Information and Commentary on Class Action Cases Affecting Employers

Employment Class Action Blog

Home | Employment Class Action Blog

On June 25, 2012 the U.S. Supreme Court agreed to decide &ldquo;[w]hether a district court may certify a class action without resolving whether the . . . class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.&rdquo; <a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2012/06/Proceeding-Order.pdf">See Court&rsquo;s Proceedings and Orders</a>. This grant of certiorari will provide the justices with a platform to more closely examine how far a lower court must go in resolving &ldquo;merits&rdquo; issues at the class certification stage. The Background The case, Comcast Corporation, et al. v. Behrend, et al., No. 11-864, arose from an action brought by Philadelphia cable subscribers alleging that Comcast Corporation (&ldquo;Comcast&rdquo;) monopolized Philadelphia&rsquo;s cable market and excluded competition in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. &sect;&sect; 1-2, The district court certified the class under rule 23(b)(3) after finding &ldquo;that the element of anti-trust impact is capable of proof at trial through evidence that is common to the class . . ., and that there is a common methodology available to measure and quantify damages on a class-wide basis.&rdquo; The Issues A divided panel of the Third Circuit affirmed on July 11, 2011, despite the U.S. Supreme Court&rsquo;s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011) (<a href="http://www.employmentclassactionreport.com/class-action/supreme-court-reverses-ninth-circuit-in-dukes-v-wal-mart/">extensively covered in this blog on June 20, 2011</a>.) <a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2012/06/The-Issues.pdf">See Behrend v. Comcast Corporation, No. 10-2865, (January 11, 2011)</a>. The Wal-Mart decision involved Title VII gender discrimination claims in the largest employment class action ever certified.&nbsp; The district court in Wal-Mart had certified a class of 1.5 million women pursuant to Rule 23(b)(2). The Third Circuit in Comcast essentially found Wal-Mart inapplicable, declaring: The factual and legal underpinnings of Wal-Mart-which involved a massive discrimination class action and different sections of Rule 23-are clearly distinct from those of this case. Wal-Mart therefore neither guides nor governs the dispute before us.&nbsp; (Emphasis added). Instead, the appellate court followed In re Hydrogen Peroxide Antitrust Litigation, 551 F.3d 305 (3d Cir. 2008), commenting: &ldquo;Although in Hydrogen Peroxide we heightened the inquiry a district court must perform on the issue of class certification, nothing in that opinion indicated that class certification hearings were to become actual trials in which factual disputes are to be resolved.&nbsp; [A] district court may inquire into the merits only insofar as it is &ldquo;necessary&rdquo; to determine whether a class certification requirement is met.&nbsp; *&nbsp; *&nbsp; *&nbsp; Eisen [v. Carlisle &amp; Jacquelin, 417 U.S. 156 (1974)] still precludes further inquiry.&rdquo; So, the appellate court avoided resolving damage issues and instead determined that plaintiffs &ldquo;could prove [their claims] through common evidence at trial. The Third Circuit also declined to apply any Daubert v. Merrill Dow Pharmaceuticals, Inc. analysis of the plaintiff&rsquo;s expert testimony. In Wal-Mart, Justice Antonia Scalia, writing for the majority, observed that the district court &ldquo;concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings&rdquo; but stated &ldquo;we doubt that is so. The Third Circuit addressed the issue in a footnote, stating: [A]lthough the Supreme Court recently hinted that Daubert may apply for evaluating expert testimony at the class certification stage, it need not turn class certification into a mini-trial.&nbsp; Wal-Mart, 131 S. Ct. at 2553-54.&nbsp; We understand the Court&rsquo;s observation to require a district court to evaluate whether an expert is presenting a model which could evolve to become admissible evidence, and not requiring a district court to determine if a model is perfect at the certification stage.&nbsp; This is consistent with our jurisprudence which requires that at class certification stage, we evaluate expert models to determine whether the theory of proof is plausible. Plainly, the Comcast appeal can be a vehicle for the justices to elaborate on the extent of merits-based review that is necessary after Wal-Mart and to what extent Daubert will apply to expert opinions and testimony at the class certification stage.&nbsp; These are issues that cut across all types of class claims, whether antitrust, employment or consumer. The Bottom Line: The Court&rsquo;s grant of certiorari in Comcast positions the justices to analyze and define key Rule 23 certification issues even if those issues also are relevant to the merits of the plaintiff&rsquo;s claims.&nbsp; The court could specifically inform the lower courts on Daubert&rsquo;s application at certification and what the applicable standards will be.

Comcast Corporation Appeal Will Permit Justices to Examine Class Certification issues Post-Wal-Mart v. Dukes