Following the Supreme Court’s ruling in Tyson Foods and in light of the greater emphasis on proportionality in the amended Federal Rules of Civil Procedure, defendants can expect to see an increase in the use of sampling in class action discovery as plaintiffs attempt to use statistical evidence to establish both liability and damages. But defendants need not take such discovery lying down. Rather, defendants should consider taking the offensive and using plaintiffs’ own sampling to defeat class allegations.
In a recent post about Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036 (2016), we detailed the Supreme Court’s holding that plaintiffs could rely on statistical evidence to determine class-wide liability. Rejecting calls for a broad rule either prohibiting or allowing representative evidence in class actions, the Court held that the permissibility of representative evidence would “depend on the purpose for which the evidence is being introduced and on the elements of the underlying cause of action” and, therefore, opened the door for plaintiffs’ attempted use of sampling in class action discovery.
Additionally, with the greater emphasis on proportionality following the recent amendment of the Federal Rules of Civil Procedure, courts increasingly endorse sampling as a less burdensome alternative to class-wide discovery. See, e.g., Halvorsen v. Credit Adjustments Inc., No. 15-CV-6228, 2016 WL 1446219, at *2 (N.D. Ill. Apr. 11, 2016) (“It may be that a party responding to discovery before a class is certified can make a good argument that only a sample of the requested materials should be produced because of concerns about undue burden and proportionality.”).
In light of these developments, defendants can expect to see an increase in the use of sampling in class action discovery to establish liability and damages and should be prepared to take the offensive in discovery to build ammunition, which includes use of plaintiffs’ own sampling, to defeat class allegations. Useful offensive tactics following the production of a sample of records include the following:
- Ensure the sample is valid. If the sample was not agreed upon in advance, make a Daubert challenge at the class certification stage of plaintiffs’ sampling methodologies by retaining a statistical expert and by using the facts within the sample to expose a lack of representativeness and variability within the sample set.
- Serve discovery requiring plaintiffs to identify class members within the sample and every instance within the sample that demonstrates liability for their claims. Doing this will flush out problems with ascertainability, administrative feasibility, individualized questions, predominance, and superiority that would require court resolution of factual questions on a class-member basis. If plaintiffs object to the requested discovery (on the basis that the exercise is unduly burdensome, for example), defendants can use those objections against them. If plaintiffs respond, defendants can use the responses to demonstrate variability within the sample. In courts applying a stricter ascertainability standard (see our prior post, “Circuits Clash Over Ascertainability Standard”), individual factual inquiries that implicate administrative feasibility issues can be used early in the litigation to challenge the ascertainability of the class. In more lenient courts, evidence of individual inquiry or burden can be used later at the class certification stage to challenge the superiority or predominance elements.
- Push the plaintiffs for a trial plan. Doing this will force plaintiffs to explain their intended use of the representative sample evidence and articulate their proposed method of allocating damages. Defendants can then use evidence from the sample to focus the court’s attention on class-wide proof problems, such as predominance and manageability, and attack plaintiffs’ damages methods by showing the inclusion of uninjured class members.
Defendants can benefit from sampling in a number of ways. Engaging in the sampling process can help defendants take the offensive with evidence that can be used to defeat class claims. Defendants may also realize significant cost efficiencies by participating in sampling as a way to impose reasonable, proportional limits on discovery. Further, willing participation in sampling may also help defendants establish goodwill by taking a non-obstructionist position with respect to discovery. Clearly, sampling need not be only a plaintiff’s sword in class action litigation.