Laboratory Corporation of America Holdings v. Davis presented a question central to modern class action litigation: whether class certification is permissible under Rule 23(b)(3) when some members of the putative class are uninjured. We previously highlighted the Supreme Court’s decision to hear argument in the case, which had the potential to resolve a widening circuit split on this issue—some courts have held that uninjured class members preclude certification entirely, others ask whether uninjured class members can be identified and excluded without requiring predominance-defeating “mini-trials,” and others (incorrectly, in our view) defer the inquiry until later stages of the case unless a “great many” of the class members are uninjured. Despite its clear interest in resolving this split, the Supreme Court ultimately determined that Laboratory Corporation had too many procedural quirks to reach the question presented, holding in an 8-1 decision that certiorari was “improvidently granted” and dismissing the appeal.
Notwithstanding this result, Laboratory Corporation still provided important guidance for class action litigation, in the following respects.
First, oral argument made clear that all sides of the debate—plaintiffs, defendant, and the United States as amicus—agreed that class certification is inappropriate under Rule 23(b)(3) if the moving party lacks an administratively feasible means of identifying and excluding uninjured class members without requiring individualized mini-trials. This standard follows directly from Rule 23(b)(3)’s predominance requirement, and is already applied in multiple Circuits, particularly following the D.C. Circuit’s influential decision in In re Rail Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619 (D.C. Cir. 2019). It appears likely that any future Supreme Court decision on this issue would, at a minimum, hold that a Rule 23(b)(3) class is inappropriate if identifying and excluding uninjured class members would require individualized mini-trials. That holding, in turn, would have important implications for class action litigation, particularly in the outlier Circuits that currently prefer to defer consideration of injury entirely.
Second, there appears to be some support on the Supreme Court for an even stricter rule. Justice Kavanaugh, writing in dissent, stated that he would have held “that a federal court may not certify a damages class that includes both injured and uninjured members,” full-stop. According to Justice Kavanaugh, “Rule 23 authorizes damages class certification only when common questions of law and fact predominate,” and “[a] damages class consisting of both injured and uninjured members does not meet that requirement.” Justice Kavanaugh also noted the United States’ support for that view during oral argument, with counsel stating “if there are members of a class that aren’t even injured, they can’t share the same injury with the other class members.” Tr. of Oral Arg. at 83. A bright-line rule that damages classes cannot contain uninjured class members would be a powerful tool for class action defendants.
Although the Court declined to address the merits of LabCorp’s appeal, a dismissal does not necessarily indicate that the Court will avoid the question in the future. The Court’s decision to hear the case suggests that it is interested in deciding whether a federal court may certify a damages class containing uninjured class members, and we would expect the Court to look for another opportunity to address this split in the near future.