Antitrust Class Action Settlements

The vast majority of antitrust class action litigation ends by
settlement. Depending on the timing of the settlement, there are different
requirements for seeking and obtaining court approval. This chapter
explores the practical considerations counsel must consider in
determining whether to settle an antitrust class action. It also examines
the procedural requirements, particularly the requirements of preliminary
and final approval of class settlements, as well as class notice issues.
Finally, this chapter also considers the impact of an antitrust settlement
on non-settling defendants.
A. Settlements Prior to Class Certification
Class certification in antitrust cases remains somewhat
unpredictable, and contested class certification proceedings are
expensive and time consuming. Frequently, therefore, settling before the
issue of class certification is decided can be an attractive option. On the
one hand, from a defense perspective, settling before a class is certified
may be undesirable because victory at the class certification stage
generally substantially reduces exposure or eliminates exposure entirely
as a practical matter. On the other hand, the uncertainty attendant to class
certification often enables defendants to settle on more favorable terms
before, as opposed to after, a class is certified. Plaintiffs face a similar
dilemma. They risk the often impractical task of pursuing individual
actions if a class is not certified, yet may be able to recover more if they
are successful in having a class certified. The uncertainty on both sides
can, and often does, drive settlement discussions before the issue of class
certification is decided.
The mechanics of settlement before class certification largely mirror
those after class certification, with one important difference: the lack of a
contested certification process in order to bind class members to the
settlement terms. In pre-certification settlement scenarios, defendants
typically stipulate to class certification (or to not oppose certification) by
agreeing with plaintiffs that, as part of the settlement, plaintiffs will
move for certification of a settlement class.
190 Class Actions Handbook
Neither route to certification of a settlement class makes class
certification automatic. The court to which the settlement is presented
must ultimately decide whether certification is appropriate under Rule
23. In Amchem Products, Inc. v. Windsor1 the Supreme Court held that a
district court reviewing a proposed settlement class must carefully weigh
the proposed settlement class against all of the requirements of Rule 23,
with the exception of trial manageability. Before Amchem, several courts
of appeals had held that the fact of settlement itself could be sufficient to
show predominance of common issues or adequacy of representation.2
The Supreme Court held, however, that although settlement may be
relevant to class certification, a court must look to factors beyond the
settlement to satisfy Rule 23. As to the proposed class of asbestos
claimants before it, the Court held that (1) common issues did not
predominate given the array of varied medical histories at issue; and
(2) already injured class members, with an interest in prompt payment,
could not adequately represent exposed-but-not-yet-symptomatic class
members interested in long-term preservation of the settlement fund.3
Following Amchem, most federal courts have rejected the suggestion
that class certification standards are relaxed in the context of a settlement
class.4 Nonetheless, many courts have certified settlement classes,
1. 521 U.S. 591, 620 (1997).
2. See, e.g., In re Asbestos Litig., 90 F.3d 963, 975 (5th Cir. 1996) (“[I]n
settlement class context, common issues arise fro m the settlement itself”
(citation and internal punctuation omitted)); White v. NFL, 41 F.3d 402,
408 (8th Cir. 1994) (“[A]dequacy of class representation . . . is ultimately
determined by the settlement itself”); In re A.H. Robins Co., 880 F.2d
709, 740 (4th Cir. 1989) (“If not a ground for certification per se,
certainly settlement should be a factor, and an important factor, to be
considered when determining certification”).
3. Amchem, 521 U.S. at 626-28.
4. See, e.g., Smith v. Sprint Commc’ns Co., 387 F.3d 612, 614 (7th Cir.
2004) (holding that because nationwide class could not be certified for
trial, class plaintiffs entered settlement negotiatio ns in a “disarmed” state
and were unable to represent interests of the parties); In re AT&T
Mobility Wireless Data Servs. Sales Litig., 270 F.R.D. 3 30, 340 (N.D. Ill.
2010) (“A court may not, however, abandon the Federal Rules merely
because a settlement seems fair, or even if the settlement is a ‘good
deal.’”); In re Ephedra Prods. Liab. Litig., 231 F.R.D. 167, 170-71
(S.D.N.Y. 2005) (rejecting invitation to relax Rule 23’s require ments for
purposes of settlement-only litigation); In re Relafen Antitrust Litig., 225
F.R.D. 14, 21 (D. Mass. 2004) (rejecting notion that courts don a
“different hat” at settlement).
Antitrust Class Action Settlements
finding that the concerns expressed in Amchem were not present and that
the requirements of Rule 23 were met.5 Some courts have even suggested
that a settlement class may be certified where a litigation class could not
be.6 As a practical matter, despite Amchem, courts seem more willing to
certify an unopposed settlement class than a contested litigation class.7
In requiring settlement classes to meet most of the Rule 23
requirements, Amchem creates, at best, the theoretical risk that entering a
pre-certification settlement will impact the defendants ability to contest
class certification in later proceedings (for example if the settlement is
not approved or otherwise does not go forward). In part for that reason,
defendants often insist on language in the settlement agreement that
makes clear that they are stipulating to class certification (or to not
oppose certification) for settlement purposes only, nothing in the
settlement agreement can be used as evidence in later proceedings, and
they reserve the right to contest class certification should the settlement
not be finalized for any reason. That language, however, does not
entirely eliminate the risk
5. See, e.g., Strube v. Am. Equity Invest. Life Ins. Co., 226 F.R.D. 688, 696-
97 (M.D. Fla. 2005); In re Phenylpropanolamine (PPA) Prods. Liab.
Litig., 227 F.R.D. 553, 562-63 (W.D. Wa. 2004); Ingram v. T he Coca-
Cola Co., 200 F.R.D. 685, 700-01 (N.D. Ga. 2001).
6. See, e.g., Schneider v. Citicorp Mortgage, 324 F. Supp. 2d 372, 375
(E.D.N.Y. 2004) (“[I]t is the questionable availability of class action
relief, if the case is not settled . . . which is the pr ime reason behind the
settlement. That is, the risk that plaintiffs will not be able to establish the
predominance of law or fact common to the members of the class
sufficient to maintain a class action to judgment is t he very reason
justifying settlement at this time.”); Ramirez v. DeCoster, 20 3 F.R.D. 30,
35 (D. Me. 2001) (“Although the named plaintiffs could not proceed to
trial as class representatives on [their] claims, they can proceed to
7. But see In re General Motors Corp. Pickup Truck Fuel Tank Prods. Liab.
Litig., 55 F.3d 768, 788 (3d Cir. 1995) (discussing possibility of a
“premature, even a collusive settleme nt” and noting tha t “[e]ven some
courts successfully using these devices to achieve settlements apparently
recognize these dangers since they certify these actions more cautiously
than ordinary classes”).

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