Page 10 - 2015_0908Litigation

S10 | Tuesday, sepTember 8, 2015 | Litigation
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Class Action Trends
the eighth Circuit Court of appeals had face. that case involved the alleged illegal upheld, and the court explained that “a plain-

previously held that a more limited Daubert agreements between the manufacturers of the tiff cannot establish ascertainability simply by
analysis was required, in the case of Cox v. antidepressant drug wellbutrin Xl and the asserting that class members can be identified
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Zurn Pex (In re Zurn Pex Plumbing Prods. Liab. generic drug companies to delay the entry of using the defendant’s records; the plaintiff
court’s conclusion that “Daubert did not apply Litig.).11 In Zurn, the district court certified a generic versions of wellbutrin into the mar- must also establish that the records are in
to expert testimony at the certification stage class of homeowners who alleged that brass ket. In that case, the court applied a rigorous fact useful for identification purposes, and
of class-action proceedings,” “[w]e doubt this fittings used in the defendant manufacturers’ Daubert analysis to the expert opinions prof- that identification will be administratively fea-
is so.”8 following this dicta from Wal-Mart, as systems were inherently defective, denying fered in opposition to a motion to decertify sible.”20 the seventh Circuit Court of appeals
strengthened by the holding in Comcast, at defendants’ Daubert motion to strike the the class, and then decertified the class. this issued a recent decision that sets up a split
least four circuits have required class certi- expert witness report. on appeal, the Circuit case involves a second hotbed issue that the among the Circuits on the issue of heightened

fication expert opinions that pass some form Court noted that it was defendants who had supreme Court has now agreed to take head ascertainability. In the case of Mullins v. Direct
of Daubert analysis. the third and seventh sought to bifurcate class certification discov- on—the standards to be used in determin- Digital,21 the Circuit Court affirmed the certi-
Circuits have required full Daubert analysis, ery, leading to the limited record available at ing whether class members are identifiable.
fication of a class of consumers alleging fraud
while the eighth and ninth Circuits have that stage of proceedings, and held that the in the marketing of a dietary supplement, after
required a more limited Daubert analysis.
inherently preliminary nature of pretrial evi- Are class Members identifiable?
rejecting the use of a heightened standard of
the seventh Circuit addressed this issue in dentiary and class certification rulings did not ascertainability. this split could be addressed
Am. Honda Motor Co. v. Allen,9 a case where require an exhaustive and conclusive Daubert Walmart and Comcast left the future of the by the supreme Court when it decides the
motorcycle purchasers sued a motorcycle analysis. similarly, the ninth Circuit held in ascertainability standard undecided. after case of Tyson Foods v. Bouaphakeo.22
manufacturer, alleging that a certain motor- 2011 that “in its analysis of Costco’s motions multiple decisions, the third Circuit just
one thing seems clear from recent devel-
cycle had a design defect that prevented the to strike [expert testimony at the class cer- concluded that, at the certification stage, opments—plaintiffs face stricter standards
adequate dampening of “wobble” (side-to-side tification stage], the district court correctly “ascertainability only requires the plaintiff to and higher costs of experts when attempting
oscillation) of the front steering assembly. the applied the evidentiary standard set forth show that class members can be identified.” to certify a class.
u.s. district Court for the northern district in Daubert”).12 the third Circuit Court of the Circuit Court reached this conclusion in
of Illinois granted the plaintiffs’ motion for appeals weighed in on the issue in the 2012 the case of Byrd v. Aaron’s Inc.,15 in which it •••••••••••••••••••••••••••••
class certification pursuant to fed. r. Civ. p. case of In re Blood Reagents Antitrust Litig.13 clarified and adhered to its prior holdings in 1. 131 s. Ct. 2541, 2551, 180 l. ed. 2d 374 (2011).
23(b)(3), despite its expression of reserva- when it considered the case of direct purchas- Carrera v. Bayer,16 Hayes v. Wal-Mart Stores17 2. 133 s. Ct. 1426, 185 l. ed. 2d 515 (2013).
tions about the reliability of the testimony of ers of traditional blood reagents, products and Marcus v. BMW of North America.18 the 3. 2015 u.s. leXIs 3860 (June 8, 2015) (writ of certio-
rari granted).
plaintiff’s expert. the Circuit Court ruled that used to test blood compatibility between eleventh Circuit took a similar approach in 4. 521 u.s. 591 (1997).
5. 521 u.s. at 620.
a full Daubert analysis must be undertaken, donors and recipients, who claimed that two the recently decided case of Karhu v. Vital 6. 509 u.s. 579, 113 s. Ct. 2786, 125 l. ed. 2d 469 (1993).
and the district court had to conclusively rule companies violated federal antitrust law by Pharms.19 In Karhu, the Circuit Court held that 7. 133 s. Ct. at 1436.
on any challenge to the prior to ruling on a conspiring to fix traditional blood reagent plaintiffs have to prove that they will be able 8. Wal-Mart, 131 s. Ct. at 2553-54.
class certification motion. In 2012, after Wal- prices. Judge anthony Joseph scirica opined to determine who purchased the products 9. 600 f.3d 813 (7th Cir. Ill. 2010).
Mart had been decided, the seventh Circuit that the implications of Comcast require that, and were members of the class before class 10. 669 f.3d 802, 812 (7th Cir. 2012).
11. 644 f.3d 604 (8th Cir. minn. 2011).
reiterated this position in the case of Messner in light of the supreme Court’s decision in certification can be granted. that case dealt 12. Ellis v. Costco Wholesale, 657 f.3d 970, 982 (9th Cir. 2011).
v. Northshore Univ. HealthSystem.10 the Cir- Comcast, a court must resolve any Daubert with the false advertising claims of purchasers 13. 783 f.3d 183 (3d Cir. pa. 2015).
cuit Court quoted its prior opinion in Honda, challenges to expert testimony offered to of a dietary supplement. the Circuit Court 14. 2015 u.s. dist. leXIs 84444 (e.d. pa. June 30, 2015).
15. 784 f.3d 154 (3d Cir. 2015).
emphasizing that “when an expert’s report demonstrate conformity with rule 23. accord- found that the purchaser’s proposal to use the 16. 727 f.3d 300 (3d Cir. 2013).
17. 725 f.3d 349 (3d Cir. 2013).
or testimony is ‘critical to class certification,’ ingly, the Circuit Court vacated the grant of advertiser’s “sales data” did not explain how 18. 687 f.3d 583 (3d Cir. 2012).
we have held that a district court must make class certification and remanded for further the data would aid class-member identifica- 19. 2015 u.s. app. leXIs 9576 (11th Cir. fla. June 9, 2015).
a conclusive ruling on any challenge to that proceedings. the recent case of In re Well- tion, and the district court acted within its 20. Karhu, 2015 u.s. app. leXIs 9576, *6-7.
expert’s qualifications or submissions before butrin XL Antitrust Litig.14 demonstrates the discretion by rejecting self-identification via 21. 2015 u.s. app. leXIs 13071 (7th Cir. Ill. July 28, 2015). 22. 2015 u.s. leXIs 3860 (u.s., June 8, 2015) (writ of
it may rule on a motion for class certification.”
depressing reality that class plaintiffs now
affidavit. the denial of class certification was
certiorari granted).

What’s the Point?
Allocation Dilemma
tunity to consider the odds on each of the tiplying the probabilities along each path
key underlying issues, on both liability and by its dollar value, and then summing all
damages, and then to arrive at the “expected the results.
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value” of a case—that is, the probability- the alternate paths can include such « Continued from page S7
as well. they are also used in medicine to weighted average value that corporations issues/uncertainties as whether a disposi- breakdown, using one of the proposed for-
make life and death decisions. thus far, use to make other important business tive motion will be granted, whether punitive mulas set forth by the various courts to
however, most lawyers have not taken the decisions.
damages will be awarded, and whether a arrive at a just allocation. the new Jersey
extra steps of mapping out the complexities to some extent, lawyers have always val- limitations period will be imposed.
and maryland courts seem to have put forth

of their cases using decision trees and care- ued claims based on the strength of their It is worth noting that in a 2002 seventh the most detailed road-maps to enable a
fully considering the probabilities of winning liability arguments and the magnitude of Circuit case, Judge richard posner actually fair resolution of the allocation dilemma.
and losing the many issues they will face damages at stake. decisions regarding set- rejected a class action settlement because •••••••••••••••••••••••••••••
at various stages of a litigation. that said, tlement involved weighing defenses and the trial judge had not done a decision
dta has been around for quite some time in expected verdicts. however, the calculations analysis calculation:“[t]he judge should 1. Health-Chem v. National Union Fire Ins., 148 misc.2d
the legal arena, having been first introduced were rarely explicitly or carefully done. dta have made a greater effort (he made none) 187, 559 n.Y.s.2d 435 (sup. n.Y. 1990).
2. Id. at 190.
to attorneys in the 1970s by marc victor of makes counsel’s detailed thought processes to quantify the net expected value of con- 3. Pfizer v. Stryker, 385 f. supp. 2d 380 (s.d.n.Y. 2005) [lak].
litigation risk analysis, Inc.
transparent and ensures that the overall case tinued litigation to the class, since a settle- 4. 385 f. supp. 2d 386-87. It must be noted that alloca-
for those who do not use dta, the client value is consistent with counsel’s views on ment for less than that value would not be tion is only permitted if the language of the policy gives
the insurer that right. If the policy is silent as to alloca- tion or defense cost sharing, a court will not impose it,
only gets a seat-of-the-pants answer about each of the underlying issues.
adequate.”
even if the result of the litigation is that the claims are
settlement, based on a “gut” feeling from dta involves four steps:
dta has been extremely helpful beyond not covered. see General Star Indemnity Company v.
counsel about the overall case value. Indeed, 1. list the potential pretrial and trial assisting the lawyer and the client in assess- Driven Sports, 14 Cv 3579 [JfB] (e.d.n.Y. 2015). see also
many counsel are afraid to make predictions, uncertainties (issues) that the judge and ing the potential exposure in a case. It has Hester v. Navigators Ins., 917 f. supp. 2d 290, 299 (s.d.n.Y.
fearing that they will suffer consequences jury will resolve during the litigation; define been used effectively to convince the adver- 2013), which held that allocation cannot be arbitrary but rather must be based on evidence of the “reasonable
if their view of the future is proven grossly the possible outcomes of each issue; and sary to accept a settlement, and to persuade amounts expended” on covered claims.
wrong. so, when counsel is pressed for prob- identify “what will happen next” for each a neutral as to the rationale behind one’s 5. Kenai v. Nat’l Union Fire Ins., 136 B.r. 59 (s.d.n.Y. 1992).
abilities, the client often hears 50-50.
outcome of each issue—capturing all this evaluation.
6. Wm. Hall v. Harleysville Insurance Co. of New Jer-
in a decision tree;
In sum, early case analysis, with the use of sey, 2009 wl 3416050 (n.J. super. a.d. 2009) (this is an
But, even 50-50 is an exercise in dta, unpublished opinion available on westlaw).
7. Hanes v. Armed Forces Ins. Exch., 2014 u.s. dist.
albeit a very simplistic one. and, with a little 2. estimate the probability that each out- the decision tree analysis, is the most cost- leXus 106036.
thought and analysis, counsel can provide come on each issue will occur;
effective way to approach a case, rather than 8. Id. at 10636.
a much more valuable answer than simply 3. determine a dollar value for each of merely plowing ahead with the traditional 9. Id.
“the overall chance of winning is 50-50.” the possible paths the case may take; and
serve an answer, then a motion, then settle 10. Federal Realty Investment Trust v. Pacific Ins. Co.,
760 f. supp. 533 (d. md. 1991).
dta provides the attorney with an oppor-
4. Calculate the overall case value by mul-
or try the case.
11. Id. at 537.