Highlights
- The U.S. Supreme Court heard oral arguments in the case Labcorp v. Davis, where visually impaired patients took legal action against Labcorp after its implementation of self-service check-in kiosks.
- The argument revealed skepticism on the Supreme Court, as the justices displayed little appetite for addressing whether Article III standing should be required for all class members at the class certification stage.
- This Holland & Knight alert details the views and questions asked by individual Supreme Court justices.
The U.S. Supreme Court heard oral arguments in Labcorp v. Davis (No. 24-304), a case that arrived at the Court to resolve a fundamental question: "[w]hether 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." In this case, visually impaired patients initiated legal action against Labcorp following the company's implementation of self-service check-in kiosks. The plaintiffs sought remedies under the Americans with Disabilities Act (ADA) and California state law, claiming discrimination because the use of touchscreen devices were inaccessible to visually impaired customers.
The case presented an opportunity to decide a question that has divided the federal circuits into three distinct camps: Some circuits hold that Article III bars certification when the class would include any uninjured persons,1 others permit certification if no more than a de minimis portion of the class lacks injury,2 while a third group (including the U.S. Court of Appeals for the Ninth Circuit, from which this case originates) largely defers the question to post-certification stages unless a "great many" class members lack standing.3
Oral argument revealed a significant procedural roadblock that may ultimately prevent the Court from reaching the substantive Article III standing question. At the heart of this appellate procedural issue are two different class definitions: an initial definition that excluded individuals who did not know about or did not want to use the kiosks (arguably limiting the class to those who could claim actual injury) and a later, broader definition that included anyone who came into a clinic, regardless of whether they wanted to use the kiosk. The critical procedural complication is that Labcorp appealed only the first, narrower definition – not the second, broader one that it now challenges before the Supreme Court. The petitioner claimed the classes differed in only immaterial ways and noted the U.S. District Court for the Central District of California's specific finding to that effect, which precluded appeal of the second order under Ninth Circuit rules. The petitioner also noted that if the Court did not provide review now, it would be too late for Labcorp to seek interlocutory review of the second order under the text of Rule 23(f).
Supreme Court Viewpoints
Justice Amy Coney Barrett captured this dilemma, noting there would be a risk of "'too bad for you because the 23(f) timeline has run," creating concern about procedural traps for litigants who rely on district courts' characterizations of their own orders. Both Justices Barrett and Sonia Sotomayor repeatedly expressed a sentiment that the court has no reason to address the second definition and should return the case to lower courts to consider whether Labcorp can still challenge the broader definition.
Still, the questioning offered valuable insights into each justice's respective thinking on the interplay between Article III and class certification standards. Though procedural complexities may prevent a definitive ruling now on the question presented, the justices' line of questioning revealed meaningful skepticism on the substantive Article III issue. Below is a digest of views expressed and questions asked by individual justices, starting with the chief justice and in order of seniority:
- Chief Justice John Roberts acknowledged the practical realities driving class action litigation, noting "the elephant in the room, that once you get to trial ... the possibility of facing the damages that are at issue in many of these cases is enough to prevent defendants, as a practical matter, from going to trial." This observation highlighted his understanding of the settlement pressure created by class certification regardless of case merits, though the chief justice did not suggest any way around the appellate procedural obstacle.
- Justice Clarence Thomas asked few questions but posed some skepticism asking, "At what point does the uninjured – having uninjured plaintiffs in – in the class present a problem for Rule 23 or for Article III?"
- Justice Samuel Alito probed the theoretical underpinnings of the plaintiff's position, asking whether they were saying "Rule 23 requires something that just happens to correspond with what Article III requires" or that "Rule 23 requires compliance with Article III." This questioning sought to determine whether the distinction between Rule 23 requirements and Article III standards was meaningful or merely semantic.
- Justice Sotomayor most directly challenged the timing of standing determinations, emphasizing the fluid nature of class proceedings: "The whole process is fluid as problems start arising. And it's not until the judgment is entered that you have to determine whether there's an administrable way to identify them – using your own words, to identify who's been injured or not." Drawing on her experience, she noted that class definitions "get amended constantly" and questioned the need for immediate standing determinations, stating, "I think the question only becomes pertinent when you're trying to give a damage award to anyone" and directly asking, "why do it immediately at class certification stage." She also expressed that the court should not address the second definition due to the procedural issues.
- Justice Elena Kagan expressed significant concern that Labcorp's approach would upend decades of class action practice: "[I]f you look back for the last 70 years of class action or whatever Rule 23 is, it strikes me that if you look at all the classes that have been certified by that point, you're always going to be able to find people for idiosyncratic reasons who don't share the same injury, who don't have standing, and that's never been seen as kind of the end all and be all ..." She appeared bemused by discussions of commonality, challenging the government's position by stating that requiring all class members to share identical injuries would "explode everything" and seemed "very inconsistent with the way class actions have been practiced for many decades." She emphasized that she will agree to disagree because "the court is not doing anything with respect to those claims until the court actually provides damages, ... and as long as the court figures this question out before the court actually does anything with respect to those claims, that seems to me good enough."
- Justice Neil Gorsuch repeatedly pressed on whether this truly was an Article III issue rather than a Rule 23 question, asking: "If I can imagine a definition that yields one uninjured person, I can't certify it? ... Well, maybe I can and maybe I can't, but I know that common issues predominate, and I know that I can sort out those things later. And I still can't certify this." When the government insisted that all class members must share a common injury, Justice Gorsuch firmly objected: "Hold on. ... I had understood it as one issue has to be common, and that that has to be predominant. ... Now you're telling me that Article III, and Article III alone, must be satisfied by everyone at the outset." He reiterated: "No, they don't all have to be common. There has to be a common question that predominates over others." He seemed persuaded by the practicalities of the case, suggesting that "overall, looking at the whole thing, it's manageable. There are at least some common questions. The named plaintiffs are generally typical and common issues predominate."
- Justice Brett Kavanaugh focused on practical solutions and real-world implications, asking: "And on the facts here – I think you've maybe covered this, but I just want to be clear. On the general facts here, could they permissibly define a damages class consistent with Article III and 23(b)(3), and if so, how?" He also inquired about settlement pressure, stating: "I thought one of the problems with an overly broad class being certified was that it would pressure defendants into settlements that are coercive and unfair. Isn't that one of the concerns you – you have? ... And do you want to explain that, the real-world problem?" This prompted Noel Francisco, counsel for Labcorp, to confirm that "what drives settlement is the fact of certification and the size of the class that's certified" because those factors require defendants to "roll the dice" with potentially massive damages. Along with Chief Justice Roberts, he acknowledged the "elephant in the room" – that certification itself often forces settlements – but did not suggest any way to overcome the procedural obstacles.
- Justice Barrett, though concerned about procedural complications, appeared somewhat aligned with Labcorp on the practical implications of the standing issue, noting: "And so the whole point is that even if we assume that you're right and that the class, as you defined it, does include only people who are injured, that doesn't take away Mr. Francisco's argument that there would still have to be some sort of process and certification to identify who was injured or not, even if it was just who wanted to go to LabCorp." However, she repeatedly expressed that procedurally, the Court had "no reason to address the second definition" that Labcorp failed to appeal.
- Justice Ketanji Brown Jackson demonstrated skepticism about requiring Article III standing determinations at certification. Justice Jackson talked the petitioner through a detailed hypothetical, where a phone customer brings a class action claiming unlawful fees charged to some customers during a six-month period. When confronted with the possibility that only some class members were actually charged the fee, Justice Jackson questioned: "I guess I don't understand why it matters how many injured versus non-injured members there are in this class as defined." She elaborated further: "What difference does it make when we're certifying this class to establish the liability, there are common issues with respect to that, and, really, the only thing that figuring out who is harmed and not matters to is who gets damages at the end of the day?"
Footnotes
1. Some U.S. Courts of Appeal, including the Second and Eighth Circuits, completely bar certification if any class members lack Article III standing. See Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006) (holding "no class may be certified that contains members lacking Article III standing"); see also Johannessohn v. Polaris Indus. Inc., 9 F.4th 981, 988 & n.3 (8th Cir. 2021) ("[A] class cannot be certified where it is defined in such a way to include individuals who lack standing.")
2. See In re Lamictal Direct Purchaser Antitrust Litig., 957 F.3d 184, 194-94 (3d Cir. 2020) (rejecting class with nontrivial number of uninjured members); see also Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 362, 365 (3d Cir. 2015).
3. See Olean Wholesale Grocery Coop. Inc. v. Bumble Bee Foods, 31 F.4th 651, 668-69 (9th Cir. 2022); Kohen v. Pacific Investment Management Co., 571 F.3d 672, 677 (7th Cir.2009) ("[A] class should not be certified if it is apparent that it contains a great many persons who have suffered no injury at the hands of the defendant.")
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