The full implications of the Supreme Court’s recent decision in Comcast v. Behrend1 are not immediately apparent. The court clearly held that whether damages could be decided on a class-wide basis was relevant to the predominance inquiry under Rule 23(b)(3). And the court reiterated the message from Wal-Mart Stores v. Dukes2 that plaintiffs must demonstrate at class certification that causation can be established for all class members in a class trial. But the Supreme Court’s decision to GVR (grant/vacate/remand) RBS Citizens v. Ross in light of its Comcast decision3 sheds some interesting light on the court’s thinking and suggests that Comcast may have a lot more to tell us than appeared at first blush.

‘Comcast’ and ‘RBS’

First, a brief recap of Comcast and RBS. Comcast involved an antitrust challenge to various practices employed by Comcast in building out its cable network. The court granted review to decide "[w]hether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis."4

The court held that plaintiffs failed to satisfy Rule 23(b)(3)’s predominance requirement because they failed to demonstrate at the class certification stage that damages could be established on a class-wide basis at the class trial. Absent a method for establishing damages on a class-wide basis, "[q]uestions of individual damage calculations will inevitably overwhelm questions common to the class."5

RBS,6 on the other hand, involved an effort to certify two classes of workers alleging violations of Illinois’s overtime laws. The Seventh Circuit upheld the district court’s grant of class certification. At issue on appeal was whether plaintiffs had satisfied Rule 23(a)(2)’s requirement that there exist a single issue of law or fact common to the class. RBS argued that plaintiffs failed to identify a common issue because plaintiffs’ claims would "require the same significant and time consuming individualized liability inquiries that the Supreme Court found problematic in Dukes."7

The Seventh Circuit disagreed, finding that the class in RBS was much smaller than the one at issue in Dukes (approximately 2,000 in RBS vs. 1.5 million in Dukes) and that the type of proof the plaintiffs were required to offer in the two cases differed significantly—proof of subjective intent to discriminate in Dukes and proof of whether RBS had "an unlawful overtime policy [that] prevented employees from collecting lawfully earned overtime compensation."8

Comcast and RBS seem largely disconnected—(1) Comcast involved predominance under 23(b)(3), whereas the issue in RBS was whether a common question existed under 23(a)(2), a far lower hurdle than (b)(3) predominance,9 and (2) damages were not at issue in RBS. But the Supreme Court felt otherwise.

Intersection

The GVR in RBS teaches us a few things. First, Dukes signaled a blurring of the lines between the common question requirement of Rule 23(a)(2) and the higher burden imposed by 23(b)(3), with the court insisting on a far more rigorous analysis of whether the common questions posed by plaintiffs to satisfy 23(a)(2) really provide common answers for the entire class rather than just raising common questions. Recall that the dissent in Dukes took the majority to task on this very point.10 The GVR of RBS in light of Comcast suggests that the court is serious about requiring that the common questions posed by plaintiffs actually provide common answers for all class members.

In RBS, the Seventh Circuit brushed off issues of whether liability for each class member turned at least in part on individualized issues of particular duties performed or hours worked by the members of the putative class. The circuit court held that, contrary to RBS’s "assertion, an individualized assessment of each [assistant branch manager's] job duties is not relevant to a claim that an unlawful company-wide policy exists to deny [assistant branch managers] overtime pay."11 The Supreme Court would seem to disagree, or at least think that its Comcast decision requires the Seventh Circuit to revisit this analysis.

This conclusion is bolstered by the statement at the end of the court’s Comcast opinion that "[t]he first step in a damages study is the translation of the legal theory of the harmful event into an analysis of the economic impact of that event."12 In other words, causation—did defendant’s wrongful conduct cause injury to each class member. Comcast makes this statement in the context of predominance under Rule 23(b)(3), but it is consistent with Dukes, which addressed the same question in the context of whether there is a common question under Rule 23(a)(2). The court in Dukes said that the critical inquiry under Rule 23(a)(2) is whether the answer to plaintiff’s articulated common question provides a common answer as to whether each class member was injured by defendant’s wrongful conduct. 131 S. Ct. at 2552 (in the context of plaintiffs’ discrimination claims, the class trial must "produce a common answer to the crucial question why was I disfavored" (emphasis in original)). The GVR of RBS would seem intended to drive this home and emphasize the importance of this inquiry, whether it arises in the context of Rule 23(a)(2)’s common-question inquiry or in the context of predominance under (b)(3).

Conclusion

The holding of Comcast may be relatively narrow, if not significant, but its reach is broad, as the GVR in RBS emphasizes. The case stands for the clear proposition that not only must plaintiffs establish at class certification that damages can be established on a class-wide basis, but it puts a stake in the ground that the court meant what it said in Dukes when it emphasized that the common questions under (a)(2) must provide common answers at the class trial on the causation issue for all class members, and presumably on their damages as well.

Allan Dinkoff is counsel at Weil, Gotshal & Manges.

Endnotes:

1. 2013 WL 1222646 (March 27, 2013).

2. 131 S. Ct. 2541 (2011).

3. 2013 WL 1285303 (April 1, 2013).

4. This is a different question than the one put forth in Comcast’s petition: "[W]hether a district court may certify a class action without resolving ‘merits arguments’ that bear on [Rule] 23′s prerequisites for certification, including whether purportedly common issues predominate over individual ones under Rule 23(b)(3)."

5. 2013 WL 1222646 at *5.

6. Ross v. RBS Citizens, 667 F.3d 900 (7th Cir. 2012).

7. Id. at 908.

8. Id. at 909-10. Of course, Dukes was also a disparate impact case. 131 S. Ct. at 2554.

9. Comcast, 2013 WL 1222646 at *4.

10. 131 S. Ct. at 2555 (Ginsburg, J., dissenting).

11. 667 F.3d at 910.

12. 2013 WL 1222646 at *7 (emphasis in original) (quoting Federal Judicial Center, Reference Manual on Scientific Evidence 432 (3d ed. 2011)).