Class certification under Federal Rule of Civil Procedure 23(b)(3) requires a finding that damages attributable to the theory of liability are measurable on a classwide basis, the Supreme Court decided today in Comcast v. Behrend. Justice Scalia, writing for a five-justice majority, emphasized that class certification is improper if plaintiffs offer only a generalized method of measuring classwide damages. According to the majority, the District Court should have addressed the merits of plaintiffs’ damages calculation methodology to determine whether damages attributable to the allegedly anticompetitive conduct were capable of classwide proof. Justices Ginsburg and Breyer jointly authored a strenuous dissent, joined by Justices Sotomayor and Kagan, arguing primarily that certiorari was improvidently granted. This opinion is sure to give class action defendants ammunition to attack expert evidence of classwide damages, though the dissent has laid the groundwork for limiting its application to this “oddity” of a case.

Comcast v. Behrend is an antitrust case involving a putative class of more than 2 million current and former Comcast cable subscribers. The plaintiffs, respondents in the Supreme Court, alleged that Comcast violated sections 1 and 2 of the Sherman Act by “clustering” its services in the Philadelphia market, a practice it implemented through agreements to swap regions with competitor cable systems. To use the Court’s illustration of this conduct, in 2001 Comcast swapped its cable systems in Palm Beach, Fla. and Los Angeles for a competitor’s Philadelphia systems. Class certification was granted by the District Court and affirmed by the Third Circuit under Rule 23(b)(3), which requires that “questions of law or fact common to class members predominate over any questions affecting only individual members.”

Based on the allegations of clustering by Comcast, plaintiffs asserted four theories of antitrust impact. But the District Court accepted only one – that Comcast’s clustering reduced competition from “overbuilders” that create cable networks on an existing company’s turf – as capable of classwide proof. Plaintiffs’ expert’s damages model, however, relied on all four theories to show that plaintiffs paid supracompetitive prices for Comcast cable. The over-inclusiveness of this damages model would prove to be plaintiffs’ undoing in the Supreme Court. While the Third Circuit viewed an attack on the methodology of the expert’s damages model as improper at the class certification stage, the Supreme Court concluded that without a methodology establishing that damages are capable of classwide measurement, “[q]uestions of individual damage calculations will inevitably overwhelm questions common to the class[.]” Majority op. at. 7.

The dissent took issue with that conclusion, stating that Rule 23(b)(3)’s predominance requirement does not “demand[] commonality as to all questions.” Dissenting op. at 4. And in one of several pointed shots at the majority opinion, the dissent provided this lifeline to class-plaintiffs’ attorneys: “The Court’s ruling is good for this day and case only. In the mine run of cases, it remains the ‘black letter rule’ that a class may obtain certification under Rule 23(b)(3) when liability questions common to the class predominate over damages questions unique to class members.” Id. at 5.

The dissenting justices would have dismissed the writ of certiorari as improvidently granted. In their view, respondents were not given a clean opportunity to address the issue decided because the Court’s reformulated statement of the question presented led the parties to focus on the admissibility of expert testimony, not on whether damages were susceptible to classwide proof.

In attacking the majority’s conclusions, the dissent also went beyond the majority’s focus on the class certification standard, challenging a fundamental assumption about the damages to which antitrust plaintiffs are entitled. Contrary to the majority view, the dissent contended that plaintiffs are entitled to damages for paying higher prices because of anticompetitive conduct, and are not limited to damages tied to the specific conduct that brought about those higher prices.