Use and Misuse of Expert Opinions at the Class ... - King & Spalding

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Page 292 DEFENSE COUNSEL JOURNAL—July 2002 on legal issues, the advocates in the case should provide enlightenment on both sides of the issue. The judge has the knowledge and expertise to dissect the most complex of legal issues, without drawing on the opinion of a hired “legal expert” who has developed a methodology that substantiates the parties’ contentions on whether the facts underlying the case predominate or that the variations between state laws in a multistate class action are manageable. If the parties are not represented by sophisticated, wellpracticed counsel who are able to articulate why and how a class should or should not be certified, there are serious issues raised about the adequacy of class counsel. 48 Thus, experts on the elements of Rule 23 should be prohibited under the purview of Rule of Evidence 702, and certification issues should be left within the purview of the judge. DAUBERT/KUMHO TIRE STANDARD SHOULD APPLY AT CLASS CERTIFICATION STAGE If expert testimony is used at class certification stage, there must be assurances of its reliability. The Daubert/Kumho Tire standard should be applied at this stage. A. Some Courts Have Rejected Daubert/Kumho Tire Standard At a trial on the merits, a federal district court’s finding that the expert’s testimony is admissible depends on whether the proponent has satisfied the requirements of Daubert v. Merrell Dow Pharmaceuticals Inc. 49 and Kumho Tire Co. v. Carmichael. 50 The trial court is to act as a “gatekeeper” to prevent experts from testifying if (1) they are not qualified, (2) their opinions are not subject to empirical proof or (3) the opinion does not logically follow from the evidence. Nevertheless, courts are uncertain whether the Daubert and Kumho Tire standard applies at the class certification stage. 51 Some courts have concluded the Daubert/Kumho Tire inquiry is completely unnecessary with regard to class certification, 52 while others suggest that some type of inquiry is necessary but have not required a Daubert level of scrutiny. For example, in Visa Check/MasterMoney, the court concluded a Daubert inquiry is not necessary at the preliminary stages of an action, such as during a class certification motion, since the purpose of a Daubert inquiry is to shield the fact-finder at trial from flawed evidence. The court found there was no reason to protect it from flawed evidence because class certification is not a trial. Instead, it rejected the defendants’ contention that Daubert was the applicable standard and applied a “limited” analysis to support the admissibility of the plaintiffs’ expert testimony. 53 The U.S. District Court for the Northern District of Georgia created its own test in In re Polypropylene Carpet Antitrust Liti- 47. See VII WIGMORE ON EVIDENCE § 1952, at 81; 3 CORBIN ON CONTRACTS § 554, at 227 (1960). 48. See, e.g., In re Asbestos Litig., 90 F.3d 963, 977 (5th Cir. 1996) (“A district court may not certify a class without concluding that class counsel are qualified, experienced and generally able to conduct the proposed litigation.”) 49. 509 U.S. 579 (1993). 50. 526 U.S. 137 (1999). 51. While the focus of this article is on federal actions where the Daubert/Kumho Tire standard applies, in state actions, practitioners should not ignore similar attacks that can be made under the appropriate state standards. The authors of this article were successful in two separate state actions in keeping out plaintiff’s expert testimony under essentially a Frye standard. In both, the plaintiffs’ experts applied methodologies that had not been recognized by their peers. 52. Visa Check/MasterMoney, 192 F.R.D. at 68, 76. See also O’Connor v. Boeing North Am. Inc., 184 F.R.D. 311, 321 n.7 (C.D. Cal. 1998); Polypropylene Carpet, 996 F.Supp. at 18, 26 (agreeing that Daubert analysis was necessary to determine admissibility of expert’s testimony but finding inquiry unnecessary at certification stage). 53. 192 F.R.D. at 76-78. See also Vickers v. Gen. Motors Corp., 204 F.R.D. 476 (D. Kan. 2001) (explaining that, while Daubert analysis not required at class certification stage, class should not be certified “on basis of an expert opinion so flawed that it is inadmissible as a matter of law”). But see Sanneman v. Chrysler Corp., 191 F.R.D. 441, 451 & n.16 (E.D. Pa. 2000) (during certification hearing, court found that expert qualified under Daubert after hearing oral argument on defendant’s Daubert motion; nevertheless, court found that testimony was insufficient to satisfy Rule 23).
Use and Misuse of Expert Opinions gation. 54 The plaintiffs sought damages and equitable relief pursuant to the Clayton Act to remedy alleged violations of the Sherman Antitrust Act arising from a conspiracy alleged to have artificially maintained the price of polypropylene carpet. Both parties introduced experts to testify whether the artificially inflated price lists were common to all plaintiffs. The court concluded that at this stage, whether an expert’s opinion is admissible does not necessitate a Daubert inquiry. Rather, it set forth a three-part test to determine the admissibility of an expert’s testimony for class certification purposes, under which the court evaluates whether the expert’s testimony (1) is in alignment with other principles within the same field, (2) will posses probative value and (3) will primarily use common evidence. The court, relying on the plaintiffs’ expert opinion, concluded that the plaintiffs had satisfied their burden of showing that the antitrust impact was common to all members of the proposed class. 55 Page 293 ity and relevance of expert opinions. 56 The Visa Check/MasterMoney court concluded it was not a trier of fact at a certification hearing, given that it is forbidden to engage in an inquiry into the merits of the case. 57 A Daubert inquiry is not, however, an evaluation of the merits. Its purpose is not to seek out the truth—it is to protect the judicial process from flawed testimony and fraud. At the certification stage, the court is drawing a conclusion whether the particular prerequisites mandated under Rule 23 have been proved in order for the parties to continue to the trial phase. The purpose of Daubert is just as applicable at this stage as it is at trial. By engaging in a Daubert inquiry, the court can verify the expert’s opinion, thereby preventing a party from offering any witness simply to substantiate its argument for or against class certification. Second, certification cannot stand if the district court finds during trial that the expert’s opinion or methodology, which led to the expert’s conclusion that the court would be able to manage the claims under divergent state laws or that the facts underlying the claims predominated throughout the entire class, does not pass a Daubert inquiry. 58 The time and expense the court has taken to hear the action could have been avoided. By simply engaging in a Daubert inquiry, the court could have denied certification early in the litigation. Class action litigation is a procedural tool implemented to conserve judicial resources by combining numerous individual suits when possible. 59 When classes are certified based on an expert’s opinion that the action was manageable or that the underlying facts predominated throughout the class, when that expert’s opinion is later 54. 996 F.Supp. 18 (N.D. Ga. 1997). 55. Id. at 25-29. 56. 509 U.S. at 592-93 (1993). See also Michelle Michelson, The Admissibility of Expert Testimony on Battering and Its Effect after Kumho Tire, 79 WASH U. L.Q. 367, 384 (2001). 57. 192 F.R.D. at 76. 58. Some courts have certified a class with the understanding that if the case became unmanageable, the court reserved the right to decertify or redefine B. Daubert/Kuhmo Tire Test Should Apply Rejection of the Daubert/Kuhmo Tire standard to evaluate the admissibility of experts’ opinions at the certification stage is incorrect for two reasons. First, the underlying purpose of the establishment of the Daubert test applies at the class certification stage. Second, the absence of any evaluation of experts at class certification stage poses a threat of wasted judicial resources. First, the Supreme Court intended the Daubert inquiry to shield a trier of fact from flawed evidence and to act as a gatekeeping function to ensure the reliabilthe class. See In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 815 (3d Cir. 1995), cert. denied, 516 U.S. 824 (1995); In re School Asbestos Litig., 789 F.2d 996, 1011 (3d Cir. 1986), cert. denied, 479 U.S. 852 (1986). 59. Alan S. Kaplinsky, Arbitration and Class Actions—A Contradiction in Terms, 81 A.L.I. 173, 183 (2001).
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Use and Misuse of Expert Opinions at the Class ... - King & Spalding

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