In Comcast, Supreme Court Reinforces Difficult Standard for Obtaining Class Certification

In its much-anticipated opinion in Comcast Corp. v. Behrend, the United States Supreme Court continued its recent trend of requiring a more demanding standard for plaintiffs seeking class certification. Citing its notable opinion in Wal-Mart Stores, Inc. v. Dukes, the Court made clear that district courts must conduct a rigorous analysis of plaintiffs’ evidence before certifying a proposed class, including addressing questions that ultimately bear on the merits.

In Comcast, the plaintiffs alleged that the cable service provider violated the Sherman Act by entering into unlawful swap agreements with other cable service providers in order to concentrate its operations. The District Court only accepted one of the plaintiffs’ theories of antitrust impact as being susceptible to class-wide proof, but the analysis performed by the plaintiffs’ expert to measure damages assumed all four theories of antitrust injury. The District Court certified the class, and on appeal, Comcast argued that the class had been improperly certified because of an alleged flaw in the expert’s model. The Third Circuit did not consider this argument because it reasoned that examining the merits of the methodology was not appropriate during the class-certification stage.

In a 5-4 opinion authored by Justice Scalia, the Supreme Court reversed, finding that the lower courts had erred because they failed to consider that the plaintiffs’ calculation of damages did not directly connect to the theory of injury, and that permitting such a failure to scrutinize the plaintiffs’ damages model at the class certification stage would “reduce Rule 23(b)(3)’s predominance requirement to a nullity.” The Court began its analysis by reiterating that to meet the predominance requirement, the plaintiffs had to show both that the alleged antitrust injury was capable of proof through evidence that was common to class, and that the resulting damages were measurable on a class-wide basis through the use of a common methodology. As such, plaintiffs’ damages model fell “far short” of establishing that damages were capable of measurement on a class-wide basis and that individual damages calculations would “inevitably overwhelm” questions common to the class.

The impact of the Comcast decision has been immediate. Three days later in Whirlpool Corp. v. Glazer, the Court vacated and remanded a decision of the Sixth Circuit, which had upheld certification of a class of consumers who had sued over allegedly defective washing machines. And in RBS Citizens NA dba Charter One v. Ross, the Court vacated and remanded a decision of the Seventh Circuit upholding the certification of a class of employees alleging violations of Illinois’ minimum wage law. In both instances, the Court instructed the circuit courts to reconsider their rulings in light of Comcast. Although the Court did not address whether a Daubert hearing is required at the class certification stage, as many had anticipated, the Supreme Court’s message in Dukes and Comcast is clear: before class certification will be granted, plaintiffs must not only show that each individual suffered a common injury, but that resulting damages can be proven with a common methodology on a class-wide basis.