Class Action Defense News, Developments and Commentary

Class Action Lawsuit Defense

Home | Class Action Lawsuit Defense

<img class="alignright size-medium wp-image-4810" src="https://classactionlawsuitdefense.bakerhostetlerblogs.com/wp-content/uploads/sites/9/2018/06/class-action-iStock-668617538-300x196.jpg" alt="" width="300" height="196" />

In Comcast v. Behrend, 569 U.S. 27 (2013), the United States Supreme Court clarified the requirements for establishing that classwide injury and damages predominate over individual issues for the purposes of FRCP 23(b)(3). In particular, where a party relies on a damages model to establish predominance, the model must be consistent with the theory of liability and “measure those damages attributable to that theory.” Id. at 35. A defendant may challenge the damages model to show that “questions of individual damage calculation will inevitably overwhelm questions common to the class.” Id. at 34. In turn, federal courts should perform a “rigorous analysis” to determine the soundness of the model, even if such inquiry will “overlap with the merits of the plaintiff’s underlying claim.” Id. at 34-35.



Comcast has been routinely applied by federal courts in class actions involving price fixing, anticompetitive conduct or other cases requiring complicated modeling to determine classwide impact. And where damages models are insufficient – because they cannot distinguish between liable misconduct and nonliable market factors, rest on unreliable assumptions or methodology, or are not grounded in facts – federal courts will deny certification. See In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244, 253 (3d Cir. 2013) (damages model led to false positives; “No damages model, no predominance, no class certification”); In re POM Wonderful LLC, 2014 WL 1225184, at *5 (C.D. Cal. March 24, 2014) (denying class certification where expert “made no attempt, let alone an attempt based upon sound methodology, to explain how Defendant’s alleged misrepresentations caused any amount of damages”); and In re Domestic Drywall Anti. Litig., 2017 WL 3700999, at *14 (E.D. Pa. Aug. 24, 2017) (no predominance where damages model was “riddled with assumptions that divorce the model from the facts”).

State court adoption of Comcast has been slower, with mixed results. Four states − Illinois, Montana, Pennsylvania and Texas − have adopted Comcast, noting that a Rule 23(b)(3) inquiry must be subject to rigorous scrutiny and well-grounded in facts. See Bueker v. Madison County, 61 N.E.3d 237, 252 (Ill. Ct. App. 5th Dist. Sept. 7, 2016) (adopting Comcast and noting that individualized review of property precluded class treatment of damages claims); Braun v. Wal-Mart Stores, 630 Pa. 292, 310-11 (Pa. 2013) (because classwide damages calculation was well-grounded in facts, and comported with the theory of liability, class certification was affirmed; citing favorably to Comcast</em&gt;); Canyon Lake Island Prop. Owners Ass’n v. Sterling/Suggs Ltd. P’ship, 2015 WL 3543125, at *7 (Tx. Ct. App. June 5, 2015) (where classwide injury and damages were not based on facts, the plaintiff did not meet its burden on predominance and class certification was denied; citing favorably to Comcast</em&gt;); and Ascencio v. Orion Int’l Corp., 2018 WL 2213938 (Mont. S.Ct. May 15, 2018) (where the plaintiff presented no facts supporting Rule 23(b)(3) superiority, class certification was denied; citing favorably to Comcast).

Two other states − New York and California – have refused to extend Comcast to state law procedural requirements. See Cardona v. Maramont Corp., 2014 WL 2558176, at *13 (N.Y. Sup. Ct. June 6, 2014) (holding Comcast is not controlling on New York class actions) and Ammari Electronics v. Pac Bell Directory, 2014 WL 989166, at *11 (Cal. App. Dist. 1 March 14, 2014) (Comcast requirement of significant proof of classwide damages not applicable to California procedure).

However, none of these state courts address when a damages model is necessary to establish the predominance of classwide injury or damages under Comcast. This may change with a recent case pending before the Ohio Supreme Court, Satterfield v. Ameritech Mobile Communications, Case No. 2017-0684.

In 2001, the Public Utilities Commission of Ohio found that Ameritech had engaged in rate discrimination, where a third-party reseller of cellular service paid Ameritech more for capacity than Ameritech’s own retail arm.

Subsequently, the plaintiffs filed a class action claiming that Ameritech’s inflated wholesale prices resulted in inflated prices for consumers. In seeking class certification, the plaintiffs only generally described their theory of common injury and damages, and did not provide a classwide damages model. The plaintiffs asserted that a model describing classwide injury and related damages is not a prerequisite under Rule 23, and that such a model would be developed after certification and fact discovery.

The trial court certified the class and the appellate court affirmed. The lower courts held that requiring a damages model during class certification would “delve too deeply into the merits.” See, e.g., Satterfield v. Ameritech Mobile Comm’ns, Inc., 86 N.E.2d 830, 842-43 (Ohio Ct. App. 2017).

In seeking discretionary review before the Ohio Supreme Court, Ameritech argued that under Comcast, a court should scrutinize whether classwide injury and damages predominate over individual issues. In pricing and anti-competition cases, this requires review of a model connecting theories of liability with classwide damages. According to Ameritech, a damages model was particularly important in Satterfield because consumer pricing depended on many individual factors, such as length of contract, type of phone, and the underlying wholesale price. The Ohio Supreme Court accepted the appeal.

If the Ohio Supreme Court adopts Comcast, Ohio courts will be required to perform rigorous, fact-based scrutiny to confirm that damages issues predominate over individual issues. Where the question of predominance requires a model, such as in anti-competition and pricing cases, the model must be based on facts and assumptions aligning with the plaintiff’s theory of the case. Promises to develop the model post-discovery, or development of a model that is not grounded in facts or the theory of liability, are unlikely to satisfy the predominance prong under Ohio’s Rule 23(B).

Briefing in Satterfield will complete over the summer, with oral argument likely to be held later this year.

State Court Adoption of Comcast v. Behrend