SCOTUS Considers Article III Questions with Significant Implications on Class Action Certification

The Supreme Court of the United States (SCOTUS) heard oral argument this week in Labcorp v. Davis (No. 24-304) to determine “[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.” If the Court's answer is “no” or some form of “no”, that would support defense counsel's mechanisms for challenging class certification on the front end of litigation.

There is currently a split among the federal circuit courts on the question. When faced with the issue of how many uninjured persons can be certified within a class without tripping over Article III, courts have taken three general viewpoints. Some circuits hold that Article III bars certification when the class would include any persons who lack standing. Other circuits, viewing the question through Rule 23(b)(3), permit certification if no more than a de minimis portion of the class includes uninjured parties. The third group of circuit courts all but defers the question to post-certification stages of a case, unless it is evident that a “great many” or “large portion” of unnamed class members lack standing.

The Labcorp case comes to SCOTUS out of the Ninth Circuit, one of the handful of circuits that do not impose a material Article III hurdle at the class certification stage. The plaintiffs in the case successfully obtained class certification from the district court for disability discrimination claims, even though there did not seem to be much dispute that the class definition captured an appreciable number of uninjured persons. After the Ninth Circuit affirmed the certification order, Labcorp petitioned and obtained certiorari from SCOTUS, leading to Tuesday’s argument before the Court.

At oral argument, Labcorp principally argued that district courts must address jurisdictional questions of standing (injury) before reaching the merits of a class action—i.e., before certifying a class.  Otherwise, defendants are faced with the prospect of defending a large number of claims by parties who independently lack standing, increasing the scope of potential litigation risk in the case and creating monumental settlement pressure. Courts also would be in a position of entering dispositive orders that are binding on unnamed class members who suffered no injury and therefore had no standing to be included in the first place, in violation of Article III. Alternatively, Petitioner addressed that a class certification encompassing uninjured parties would plague litigation with individualized inquiries as to who was actually injured, contrary to Rule 23(b)(3).  Labcorp argued that the first issue (Article III standing) can typically be addressed by requiring courts to define the class to only include those individuals who have been injured.  But even assuming a class can be redefined to exclude individuals who lack injury, Labcorp argued that a class cannot be certified under Rule 23 unless there is an administrable way to separate non-injured individuals without conducting minitrials as to each.  To do so would present clear ‘predominance’ and ‘commonality’ issues under Rule 23(b)(3).

In contrast, Respondents’ counsel argued that courts need not take up all Article III questions at the class certification stage and specifically that absent class members should not be required to demonstrate their standing until the court acts on them as individuals, typically at the relief phase of the case.  Respondents’ counsel placed particular emphasis in their briefing on existing precedent, in which the Court suggested that “class certification issues” in some cases are “logically antecedent to Article III concerns” and “should be treated first.”

The Solicitor General of the United States also participated in the argument and focused primarily on Rule 23’s certification requirements. Specifically, the government argued that the Rule 23(b) certification analysis encompasses elements of ‘predominance,’ ‘commonality,’ and the like, that cannot be satisfied when the class includes uninjured members. The government firmly pressed that Rule 23 requires class members to share a common injury or else the class action mechanism breaks down.  Therefore, an individual who has not first suffered an injury should not be part of the class. See U.S. Amicus Brief, Mar. 12, 2025 (“Courts should not certify a class under Rule 23(b)(3)—which permits class actions seeking money damages—when some members of the proposed class lack any Article III injury.”).

Many of the Justices, especially from the more liberal side of the Court, confronted the Petitioner’s Article III positions head on. These included challenges regarding the logistical difficulties district courts would face in sorting out broad Article III inquiries at the class certification stage, as compared to current measures that allow standing to be addressed after all class members come before the court at the relief stage. Some Justices also raised procedural concerns as to whether they could even consider Petitioner’s arguments given the procedural posture from which the case was presented from the Ninth Circuit below. These discussions signaled that the Court may defer or limit its ruling on the Article III and Rule 23(b)(3) questions at issue.

The Court’s ultimate resolution of the case is difficult to predict. For now, the key takeaways are that many Justices appear unprepared to impose a strict Article III requirement applicable to unnamed class members at the certification stage, and the Court may even punt some or all of the meatier constitutional issues for a later day. Given that the Court’s prior class action standing opinions—e.g., Spokeo (2016) and TransUnion (2021)—were rendered as split decisions, it would not be surprising to see a similar outcome here.