Seyfarth Synopsis: On June 5, 2025, the U.S. Supreme Court changed course and dismissed the writ of certiorari that it previously had granted in Laboratory Corporation of America Holdings v. Davis, No. 24-304 (U.S. June 5, 2025). In doing so, the Supreme Court passed on the chance to decide the question that had been presented, namely: whether federal courts may certify a Rule 23 damages class that includes both injured and uninjured members. These sorts of issues are frequently litigated in the employment context. The Supreme Court's decision is not helpful to employers in the near term, since it does not restrict these class actions as a rule in federal court. However, the Supreme Court has not closed the door on revisiting the issue, and the inclusion of uninjured class members can still provide grounds for defendants to oppose certification in the meantime.
Case Background
Defendant Labcorp offered patients on-site, self-service, touchscreen kiosks to check in for their appointments at its patient service centers. These touchscreen kiosks were offered in addition to either checking in at the front desk or the online check-in process that patients could complete before they arrived. The kiosks were not accessible to blind patients unless the patients had assistance. To address the accessibility issue, Labcorp ensured that its patient service centers had at least one employee available who could check in patients at the front desk using the same technology used in the kiosks.
Luke Davis and Julian Vargas—both of whom are legally blind—filed a class action against Labcorp under Title III of the Americans with Disabilities Act ("ADA") and the California Unruh Civil Rights Act ("Unruh Act"), which considers violations of the ADA to constitute violations of the state law and provides for a minimum of $4,000 in damages for each offense. The plaintiffs alleged that Labcorp denied them and other blind individuals full and equal access to the patient service centers because the kiosks were inaccessible to them. However, the record indicated that many class members were not actually harmed by Labcorp's new kiosks on account of not being able to use them because, for instance, they would prefer to use the front desk anyway.
The district court certified a class of potentially more than 100,000 blind individuals seeking nearly $500 million in damages under the Unruh Act per year. While Labcorp's petition for interlocutory appeal was pending with the Court of Appeals for the Ninth Circuit, the district court clarified the class definition without materially altering the composition of the class or changing its original class certification order, which the Ninth Circuit subsequently affirmed.
The Supreme Court's Decision
The U.S. Supreme Court initially granted certiorari to decide whether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III injury. Before reaching the question, however, in a single-sentence per curiam decision, the Supreme Court reversed course and ordered that the writ of certiorari was dismissed as "improvidently granted." Those eagerly awaiting the answer to the question are now left to wait for the next test case.
Justice Kavanaugh, in the lone dissent, raised some frustrations likely to be shared by those left waiting. Presuming that his colleagues did not "want to deal with" the plaintiffs' threshold argument that the matter was moot because the district court's original class certification order was supplanted by its subsequent order clarifying the class definition, Justice Kavanaugh rejected the argument as "insubstantial" as, among other things, the subsequent order did not materially change the original order that actually granted class certification and that Labcorp appealed.
Justice Kavanaugh also addressed the merits with respect to the question presented. Justice Kavanaugh characterized the case as "straightforward" under Rule 23 and the Supreme Court's precedents. While Rule 23 requires that common questions predominate in damages class actions, common questions do not predominate in a class consisting of both injured and uninjured members. Justice Kavanaugh also agreed with the United States, which had joined as amicus curiae, that "if there are members of a class that aren't even injured, they can't share the same injury with the other class members." Justice Kavanaugh also clearly signaled where he will stand if the issue reaches the Supreme Court in the future; he would have held that federal courts may not certify a proposed damages class under Rule 23 when the class includes both injured and uninjured members.
Justice Kavanaugh warned that the Ninth Circuit's decision to the contrary will "generate serious and real-world consequences." Pointing to the half a billion dollars a year that Labcorp was facing in potential damages, Justice Kavanaugh explained that classes "overinflated with uninjured members" can force companies into agreeing to "costly settlements" under the threat of "massive liability." In turn, companies pass on these costs to consumers, retirement account holders, and workers, ultimately harming each of these groups, among others.
Implications For Employers
This decision had the potential to significantly limit class actions in federal court. As Labcorp noted in its petition for a writ of certiorari, "around 10,000" class action lawsuits are filed annually. Citing Seyfarth's ADA Title III blog, Labcorp also pointed out that half of the recent record high in ADA cases like its own were filed in California, where plaintiffs may attempt to recover statutory damages under the Unruh Act based on a purported violation of the ADA, even if the plaintiffs were not actually injured. And while not pertinent to Labcorp's argument, it is also true that these issues are frequently litigated in the employment context.
Although the Supreme Court's ruling was anticlimactic, the question is likely to resurface, and very well may regain traction. There remains a circuit split over the issue. And, although he did not cite it in his dissent, Justice Kavanaugh's majority opinion in TransUnion LLC v. Ramirez—in which the Supreme Court held that every class member must have Article III standing to recover individual damages—was joined by four of his colleagues who are still on the bench.
In the meantime, employers and other corporate defendants of class actions should continue to consider the issue in crafting their defense strategy. For example, evidence concerning uninjured class members may reveal that whether members of a proposed class were injured raises evidentiary questions that likely will vary by class member, which individualized inquires may predominate and preclude class certification.
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