow in the quiver of companies battling class certification.  

Specifically, the Supreme Court is considering whether the issue of standing—a regular refrain of its recent decisions2—presents limitations on class certification. Under Article III of the Constitution, federal courts only have jurisdiction to adjudicate “cases” and “controversies.” A case or controversy exists where the party bringing a lawsuit possesses standing. To establish standing, the party must have suffered an actual, concrete injury that is not speculative or hypothetical. That injury must further be attributable to the conduct complained of and must likely be remedied by the relief sought from the court.3

The precise question presented in Davis is whether a federal court may certify a class under Rule 23(b)(3) where some members of the class lack standing. Rule 23(b)(3) permits certification where a court finds that “questions of law or fact common to class members predominate over any questions affecting only individual members.” In Davis, two blind plaintiffs sought to certify a class under Rule 23(b)(3), alleging that LabCorp discriminated against them and others of similar disability by not ensuring that self-service kiosks in patient service centers were equally accessible. Plaintiffs proposed a class encompassing all blind persons in California who visited a center with such kiosks in recent years, seeking millions of dollars in statutory penalties under California civil rights laws. 

The federal district court certified the proposed class pursuant to Rule 23(b)(3). On appeal, LabCorp argued, among other things, that not all members of the class—i.e., all blind persons in California who visited a patient service center with a self-service kiosk in recent years—were actually harmed in a manner sufficient to establish standing. The Ninth Circuit Court of Appeals affirmed the certification, however, holding that a class may be certified even if some potential class members may not have been injured.4 LabCorp then petitioned the Supreme Court, which agreed to hear the issue on January 24, 2025.  

In its petition to the Supreme Court, LabCorp argues that the circuit courts of appeals are divided on this issue, falling into three “camps.”5 The first camp, encompassing the Second and Eighth Circuits, holds that a class may not be certified if it contains any members who have not suffered an injury.6 The second camp, encompassing the First and D.C. Circuits, holds that a class may not be certified if it contains more than a minimal number of members who have not suffered an injury.7 The third camp, encompassing the Seventh, Ninth, and Eleventh Circuits, holds that a class may not be certified only if it contains a substantial number of members who have not suffered an injury.8

LabCorp argues that the “hyper permissive approach” espoused by the third camp is incorrect. Specifically, LabCorp contends that such an approach contradicts the Constitution’s “case” or “controversy” requirement, by allowing individuals who lack standing to nevertheless pursue a claim in federal court. Respondents counter that requiring all class members to demonstrate proof that they have suffered an injury prior to certification would be at odds with the purpose of Rule 23. Instead, Respondents argue that questions regarding standing for uninjured class members should be resolved when the actual claims are adjudicated, not merely when the class is preliminarily certified. Ultimately, LabCorp urges the Supreme Court to adopt the first camp’s approach, while Respondents urge the Supreme Court to adopt the third camp’s approach. 

The impact of the Supreme Court’s decision may have profound consequences on the nature of class actions. If the Supreme Court sides with LabCorp, companies may have an easier time fighting certification, and any certified classes will likely be smaller and more narrowly-defined. If the Supreme Court sides with Respondents, the size of certified classes may swell with the addition of uninjured members, thereby increasing the amount of monetary damages at stake. 

The bottom line is that a decision in favor of LabCorp will hand companies facing cumbersome class actions a powerful tool for challenging certification, which in turn may significantly limit the financial exposure of such lawsuits.  

The commercial litigation attorneys at Freeman Mathis & Gary, LLP are well-versed in class actions and have litigated issues related to class certification in federal courts throughout the United States.  

For more information, please contact Cameron Regnery at cameron.regnery@fmglaw.com or your local FMG attorney. 

  1. Davis v. Lab’y Corp. of Am. Holdings, Case No. 20-0893 FMO (KSx), 2022 WL 22855520 (C.D. Cal. June 13, 2022), aff’d, 2024 WL 489288 (9th Cir. Feb. 8, 2024), cert. granted in part, 2025 WL 288305 (U.S. Jan. 24, 2025) (mem.).  ↩︎
  2. See, e.g., Murthy v. Missouri, 603 U.S. 43 (2024); Food & Drug Admin. v. All. for Hippocratic Med., 602 U.S. 367 (2024); Dep’t of Educ. v. Brown, 600 U.S. 551 (2023); United States v. Texas, 599 U.S. 670 (2023).  ↩︎
  3. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). ↩︎
  4. Davis, 2024 WL 489288, at *2 n.1.  ↩︎
  5. Notably, Respondents strongly disagree with LabCorp’s characterization of the circuit split. The Petition for Writ of Certiorari and Respondents’ Brief in Opposition are available at https://www.scotusblog.com/case-files/cases/laboratory-corporation-of-america-holdings-v-davis/.   ↩︎
  6. See Denney v. Deutsche Bank AG, 443 F.3d 253 (2d Cir. 2006); Avritt v. Reliastar Life Ins. Co., 615 F.3d 1023 (8th Cir. 2010). ↩︎
  7. See In re Asacol Antitrust Litig., 907 F.3d 42 (1st Cir. 2018); In re Rail Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619 (D.C. Cir. 2019) ↩︎
  8. See Kohen v. Pac. Inv. Mgmt. Co. LLC, 571 F.3d 672 (7th Cir. 2009); Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022); Cordoba v. DIRECTV, LLC, 942 F.3d 1259 (11th Cir. 2019).  ↩︎

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