In another important precedent for defending class actions, on March 27, 2013 the Supreme Court ruled that trial courts must apply a rigorous analysis to the prerequisites for class certification, particularly the commonality of the harm, even if the analysis overlaps with the merits of the case. In this case, class certification was inappropriate because damages could not be shown on a class-wide basis. This decision raises the bar for plaintiff class certification and lessens the burden on companies that are forced to defend or settle class actions that should not be certified in the first place.
In this antitrust class action, subscribers to Comcast’s cable television services alleged that Comcast’s clustering of operations eliminated competition and led to supra-competitive prices in the Philadelphia market and sought certification of a 2 million member class. Rule 23(b)(3) of the Federal Rules of Civil Procedure requires that "questions of law or fact common to class members predominate over any questions affecting only individual members." The plaintiffs put forward multiple theories of harm, but the trial court accepted only one theory. However, the plaintiffs' damages expert testified based on a model that assumed the validity of all theories and did not isolate the harms arising from only the theory accepted by the trial court. The plaintiffs argued that examination of the expert’s methodology was looking at the merits and not appropriate at the class certification stage, but the court disagreed. This case builds on recent Supreme Court cases imposing restrictions on class action plaintiffs, particularly Wal-Mart Stores Inc. v. Dukes, by explaining that the “predominance” standard in damages class actions is even more demanding than in other types of class actions, even if the analysis involves an inquiry into the merits.