Monday, November 05, 2012

Supreme Court Hears Oral Argument in Antitrust Class Action Against Comcast

This posting was written by Jeffrey May, Editor of Trade Regulation Reporter.

As the U.S. Supreme Court heard oral argument on November 5 about the appropriate standard for class certification in a consumer antitrust action against cable provider Comcast Corporation, the justices spent much of the time trying to determine whether the parties actually had opposing views on the appropriate legal standard (Comcast Corp. v. Behrend, Dkt. 11-864).

The case could impact the ability of consumers to pursue damages class actions if the Court were to impose tougher standards on lower courts as they consider motions for class certification.

“[I]t 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,” commented Justice Elena Kagan. “And, you know, usually we decide cases based on disagreements about law, and here I can't find one.”

In deciding to take up the case, the U.S. Supreme Court “wanted to talk about . . . whether a district court at a class certification stage has to conduct a Daubert inquiry, in other words, [whether it] has to decide on the admissibility of expert testimony relating to class-wide damages,” according to Justice Kagan. Comcast's counsel had argued that the complaining cable customers’ damages model no longer fit the legal theory that remained in the case.

In June 2012, the Supreme Court agreed to review a decision of the U.S. Court of Appeals in Philadelphia (655 F.3d 182, 2011-2 Trade Cases ¶77,575), upholding the certification of a class of approximately two million cable television customers in the Philadelphia area. The customers allege that Comcast engaged in unlawful monopolization.

The appellate court ruled that the lower court satisfied the “rigorous analysis” standard established by the Third Circuit in In re Hydrogen Peroxide Antitrust Litigation (552 F.3d 305, 2008-2 Trade Cases ¶76,453) in determining that questions of fact or law common to class members predominated over individual issues, for purposes of meeting the certification requirements of Federal Rule of Civil Procedure 23(b)(3).

In its petition, Comcast asked whether a district court may certify a class action without resolving “merits arguments” that bear on prerequisites for certification under Rule 23, including whether purportedly common issues predominate over individual ones under Rule 23(b)(3).

In granting certiorari, the Court limited its review to the question: “Whether 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.”

There was some question as to whether Comcast waived its right to object to the admissibility of the expert testimony. Comcast's counsel asserted that Comcast had never said that its objection was only to the weight and not to the admissibility of the evidence.

Counsel for the customers contended that Comcast was so profoundly uninterested in Daubert, and was so focused on arguing weight and probativeness as opposed to admissibility, that it never even cited the case at the district court level. The Supreme Court's 1993 decision in Daubert v. Merrell Dow Pharmaceuticals, Inc. (509 U. S. 579), sets out certain requirements for the admission of expert testimony.

Chief Justice John Roberts suggested that the Court should answer the question presented as reformulated and send it back down to the district court to determine whether or not the parties adequately preserved the objection or not. “[T]he district court presumably can decide based on the proceedings and all that below, all the scars and mess-ups, whether or not it was adequately preserved or not,” he noted.

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