Supreme Court Watch: Comcast v. Behrend - Examining Expert Evidence In The Class Action Certification Process

The Supreme Court considers the standards for making the necessary showing for certification of a proposed class under Fed. R. Civ. P. 23. In the case, the Court specified its particular interest in whether a trial judge should require a plaintiff’s expert (on damages) to satisfy FRE 702 and the Daubert requirements to resolve whether certification standards, such as commonality among the class members exist. The case may clarify the relationship between Daubert findings of reliability and determinations as to the ultimate merits of the class action, in Comcast v. Behrend (No. 11-864)

Question At Issue

While the Behrend case could have important implications for the application of Fed. R. Civ. P. 23, its impact on evidence law is a bit less well defined. The Court could, as some justices suggested during oral argument, conclude that there is no need to address the issue of presenting expert evidence in class certification determinations. Rather, the Court could find that the trial record reflects that, Comcast waived the issue of expert evidence which is now in contention. This would be a bit ironic if for no other reason that it was the Court, in granting Comcast's petition for a writ of certiorari, the question presented is:

Whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.

Implications For The FRE

If the Court does address the merits of the case, it could have a broad significance for the judge's role under Daubert as gatekeeper, in this case for proffered expert evidence. The basic implication Behrend can have concerns how a trial judge can resolve class action issues that go to the merits of the case, while at the same time using this merits decision to certify the class that will present the plaintiffs' merits case.

Background

Denominated as an antitrust class action brought on behalf of cable customers against Comcast and other cable service providers, the Supreme Court limited its review of the case to a narrowly focused exploration of the implementation of class action procedure under Fed. R. Civ. P. 23. As suggested by one commentator at the time, the case received cert, the grant could have reflected a not-so-hidden agenda to finish what the Court in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. _, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (2011) had started, in limiting the scope of class action litigation.

The basis for the commentator's conclusion was that the case had been “relisted” seven times by the court for a certification petition vote. This led to speculation that the delay in deciding whether to grant cert reflected the difficulty members of the Court who favored taking the case had "in securing the four votes necessary to grant a certiorari petition, which in turn could suggest ... a similarly difficult time finding the five-vote majority necessary to promulgate their favored doctrine as to the proper expert analysis to be undertaken by courts attendant to Rule 23 class certification analysis." This doctrine, purportedly, would serve to severely restrict the application of the standards for certification of a class. See Impact Litigation Journal, "Comcast v. Behrend: U.S. Supreme Court Grants Cert. to Address Application of Daubert to Certification Proceedings," June 27, 2012.

The Litigants

The case arose from allegations that Comcast violated the antitrust laws by entering an arrangement with competitors to trade cable resources so that they could illegally allocate the Philadelphia cable market among themselves. This restrained competition by a process of "anticompetitive clustering." The plaintiff alleged that this approach to the market clustered cable users into single franchise areas that discouraged the entry of other cable provider competition. As a result, cable subscribers suffered from paying higher cable service prices than they would have had real competition existed in the area.

Eastern District of Pennsylvania

Suit was filed in 2003 by plaintiffs as a class of cable customers in the Philadelphia region. To successfully mount this challenge, the plaintiffs needed trial court certification as a class under Fed. R. Civ. P. 23. This process did not resolve easily. The plaintiffs contended that cable customers of the Philadelphia area should form the class, even though this covered cable customers who were subject to different cable charges, depending on the local cable franchise provider. In opposition, Comcast alleged that the conditions in each franchise area were too dissimilar to allow for a class action and would not be able to meet prerequisites for class standing under Rule 23 requirements. After extensive hearings, the U.S. District Court for the Eastern District of Pennsylvania rejected Comcast's position and certified a class in 2007.

Comcast appealed to the Third Circuit but made little headway in dislodging the certification there. Although the Circuit was divided, the majority rejected Comcast’s argument that some members of the plaintiff class could not have suffered injury - that there was no common injury and that facts common to the class would disclose this. Comcast urged the circuit find that the trial judge erred in executing his responsibilities under Fed. R. Civ. P. 23 by not conducting a Daubert hearing into the reliability of the plaintiff's proffered expert evidence concerning the commonality of damages among class members. The circuit noted that if it were to applying that rule Comcast suggested, this was also bring the trial judge to resolve merit issues as well.

Third Circuit

The circuit disagreed, considering the proper standard for evaluation of class certification to involve the trial judge in evaluating "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. 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.” Behrend v. Comcast Corp., 655 F. 3d 182, 204 n.13 (3d Cir. 2011).

Of course, Comcast had disagreed with this understanding. The defendant urged the circuit to reconsider its traditional approach with a change it suggested was signaled by the Supreme Court's recent ruling in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. _, 131 S.Ct. 2541, 2551 (2011). Comcast contended that the Dukes case stood for an approach were the trial judge decides class certification by addressing all the requirements of Fed. R. Civ.P. 23, even if this disposition for certification purposes would also involve reaching the merits issues that the court would later address once it had certified a class to present the merits of the class plaintiff's case.

Presentation Of The Merits Of Comcast's Case

In its merit briefs, Comcast focused on whether the plaintiffs had shown, as is necessary for class certification to occur, that there were common questions predominating among its members. The plaintiff's model for measuring damages was miscast as it confused harm caused by the alleged defendant's market practices, with the harm that was suffered by only by the plaintiffs. Because there were so many franchises involved, Comcast argued that as a practical matter, there was a need for "individualized proof of damages" for each member of the class, and that this burden counseled against certification of the class. This was simply one example of other instances in which the plaintiff failed to produce reliable evidence that "class-wide questions predominate over individual ones" as to make treating the case as a class action inappropriate.

In responding, the plaintiffs had an entirely different focus. One part of its argument was procedural. As Comcast had never requested a Daubert hearing in the courts below, it could not now urge a Daubert failure as an error. The plaintiffs contended that Comcast had precluded an appeal based on Daubert because they had failed to preserve the error. In addition, the plaintiffs argued that at this early stage opf the litigation, at the certification stage, there was no "need" for a "final ruling on the admissibility of the evidence" at the time. To decide otherwise and to require that a plaintiff class "Show that the case is susceptible to awarding damages on a class-wide basis, even though the court had yet to decide to Grant or deny the plaintiffs class certification in Rule 23(b)(3) Cases.

Oral Argument

Oral argument in the case occurred on November 5, 2012. To a considerable degree, the focus of questioning of the parties adhered closely to the major themes mapped out in the briefs. The issues addressed at oral argument included:

  1. Waiver: Several Justices followed up on the argument of the plaintiff that the defendant waived consideration of the Daubert issue because, as Justice Sotomayor noted, "I think you really can’t deny that you never raised the word ‘Daubert’ below until the very end.” Justices Kagan also expressed a similar concern that the defendant had waived the Daubert issue becuase of failing to object below in any effective way. Chief Justice Roberts appeared to recognize the waiver issue, but suggested it could be circumvented by the Supreme Court addressing the merits of the plaintiff's claim about application of Daubert at the class certification stage of proceedings, but then the Court would "send it back" so that the trial court could "determine whether or not the parties adequately preserved" the issue. Justice Alito followed-up by asking “If we were to answer the question presented . . . I take it your answer would be that a district court under those circumstances may not certify a class action; is that right? Plaintiffs conceded that if a Daubert objection were not waived, then the district court could not certify the class without resolving the objection.
  2. Limited Scope: Justice Ginsberg's questioning sought to focus the discussion of the class certification process and that the plaintiff's case was applicable with regard to theories enabling determination of class-wide damages, as specified in the question presented upon the grant of certiorari. The Justice noted, as a practical matter that had the certification been limited strictly to the issue of liability, it was still possible that once this liability is determined, the court can then assess damage amounts not for the class, for each class member "individually." The same type of dichotomy existed with employment discrimination class action cases as it is typical there for a court to bifurcate the trial of liability issues from the issues of damages, so that if liability is found to be class-wide, the damages can still be individually determined for members of the class.
  3. Broad Agreements: The Justices plumbed for the nature of the controversy, noting that at one point there seemed to be wide areas of agreement between the parties on crucial issues. Justice Kagan challenged the parties, noting that there was little difference between the parties as on “the legal standard that was used was exactly the legal standard meant."

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In the meantime, the briefs filed in the case, along with other materials, are available below:

Oral Argument

Merits Briefs

Amicus Curiae Briefs

Certiorari Petition Briefs

Lower Court Ruling and Record

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