United States District Court, D. Colorado
JOHANA PAOLA BELTRAN, LUSAPHO HLATSHANENI, BEAUDETTE DEETLEFS, DAYANNA PAOLA CARDENAS CAICEDO, ALEXANDRA IVETTE GONZALEZ, SARAH CAROLINA AZUELA RASCON, LAURA MEJIA JIMENEZ, JULIANE HARNING, NICOLE MAPLEDORAM, and those similarly situated, Plaintiffs,
INTEREXCHANGE, INC, USAUPAIR, INC., GREAT AUPAIR, LLC, EXPERT GROUP INTERNATIONAL INC., d/b/a Expert AuPair, EURAUPAIR INTERCULTURAL CHILD CARE PROGRAMS, CULTURAL HOMSTAY INTERNATIONAL, CULTURAL CARE, INC. d/b/a Cultural Care Au Pair, AUPAIRCARE INC., AU PAIR INTERNATIONAL, INC., APF GLOBAL EXCHANGE, NFP, d/b/a AuPair Foundation, AMERICAN INSTITUTE FOR FOREIGN STUDY d/b/a Au Pair in America, AMERICAN CULTURAL EXCHANGE, LLC, d/b/a GoAuPair, GOAUPAIR OPERATIONS, LLC, d/b/a GoAuPair, AGENT AU PAIR, A.P.EX. AMERICAN PROFESSIONAL EXCHANGE, LLC d/b/a/ ProAuPair, and 20/20 CARE EXCHANGE, INC. d/b/a The International Au Pair Exchange, Defendants.
KATHLEEN M. TAFOYA, UNITED STATES MAGISTRATE JUDGE.
matter is before the court on “Defendants' Motion
to Exclude Expert Testimony of William Kerr Pursuant to
F.R.E. 702” [Doc. No. 606]. “Plaintiffs'
Opposition to Defendants' Daubert Motion as to Class
Certification Opinions” [Doc. No. 650] was filed
on August 8, 2017 and Defendants' Reply in Support of
Defendants' Motion to Exclude Expert Testimony of William
Kerr Pursuant to F.R.E. 702 (ECF No. 606)” [Doc. No.
666] was filed on August 21, 2017. A hearing was conducted on
January 9, 2018.
detailed and lengthy motion for Fed.R.Civ.P. 23 class
certification has been filed by the Plaintiffs. [Doc. No.
562/559.] Defendants vigorously oppose such certification.
The class action is “an exception to the usual rule
that litigation is conducted by and on behalf of the
individual named parties only.” Califano v.
Yamasaki, 442 U.S. 682, 700-701 (1979). To come
within the exception, a party seeking to maintain a class
action “must affirmatively demonstrate his
compliance” with Rule 23. Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 350 (2011). The Rule “does
not set forth a mere pleading standard.” Id.
Rather, a party must not only be prepared to prove that there
are, in fact, sufficiently numerous parties, common questions
of law or fact, typicality of claims or defenses, and
adequacy of representation, as required by Rule 23(a), but
also satisfy through evidentiary proof at least one of the
provisions of Rule 23(b). Rule 23(b)(3) requires a court to
find that “the questions of law or fact common to class
members predominate over any questions affecting only
individual members.” Comcast Corp. v. Behrend,
569 U.S. 27, 33 (2013). As stated by the dissent in
Comcast, “it remains the ‘black letter
rule' that a class may obtain certification under Rule
23(b)(3) when liability questions common to the class
predominate over damages questions unique to class
members.” Id. at 42-43.
attempting to meet the burden to show treatment as a class
action is justified in this case, the plaintiffs presented
two expert reports from William O. Kerr. (See “Expert
Report of William O. Kerr” (“Kerr Rpt.”)
[Doc. No. 560-65] and “Rebuttal Expert Report of
William O. Kerr” (“Kerr Rebut. Rpt.”) [Doc.
No. 560-66].) As it relates to Dr. Kerr's reports and
expert testimony, the District Court will be required to
consider the common impact on the members of the proposed
class from the complained-of activities. The activity is
allegedly conspiring to fix the stipend paid to au pairs at
an artificially and illegally low $195.75 per week. Dr. Kerr,
an economist, presents two models which address the harm (or
damages) to the au pair class(es) caused by Defendants'
alleged anti-competitive behavior. Both models utilize the
so-called “but-for” comparative analysis, meaning
that the expert looks to the economic circumstances that
would likely have transpired absent the wrongdoing by
Kerr concludes that “but-for the actions of the
defendants, standard au pairs would have been paid at
least the legally required amount of weekly
stipend.” (Kerr Rebut. Rpt. at 11, ¶ 20,
emphasis added.) Given this conclusion, Dr. Kerr presents the
court with a model for calculation of damages for the
proposed classes at the floor - to wit: at least the
legally required amount of stipend pursuant to federal and
state minimum wage laws - and another model applicable to the
competitive ceiling - to wit: comparing the au pair class in
this case against benchmark groups of workers operating in
the free market of the United States, which includes within
it, the market's legislative restrictions such as minimum
assert Dr. Kerr's opinions should be disallowed because
he lacks any workable methodology for calculating damages on
a class-wide basis. As a preliminary challenge, Defendants
claim that a survey Dr. Kerr relied upon in determining that
all the au pair classes nearly uniformly received $195.75 per
week as a stipend did not comply with professional standards
that govern survey research. Second, Defendants claim Dr.
Kerr's “Wage and Hour Law Compliance Model”
for computing damages for the classes is a mere restatement
of Plaintiffs' legal position concerning labor law
violations and is therefore inapplicable to an antitrust
class. Third, Defendants claim Dr. Kerr's “Price
Competition Model” lacks a reliable basis for
calculating damages because the benchmark comparative groups
chosen by Dr. Kerr are flawed and the Price Competition Model
does not live up to the standards set by Daubert v.
Merrell Dow Pharms., Inc., 509 U.S. 579 (1993)
for the admissibility of expert opinion testimony. Defendants
therefore urge that Dr. Kerr's reports and testimony
should be stricken and not considered for any purpose in the
court's determination regarding Rule 23 class
Dr. Kerr's Survey Results
requires the plaintiffs to demonstrate that the class members
have suffered the same injury. Gen. Tel. Co. of the
Southwest v. Falcon, 457 U.S. 147, 157 (1982). This does
not mean merely that they have all suffered a violation of
the same provision of law. Dukes, 564 U.S. at
349-50. In considering the applicability of class treatment,
the District Court's analysis will likely entail
“overlap with the merits of the plaintiff[s']
underlying claim[s].” Id. That is so because
the “‘class determination generally involves
considerations that are enmeshed in the factual and legal
issues comprising the plaintiff's cause of
action.'” Falcon, 457 U.S. at 160
(internal quotations omitted); Comcast, 569 U.S. at
33-34. Dr. Kerr opines that the proposed classes suffered
common harm from the complained-of actions of Defendant
because the au pairs “were paid for employment at
amounts below what they would have been paid had
Defendants' complied with the law[.]” (Kerr Rebut.
Rpt. at p. 5, ¶ 4.)
the amount of money the putative class members were paid is
the first step in any analysis which seeks to prove that the
payment was insufficient. To determine that amount, Dr. Kerr
reviewed the extensive evidence of Defendants' business
practices, which show that every one of the defendants
consistently represented the stipend as “fixed, ”
“set, ” or that it simply “is”
$195.75. (Kerr Rep. at 16.) The evidence relied upon by Dr.
Kerr included: contemporaneous business records of the actual
stipend amount, including statements Defendants made about
the stipend in their marketing materials, policies and
guidelines (Kerr. Rebut. Rpt. at ¶ 14); Defendants'
standard form contracts, which attempt to legally bind the
au pairs to the represented stipend (id. at
17-18, 20); Defendants' own ordinary-course surveys,
showing that host families uniformly adhere to
Defendants' fixed wages (id. at 22); and the
parties' depositions, which also support the proposition
that au pairs were paid a fixed wage (id. at 17,
19-22). (See also Kerr Rep. ¶¶ 39-55 &
Kerr also gathered information to support his findings from
sponsor announcements to au pair candidates and potential
host families, sponsor organization marketing material
directed toward host families, a declaration from a host
parent, deposition testimony of a foreign au pair agency
director who worked with U.S. sponsors to place au pairs,
monthly contact reports administered by certain sponsors and
audit reports submitted to the Department of State. (Kerr
Rebut. Rpt. at 7-8.) In paragraph 18, id., Kerr
lists at least five other sources evidencing that au pairs
were paid $195.75 per week by host families at the direction
of all the sponsor organizations. All those sources-direct
and indirect, contemporaneous and retrospective- show the
same thing. Au pairs' wages were consistently fixed at or
very near $195.75 per week. Id.; see also
Rule 23 Mot. at 33 n.43 (Rodr. Decl. Ex. 30); Kerr Rep.
¶ 51. Into this broad mix of evidentiary sources comes
the survey about which Defendants complain.
Kerr's survey was provided to every host family for which
Defendants provided an email. There was “no sampling
involved at all.” (Resp. at 10.) A total of 8, 806
families responded, of which 4, 583 both (1) concerned an au
pair within one of the alleged classes and (2) contained a
specific response to the question “what was the typical
weekly stipend amount paid?” (Id.) The only
other question on the survey was the year the au pair worked
and the type of au pair the host family employed. While the
numbers of responses were in the thousands, as a percentage
of the whole, the number of responding host families
represented only an 18% response rate from the total number
of surveys sent out. (Mot. at 13.)
survey were the only evidence supporting the base finding
that au pairs were paid $195.75 per week, such a low response
rate would have to be carefully considered, even though it
reached a very broad spectrum of host families in the au pair
group. But such is not the case here. The survey
in question was merely some confirmation of all the other
voluminous evidence supporting the conclusion that putative
class member au pairs were almost uniformly paid $195.75 per
week as a stipend by the host families.
court finds that even if the survey and its results were
discounted entirely, Dr. Kerr's conclusion that
“all, or a substantial majority of, au pairs were
offered and paid a weekly stipend of approximately
$195.75” (Kerr Rpt. ¶ 39) is amply supported by
the other overwhelming evidence he considered. For class
certification purposes, Dr. Kerr's expert opinion that
the record demonstrates commonality with regard to the weekly
stipend amount is based on sufficient facts, data and
testimony to render it reliable. See Fed. R. Evid.
Wage and Hour Law ...