Wal-Mart, Comcast, and the Not-So-New Direction in Class Certification Analysis

Wal-Mart, Comcast, and the Not-So-New Direction in Class Certification Analysis

By Mr. Roni Adil Radi Elias

Since the turn of the twenty-first century, the Supreme Court has been relatively quiet in matters of class certification procedure, not issuing any opinions regarding Fed. R. Civ. P. 23 until 2011, when it decided Wal-Mart Stores, Inc. v. Dukes,[1] which was followed relatively quickly by its decision in Comcast Corp. v Behrend.[2] Some commentators have suggested these two cases mark a new direction, making it harder for plaintiffs to meet the requirements for class certification.[3] A careful consideration of the two decisions and the case law following them does not support this conclusion, however. The decisions in these two cases seem to reinforce existing understandings more than they lead to new ones.

In Wal-Mart, its first significant Supreme Court decision about class action procedure since its 1997 decision in Amchem Prods., Inc. v. Windsor,[4] the plaintiff alleged that the nationwide discount retailer discriminated against a class of 1.5 million female employees through company-wide policies that discriminated against women in pay and promotions.[5] The plaintiffs alleged that the company’s policy of permitting pay and promotion decisions to be made on the basis of subjective factors was an instrument for permitting unlawful discrimination against women.[6] After the district court certified the class, Wal-Mart challenged the class certification order, arguing that the claims of the class members did not satisfy the commonality requirement of Fed. R. Civ. P. 23(a).[7]

Reversing the Ninth Circuit, the Court held that class action plaintiffs must show through a “rigorous analysis”[8] that all class members “have suffered the same injury” and that their claims “depend upon a common contention” such that “determination of [the contention’s] truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”[9] Applying this standard, the Court held that the plaintiffs had “not established the existence of any common question,” because they provided “no convincing proof of a companywide discriminatory pay and promotion policy.”[10] In the Court’s view, the reliance upon subjective factors in decision-making about pay and promotions for women would not have a common outcome regarding every single class member.

The Comcast case involved an antitrust claim asserted on behalf of a putative class of cable television subscribers. The plaintiffs alleged that Comcast's clustering of operations eliminated competition and led to non-competitive prices in the Philadelphia region.[11] The plaintiffs sought certification of a purported class of two million current and former Comcast subscribers. Regarding their allegations of damages, the plaintiffs advanced four alternative theories, each based on a different conceptualization of the antitrust injury caused by Comcast’s alleged anti-competitive practices.[12] The district court rejected three and permitted the case to be certified on the basis of only one, which was described as the "overbuilder theory."[13] The district court held that a damages model prepared by the plaintiffs' expert, Dr. James McClave (the McClave model), provided an adequate methodology to measure damages on a class wide basis in terms of the overbuilder theory.[14] But the McClave model was not specifically tailored to describe damages in connection with the overbuilder theory; it purported to explain damages regarding any of the four alternative theories of injury that the plaintiffs had alleged.

On appeal, the U.S. Court of Appeals for the Third Circuit rejected Comcast's argument that the class was improperly certified because the McClave model failed to tie its damages calculation to the overbuilder theory. The Supreme Court found that the Third Circuit's approach "flatly contradict[ed]" its requirement of a “rigorous analysis” (as re-affirmed in Wal-Mart) of whether the plaintiffs’ case would meet the requirements of Rule 23, particularly the requirement of the predominance of common questions.[15] The Court also pointed out that the "same analytical principles" are not only applicable in class actions where the plaintiffs seek damages as opposed to equitable relief, but also that "Rule 23(b)(3)'s predominance criterion is even more demanding than Rule 23(a)."[16] For the Comcast majority, the crucial problem with the plaintiff’s case as a class action was the apparent disjunction between its theory of the antitrust injury and the basis for claiming damages.[17] Because of the lack of a sufficiently close connection between the theory of injury and the theory of damages, resolving factual questions about the class members’ alleged injuries would not advance the resolution of questions about damages, and the factual inquiries about the harm suffered by the class members would be individualized and would overwhelm the common questions about injury.

Some commentators have read Comcast in Wal-Mart and concluded that the two opinions together have effected a sea change in how courts must apply Rule 23, making it significantly harder for plaintiffs to satisfy both the predominance and commonality requirements. As one commentator put it, “there can be little doubt that the decision solidifies the trend established in the court's 2011 decision inWal-Mart Stores, Inc. v. Dukesthat plaintiffs must be able to demonstrate that the case is susceptible to resolution by common proof.”[18] But this is an overstatement. The requirement of common proof is hardly a “trend” in the procedural requirements for class actions. It has always been the rule. It is more accurate to say that Wal-Mart and Comcast confirm established understandings of the procedural requirements for class actions and that they reject plaintiffs’ arguments to for a more relaxed understanding of those requirements.

In Wal-Mart, the plaintiffs argued that a policy of giving substantial subjective discretion to the management of individual stores was a method of uniform decision-making that always worked to the detriment of women. This is like the Sherlock Holmes deduction about the dog that did not bark. The plaintiffs were trying to make the case that the existence of subjective discretion in a wide range of individual decisions alongside a statistical showing of discriminatory outcomes meant that subjective discretion caused discriminatory decision-making always. The Court’s holding merely recognized the reality that Wal-Mart, in asserting its defense, could rebut the plaintiffs’ deduction about the uniform nature of subjective decision-making by raising individualized questions regarding each class member. Finally, Wal-Mart stands for the proposition that the parameters for deciding the question of commonality cannot be unilaterally defined by the putative class representative and its theory of the case; if the class representative’s theory turns on a common question, but the defense’s rebuttal theory turns on individualized questions, the case still fails to satisfy the commonality requirement.

Similarly, in Comcast, the decision does not radically change the way courts must approach the analysis of predominance. If there is a disjunction between the plaintiff’s theory of injury and its theory of damages, and if damages can only be proven through individualized inquiry, then the predominance requirement is not met. This is really not something new. The reasoning employed by the Comcast dissent suggests as much. The dissenting justices did not complain that the majority was changing the contours of Rule 23; rather they contended that the majority misunderstood the concept of anti-trust claims and the relationship between injury and damages in those claims.[19]

Case law following Wal-Mart and Comcast confirms the conclusion there is no significant new direction in class action procedure. Earlier this year, the Second Circuit concluded that the dispositive factor in the class certification analysis in Comcast was the disjunction between the plaintiffs’ theory of liability and their method for calculating damages.[20] In reaching this conclusion, the Second Circuit cited numerous class action decisions since Comcast that reached similar conclusions.[21]

When a court speaks infrequently on a subject, it is tempting to view its occasional utterances as ground-breaking. While many observers seem to have given in to this temptation in class action procedure, that indulgence is unwarranted. Wal-Mart and Comcast are important cases in interpreting Rule 23, but they confirm well-established boundaries rather than mark out new territory.

-Roni A. Elias is from Khartoum, Sudan. In 2015, Ms. Alexis Leventhal & Roni A. Elias will be publishing their law review article in the American Bankruptcy Institute Law Review.


[1] Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011).

[2] Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).

[3] John B. Lewis, et al., Common and Predominating Damages: Comcast Opinion Extends Wal-Mart v. Dukes' Standards for Class Certification but Leaves the Question of Daubert for Another Day, http://www.bakerlaw.com/alerts/Common-and-Predominating-Damages-Comcast-Opinion-Extends-Wal-Mart-v-Dukes-Standards-for-Class-Certification-but-Leaves-the-Question-of-Daubert-for-Another-Day-4-2-2013 (last visited February 8, 2015).

[4] Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997).

[5] Wal-Mart, 131 S. Ct. at 2547.

[6] Id.

[7] Id. at 2549.

[8] Id.

[9] Wal-Mart, 131 S. Ct. at 2551.

[10] Id. at 2556.

[11] Comcast, 133 S. Ct. at 1430.

[12] Id.

[13] Behrend v. Comcast Corp., 264 F.R.D. 150, 165-81 (E.D. Pa. 2010).

[14] See id.

[15] Comcast, 133 S. Ct. at 1433.

[16] Id. at 1432.

[17] Id. at 1433-35.

[18] Lewis, et al., supra note 3.

[19] Comcast, 133 S. Ct. at 1436-37 (Ginsburg, J., dissenting) (nothing both that the majority’s opinion “breaks no new ground on the standard for certifying a class action under Federal Rule of Civil Procedure 23(b)(3)” and that, at the same time, “the Court sets forth a profoundly mistaken view of antitrust law”).

[20] Roach v. T.L. Cannon Corp., Case No. 13-3070 (2d Cir., Feb. 10, 2015).

[21] Id. (citing AstraZeneca AB v. United Food & Commercial Workers Unions & Emp'rs Midwest Health Benefits Fund (In re Nexium Antitrust Litig.),No. 14-1521, 2015 WL 265548, at *8, *10 (1st Cir. Jan. 21, 2015); Dow Chem. Co. v. Seegott Holdings, Inc. (In re Urethane Antitrust Litig.), 768 F.3d 1245, 1257-58 (10th Cir. 2014); In re Deepwater Horizon, 739 F.3d 790, 817 (5th Cir. 2014);

Glazer v. Whirlpool Corp. (In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig.),722 F.3d 838, 860-61 (6th Cir. 2013);Butler v. Sears, Roebuck & Co.,727 F.3d 796, 799 (7th Cir. 2013)); see also In re Rail Freight Surcharge Antitrust Litigation, 725 F.3d 244, 254-55 (D.C. Cir. 2013) (holding that the requisite “rigorous analysis” of certification factors must include a consideration of whether the plaintiffs’ damages theory corresponds with their liability theory).

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