WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court heard
oral arguments Nov. 5 on "[w]hether a district court may certify a class action
without resolving whether the plaintiff class has introduced admissible
evidence, including expert testimony, to show that the case is susceptible to
awarding damages on a class-wide basis" (Comcast Corporation, et al. v.
Caroline Behrend, et al., No. 11-864, U.S. Sup.).
Miguel Estrada of Gibson, Dunn & Crutcher in Washington argued that the Third Circuit U.S. Court of
Appeals erred in affirming the certification of a class of approximately 2
million nonbasic cable television customers in the Philadelphia
market on claims that Comcast Corp. worked to establish a monopoly in the Philadelphia market and
then increased prices once it had eliminated competition.
Holding that the assessment of the adequacy of expert
evidence offered in support of class certification is a merits question that
need not be decided in the class certification inquiry is not consistent with
the rule that "questions, whether they be damages or liability, that are common
to the class predominate over those that are individual as to class members,"
"The damages model just does not fit the legal theory [of
liability] that stays in the case" or "the record in this case," Estrada said
in support of Comcast's argument that the Third Circuit erred by dismissing as
premature Comcast's arguments that the customers' damages model did not
"measure damages from the only theory of antitrust impact credited by the
district court, i.e., that Comcast, by engaging in clustering, had
deterred competition from overbuilders."
In response to Justice Elena Kagan's comments that
Comcast waived its argument that the customer's expert report evidence was
inadmissible, Estrada said Comcast objected to the weight and admissibility of
the customers' expert report.
Barry Barnett of Susman Godfrey in Dallas, representing the customers, argued
that Comcast argued "weight and probativeness as opposed to admissibility" and
"never, ever cited Daubert [Daubert v. Merrell Dow Pharms. (509 U.S. 579,
589)]." The class members contended that the Supreme Court should
dismiss the writ as improvidently granted because Comcast raised the issue of
admissibility for the first time in its merits brief after the Supreme Court
Justice Anthony M. Kennedy commented that because the
judge can exclude evidence that he admitted "if it turns out that that doesn't
meet the standard of reliability," conducting a Daubert analysis and
then determining whether evidence is reliable "is just a magic words approach."
Barnett responded, "I submit that it is disrespectful to
a district judge not to object on Daubert grounds and then complain that what
he did was completely unusable in the court."
When asked by Justice Sonia Sotomayor whether Barnett
agreed with a rule that before he certifies a class, a judge must "decide
whether the methods being used are probative and relevant, sufficient to prove
common . . . question of damages," Barnett said that he agreed if "there is a
proper objection made such that the district court is put on notice that he or
she needs to do the work."
Justices Samuel Anthony Alito Jr., Antonin Scalia and
Kagan asked whether there is a difference between determining probative value
and admissibility, and Chief Justice John G. Roberts Jr. commented that "one
option for the Court . . . is to send it back for the court to determine
whether or not the parties adequately preserved that . . . objection."
Justice Kagan mentioned that it appeared that the parties
did not disagree about any legal standards.
"[T]his is a case where it seems to me that except for
the question of how good the expert report is, none of the parties have any
adversarial difference as to the appropriate legal standard. And, you
know, usually we decide cases based on disagreements about law, and here I
can't find one," Justice Kagan said.
In his rebuttal, Estrada said that "a damages model
can[not] stand up to examination on the theory that it is not linked to any
theory of anticompetitive conduct." Comcast argued that the Third Circuit
erred by dismissing as premature Comcast's arguments that the customers'
damages model did not "measure damages from the only theory of antitrust
impact credited by the district court, i.e., that Comcast, by engaging
in clustering, had deterred competition from overbuilders."
Comcast is also represented by Mark A. Perry and Scott P.
Martin of Gibson Dunn, Sheron Korpus of Kasowitz, Benson, Torres & Friedman
in New York and Darryl J. May of Ballard Spahr
The class is also represented by Daniel H. Charest of
Susman Godfrey in Dallas; Samuel D. Heins, Vincent J. Esades and David Woodward
of Heins Mills & Olson in Minneapolis; Anthony J. Bolognese and Joshua H.
Grabar of Bolognese & Associates in Philadelphia; and Joseph Goldberg of
Freedman Boyd Hollander Goldberg Urias & Ward in Albuquerque, N.M.
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