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At the class certification stage, a harder look at experts

In the year since the U.S. Supreme Court made it tougher for large groups of plaintiffs to prove that they should proceed in a class action, courts have been taking a harder look at a key type of evidence plaintiffs use to make that case: expert witness testimony.

Increasingly, federal trial and appellate courts at the class certification stage are applying a tougher standard for admitting expert testimony, which purported class members have relied upon heavily, particularly in cases involving toxic tort claims, antitrust actions and even allegations of discrimination.

“It’s an important issue because of how often expert testimony is critical at the class certification stage,” said Sean Wajert, a partner in the Philadelphia office of Dechert.

What’s more, the stricter standard is making it more difficult for defendants to admit testimony to oppose class certification. In the recent 7th Circuit decision in the case Messner v. Northshore University HealthSystem, the court made clear that the same expert testimony reliability test that is used at trial must be applied to evidence offered at the class certification stage, regardless of which party offers it.

Though the Supreme Court gave a hint that it would endorse such a heightened standard, until and unless the Court rules directly, “this issue will play out in the federal courts for some time,” Wajert said.

Judging the experts

In general, expert witness testimony presented in federal trials is evaluated for reliability under the standard established in the 1993 case Daubert v. Merrell Dow Pharmaceuticals Inc. (509 U.S. 579). In a nutshell, that standard allows expert testimony to be admitted only if the expert testifies regarding technical, scientific or other specialized knowledge that has a valid scientific connection to the pertinent inquiry and will assist the trier of fact. The case also set out a number of other considerations to be taken into account when making the determination.

But while that standard has long been used at the merits stage of federal litigation, the question of whether it applied to expert testimony offered at the class certification stage remained open.

The district courts and circuit courts traditionally have not required a complete Daubert analysis at the class certification stage. But in recent years, attorneys say there has been a change in the tide, with more federal judges requiring parties offering expert evidence at the certification stage to meet a standard similar, if not identical, to the one established in Daubert – giving rise to the “Daubert light” and “quasi Daubert” standards.

The Supreme Court has yet to directly weigh in on the issue, but the justices seemed to give a big hint in their opinion last year in Wal-Mart v. Dukes. In dicta, Justice Antonin Scalia wrote: “The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. We doubt that is so.”

Since then, courts have been scrutinizing the reliability of expert witness testimony even more closely, making the already tough road plaintiffs must trek to get a class action certified even steeper.

“There is very little if anything in recent appellate jurisprudence that points away from having a Daubert analysis at the class certification stage,” said Bruce Sokler, a Washington, DC.-based member of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.

Some attorneys say this trend was emerging long before the Wal-Mart ruling.

“Over the last decade or so, courts across all circuits, with some exceptions, have moved to a more rigorous standard of scrutinizing expert testimony at the class certification stage, despite the fact that such scrutiny will likely involve looking into the merits of the case,” said Andreas Stargard, a senior associate in the Washington, D.C., office of Baker Botts.

Although the traditional rule has always been that “class certification and the merits of the underlying cause of action have been divorced from each other, I think over time that has shifted,” he said.

But after Wal-Mart, Stargard said, the scrutiny of expert testimony has gotten even more pointed, with more courts opting to apply the full-force Daubert analysis at the certification stage.

“I think courts have started to look especially critically at the ‘Daubert light’ standard, or whatever you want to call it, after the Wal-Mart decision,” Stargard said. “While I don’t think Wal-Mart was the originator of the trend, it has certainly given further support” for the tougher standard.

Burden still heavier on plaintiffs

The heightened standard isn’t just making plaintiffs’ attorneys jobs harder. As the 7th Circuit ruling in Messner demonstrates, courts are delving into the reliability of expert testimony offered by defendants opposing class certification bids.

But it’s still a bigger consideration for plaintiffs, attorneys say, because outside of antitrust cases like Messner, it’s plaintiffs who rely more heavily on expert evidence.

At the class certification stage, “the burden rests on plaintiffs. That hasn’t changed,” Stargard said. “Yes, the 7th Circuit decision clearly [states] that the expert qualification issue is symmetrical. However, it is only symmetrical if the defense chooses to submit expert evidence at all.”

Wajert agreed.

“It depends on the substantive law in the case,” Wajert said. “In cases involving product liability, mass tort and toxic torts, the overwhelming number of challenges to [the admissibility of] expert testimony are made by the defense. But in other kinds of cases, such as antitrust, there can be challenges in either direction.”

In Messner, “I think the court correctly found that the rule does not distinguish between the two contexts,” Wajert said. “[So], depending on the nature of a case, the testimony of an expert becomes particularly critical to a decision as to whether a class can be certified or not.”

The new trend may not only make a class certification bid a tougher sell, but it may also result in far fewer settlements, lawyers said.

“The plaintiffs’ bar has had … a false sense of security that once they navigate discovery and get a class certified, defendants will settle” to avoid long, costly class action litigation, Stargard said. “That’s no longer the case. So for the defense bar, that is a practical upshot to all of this.”

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