February 28, 2019 Practice Points

Sali v. Corona’s Directives on Expert Testimony at the Class Stage

The decision will have a unique impact on class action litigation in the Ninth Circuit.

By Erica Rutner

On November 27, 2018, the Ninth Circuit in Sali v. Corona Reg’l Med. Ctr., 909 F. 3d 999 (9th Cir. 2018) issued an amended opinion which reaffirmed its view that evidence need not be admissible at the class certification stage. In so doing, the Ninth Circuit unequivocally proclaimed that “[i]nadmissibility alone is not a proper basis to reject evidence submitted in support of class certification . . . . The court’s consideration should not be limited to only admissible evidence.” Critically, although the Ninth Circuit observed that a district court should evaluate the admissibility of challenged expert testimony offered in support of class certification under the standard set forth in Daubert, it declared that “admissibility must not be dispositive.” 

Thus, in sharp contrast with the law in many other circuits, the Ninth Circuit permits a district court to base its class certification decision on expert testimony that does not pass muster under Daubert. Indeed, the Ninth Circuit mandates that the district court consider such testimony in reaching a class certification decision. The Ninth Circuit’s decision on expert testimony and Daubert expressly contradicts the decisions of almost every other appellate court to reach the issue, including the Second, Third, Fifth, Sixth, Seventh, and Eleventh Circuits. It also conflicts with Supreme Court dicta in Wal-Mart v. Dukes, wherein the Court referred to the district court’s conclusion that Daubert did not apply at the class certification stage and stated “[w]e doubt that is so.” In fact, even the Eighth Circuit decision in Cox v. Zurn Pex, Inc.—which Sali cited in support of its holding—found that a “tailored” Daubert analysis is appropriate and that the district court rightfully examined the reliability of the expert’s opinion at the class certification stage. Thus, the Ninth Circuit’s view in Sali is undoubtedly unique amongst the circuits that have spoken on the issue.

Given the conviction with which the Ninth Circuit set forth its views, the Sali decision will have a fundamental impact on how class actions are litigated in the Ninth Circuit and practitioners should take note. Expert testimony is often critical to class certification issues and is typically offered to support both classwide liability and damages. Where the expert testimony offered on these issues is deemed inadmissible under Daubert, district courts frequently deny class certification. Thus, practitioners have long focused on whether expert testimony offered in support of class issues meet the strictures of Daubert—developing litigation strategies intended to defend or defeat expert admissibility at the class stage. However, the Sali decision enables plaintiffs in the Ninth Circuit to do an initial end-run around Daubert in getting to the all-important class certification decision. Plaintiffs in the Ninth Circuit are now likely to offer less credible experts in defense of class certification, while defendants will be forced to develop new strategies to overcome this type of evidence at the class stage. And all this means that more class actions are likely to be filed—and certified—in the Ninth Circuit.

Notably, on January 11, 2019, Corona Regional Medical Center filed an extension of time to file its petition for writ of certiorari—indicating that it does intend to seek Supreme Court review of the decision. Given the sharp circuit conflict and the new make-up of the Supreme Court, there is certainly a strong potential that certiorari will be granted and Sali will eventually be overturned.   For now, however, the Sali decision will necessarily impact class action litigation in the Ninth Circuit. Defendants can no longer rest their class action arguments on the inadmissibility of class experts and must instead focus on developing alternative positions, even in the face of dubious expert methodology. Plaintiffs, on the other hand, have more tools at their disposal to develop and defend their bid for class certification, and counsel can expend less resources in doing so. Only time will tell how long this new dynamic might last.
 

Erica Rutner is a partner at Lash & Goldberg LLP in Miami, Florida.


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