Although the class action bar in general is eagerly awaiting the Supreme Court argument in Comcast Corp. v. Behrend (No. 11-864)—which will be argued November 5th—antitrust practitioners in particular have a keen interest in the case. The issue presented is whether a district court may certify a class action without first resolving whether an expert witness’s testimony that the case can be tried on a class-wide basis passes muster under Daubert, the standard for admissibility at trial.
The Supreme Court left this issue open in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011). In that case, an enormous wage-and-hour class action, the district court had declined to address the defendant’s Daubert objection to the plaintiff’s expert at the class-certification stage. The Supreme Court expressed “doubt” concerning the district court’s conclusion that “Daubert d[oes] not apply to expert testimony at the certification stage,” but did not definitively reach the issue. Antitrust practitioners have been especially interested in this issue because virtually all antitrust class actions feature dueling expert testimony on whether and to what extent the damages allegedly suffered by the putative classes are susceptible to common proof on a class-wide basis.
The importance of expert economic analysis to class certification in antitrust cases is beyond doubt. Courts frequently wade into expert regression models to determine whether the plaintiffs’ analysis “mask[s] important differences between products and purchasers” that make class certification inappropriate (or at least render the proposed class overbroad). In re Graphics Processing Units Antitrust Litig., 253 F.R.D. 478, 494 (N.D. Cal. 2008); see also, e.g., In re Plastics Additives Antitrust Litig., 2010 WL 3431837, at *15-*16 (E.D. Pa. 2010); Reed v. Advocate Health Care, 268 F.R.D. 573, 591-592 (N.D. Ill. 2009). If the fight over class certification “is often the whole ball game” (Hartford Accident & Indem. Co v. Beaver, 466 F.3d 1289, 1294 (11th Cir. 2006)), the fight over the plaintiff’s economic model is the first eight-and-a-half innings.
Yet courts remain uncertain about precisely what level of scrutiny applies to expert testimony proffered at the class-certification stage. For example, the district court in Dukes thought that the Daubert standard—which governs admissibility at trial—was inapplicable. Other courts have recognized that the reliability concerns that drive the Daubert standard apply with equal force at class certification. And even in jurisdictions that recognize that expert testimony must be closely scrutinized at the class-certification stage, judges will disagree as to what that means. For example, in In re Intel Corp Microprocessor Antitrust Litigation, No. 1:05-cv-00485 (D. Del.), the court-appointed special master in an antitrust case concluded that the plaintiff’s expert lacked credibility—only to have the presiding judge decide that an additional hearing must be convened and more evidence considered in order to probe the reliability of the plaintiff’s economic model. The Supreme Court’s decision should bring some much needed clarity on this important question.
Our colleague Andy Pincus notes that in Comcast, the Supreme Court should follow its earlier suggestion in Dukes that the Daubert rule should apply to evidence presented at the class certification stage. As Law360 quotes him: (subscription required):
In some sense, it seems pretty obvious to me to say, “How could you have a situation where a judge makes this decision and ignores whether or not the plaintiffs’ evidence is going to pass the Daubert test and get to trial, and it turns out none of the evidence is admissible?”