Comcast and Economic Analysis of Class Certification Issues

23 July 2013
Drew Claxton and Dr. Faten Sabry

The US Supreme Court's recent decision in Comcast Corp. v. Behrend on 27 March 2013 is likely to have significant implications on the use of economic analysis at the certification stage of class action litigation. The decision reversed the judgment of the Court of Appeals for the Third Circuit, where the Appeals Court had affirmed the District Court's decision to certify a class of more than two million Comcast cable subscribers who alleged federal antitrust violations. The Supreme Court reiterated that the District and Circuit Courts needed to take a more critical look at how plaintiffs claimed to be harmed as a class and how damages would be calculated for each individual class member, even if such review involved the merits of the case, and found that the plaintiffs had failed to meet the predominance requirements of Rule 23(b)(3) as their methodology to calculate damages was not tied to their theory of liability. In this NERA paper, Senior Consultant Drew Claxton and Senior Vice President Dr. Faten Sabry discuss the Supreme Court's decision and its potential impact on consumer class actions, with a focus on the role of economic analysis in the certification stage of consumer class actions. The authors use two recent product liability consumer class actions as illustrative examples.