The Seventh Circuit has started 2012 off with a significant class certification opinion.  Messner v. Northshore Univ. Healthsystem, No. 10-2514, 2012 U.S. App. LEXIS 731 (7th Cir. Jan. 13, 2012) was an antitrust case alleging that a merger of two hospitals violated federal antitrust laws, but the opinion speaks to several broader issues regarding class certification that are important for many putative class actions, including insurance cases: 

  • A Full Daubert Analysis Is Required On Both Sides If The Expert Testimony Is Important For A Class Certification Issue:  The Seventh Circuit reaffirmed its prior holding that “[w]hen an expert’s report or testimony is ‘critical to class certification’ . . . a district court must make a conclusive ruling on any challenge to that expert’s qualifications or submissions before it may rule on a motion for class certification.”  Id. at *15.  This is contrary to the Eighth Circuit’s view that only a focused, limited Daubert analysis is required.  (For more on that, see my prior post about In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604 (2011).)  The Seventh Circuit further elaborated that the word “critical” should be interpreted “broadly to describe expert testimony important to an issue decisive for the motion for class certification.  If a district court has doubts about whether an expert’s opinions may be critical for a class certification decision, the court should make an explicit Daubert ruling.”  Messner, at *16.  The Seventh Circuit held that where the testimony of the defendant’s expert “laid the foundation” for the opposition to certification, a full Daubert analysis was required.  The court rejected arguments that Daubert standards should only apply to plaintiffs because they bear the burden of proof on class certification, reasoning that a class certification ruling is important to both sides and Rule 702 applies to both sides regardless of who bears the burden of proof.  This is not an unanticipated outcome but it stresses the importance for defendants and their counsel of fully vetting their expert testimony used at class certification, just as they would in preparing experts for use at trial.  Defendants should not focus on attacking the plaintiffs’ expert without taking care to ensure that their own expert’s analysis will withstand a rigorous Daubert inquiry. 
  • Lack of Injury to Some Class Members:  The court drew what it described as a “critical” distinction between cases where it is shown that a large part of the class has suffered no injury as a factual matter, and cases where a large number of class members could not possibly have been harmed.  It said only the latter are inappropriate for certification: 

[I]f a proposed class consists largely (or entirely, for that matter) of members who are ultimately shown to have suffered no harm, that may not mean that the class was improperly certified but only that the class failed to meet its burden of proof on the merits.  If, however, a class is defined so broadly as to include a great number of members who for some reason could not have been harmed by the defendant’s allegedly unlawful conduct, the class is defined too broadly to permit certification.  . . . There is no precise measure for “a great many.”  Such determinations are a matter of degree, and will turn on the facts as they appear from case to case. 

Id. at *53-55.  This seems to be a new and notable holding.  It could potentially apply to insurance class actions given that it is common for some part of the proposed class in an insurance class action to have sustained no injury.  The court here creates a standard that likely will be difficult for district courts to apply and there likely will be inconsistency in application of this new standard.  I’m not aware of any other circuit articulating this standard.  But class certification decisions in this area tend to focus more on whether individualized inquiries (and how many of them) are required to determine whether individuals fall within a class definition or were harmed.  Class actions that might meet this new Seventh Circuit standard still may fail to satisfy the predominance requirement.  The Supreme Court also will say something this Term about what kind of injury to a named plaintiff (and perhaps class members, at least by extension) is necessary to establish Article III standing, in a case under the Real Estate Settlement Practices Act, see First American Fin. Corp. v. Edwards, No. 10-708 (check out SCOTUS blog’s recap of the oral argument for more on that case and speculation on possible outcomes).  This Supreme Court opinion might impact the kind of issue the Seventh Circuit dealt with in Messner, but that will depend largely on how broadly or narrowly the opinion is written. 

  • Fail-Safe Classes and Class Definitions:  The Seventh Circuit further discussed “the problem of the fail-safe class: one that is defined so that whether a person qualifies as a member depends on whether the person has a valid claim.  Such a class definition is improper because a class member either wins or, by virtue of losing, is defined out of the class and is therefore not bound by the judgment.”  Messner, at *55-56.  This is also an issue that frequently comes up in insurance class actions because some plaintiffs’ lawyers define their proposed classes in this fashion.  The court further explained that “[d]efining a class so as to avoid, on one hand, being overinclusive and, on the other hand, the fail-safe problem is more of an art than a science.  Either problem can and often should be solved by refining the class definition rather than by flatly denying class certification on that basis.”  Id. at *56-57.  This comment poses a practical problem for case management by district courts that seems to be ignored here.  The scope of a class definition is often essential for framing the discovery that is taken on class certification issues and also for developing expert testimony on class certification.  While a plaintiff is not completely locked into a class definition drafted prior to any discovery, there needs to be a point at which the proposed class definition is established and class certification is decided on that definition, up or down, otherwise the defendant and the judge are trying to constantly deal with a moving target.  I don’t think the court is saying here that the trial judge should do the plaintiffs’ work for them and come up with his or her own definition that satisfies class certification standards; that would eviscerate the plaintiffs’ burden of proof and almost convert the judge into an advocate for the plaintiffs making their best arguments for them.  District courts, at least in the Seventh Circuit, will have to sort out how to address this new commentary, which appears to be dicta.


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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.