By Andrew J. Trask, Senior Counsel in Shook Hardy & Bacon L.L.P.’s Los Angeles office.

On April 29, the U.S. Supreme Court will hear argument in Laboratory Corp. of America Holdings v. Davis, No. 24-304, on appeal from the Ninth Circuit. The case has captured the attention of the class-action defense bar because the Court will address the viability of class actions that include uninjured members.

The Labcorp case

In 2020, several blind individuals filed a putative class action against Labcorp, a leading provider of laboratory services, alleging that the company’s use of touchscreen kiosks for self-service check-in violates the Americans with Disabilities Act (ADA). They claimed that because the kiosks are not accessible to the blind, blind and other visually impaired individuals must seek the assistance of a sighted person and divulge personal medical information in a nonconfidential setting in order to register.

When the district court considered whether to certify a class that “could be north of 100,000 people,” however, evidence showed that few class members felt inconvenienced or experienced any harm. 1 Nonetheless, the court certified the class, stating “a district court is not precluded from certifying a class even if plaintiffs may have to prove individualized damages at trial.” 2 The court said it could “bifurcate” the case into liability and damages phases and “create a claims process” to “validate individualized” injury claims. 3

The Ninth Circuit affirmed, stating that the fact “some potential class members may not have been injured does not defeat commonality” because Federal Rule of Civil Procedure 23(b) permits “certification of a class that potentially includes more than a de minimis number of uninjured class members.” 4

Labcorp petitioned for certiorari, which the Supreme Court granted to decide “[w]hether a federal court may certify a class action pursuant to [Rule] 23(b)(3) when some members of the proposed class lack any Article III injury.” 5

The debate over including uninjured class members

Davis presents the Court with an opportunity to resolve a circuit split as to whether a class may be certified where a significant number of class members have not been harmed. That issue has been the subject of at least three federal appellate cases prior to Davis: In re Asacol Antitrust Litigation, 6 In re Rail Freight Fuel Surcharge Antitrust Litigation, 7 and Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods, LLC. 8

In In re Asacol, the plaintiffs filed a putative consumer protection and antitrust class action against a pharmaceutical manufacturer for pulling its ulcerative colitis drug from the market before the patent expired and replacing it with a similar drug that allegedly allowed the manufacturer to maintain exclusivity. Evidence showed, however, that roughly 10% of the class would not have switched to a lower-priced generic alternative, and so were not harmed. The trial court certified the class, ruling the uninjured class members could be excluded by a process to be determined later. The First Circuit reversed because the “need to identify those individuals will predominate and render an adjudication unmanageable” without some “mechanism that can manageably remove uninjured persons from the class in a manner that protects the parties’ rights.” 9

In In re Rail Freight, the plaintiffs alleged four large rail freight companies conspired to fix prices. The district court denied certification because the plaintiff’s regression analysis (introduced as classwide evidence of causation, injury, and damages) showed that at least 2,000 class members suffered no injury from the alleged conspiracy. The D.C. Circuit affirmed because “plaintiffs have proposed no further way—short of full-blown, individual trials—to reduce this number and segregate the uninjured from the truly injured.” 10

Finally, in Olean, tuna purchasers sued suppliers of packaged tuna, alleging (based on criminal guilty pleas) that they had conspired to fix prices. Plaintiffs’ regression model to prove classwide antitrust impact showed that between 6.5% and 28% of the class had not overpaid for tuna, but the trial court still certified a class. The Ninth Circuit, sitting en banc, held that “such issues would have to be addressed at the damages stage,” but “there is no per se rule that a district court is precluded from certifying a class if plaintiffs may have to prove individualized damages at trial.” 11

So at least two federal circuits have held that a court may not certify a class if some members are uninjured. Olean, by contrast, treated the question as a merits inquiry that could be decided after trial.

The upcoming argument

The U.S. Supreme Court has expressed a strong interest in the question of whether uninjured individuals can take advantage of the class-action device. That interest motivated Justice Kavanaugh’s opinion in TransUnion LLC v. Ramirez, 12 and much of the majority’s reasoning in Tyson Foods, Inc. v. Bouaphakeo. 13 Both cases focused on the need to establish standing for each class member, and the allowable methods of proof for doing so at certification.

Plaintiffs’ counsel often take advantage of the ambiguity surrounding injury in class actions to certify classes that maximize the number of potentially uninjured members in an effort to maximize the potential fees they may collect. In addition, as Labcorp and numerous amici (including WLF) pointed out, the larger the potential liability from the class action, the greater the pressure on the defendant to settle after certification rather than risk a significant verdict at trial. If the justices focus their questioning on the mechanisms by which plaintiffs can prove injury, and the evidence allowed for doing so, they may share the same concerns as class-action defendants.

Notes

  1. Brief for Petitioner, at 2, Davis v. Lab. Corp. of Am. Holdings, No. 24-304 (U.S. filed Mar. 5, 2025).
  2. Davis v. Lab. Corp. of Am. Holdings, 2022 WL 22855520, at *9 (C.D. Cal. June 13, 2022) (quoting Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods, LLC, 31 F.4th 651, 669 (9th Cir. 2022)), aff’d, 2024 WL 489288 (9th Cir. Feb. 8, 2024), cert. granted in part, 2025 WL 288305 (U.S. Jan. 24, 2025).
  3. Id.
  4. Davis, 2024 WL 489288, at *2 n.1 (citing Olean, 31 F.4th at 668-69).
  5. Davis, 2025 WL 288305, at *1.
  6. 907 F.3d 42 (1st Cir. 2018).
  7. 934 F.3d 619 (D.C. Cir. 2019).
  8. 31 F.4th 651 (9th Cir.) (en banc), cert. denied, 143 S. Ct. 424 (2022).
  9. In re Asacol, 907 F.3d at 53–54.
  10. In re Rail Freight, 934 F.3d at 625 (cleaned up).
  11. Olean, 31 F.4th at 681–82.
  12. 594 U.S. 413 (2021).
  13. 577 U.S. 442 (2016).