IN RE: RAIL FREIGHT FUEL SURCHARGE ANTITRUST LITIGATION - MDL 1869
Filing
806
MEMORANDUM OPINION AND ORDER denying Plaintiffs' Motion to Exclude Opinions Offered by Dr. Joseph Kalt 774 . Signed by Judge Paul L. Friedman on May 20, 2016. (MA)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
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In re RAIL FREIGHT FUEL SURCHARGE
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ANTITRUST LITIGATION
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This document relates to:
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ALL DIRECT PURCHASER CASES
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MDL Docket No. 1869
Misc. No. 07-0489 (PLF)
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiffs’ Motion to Exclude Opinions
Offered by Dr. Joseph Kalt at the class certification hearing, Dkt. 774. Plaintiffs argue that the
Court must do an analysis of Dr. Kalt’s report and proffered testimony under Rule 702 of the
Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993), and make a Daubert determination prior to the class certification hearing. They maintain
that the Court should refuse to consider Dr. Kalt’s opinions on class certification under the
standards of Rule 702 and Daubert.
Defendants respond that under the case law, no Daubert hearing is required prior
to class certification, that plaintiffs’ motion is a blatant misuse of the Daubert inquiry, and that
none of plaintiffs’ arguments can fairly be described as focusing “solely on principles and
methodology, [rather than] on the conclusions that they generate.” Defendants’ Opposition at 1
(quoting Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. at 595) [Dkt. 777]. Defendants
maintain that the proper forum for considering the reliability of Dr. Kalt’s methodology and the
validity of his opinions is at the class certification hearing itself. Id. at 12. The Court indicated
at the status conference on May 3, 2016 that it was inclined to agree with defendants’ position on
this matter. See 5/3/16 Tr. at 21-22 [Dkt. 805]. Having now reviewed the parties’ papers, the
Court will deny plaintiffs’ motion to exclude Dr. Kalt’s opinions under Rule 702 and Daubert.
Under Daubert, the Court is to act as a “gatekeeper” with respect to the issue of
the admissibility of expert testimony and evidence, primarily so that the trier of fact will not be
exposed to unreliable or irrelevant testimony about scientific, technical, or other esoteric matters.
Where the factfinder is the court and not a jury, however, the question is for whom the Court is
supposed to be keeping the gate. “There is less need for the gatekeeper to keep the gate when the
gatekeeper is keeping the gate only for himself.” United States v. Brown, 415 F.3d 1257, 1269
(11th Cir. 2005); see also Jacobsen v. Oliver, No. 01-1810, 2007 WL 5527513, at *1 (D.D.C.
Nov. 2, 2007); F.T.C. v. Whole Foods Mkt., Inc., No. 07-1021, 2007 WL 7632283, at *2 (D.D.C.
July 27, 2007). As Judge Diane Wood has explained for the Seventh Circuit:
Where the gatekeeper and the factfinder are one and the same — that is, the judge
— the need to make [Daubert and Rule 702] decisions prior to hearing the
testimony is lessened. That is not to say that the scientific reliability requirement
is lessened in such situations; the point is only that the court can hear the evidence
and make its reliability determination during, rather than in advance of, trial.
Thus, where the factfinder and the gatekeeper are the same, the court does not err
in admitting the evidence subject to the ability later to exclude it or disregard it if
it turns out not to meet the standard of reliability established by Rule 702.
In re Salem, 465 F.3d 767, 777 (7th Cir. 2006) (internal citation omitted); see also Gibbs v.
Gibbs, 210 F.3d 491, 500 (5th Cir. 2000).
This gatekeeping analysis applies equally to class certification hearings. The
Supreme Court in dictum has expressed its “doubt” that “Daubert did not apply to expert
testimony at the certification stage of class action proceedings,” but it has not squarely decided
the question. See Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2554 (2011). No court has
held that district courts must hold a separate Daubert hearing in advance of a class certification
hearing, or that district courts must bifurcate the class certification hearing between Daubert and
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Rule 23 class certification analysis. It therefore is appropriate for courts to hear the evidence and
argument regarding Daubert during the class certification proceeding.
The Court recognizes that the Daubert and Rule 23 standards are different and
that those differences inform how the Court will structure its analysis and opinion on class
certification. While the D.C. Circuit has not opined on this issue, Judge Anthony Scirica of the
Third Circuit has recently explained that when the reliability of an expert’s methodology is being
challenged, a district court must “conduct a Daubert inquiry before assessing whether the
requirements of Rule 23 have been met.” In re Blood Reagents Antitrust Litig., 783 F.3d 183,
188 (3d Cir. 2015). This is because “[e]xpert testimony that is insufficiently reliable to satisfy
the Daubert standard cannot prove that the Rule 23(a) prerequisites have been met in fact, nor
can it establish through evidentiary proof that Rule 23(b) is satisfied.” Id. at 187 (internal
quotation marks omitted); see also Messner v. Northshore Univ. HealthSystem, 669 F.3d 802,
812 (7th Cir. 2012) (“[A] district court must make a conclusive ruling on any challenge to that
expert's qualifications or submissions [under Daubert] before it may rule on a motion for class
certification.” (citing Am. Honda Motor Co. v. Allen, 600 F.3d 813, 815 (7th Cir. 2010))). In its
opinion on class certification, the Court therefore will first address the relevance of all expert
opinions and the reliability of the experts’ methodology under Daubert and Rule 702, and then
conduct the “rigorous analysis” of all of the relevant evidence — including expert testimony that
meets the Daubert and Rule 702 standards — that is critical to proving the class certification
requirements under Rules 23(a) and 23(b) of the Federal Rules of Civil Procedure. See In re
Blood Reagents Antitrust Litig., 783 F.3d at 187.
That having been said, there is no need for the Court to address each of the six
separate bases asserted by plaintiffs for the exclusion of Dr. Kalt’s opinions. Suffice it to say
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that most, if not all of them, are not valid Daubert arguments at all because they do not challenge
the principles or methodologies that Dr. Kalt employed. Rather, they are attacks on Dr. Kalt’s
theories or his responses to the opinions, regression analyses, and models of plaintiffs’ experts.
The Court will determine at the class certification hearing — consistent with Daubert and Rule
702 — the relevance, reliability, admissibility, and weight it should afford the reports, testimony,
and opinions of all experts.
For all of these reasons, Plaintiffs’ Motion to Exclude Opinions Offered by Dr.
Joseph Kalt, Dkt. 774, is DENIED.
SO ORDERED.
/s/_______________________
PAUL L. FRIEDMAN
United States District Judge
DATE: May 20, 2016
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