Businesses have long argued that federal courts cannot grant class certification when members of the proposed class would lack Article III standing to bring their own claims. The Supreme Court is now poised to provide an answer. Last Friday, the Court granted review in Laboratory Corp. of America v. Davis to decide “[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.” (Rule 23(b)(3) is the provision that governs certification of virtually all damages classes.) This issue is critical to class action litigation, and one that the Supreme Court left open in TransUnion v. Ramirez and Spokeo, Inc. v. Robins. (We, along with our colleague Andy Pincus and others at the firm, represented the petitioner in Spokeo and filed an amicus brief in TransUnion.)
In TransUnion, the Supreme Court reinforced Spokeo’s core holding that, to have Article III standing to seek damages, it is not enough for a plaintiff to assert a statutory violation; the plaintiff also must show a concrete harm resulting from that alleged violation. The TransUnion Court went on to hold that absent class members, too, must each satisfy Article III’s standing requirement to recover damages.
But because of the procedural posture of that case (an appeal from a final judgment), the TransUnion Court did not expressly reach how putative class members’ standing (or lack thereof) should be addressed at the class-certification stage. This issue did not come up in Spokeo either, as that case had come up to the Court at the pleadings stage, well before any class-certification proceedings.
In reserving the class-certification question, the Court in TransUnion pointed in a footnote to an Eleventh Circuit decision, Cordoba v. DIRECTV, LLC, that reversed certification of a damages class because individualized issues surrounding class members’ Article III standing “posed a powerful problem under Rule 23(b)(3)’s predominance factor.” (Our firm represented the defendant in Cordoba; Andy Pincus argued the appeal.) As we’ve previously discussed, that footnote is a pretty strong hint that the principles in TransUnion and Spokeo should make it harder for plaintiffs to certify damages classes where individualized inquiries are needed to weed out those with standing from those without—at least when more than a trivial number of class members lack standing.
Not all lower courts, however, have taken that hint. The Labcorp case is a prime example. Labcorp is one of the nation’s largest providers of diagnostic tests; likely many of our readers have gone to one of their facilities for a blood test or similar service. After Labcorp introduced the option of checking in for appointments at its centers via a self-service kiosk (in addition to the pre-existing front-desk and online options), a group of plaintiffs who are legally blind brought a putative class action. The plaintiffs asserted that the kiosks discriminated against them, and sought certification of a nationwide injunctive relief class for claims under the Americans with Disabilities Act and other federal laws, and of a California damages subclass for a derivative claim under California’s Unruh Act, which provides for statutory damages of $4,000 per violation.
According to Labcorp’s petition seeking Supreme Court review, record evidence showed that many blind patients were either unaware of the kiosks or uninterested in using them, because they were served just as well by the front-desk option—in which the same technology in the kiosks is used by front desk staff. Nonetheless, the plaintiffs sought certification of broad classes of all legally blind patients who merely had an appointment at a Labcorp location with a kiosk—regardless of whether the patient knew of the kiosk’s presence or wanted to use it.
The district court certified both the injunctive-relief and damages classes and the Ninth Circuit affirmed. Labcorp petitioned the Supreme Court for review, and the Court agreed to hear the case, but it rewrote the question presented to limit it to the propriety of certifying a damages class.
The case is likely to be decided during the Court’s current term (by the end of June).