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Third Circuit: Expert Testimony Critical to Class Certification Must Satisfy Daubert

On April 8, 2015, a unanimous panel of the Third Circuit Court of Appeals issued an opinion vacating an order granting class certification in In re Blood Reagents Antitrust Litigation and remanding to the district court. This multidistrict litigation was filed by direct purchasers of blood reagents who allege that defendant Immucor, Inc., which settled with the plaintiffs prior to class certification, and defendant-appellant Ortho-Clinical Diagnostics, Inc. (“Ortho”) engaged in a horizontal price-fixing conspiracy.

The Third Circuit concluded that remand in Blood Reagents is appropriate to allow the district court to consider the propriety of class certification in light of the Supreme Court’s decision in Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013) (“Comcast”), which reversed Behrend v. Comcast Corp., 655 F.3d 182 (3d Cir. 2011) (“Behrend”), after the district court had relied onBehrend. When rejecting Ortho’s challenges to the plaintiffs’ impact and damages model, the district court relied on Behrend, concluding that the expert’s testimony “‘could evolve to become admissible evidence.’” In re Blood Reagents Antitrust Litig., 283 F.R.D. 222, 240, 241, 243 (E.D. Pa. 2012) (quoting Behrend, 655 F.3d at 204 n.13). In this week’s opinion, the Third Circuit explained, however, that “Behrend’s ‘could evolve’ formulation of the Rule 23 standard did not survive Comcast.” In re Blood Reagents Antitrust Litig., __ F.3d __, __, No. 12-4067, 2015 WL 1543101, at *2 (3d Cir. Apr. 8, 2015). The Third Circuit’s Blood Reagents decision makes clear that if plaintiffs rely on a damages model to prove common questions predominate with respect to antitrust impact and damages, the district court must be persuaded that the plaintiffs’ model will in fact establish that the requirements of Rule 23 of the Federal Rules of Civil Procedure have been met.

The Third Circuit also addressed squarely for the first time in Blood Reagents the issue of whether Rule 23 requires scrutiny of challenged expert testimony under the test set forth in Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Ortho had challenged in the district court, among other things, the reliability of the plaintiffs’ expert’s methodologies and whether his testimony satisfied the requirements of Rule 23(b)(3). In resolving this issue, the Third Circuit held:

We join certain of our sister courts to hold that a plaintiff cannot rely on challenged expert testimony, when critical to class certification, to demonstrate conformity with Rule 23 unless the plaintiff also demonstrates, and the trial court finds, that the expert testimony satisfies the standard set out in Daubert.

Blood Reagents, 2015 WL 1543101, at *3. The court explained that the Supreme Court has emphasized the need for a “rigorous analysis” at the class certification stage. As part of this rigorous analysis, the party seeking class certification must show in fact that the requirements of Rule 23(a) are met, and also must have evidentiary proof that one of the provisions of Rule 23(b) is satisfied. Given those requirements, the Third Circuit went on to state: “Expert testimony that is insufficiently reliable to satisfy the Daubert standard cannot ‘prove’ that the Rule 23(a) prerequisites have been met ‘in fact,’ nor can it establish ‘through evidentiary proof’ that Rule 23(b) is satisfied.” Id.

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About this Author

Paul H. Saint-Antoine, Litigation lawyer, Drinker Biddle
Partner

Paul H. Saint-Antoine is an experienced litigator and best known for his work defending companies sued under the federal and state antitrust laws. He co-chairs the firm's Antitrust team.

In addition to his experience in federal civil enforcement actions, Paul has represented a broad range of businesses in private antitrust litigation, extending to products and services in the pharmaceutical, computer, software, paper, telecommunications, energy, transportation, insurance and healthcare sectors.

215-988-2990
Joanne Lewers, Antitrust lawyer, Drinker Biddle
Partner

Joanne C. Lewers is a litigation partner and member of the Antitrust Practice Group. In addition to advising on antitrust matters, she works on consumer protection and other complex cases.

Joanne represents clients involved in state and federal antitrust suits alleging conspiracy and monopolization claims. She also appears before the federal antitrust agencies on behalf of clients seeking antitrust clearance for their proposed mergers or acquisitions. She regularly offers clients antitrust compliance counseling in a range of settings.

215-988-2712
Richard Coe, Antitrust, Securities, M&A Attorney, Drinker Biddle
Partner

Richard E. Coe represents clients in complex disputes involving antitrust, mergers and acquisitions, securities and corporate governance issues. He routinely handles class action cases and has particular experience in the pharmaceutical and financial services industries. He is co-leader of the Commercial Litigation Team.

Rick frequently represents public companies, their directors and officers, and investors in the defense of claims arising from corporate transactions. He has defended clients against challenges to mergers and...

215-988-3393