WLF Legal Opinion Letter
Influential Federal Court Mandates Daubert Analysis
At Class Certification Stage
By Jennifer L. Brown
July 9, 2010 (Vol. 19 No. 15)
In 2003, the Civil Rules Advisory Committee amended Fed. R. Civ. P. 23 to remove the provision that class certification "may be conditional." The amendment reflected the growing consensus among federal appellate courts that class certification should be denied unless a critical evaluation of the evidence supported findings that each of the Rule 23 requirements had been met. Courts, however, have continued to wrestle with the level of scrutiny required at the class certification stage when an expert's opinions are integral to the Rule 23 analysis and are challenged as unreliable and inadmissible.
In American Honda Motor Company, Inc. v Allen, 600 F.3d 813 (7th Cir. 2010), the Seventh Circuit conclusively answered the question. If an expert's opinion is critical to the class certification determination and its admissibility is challenged, a full Daubert analysis must be undertaken prior to class certification.
The district court certified a class of Honda motorcycle purchasers alleging that the front steering assembly of their Gold Wing GL 1800 motorcycles "wobbled" or shook excessively. Plaintiffs based their claim and request for class certification primarily on the report of a single expert. Plaintiffs' expert opined that any wobble or oscillations of the steering assembly should dissipate within 3/4 of a second to prevent riders from perceiving and reacting to them. Based on the test of one GL 1800 motorcycle, Plaintiffs' expert concluded that all GL 1800 motorcycles failed the standard which he had devised and thus were defective.
Honda argued that Plaintiffs' expert's opinions failed the reliability standards established by Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). Specifically, Honda argued that the standard of the Plaintiffs' expert was unsupported by empirical testing, was the product of litigation rather than independent research and was not generally accepted in the relevant scientific, technical, or professional community. Honda also challenged the reliability of the expert's conclusions based on the testing of only one motorcycle.
While the district court expressed grave reservations about the reliability of Plaintiffs' expert's opinions, the court declined to strike the expert's report "at this early stage of the proceedings" and granted Plaintiffs' motion for class certification.
The Seventh Circuit's Decision.
The Seventh Circuit vacated class certification and held that a full Daubert analysis must be undertaken at the class certification stage when an expert's opinion critical to the class certification determination is challenged. Hearkening back to its holding in Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001), the court noted that district courts are compelled "to make whatever factual and legal inquiries are necessary to ensure that requirements for class certification are satisfied before deciding whether a class should be certified, even if those considerations overlap the merits of the case." While some district courts have struggled with whether that includes a full-blown Daubert analysis, the court answered with a definitive and unqualified yes.
To establish Rule 23's predominance requirement and demonstrate that the case was capable of class-wide resolution, Plaintiffs relied on their expert's opinion that there was a defect common to all GL 1800 motorcycles. Because the district court must determine predominance before certifying a class, the district court could not defer to a later date conclusively analyzing the reliability and admissibility of this testimony. To do so was an abuse of discretion.
The court then concluded that exclusion of the expert's opinions was the "inescapable result" of a thorough Daubert analysis. The Daubert framework tests the scientific reliability of an expert's opinions -- a test Plaintiffs' expert's opinions failed in this case.
Analyzing the Unreliability of Plaintiffs' Expert's Opinions.
Daubert established a non-exhaustive list of guideposts to scrutinize the reliability of an expert's opinions, including whether the theory has been tested, subjected to peer review and publication, and whether it is generally accepted in the relevant scientific or technical community. In addition, the 2000 Advisory Committee's Notes to Rule 702 recommended additional benchmarks, including whether the expert's opinions resulted from independent research or are a product of litigation; whether the expert has accounted for alternative explanations; and whether the expert was as careful in forming his opinions for litigation as he would be in his non-testifying professional work. Analyzing each of these guideposts in turn, the court concluded that Plaintiffs' expert's theory came up short.
Focusing first on the wobble standard proposed by Plaintiffs' expert, the court joined the district court in harboring "definite reservations" about its reliability. The standard employed by Plaintiffs' expert was one he had crafted for an earlier case involving Honda. While it had been published in a peer-reviewed journal, the court expressed skepticism about accepting that as an indicia of reliability given that the article was directed to other motorcycle engineers who testify as experts on motorcycle instability. The court concluded that there was no evidence that Plaintiffs' expert's wobble standard was generally accepted. On the contrary, the court noted that in his article, Plaintiffs' expert readily acknowledged that no standard had been established by the government, industry, or a leading professional organization.
The court also questioned the methodology Plaintiffs' expert employed to arrive at his wobble standard. Plaintiffs' expert conducted no studies to determine when motorcycle riders perceive wobble. Instead, he merely labeled his standard as "reasonable" based on his previous assessment of the same, which was "similarly unsupported."
Finally, the court was troubled by the expert's reliance on the test of a single motorcycle ridden by a single rider to opine that an entire fleet of motorcycles manufactured over a seven-year period was defective. While the court acknowledged that determining the necessary minimum sample size was tricky, "a sample size of one is rarely, if ever, sufficient." This was all the more true when the record revealed that the wobble manifested itself differently among motorcycles, riders and road conditions.
Ultimately, the court concluded that Plaintiffs' expert's opinions were unreliable and inadmissible. Without expert testimony to support their common defect theory, Plaintiffs could not establish Rule 23's predominance requirement, rendering class certification inappropriate.
The Seventh Circuit's conclusion that a full Daubert analysis should be undertaken before a court relies on an expert's opinion in determining class certification is a natural extension of the growing acknowledgment by the courts and the Rules Advisory Committee that class certification should only be permitted after a rigorous application of Rule 23's requirements. It is only a matter of time before other federal appellate courts adopt this same conclusion.
Jennifer L. Brown is a San Francisco-based partner in the law firm Shook, Hardy & Bacon LLP's Global Product Liability and Class Action and Complex Litigation groups.