Robert Ambrogi – November 20, 2012<\/p>\n
Is a\u00a0Daubert<\/em>\u00a0hearing a mere magical incantation, unnecessary to invoke as long as the trick is still performed?<\/p>\n Several Supreme Court justices seemed to suggest as much, as the court heard oral arguments Nov. 5 in\u00a0Comcast Corp. v. Behrend<\/em>, an antitrust case that presents the question of the extent to which a trial court must vet an expert witness under the\u00a0Daubert<\/em>\u00a0standard prior to certification of a class action.<\/p>\n If the issue in the case sounds familiar, it is not because of\u00a0d\u00e9j\u00e0 vu<\/em>. Just over a year ago, the Supreme Court decided\u00a0Wal-Mart Stores, Inc. v. Dukes<\/em>, a case in which the court had been expected to decide the very same question.<\/p>\n But rather than decide the\u00a0Daubert<\/em>\u00a0issue in\u00a0Wal-Mart<\/em>, the court stepped around it, dropping a tantalizing nugget of dictum along the way that suggested how it might rule the next time around. \u201cThe District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings,\u201d Justice Antonin Scalia wrote. \u201cWe doubt that is so.\u201d<\/p>\n Comcast<\/em>\u00a0could be that next time. The case arose out of a lawsuit alleging that Comcast had created a cable TV monopoly in greater Philadelphia, in violation of the Sherman Act. The plaintiffs sought certification of a class action on behalf of Comcast customers.<\/p>\n The District Court ruled that class certification was appropriate, finding that issues common to members of the class predominated over issues unique to individual class members. In reaching this conclusion, the court relied on a damages model presented by the plaintiffs\u2019 expert, without ever conducting a\u00a0Daubert<\/em>\u00a0hearing on the testimony and even though the model incorporated theories of liability rejected by the court. On appeal, the 3rd U.S. Circuit Court of Appeals affirmed.<\/p>\n Foreshadowing the Outcome<\/strong><\/p>\n So did the oral arguments present any clues as to how the court is likely to rule on the issue this time around? That is hard to say, given that the justices sometimes seemed impatient, even exasperated, with the arguments of counsel on both sides of the case.<\/p>\n In fact, the closest any justice expressly came to foreshadowing the outcome was when Chief Justice John G. Roberts suggested the possibility that the court should decide only a subsidiary issue and then send the case back to the District Court for further consideration.<\/p>\n Barry Barnett, counsel for the respondents (the plaintiffs in the trial court), argued both in his brief and during oral argument that Comcast had waived the\u00a0Daubert<\/em>\u00a0issue by choosing not to object to the admission of the expert\u2019s testimony.<\/p>\n After several justices questioned both counsel about this issue, Chief Justice Roberts interjected. \u201cWe are having an elaborate discussion, and you did in the briefs, about whether or not this was a claim that was waived below. No court has addressed that yet.\u201d<\/p>\n \u201cWe\u2019re a court of review, not first view,\u201d he continued. \u201cSo it seems to me that one option for the court, since we did reformulate the question, is to answer the question and then send it back for the court to determine whether or not the parties adequately preserved that option or not \u2014 that objection or not.\u201d<\/p>\n Could Damages be Bifurcated?<\/strong><\/p>\n Earlier in the oral argument, prior to Chief Justice Roberts\u2019 comment, several justices questioned Miguel Estrada, Comcast\u2019s counsel, about whether the damages evidence was even necessary for the class certification. Justice Ruth Bader Ginsburg first raised this issue.<\/p>\n \u201cGenerally \u2013 at least it\u2019s my impression \u2013 that in class certifications, if the liability question can be adjudicated on a class basis, then the damages question may be adjudicated individually,\u201d Justice Ginsburg said. She drew an analogy to a Title VII class action, pointing out that, if plaintiffs can show a pattern or practice of discrimination and establish liability, damages can be assessed on an individual basis. \u201cSo why isn\u2019t bifurcation possible here?\u201d<\/p>\n Even as Estrada continued to argue that bifurcation was not possible in this case because of the nature of the damages, Justice Stephen G. Breyer indicated such an approach is \u201chornbook law.\u201d<\/p>\n \u201cThree pipe manufacturers get together and in January fix their prices, all right?\u201d Justice Breyer postulated. \u201cFourteen wholesalers want to show that and each has different damages because they bought different amounts of pipe. Hornbook law: Certify the class and leave the damages issues for later.\u201d<\/p>\n Estrada persisted. \u201cThe damage model just does not fit the legal theory that stays in the case,\u201d he argued.<\/p>\n Mere Magic Words<\/strong><\/p>\n But it was soon after Barnett took the podium and began to argue that Comcast had waived its\u00a0Daubert\u00a0<\/em>objection that the justices\u2019 questions turned to whether the need to invoke\u00a0Daubert\u00a0<\/em>by name was a matter of \u201cmagic words,\u201d putting form over substance.<\/p>\n \u201cI don\u2019t see why the judge has to say: All right, now first I\u2019m going to do\u00a0Daubert<\/em>, and next I\u2019m going to do whether this is reliable,\u201d Justice Anthony M. Kennedy prodded. \u201cThis is just a magic words approach, it seems to me.\u201d<\/p>\n Picking up on that, Justice Sonia Sotomayor asked, \u201cWhy do you disagree with the simple proposition that a district court, by whatever magic words it uses, has to come to the conclusion that the expert\u2019s testimony is persuasive? And isn\u2019t that at bottom line a judgment that it\u2019s reliable and probative?\u201d<\/p>\n Barnett countered that the issue is not merely a matter of magic words. \u201cOnce you say\u00a0Daubert<\/em>, once you say [Rule] 702, or once you say, \u2018I object, it\u2019s not reliable,\u2019 at the time, contemporaneously, the district judge has an opportunity to fix whatever the problem is. And the other side has a chance to fix whatever the problem is, too.\u201d<\/p>\n Looking for a Legal Issue<\/strong><\/p>\n A turning point in the argument seemed to come when Barnett conceded that, had the trial judge properly excluded the expert under\u00a0Daubert<\/em>, class certification would not have been appropriate. That led Justice Elena Kagan to state, \u201cI am still in search of a legal question that anybody disagrees about here.\u201d Justice Samuel Alito followed her, saying, \u201cWell, then the only remaining question is whether the issue was in the case as a factual \u2013 as a matter of the record here; isn\u2019t that right?\u201d<\/p>\n Once again, the argument returned to magic words. \u201cThe problem everyone\u2019s having is \u2013 I think \u2013 that why do you need\u00a0Daubert<\/em>\u00a0to point out that something is not probative or unreliable?\u201d Justice Sotomayor said. \u201cWhether it\u2019s an expert or a lay witness testifying, wouldn\u2019t you apply the same standard to anybody\u2019s testimony?\u201d<\/p>\n \u201cIt doesn\u2019t make a dime\u2019s worth of difference whether the judge excludes it under\u00a0Daubert<\/em>\u00a0or proceeds to find it simply unreliable,\u201d Justice Antonin Scalia followed. \u201cSuppose we held that. What difference would it make in the world?\u201d<\/p>\n Justice Scalia\u2019s question had the ring of sounding rhetorical. But several justices appeared to embrace the idea that\u00a0Daubert<\/em>\u00a0may be just an unnecessary magic word. If the judge in substance decides what\u00a0Daubert\u00a0<\/em>requires, then does it matter whether the judge calls it a\u00a0Daubert<\/em>\u00a0ruling?<\/p>\n For the answer to that question, we will have to wait and see what the court pulls out of its deliberative magic hat.<\/p>\n