Opinion ID: 901147
Heading Depth: 2
Heading Rank: 1

Heading: Daubert Standards and Class Certification

Text: [¶ 39.] While my concerns with the plaintiffs' theories on damages are not so serious as to discommend class certification, the question remains whether those theories will survive the Daubert hearing. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469(1993); Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). This Court's opinion acknowledges that the full Daubert criteria have yet to be applied here. These standards cannot be satisfied by simply establishing the threshold tests for achieving class action status. Each expert's theories must pass the rigors of scientific methodology. [¶ 40.] Though the substantive arguments may be similar, evaluating expert evidence in accord with Daubert entails an inquiry distinct from the appraisal of expert evidence in support of a motion for class certification. In re Visa Check/MasterMoney Antitrust Litigation, 280 F.3d 124, 132 n. 4 (2d Cir.2001). Trial courts should not postpone consideration of a motion for class certification for the sake of waiting until a Daubert examination is appropriate. Id.; see SDCL 15-6-23(c)(1) (As soon as practicable after commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained.). In applying discretion to grant or deny a motion for class certification, the court's inquiry is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178, 94 S.Ct. 2140, 2153, 40 L.Ed.2d 732 (1974). [¶ 41.] On the other hand, SDCL 19-15-2 (Rule 702) governs the admissibility of expert testimony. The test for admissibility, the Daubert standard, was adopted in South Dakota in State v. Hofer, 512 N.W.2d 482, 484 (S.D.1994). See also Estate of Dokken, 2000 SD 9, ¶ 51, 604 N.W.2d 487, 500 (Amundson, J., concurring specially) (explaining that Kumho expands the Daubert gate-keeping function). To abide by Daubert-Kumho, the proponent offering expert testimony must show that the expert's theory or method qualifies as scientific, technical, or specialized knowledge under SDCL 19-15-2 (Rule 702). State v. Guthrie, 2001 SD 61, ¶ 34, 627 N.W.2d 401, 415-16. This burden is met by establishing that there has been adequate empirical proof of the validity of the theory or method. Edward J. Imwinkelried, Evidentiary Foundations 287 (4th ed. 1998). Under this standard, a court considers admissibility based on technical methodology, not the scientific correctness of an opinion because [i]t is not the trial court's role to decide whether an expert's opinion is correct. See Smith v. Ford Motor Co., 215 F.3d 713 (7th Cir.2000). In deciding whether to admit expert testimony, a court must ensure that the opinion rests on a reliable foundation. Daubert, 509 U.S. at 597, 113 S.Ct. at 2799, 125 L.Ed.2d at 485. The standards set forth in Daubert are not limited to what has traditionally been perceived as scientific evidence. These standards must be satisfied whenever scientific, technical, or other specialized knowledge is offered. Kumho, 526 U.S. at 141, 119 S.Ct. at 1171, 143 L.Ed.2d at 246. [¶ 42.] When [f]aced with a proffer of expert [testimony on scientific, technical, or other specialized knowledge], the trial judge must determine at a preliminary hearing whether the expert is proposing to testify to (1) scientific knowledge that (2) will assist the trier of fact to understand or determine a fact in issue. Daubert, 509 U.S. at 592, 113 S.Ct. at 2796, 125 L.Ed.2d at 482. See also SDCL 19-9-7 (Rule 104(a)) (preliminary questions determined by court). Thus the trial court, not the jury, must make a preliminary assessment whether the reasoning or methodology underlying the testimony is scientifically valid and whether that reasoning or methodology can be applied to the facts in issue. Id. That has yet to be established here. [¶ 43.] In the Daubert hearing, the trial judge may consider the following nonexclusive guidelines for assessing an expert's methodology: (1) whether the method is testable or falsifiable; (2) whether the method was subjected to peer review; (3) the known or potential error rate; (4) whether standards exist to control procedures for the method; (5) whether the method is generally accepted; (6) the relationship of the technique to methods that have been established as reliable; (7) the qualifications of the expert; and (8) the non-judicial uses to which the method has been put. See Guthrie, 2001 SD 61 at ¶ 35, 627 N.W.2d at 416 (citations omitted). Daubert's list of factors may not each apply to all experts in every case. Rogen v. Monson, 2000 SD 51, ¶ 28, 609 N.W.2d 456, 462-63 (Konenkamp, J. concurring) (citing Kumho, 526 U.S. at 141, 119 S.Ct. at 1171, 143 L.Ed.2d 238). With these and perhaps other relevant considerations, a judge must ensure that the testifying experts provide a proven scientific basis for a jury to find with reasonable scientific, technical, or, as here, econometric probability that it is more likely than not that defendant's conduct proximately caused the claimed loss to each class member.