The New Normal: The Need for Damages Proof To Certify Consumer Classes Post-Comcast
In consumer class actions, the damages measure tends to remain undisclosed or ill-defined when plaintiffs move for class certification. Revealing as little as possible about damages allows plaintiffs to more flexibly adapt to changes in theory or proof as the action unfolds. It also deprives defendants of an early opportunity to challenge any particular damages measure. By focusing on liability issues over damages issues when assessing Federal Rule of Civil Procedure 23(b)(3)’s predominance requirement, federal courts have acquiesced in—if not encouraged—this hide-thedamages- ball strategy.
Lower-court reaction to last year’s U.S. Supreme Court opinion in Comcast Corp. v. Behrend1 is increasingly rendering this strategy untenable. Although an antitrust case, Comcast offers a fundamental Rule 23(b)(3) insight: Individual damages can overwhelm common issues, defeating predominance. As a result, a district court’s rigorous analysis must invariably assess if individual damages issues predominate, or not. Citing Comcast, district courts now require consumer plaintiffs on Rule 23(b)(3) motions to show precisely how they will measure and prove classwide damages at trial. Unsound methods do not carry this burden. Indeed, Comcast suggests consumer plaintiffs must show that the proposed measure squarely rests on proof of consumer harm. Damages issues in consumer class actions will continue to garner Rule 23(b)(3) attention as lower courts grapple with Comcast’s full implications.
Originally published in Class Action Litigation Report.
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Reproduced with permission from Class Action Litigation Report, 15 CLASS 332, 03/28/2014. Copyright 2014 by
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C ER T I F I C AT I ON
The New Normal: The Need for Damages Proof
To Certify Consumer Classes Post-Comcast
BY SASCHA HENRY AND JOHN M. LANDRY
I n consumer class actions, the damages measuretends to remain undisclosed or ill-defined whenplaintiffs move for class certification. Revealing as
little as possible about damages allows plaintiffs to
more flexibly adapt to changes in theory or proof as the
action unfolds. It also deprives defendants of an early
opportunity to challenge any particular damages mea-
sure. By focusing on liability issues over damages is-
sues when assessing Federal Rule of Civil Procedure
23(b)(3)’s predominance requirement, federal courts
have acquiesced in—if not encouraged—this hide-the-
Lower-court reaction to last year’s U.S. Supreme
Court opinion in Comcast Corp. v. Behrend1 is increas-
ingly rendering this strategy untenable. Although an
antitrust case, Comcast offers a fundamental Rule
23(b)(3) insight: Individual damages can overwhelm
common issues, defeating predominance. As a result, a
district court’s rigorous analysis must invariably assess
if individual damages issues predominate, or not. Citing
Comcast, district courts now require consumer plain-
tiffs on Rule 23(b)(3) motions to show precisely how
they will measure and prove classwide damages at trial.
Unsound methods do not carry this burden. Indeed,
Comcast suggests consumer plaintiffs must show that
the proposed measure squarely rests on proof of con-
sumer harm. Damages issues in consumer class actions
will continue to garner Rule 23(b)(3) attention as lower
courts grapple with Comcast’s full implications.
Individual Damages and Rule 23(b)(3)
Plaintiffs purporting to assert monetary claims on be-
half of consumer classes in federal court must proceed
via Rule 23(b)(3).2 This rule requires, among other
things, that ‘‘questions of law or fact common to the
class predominate over any questions affecting only in-
dividual members.’’3 Awarding damages to class mem-
bers inherently requires some degree of individualized
proof. For some courts, non-formulaic or ‘‘labyrinthine’’
calculations defeat predominance unless a proposed
1 133 S. Ct. 1426 (2013).
2 Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2558
(2011) (stating ‘‘individualized monetary claims belong in Rule
3 Fed. R. Civ. P. 23(b)(3).
Sascha Henry, a partner in Sheppard Mullin’s
Business Trial practice group in Los Angeles
and co-chair of the firm’s consumer class
action defense team, specializes in defending
clients in complex business litigation and con-
sumer class actions. She is available at
John M. Landry, a special counsel in Shep-
pard Mullin’s Antitrust practice group in Los
Angeles, practices in a broad spectrum of sub-
ject areas and has substantial expertise in
the defense of complex class actions. He can
be reached at email@example.com.
COPYRIGHT 2014 BY THE BUREAU OF NATIONAL AFFAIRS, INC. ISSN 1529-0115
classwide method—serving as an intermediate step—
can overcome the complexity and render the ‘‘the pro-
cess of computing individual damages . . . a virtually
mechanical task.’’4 But many courts, pre-Comcast,
avoided damages inquiries altogether by testing only
whether common liability issues predominated over in-
dividual liability issues, rather than over all issues.5
These courts also relied on the availability of later pro-
cedures to manage individual damages issues.6 As the
First Circuit has stated, the ‘‘individuation of damages
in consumer class actions is rarely determinative under
Rule 23(b)(3). Where, as here, common questions pre-
dominate regarding liability, the courts generally find
the predominance requirement to be satisfied even if in-
dividual damages remain.’’7
Comcast v. Behrend
Comcast allegedly acquired a monopoly subscriber
share in a 16-county geographic market, and raised its
cable rates above competitive levels. Comcast subscrib-
ers brought antitrust claims against Comcast in federal
district court. They advanced four competition-injury
theories and a classwide damages model to measure
their aggregate effects. On the plaintiffs’ motion for
class certification, however, the district court found
only one of the four theories susceptible to class treat-
ment. Although the damages model did not isolate this
theory’s effects from the other three, the court con-
cluded common issues predominated over any indi-
vidual damages issues, and certified the alleged class.
A Third Circuit panel affirmed. It viewed the model’s
failure to measure only those damages arising from the
one accepted theory as a merits-based consideration
outside the bounds of Rule 23. To establish predomi-
nance, it held a plaintiff need only ‘‘assure’’ the district
court that ‘‘damages are capable of measurement and
will not require labyrinthine individual calculations.’’8 It
found that the plaintiffs’ model accomplished this by
‘‘provid[ing] a method to measure and quantify dam-
ages on a classwide basis.’’9 It found no need to decide
‘‘whether the methodology [was] a just and reasonable
inference or speculative.’’10
A divided Supreme Court reversed ‘‘on the straight-
forward application of class-certification principles.’’11
It found that the plaintiffs’ damages model ‘‘bore on the
propriety of class certification’’ and, therefore, deserved
full Rule 23(b)(3) scrutiny. Without discussion, the
Court accepted the Third Circuit’s basic premise that
labyrinthine calculations can predominate, requiring a
classwide damages method. But it disagreed that ‘‘any
method of measurement is acceptable so long as it can
be applied classwide, no matter how arbitrary the mea-
surements may be.’’12 In the Court’s view, the model’s
failure to align with the only accepted liability theory
rendered it ‘‘unsound,’’ and thus incapable of measur-
ing the damages in the case.13 Because plaintiffs con-
ceded the need for a classwide damages method, and
had proposed no alternative model, they failed to show
Rule 23(b)(3) predominance.14
The dissent focused on the ‘‘oddity’’ of the plaintiffs’
concession on the need to prove damages on a class-
wide basis. It took pains to cabin the majority’s opinion
to the particular facts, stating ‘‘[t]he Court’s ruling is
good for this day and case only.’’15 It further cautioned
that ‘‘the [majority’s] decision should not be read to re-
quire, as a prerequisite to certification, that damages at-
tributable to a classwide injury be measurable ‘on a
classwide basis.’ ’’16
Comcast and Putative Consumer Class Actions
At its core, Comcast rests on the notion that indi-
vidual damages issues can overwhelm common issues,
including common liability issues, and defeat predomi-
nance. Rulings in putative consumer class actions since
Comcast permit several observations. Plaintiffs seeking
class action recoveries must now generally present a
classwide method for measuring damages. The pro-
posed method must be ‘‘sound’’ and suited for the task
at hand. The method must also tie tightly into the plain-
tiff’s theory of consumer harm by yielding an actual
Consumer Plaintiffs Must Demonstrate
Method to Prove Classwide Damages
Damages calculations in consumer class actions are
not naturally formulaic.17 Along with a proposed dam-
ages measure, expert evaluation or other assessment is
often needed to show the fact and extent of consumer
injury. Under Comcast, a failure to disclose an ad-
equate method leaves the predominance question (on
which plaintiff bears the burden of proof) fatally unre-
solved.18 Accordingly, as a practical matter, consumer
plaintiffs cannot risk remaining silent on damages.
Moreover, district courts read Comcast as affirmatively
requiring plaintiffs to proffer a classwide method for
measuring consumer harm.
Bright v. Asset Acceptance, LLC19 is an example.
There, the defendant debt collection agency allegedly
violated federal law when it called consumers using a
telephone number disguising the agency’s true name on
4 See, e.g., Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir.
1975); Bell Atlantic Corp. v. AT&T Corp., 339 F.3d 294, 304
(5th Cir. 2003).
5 See, e.g., Tardoff v. Knox County, 365 F.3d 1, 6 (1st Cir.
6 See, e.g., In re Visa Check/MasterMoney Antitrust Litig.,
280 F.3d 124, 141 (2d Cir. 2001).
7 Smilow v. Sw. Bell Mobile Sys. Inc., 323 F.3d 32, 40 (1st
8 Behrend v. Comcast Corp., 655 F.3d 182, 206 (3d Cir.
11 Comcast, 133 S. Ct. at 1433.
13 Id. at 1434.
14 In an aside, the Court agreed with this concession, not-
ing that even if plaintiffs’ model had aligned with the liability
theory, the model still would not have established the requisite
‘‘commonality of damages’’ unless it showed uniform price ef-
fects across all 16 counties. See id. at 1435 n.6.
15 Id. at 1437 (Ginsburg & Breyer, JJ., dissenting).
16 Id. at 1436.
17 Some non-consumer contexts may allow formulaic calcu-
lations. See, e.g., Leyva v. Medline Indus., Inc., 716 F.3d 510,
514 (9th Cir. 2013) (finding defendant’s payroll database en-
abled formulaic calculations in alleged wage and hour class ac-
18 Plaintiffs in Comcast, in fact, conceded the lack of pre-
dominance absent a valid classwide damages model.
19 292 F.R.D. 190 (D. N.J. 2013).
3-28-14 COPYRIGHT 2014 BY THE BUREAU OF NATIONAL AFFAIRS, INC. CLASS ISSN 1529-0115
consumer’s caller I.D. devices. Although the plaintiff as-
serted damages claims, and moved to certify a con-
sumer class, he never explained how he planned to
prove damages. He argued that any individual damages
issues would not predominate over the main, common
liability questions. The district court denied the motion,
stating ‘‘[t]he Supreme Court’s recent opinion in
[Comcast] is clear that a plaintiff seeking class certifi-
cation must present evidence of a reliable methodology
for calculating damages on a class-wide basis.’’20
Bright is consistent with other decisions interpreting
Comcast as not permitting Rule 23(b)(3) certifications
when individual damages calculations overwhelm com-
mon questions.21 These decisions read Comcast as cat-
egorically requiring a method capable of measuring
damages for each class member. Notably, two federal
courts of appeals view any such mandate as having
‘‘limited application’’ when consumer plaintiffs seek to
certify classes for purposes of only determining liability
using Rule 23(c)(4) (authorizing ‘‘issues’’ classes), leav-
ing damages determinations for separate non-class pro-
ceedings.22 But using Rule 23(c)(4) to create the
common-issue predominance that otherwise would not
exist is controversial.23 A consumer plaintiff must also
separately justify the invocation of Rule 23(c)(4) as
‘‘materially advanc[ing] the disposition of the litigation
as a whole.’’24 Yet, when no available classwide method
can overcome non-formulaic individual damages calcu-
lations, expect consumer plaintiffs to invoke Rule
Classwide Method Must
Be Valid and Plausible
Comcast also requires that district courts apply a rig-
orous analysis to proposed classwide damages meth-
ods. This is a significant shift in the scrutiny formerly
afforded proposed damages models at the class certifi-
cation stage. At least one district court has analogized
this aspect of Comcast to the more demanding pleading
scrutiny the Court introduced in Bell Atlantic Corp. v.
Twombly.25 In Comcast, the damages model failed to
survive rigorous analysis because its scope did not align
with the only liability theory in the case. Comcast
squarely applies to any proposed method in a consumer
class action that exhibits this same flaw.
That was the case in Martin v. Ford Motor Com-
pany.26 Alleging a design defect leading to a cracked
rear axle, the plaintiff sued Ford under various theories,
including violation of state consumer protection laws.
On the plaintiff’s motion for class certification, the dis-
trict court cited Comcast for the proposition that a
plaintiff’s damages model must measure only those
damages attributable to the liability theory.27 The facts
showed Ford had implemented a safety recall in con-
nection with rear axle complaints, with the recall data
revealing no cracks in 83.2 percent of rear axles. For
these owners, plaintiff’s expert proposed measuring
damages based on decreases in resale prices for Wind-
stars after the market learned of the safety recall. Al-
though the expert opined that resale prices would re-
flect the recall’s impact, his report failed to offer a
method to isolate that impact from other factors bear-
ing on resale prices.28 Thus, Comcast required the dis-
trict court to reject plaintiff’s resale-price based model.
Though the model in Martin failed for the same rea-
son as the model in Comcast, any flaw undermining the
soundness of a proposed damages method leaves the
predominance question unanswered, and defeats class
certification. In Gooden v. Suntrust Mortgage, Inc.,29
the plaintiff’s mortgage agreement with defendant re-
quired her to purchase hazard and flood insurance cov-
erage in an amount at least equal to the replacement
value of her home. Claiming her existing coverage was
inadequate, defendant ‘‘forced placed’’ additional insur-
ance on the property at her expense. Plaintiff sued de-
fendant for damages on behalf of herself and an alleged
class. To overcome the court’s need to determine the re-
placement value of each class members’ home for pur-
poses of liability and damages, she proposed using the
values the bank itself estimated at the time it forced
placed the coverage. The bank argued, however, that its
estimates were only ‘‘shorthand calculations’’ and not
actual replacement values. Citing Comcast, the district
court stated: ‘‘Simply because defendant uses these
proxies to determine the amount of insurance it will re-
quire of its borrowers as part of its own business model
does not change the fact that these proxies are essen-
tially estimates that do not take into consideration the
many individual factors that might affect a particular
home’s replacement value.’’30
In post-Comcast consumer class actions, when pro-
posed damages methods are invalid, fail to rest on rea-
sonable inferences, or otherwise cannot perform the in-
tended task, they provide no basis for a district court to
conclude that individual damages calculations do not
predominate, and so defeat class certification.
Proposed Damages Method Must
Also Yield Actual Damages Number
As Comcast instructs, ‘‘plaintiff’s damages case must
be consistent with its liability case.’’31 This arguably re-
quires more than merely showing that the ‘‘model . . .
measures only those damages attributable to the
[liability] theory.’’ That is, even when the scope of al-
leged damages aligns with liability, Comcast suggests
the need for plaintiffs to establish a more fundamental
connection by showing the proposed method actually
produces a positive damages number. This is precisely
20 Id. at 203.
21 See Cabbat v. Philip Morris USA, Inc., 2014 BL 1807, at
*12 (D. Haw. Jan. 6, 2014); Wheeler v. United Servs. Auto.
Ass’n, 2013 BL 228368, at *4-5 (D. Alaska Aug. 27, 2013);
Cowden v. Parker & Assocs., Inc., 2013 BL 134148, at *6-7
(E.D. Ky. May 22, 2013); Roach v. T.L. Cannon Corp., 2013 BL
83767, at *3-4 (N.D.N.Y. Mar. 29, 2013).
22 In re Whirlpool Corp. Frontloading Washer Prods. Liab.
Litig., 722 F.3d 838, 860 (6th Cir. 2013); Butler v. Sears, Roe-
buck and Co., 727 F.3d 796, 800 (7th Cir. 2013); see also In re
Deepwater Horizon, 739 F.3d 790 (5th Cir. 2014).
23 Castano v. Am. Tobacco Co., 84 F.3d 734, 745 n.21 (5th
24 Manual for Complex Litigation (Fourth) § 21.24 (2004).
25 In re BP P.L.C., 2013 BL 336825, at *18 (S.D. Tex. Dec. 6,
26 292 F.R.D. 252 (E.D. Pa. 2013).
27 Id. at 274.
28 Id. at 275-76, 279.
29 2013 BL 342689 (E.D. Cal. Dec. 11, 2013).
30 Id. at *6-7.
31 Comcast, 133 S. Ct. at 1433.
CLASS ACTION LITIGATION REPORT ISSN 1529-0115 BNA 3-28-14
how two district courts have applied Comcast’s
In Guido v. L’Oreal, USA, Inc.,32 the plaintiff alleged
L’Oreal failed to label its ‘‘anti-frizz’’ hair products as
flammable. In support of class certification, she stated
that expert proof at trial would value the properly-
labeled product at $0 or substantially less than its actual
retail price. She proposed to calculate damages based
on the difference between the historical prices paid and
the product’s true market value. The district court
deemed this measure valid under the consumer protec-
tion statutes at issue. The court, however, citing Com-
cast as requiring ‘‘evidence demonstrating the exis-
tence of a class-wide method of awarding relief that is
consistent with plaintiff’s theory of liability,’’ demanded
that the plaintiff submit expert proof showing that the
product’s historical market prices in fact exceeded the
true market value.33 In other words, only by showing
that L’Oreal’s alleged omissions measurably impacted
market prices could plaintiff establish the requisite con-
sistency between liability and damages. The district
court denied class certification without prejudice to al-
low the opportunity to submit any such proof.34
A similar result occurred in Stoneback v. Artsquest.35
There, the purchaser of collectible beer steins and mugs
brought a putative class action against the seller for
falsely advertising the items as made in Germany, when
they were really made in China. She claimed that she
and an alleged consumer class paid inflated prices as a
result. Evidence in support of class certification showed
the defendant paid its importer less for steins and mugs
originating from China than from Germany. The district
court found this failed to comply with Comcast’s com-
mand ‘‘that damages [be] susceptible of measurement
across the entire class.’’ It criticized the plaintiff for fail-
ing to produce ‘‘any evidence comparing the actual
value of steins and mugs manufactured in Germany
with the actual value of steins and mugs manufactured
in China.’’36 Without this evidence, nothing suggested
the alleged false advertising caused any injury, particu-
larly since defendant, when it later corrected its label-
ing, did not lower its prices.
As in the above cases, consumer class actions often
require inquiry into the ‘‘true’’ value of an allegedly
falsely advertised product to show the fact and extent of
injury. Guido and Stoneback illustrate the use of Com-
cast to require plaintiffs to show, at the Rule 23 stage,
an actual excess in the amount paid over the value re-
ceived. In other words, only when the plaintiff can show
the proposed damages measure in fact yields a dam-
ages number has plaintiff shown the requisite
‘‘consisten[cy] with its liability case.’’ Merely pointing
to a valid damages measure and the availability of sales
and price data fails to forge the deeper link Comcast re-
Consumer class action plaintiffs can no longer re-
main silent on damages at the Rule 23 stage. Because
individual damages issues can predominate, plaintiffs
must reveal how they intend to measure damages
across the entire class. The proposed classwide dam-
ages method must be valid, sound and closely bound to
plaintiff’s liability theory. Significantly, district courts
must entertain defendants’ challenges to this proof.
32 Case No. 2:11-cv-01067 (C.D. Cal. July 1, 2013).
33 Id. at 23-24.
34 The plaintiff subsequently renewed her motion. The
pending motion proffers expert testimony claiming that scien-
tific methods (‘‘Random Coefficients Demand Estimation’’ and
‘‘Conjoint Analysis’’) can prove the product’s true market
value (absent the warning label) and the additional units
L’Oreal sold as a result of its alleged failure-to-label conduct.
Her expert also offers a preliminary observation that the prod-
uct’s average effective price increased after L’Oreal removed
the warning label, stating that this suggests consumers valued
the product more without the label. This submission may not
satisfy the court’s Comcast demand. It also opens the door to
possible Daubert challenges.
35 2013 BL 164516 (E.D. Pa. June 20, 2013).
36 Id. at *16.
37 See Cabbat, 2014 BL 1807, at *12 (finding plaintiffs’
‘‘bare representations’’ that proposed ‘‘damages methodology
is point-of-purchase and benefit of the bargain’’ did not show
it ‘‘measure[d] the economic impact of [defendant]’s alleged
conduct’’). At least one district court, however, found the req-
uisite ‘‘consistency’’ where plaintiffs alleged point-of-sale in-
jury, sought return of some or all of the purchase price, and
‘‘represent[ed]’’ they could calculate damages based on defen-
dant’s sales records. See Astiana v. Kashi Co., 291 F.R.D. 493,
506 (S.D. Cal. 2013). The court in Astiana, however, arguably
did not require a proposed method of proof, only the assurance
of one, in direct contravention of Comcast.
3-28-14 COPYRIGHT 2014 BY THE BUREAU OF NATIONAL AFFAIRS, INC. CLASS ISSN 1529-0115
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