This Supreme Court case could upend class actions

Reuters

24-04-2025

April 24 (Reuters) - When the U.S. Supreme Court next week hears arguments in a case that could reshape class action litigation, the justices will consider some lofty questions about constitutional standing and jurisdiction.
My curiosity, however, has more to do with the practical effects. If the high court sides with diagnostic-testing company Laboratory Corporation of America and holds that class actions can't be certified if they include uninjured members, what might the real-world legal impact be?
In a word, huge.
Multiple interest groups in friend-of-the-court briefs have offered hypothetical scenarios if the court should bar classes with uninjured members. Among them, this could thwart class actions involving low dollar claims, upend private antitrust enforcement or stymie defendants looking for 'global peace' to resolve cases where liability is widespread.
Conversely, what if the respondents – two legally blind patients who sought medical testing and the American Council for the Blind – prevail in establishing a more lenient class certification standard nationwide? Will this allow plaintiffs to 'lard up classes with the uninjured,' as Labcorp lawyers put it, opens new tab, and coerce settlements from companies spooked by potential liability?
To be clear, no one is suggesting that uninjured class members are entitled to compensation. The key question is when and how they're weeded out of the class.
The high court has been circling the issue for several years after pointedly leaving it open in two prior class certification decisions – Tyson Foods v. Bouaphakeo in 2016 and TransUnion v. Ramirez in 2021.
In Labcorp vs. Davis, which is set for argument on April 29, the justices will confront it head-on.
Originally filed in Los Angeles federal court in 2020, the class action was brought on behalf of visually impaired people who were unable to use Labcorp's check-in kiosks when arriving for blood draws or other medical tests. The plaintiffs allege violations of the Americans with Disabilities Act and California's Unruh Civil Rights Act, which carries statutory penalties of $4,000 per violation.
Labcorp did not respond to a request for comment. Lead counsel Noel Francisco, a Jones Day partner who served as solicitor general during President Donald Trump's first administration, declined comment through a firm spokesperson.
Labcorp argues that thousands of class members were unaware of or uninterested in using the kiosks. That means they sustained no injury and lack standing to sue under Article III of the U.S. Constitution, Labcorp says.
The company also asserts that Rule 23(b)(3) of the Federal Rules of Civil Procedure, which authorizes a class only where common questions of law and fact predominate, does not permit a putative class 'saturated with significant numbers of uninjured members.' Sorting out the injured from the uninjured would 'overwhelm any common questions — destroying predominance,' Labcorp says.
If Labcorp's position prevails, 'it will make it a lot harder for people to get into the courthouse door,' said Deepak Gupta, of Gupta Wessler, who represents the blind patients.
In an amicus brief, opens new tab, the AARP and other consumer advocates offer a hypothetical example for support.
What if members of the U.S. National Guard who worked for the same civilian employer were discriminated against when they took leave for training and wanted to bring a class action? (In a footnote, the amici cite four prior cases with such allegations.)
If the Supreme Court changed the rules to require every putative class member to provide proof of injury at the onset of litigation, plaintiffs lawyers would need to get detailed payroll and military records for them all, the amici theorize, plus records from the defendant covering civilian benefits. Then they'd need to hire an expert to review and analyze the data and calculate the individual financial injury for each member of the proposed class.
This would 'frontload an enormous amount of work' properly saved for later damage calculations – after the case has been litigated on the merits, the amici argue.
That result would make it harder and more costly to bring class actions. Or as Gupta's clients put it, opens new tab, such a rule "would eviscerate the operation of the class device" in many instances.
Antitrust watchdogs are also sounding the alarm if the court should rule that classes cannot contain any uninjured members.
Antitrust class actions are different from statutory damages cases, the American Antitrust Institute in an amicus brief, opens new tab points out. That's because antitrust class actions – where plaintiffs typically claim the defendant's anticompetitive behavior distorted the free market – rely on econometric analysis to determine damages for the class as a whole. Similar analysis can be used to identify which members are injured.
As a result, it is 'generally untrue' that including uninjured class members inflates damages or overwhelms common questions in antitrust class actions, the American Antitrust Institute said, urging the court to 'write narrowly' in crafting its decision.
Even some corporate defendants could rue a ban on certifying classes with a signifcant number of uninjured members – at least in some circumstances, cautioned Harvard Law School professor William Rubenstein and New York University Law School professor Arthur Miller in a brief supporting neither party, opens new tab.
'When liability is more likely – crashes, derailments, environmental spills, diesel emissions fraud – defendants often embrace the class mechanism' as a way to provide closure, the professors wrote – and the bigger, the better. Such defendants 'have an interest in maximizing the breadth of the class, lest future litigation seep through the seams of the settlement.'
Still, Labcorp and its allies counter that certifying classes with uninjured members is fundamentally improper, arguing that federal courts have no power to assess their claims 'even if bundled with the claims of those who do have standing.'
Doing so has consequences, Labcorp says. 'For in class actions, certification is often the ballgame. Once a class has been certified, the next step is usually settlement, not trial.'
If a plaintiffs can inflate the size of a class with people who aren't injured, Labcorp says, it can 'drive up potential liability, and thus manufacture leverage to extort a settlement for all members, whether harmed or not.'