The recent US Supreme Court decision to dismiss Laboratory Corp. of America Holdings v. Davis as “improvidently granted” leaves unresolved a significant issue in the realm of class action litigation. The dismissal by an 8-1 vote did not address the key question of whether federal courts can certify damages classes under Rule 23 that include both injured and uninjured class members. This continues to create an unclear legal landscape for class action practices.
Justice Brett Kavanaugh, the sole dissenter, expressed dissatisfaction with the court’s decision to sidestep the substantive legal issue. His dissent underscores concerns shared by conservative justices and highlights potential economic repercussions. Kavanaugh argues that without enforcing Article III rigor on Rule 23’s predominance requirement, class action liability could expand, potentially affecting business operations nationwide.
The underlying case against LabCorp revolved around accessibility issues at its diagnostic facilities. It presented a scenario where potential class members, including legally blind individuals in California, could seek substantial damages. The district court and the Ninth Circuit previously allowed class certification despite uninjured members being part of the class, increasing potential liability exponentially.
Kavanaugh’s dissent further criticized the majority’s procedural handling of the case, particularly for avoiding engaging with what he termed the “insubstantial” mootness argument raised by the plaintiffs. On the substantive side, Kavanaugh emphasized that a class comprising both injured and uninjured members does not meet the predominance requirement of shared legal and factual questions.
The decision also leaves intact a circuit split regarding certifying such classes. The Ninth and Eleventh Circuits may permit certification under Rule 23(b)(3) even with potentially uninjured members, contrary to the stance of the Second, Fourth, and Eighth Circuits, which requires all members to have standing.
Kavanaugh warned about the overbroad class certification’s economic implications, stating it coerces businesses into large settlements, leading to increased operational costs. These costs trickle down to consumers, affecting prices and wage structures, thus broadening the implications of this unresolved legal issue. For businesses operating nationwide, the lack of uniformity across circuits creates additional strategic challenges, as pointed out by countless defense attorneys who had urged the Supreme Court to clarify the matter.
While the current dismissal leaves businesses and plaintiffs navigating a fragmented legal framework, legal communities are hopeful for a future, procedurally ripe case that could offer the clarity and uniformity sought in class certification standards.
For further information, the full text of the dissented case, Laboratory Corp. of America Holdings v. Davis, is available.