Posts Tagged ‘daubert’

The October 2015 United States Supreme Court Term is already well underway, and there are several cases on the docket that could have a significant impact on class action practice.  Here is a summary of the three cases this term that I think could have the biggest impact on class action practice going forward:

Campbell-Ewald Co. v. Gomez, No. 14-857

The Campbell-Ewald case addresses the tactic known as “picking-off” named plaintiffs in class actions, and deals with the question whether an offer of judgment that would provide a named plaintiff complete relief is sufficient to moot the plaintiffs’ claim, even if it is not accepted.  The case follows the Court’s 2013 decision in Genesis Healthcare v. Symczyk, where the majority opinion assumed, without deciding, that an offer of judgment had mooted the named plaintiffs’ claim in an FLSA collective action, based on a finding that the issue had been waived below.

Oral argument in Campbell-Ewald was held in October.  Justices Alito, Scalia, and Chief Justice Roberts all displayed open hostility to the plaintiffs’ position that she should be allowed to litigate the case even after the defendant had offered everything she hoped to achieve for herself in the case.  Despite these views, however, it remains to be seen whether a majority of the court will ultimately hold that any unaccepted offer of settlement is sufficient to actually moot the plaintiffs’ claim under Article III, or whether the decision will fall short of reaching that sweeping question.  Some of the questions posed by likely swing voter, Justice Kennedy, suggest that he agrees with his conservative colleagues that a litigant who has been offered full relief should not be permitted to proceed with the case, but other questions reflected a reluctance to treat an unaccepted offer the same as a judgment.  This suggests that the Court’s ultimate decision could turn on a more technical procedural analysis rather than the broader and more abstract question of whether a controversy can ever exist following an offer of full relief, but of course the questions posed during oral argument do not always signal the Court’s ultimate analysis.

When the Supreme Court originally granted cert in Campbell-Ewald, there appeared to be a split in the circuits on this question, but since then, the circuits have become aligned with the view that an unaccepted offer in a proposed class action does not moot the named plaintiffs’ claims.  A contrary ruling by the Supreme Court would revive a powerful tool that defendants could wield to effectively preempt many types of consumer class actions, especially those seeking statutory damages for small individual amounts.

Spokeo, Inc. v. Robins, No. 13-1339

Spokeo has been hailed as a case with the potential to end “no-injury” class actions.  Ostensibly at issue is whether Congress has the power to enact legislation that gives a private plaintiff the right to seek statutory damages despite the lack of any concrete injury.  A decision could therefore potentially have a significant impact on class actions brought under a variety of federal statutes that provide a private right of action to recover statutory damages upon proof of a violation, one that goes beyond the Fair Credit Reporting Act, the statute at issue in Spokeo.

However, during today’s oral argument, much of the questioning focused on whether the named plaintiff had, in fact, suffered an injury by alleging that false information had been published on his credit report, and the extent to which Congress actually intended to limit the private right of action under the Fair Credit Reporting Act to persons who could show an actual injury.  It seems likely that the outcome of the case will turn on the majority’s view of those two factors.

Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146

Tyson Foods offers the Court an opportunity to further elaborate on the concept of “trial by formula”, discussed in Justice Scalia’s 2011 opinion in Wal-Mart Stores, Inc. v. Dukes, as well as the standards governing expert testimony at the class certification phase, which the Court touched upon but did not  ultimately address directly in both Wal-Mart and again in the 2013 decision in Comcast Corp. v. Behrend.  It also raises the question whether it is ever proper to certify a damages class that includes individual plaintiffs that undisputedly lack any injury or damages.

Specifically, the Court granted certiorari on the following two questions:

I. Whether differences among individual class members may be ignored and a class action certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act, where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample; and

II. Whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the Fair Labor Standards Act, when the class contains hundreds of members who were not injured and have no legal right to any damages.

Oral argument in Tyson Foods is set for next Monday, November 10.

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In case you missed it, the BakerHostetler class action defense team published its second annual Year-End Review of Class Actions last month.  The 2013 issue was expertly edited by Dustin Dow of our Cleveland office, and features contributions from other members of the firm’s class action defense team across the country.  The 54-page report has a thorough recap of the key class action developments in the U.S. Supreme Court as well as other federal and state courts, summaries of key developments in various substantive areas of law in which class actions are prominent, and a preview of what to look for in 2014.  Click the link above to download a copy.

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2013 was a memorable year for class actions.  I’ve assembled my top 10 most significant developments below.  There were almost enough U.S. Supreme Court decisions to fill up the entire list, but my number 1 development was still a pair of lower court decisions that may also become the story of the year in 2014.

10. Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013) – Not a class action decision per se, but likely to have significant repercussions on the development of international class action law.  Extraterritorial effect of the Alien Tort Statute is significantly limited.

9. Clapper v. Amnesty Intern. USA, 133 S. Ct. 1138 (2013) – Another non-class action decision already having a significant impact on the question of standing in data privacy class actions.

8. Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013) – Class Arbitration is not completely dead, but there’s a blueprint for how to kill it.

7. American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013)- Arbitration continues to reign supreme, even under the “federal law of arbitrability”

6. Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) – Can class actions be defeated simply by picking off the representatives one at a time?  That’s for the circuits to decide.

5. Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, 133 S.Ct. 1184 (2013) – Supreme Court holds that materiality is a common question and that proof of materiality is not a prerequisite to class certification, but raises questions about the continued viability of the Basic fraud on the market presumption in securities cases.

4. Certiorari granted in Halliburton v. Erica P. John Fund, No 13-317 – That didn’t take long.  On the heels of , Supreme Court agrees to revisit the Basic fraud on the market presumption.

3. Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013) – Limited holding = damages theory has to match theory of liability.  Expansive holding = no class certification unless the question of damages is susceptible to common, classwide proof.  Which holding will be embraced by the lower courts?

2. Standard Fire Ins. Co. v Knowles, 133 S. Ct. 1345 (2013) – First ever CAFA decision limits representative plaintiffs’ ability to bind class prior to class certification.  Can’t avoid federal jurisdiction by stipulating to no more than $4,999,999.99 in damages on behalf of a putative class.

1. Moldy Washing Machine Decisions – Limited Comcast holding prevails so far.  Two lower courts reaffirm class certification orders after remand in light of Comcast.  Issue certification is alive and well, for the moment, but stay tuned to see if the Court takes up these cases in 2014.

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I’m very excited to be speaking at a Strafford Publications CLE webinar tomorrow entitled: Statistics in Class Action Litigation: Admissibility, Expert Witnesses and Impact of Comcast v. Behrend.   The program is scheduled for June 18, 2013 at  1:00pm-2:30pm EDT.  This is the third iteration of this presentation, which has been updated to offer insights in light of the Supreme Court’s Comcast decision earlier this term.  Brian Troyer of Thompson Hine in Cleveland and Justin Hopson and Rick Preston from Hitachi Consulting in Denver will be co-presenting.  Below is a synopsis of the program.  Click here for more information and to register:

Class certification standards have become more rigorous, and the skillful use of statistical evidence is an important part of class actions. Effectively employing or challenging statistics can make a difference in winning or losing a class certification motion.

Statistical evidence is introduced through expert witness testimony, and Daubert challenges may be an effective strategy. This raises the issue of the scope of the court’s inquiry into the merits at the class certification stage.

The 2011 Wal-Mart v. Dukes Supreme Court ruling underscored the prominent role of statistical evidence in assessing the merits at the certification stage. The Court’s recent Comcast v. Behrend ruling reinforces Dukes regarding merits assessments at class certification, thus impacting the continued role of statistical evidence.

Listen as our experienced panel examines statistical evidence in certification proceedings, the impact of Comcast v. Behrend and related case law, and best practices for using statistics and cross-examining witnesses.


  1. Role of statistical evidence in support of class certification
  2. Expert testimony and Daubert analysis at class certification stage
  3. Impact of Comcast v. Berhrend and Wal-Mart v. Dukes
  4. Science of statistics and cross-examining the statistics witness


The panel will review these and other key questions:

  • What is the impact of Comcast and Dukes upon the use of statistical analysis at class certification?
  • What strategies can counsel use to effectively cross-examine statistics witnesses?
  • What types of statistics can be introduced and what are the proper ways to utilize statistics?

Following the speaker presentations, you’ll have an opportunity to get answers to your specific questions during the interactive Q&A.

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The Class Actions, Mass Torts and Derivative Suits Subcommittee of the Colorado Bar Association, now ably chaired by my BakerHostetler partner, Casie Collignon, held its first CLE luncheon of the year this past Friday.  The program, United States Supreme Court vs. Class Actions in 2013, featured excellent commentary about the Supreme Court’s 2013 class action decisions by The Honorable Marcia Krieger, Chief Judge, U.S. District Court for the District of Colorado, Seth Katz of Burg Simpson, and John Fitzpatrick of Wheeler Trigg O’Donnell.  Here are just a few of the many insightful observations made by each of the speakers:

Judge Krieger opened by observing that none of the cases this term have been a surprise from the standpoint of what a trial court judge would have expected given existing law.  Amgen was predictable because the question of materiality in a securities fraud case is unquestionably a common issue, so it is not surprising that it is a question for trial, not a prerequisite for class certification.  Standard Fire can be viewed as a straightforward application of agency law: a plaintiff cannot bind a class of people that he or she doesn’t yet represent.  Comcast exemplifies the importance of examining the plaintiffs’ theory of liability and the relationship to the theory of loss.  Damages are not the same as loss.  The theory by which the plaintiff establishes loss determines the measure of damages.

When asked to identify any trends that she has been seeing in class actions recently, Judge Krieger identified issue certification as a key trend.  She has been seeing more situations where the factual issues may be individualized but there are common legal issues that can be resolved classwide.  She noted that she has been inclined to grant partial certification limited to the common legal issue(s) in that situation.

From the plaintiffs’ perspective, Katz agreed that the outcome of Standard Fire was not surprising, and he went as far as to say that the outcome was correct, noting that plaintiffs’ attorneys shouldn’t be afraid of the federal courts.  Although the holding of Amgen was favorable to plaintiffs, Katz noted an issue that should be of great concern to plaintiffs, and that is the commentary from the conservative wing of the court suggesting that they might be willing to revisit the fraud-on-the-market presumption adopted in Basic Inc. v. Levinson.  Katz sees the potential of a 4-4 split on that issue, with Chief Justice Roberts being the deciding vote.  He predicts market studies being commissioned by both sides over the coming years to demonstrate or disprove the continued efficiency of the markets.

Comcast, Katz noted, caused a collective sigh of relief in the plaintiffs’ bar because it does not go as far as many would have feared by requiring Daubert hearings at the class certification phase.  He noted that one positive impact for plaintiffs arising from the “death of Eisen” (the rejection in decisions like Wal-Mart and Comcast of the idea that merits questions were off-limits at the class certification phase) is that it gives plaintiffs’ counsel an opportunity to obtain merits discovery much earlier in a case than was allowed previously.  On the other hand, Katz expressed fear about the possibility that the Court is trying to raise the bar for plaintiffs with a subtle change in the language about what common proof is necessary on the issue of damages.  Where earlier decisions required that damages be “susceptible to classwide proof,” the Comcast majority phrased the standard as requiring the plaintiff to “prove classwide damages.”  Katz predicts that defendants will argue that this means damages must be uniform, as opposed to simply being susceptible to formulaic calculation.  He noted, however, that the few lower courts that have interpreted Comcast so far have rejected a broad application of the decision.

Fitzpatrick combined philosophical commentary about the evolution of class actions with some practical tips for defense lawyers.  Standard Fire, he argued, is proof that judicial hellholes still exist.  He pointed to Amgen as an example of the dangers of accepting conventional wisdom, pointing out that the outcome in that case might well have been different if the defendants had stipulated to the existence of an efficient market.

Comcast, Fitzpatrick said, provides an opportunity for defendants to prevail at the class certification stage by discrediting a plaintiffs’ expert.  Focus not just on the opinions themselves, he suggested, but also on 1) the existence of bias; 2) the expert’s credentials, and 3) flaws in the methodology.  Scour the country for transcripts about the plaintiffs’ experts.  Look at misstatements and exaggerations in the expert’s CV.  Make sure you find and read all of their prior statements in books, media, and transcripts.  Just as important, Fitzpatrick reminded defense practitioners, is the make sure to prepare your own experts for class certification.

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The United States Supreme Court issued its decision in Comcast Corp. v. Behrend, No. 11-864 today.  In a 5-4 decision, the Court held that the class of cable subscribers had been improperly certified.  Justice Scalia, writing for the majority, reasoned that the expert testimony offered by the plaintiff to show that antitrust damages were capable of class-wide proof addressed alleged damages that did not logically flow from the plaintiff’s theory of class-wide liability.  The majority held that the trial court had erred by refusing to consider questions concerning the expert testimony on damages that might overlap with the “merits,” while the Third Circuit had erred by accepting the plaintiffs’ contention that it had a class-wide theory of damages through expert testimony without actually scrutinizing the factual basis for that contention:

The Court of Appeals simply concluded that respondents “provided a method to measure and quantify damages on a classwide basis,” finding it unnecessary to decide “whether the methodology [was] a just and reasonable inference or speculative.” 655 F. 3d, at 206.  Under that logic, at the class-certification stage any method of measurement is acceptable so long as it can be applied classwide, no matter how arbitrary the measurements may be.  Such a proposition would reduce Rule 23(b)(3)’s predominance requirement to a nullity.

The dissenting Justices would have dismissed the writ of certiorari as having been improvidently granted.  The dissent’s criticism of the majority’s holding has more to do with the procedural posture of the case and the methodology used by the majority in reaching its factual conclusions than with the legal class certification concepts underlying the majority’s reasoning.  In particular, the dissent faulted the majority for having changed the issue on review after the conclusion of briefing and took issue with the majority’s analysis of the factual basis for the expert’s opinions.

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I’m pleased to announce that the BakerHostetler Class Action Defense Team has just released its 2012 Year-end Review of Class Actions, a joint project with the firm’s Employment Class Actions, Antitrust, and Data Privacy practice teams.  See below for a synopsis of the project.  Click the link above to access a copy of the report itself:

We are pleased to share with you the BakerHostetler 2012 Year-end Review of Class Actions, which offers a summary of some of the key developments in class action litigation during the past year. Class action litigation continues to persist in all areas of civil litigation despite the Supreme Court’s 2011 decisions in AT&T Mobility v. Concepcion and in Wal-Mart Stores, Inc. v. Dukes, which were seen by many commentators as marking the beginning of the end of class actions as we know them. But while the Supreme Court’s 2011 decisions have had a significant impact on class action litigation, they have not brought about its demise and are not likely to do so anytime soon. In the last two years, we’ve seen landmark decisions and the addition of important judicial gloss to those decisions. 2013 will be no different as the Supreme Court is set to weigh in on a series of key cases this spring.

We hope you find this Review a useful tool as you move forward into the new year. This comprehensive analysis of last year’s developments in class action procedure and jurisdiction, as well as developments by subject matter will hopefully provide context and insight as you look ahead to 2013’s expected trends in class action law, including the proliferation of privacy class action litigation and class action litigation relating to the LIBOR rate-fixing scandal.

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