Arguing Class Actions is a monthly column by Adam J. Levitt for the National Law Journal.
Reprinted with permission from the June, 3 2024 edition of the National Law Journal. © 2024 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Juries are more than capable of deciding damages for class members, not just individual litigants. Acknowledging that fact begs the question of why courts (and defense counsel), in class action cases, place such an emphasis on the need for expert testimony regarding damages at both the class certification and merits stages of those cases. Class action litigation nowadays all too often turns into a battle of the experts (and efforts to exclude them), especially related to damages, which invades the province of the jury, contributes to out-of-control litigation costs for all parties and results in the overuse of judicial resources. Indeed, the cost of preparing an expert report on damages can conservatively range between $75,000-$250,000, per expert, and is often exponentially more, especially, for example, in antitrust litigation.
Notwithstanding this blind rush to “expertize” damages issues, the fact is that juries and the courts can and should be trusted to handle those issues in class actions. For example, in a recent class action automobile defect trial in which my firm served as lead counsel, the jury awarded $2,700 per class vehicle, for a total of over $102 million in classwide damages, which they awarded following less than a full day of deliberation after an almost three-week trial. See Siqueiros v. General Motors, 676 F. Supp. 3d 776, 814–15 (N.D. Cal. 2023) (concluding there was substantial evidence to support the jury’s award of $2,700 per class vehicle). Although the plaintiffs there had a damages expert who testified that the cost of repair could be used as a basis for damages to restore to each class member the benefit of their bargain, the $2,700 amount came from an internal GM memo. The court further concluded that the expert’s testimony could be applied classwide, as it was based on an objective standard, and not the individual subjective expectations of each consumer. This example shows how juries can weigh record evidence and expert testimony at trial to determine not only per-class member damages but also classwide damages.
Notwithstanding that reality, class actions all too often unnecessarily get mired in damages expert minutiae at the class certification stage. Multiple treatises have recognized this problem. See 3 Newberg and Rubenstein on Class Actions Section 7:24, Use of Expert Testimony at the Class Certification Stage (6th ed.) (“Issues arising out of the use of expert witnesses at the class certification stage have beguiled the federal courts”); Introduction to Damages in Class Actions (“Few topics in class action practice have generated more controversy, and are more complex and nuanced, than the issue of monetary damages.”); 3 Bus. & Com. Litig. Fed. Cts. Section 25:68, Use of Experts in Class Certification (5th ed.) (citing how one issue that has split the circuits, and which the Supreme Court has yet to resolve, is whether expert testimony used in class certification must meet the reliability standards of Daubert); 7 Jones on Evidence Section 53:44, Class actions and Expert Testimony to Establish Classwide Damages (7th ed.) (“Establishing classwide damages is no small feat for class action attorneys.”).
But is it truly necessary to consistently approach damages through experts in class actions? For several reasons, the answer is “no.” First, perpetual reliance on expert testimony could form bad judicial habits in at least two respects. It can contribute to forming expectations that damages issues must be technical and complex, when that is not necessarily so. At the same time, it can discourage courts and trial lawyers from putting into place the trial tools and settings that would allow juries to rise to the task of determining damages issues on their own. Second, class certification is generally not the time to decide the merits of the case, which should make expert testimony less of a focus. See 3 Newberg and Rubenstein on Class Actions Section 7:23, Consideration of the Merits at Class Certification, (6th ed.) (citing how the Supreme Court has cautioned against free-ranging merits inquiries at the class certification stage and the merits may be considered only to the extent relevant to determining the Rule 23 prerequisites).
Third, the key to damages at the class certification stage is for plaintiffs to demonstrate a classwide method for determining damages, and not proving the existence and exact amount of damages at that stage of the litigation. 6 Newberg and Rubenstein on Class Actions Section 20:62, Damages at Class Certification—Common Method of Proving Damages Across the Whole Class (6th ed.); see also 4 Newberg and Rubenstein on Class Actions Section 12:1 (6th ed.) (“What persists across the different types of class suits is the need for a method for determining damages that can be applied to the claims of all or most class members.”). Demonstrating such a method need not be overly complicated nor the exclusive province of experts. Arguably, using a defendant’s own analysis and documents—such as GM’s internal repair memo in the Siqueiros case—could provide such a method in appropriate circumstances. Additional ways of demonstrating such a method include representative proof regarding an average class member that can be applied to other class members, statistical extrapolation from a representative sample of class members, appointing a special master to determine individual damages in a common fashion, and pursuing nominal damages. See 4 Newberg and Rubenstein on Class Actions Section 12:5, Methods of Proving Individual Damages, (6th ed.); 7 Jones on Evidence Section 53:44, Class actions and Expert Testimony to Establish Classwide Damages (7th ed.).
For the foregoing reasons, today’s immense focus on experts for all parties at the class certification stage and at trial largely misses the forest for the trees. An undue focus on experts is not only unnecessary, but also comes with immense cost for parties and judicial resources, while affirmatively undermining the province of the judiciary and the jury. It is no wonder that some courts have even limited parties to a small number of experts. See Frasco v. Flo Health, Case No. 3:21-cv-00757 (N.D. Cal.) (in a February 2024 hearing, Judge James Donato described the parties’ nine proposed experts for summary judgment and class certification motions as an “overkill approach” and limited the plaintiffs to two experts and the defendants to sharing two rebuttal experts).
The solution to an over-emphasis on experts in class actions is not to entirely do away with them. Indeed, they may be necessary for certain damages methods like conjoint analysis and statistical sampling. However, damages experts in class actions need not be so consistently front-and-center. Instead, litigants and the courts can use the available strategies and court procedures discussed herein to manage damages issues, and they can and should trust juries to be able to decide damages issues in class action trials when it comes time to determining how and to what extent class members have been harmed.
—DiCello Levitt partner, Adam Prom, contributed to the preparation of this column.
Adam J. Levitt is a founding partner of DiCello Levitt, where he heads the firm’s class action and public client practice groups. He can be reached at [email protected].