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“Critical Mistake” In Damages Model Sinks California Class Action


On July 29, Judge William Alsup of the Northern District of California issued a decertification order in a long-running class action dispute concerning Cricket Wireless’s 4G advertising, ruling that plaintiff’s counsel made “too critical a mistake” in fashioning their class-wide damages model.  See Freitas v. Cricket Wireless, LLC, 2022 WL 3018061, at *6 (N.D. Cal. July 29, 2022).

In Freitas, plaintiff won certification by asserting that she could prove “price premium” damages on class-wide basis using “econometric tools to isolate the value of 4G/LTE.”  Id. at *3.  But upon review of plaintiff’s ensuing damages model, the court determined that it was not tailored to isolate the alleged “price premium” under Comcast Corporation v. Behrend, 569 U.S. 27, 35 (2013), which held that “a model purporting to serve as evidence of damages in [a] class action must measure only those damages attributable” to plaintiff’s theory of liability.  Specifically, the court faulted plaintiff’s experts for failing to control for various confounding factors that could impact the pricing of Cricket’s 4G phones and service plans.  Freitas, 2022 WL 3018061, at *3–6.  Because plaintiff’s expert models did not identify a “price premium” attributable to Cricket’s alleged misconduct, they failed Comcast, thereby requiring decertification.

Judge Alsup’s decision is a cautionary tale for class action plaintiffs attempting to prove damages on a “price premium” theory.  Even after winning certification, “price premium” claims are still vulnerable if the corresponding damages models aren’t narrowly tailored to identifying the impact of defendants’ alleged misconduct.


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