Class Actions Brief Blog

In order to have a class certified, the plaintiffs have the burden of proving to the satisfaction of the court, “after a rigorous analysis,” that they comply with Rule 23—that is, that “there are in fact sufficiently numerous parties, common questions of law or fact, etc.”  Wal-Mart Stores Inc. v. Dukes, 564 U.S. 338, 350-51 (2011) (internal quote omitted).  One of the findings required by Rule 23 is that common issues predominate, as discussed in last month’s blog post by Travis Hinman.  Predominance as to damages requires a showing that the members of a proposed class were harmed by the alleged illegal conduct—a showing frequently made by a regression analysis performed by an expert economist, especially in antitrust cases.  In Comcast Corp. v. Behrend, 569 U.S. 27 (2013), the Supreme Court made clear that the obligation to find facts after a “rigorous analysis” applies to expert opinion, and that a court may not refuse “to entertain arguments against [a] damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination.”  Id. at 34.  However, several courts have read the Supreme Court’s decision in Tyson Foods Inc. v. Bouaphakeo, 577 U.S. 442 (2016), as implicitly overruling Comcast, providing an exception when it comes to considering an expert’s opinion.  These decisions have created significant uncertainty as to the plaintiff’s burden at class certification.

In Tyson, the plaintiffs showed predominance in a class and FLSA collective action by relying on their expert’s calculation of an average time spent donning and doffing protective gear to be applied to members of the class—an approach necessitated by the employer’s failure to keep records required by statute.  Tyson noted that the defendant “did not raise a challenge to respondents’ experts’ methodology under Daubert,” and then invoked the summary judgment standard to review the expert’s opinion, stating that “[t]he District Court could have denied class certification on this ground only if it concluded that no reasonable juror could have believed that the employees spent roughly equal time donning and doffing.”  Id. at 459.  Tyson limited its holding to “FLSA actions” and cautioned that “[t]he fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases.”  Id. at 460.

A couple of cases interpret Tyson’s reference to the absence of a Daubert motion to mean that, if defendants fail to file a Daubert motion to disqualify an expert’s opinion, the only remaining task for the court is to determine whether “no reasonable juror” would find the model persuasive, rather than weighing criticism and competing models from the defense and finding facts.  In re: Syngenta AG MIR 162 Corn Litig., 2016 WL 5371856, at *7 (D. Kan. 2016) noted that the defendant, “like the defendant in Tyson Foods, did not raise a Daubert challenge,” and held that, because “a reasonable juror could believe” the expert’s opinion regarding damages, “under Tyson Foods, the Court cannot deny class certification” on that ground.  Similarly, Seaman v. Duke University, 2018 WL 671239, at *9 (M.D.N.C. 2018) cited Tyson for the proposition that “[p]ersuasiveness of the class-wide evidence is, in general, a matter for a jury”—adding, in a footnote that “if no reasonable juror could believe the class-wide evidence, [plaintiff] would lack common proof.… and any arguments that [plaintiff’s] evidence fails to prove some elements of her claim can be addressed at summary judgment or at trial.” In keeping with its reading of Tyson, Seaman certified a class without considering the contrary evidence of the defense expert.

One case has gone even further, citing Tyson for the proposition that the summary judgment standard applies even to the consideration of a Daubert motion itself at the class certification stage.  In Beltran v. InterExchange Inc., 2018 WL 1509258 (D. Col. 2018), the defendants had appealed the magistrate judge’s denial of a motion to exclude the testimony of the plaintiff’s expert regarding an admittedly preliminary damages model offered in support of predominance in an antitrust class action.  The magistrate had determined that where a damages model is “merely incomplete” at class certification, then as long as it is “workable, a District Court can only deny class certification on the basis of” predominance “if it conclude[s] that no reasonable juror could have believed the model and its output.” 2018 WL 526907, at *7 (D. Colo. 2018) (citing Tyson).  The magistrate therefore declined to exclude the incomplete analysis on what it termed “an over-technical application of Daubert.”  Id. at *8.  The district judge affirmed on the same ground, holding that the “Magistrate Judge did not err in applying a relaxed Daubert-like standard to” the expert’s opinion at class certification.  2018 WL 1509258 at *4.  Tyson had prefaced its discussion with the observation that there had not been a Daubert challenge “and, as a result, there is no basis in the record to conclude it was legal error to admit that evidence,” 136 S. Ct. at 1048–49, but neither the magistrate nor the district court in Beltran addressed this point.

Using language similar to Beltran, the In re Restasis Antitrust Litigation, 335 F.R.D. 1 (E.D.N.Y. 2020) court read Tyson’s “no reasonable juror” language as requiring a determination of whether the plaintiffs have “advanced a workable methodology to demonstrate that antitrust injury can be proven on a class-wide basis.”  By contrast, the court in Dzielak v. Whirlpool Corp., 2017 WL 6513347, at *12 (D.N.J. 2017) determined that Tyson’s “no reasonable juror standard” can be stricter than Daubert.  Following a Daubert motion, the court permitted plaintiffs to present two models in support of their motion for class certification.  In ruling on the class certification motion, however, the Whirlpool court determined one model failed the “no reasonable juror” test.  (The court granted class certification based on the other damages model as to one defendant.)

Two Courts of Appeals have addressed the application of Tyson to expert opinions under Rule 23.  In In re Lamictal Direct Purchaser Antitrust Litigation, 957 F.3d 184 (3d. Cir. 2020), the Third Circuit reversed a district court decision that had employed Tyson’s “no reasonable juror” standard, explaining that  “Tyson Foods was discussing representative evidence in the FLSA context, a unique labor situation in which, often due to inadequate record keeping, a representative sample of employees may be the only feasible way to establish liability.” Id. at 191.  The Lamictal court also noted that “the Court in Tyson Foods was asked to decertify a class after the jury had rendered a verdict in favor of the plaintiff class, but finding the jury could have relied on the representative evidence, it declined to do so.” Id. at 192.  In using the Tyson standard, the district court had certified the class without undertaking the necessary “rigorous analysis” by failing to resolve key factual disputes, assess competing evidence and weigh conflicting expert testimony.  957 F.3d at 187–88.

We may soon find out whether the Ninth Circuit will follow the Third or create a Circuit split on this issue.  As noted in last month’s post, the Ninth Circuit addressed the subject of how many uninjured class members are enough to defeat a showing of predominance in Olean Wholesale Grocery Coop. Inc. v. Bumble Bee Foods LLC, 2021 WL 1257845 (9th Cir. Apr. 6, 2021).  That decision also addressed how a trial court is to determine whether plaintiffs have met their burden to show classwide injury—by conducting a “rigorous analysis” in judging the persuasiveness of the evidence presented by both sides, expert analysis included.  Id. at 5. If courts find a statistical model difficult to understand, “it is imperative that qualified individuals explain how the model works, and courts must ensure that it produces reliable information.” Id. at *6 (internal quotes omitted).  Olean specifically held that the “no reasonable jury” standard from Tyson “is cabined to wage-and-hour suits and doesn’t apply” to Rule 23 class actions like the antitrust case before it.  Id. at n.4.  En banc review was granted, vacating the panel opinion, and oral argument was held last month but no decision has yet been issued.