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Hostetler v. Johnson Controls, Inc.

Area of Law:

Class action arising out of alleged environmental contamination. The case was originally filed in state court and removed under the Class Action Fairness Act. Plaintiff moved to remand under the “local controversy” exception and in support of its motion, filed a survey and an expert report from a statistician regarding the citizenship of the potential class members.

Grounds:

In opposition to plaintiffs’ motion to remand, defendant filed a motion to strike plaintiffs’ survey and expert report because they provided no reliable basis upon which to express any opinion as to the citizenship of the class as a whole.

Outcome:

Granted.

Analysis:

As a first step of analyzing the survey, the court looked at the universe of surveyed people. It concluded that plaintiffs never considered whether the selected public records list of individuals would represent a fair cross-section of the class as a whole. The plaintiffs’ expert also merely accepted the list given to him by plaintiffs’ counsel. Thus he opined only on the citizenship of individuals in the public records list, not the class as a whole.

The court next looked at whether the survey selected an appropriate sample of the total population from which to take the survey. The court concluded that plaintiffs failed to select a random sample, as they merely eliminated people who could not be contacted by phone. This was not a random sample, but a “sample of convenience.” Contacting all individuals for whom contact information was available did not remedy the error because if there is a bias, a larger sample will not alleviate the bias. Again, plaintiffs’ expert never considered whether the sample was appropriate.

Finally, the court analyzed whether the survey results were impacted by non-response bias, which occurs when the nonresponses to a survey are not random, but correlate to a trait the survey is intended to measure. Response rate of below 80% would typically be a concern, and here it was only 11.6%. Once again, plaintiffs’ expert failed to even consider this source of bias as part of his analysis.

Because the expert failed to consider the appropriate factors, the issue was not of fact but of method and admissibility. Therefore, the court concluded that plaintiffs’ survey and expert report were not products of a reliable method and granted the motion.