Last week I attended the Defense Research Institute (DRI) Class Action Seminar in Washington, DC. Here are some insights I gleaned from day 1 of the seminar (focusing on presentations that had some relevance to insurance class actions):
Comcast v. Behrend (see blog post): Miguel Estrada, who argued this case for Comcast in the Supreme Court, noted that whether, or to what extent Daubert applies at class certification is less important in light of the Court’s decision. If the expert’s testimony, even if admissible, cannot prove damages (or whatever the issue is) on a classwide basis, a class should not be certified under the Court’s decision. Estrada noted that a Ninth Circuit opinion has read Comcast in a limited manner (Levya v. Medline Industries, Inc.). He predicted that the use of Rule 23(c)(4) issues classes is likely to be a focus in the future, and there is already a circuit split on whether the case as a whole must satisfy Rule 23(b)(3)’s predominance requirement if Rule 23(c)(4) is used. The use of (c)(4) to separate liability from damages also can potentially present a Seventh Amendment problem because the second jury cannot reexamine a question decided by the first jury.
Amgen v. Conn. Retirement Plans (see blog post): Noah Levine of WilmerHale, who led the briefing for Amgen, presented on this case. I’ll focus on the potential impact outside of the securities realm. Levine predicted that Amgen should have little impact outside the securities context. To the extent Amgen has some language regarding general class certification principles that is shaded in a manner potentially more favorable to plaintiffs, there is a counter to it in other Supreme Court opinions, including Comcast, which came down soon after.
Impact of Wal-Mart v. Dukes: Jennifer Quinn-Barabanov of Steptoe & Johnson presented on the impact that Wal-Mart v. Dukes has had in the lower courts. It has resulted in a greater focus in class certification decisions on the elements of each cause of action, and whether the theory of liability or statistics being proffered are sufficiently aligned with the class definition. Courts are skittish about certifying damages classes under Rule 23(b)(2). How Daubert is applied at class certification does not seem to be making much of a difference in outcome. In cases where discovery is largely complete by the time class certification is decided, more rigorous scrutiny is appropriate.
In-House Counsel Panel: Members of an in-house counsel panel from several large corporations indicated that they have not seen a decrease in class action filings despite the recent Supreme Court decisions over the last several years. Some companies that have not implemented arbitration provisions or do not have the ability to do so have seen a greater number of class action filings. They are seeing more filings in federal circuits and districts perceived as more favorable on class certification. Fewer Rule 23(f) petitions are being granted by the courts of appeals. It was also expressed that the plaintiffs’ bar tends to be more active in participating in judicial education and the defense bar should be more active to balance that out. Too often judges handling an MDL perceive the desired outcome as a global settlement and there can be insufficient consideration of the merits. There is a greater willingness to try class actions, even large ones, when necessary to send a message to the plaintiffs’ bar. Outside counsel trying a class action should be able to put together a real budget and stay within it.
Class Action Trials: Neal Walters of Ballard Spahr presented on class action trials. The charge conference is particularly difficult and time consuming in a class action trial. Courts have taken different positions with respect to introducing absent class member evidence, but such evidence can be introduced at least through experts. Juries can be uncomfortable with the whole concept of making a decision about a class when there is only one representative participating. Neal offered three “rules” for trying a class action on the defense side: (1) expand the record to include the experiences of absent class members; (2) plaintiffs’ experts become more exposed at trial because plaintiffs’ theories change, and there can be a mismatch between the expert’s testimony and the class representative’s situation; and (3) even a partial defense verdict can result in decertification. He left us with the following takeaway: “the value of persistence and looking at class certification at every stage of the case is priceless.”
Lessons Learned from the Toyota MDL: Cari Dawson of Alston & Bird presented on lessons learned from the MDL proceeding arising from claims involving unintended acceleration in Toyota vehicles. She talked about the importance of understanding a company’s ultimate goals and objectives, and mapping out a plan early. In a case of this size, she uses “special teams” for particular projects in the case, such as comprehensive choice of law research, factual development and briefing. She also talked about the importance of making policy arguments, not just legal ones. For example, where the issue is whether putative class members have to sustain an injury-in-fact, one policy argument that can be made is that we do not want to live in a world where people are paid for harm that they may never sustain. Rather, scarce judicial resources should be devoted to compensating people who have real injuries. It is also important to keep in mind the client’s business objectives. For example, making a witness cry at a deposition may not be consistent with the client’s objectives where the client would like that witness (and his or her family and friends) to continue doing business with the company.