Earlier this month, the Supreme Court declined to hear an appeal from the Ninth Circuit’s decision in Lytle v. Nutramax Laboratories, Inc. affirming the certification of a class of owners of elderly dogs, alleging that the Cosequin supplement sold for canine joint health and mobility has no such benefit. That decision threatens to turn the circuit split over the standard for expert opinion at class certification into a major rift by permitting plaintiffs in the Ninth Circuit to rely on an expert model for which the expert “has not collected all of the necessary data to perform his calculations” and therefore has not executed.
The Supreme Court held in 2011 in Wal-Mart Stores, Inc. v. Dukes that, at class certification, plaintiffs have the burden of proving to the satisfaction of the court, “after a rigorous analysis,” that they comply with the requirements of Rule 23—that is, that “there are in fact sufficiently numerous parties, common questions of law or fact, etc.” Two years later, in Comcast Corp. v. Behrend, the high court made clear that the obligation to conduct a “rigorous analysis” applies to expert opinion offered in support of class certification. Plaintiffs frequently rely on expert opinion to satisfy their predominance requirement under Rule 23(b)—that “questions of law or fact common to class members predominate over any questions affecting only individual members.” As the D.C. Circuit pithily put it in the frequently cited decision In re Rail Freight Fuel Surcharge Antitrust Litigation: “No damages model, no predominance, no class certification.”
This Blog has previously explored how some courts have read the Supreme Court’s decision regarding an expert opinion offered to prove predominance in Tyson Foods, Inc. v. Bouaphakeo as implicitly overruling Comcast so that, when the defendants fail to file a Daubert motion to disqualify plaintiffs’ expert’s opinion submitted in support of class certification, the only remaining task for the court is to determine whether “no reasonable juror” would find the model persuasive. This Blog also explained how, in Olean Wholesale Grocery v. Bumble Bee Foods, the Ninth Circuit held en banc that the existence of more than a de minimis number of uninjured putative class members does not automatically preclude class certification, creating a split with the First and D.C. Circuits. In so doing, Olean cited Tyson Foods for the proposition that “evidence at certification must meet all the usual requirements of admissibility” and stated that defendants “may challenge the reliability of an expert’s evidence under Daubert” in opposing class certification.
In its August 23, 2024, decision in Lytle, however, a Ninth Circuit panel ignored that language and determined that “there is no requirement that the evidence relied upon by Plaintiffs to support class certification be presented in an admissible form at the class certification stage.” Accordingly, Lytle held that “class action plaintiffs may rely on an unexecuted damages model to demonstrate that damages are susceptible to common proof so long as the district court finds, by a preponderance of the evidence, that the model will be able to reliably calculate damages in a manner common to the class at trial.” In such cases, “where an expert’s model has yet to be fully developed,” Lytle held that “a limited Daubert analysis may be necessary, but the more full-blown Daubert assessment of the results of the application of the model would be premature.” Furthermore, citing Olean, Lytle held that the fact that running the model may show some class members were uninjured “does not in itself demonstrate class certification was improper,” since the type of model plaintiffs’ expert planned to run could show which members were injured and which were not.
Defendants sought a writ of certiorari, observing that “the First, Third, Fifth, Seventh, and Eleventh Circuits have held that the Rules of Evidence and Daubert apply to expert opinions submitted in conjunction with class certification briefing.” The Ninth Circuit is the only one to have taken the opposite position since the decisions in Comcast and Tyson. (The Eighth Circuit did so earlier.) Defendants also observed that Lytle “allows putative class counsel to choose what evidentiary standard applies, and under which expert testimony that is less developed receives less scrutiny.” (Emphasis in original.)
Given the Supreme Court’s denial of a writ of certiorari, the expert evidence required to support class certification in the Ninth Circuit now appears to be significantly lower than in other jurisdictions, at least when plaintiffs submit an unfinished economic model. On the other hand, as noted in our previous post, the high court has agreed to hear an appeal to address whether a class can contain uninjured members. If the Supreme Court rules it cannot, the type of “unexecuted” model approved in Lytle may no longer suffice, since it cannot show the absence of such uninjured members. Stay tuned to see whether the old dogs’ new trick continues to work.
