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Litigation News Online

September 2008

Court Orders Daubert Hearing as Part of Class Certification Analysis

By Sean T. Carnathan, Litigation News Associate Editor

In what appears to be part of a trend across the country, a federal trial court in West Virginia has ordered a full, evidentiary Daubert hearing as part of deciding a motion on whether to certify a class in a pending action.

The U.S. District Court for the Southern District of West Virginia’s ruling in Rhodes v. E.I. DuPont de Nemours and Co. [PDF] follows a number of decisions in federal circuits to allow, or even require, a rigorous analysis of the facts underlying a motion for class certification, although that analysis may stray into the merits of the suit.

The claims in Rhodes involve an alleged contaminant in the community’s water supply. The plaintiff had moved the court to certify a class of all individuals who for a certain period had been residential water customers of the community’s water district. The court issued an opinion and order [PDF] in June, 2008, setting a Daubert hearing to “test the plaintiffs’ key experts’ methodology and assumptions” and then ordered the parties to submit post-hearing briefs regarding the appropriateness of class certification.

The Rhodes plaintiffs’ briefing argues that “no court has ever held that district court judges must conduct Daubert hearings to assess the reliability of expert opinions offered at the class certification stage,” and that “[a]n extensive Daubert analysis at the class certification stage puts an inappropriate burden on plaintiffs and their experts.”

While it may not be mandatory and “the use of a Daubert hearing at the class certification stage is not commonplace, it is also not especially unusual,” says Andrew Sandler, New York City, cochair of the Section of Litigation’s Consumer and Personal Rights Litigation Committee. “The appropriate use of Daubert hearings at the class certification stage promotes judicial efficiency by providing a mechanism to limit class litigation in circumstances where the class claims are not well founded,” says Sandler.

How Deeply Should Courts Examine the Merits at Class Certification?

The propriety of the Daubert hearing ruling in Rhodes is part of a larger issue regarding the extent to which a court should inquire into the underlying merits at the class certification stage, critics note.

The U.S. Supreme Court created the tension through two somewhat opposing pronouncements. On the one hand, the Court has stated that a trial court shall not “conduct a preliminary inquiry into the merits of the suit” when deciding whether to certify the class. Eisen v. Carlisle & Jacquelin. On the other hand, the Court has also stated that a trial court shall not certify a class unless it is “satisfied, after a rigorous analysis that the requirements of Rule 23 have been satisfied.” General Telephone Co. of the Southwest v. Falcon.

The difficulty is how a court makes a rigorous analysis without entering into a forbidden merits inquiry, the court opinions reflect.

Courts differ in the extent to which inquiry is required or permitted. In the Second, Fourth, Fifth, and Seventh Circuits, district courts do not rely solely on plaintiffs’ allegations for the purpose of class certification, but instead make specific findings of their own. In re Initial Public Offering Securities Litigation; Gariety v. Grant Thornton, LLP; Unger v. Amedisys, Inc.; Szabo v. Bridgeport Machines, Inc. The Third and Eighth Circuits allow some inquiry but do not require such inquiry in every instance. Newton v. Merrrill Lynch, Pierce, Fenner & Smith, Inc.; Blades v. Monsanto Co.

The First Circuit [PDF] has opined that trial courts have the power to test “disputed premises early on if and when the class action would be proper on one premise, but not another.” In re PolyMedica Corp. Sec. Litig.; In re New Motor Vehicles Canadian Export Antitrust Litig. (discussing approaches of different circuits). The Ninth Circuit allows “some inquiry into the substance of the case” at class certification. Staton v. Boeing Co.; Dukes v. Wal-Mart, Inc. [PDF].

Daubert challenges are becoming common in discrimination and antitrust cases but are less likely in consumer fraud cases, notes Mark Herrmann, New York City, a Section member actively involved in nationwide class actions and author of a drug and device law blog.

Practitioners should routinely anticipate a Daubert hearing at the class certification stage, Herrmann advises. “You should retain and consult your expert early in the litigation and open up issues during preclass certification discovery with the Daubert hearing in mind.”


What You’ve Had to Say:

  • September 29, 2008 – Certifying a class before most of discovery doesn't even make sense. Doing so may deny the ability to access much of the information that would become the very basis for class certification in the first place! The decision almost presupposes that discovery is a useless endeavor. – Justin Clark Cincinnati, OH

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