Supreme Court Rules That District Court Must Rigorously Review Plaintiffs’ Damages Model at Class Certification Stage

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The Supreme Court this week in Comcast Corp. v. Behrend forcefully reiterated that Rule 23(b)(3) requires the district court to engage in rigorous review to ensure that damages are capable of measurement on a classwide basis, even though making that assessment may require the court to inquire into the merits of the plaintiffs’ claim. Despite the dissent’s attempt to confine Comcast to its particular facts, the Court’s decision raises the hurdle for class certification both in antitrust and other class cases.

Comcast arose out of a claim that Comcast engaged in illegal anticompetitive conduct in the Philadelphia market by “clustering” its operations in that region. The plaintiffs sought to certify a class under Federal Rule of Civil Procedure 23(b)(3), which requires that a court find that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” Plaintiffs had alleged four theories of antitrust injury from Comcast’s conduct, but the court permitted only one of those to proceed. In support of class certification, the plaintiffs’ damages expert provided testimony that calculated damages on the assumption that all four of plaintiffs’ liability theories were valid, including the three that had been rejected by the court. The district court nonetheless found that the plaintiffs had met their burden to show classwide damages that were susceptible to a common method of proof on the ground that plaintiffs’ model could support a classwide damages determination, and the Third Circuit affirmed. The court of appeals reasoned that Comcast’s arguments amounted to an attack on the merits of the expert’s methodology that was premature at the class certification stage.

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