Supreme Court to Review Comcast Class Certification Appeal
The Supreme Court announced on June 25, 2012, that it will be reviewing the Third Circuit U.S. Court of Appeals’ decision in Comcast v. Behrend. The Court will limit its review to the question of “[w]hether 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.” Comcast sought the review, arguing that the plaintiff class does not have the required commonality of interest for class certification.
The original antitrust suit, filed in 2003, alleged that Comcast “clustered” cable systems in the Philadelphia area by buying rivals and swapping coverage areas. The plaintiffs argue that these actions enabled the company to control the market and raise cable prices in violation of federal antitrust law. They claimed that Comcast conspired with other cable providers to strike deals by exchanging assets to ensure that companies would be able to maintain exclusivity over clusters of markets. The U.S. District Court for the Eastern District of Pennsylvania certified the class of approximately 2 million cable television subscribers.
The Third Circuit affirmed the certification of the class, stating that the plaintiffs “established by a preponderance of the evidence that they would be able to prove through common evidence: (1) class-wide antitrust impact (higher cost on non-basic cable programming), and (2) a common methodology to quantify damages on a class-wide basis.” The Third Circuit stated that the district court must conduct a “rigorous analysis,” and that “an overlap between a class certification requirement and the merits of a claim is no reason to decline to resolve relevant disputes when necessary to determine whether a class certification requirement is met.”
Comcast took the case to the Supreme Court, arguing under the Court’s decision in Wal-Mart Stores, Inc. v. Dukes (131 S.Ct. 2541 (2011)). In Dukes, the Court held that district courts are required to resolve any “merits question” bearing on class certification, even if the plaintiffs “will surely have to prove [those issues] again at trial in order to make out their case on the merits.” Comcast argued that the Third Circuit did not consider the merit arguments relevant to the class certification analysis, as the relevant analysis under Dukes would be whether the plaintiffs had “in fact” satisfied the prerequisites for class certification, and not, as the Third Circuit stated, whether they could “prove their claims through common evidence at trial.” The Supreme Court granted cert.
This Supreme Court decision could set more stringent standards in class-action lawsuits. If the court rules in Comcast’s favor, future plaintiffs would have to show at the class-certification stage that they have a method of proving damages that is both admissible at trial and is common for all plaintiffs.
The court is expected to review the case in its next term, which starts in October.