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The Value of Proposing Conjoint Analysis in Support of Damages Models for Class Certification

A recent decision by a California court sheds light on the value of proposing conjoint analysis to support a damages model in class certification.

In the in re Arris cable modem consumer litigation case, Judge Lucy H. Koh granted class certification for the plaintiffs and denied defendants’ motion to exclude the expert testimony of Applied Marketing Science’s Steven P. Gaskin regarding a class action conjoint survey designed to serve as a basis for the calculation of damages.

The class action involved consumers who purchased a specific cable modem manufactured by Arris Cable that was sold between 2015 and 2017. Plaintiffs alleged that Arris’ modem had a defect that caused severe network latency and that the defendant was “aware of at least some” of the latency defects while developing the Modem prior to public release. Plaintiffs contended that even though aware, the defendant made representations about the modem’s speed and reliability and failed to disclose the latency defects, thus misleading consumers. Plaintiffs also made a second allegation related to the modem's lack of compatibility with Comcast's network. Similarly, plaintiffs argued that the defendant knew that Comcast would not allow the modem to fully utilize its channel capabilities, and thus rendered Arris’ compatibility statements about the modem misleading.

To certify the class, the plaintiffs were subjected to a burden which, in part, required them to provide a damages model showing that “damages are susceptible of measurement across the entire class for purposes of Rule 23(b)(3).” Plaintiffs alleged that they were injured by paying a premium for the modem, more than they would have if they had known of the defects. Accordingly, plaintiff’s class action expert, Steven P. Gaskin of Applied Marketing Science, proposed a choice based conjoint study that would yield estimates of the reduction in market value for the modem with defects compared to an otherwise identical modem with performance as promised.

Defendant argued that Gaskin’s conjoint survey would not accurately measure the defects alleged. However, the court found that “conjoint analysis is a generally reliable, well recognized method for estimating how consumers value different attributes of a product” and the defendant’s criticisms of Gaskin’s survey were unpersuasive. Accordingly, the defendant’s motion to exclude Gaskin’s testimony was denied and ultimately the class certified.

This is a case where hiring a survey expert familiar with class certification surveys and false advertising class action market research was helpful to the plaintiffs. To learn more about Applied Marketing Science, Steve P. Gaskin, or class action surveys please contact us.

Class Action/Class Certification, Conjoint Analysis