Posted in Antitrust Class Actions, Class Action Decisions, rule 23, Supreme Court Decisions, tagged antitrust impact, behrend, breyer, class-wide, classwide, classwide impact, classwide proof, comcast, daubert, expert testimony, expert witness, ginsburg, methodology, predominance, regression, rigorous analysis, scalia, scotus, scrutinize, scrutiny, Supreme Court on March 27, 2013|
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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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Posted in Class Action Decisions, Class Action Fairness Act, Supreme Court Decisions, tagged $4, $5, 000, 1332, 5 million, 999, amount in controversy, breyer, CAFA, class action, Class Action Fairness Act, diversity, knowles, scotus, standard fire, Supreme Court on March 19, 2013|
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The Supreme Court issued its first-ever decision interpreting the Class Action Fairness Act (CAFA) today, and its holding strengthens defendants’ right to a federal forum in class actions.
The question presented in Standard Fire Insurance Co. v. Knowles, No. 11-1450, slip op. (U.S., Mar. 19, 2012) was a simple one: can a plaintiff avoid federal jurisdiction under CAFA by stipulating to less than $5 million in damages on behalf of the putative class? The Court’s unanimous answer was no, and its reasoning is also simple:
Stipulations must be binding . . . [and] a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified.
Slip op. at 3-4.
Does Standard Fire mean the end of any debate about the federal courts as a forum for class actions? Probably not. Justice Breyer’s well-reasoned opinion makes the issue sound like a no-brainer, but this is an issue that had been far from settled in the lower courts. The fact that the Supreme Court had to intervene on this issue is in part a symptom of a lingering antagonism by many lower federal court judges toward diversity jurisdiction. The ruling is unlikely to change the predisposition of some federal judges to look for ways to clear their dockets by remanding diversity cases to the state courts. Although the effectiveness of this particular method for avoiding CAFA jurisdiction is now settled in defendants’ favor, that is not to say that other tactics for avoiding federal jurisdiction in class actions won’t succeed in the future.
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I’ve been meaning to post a link to a new class action-related blog authored by my law partner, Deborah Renner. Deborah is as knowledgeable about class actions as anyone I know, and she’s always up on the latest trends. She has a background that uniquely pairs the practical and academic aspects of class actions, having taught class action law at Fordham Law School in addition to her many years as a class action defense litigator. Deborah is primary editor of the firm’s blog, Class Action Lawsuit Defense, but she also recently launched her own personal blog, Renner on Class Actions, where she offers astute insights and in-depth analysis into a variety of class action issues and trends. Be sure to check it out.
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