Seventh Circuit Underscores Important Role for Pre-Certification Challenges to Expert Witnesses

In order to certify a class action, it is the plaintiff’s burden to prove that all of the requirements of Rule 23 of the Federal Rules of Civil Procedure are satisfied. In some class actions, plaintiffs cannot proceed without expert testimony that can prove, at a minimum, that issues can be addressed based on common evidence.  In those types of cases, courts cannot take a “wait-and-see” approach to shaky expert opinions.  As the Seventh Circuit had made clear, courts must decide Daubert[1] challenges to “conclusively rule on any challenge to [an] expert’s qualifications or submissions prior to ruling on a class certification motion.”[2]  And in Haley v. Kolbe & Kolbe Millwork, Inc., the lower court was listening.  Its decision, which the Seventh Circuit affirmed in full last week, reminds class action defense counsel of the important role pursuing Daubert challenges can play when opposing class certification.[3]

The Haley Case

The Haley plaintiffs brought a nationwide class action in the Western District of Wisconsin, asserting defects in windows manufactured by Kolbe.  The complaint did not specify what those alleged defects were; the plaintiffs relied entirely on the later issued reports of two proffered expert witnesses to explain their defect theories.

Those reports and theories had holes, however. One expert’s four-part theory incorporated a mistaken assumption that the lack of a factory-applied finish on some windows was Kolbe’s fault.  (In fact, factory-applied finish was optional, and Kolbe instructed customers to finish sashes that were ordered bare.)  The other expert opined that Kolbe’s factory paint was too impermeable and trapped water inside the wood sashes, without comparing the permeability of Kolbe’s paint to any other paint options or industry norms.

Plaintiffs argued that these flaws went only to the “weight,” and not the admissibility of the expert testimony. Recognizing the importance of these opinions to the merits of the named plaintiffs’ claims, as well as to class certification, the district court conducted a rigorous analysis and excluded both experts.  Because the court concluded that without expert testimony, neither the named plaintiffs nor the putative class could establish “defect and causation,” the court granted summary judgment and refused to certify the class—and the plaintiffs waived any argument to the contrary.

On July 11, 2017, the Seventh Circuit affirmed the district court in full. While noting at oral argument that the district court’s use of Daubert was “aggressive” when compared to routine cases, the panel’s decision took no issue with the district court’s exclusion of the experts.  It noted that the district court’s evaluation of the experts’ flaws tracked the requirements of Rule 702, and agreed that the Haley plaintiffs’ generic “goes to weight” mantra was not enough.  All other arguments, it concluded, had been waived.

Haley’s Helpful Reminders

The Haley case broke no new legal ground, but it does serve to reinforce a few best practices for class action defense counsel:

• Don’t be bashful about your Daubert challenges – in class actions, courts must take them seriously. In routine, single-party litigation, many practitioners have the (justifiable) mindset that Daubert challenges are longshots—because it is usually a safer course for the court to allow the expert to testify, and fix things later if the jury is led astray by flawed opinions. In class actions, they may derail the entire case.
• Consider bringing your Daubert challenges before completing class certification briefing – which means you need to be thinking about Daubert right away. While there may be strategic reasons for waiting in some cases, one should consider filing a Daubert challenge before—or in conjunction with—briefing on class certification. That consideration should drive planning at the initial scheduling conference, where deadlines for expert disclosures and class certification briefing are set.  Make sure you leave enough time to research and depose the plaintiffs’ experts—and raise any Daubert challenges—before class certification briefing is complete.
• Make the court’s job easier by answering the “how” questions. Daubert motions present time-consuming challenges for courts, and those courts rely on counsel to help them. They don’t need much assistance on the law; courts know how the Rule 702 and Daubert factors work, and they apply them routinely. But no court will grant a Daubert motion unless it understands the experts’ opinions and their basis, and those opinions are often complex and highly technical—as they were in Haley, where the opinions had several parts and sub-parts and the expert reports ran for more than 1,000 pages.  Therefore, Kolbe focused its briefing less on argument and more on explanation of how the experts’ theories work, and how mistakes in their methods and assumptions affected their reliability.  When described with vivid, everyday language rather than scientific jargon, these explanations make it easier for courts to quickly and fully grasp the experts’ theories and their flaws—and thus easier for courts to grant motions to exclude them.

[1] Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993).

[2] Am. Honda Motor Co. v. Allen, 600 F.3d 813, 815-16 (7^th Cir. 2010).

[3] Foley was counsel to the defendant in this case.