Lawsuits involving Big Data and Statistical Analysis

Wal-Mart Stores Inc. v. Dukes, 131 S. Ct. 2541 (2011)

• Plaintiffs proposed to prove a general policy and common mode of sex discrimination  through statistical comparison, by region, of eligible and promoted women and statistical comparison of promotions of women by competitors
  • Court ruled: Regional and national disparities would not establish uniform, store-by-store discrimination
    • And even if they did, they would not demonstrate discrimination at an individual level
• Court also ruled that Plan for “trial by formula” violated the Rules Enabling Act and Due Process Clause by depriving Wal-Mart of the right to litigate individual defenses.
  • District Court proposed summary proceedings on a sample of class members’ claims, followed by extrapolation of aggregate results to the entire class.
  • Defendants argue that this is averaging winners and losers? Extrapolating to injured and uninjured without regard to individual facts?

Comcast Corp. v. Behrend, 133 S. Ct. 24 (2013)

• Econometric analysis of class-wide damages must be consistent with plaintiffs’ liability and causation theory
  • Supreme Court reversed class certification, holding that the lower courts were required to evaluate whether plaintiffs’ damage model was “consistent with their liability case.”
  • Courts must resolve issues necessary to determine whether Rule 23 is satisfied, regardless of overlap with the merits.
• In the absence of a model “establishing that damages are capable of measurement on a class-wide basis,” individual damage questions would “overwhelm” the litigation

McLaughlin v. American Co., 522 F.3d 215 (2d Cir. 2008)

• Plaintiffs alleged implicit representation that light cigarettes are healthier; sought $800 billion under RICO and certification of a nationwide class of all purchasers.
•  Plaintiffs relied upon sixteen experts, including economists who proposed statistical and econometric analyses, under a “price impact” theory of reliance similar to the fraud-on-the-market theory.  Court did the following:
  • Second Circuit reversed certification, finding that individual proof of reliance, loss causation, injury, damages (and limitations) was required:
    • Market for light cigarettes is not efficient (econometric method inappropriate).
    • Individual evidence presented to show lack of reliance by customers.
    • Expert’s survey evidence regarding consumer reliance “pure speculation.”
    • Statistical analysis did not prove the relevant facts but actually assumed reliance.
  • Rejected “fluid recovery” approach of awarding aggregate “class” damages followed by “simplified proof of claim procedure”

In re Neurontin Sales & Mkt’g Practices Litig.

• Alleged off-label promotion, RICO and NJCFA claims • Problem: commonality of question of causation by allegedly fraudulent marketing
  • In the first opinion denying class certification, 244 F.R.D. 89 (D. Mass. 2007), plaintiffs were given the opportunity to show through “statistical proof” that essentially all prescriptions in each prescription category were caused by fraud. • Second class certification motion also denied, 257 F.R.D. 315 (D. Mass. 2009), vacated and remanded, 712 F.3d 60 (1st Cir. 2013).
• District Court’s denial of TPP class – Certification denied because differences between TPP knowledge and reimbursement decisions required individual inquiries to determine the percentage of payments by each TPP that were fraud-induced.
• After trial of individual TPP claims, the Third Circuit vacated and remanded for consideration whether its holding that statistical proof was sufficient to avoid summary judgment on proximate and but-for causation on an individual claim would change the class certification result. Harden Mf’g Corp. v. Pfizer, Inc., 712 F.3d 60 (1st Cir. 2013).
  • Held economist’s statistical analysis purporting to show percentages of prescriptions induced by fraud sufficient to show causation.
  • Credited economist’s opinion that physician testimony about factors in prescribing decisions is unreliable. 
  • Most courts have reached contrary conclusions about whether similar statistical analyses can be used to prove causation and reliance in pharmaceutical marketing cases.

UFCW Local 1776 & Participating Health & Welfare Fund v. Eli Lilly & Co., 620 F.3d 121 (2d Cir. 2010) (In re Zyprexa)

• “Excess price” analysis could not provide common proof of
• “Excess sales” theory could not provide common proof of causation because, e.g.,

Rhodes v. E.I. Du Pont de Nemours and Co., 253 F.R.D. 365 (S.D.W.V. 2008)

• The court denied certification of medical monitoring claims based on contamination of drinking water. • Selected deficiencies in toxicologist’s and epidemiologist’s quantitative opinions offered to establish common proof: