On January 24, 2024, the Supreme Court granted certiorari in Laboratory Corp. of America v. Davis (“LabCorp”),[1] to consider “[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.” This will be the first time that the Supreme Court has addressed Article III standing requirements in class actions since deciding TransUnion LLC v. Ramirez in 2021. And it presents an opportunity for the Justices to resolve significant confusion among federal district courts about the extent to which a class can be certified if there is evidence that putative class members did not suffer any injury.[2] If the High Court chooses to resolve the circuit split and require that all putative class members have suffered an Article III injury, it could raise the standard plaintiffs must meet to certify a class.
The District Court Certifies a Class with Uninjured Members
LabCorp is a class action that was filed on behalf of all legally blind individuals who visited a LabCorp patient center and alleged that, due to their disability, they were unable to use LabCorp’s Self-Service kiosks. The California class asserted claims under California’s Unruh Civil Rights Act (Unruh Act), which provides for $4,000 in statutory damages for each violation.
In certifying the California Class, the District Court found that common facts predominated the Unruh Act claim, but only addressed the named plaintiff’s standing. The District Court found that all class members were subject to the same injuring behavior, namely that the LabCorp Self-Service kiosks were inaccessible to them. The District Court also found that the named plaintiff’s injury met the typicality requirement, explaining that the Ninth Circuit’s permissive standard did not require that the named plaintiffs’ injuries be identical with those of the other class members, only that the unnamed class members have injuries similar to those of the named plaintiffs and that the injuries result from the same, injurious course of conduct.[3] In other words, the District Court did not require that plaintiff establish, at class certification, that all putative class members suffered an injury.
The Ninth Circuit Affirms, Deepening a Split Among the Courts of Appeals
The Ninth Circuit affirmed. In its standing analysis, the Ninth Circuit only looked at whether the named plaintiff had met the Article III standing requirement and rejected defendants’ arguments that that many of the putative class members lacked Article III standing. According to Defendant, discovery revealed that many of the class members were not aware that the LabCorp facilities included Self-Service kiosks and therefore were not injured.
But because the Ninth Circuit held that the named plaintiff had standing, the court only addressed Defendants’ argument in a footnote, stating that class certification was not defeated even if some potential class members may not have been injured. To support its position, the court cited Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 667 (9th Cir. 2022), which held that Rule 23 permits “certification of a class that potentially includes more than a de minimis number of uninjured class members[.]” But the court did not conduct any substantive analysis of whether the district court certified a class with more than a de minimis number of injured members.
The Ninth Circuit’s standard, which allows for more than a “de minimis” number of uninjured class members, aligns with the Seventh and Eleventh Circuits, although the Ninth Circuit has not clarified what that number would be. See Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 669 (9th Cir. 2022) (“we reject the dissent’s argument that Rule 23 does not permit the certification of a class that potentially includes more than a de minimis number of uninjured class members”). By contrast, the Seventh and Eleventh Circuits have held that the number of uninjured class members would have to be less than a “great many” or a “large portion” of the certified class. See Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012) (“There is no precise measure for ‘a great many.’”); Cordoba v. DIRECTV, LLC, 942 F.3d 1259, 1277 (11th Cir. 2019) (a class fails predominance only where a “large portion” of members lack injury).
But other Circuits have taken different approaches.
The DC and First Circuits have articulated a less permissive standard, holding that a class may be certified only if a “de minimis” number of the potential class members lack standing. See In re Nexium Antitrust Litig., 777 F.3d 9, 25 (1st Cir. 2015) (“a certified class may include a de minimis number of potentially uninjured parties.”); In re Rail Freight Fuel Surcharge Antitrust Litig. – MDL No. 1869, 934 F.3d 619, 627 (D.C. Cir. 2019) (denying class certification because more than a de minimis number of class members lacked any Article III injury).
By contrast, the Second and Eighth Circuits have imposed a high bar and require that all potential class members must have Article III standing in order to be certified. See Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006) (“no class may be certified that contains members lacking Article III standing”); Halvorson v. Auto-Owners Life Ins. Co., 718 F.3d 773, 778 (8th Cir. 2013) (“In order for a class to be certified, each member must have standing.”).
Key Takeaways
By granting certiorari on the question of whether a 23(b) class action could be certified when some members of the proposed class lack any Article III injury, the Supreme Court will have the opportunity to resolve an important circuit split and provide guidance to courts that have struggled with how to apply TransUnion at class certification.
Besides resolving the circuit split, this case will also present the Supreme Court conservative majority with an opportunity to take a more restrictive approach to class certification. Indeed, the same conservative majority that wrote the majority opinion in TransUnion could agree with the Second and Eighth Circuits and require all putative class members to establish Article III standing in order for a class to be certified. If so, this decision would raise the bar for all class actions and would be particularly important for privacy class actions, like TransUnion, where determining a cognizable injury can be difficult. The Court will also have the opportunity to address the implications for class certification where the class representative experienced a materially different, and more severe, injury than all or most other class members. Morrison & Foerster will continue to follow this case.
[1] No. 24-0304.
[2] TransUnion LLC v. Ramirez, 594 U.S. 413 (2021).
[3] Davis v. Lab’y Corp. of Am. Holdings, 2022 WL 22855520, at *5 (C.D. Cal. June 13, 2022).
[View source.]
