Background: A missed opportunity for clarity on uninjured class members
On June 5, 2025, the US Supreme Court dismissed as improvidently granted a closely watched case that could have clarified whether federal courts may certify damages class actions under Rule 23 when the class includes both injured and uninjured members. The case, Lab. Corp. of Am. Holdings v. Davis, No. 24–304, arose from a dispute involving the accessibility of self-service kiosks for visually impaired patients at a diagnostic laboratory provider. Plaintiffs sought to certify a class with potential damages of up to $500 million per year.
The district court certified the class, and the Ninth Circuit affirmed, holding that Rule 23 permits certification even if the class “potentially includes more than a de minimis number of uninjured class members.” The Supreme Court initially granted certiorari but ultimately dismissed the appeal as improvidently granted, which is used when the Court believes it should not have accepted certification, and did not address the merits, leaving the lower court’s decision in place.
The 8–1 decision tracked the Court’s concerns at the April 29, 2025 oral argument about issuing an advisory opinion. The oral argument also covered the merits of LabCorp’s argument that to demonstrate predominance each class member had to first establish standing and several justices, including Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, and Ketanji Brown Jackson appeared skeptical of LabCorp’s position.
Dissent highlights concern that certification of overbroad classes coerces settlements
Justice Brett Kavanaugh filed a sole dissent, arguing that the Court should have decided the substantive question. He maintained that federal courts “may not certify a damages class under Rule 23 when, as here, the proposed class includes both injured and uninjured class members,” because common questions cannot predominate in such circumstances. He emphasized that overbroad class certifications can expose businesses to massive potential liability and pressure costly settlements regardless of the merits, writing:
Overbroad and incorrectly certified classes threaten massive liability – here, with potential damages up to about $500 million per year. That reality in turn can coerce businesses into costly settlements that they sometimes must reluctantly swallow rather than betting the company on the uncertainties of trial.
Justice Kavanaugh further noted that these increased costs can have ripple effects, ultimately impacting consumers, retirement account holders, and employees through higher prices, lower returns, and reduced benefits.
Implications for businesses and class action defendants
The Supreme Court’s decision to sidestep the issue leaves in place a hotly contested circuit split between the Ninth and Eleventh Circuits, who typically allow Rule 23(b)(3) certification with potentially uninjured members, and the Second, Fourth, and Eighth Circuits, who typically bar certification where members lack standing, with the other Circuits falling somewhere in the middle. This ensures ongoing uncertainty for businesses facing class action litigation.
The pressure for a decision on the merits is felt most by Circuits that do not have a clear approach to certification when it comes to assessing injury. The Seventh Circuit, for example, held that mandatory injury assessments would “put the cart before the horse,” but later denied certification when there were too many uninjured members. Even still, the Seventh Circuit has acknowledged that a class will often include uninjured members at the outset. The Fifth and Tenth Circuits similarly do not have a clear stance on including uninjured members at the certification stage. And in the Ninth Circuit and other jurisdictions following similar precedent, companies may continue to face the risk of class certification even when the class definition arguably sweeps in uninjured members.
Until the Supreme Court provides definitive guidance, businesses should be aware of the potential for broad class definitions and the associated risks. Businesses should also be wary of the possibility of the Ninth Circuit’s approach becoming the law of the land – with at least four Justices having expressed skepticism against LabCorp’s position. Ongoing uncertainty underscores the importance of closely monitoring class action developments and engaging in early, strategic litigation planning.
We will continue to monitor developments in this area and consider proactive strategies for challenging class certification where appropriate.
Key takeaways
- The Supreme Court declined to resolve whether Rule 23 permits certification of damages classes that include uninjured members, leaving the issue unsettled.
- The Ninth Circuit’s approach, which allows certification even with more than a de minimis number of uninjured class members, remains in effect.
- Businesses may continue to face significant exposure and pressure to settle in class actions with potentially overbroad class definitions.
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