Three Class Action Cases to Be Decided by the U.S. Supreme Court in its October 2012 Term

Class action cases are once again front and center in the U.S. Supreme Court in the October 2012 term, which began last week. The Court has accepted three class action cases — each of which could have a substantial effect on class action jurisprudence in Ohio and federal courts. 

The first case — Comcast v. Behrend, U.S. Supreme Court Case No. 11-864 — will likely have the most far-reaching effect on class action law. The issue in the case is this: Whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.

The Comcast Plaintiffs allege that Comcast monopolized Philadelphia’s cable market and excluded competition in violation of the Sherman Act. Because Plaintiffs would be required at trial to prove damages as an element of their claims, Plaintiffs attempted to satisfy Rule 23(b)(3)’s predominance requirement by introducing an expert witness who proposed to calculate damages on a class-wide basis. Comcast’s experts in turn presented a number of challenges to Plaintiffs’ damages model.

The district court certified the class under Rule 23(b)(3), finding that “there is a common methodology available to measure and quantify damages on a class-wide basis.” A divided panel of the Third Circuit affirmed. The majority declined to address Comcast’s challenges to Plaintiffs’ damages model on the grounds that “[w]e have not reached the stage of determining on the merits whether the methodology [offered by Plaintiffs] is a just and reasonable inference or speculative,” and that Comcast’s “attacks on the merits of the methodology” have “no place in the class certification inquiry.”

The second case to be decided by the U.S. Supreme Court this term is Standard Fire Insurance Co. v. Knowles, U.S. Supreme Court Case No. 11-1450. This case addresses the Class Action Fairness Act and will address a loophole that has been exploited by Plaintiffs’ attorneys in certain jurisdictions.

The third case to be decided this term is Amgen v. Conn. Retirement Systems, U.S. Supreme Court No. 11-1085. The issues to be decided by the Court are:

  1. Whether, in a misrepresentation case under Securities and Exchange Commission Rule 10b-5, the district court must require proof of materiality before certifying a plaintiff class based on the “fraud on the market” theory; and
  2. Whether, in such a case, the district court must allow the defendant to present evidence rebutting the applicability of the “fraud on the market” theory before certifying a plaintiff class based on that theory.

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