Just a decade ago, it was still an open question whether parties could challenge the admissibility of expert testimony in class certification proceedings. The United States Supreme Court recognized the issue in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), and suggested that experts should be scrutinized as usual, noting that “The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. We doubt that this is so . . .” Since then, multiple circuits have taken that hint and held that a court must conduct a full Rule 702 analysis before deciding whether to certify a class. The Fifth Circuit, in Prantil v. Arkema Incorporated, 986 F.3d 570 (5th Cir. 2021), became the fourth federal court of appeal to adopt this rule expressly. As the district court’s recent decision on remand in Prantil demonstrates, a full Rule 702 analysis can make the difference between certifying or rejecting a class.
Plaintiffs in Prantil alleged that they suffered adverse health effects, property damage, or both due to emissions after one of Defendant’s nearby facilities experienced a chemical fire in the wake of Hurricane Harvey. Plaintiffs initially moved to certify both a damages class under Rule 23(b)(3) relating to negligence, trespass, and public nuisance claims and an injunctive-relief class under Rule 23(b)(2). Defendants moved to exclude certain of Plaintiffs’ experts under Rule 702. However, as noted by the Fifth Circuit, the district court considered it “unclear” whether a full analysis was required at the certification stage and “was not as searching in its assessment of the expert reports’ reliability as it would have been outside the certification setting.” The district court denied Defendants’ motions and went on to certify both the damages class and the injunctive-relief class. The Fifth Circuit reversed and remanded, noting that “an assessment of the reliability of Plaintiffs’ scientific evidence for certification cannot be deferred.”
On remand (Prantil v. Arkema France S.A., 2022 WL 1570022 (S.D. Tex. May 18, 2022)), the district court conducted a thorough Rule 702 analysis. Although most of Plaintiffs’ experts passed muster, a notable casualty was the expert who had provided a formula for calculating class-wide damages as a function of impaired property value. The district court described this expert’s report as “the lynchpin of Plaintiffs’ damages class.” However, the expert’s trendline methodology was unreliable because he failed to control for key differences between valuations for class members’ property versus control property and failed to validate his analysis with statistics. His case study methodology was also unreliable; it was not based on any discernible methodology, and the expert was unable to select relevant case studies because he did not know which contaminants were at issue. The court therefore excluded the expert’s opinions as unreliable, citing a prior court that had done the same.
The court went on to observe that “the only common evidence that demonstrates that the Incident caused [Plaintiffs’] damages comes from” the excluded damages expert. Plaintiffs therefore had “no way of proving causation and damages absent individualized inquiries into thousands of properties.” The Court therefore could not “find that common issues predominate over complex individualized issues regarding causation and damages” and denied Plaintiffs’ renewed request to certify a damages class under Rule 23(b)(3).
In Prantil, a full Rule 702 analysis singlehandedly caused a court to deny on remand a certification motion it had previously granted. The night-and-day change in Prantil aptly illustrates how unreliable methodology yielding unreliable opinions can lead to unjust class certification decisions and, on the flipside, how properly enforcing Rule 702 can prevent certification of inappropriate damages classes. Courts should rigorously apply Rule 702 at the class certification stage, and defendants should insist on it when certification motions potentially turn on the reliability of an expert’s testimony.
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