Could a Circuit Split on Article III Standing and Class Certification Remain Unresolved Due to a Procedural Snafu Before the Supreme Court?
The United States Supreme Court may dismiss a key class action standing case as improvidently granted. The Court granted certiorari in Labcorp v. Davis, No. 24-304, to resolve a longstanding circuit split over the requirements for class action certification.
Federal Rule of Civil Procedure 23 outlines four prerequisites for class certification:
- numerosity
- commonality
- typicality and
- adequacy of class representative.
But federal appellate courts disagree on how these Rule 23 requirements interact with Article III standing under the U.S. Constitution.
This case could redefine the landscape of class action litigation for both defendants and plaintiffs. Since the majority of class actions settle before trial—due to the financial exposure of potential jury awards—class certification often serves as the critical turning point in class litigation.
If each class member must now prove Article III standing at the certification stage, rather than later in discovery, litigants will need to place even greater emphasis on either proving or defeating class certification. However, this potential paradigm shift from the Supreme Court may have to wait for another day if the Court decides to dismiss the case as improvidently granted.
How the Case Came to the Supreme Court
Labcorp, a provider of laboratory diagnostic services, installed mandatory touchscreen kiosks for check-in at its California facilities during the COVID-19 pandemic. A group of blind individuals filed a class action lawsuit under the Americans with Disabilities Act (ADA) and California law, alleging that these kiosks discriminated against blind persons who could not use them.
The district court initially defined the class in May 2022 (later amended in June 2022) to exclude blind individuals who either did not know about or did not want to use the kiosks, reasoning that they were not actually injured. In August 2022, the court broadened the class definition to include all individuals who visited a clinic, regardless of their awareness or intent to use the kiosks.
Labcorp appealed only the May order, arguing that under that definition, not all class members could show they suffered a cognizable injury by intending but not being able to use a kiosk. Labcorp argued that neither the class representative nor the class members had suffered a cognizable injury and thus lacked Article III standing, which it claims should be considered at the class certification stage.
On appeal, the Ninth Circuit held that a showing of Article III standing for all class members is not required at the class certification stage.
Article III Standing Requirements
Article III of the U.S. Constitution limits federal courts to their properly judicial role, requiring plaintiffs to show:
- an injury in fact
- that is fairly traceable to the defendant’s allegedly unlawful conduct and
- that is likely to be redressed by the requested relief.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992). The burden is on the party invoking federal court jurisdiction to prove each element of standing with sufficient, admissible evidence. Id. at 561.
Labcorp argued that the plaintiffs failed to show a common injury in fact necessary for the commonality prerequisite for class certification. To establish injury in fact, a plaintiff must demonstrate an invasion of a legally protected interest that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id. at 560. A “particularized” injury “must affect the plaintiff in a personal and individual way.” Id. at 560 n.1.
The Circuit Split
Labcorp contends that Rule 23’s “commonality” requirement means that every class member must have Article III standing—i.e., a shared injury.
Federal circuits are split on whether standing must be established for all class members at the certification stage:
Strict Standing Requirement. The Second and Eight Circuits deny certification if any class members lack Article III standing. These courts echo Labcorp’s argument that common questions of law and fact require proof of a common injury, which in turn implicates Article III standing for class certification.
- Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006): “[N]o class may be certified that contains members lacking Article III standing.”
- 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.”
Flexible Approach. The First, Third, Fifth, Seventh, Ninth, and Tenth Circuits allow certification if the class representative has standing, even if some class members are uninjured, as long as the number of uninjured members is de minimis.
This flexible approach recognizes that post-class certification discovery can be an appropriate time to test whether certain class members actually share in the claims, facts, and law common across the class.
- In re Nexium Antitrust Litig., 777 F.3d 9, 25 (1st Cir. 2015): “We think that a certified class may include a de minimis number of potentially uninjured parties.”
- Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 362, 369 (3d Cir. 2015): Finding Article III standing for class certification “so long as a named class representative has standing.”
- Mims v. Stewart Title Guar. Co., 590 F.3d 298, 308 (5th Cir. 2009): “Class certification is not precluded simply because a class may include persons who have not been injured by the defendant’s conduct.”
- Kohen v. Pac. Inv. Mgmt. 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[.]”
- Olean Wholesale Grocery Coop. Inc. v. Bumble Bee Foods, 31 F.4th 651, 668–69 (9th Cir. 2022): “[W]e 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.”
- DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1198 (10th Cir. 2010): Holding “only named plaintiffs in a class action seeking prospective injunctive relief must demonstrate standing” because “Rule 23’s certification requirements neither require all class members to suffer harm or threat of immediate harm nor Named Plaintiffs to prove class members have suffered such harm.”
The Ninth Circuit in Labcorp allowed class certification despite it being unclear whether all class members satisfied Article III, stating that Labcorp’s argument about uninjured class members “does not defeat commonality at this time.” Davis v. Lab’y Corp. of Am. Holdings, 2024 WL 489288, at *2 n.1 (9th Cir. Feb. 8, 2024) (citing Olean, 31 F.4th 651).
The Supreme Court granted certiorari on the following question:
Whether 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.
Oral Argument and Prospect of Dismissal
At the Supreme Court oral argument in May, most questions from the justices did not focus on the merits of Article III standing at the class certification stage. That said, several justices appeared to favor the plaintiffs’ position in certifying the class despite standing issues. But the case now appears likely to be dismissed as improvidently granted (DIG).
The Supreme Court can dismiss a case as improvidently granted at any point before issuing a decision. Although the Court rarely explains why, a DIG can occur for various reasons. The most common DIG is when, after certiorari is granted, the court discovers that the case is not a suitable vehicle to resolve the presented question. This can happen if the facts or procedural posture have changed.
Other less common DIGs occur when the Court cannot reach a consensus or it thinks it was “persuaded . . . to grant certiorari on [one] issue, however, petitioners chose to rely on a different argument in their merits briefing.” Visa v. Osborn, 580 U.S. 993, 993 (216) (cleaned up).
In Labcorp, several justices noted a procedural issue: Labcorp appealed the May 2022 class definition, which was later superseded by the August 2022 definition. However, the Ninth Circuit’s opinion focused on the outdated May definition. Justices Amy Coney Barrett and Sonia Sotomayor questioned whether the Supreme Court should even address the operative August definition, given that it was not appealed and the time to do so has passed under Rule 23(f) and Ninth Circuit procedures. Justice Sotomayor pointed out that LabCorp was “asking [the Court] to opine on the May 9 order that’s been superseded by [the August 2022] one.”
Justices Clarence Thomas, Elana Kagan and Neil Gorsuch joined Justices Sotomayor and Barrett in expressing concern over whether the Supreme Court should even address the operative August class definition given that it was not appealed. Instead, those justices implied they would send the case back to the lower courts to let them consider whether Labcorp could even challenge that definition at this point.
That said, the few questions on the merits of the appeal suggested that lack of Article III standing for some class members should not defeat initial class certification. Several justices—Ketanji Brown Jackson, Kagan, Gorsuch, and Sotomayor—proposed a “fluid” approach to class certification, allowing courts to sort out injured from uninjured members as the case progresses. Id. at 42. Justice Gorsuch noted that Rule 23 requires courts to “separate the wheat from the chaff.” Id. at 56. That is why class action litigation over the last 70 years has always taken a fluid approach to nail down individualized damages after a class has been certified based on finding “a common question that predominates over others.” Id. at 94.
Chief Justice John Roberts and Justice Brett Kavanaugh offered at least some sympathy to Labcorp’s position. Both recognized the practical reality of class action litigation—or the “elephant in the room,” according to Chief Justice Roberts—was that once a class action gets past class certification, “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.” Id. at 138.
In other words, Chief Justice Roberts and Justice Kavanaugh were both concerned with the disadvantaged position of defendants in class action lawsuits who may be forced to settle unmeritorious claims with uninjured class members simply because they got past class certification. While sympathetic to Labcorp’s concerns, however, neither justice proposed a solution to the procedural hurdles identified by their colleagues.
With many justices expressing doubts about whether Labcorp is the right case to resolve the circuit split, the Supreme Court may dismiss the writ of certiorari as improvidently granted. But even if the Court does reach the merits, it seems likely to uphold the position that class certification under Rule 23 does not require every class member to demonstrate Article III standing at the certification stage.
Key Takeaway
Due to procedural complications, the Supreme Court’s decision in Labcorp v. Davis may not resolve the circuit split over Article III standing for class certification. For now, the debate over whether all class members must have Article III standing at the certification stage remains unsettled.
Please contact Patrick Judd or any member of the Phelps Litigation team if you have questions or need advice or guidance.
How the Case Came to the Supreme Court
Labcorp, a provider of laboratory diagnostic services, installed mandatory touchscreen kiosks for check-in at its California facilities during the COVID-19 pandemic. A group of blind individuals filed a class action lawsuit under the Americans with Disabilities Act (ADA) and California law, alleging that these kiosks discriminated against blind persons who could not use them.
The district court initially defined the class in May 2022 (later amended in June 2022) to exclude blind individuals who either did not know about or did not want to use the kiosks, reasoning that they were not actually injured. In August 2022, the court broadened the class definition to include all individuals who visited a clinic, regardless of their awareness or intent to use the kiosks.
Labcorp appealed only the May order, arguing that under that definition, not all class members could show they suffered a cognizable injury by intending but not being able to use a kiosk. Labcorp argued that neither the class representative nor the class members had suffered a cognizable injury and thus lacked Article III standing, which it claims should be considered at the class certification stage.
On appeal, the Ninth Circuit held that a showing of Article III standing for all class members is not required at the class certification stage.
Article III Standing Requirements
Article III of the U.S. Constitution limits federal courts to their properly judicial role, requiring plaintiffs to show:
- an injury in fact
- that is fairly traceable to the defendant’s allegedly unlawful conduct and
- that is likely to be redressed by the requested relief.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992). The burden is on the party invoking federal court jurisdiction to prove each element of standing with sufficient, admissible evidence. Id. at 561.
Labcorp argued that the plaintiffs failed to show a common injury in fact necessary for the commonality prerequisite for class certification. To establish injury in fact, a plaintiff must demonstrate an invasion of a legally protected interest that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id. at 560. A “particularized” injury “must affect the plaintiff in a personal and individual way.” Id. at 560 n.1.
The Circuit Split
Labcorp contends that Rule 23’s “commonality” requirement means that every class member must have Article III standing—i.e., a shared injury.
Federal circuits are split on whether standing must be established for all class members at the certification stage:
Strict Standing Requirement. The Second and Eight Circuits deny certification if any class members lack Article III standing. These courts echo Labcorp’s argument that common questions of law and fact require proof of a common injury, which in turn implicates Article III standing for class certification.
- Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006): “[N]o class may be certified that contains members lacking Article III standing.”
- 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.”
Flexible Approach. The First, Third, Fifth, Seventh, Ninth, and Tenth Circuits allow certification if the class representative has standing, even if some class members are uninjured, as long as the number of uninjured members is de minimis.
This flexible approach recognizes that post-class certification discovery can be an appropriate time to test whether certain class members actually share in the claims, facts, and law common across the class.
- In re Nexium Antitrust Litig., 777 F.3d 9, 25 (1st Cir. 2015): “We think that a certified class may include a de minimis number of potentially uninjured parties.”
- Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 362, 369 (3d Cir. 2015): Finding Article III standing for class certification “so long as a named class representative has standing.”
- Mims v. Stewart Title Guar. Co., 590 F.3d 298, 308 (5th Cir. 2009): “Class certification is not precluded simply because a class may include persons who have not been injured by the defendant’s conduct.”
- Kohen v. Pac. Inv. Mgmt. 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[.]”
- Olean Wholesale Grocery Coop. Inc. v. Bumble Bee Foods, 31 F.4th 651, 668–69 (9th Cir. 2022): “[W]e 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.”
- DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1198 (10th Cir. 2010): Holding “only named plaintiffs in a class action seeking prospective injunctive relief must demonstrate standing” because “Rule 23’s certification requirements neither require all class members to suffer harm or threat of immediate harm nor Named Plaintiffs to prove class members have suffered such harm.”
The Ninth Circuit in Labcorp allowed class certification despite it being unclear whether all class members satisfied Article III, stating that Labcorp’s argument about uninjured class members “does not defeat commonality at this time.” Davis v. Lab’y Corp. of Am. Holdings, 2024 WL 489288, at *2 n.1 (9th Cir. Feb. 8, 2024) (citing Olean, 31 F.4th 651).
The Supreme Court granted certiorari on the following question:
Whether 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.
Oral Argument and Prospect of Dismissal
At the Supreme Court oral argument in May, most questions from the justices did not focus on the merits of Article III standing at the class certification stage. That said, several justices appeared to favor the plaintiffs’ position in certifying the class despite standing issues. But the case now appears likely to be dismissed as improvidently granted (DIG).
The Supreme Court can dismiss a case as improvidently granted at any point before issuing a decision. Although the Court rarely explains why, a DIG can occur for various reasons. The most common DIG is when, after certiorari is granted, the court discovers that the case is not a suitable vehicle to resolve the presented question. This can happen if the facts or procedural posture have changed.
Other less common DIGs occur when the Court cannot reach a consensus or it thinks it was “persuaded . . . to grant certiorari on [one] issue, however, petitioners chose to rely on a different argument in their merits briefing.” Visa v. Osborn, 580 U.S. 993, 993 (216) (cleaned up).
In Labcorp, several justices noted a procedural issue: Labcorp appealed the May 2022 class definition, which was later superseded by the August 2022 definition. However, the Ninth Circuit’s opinion focused on the outdated May definition. Justices Amy Coney Barrett and Sonia Sotomayor questioned whether the Supreme Court should even address the operative August definition, given that it was not appealed and the time to do so has passed under Rule 23(f) and Ninth Circuit procedures. Justice Sotomayor pointed out that LabCorp was “asking [the Court] to opine on the May 9 order that’s been superseded by [the August 2022] one.”
Justices Clarence Thomas, Elana Kagan and Neil Gorsuch joined Justices Sotomayor and Barrett in expressing concern over whether the Supreme Court should even address the operative August class definition given that it was not appealed. Instead, those justices implied they would send the case back to the lower courts to let them consider whether Labcorp could even challenge that definition at this point.
That said, the few questions on the merits of the appeal suggested that lack of Article III standing for some class members should not defeat initial class certification. Several justices—Ketanji Brown Jackson, Kagan, Gorsuch, and Sotomayor—proposed a “fluid” approach to class certification, allowing courts to sort out injured from uninjured members as the case progresses. Id. at 42. Justice Gorsuch noted that Rule 23 requires courts to “separate the wheat from the chaff.” Id. at 56. That is why class action litigation over the last 70 years has always taken a fluid approach to nail down individualized damages after a class has been certified based on finding “a common question that predominates over others.” Id. at 94.
Chief Justice John Roberts and Justice Brett Kavanaugh offered at least some sympathy to Labcorp’s position. Both recognized the practical reality of class action litigation—or the “elephant in the room,” according to Chief Justice Roberts—was that once a class action gets past class certification, “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.” Id. at 138.
In other words, Chief Justice Roberts and Justice Kavanaugh were both concerned with the disadvantaged position of defendants in class action lawsuits who may be forced to settle unmeritorious claims with uninjured class members simply because they got past class certification. While sympathetic to Labcorp’s concerns, however, neither justice proposed a solution to the procedural hurdles identified by their colleagues.
With many justices expressing doubts about whether Labcorp is the right case to resolve the circuit split, the Supreme Court may dismiss the writ of certiorari as improvidently granted. But even if the Court does reach the merits, it seems likely to uphold the position that class certification under Rule 23 does not require every class member to demonstrate Article III standing at the certification stage.
Key Takeaway
Due to procedural complications, the Supreme Court’s decision in Labcorp v. Davis may not resolve the circuit split over Article III standing for class certification. For now, the debate over whether all class members must have Article III standing at the certification stage remains unsettled.
Please contact Patrick Judd or any member of the Phelps Litigation team if you have questions or need advice or guidance.
