Presenting a live 90-minute webinar with interactive Q&A Opposing Class Certification by Attacking Plaintiffs' Classwide Damages Methods Examining and Preparing to Challenge Damages Methods such as Surveys, Event Studies and Regression Analysis TUESDAY, DECEMBER 20, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Galen D. Bellamy, Partner, Wheeler Trigg O'Donnell , Denver Jeremy M. Creelan, Partner, Jenner & Block , New York Aaron Dolgoff, Vice President, Charles River Associates , Boston The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Predominance: Comcast and the World That Came Before Jeremy Creelan jcreelan@jenner.com December 20, 2016
Pre- Amchem : Increasing Scrutiny of Certification • As class actions used increasingly to bring mass tort claims in 1980s, courts increased scrutiny of certification on predominance and other Rule 23 grounds. For example: – Castano v. Am. Tobacco Co. , 84 F.3d 734, 740 (5th Cir. 1996) (tobacco): “The district court erred in its analysis in two distinct ways. First, it failed to consider how variations in state law affect predominance and superiority. Second, its predominance inquiry did not include consideration of how a trial on the merits would be conducted.” – In re Am. Med. Sys., Inc. , 75 F.3d 1069, 1085 (6th Cir. 1996) (penile implants): “As this case illustrates, the products are different, each plaintiff has a unique complaint, and each receives different information and assurances from his treating physician. Given the absence of evidence that common issues predominate, certification was improper.” – Boughton v. Cotter Corp., 65 F.3d 823 (10 th Cir. 1995) (hazardous emissions from uranium mill) 6
Amchem Prod., Inc. v. Windsor (1997): “Cohesiveness” Test • Purported class action on behalf of all those exposed to defendant’s asbestos • Settlement class – neither party intends to litigate • District Court certified class based on shared experience of asbestos exposure & interest in prompt compensation; held that settlement was fair • 3d Cir. vacated for lack of predominance under Rule 23(b)(3) 7
Amchem Prod., Inc. v. Windsor (1997): “Cohesiveness” Test • Ginsburg for Majority (6) – “The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” – Predominance readily met in consumer or securities fraud as well as antitrust cases – Predominance may be met in mass tort cases arising from common cause or disaster – Fact that all members had been exposed to asbestos was insufficient to meet predominance, as different members were exposed to different products for different amounts of time in different ways, and differences in state law compounded those disparities – Settlement class – lower bar? 8
Amchem Progeny: Predominance Requirement Powerful • Predominance requirement satisfied: – Smilow v. Sw. Bell Mobile Sys., Inc. , 323 F.3d 32, 39 – 40 (1st Cir. 2003) – Gunnells v. Healthplan Servs., Inc. , 348 F.3d 417 (4th Cir. 2003) – In re Visa Check/MasterMoney Antitrust Litig. , 280 F.3d 124 (2d Cir. 2001) • Predominance requirement NOT satisfied: – Danvers Motor Co. v. Ford Motor Co. , 543 F.3d 141, 148 (3d Cir. 2008) – Broussard v. Meineke Disc. Muffler Shops , 155 F.3d 331 (4th Cir. 1998) – Jackson v. Motel 6 Multipurpose, Inc. , 130 F.3d 999 (11th Cir. 1997) 9
Amchem Progeny: Predominance Requirement Unclear • Individualized damages a bar to certification – Randall v. Rolls-Royce Corp. , 637 F.3d 818 (7th Cir. 2011) – Blades v. Monsanto Co. , 400 F.3d 562, 570-71 (8th Cir. 2005) • Individualized damages NOT a bar to certification (majority) – Yokoyama v. Midland Nat’l Life Ins. Co. , 594 F.3d 1087, 1089 (9th Cir. 2010) – In re New Motor Vehicles Canadian Exp. Antitrust Litig. , 522 F.3d 6 (1st Cir. 2008) – Allapattah Servs. v. Exxon Corp. , 333 F.3d 1248, 1261 (11th Cir. 2003) 10
Comcast v. Behrend (2013): “Rigorous Analysis” of Predominance • Purported class action on behalf of 2M Comcast subscribers • Sherman Act claims challenging alleged “clustering” scheme to eliminate competition in Philadelphia area • District Ct rejected 3 of Ps’ 4 theories of anti -competitive impacts; accepted “overbuilder deterrence” theory b/c “capable of measurement on classwide basis” and “capable of classwide proof” • Ps’ expert damages analysis included all 4 impacts; did not isolate “overbuilder” theory 11
Comcast v. Behrend (2013): “Rigorous Analysis” of Predominance • Scalia for Majority (5) – “Rigorous analysis” required at class certification to confirm Ps’ damages case consistent with liability case under FRCP 23(b)(3) – Overlap with merits analysis – Ps’ expert did not tie supra - competitive prices to “overbuilder deterrence” theory damages incapable of measurement on a classwide basis if based on Ps’ expert analysis 12
Comcast v. Behrend (2013): “Rigorous Analysis” of Predominance • Ginsberg for Dissent (4) – Court should dismiss cert. as improvidently granted b/c question presented whether expert evidence admissible at certification – “no new ground” on FRCP 23(b)(3) standards – Class may be certified even if damages not provable in aggregate – Ps’ expert analysis did allow classwide proof of damages because Comcast agreed that Ps’ 3 other theories had no impact on prices 13
Comcast v. Behrend (2013): “Rigorous Analysis” of Predominance • Key Takeaways – Part of pantheon of recent SCOTUS cases shifting merits analyses earlier in life of a case – Lingering difficulties for appeals courts trying to review half-formed factual record from certification stage – Strategic Note: Identify mismatch between Ps’ theory and damages model before class cert. consideration 14
Comcast v. Behrend (2013): “Rigorous Analysis” of Predominance • Questions – Would courts take Scalia at his word? • Or limit Comcast to its facts? • Or limit Comcast to nexus between damages theory and liability theory? – C omcast addressed combined liability-damages class certification: impact on liability-only or damages-only classes? – Was Comcast about reliability of damages analysis or case management or Due Process? 15
T HE E VOLVING I MPACT O F C OMCAST O N P ROPOSED C LASS D AMAGES M ODELS Galen D. Bellamy bellamy@wtotrial.com December 20, 2016 370 Seventeenth Street | Suite 4500 | Denver, Colorado 80202-5647 | P 303.244.1800 | F 303.244.1879 | wtotrial.com
Question 1 Raised by Comcast: How “Rigorous” Must the Analysis Be? Comcast held that courts must consider challenges to damage methodology even if those challenges overlap with the merits. If a court must consider challenges to class damages evidence, does that include Daubert challenges to damages experts? How developed or far along must the damages methodology be to survive challenge? Any proposed model need not include exact calculations. Is the rigorous analysis of classwide damages limited to ensuring that the plaintiffs’ model is consistent with its liability theory? 17
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