United States: Class Action Certification Requires That Damages Attributable To A Class-Wide Injury Be Measurable On A Class-Wide Basis.

On March 27, 2013 the Supreme Court reversed a class certification by the Third Circuit in an antitrust case, holding that a party seeking class certification must show a class-wide way to calculate damages. Comcast Corp. v. Behrend, 133 S.Ct. 1462 (2013).

Plaintiffs were subscribers to Comcast's cable television services. They filed a class action antitrust suit against Comcast, alleging that Comcast monopolized Philadelphia's cable market by "clustering" cable systems in the region by swapping their own systems outside the region for systems located in the region and then charging supra-competitive prices. The plaintiffs proposed four theories of antitrust impact. The district court rejected all but one—namely, that Comcast deterred competition from "overbuilders" that would have extended service to the Philadelphia area but for Comcast's conduct. The district court certified a class of more than 2 million subscribers. The Third Circuit affirmed, refusing to entertain arguments against the plaintiffs' damage model before a hearing on the merits. 

The Supreme Court reversed. Federal Rule of Civil Procedure 23(b)(3) requires questions of law or fact common to class members to predominate over any questions affecting only individual members. Because plaintiffs' expert admitted that his damage model calculated damages arising from the anticompetitive conduct as a whole and did not isolate damages caused solely by exclusion of overbuilders, the Court held that the plaintiffs had failed to show that a common question of fact—the amount of damages—was predominant. The Court held that the Third Circuit erred in failing to consider challenges to the damage model that bore on the propriety of class certification simply because those arguments would also be pertinent to the merits determination.

The decision will make it more difficult to obtain certification of class actions because individual issues of damages that are not amenable to class-wide resolution will defeat class certification.

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