A highly anticipated Supreme Court ruling regarding class certification recently fell a little flat of expectations. While defense attorneys feared the Court’s decision would make it easier for class-actions to attain certification using any evidence at the certification stage, plaintiffs attorneys feared the opposite. They were afraid of the Court going in the other direction and making it more difficult to use expert testimony to justify class certification. In the end the Court’s ruling was so narrow as to justify none of the fears of the two sides.
The matter before the Court involved Comcast and a class action of Comcast table television subscribers who allege that Comcast “clustered” its operations in certain regions (including the Philadelphia area) by acquiring competitors’ cable systems in those areas and then selling the competitors its own cable systems in other regions. This led to Comcast allegedly participating in four different means of stifling competition in its operating regions. One of these practices was using its dominant marketing position to deter others (called “overbuilders”) from opening competing networks in its regions.
At the class certification stage, the plaintiffs presented evidence from an expert witness who used an econometrics model to show how much lower Comcast’s prices would have been without its anticompetitive practices. However, this model showed only the effect of all four anticompetitive practices taken as a whole. The district court, on the other hand, said it would only certify a class of Comcast subscribers pursuing the overbuilder-deterrent theory of antitrust liability. While the district court recognized that the expert’s model did not calculate the damages (if any) from that particular antitrust practices, it nonetheless decided that such an amount could be calculated on a class-wide basis and so decided to certify the class. It ruled that to delve further into the specifics of the plaintiffs’ evidence would be to prematurely determine the merits of the case, a matter the court said is for the trial after the class has been certified. The Third Circuit Court agreed.
When the Supreme Court agreed to review the Third Circuit Court’s ruling, it deviated from the normal proceedings and formulated the question it wanted the parties to address: “Whether a district court may certify a class action without resolving whether the plaintiff has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.” The parties then debated whether the opinions of the plaintiffs’ expert witness were sufficient and whether they were even necessary to grant class certification.
The Supreme Court reversed the Third Circuit Court’s ruling in a 5-4 decision. According to the Supreme Court, Rule 23 (on class certification) must be satisfied. Rule 23 requires sufficient evidence that the class can prove a claim of damages in order to acquire certification. The Supreme Court ruled that this requirement must be met, even if it involves delving into the merits of the case. According to the Supreme Court’s decision, the district court’s ruling to refuse to consider any of the merit’s of the case “flatly contradicts” previous rulings on the matter by the Supreme Court, as well as Rule 23.
Despite the highly anticipated status of this ruling, it turned out to be rather disappointing as a narrow ruling, which applies to the unique context of this particular case. It is unlikely to affect most class action litigation.
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