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Sampling for Individual Damages in Class Action Litigation

83 Pages Posted: 22 Mar 2017 Last revised: 25 Aug 2017

Hillel J Bavli

Harvard University

John Kenneth Felter

Ropes & Gray LLP

Date Written: March 22, 2017

Abstract

The 2016 Supreme Court decision in Tyson Foods v. Bouaphakeo revived the use of “representative” or sampling evidence in class actions.  Federal courts are now more receptive to class plaintiffs’ efforts to prove classwide liability and, occasionally, aggregate damages, with sampling evidence.  However, federal courts still routinely deny motions for class certification because they find that calculations of class members’ individual damages defeat the predominance prerequisite of Rule 23(b)(3).  As a result, meritorious classwide claims founder. In this paper, we combine legal and statistical analyses and propose a novel solution to this dilemma that adheres to the Tyson decision and satisfies Daubert and Federal Rule of Evidence 702 standards and the prerequisites of Rule 23(b)(3) classes.  We develop a method and derive a threshold to determine whether class damages claims are sufficiently homogeneous to justify the admissibility of sampling evidence to prove individual damages.  Relying on Daubert and its progeny, and other well-recognized authority, we argue that accuracy is an appropriate standard for evidentiary reliability.  Then, using universally-accepted statistical methods and standards, we show that, whenever judgment variability exceeds claim variability (two terms we define), sampling evidence improves accuracy and evidentiary reliability and is, therefore, admissible in Rule 23(b)(3) class certification proceedings.  We also recommend several procedures to evaluate whether damages claims of a putative class satisfy the derived threshold. We conclude by opining that our proposed method to prove individual damages achieves the Supreme Court’s stated goals of Rule 23(b)(3) class actions, “economies of time, effort and expense” and the promotion of “uniformity of decisions as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results.”

Keywords: Tyson, sampling, evidence, reliability, class action, individual damages, classwide damages, accuracy, certification, predominance

Suggested Citation

Bavli, Hillel J and Felter, John Kenneth, Sampling for Individual Damages in Class Action Litigation (March 22, 2017). Boston College Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2937962 or http://dx.doi.org/10.2139/ssrn.2937962

Hillel J Bavli (Contact Author)

Harvard University ( email )

1737 Cambridge Street
3rd Floor
Cambridge, MA 02138
United States

John Kenneth Felter

Ropes & Gray LLP ( email )

One International Place
Boston, MA 02110
United States

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