While statistical evidence has long been held to be probative on the issue of potential discrimination, it can also be tricky. Questions often abound regarding the collection of data used for statistical comparisons, the methodology used and the treatment of results. A recent decision from the Ninth Circuit holds that a district court cannot ignore these questions when deciding whether to certify a class but must actually resolve them when completing the requisite “rigorous” analysis.

In Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods, LLC, Case No. 19-56514 (9th Cir., Apr. 6, 2021), the plaintiffs brought an antitrust case involving alleged price fixing in the canned tuna business. When the plaintiffs moved the court to certify a class of proposed purchasers of those products, the parties presented conflicting expert statistical testimony.

While the issues involved were complex, at its core the question came down to the percentage of class members who actually suffered any claimed injury. The plaintiffs’ expert testified that only about 6 percent of the proposed class members would not have suffered any injury. The defense expert, by contrast, testified that at least 28 percent had suffered no alleged injury. The district court noted the difference and stated that the defendants’ arguments were “serious and could be persuasive to a finder of fact,” but certified the case anyway because, it said, the plaintiffs had shown that they were “capable of proving impact” in that they could show that all but a small fraction of the proposed class members had suffered a claimed injury.

The defendants appealed under Rule 23(f), and the Ninth Circuit reversed. It found that the district court abused its discretion by failing to resolve this fact issue before certifying the class under Rule 23(b)(3).

Importantly, the court distinguished representative claims under the FLSA, which may in some respects be decided under different rules (including not being subject to Rule 23). The court also found that representative evidence could be used to establish predominance, but only if appropriate and reliable. In this instance, the debate on the number of persons with no injuries, the court found, had to be resolved to determine whether “predominance” existed. If, as the defendants asserted, over a quarter of the proposed class members had suffered no injury, then there was more than a de minimis number and the case could not be certified. The court found that the plaintiffs had a duty to establish predominance by a preponderance of the evidence and had to prove that all the plaintiffs (except possibly a de minimis number of them) had suffered harm. It therefore remanded the case to the district court to make fact determinations on that issue.

Class actions are expensive and put undue pressure on defendants to settle. The Olean case took the right approach in ensuring that a class action for which the satisfaction of Rule 23(b)(3) was questionable would not proceed further.

The bottom line: A district court must resolve factual disputes when determining whether the predominance requirement of Rule 23(b)(3) has been met.