On interlocutory review, the Sixth Circuit affirmed the district court’s decision even though damages would need to be determined on an individual basis for each class member. The Supreme Court vacated and remanded for further consideration in light of Comcast.
Amgen and Comcast
One month prior to its Comcast decision, the Supreme Court clarified the requirements of Rule 23(b)(3) in Amgen Inc. v. Connecticut Retirement Plans & Trust Funds [PDF]. The Court explained that it is not necessary to prove each element of a claim on a classwide basis, but common questions must predominate over individual ones so that the claims will “prevail or fail in unison.”
Following Amgen, the Supreme Court addressed class certification again in Comcast by reviewing the Third Circuit’s approval of certification for a liability and damages class under Rules 23(a) and 23(b)(3). The class asserted antitrust violations by Comcast. While the plaintiffs raised four different theories of antitrust impact, the district court determined that only one was “capable of class-wide proof.” Nonetheless, the plaintiffs’ expert calculated damages using a model that included all four theories.
The Supreme Court reversed the Third Circuit’s grant of certification. It determined Rule 23(b)(3)’s predominance requirement was not satisfied because the model failed to “measure only those damages attributable” to the certified theory, i.e., it grouped all four theories together. Thus, the plaintiffs “f[ell] far short of establishing that damages [were] capable of measurement on a classwide basis,” and “[q]uestions of individual damage calculations w[ould] inevitably overwhelm questions common to the class.”
Class Certification after Comcast
After Comcast, some concerns arose that class certification could only be obtained if each class member “had the exact same damages,” explains Jocelyn D. Larkin, Berkeley, CA, former cochair of the ABA Section of Litigation’s Class Actions and Derivative Suits Committee. However, the recent Glazer decision concludes liability and damages may still be determined separately under Rule 23.
The Sixth Circuit explained that Amgen and Comcast reinforced its prior class certification decision under Rule 23(b)(3). Applying Amgen, the court explained that common class questions predominated because the evidence as to causation and failure to warn would be the same for all class members.
The appellate courtdistinguished Glazer from Comcast because the class in Glazer was certified only as to liability, whereas the Comcast class was certified as to both liability and damages. The court explained that when liability and damages are bifurcated, Comcast “has limited application.” Specifically, a class may still be certified “under Rule 23(b)(3) when liability questions common to the class predominate over damages questions unique to class members.” Accordingly, the court affirmed certification.
The Seventh Circuit recently came to a similar conclusion, explaining that the significance of Comcast is “in the emphasis that the majority opinion places on the requirement of predominance and on its having to be satisfied by proof presented at the class certification stage rather than deferred to later stages in the litigation.” Butler v. Sears, Roebuck and Co.
Practicing with the Predominance Standard
It appears that “at very best Comcast stands for the proposition that you have to take a close look at predominance,” explains Larkin. However, while the Comcast decision may be limited in application, “the Supreme Court is clearly very, very interested in class actions,” she continues. In seeking class certification post-Comcast, it will “be important to frame the common liability questions in a simple way that makes it clear why a class action device will be an efficient way to litigate issues that affect a whole group of people.”
“Class certification is getting harder, and it behooves lawyers who are bringing class actions who are going to have the burden of having the class certified to think through the Rule 23 requirements very carefully,” explains Louis F. Burke, New York, NY, cochair of the Section of Litigation’s Class Actions and Derivative Suits Committee. Litigants need to “understand that judges are going to put them to a test to go beyond the pleading” and prove compliance with Rule 23, concludes Burke.
Robert T. Denny is a contributing editor for Litigation News.