In a move that has left the legal and corporate communities seeking clarity, the Supreme Court of the United States issued a one-sentence per curiam decision on June 5, 2025, dismissing the writ of certiorari in Laboratory Corporation of America Holdings v. Davis. The dismissal, categorized as "improvidently granted," effectively cancels the Court’s scheduled review of a critical question regarding class action litigation: whether federal courts may certify a class for damages under Federal Rule of Civil Procedure 23 when that class includes a significant number of members who have suffered no actual injury. This procedural retreat means the Ninth Circuit’s previous ruling stands, at least for the time being, maintaining a status quo that many employers and defense counsel argue unfairly exposes corporations to massive, overinflated liability.
The case of Laboratory Corporation of America Holdings (Labcorp) v. Davis began as a dispute over the accessibility of self-service technology but evolved into a high-stakes battle over the fundamental requirements of Article III standing and class certification. By declining to rule on the merits, the Supreme Court has passed on an opportunity to resolve a growing circuit split that dictates how class actions are handled in different parts of the country. For employers, particularly those operating in California and other litigious jurisdictions, the dismissal represents a missed chance for a "bright-line" rule that could have curtailed "no-injury" class actions.
Background of the Dispute: Kiosks and Accessibility
The litigation originated from Labcorp’s implementation of touchscreen kiosks at its various patient service centers. These kiosks were designed to streamline the check-in process, allowing patients to bypass traditional front-desk queues. However, the kiosks were not equipped with screen-reading technology or tactile interfaces, making them inaccessible to blind or visually impaired patients attempting to use them independently.
Two legally blind individuals, Luke Davis and Julian Vargas, filed a class action lawsuit alleging that these kiosks violated Title III of the Americans with Disabilities Act (ADA) and the California Unruh Civil Rights Act. Labcorp contended that it provided "meaningful access" by ensuring that staff members were available at every location to assist patients with check-ins, essentially performing the same functions as the kiosks.
The core of the legal conflict arose when the district court certified a class that could potentially include more than 100,000 blind individuals. Under the California Unruh Act, a violation of the ADA is automatically considered a violation of state law, carrying a mandatory minimum of $4,000 in statutory damages per incident. Labcorp argued that many individuals in this massive class had never actually attempted to use a kiosk, had no desire to use one, or were perfectly satisfied with the assistance provided by staff, meaning they suffered no "injury-in-fact." Despite these arguments, the Ninth Circuit Court of Appeals affirmed the class certification, prompting Labcorp’s appeal to the nation’s highest court.
The Legal Threshold: Article III Standing and Rule 23
The central question Labcorp presented to the Supreme Court was whether a federal court violates Article III of the Constitution or Rule 23 of the Federal Rules of Civil Procedure by certifying a class where many members lack standing. Article III standing requires a plaintiff to demonstrate a "concrete and particularized" injury. In the 2021 landmark case TransUnion LLC v. Ramirez, the Supreme Court held that "every class member must have Article III standing to recover individual damages."
However, a procedural gray area remains: must this standing be proven at the certification stage, or can a class be certified first, with uninjured members weeded out later during the damages phase? Labcorp and its supporters argued that allowing a class to be certified with uninjured members violates the "predominance" requirement of Rule 23(b)(3), which mandates that questions of law or fact common to class members must predominate over any questions affecting only individual members. If a court must conduct thousands of mini-trials to determine who was actually injured and who was not, Labcorp argued, common questions do not predominate.
Chronology of the Case
The journey of Labcorp v. Davis through the judicial system highlights the complexities of modern class action defense:
- Initial Filing: Davis and Vargas file suit in California, alleging systemic accessibility barriers via Labcorp’s kiosk system.
- District Court Certification: The district court certifies a class of all blind or visually impaired individuals who visited Labcorp locations in California during the class period.
- Interlocutory Appeal: Labcorp seeks an immediate appeal of the certification under Rule 23(f), arguing the class is "fail-safe" and overbroad.
- District Court Clarification: While the appeal is pending, the district court issues a clarifying order regarding the class definition. Labcorp argues this is a minor tweak; plaintiffs later argue it renders the original appeal moot.
- Ninth Circuit Affirmation: The Ninth Circuit upholds the certification, staying in line with its generally plaintiff-friendly interpretation of class standing requirements.
- Supreme Court Grant: In late 2024, the Supreme Court grants certiorari, signaling an intent to resolve the "no-injury" class member issue.
- Dismissal: On June 5, 2025, the Supreme Court dismisses the case as "improvidently granted."
Justice Kavanaugh’s Dissenting View
The dismissal was not unanimous in spirit. Justice Brett Kavanaugh issued a sharp dissent, expressing frustration with the Court’s decision to walk away from the case. Kavanaugh argued that the issue was "straightforward" and that the Ninth Circuit’s approach creates "serious and real-world consequences."
Kavanaugh emphasized that "classes overinflated with uninjured members" create an environment of "blackmail settlements," where corporations are forced to settle meritless claims because the risk of a multi-hundred-million-dollar judgment—even if based on uninjured class members—is too great to take to trial. He noted that Labcorp was facing potential liability of $500 million per year, a figure he suggested was untethered from any actual harm suffered by the vast majority of the 100,000 class members.
The Justice also addressed the plaintiffs’ argument that the case was moot due to the district court’s clarification of the class definition. Kavanaugh dismissed this as "insubstantial," suggesting that the core legal error remained regardless of minor administrative changes to the class description. His dissent serves as a clear signal that at least some members of the Court’s conservative majority are eager to revisit this issue in a future case.
Data and Economic Impact of ADA Class Actions
The implications of the Supreme Court’s silence are best understood through the lens of current litigation trends. According to data tracked by legal analysts at Seyfarth Shaw, ADA Title III federal lawsuit filings have consistently hit record highs over the past decade.
- Volume: Approximately 10,000 to 11,000 ADA Title III lawsuits are filed annually in federal courts.
- Concentration: California remains the epicenter of this litigation, accounting for nearly 50% of all filings. This is largely due to the Unruh Act’s $4,000-per-violation statutory damages, which provides a lucrative incentive for plaintiffs’ firms.
- Settlement Pressures: Research indicates that over 90% of these class actions settle before reaching a trial on the merits. The cost of defending a class action through discovery and certification often exceeds $500,000, creating a strong economic incentive for "nuisance" settlements.
Corporate defendants argue that these costs are ultimately regressive, passed on to consumers in the form of higher prices for healthcare, services, and goods. In the Labcorp context, the potential $500 million liability would represent a significant portion of the company’s operating income, potentially impacting its ability to invest in new diagnostic technologies or maintain service levels.
Broader Implications for Employers and Defendants
The dismissal of the Labcorp case leaves a "circuit split" intact. In the Ninth Circuit (covering California, Washington, Oregon, and Arizona), it remains easier for plaintiffs to certify broad classes that include uninjured members. In contrast, other circuits have signaled a stricter adherence to the principle that uninjured members cannot be part of a certified damages class.
For employers, the immediate takeaways are strategic:
- Challenging Predominance: Even without a Supreme Court mandate, defendants should continue to argue that the presence of uninjured members makes a class uncertifiable because it requires individualized inquiries into each member’s experience.
- Focus on Article III Standing: Following the TransUnion precedent, defendants must aggressively move to exclude any class member who cannot prove a concrete injury before any final judgment is entered.
- Jurisdictional Strategy: Companies may face increased pressure to litigate these issues in more conservative circuits or seek to move cases out of California when possible, though the latter is often difficult under current venue rules.
Conclusion and Future Outlook
While the Supreme Court’s decision to dismiss Labcorp v. Davis is a setback for those seeking to limit class action scope, it is likely a temporary delay rather than a permanent refusal. The "no-injury" class member issue is a fundamental constitutional question that continues to create inconsistent results across the United States.
As Justice Kavanaugh noted, the current state of the law allows for "massive liability" based on "zero injury." Until the Court finds a different vehicle to address this paradox, corporations will continue to navigate a landscape where the size of a class—and the resulting settlement pressure—may have very little to do with the actual harm caused. Legal experts expect a new test case to reach the Court within the next two terms, as defendants seek to turn Kavanaugh’s dissent into a majority opinion. In the interim, the "litigation tax" on American businesses, particularly in the realm of accessibility technology, is expected to persist.
