For many years, under a widespread interpretation of a 1974 Supreme Court case called Eisen v. Carlisle & Jacquelin, many courts believed that in deciding whether to certify a lawsuit as a class action they were not authorized to look ahead to the suit’s merits, even if the evidence at hand suggested those merits to be fatally flawed. In its landmark decision in Wal-Mart v. Dukes, however, the Court made clear that determining whether the prerequisites for class handling have been satisfied will frequently call on courts to consider and resolve questions that overlap the merits. But the exact application of Dukes has yet to be worked out, and lower courts are generating inconsistent results.
The Court has agreed to take up these questions again in a case called Comcast v. Behrend. The Third Circuit, considering an antitrust case challenging Comcast’s business practices in communities around Philadelphia as anticompetitive, upheld certification despite Comcast’s argument that some members of the plaintiff class could not have suffered injury; in particular, it rejected Comcast’s argument that the judge should subject the views of the plaintiff’s expert on damages to Daubert scrutiny to determine whether those views were based on principles accepted by the relevant scientific community.
Now the Cato Institute has filed an amicus brief (to quote my colleague Ilya Shapiro)
urging the Court to clarify that what it meant in Dukes was that a full inquiry into the reliability and admissibility of expert testimony (a so-called Daubert inquiry) is required at the class-certification stage. A lower standard would obviously prejudice defendants because class certification “magnifies and strengthens the number of unmeritorious claims” and creates “insurmountable pressure on defendants to settle.” But it would also prejudice absent class members because certification based on inadmissible evidence may distort their perception of the likelihood of success and encourage the members to stay in the class. Since all class members who don’t opt out of the class are ultimately bound by a class action judgment, there’s a large potential for harm to these potentially valid claims as well.
For more background on the facts and legal implications of Comcast v. Behrend, see the Philadelphia Inquirer’s coverage, Paul Karlsgodt, and Sean Wajert and, on the related case of Gates v. Rohm & Haas, Andrew Trask.
