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July 16, 2015 Articles

Expert Evidence at Class Certification and the Role of Daubert

By M. Joseph Winebrenner

Class certification is often the most significant stage of a putative class action. If granted, a plaintiff’s individual claims can be transformed into claims asserted on behalf of hundreds or thousands, subjecting a defendant to substantial additional exposure. On the other hand, if class certification is denied, it can be the death knell of the litigation, as the reduced stakes no longer justify investment by the named plaintiffs or their counsel.

Because of the significance of class certification, parties often invest in expert evidence to support, or oppose, a class-certification bid. For example, expert evidence is frequently offered in the context of antitrust class actions, to determine whether “anti-trust impact” can be established using common proof; in product liability class actions, to determine whether a common design defect exists that predominates over individual issues; and in employment class actions, to determine whether there is a common pattern or practice of discrimination that affects the class as a whole. As the trend of offering—and challenging—expert evidence at the class-certification stage has become more common, the following question has come to a head: Does Daubert apply at the class-certification stage and, if so, to what extent does it apply?

As discussed in more detail below, most courts—including the Supreme Court—have recognized the important role that Daubert plays in the assessment of expert evidence in class-certification proceedings. Yet, some circuit courts have butted heads over the extent to which Daubert must be applied. This article evaluates the current state of the law.

The Class-Certification Standard
Federal Rule of Civil Procedure 23 prescribes the requirements for class certification. Rule 23(a) requires the proponent of class certification to prove four elements: (1) numerosity—that the class is so numerous that joinder of all members is impractical; (2) commonality—that there are questions of law or fact common to the class; (3) typicality—that the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) adequacy—that the representative parties will fairly and adequately protect the interests of the class. Rule 23(b) prescribes additional requirements, the substance of which depends on the type of class action that is sought. In addition to the requirements of Rules 23(a) and 23(b), the proponent of class certification must also propose a class definition in terms that are objectively identifiable—a final requirement known as ascertainability.

The Supreme Court has recognized that these requirements represent more than just a pleading standard. In Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the Court held that “[a] party seeking class certification must affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to prove” that the requirements are satisfied. 131 S. Ct. at 2551 (emphasis added). Moreover, “certification is proper only if ‘the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.’” Id. (emphasis added).

Given these strict requirements, parties both supporting and opposing class certification often rely on—and challenge—expert evidence at the class-certification stage. Given the Supreme Court’s directive that district courts must perform a “rigorous analysis” of proof, the precise role of the Daubert inquiry, as part of the “rigorous analysis,” has become a recurring focus of motion practice in district and circuit courts.

The Role of Daubert at Class Certification
While most courts—including the Supreme Court—agree that Daubert plays an important role at the class-certification stage, there is a split among the circuit courts as to whether Daubert must be applied to its full extent in every putative class action. The following subsections describe the current state of the law in the Supreme Court and in the circuit courts that have addressed the issue.


The Supreme Court: Daubert has a role. Although the Supreme Court has not expressly ruled whether or to what extent Daubert must apply at the class-certification stage, the Court has strongly suggested, in what some courts have characterized as dicta, that Daubert plays at least some role. See Dukes, 131 S. Ct. at 2553–54 (“The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. We doubt that is so. . . .”). Moreover, in Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432–35 (2013), the Court reversed a district court’s class-certification order, concluding that the plaintiffs’ damages model—which was the subject of expert testimony—was insufficiently related to the plaintiffs’ theory of liability; therefore, the requirement of predominance could not be satisfied. Although the Court did not expressly rule on the role of Daubert, the Court’s reasoning closely paralleled the logic of the Daubert “fit” test—requiring that an expert’s proffered testimony “fit” the facts of the case—and, accordingly, further underscores the important role of Daubert at class certification.

The Seventh Circuit: A full Daubert inquiry is required as to critical witnesses. The Seventh Circuit was the first modern circuit court to address the role of Daubert at the class-certification stage, in American Honda Motor Co. v. Allen, 600 F.3d 813 (7th Cir. 2010). There, the plaintiffs alleged that Honda motorcycles had a design defect that caused the front steering assembly to “wobble.” They offered the report of a motorcycle engineer in support of class certification, and Honda moved to strike the report as unreliable under Daubert. Although the district court acknowledged “definite reservations” with the report, it declined to strike it at the class-certification stage and did not perform a complete Daubert analysis. The district court ultimately granted the plaintiffs’ class-certification motion.

The Seventh Circuit reversed, holding that

when an expert’s report or testimony is critical to class certification, as it is here, a district court must conclusively rule on any challenge to the expert’s qualifications or submissions prior to ruling on a class certification motion. That is, the district court must perform a full Daubert analysis before certifying the class if the situation warrants.

600 F.3d at 815–16.

The court further made clear that a cursory dismissal of a Daubert challenge will not suffice. Id. at 816 (“[T]he court must provide more than just conclusory statements of admissibility to show that it adequately performed the Daubert analysis.”).

The Seventh Circuit was given an opportunity to revisit its American Honda ruling two years later in Messner v. NorthShore University Health System, 669 F.3d 802 (7th Cir. 2012), but reaffirmed its rule that a full Daubert analysis must be performed before class certification is decided, even if the district court ultimately denies class certification. 669 F.3d at 812–14.

The Eighth Circuit: A Focused Daubert inquiry is acceptable. The Eighth Circuit parted ways with the Seventh Circuit’s rule in In re Zurn Pex Plumbing Products Liability Litigation, 644 F.3d 604 (8th Cir. 2011). There, the plaintiff homeowners filed a putative class action against a plumbing system manufacturer, alleging that the brass fittings used in its plumbing systems were defective and susceptible to cracking. The plaintiffs moved for class certification and offered multiple experts to support their bid. The defendant moved to strike these experts under Daubert, relying on the American Honda standard, which required a full Daubert analysis as to all critical witnesses.

In considering the defendant’s motions to strike, the district court applied a “focused” Daubert inquiry on the specific issues relevant to class certification and specifically took into account the fact that discovery was ongoing, and not complete. For one of the plaintiffs’ expert witnesses in particular—a statistician who conceded in deposition that he did not and could not perform his usual methodology because he had insufficient data at his disposal—the court’s departure from the American Honda standard proved significant. The district court acknowledged the shortcomings of the witness’s opinions but nevertheless declined to strike them at the class-certification stage because discovery was not yet complete. The court observed that “Dr. Blischke’s analysis was circumscribed by the availability of warranty claims data. . . . [A]s merits discovery unfolds and more information becomes available, Dr. Blischke’s 40 year estimate for the mean time to failure may or may not be admissible.” In re Zurn Pex Plumbing Prods. Liab. Litig., 267 F.R.D. 549, 556 (D. Minn. 2010).

The Eighth Circuit affirmed and, in so doing, parted ways with the Seventh Circuit’s ruling in American Honda. Because of the “preliminary” nature of class certification, the court concluded that a requirement for an “exhaustive and conclusive Daubert inquiry” at the class-certification stage was not appropriate; and in this case, the district court’s “focused” inquiry based on the “available evidence” was not error. 644 F.3d at 614.

Other circuits that have addressed the issue. The Third, Sixth, and Ninth Circuits have also addressed the issue, and all have recognized the important role that Daubert plays at the class-certification stage.

The Third Circuit adopted the American Honda rule in In re Blood Reagents Antitrust Litigation, 783 F.3d 183 (3d Cir. 2015). There, in circumstances similar to those posed in Zurn, the district court recognized shortcomings in the plaintiffs’ expert’s proffered evidence but concluded that it “could evolve to become admissible evidence” at trial and, on that basis, declined to strike the evidence and granted certification. The Third Circuit reversed, holding that “a plaintiff cannot rely on challenged expert testimony, when critical to class certification, to demonstrate conformity with Rule 23 unless the plaintiff also demonstrates, and the trial court finds, that the expert testimony satisfies the standard set out in Daubert.” 783 F.3d at 187. According to the court, this result is compelled by the Supreme Court’s language in the Dukes and Comcast cases: “Expert testimony that is insufficiently reliable to satisfy the Daubert standard cannot ‘prove’ that the Rule 23(a) prerequisites have been met ‘in fact,’ nor can it establish ‘through evidentiary proof’ that Rule 23(b) is satisfied.” Id.

In In re Carpenter, No. 14-0302, 2014 U.S. App. LEXIS 24707 (6th Cir. Sept. 29, 2014), an antitrust matter, the plaintiffs offered expert evidence in support of their class-certification bid, and the defendants challenged that evidence. The district court applied a full Daubert analysis to the witnesses who were critical to the class-certification determination but nevertheless granted the plaintiffs’ motion for class certification. The Sixth Circuit affirmed, approving the district court’s application of Daubert in this context.

The Ninth Circuit also approved the application of Daubert at class certification in Ellis v. Costco Wholesale Corp., 657 F.3d 970 (9th Cir. 2011). There, the parties offered competing experts on the issue of class certification, and the defendant moved to strike the plaintiffs’ experts. The district court applied Daubert but denied the defendant’s motion to strike and granted certification without weighing the competing expert opinions. On appeal, the Ninth Circuit approved the application of Daubert at the class-certification stage but found error in the district court’s refusal to weigh the competing expert opinions. The court held that the Daubert analysis is only a part of the “rigorous analysis” required by the Dukes case. In other words, while a Daubert inquiry may be an essential component of the analysis, it is not the complete analysis; and to the extent expert evidence is deemed admissible, the district court must also act as fact finder and must weigh the evidence and resolve any factual disputes necessary to determine whether the class-certification requirements are in fact met.

Although the Supreme Court has not expressly defined the extent to which a Daubert inquiry is required at the class-certification stage, most courts—including the Supreme Court—recognize that Daubert plays some role. While there is a circuit split over the extent to which Daubert must be applied in every case, the majority of circuit courts that have addressed the issue have recognized that a full Daubert analysis, at least with respect to the expert witnesses who are critical to the certification question, is appropriate. Given the frequent use, and challenge, of expert evidence at the class-certification stage, it is likely this issue will continue to receive attention at the circuit court level, unless and until it is finally resolved by the Supreme Court.

Keywords: mass torts litigation, class action, class certification, Daubert, expert witness

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