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Jun 30

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Supreme Court To Address Use of Statistics For Class Action Certification

The April 2013 Supreme Court decision in Comcast Corp. v. Behrend, No. 11-864, was a profound change benefitting companies facing class action lawsuits.  The Court held that a plaintiff seeking certification must establish through “evidentiary proof” that damages can be measured on a class-wide basis.  Individual damage issues can defeat class certification where those issues cannot be resolved on a class-wide basis.  This tightens the requirements of some courts which have held that individual issues related to the amount of damages should not preclude class certification.

Since that time, trial courts, attorneys, and damage witness have struggled to determine the extent to which individual concerns over damages prevent class certification.  If held to the strictest standard, few classes could ever become certified. To attempt to address the Comcast damage requirements, most plaintiffs now endeavor to use statistics to show typical reactions, prices, etc.  But, in most cases, the mere fact that statistics measuring central tendency are used demonstrates that proposed class members are not all identical.

With this important background in mind, the U.S. Supreme Court has agreed to re-visit the use of statistics to demonstrate the commonality required for class certification.  In agreeing to review Tyson Foods, Inc. v. Bouaphakeo, a wage and hour class action case, the Court will address the use of statistical techniques that presume all class members are similar and whether a class can include individuals who were not injured.

As described in this related article, should the Supreme Court remove statistical analysis as a tool to address differences, it will seriously erode the ability of many groups of similarly situated individuals to achieve class certification and calculate damages.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2015/06/supreme-court-to-address-use-of-statistics-for-class-action-certification/

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