Antitrust Class Certification Standards

• Pages: 129-170

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CHAPTER VI

ANTITRUST CLASS CERTIFICATION STANDARDS

Federal Rule of Civil Procedure 23 embeds most, but not all, of the

standards for class certification of an antitrust claim. Rule 23 antitrust

practice has evolved in recent years into one that demands as much of the

resources—in terms of time, effort and expense—as perhaps the case as a

whole, more than pure “merits” discovery, trial, or an appeal of a

judgment. As made clear by the Supreme Court:

Rule 23 does not set forth a mere pleading standard. A party seeking

class certification must affirmatively demonstrate his complia nce with

the Rule—that is, he must be prepared to prove that there are in fact

sufficiently numerous parties, common questions of law or fact, etc.1

More recently, the Supreme Court has elaborated, in an antitrust

case:

Repeatedly, we have emphasized that it “‘may be necessary for the

court to probe behind the pleadings before coming to rest on the

certification question,’ and that certification is proper only if ‘the trial

court is satisfied, after a rigorous analysis, that the prerequisites of Rule

23(a) have been satisfied.’”2

Thus the savvy practitioner must focus substantial resources to the

discovery, experts, evidentiary record, hearing, and possible

interlocutory appeal that class certification demands.

Plaintiffs in any class action must have standing and otherwise meet

the requirements of Rule 23 of the Federal Rules of Civil Procedure in

order to maintain a class action. Under Rule 23(a), a class plaintiff must

demonstrate numerosity, commonality, typicality, and adequacy of

representation. In addition, class plaintiffs must satisfy at least one of the

requirements of Rule 23(b) by demonstrating that: (1) the prosecution of

1. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011).

2. Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013) (quoting both

Dukes and General Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160-161

(1982)).

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separate actions could potentially establish inconsistent standards of

conduct or substantially impair other class members’ ability to protect

their interests; (2) final injunctive or declaratory relief is appropriate

because the party opposing the class acted on grounds generally

applicable to the class; or (3) common issues predominate over

individual issues and a class action is a superior mechanism for resolving

the claims. Although none of these requirements is unique to antitrust, in

recent years there has been a trend in antitrust class actions toward

greater scrutiny of class certification motions. Some courts of appeals

appear to have raised the bar for certification of antitrust class actions,

but there are countercurrents as well.

A. Class Plaintiffs Must Possess Article III Standing

As a threshold matter, class action plaintiffs must satisfy the standing

requirements of Article III of the United States Constitution.3

Specifically, plaintiffs must show that: (1) they suffered an actual or

imminent injury-in-fact; (2) the injury must be fairly traceable to the

alleged conduct of the defendant; and (3) injury will likely be redressed

by a favorable decision in the litigation.4

In a pure antitrust case the injury must constitute “antitrust injur y,”

the type of injury that the antitrust laws were designed to address.5 The

fact that the plaintiffs seek to certify a class does not alter the standing

requirement. A named plaintiff cannot use the class action mechanism to

create standing that is otherwise lacking.6 As the Supreme Court

3. Although Article III requirements must be satisfied in every case, courts

sometimes will address the procedural requirements of Rule 23 before

deciding the issue of standing. See Amchem Prods. v. Windsor, 521 U.S.

591, 612-13 (1997) (resolution of class certification “is logically

antecedent to the existence of any Article III issues); see also In re

Chocolate Confectionary Antitrust Litig., 602 F. Supp. 2d 538, 579-80

(M.D. Pa. 2009) (same).

4. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992);

Wheeler v. Pilgrim’ s Pride Corp., 246 F.R.D. 532, 536 (E.D. Tex. 2007).

5. “Plaintiffs must prove antitrust injury, which is to sa y injury of the type

the antitrust laws were intended to prevent and that flows from that which

makes defendants’ a cts unlawful.” Brun swick Corp. v. Pueblo Bowl-O-

Mat, Inc, 429 U.S. 477, 489 (1977).

6. See Lewis v. Casey, 518 U.S. 343, 357 (1996) (prisoner rights injunctive

relief class); Wheeler, 246 F.R.D. at 537 (noting that “[i]nclusion of class

action allegations in a complaint does not relieve a plaintiff of hi mself

meeting the require ments for constitutio nal standing, even if the persons

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explained, a class action “adds nothing to the question of standing, for

even named plaintiffs who represent a class must allege and show

that they personally have bee n injured, not that injury has been suffered

by other, unidentified, members of the class to which they belong and

which they purport to represent.”7 In antitrust litigation, the standing

requirement is applied to reflect the fact that antitrust liability is joint and

several. Typically, to satisfy standing, every plaintiff must have been

injured by every defendant. However, due to joint and several liability, a

plaintiff injured by one defendant as a result of a conspiracy has

standing to represent a class of individuals injured by any of the

defendant’s co-conspirators.8

Another implicit requirement for proceeding as a class action is that

the proposed class must be precisely defined.9 A careful class definition

described in the class definition would have standin g themselves to

sue.”); In re Milk Prods. Antitrust Litig., 195 F.3d 430, 436 (8th Cir.

1999) (holding that class cannot be certified if named plaintiff does not

have standing); In re Flonase Antitrust Litig., 610 F. Supp. 2d 409, 413

(E.D. Pa. 2009); In re NASDAQ Market-Makers Antitrust Litig., 169

F.R.D. 493, 504-05 (S.D.N.Y. 1996).

7. Lewis, 518 U.S. at 357 (quoting Simon v. E. Ky. We lfare Rts. Org., 426

U.S. 26, 40 n.20 (1976)). A named plaintiff who lacks standing cannot

represent a class. See Harris v. McRae, 448 U.S. 297, 320 n.23 (1980); In

re Milk Prods., 195 F.3d at 436 (holding that puta tive class could no t

have been properly certified, where only remaining named plaintiff

lacked standing.).

8. See, e.g., In re NASDAQ Mark et-Makers, 169 F.R.D. at 504-05; see also

In re OSB Antitrust Litig., 2007 WL 2253418, at *10 (E.D. Pa. 2007)

(holding that an antitrust plaintiff need not claim damages from every

defendant to satisfy Rule 23).

9. In re Tableware Antitrust Litig., 241 F.R.D. 644, 650 (N.D. Cal. 2007)

(“Courts have also read an additional threshold requirement into FRCP

23(a) that does not neatly fall under any of the four listed prerequisites: to

certify a class. there must be some evidence that a class exists and that it

may be defined with reasonable specificity.”); In re Foundry Resins

Antitrust Litig., 242 F. Supp. 2d 393, 402 (S.D. Ohio 2007) (“A threshold

issue that is implicit in a Rule 23 inquir y is that a court conclude that the

named plaintiffs seeking certification propose an identifiable,

unambiguous class i n which they are members.”); In re Copp er Antitrust

Litig., 196 F.R.D. 348, 359 (W.D. Wis. 2000), aff’d. on other grounds,

306 F.3d 496 (7th Circ. 2002); White v. NFL, 822 F. Supp. 1389, 1402

(D. Minn. 1993).