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Posts Tagged ‘regression’

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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This is the last of six posts summarizing my notes of the six presentations at the ABA’s 16th Annual Class Actions Institute held in October in Chicago.  For more on this excellent conference, see my October 31, November 5, November 6November 18, and December 3 CAB posts.

This year’s Institute was capped off by a presentation and demonstration entitled: “Preparing Early and Often,” State-of-the-Art Strategies for Managing Class Action Experts.  Andrew J. McGuiness moderated the panel, which consisted of expert economists Dr. Janet S. Netz and Dr. James Langenfeld, attorneys Mary Jane Fait and Laurie A. Novion, and U.S. District Court Judge Gerald E. Rosen.  The panel’s insightful tips were highlighted by vignettes in the form of mock examinations of the two experts. 

Daubert analysis of proposed expert testimony is required at the class certification, a question on which the Supreme Court may shed some light when it rules on Comcast v. Behrend later this term.  At the moment, circuits that require a Daubert analysis include the Fourth, Seventh, Ninth, and Eleventh Circuits.  The Sixth and Eighth Circuits have both adopted a Daubert-lite standard, while the Fifth Circuit has taken a “Daubert Maybe ” or “Daubert I don’t know” approach to the question.

The vignettes illustrated some of the key potential lines of attack on a plaintiff’s or a defendant’s expert’s opinions presented in support of or in opposition to class certification.  They include (but are not limited to): 1) whether the expert relied on a reliable dataset; 2) whether there is a formulaic basis for calculating damages; 3) whether there are any inconsistencies between the defendant’s own transactional data and outside data, such as market research data; 4) whether any individual variation in the data can be explained in a systemic way; and 5) whether a regression analysis or other analytical model is a valid way of evaluating the data or its causal connection to the defendant’s alleged misconduct.

Both the vignettes and the panelists’ observations served to reinforce how important it is for the lawyer to present an expert’s testimony in a way so that the judge understands the evidence.

One key practice tip offered by the panel was to consider using a consulting expert before turning to a testifying expert.  This way, different models or modes of analysis can be tested without fear of tainting the conclusions of the testifying expert or unnecessarily exposing the testifying expert to impeachment or cross-examination. 

However, that does not mean that it is not necessary to make full disclosure to the testifying expert about the material facts and legal issues in the case.  A common frustration that experts have with lawyers is they oftentimes fail to provide a fair and clear picture of the facts or applicable law, leading the expert to an opinion that is at odds with the facts or irrelevant to the issues in the case.  At minimum, this can put the expert in an awkward position and undermine the attorney’s client’s chances for success.  At worst, it can both lead to an adverse decision and cause undeserved and lasting damage to the expert’s professional reputation.

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In preparing for our webinar on the use of statistics in class actions tomorrow, I discovered that the California Supreme Court has granted review in Duran v. U.S. Bank, a case that could have major implications for the future of statistical sampling as common proof in class actions.  See my April 6, 2012 post titled Trial by Formula, Statistical Sampling, and the Right to Due Process for a summary of the Court of Appeal’s decision, which has lost its precedential effect by virtue of the decision to grant review.  The supreme court’s docket for the case  is available here.   Kimberly Kralowec has posted many of the court documents on her blog, The UCL Practitioner.

The folks at the Litigation Impact Journal have noted that the decision to grant review in Duran was foreshadowed by Justice Werdegar’s concurrence in his own majority opinion in the California Supreme Court’s highly publicized decision last month in Brinker Restaurant Corp. v. Superior Court.  In that concurrence, Justice Werdeger argued that “[r]epresentative testimony, surveys, and statistical analysis all are available as tools to render manageable determinations of the extent of liability [in wage and hour cases].”  In Duran, the court will have an opportunity to explore that issue in more detail.

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