Wednesday, March 27, 2013

SCOTUS Decision in Comcast Corp. v. Behrend

Today the Supreme Court decided Comcast Corp. v. Behrend (No. 11-864), a case challenging a Third Circuit decision affirming certification of an antitrust class action. For our earlier coverage, see here and here. By a 5-to-4 vote, the Court concluded that the class action did not satisfy Rule 23(b)(3). Justice Scalia writes the majority opinion. Here’s an excerpt [Slip Op. 6-7]:

Respondents’ class action was improperly certified under Rule 23(b)(3). By refusing to entertain arguments against respondents’ damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination, the Court of Appeals ran afoul of our precedents requiring precisely that inquiry. And it is clear that, under the proper standard for evaluating certification, respondents’ model falls far short of establishing that damages are capable of measurement on a classwide basis. Without presenting another methodology, respondents cannot show Rule 23(b)(3) predominance: Questions of individual damage calculations will inevitably overwhelm questions common to the class.

The dissenting opinion is co-authored by Justices Ginsburg and Breyer, and joined by Sotomayor and Kagan. Among other things, the dissenters argue that case should have been DIG’ed—that the writ of certiorari should have been dismissed as improvidently granted. [See Dissenting Op. 1-2] They note that the Supreme Court had reformulated the question presented when granting certiorari, but that “our reformulated question was inapt” given Comcast’s failure to preserve certain issues.Turning to Rule 23, the dissenting opinion states:

While the Court’s decision to review the merits of the District Court’s certification order is both unwise and unfair to respondents, the opinion breaks no new ground on the standard for certifying a class action under Federal Rule of Civil Procedure 23(b)(3). In particular, the decision should not be read to require, as a prerequisite to certification, that damages attributable to a classwide injury be measurable “‘on a class-wide basis.’” See ante, at 2–3 (acknowledging Court’s dependence on the absence of contest on the matter in this case); Tr. of Oral Arg. 41. To gain class-action certification under Rule 23(b)(3), the named plaintiff must demonstrate, and the District Court must find, “that the questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance requirement is meant to “tes[t] whether proposed classes are sufficiently cohesive to warrant adjudication by representation,” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623 (1997), but it scarcely demands commonality as to all questions. See 7AA C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §1778, p. 121 (3d ed. 2005) (hereinafter Wright, Miller, & Kane). In particular, when adjudication of questions of liability common to the class will achieve economies of time and expense, the predominance standard is generally satisfied even if damages are not provable in the aggregate. See Advisory Committee’s 1966 Notes on Fed. Rule Civ. Proc. 23, 28 U. S. C. App., p. 141 (“[A] fraud perpetrated on numerous persons by the use of similar misrepresentations may be an appealing situation for a class action, and it may remain so despite the need, if liability is found, for separate determination of the damages suffered by individuals within the class.”); 7AA Wright, Miller, & Kane §1781, at 235–237. Recognition that individual damages calculations do not preclude class certification under Rule 23(b)(3) is well nigh universal. 

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