The law and economics of class actions: Yesterday, today, and tomorrow

Legal and economic analyses overlap and interact in many areas. Recent U.S. Supreme Court and lower court decisions on class action lawsuits clearly focus on the critical role that economic analysis plays in determining the outcome class actions. Class action decisions, such as The Wal-Mart Stores, Inc. v. Dukes ¹ and Comcast Corp. v. Behrend,² have made national headlines, and are affecting how class action cases are evaluated and managed. For example, Comcast, Dukes, and other recent cases have arguably raised the bar in class certification for showing common impact and predominance through expert testimony. In these and other class actions, one critical question is whether there exists a plausible systematic way to identify the class members who have been economically impacted by a wrongful act and to formulate a reliable generally accepted economic methodology to measure their damages. If there is no reliable systematic approach to identifying which class members have been affected, then class members must pursue the case individually, which often means the case does not go forward because of the cost of the litigation is too high for a single class member. These class action decisions have turned on the adequacy of the analyses put forth by expert economists, finding the basic economic and statistical analyses of the plaintiffs’ economists to be insufficient. The decisions are likely to have significant implications for use of expert testifiers in class certification and in estimation of monetary damages, and will present challenges to both attorneys and economists in antitrust and other class actions going forward.