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Class Action Issues Update Fall 2025

The American Antitrust Institute (AAI) seeks to preserve the effectiveness of antitrust class actions as a central and vital component of private antitrust enforcement. As part of its efforts, AAI issues periodic updates on developments in the courts and elsewhere that may affect this important device for protecting competition, consumers, and workers. This update covers developments since our Fall 2024 update and includes the following new decisions:

  • Uninjured Class Members and Article III Standing at Class Certification: Dee’s Inc. v. Inmar, Inc., 127 F.4th 925 (4th Cir. 2025); Wilson v. Centene Mgmt. Co., L.L.C., 144 F.4th 780 (5th Cir. 2025); Speerly v. GM, 143 F.4th 306 (6th Cir. 2025); Lab. Corp. of Am. Holdings v. Davis, 145 S. Ct. 1608 (2025)
  • Daubert at Class Certification: In re Nissan N. Am., 122 F.4th 239 (6th Cir. 2024)
  • Mandatory Arbitration Agreements: Davitashvili v. Grubhub, 131 F.4th 109 (2d Cir. 2025); Flores v. N.Y. Football Giants, 150 F.4th 172 (2d Cir. 2025); Heckman v. Live Nation Ent., 120 F.4th 670 (9th Cir. 2024) ; Brock v. Flowers Foods, 121 F.4th 753 (10th Cir. 2024); Lackie Drug Store v. OptumRx, 143 F.4th 985 (8th Cir. 2025)
  • Attorney’s Fees: In re Wawa Data Sec. Litig., 141 F.4th 456 (3d Cir. 2025); In re Broiler Chicken Antitrust Litig., 142 F.4th 568 (7th Cir. 2025); Kurtz v. Kimberly-Clark Corp., 142 F.4th 112 (2d Cir. 2025); Paredes v. Zen Nails Studio, 134 F.4th 750 (4th Cir. 2025); Morrow v. Jones, 2025 U.S. App. LEXIS 14230 (5th Cir. Jun. 10, 2025)

I. Uninjured Class Members and Article III Standing at Class Certification

We have long been following the recurring debate in the federal courts over the rules and standards that govern the certification of classes that may contain some class members who were not injured by the defendant’s conduct.

The Second and Eighth Circuits have adopted rules against classes that contain uninjured class members. The Second Circuit has framed the issue as a question of standing, holding that “no class may be certified that contains members lacking Article III standing,” and requiring that a class “be defined in such a way that anyone within it would have standing.”[1] Basing its analysis not on Article III but on the predominance requirement of Rule 23(b)(3), the Eighth Circuit has denied class certification where the “individual inquiries” necessary to determine which class members were uninjured would “overwhelm questions common to the class.”[2]

Also relying on Rule 23, the First and D.C. Circuits have indicated that a district court should not certify a class if uninjured class members exceed a de minimis number,[3] while the Seventh, Ninth and Eleventh Circuits have stated that certification is imperiled only when the number of uninjured class members is “great.”[4] Reviewing the issue in the context of an antitrust class action, the Tenth Circuit has affirmed that certification of an issue class on the question of antitrust liability under Rule 23(c)(4) is appropriate even in the presence of an untold number of uninjured class members, as damages determinations in such cases are left for individual determination.[5]

The Ninth and Eleventh Circuits have squarely held that the presence of uninjured class members does not present an Article III standing issue. As explained in our Spring 2020 update, the Eleventh Circuit in Cordoba v. DIRECTV, 942 F.3d 1259 (11th Cir. 2019), held that, although individualized questions of standing can be relevant to the predominance inquiry, the presence of uninjured class members does not defeat class certification on the grounds that the allegedly uninjured members lack Article III standing.

The Ninth Circuit later agreed, holding in Ramirez v. TransUnion, 951 F.3d 1008 (9th Cir. 2020)—which dealt with the similar question of standing at the money damages stage of a TCPA class action—that every class member must have Article III standing “at the final judgment stage of a class action in order to recover monetary damages,” but it reiterated its previous holdings that “only the representative plaintiff need allege standing at the motion to dismiss and class certification stages . . . and even at the final judgment stage in class actions involving only injunctive relief.” A sharply divided Supreme Court subsequently reversed on the separate question of whether each plaintiff had standing in that case, 594 U.S. 413 (2021). In doing so, the Court held that “every class member must have Article III standing to recover individual damages,” explicitly declining to reach “the distinct question whether every class member must demonstrate standing before a court certifies a class.”

As we reported in our Fall 2016 update, the Supreme Court did not squarely reach the issue in either Tyson Foods v. Bouaphakeo, 577 U.S. 442 (2016) or Spokeo v. Robbins, 578 U.S. 330 (2016), although both opinions included language suggesting the presence of uninjured class members does not necessarily defeat class certification.

AAI has been actively involved in this issue. As we wrote in our Summer 2015 update, AAI first briefed the issue In re Nexium Antitrust Litig., 777 F.3d 9 (1st Cir. 2015), in which the First Circuit recognized that “objections to certifying a class including uninjured members run counter to fundamental class action policies” because “excluding all uninjured class members at the certification stage is almost impossible in many cases, given the inappropriateness of certifying what is known as a ‘fail-safe class’—a class defined in terms of the legal injury.” As we discussed in our Fall 2018 update, the First Circuit narrowly cabined Nexium in its subsequent ruling in In re Asacol, 907 F.3d 42 (1st Cir. 2018), in which it held that, without a classwide method to sort among injured and uninjured class members, individual questions may predominate over common questions absent unrebutted evidence of individual injury that renders the class sufficiently manageable.

As we wrote in our Spring/Summer 2022 update, we also briefed the issue before an en banc panel of the Ninth Circuit, which held in Olean Wholesale Grocery Coop. v. Bumble Bee Foods, 31 F.4th 651 (9th Cir. 2022), that “courts must apply Rule 23(b)(3) on a case-by-case basis, rather than rely on a per se rule that a class cannot be certified if it includes more than a de minimis number of uninjured class members,” and that the proper inquiry is whether the plaintiffs’ evidence is capable of establishing antitrust impact on a classwide basis.

Courts have also grappled with the question of whether a defendant’s due process rights are implicated by a class that may include uninjured class members. As we wrote in our Spring 2020 update, the Seventh Circuit held in Physicians Healthsource v. A-S Medication Sols., 950 F.3d 959 (7th Cir. 2020), that the defendant’s due process rights were indeed implicated, but only in the unique context of a claim under the Telephone Consumer Protection Act (TCPA) because unclaimed money can revert to the defendant in TCPA cases. In its amicus briefs on this issue, AAI has argued that, in cases where damages are calculated as the total sum of overcharges—which is true of most antitrust cases—a defendant does not have a due process interest in challenging the inclusion of a class member that may have suffered no damages.

Earlier this year, the Fourth Circuit addressed the Article III standing issue in Mr. Dee’s Inc. v. Inmar, Inc., 127 F.4th 925 (4th Cir. 2025), in which the court affirmed the district court’s refusal to certify a class of manufacturers who allegedly overpaid for coupon processing services due to the defendants’ price-fixing conspiracy because nearly a third of the class members did not pay higher prices. After finding that the high share of uninjured class members presented a predominance problem, the court relied on the Supreme Court’s opinion in TransUnion to conclude that “such a high share of uninjured members also raises Article III standing concerns.”

The issue of uninjured class members is arguably analogous to the issue of “disjuncture,” which focuses on whether a disparity between the named plaintiffs’ injuries and the injuries of prospective class members presents standing issues under Article III. In assessing disjuncture, the First, Third, Sixth, and Ninth Circuits employ the “class-certification approach,” which requires only that the named plaintiffs have standing,[6] while the Second and Eleventh Circuits have adopted the more intensive “standing approach,” which requires that the named plaintiff must have suffered harms that are analogous to those suffered by the rest of the class.[7]

Earlier this year, the Fifth Circuit joined the First, Third, Sixth, and Ninth Circuits in adopting the class-certification approach. In Wilson v. Centene Mgmt. Co., 144 F.4th 780 (5th Cir. 2025), the plaintiff health insurance purchasers alleged that they overpaid for premiums because the defendant overrepresented the size of its insurance network. The district court denied class certification on the basis that the named plaintiffs failed to establish that the class members would have paid lower premiums if the defendant had adequately represented the size of its network. Framing the issue as “the manner and degree of proof required to establish injury-in-fact at the class-certification stage,” the Fifth Circuit vacated and remanded with instructions to apply the class-certification approach, reasoning that the standing approach “prematurely and unnecessarily muddies the waters for the threshold constitutional issue of justiciability.”

Although the Sixth Circuit has squarely adopted the standing approach, a recent concurrence indicates some disagreement among judges on this point. In Speerly v. GM, 143 F.4th 306 (6th Cir. 2025), an en banc panel of the Sixth Circuit vacated the district court’s certification of 26 state-wide subclasses in an automobile defect case for failure to satisfy Rule 23’s commonality and predominance requirements. Judges Thamar and Nalbandian each wrote separate concurrences on the issue of Article III standing in class cases. Judge Nalbandian wrote that the court “should have resolved the standing question by holding that a class cannot be certified with members who have not suffered an injury in fact.” Disagreeing, Judge Thamar wrote that “[c]ourts should look to Rule 23, not Article III, in determining whether a named plaintiff may represent a class of members who assert different injuries—or no injury at all.”

This summer, the Supreme Court was poised to reach the role of Article III and predominance at class certification in Lab. Corp. of Am. Holdings (“Labcorp”) v. Davis, 145 S. Ct. 1608 (2025). Petitioners in Labcorp challenged a Ninth Circuit order certifying a class of blind patients seeking statutory damages under the ADA and California state law on the basis that the class contained uninjured class members, which they contended both violated Article III and prevented plaintiffs from satisfying Rule 23’s predominance requirement. The Court had granted certiorari on the question of “[w]hether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III Injury.”

AAI submitted an amicus brief explaining, among other things, that Article III injury can be a common question that supports a finding of predominance, that Labcorp elided important differences in the standards for establishing Article III injury and for establishing antitrust injury on the merits, and that, in antitrust cases, the presence of uninjured class members usually does not alter the amount of damages. But the Court did not reach the merits. After oral argument—at which it became clear that the class certification order at issue had been superseded below and was no longer in effect—the Court dismissed certiorari as improvidently granted.

Justice Kavanaugh dissented, writing that he would have reached the merits and would have held that “federal courts may not certify a damages class pursuant to Rule 23 when the class includes both injured and uninjured class members.” In his reasoning, Justice Kavanaugh mentioned only the predominance requirement and did not address Article III standing; he based his view on the risk that classes that are “overinflated” with uninjured class members “raise the stakes for businesses that are the targets of class actions,” allowing “coerced settlements” which “substantially raise the costs of doing business.”

Justice Kavanaugh’s dissent in Labcorp and the ongoing circuit splits suggest that the issue of classes containing uninjured members and other issues related to Rule 23’s relationship to Article III are likely to be raised in the Court again.

II. Daubert at Class Certification 

When plaintiffs rely on expert testimony at the class certification stage, courts are split as to whether a court should perform a full Daubert analysis of the expert testimony or instead apply a tailored approach specific to the “rigorous analysis” required to satisfy Rule 23. In antitrust class actions, plaintiffs often rely on expert testimony to establish that common questions will predominate over individualized questions when they attempt to prove impact and damages at trial.

Since at least 2015, the Third, Seventh, and Eleventh Circuits have held that Daubert applies in full at class certification.[8] Because Rule 23 must be satisfied with admissible evidence, they reason, courts may not certify a class without first resolving disputes about the reliability of expert testimony that a plaintiff uses to support certification. In our Spring/Summer 2021 update, we reported that the Fifth Circuit joined these courts, holding in Prantil v. Arkema Inc., 986 F.3d 570 (5th Cir. 2021), that “the Daubert hurdle must be cleared when scientific evidence is relevant to the decision to certify.”

In contrast, the Eighth and Ninth Circuits have held that a plaintiff need not clear the Daubert hurdle until after class certification.[9] These courts reason that a plaintiff’s class-certification evidence need not be admissible, as certification is not outcome-determinative and is often decided when merits discovery is incomplete, and that the purpose of Daubert—preventing unreliable evidence from swaying a jury—is not yet relevant. Under this approach, a court does not err by either conducting a “focused Daubert analysis” to determine the persuasiveness of expert testimony or by ruling on a Daubert challenge after class certification.[10]

Since our last update, the Sixth Circuit has joined the Third, Seventh, and Eleventh Circuits in In re Nissan N. Am., 122 F.4th 239 (6th Cir. 2024). Plaintiffs from 10 states sought to certify a class of drivers of Nissan cars with an allegedly defective automatic braking system. The district court certified the class without ruling on Nissan’s Daubert challenge to the drivers’ expert testimony that each model in the class had the same defect. The Sixth Circuit reversed, holding that, if challenged testimony is “material” to a class certification motion, the district court must demonstrate the expert’s credibility under Daubert. In doing so, it explicitly rejected plaintiffs’ arguments that the purpose of Daubert is to keep unreliable evidence from swaying a jury, reasoning that class certification is “a fact-based inquiry” and Rule 702—which Daubert interpreted—“does not distinguish between jury and bench trials.”

III. Mandatory Arbitration Agreements 

We have long been following the antitrust implications of mandatory arbitration agreements in adhesion contracts. Mandatory arbitration agreements often include forced class action waivers that may prevent class litigation and class arbitration. In our Summer 2015 update, we examined the impact of Am. Express Co. v. Italian Colors Rest., 570 U.S. 228 (2013), in which the Supreme Court instructed lower courts to “rigorously enforce arbitration agreements according to their terms,” even when that meant forcing federal antitrust plaintiffs into individual arbitrations that would make their claims prohibitively costly.

This spring, the Second Circuit ruled that an arbitration agreement between antitrust plaintiffs and defendants did not bar the plaintiffs’ class claims because there was an insufficient nexus between the arbitration agreement and the claims. In Davitashvili v. Grubhub, 131 F.4th 109 (2d Cir. 2025), the plaintiff diners alleged that no-price-competition clauses used by food-delivery platforms Grubhub, Postmates, and Uber—under which restaurants agree not to sell meals at lower prices off the platforms—violate federal and state antitrust laws. Relying on Italian Colors, Grubhub moved to compel arbitration of claims brought by plaintiffs who used its platform, the terms of which require arbitration of claims arising out of users’ “access and use” of the platform. The district court denied the motion, finding that the arbitration agreements lacked any nexus to plaintiffs’ claims.

A divided panel of the Second Circuit affirmed. In an opinion authored by Judge Cabranes and joined in full by Judge Pérez, the majority found that, because plaintiffs allege that they pay higher prices when ordering from other platforms and restaurants due to Grubhub’s agreements with restaurants, their claims do not “arise out of” their use of Grubhub under the Federal Arbitration Act (“FAA”). In a separate opinion concurring in part but dissenting on this point, Judge Sullivan agreed that a defendant may not compel arbitration of claims that are “completely unrelated” to the underlying transaction in which the arbitration agreement was made. But he considered the FAA’s “arising out of” language to be satisfied because plaintiffs’ “use of Grubhub’s platform is what gave Grubhub the market power to commit the alleged antitrust violations.” The panel unanimously agreed that plaintiffs’ claims against Postmates and Uber must be sent to an arbitrator because their arbitration provisions, unlike Grubhub’s arbitration provision, delegated the threshold question of arbitrability to the arbitrator rather than the court.

Italian Colors dealt with the judge-made “effective vindication” exception to the FAA, which the Court first recognized in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985), and which establishes that even FAA-protected arbitration agreements are subject to invalidation when they operate as a prospective waiver of a party’s right to pursue statutory remedies. Although it held in Italian Colors that an antitrust plaintiff cannot invoke the exception to invalidate a class-action waiver merely because the costs of individually arbitrating a federal statutory claim exceeded its potential recovery, the Court did not invalidate the exception, and a plaintiff can still challenge an arbitration provision under Mitsubishi if it prevents them from pursuing statutory remedies. Earlier this year, the Second Circuit in Flores v. N.Y. Football Giants, 150 F.4th 172 (2d Cir. 2025), invalidated a professional football player’s arbitration agreement with the NFL under the effective-vindication exception after finding that it required him to submit his claims to the “unilateral discretion” of the NFL Commissioner, without providing an independent arbitral forum or a process for bilateral dispute resolution.

We have also been following cases addressing preemption of the FAA under state law. The general rule, adopted by the Supreme Court in AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), is that the FAA preempts any state law that “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” in passing the FAA. Concepcion dealt with the California Supreme Court’s decision in Discover Bank v. Superior Court, 113 P.3d 1100 (Cal. 2005), which held that class action waivers in consumer contracts of adhesion are unconscionable under California law. The Court has since interpreted Concepcion expansively. In our Spring 2016 update, for example, we discussed DIRECTV v. Imburgia, 136 S. Ct. 463 (2015), in which the Court enforced an arbitration agreement that expressly incorporated California law, which, under Discover Bank, would have barred enforcement at the time of the contract but which was subsequently held preempted in Concepcion.

Notwithstanding Concepcion, courts have sometimes found class-action waivers in mandatory arbitration clauses to be invalid under state law. In our Fall 2020 update, we reported on Waithaka v. Amazon.com, 966 F.3d 10 (1st Cir. 2020), in which the First Circuit, upon finding that the plaintiffs were excluded from the FAA’s coverage, held that the statutory right to proceed as a class articulated in the employment statutes under scrutiny “represent[s] the fundamental public policy of Massachusetts” and that the class action waiver was therefore invalid under state law. The Supreme Court later denied a petition for certiorari of that opinion.

Last fall, the Ninth Circuit held in Heckman v. Live Nation Ent., 120 F.4th 670 (9th Cir. 2024), that the FAA did not preempt California unconscionability law as applied to a mass-arbitration agreement, invalidated the agreement as unconscionable, and allowed plaintiffs to proceed with their antitrust class action. The plaintiffs bought tickets to events promoted by Live Nation and sold through Ticketmaster and, in doing so, agreed to bring any claims against them in a mass arbitration. The district court denied defendants’ motion to compel arbitration in the plaintiffs’ antitrust case, finding that the mass-arbitration agreement was procedurally and substantively unconscionable as a matter of California law.

The Ninth Circuit agreed. First, as a matter of procedural unconscionability, defendants’ dominance in the live entertainment ticket market meant that plaintiffs had little choice but to purchase tickets from them. Second, the agreements’ terms were materially misleading and permitted unilateral and retroactive changes without notice. Finally, the mass arbitration rules were “so dense, convoluted and internally contradictory to be borderline unintelligible.” The court also found the mass-arbitration rules substantively unconscionable because they made bellwether decisions binding on all other claimants without notice or an opportunity to be heard, failed to provide a right to discovery, and gave defendants—but not plaintiffs—a right to appeal.

As an alternative and independent basis for affirming the district court’s decision, the Ninth Circuit held that the FAA did not preempt application of the Discover Bank rule to the mass-arbitration agreement because it required classwide, rather than bilateral, arbitration. Distinguishing Concepcion, the court concluded that “Congress did not have class-wide arbitration in mind when it passed the FAA,” since “[c]lass-wide arbitration did not exist in 1925” when the FAA was passed, and “FAA precedents treat bilateral arbitration as the prototype of the individualized and informal form of arbitration protected from undue state interference by the FAA.” Accordingly, it concluded that the application of California law to the mass-arbitration rules was not preempted by the FAA.” The U.S. Supreme Court subsequently denied a petition for certiorari.

We have long been tracking the use of mandatory arbitration clauses in employment agreements, which the Supreme Court upheld in a 5-4 decision in Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018). In our Spring 2019 update, we reviewed the Supreme Court’s decision in New Prime v. Oliveria, 139 S. Ct. 532 (2019), which held that the FAA does not compel courts to enforce private arbitration agreements involving employment contracts with “transportation workers,” which Section 1 of the FAA expressly excludes from the Act’s coverage provided they are “engaged in foreign or interstate commerce.”

Since Olivera, courts have been grappling with the scope of the FAA’s transportation-worker exclusion. In our Summer 2022 update, we examined the Supreme Court’s unanimous holding in Saxon v. Sw. Airlines, 142 S. Ct. 1783 (2022), that a class of workers is “engaged in foreign or interstate commerce” for purposes of the FAA exclusion if they are “directly involved in transporting goods across state or international borders.” In our Spring 2024 update, we examined the Supreme Court’s holding in Bissonnette v. LePage Bakeries Park St., 601 U.S. 246 (2024), that a worker need not work in the transportation industry to fall within the exclusion, and that courts should focus on workers’ duties rather than the industry they work in. We also explained that a circuit split has formed regarding last-mile delivery drivers, with the First and Ninth Circuits holding that they fall within the transportation-worker exclusion and the Fifth Circuit holding that they are subject to the FAA.[11]

The Supreme Court is poised to weigh in. Earlier this year the Tenth Circuit joined the First and Ninth Circuits in holding that last-mile delivery drivers fall within the transportation-worker exclusion even if they do not cross state lines. In Brock v. Flowers Foods, 121 F.4th 753 (10th Cir. 2024), the court examined whether a delivery driver who distributes baked goods from a  national baker to in-state retail stores fell within the transportation-worker exclusion under Bissonnette. Adopting the First and Ninth Circuit’s approaches in Waithaka and Rittman, and distinguishing cases in which rideshare and food-delivery drivers were found not to fall within the exclusion, the Tenth Circuit based its conclusion on the buyer-seller relationship between the driver’s customers and his employer. Because the driver places orders for baked goods from out-of-state bakeries owned by the national baker, picks them up at an in-state warehouse owned by the baker, and delivers them to in-state retailers under the continuous control of the baker, the court concluded that he was directly engaged in interstate commerce under Saxon. The baker appealed, and the Supreme Court granted certiorari on October 20.

We have also been tracking cases holding that a defendant has waived its right to enforce an arbitration agreement. In our Fall 2024 update, we examined the Eighth Circuit’s holding in Thomas v. Pawn Am. Minn., 108 F.4th 610 (8th Cir. 2024), that a defendant waived its right to compel arbitration by “substantially invoking the litigation machinery” when it participated in a motion-to-dismiss hearing, stipulated to a discovery plan, and scheduled a mediation before moving to compel discovery. Earlier this year, the Eighth Circuit in Lackie Drug Store v. OptumRx, 143 F.4th 985 (8th Cir. 2025), held that a waived right to arbitration was “revived” with respect to newly added claims in an amended complaint such that a defendant could move to compel arbitration of those claims, but the defendant could not compel arbitration of the pre-existing claims insofar as the amendments did not expand their scope.

IV. Attorney’s Fees 

Over the past several years, we have been tracking notable developments involving the fairness and reasonableness of fee awards in class-action settlements under Rule 23(e)(2), which has important implications for private enforcement incentives. In our Spring 2024 update, we examined In re Wawa Data Sec. Litig., 85 F.4th 712 (3d Cir. 2023) (“Wawa I”), in which the Third Circuit vacated a $3.2 million settlement fee award and remanded with instructions to reconsider the reasonableness of the award. The panel instructed the district court to consider the award not only relative to the total funds made available to the class but also to the amounts distributed and expected to be claimed. It also instructed the district court to consider whether the fee agreement’s terms reflected the existence of a side agreement between plaintiffs’ counsel and the opposing party.

On remand, the district court again approved the fee award, finding that each class member received considerable value in the form of coupons and injunctive relief compared to the relatively small damages they suffered, and that a side agreement was unlikely. Earlier this year, the Third Circuit affirmed in In re Wawa Data Sec. Litig., 141 F.4th 456 (3d Cir. 2025) (“Wawa II”). Reiterating its “flexible approach toward analyzing fee awards,” the court held that the district court’s remand opinion did not violate its opinion in Wawa I.

Also in our Spring 2024 update, we examined In re Broiler Chicken Antitrust Litig., 80 F.4th 797 (7th Cir. 2023) (“Broiler I”), where the Seventh Circuit endorsed the district court’s approach of evaluating the fairness of fee awards by considering how the plaintiffs would have negotiated with the attorneys had the bargain occurred at the outset of the case when the risk of losing the litigation existed. The panel reversed the district court’s fee award—amounting to 33% of the settlement fund—because the court failed to consider auction bids made by counsel in other litigation.

On remand, the district court decreased the fee award from 33% to 30% based on court-compiled statistical data from comparable cases. Earlier this year, in In re Broiler Chicken Antitrust Litig., 142 F.4th 568 (7th Cir. 2025) (“Broiler II”), a Seventh Circuit panel modified the award, affirming the district court’s analysis but finding that it had erroneously included a skewed sample of cases with higher-than-average fees. The panel adopted 26.6% as the properly calculated median—and therefore a suitable attorney’s fee award—after removing the skewed sample.

This July, the Second Circuit clarified the standards applicable to attorney’s fees in settlements where fee funds are segregated from class settlement funds. In Kurtz v. Kimberly-Clark Corp., 142 F.4th 112 (2d Cir. 2025), the court reversed an attorney’s fee award in a segregated-funds settlement because the court failed to consider the proportion of relief provided “for the class” under Rule 23(e)(2)(C)(iii), relying on Eighth and Ninth Circuit authority holding that class recovery and attorneys’ fees should be reviewed together even when the two are structurally segregated.[12] It also held that whether the appropriate benchmark for the proportionality analysis under Rule 23(e)(2)(C) is the hypothetical maximum recovery to the class or the actual class recovery is a fact-bound question that the district court has discretion to resolve.

The court in Kurtz also elaborated on the relationship between the proportionality analysis of a settlement fee agreement under Rule 23(e) and the reasonableness of an attorney’s fee under Rule 23(h): Although both rules ask courts to weigh class recovery against attorney’s fees, Rule 23(h) uses class recovery as a proxy for attorney success to determine whether fees are reasonably calculated and genuinely earned, while Rule 23(e) safeguards the fairness of a settlement for the class by asking whether the proportion of attorney’s fees compared to the total recovery allocated to the class raises any questions about the settlement’s adequacy.

This April, the Fourth Circuit ruled that a district court may not treat as presumptively reasonable an attorney’s fee provision that complies with a fee matrix in the court’s local rules. After winning a bench trial, plaintiffs in Paredes v. Zen Nails Studio, 134 F.4th 750 (4th Cir. 2025), moved for attorney’s fees under the fee-shifting provision of the Fair Labor Standards Act (“FLSA”) which, like Rule 23, requires that an attorney’s fee award be “reasonable.” The Maryland district court granted the motion but at reduced hourly rates, based on a fee matrix in the court’s local rules, which the court treated as presumptively reasonable. The Fourth Circuit reversed, holding that the district court erred in treating the matrix rates as presumptively correct and higher rates as requiring special justification. While a fee matrix in a court’s local rules can be a useful starting point to determine fees, a court must consider it alongside other relevant evidence including lawyer affidavits, fee awards in similar cases, general surveys, and the court’s own experience.

We have also been following opinions on Rule 23(h)’s requirement that class members have notice and the opportunity to object to fee awards. In our Fall 2024 update, we reported on In re T-Mobile Customer Data Sec. Breach Litig., 111 F.4th 849 (8th Cir. 2024), in which the Eighth Circuit reversed a district court’s decision striking an unnamed class member’s fee objection on the sole basis that she and her counsel were “serial objectors.” We also reported on Chieftain Royalty Co. v. SM Energy Co., 100 F.4th 1147 (10th Cir. 2024), in which the Tenth Circuit ruled that Rule 23(h) required classwide notice of a revised motion for attorneys’ fees that class counsel had submitted in district court after its initial fee award was reversed.

The Fifth Circuit recently ruled that a district court must ensure that class members have actual notice and an opportunity to object to a fee motion under Rule 23(h), even if no class member objects. In Morrow v. Jones, 2025 U.S. App. LEXIS 14230 (5th Cir. Jun. 10, 2025), the court reversed a fee award for failure to provide proper notice. In a prior opinion, the court had vacated the district court’s denial of the motion, which the district court then granted on remand. Defendants appealed, contending that they had no opportunity to object to the motion because the district court stayed the case while it was on appeal and decided the motion without lifting the stay. In its non-precedential opinion reversing the fee award, a Fifth Circuit panel relied on Rule 23(h) and the accompanying Advisory Committee Notes to conclude that, because courts have an independent obligation to protect the interests of the class, failing to enforce Rule 23(h)’s notice requirement was an abuse of discretion regardless of whether a class member had raised the issue.

V. Empirical Data on Class Actions 

In July, Huntington Bank (Huntington) and the UC Hastings Center for Litigation and Courts (UCHCLC) published the 2024 Antitrust Annual Report: Class Action Filings in Federal Court, their seventh annual antitrust report examining empirical information involving the filing and resolution of private antitrust class action lawsuits. The new report covers the years 2009–2024.

The Report shows the number of antitrust class action complaints filed each year, the amount of time they took on average to reach a settlement, the mean and median recoveries, the attorneys’ fees and costs awarded, and the total settlement amounts in each year and overall. It also analyzes the law firms that represented plaintiffs and defendants in antitrust class action settlements, describes cumulative results, and tabulates cumulative totals for claims administrators involved in the settlement process. The report also distinguishes private antitrust enforcement by particular industries, by type of claim, and by type of plaintiff. Key findings include the following:

  • From 2009–2024, a mean number of 123 consolidated complaints were filed per year, with outlier years as low as 72 and as high as 220.
  • From 2009–2024 there were Defendant Wins in 146 cases as a result of judgments on the pleadings, summary judgment, judgment as a matter of law, or trial.
  • From 2009–2024, most antitrust class actions that reached final approval did so within 5–7 years.
  • The mean settlement amount varied by year from $6 million to $184 million, and the median amount varied by year from $2 million to $18.5 million.
  • The total annual settlements ranged from $225 million to $9.6 billion per year.
  • The cumulative total of settlements was $44.8 billion.

Download the Fall 2025 Class Action Issues Update

 

[1] Denney v. Deutsche Bank AG, 443 F.3d 253 (2d Cir. 2006).

[2] Halvorson v. Auto-Owners Life Ins. Co., 718 F.3d 773 (8th Cir. 2013).

[3] In re Asacol Antitrust Litig., 907 F.3d 42 (1st Cir. 2018); In re Rail Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619 (D.C. Cir. 2019).

[4] Messner v. Northshore Univ. HealthSystem, 669 F.3d 802 (7th Cir. 2012); Cordoba v. DIRECTV, 942 F.3d 1259 (11th Cir. 2019); Olean Wholesale Grocery Coop. v. Bumble Bee Foods, 31 F.4th 651 (9th Cir. 2022) (en banc).

[5] Black v. Occidental Petro. Corp., 69 F.4th 1161 (10th Cir. 2023).

[6] Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410 (6th Cir. 1998); Melendres v. Arpaio, 784 F.3d 1254 (9th Cir. 2015); In re Asacol Antitrust Litig., 907 F.3d 42 (1st Cir. 2018); Boley v. Universal Health Servs., 36 F.4th 124 (3d Cir. 2022).

[7] Fox v. Ritz-Carlton Hotel Co., 977 F.3d 1039 (11th Cir. 2020); Barrows v. Becerra, 24 F.4th 116 (2d Cir. 2022).

[8] Am. Honda Motor Co. v. Allen, 600 F.3d 813 (7th Cir. 2010); Sher v. Raytheon Co., 419 F. App’x 887 (11th Cir. 2011); In re Blood Reagents Antitrust Litig., 783 F.3d 183 (3d Cir. 2015).

[9] In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604 (8th Cir. 2011); Sali v. Corona Reg’l Med. Ctr., 909 F.3d 996 (9th Cir. 2018).

[10] Cody v. City of St. Louis, 103 F.4th 523 (8th Cir. 2024).

[11] Rittmann v. Amazon.com, 971 F.3d 904 (9th Cir. 2020); Waithaka v. Amazon.com, 966 F.3d 10, 26 (1st Cir. 2020); Lopez v. Cintas Corp., 47 F.4th 428 (5th Cir. 2022).

[12] In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011); Johnston v. Comerica Mortg. Corp., 83 F.3d 241 (8th Cir. 1996).

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AAI Asks En Banc Ninth Circuit to Reconsider Panel’s Algorithmic Collusion Opinion (Gibson v. Cendyn)

On October 9, 2025, the American Antitrust Institute (AAI) filed an amicus brief urging the Ninth Circuit Court of Appeals to grant rehearing en banc in Gibson v. Cendyn Grp., Inc. (9th Cir. No. 24-3576).

The plaintiffs in Gibson allege that defendants, hotels on the Las Vegas strip, licensed the same third-party pricing algorithm, which used the hotels’ non-public, commercially sensitive pricing information to make pricing and vacancy recommendations that had the effect of reducing room occupancy and driving up prices. The district court dismissed the case, and AAI filed an amicus brief urging the Ninth Circuit to reverse. A panel of the Ninth Circuit affirmed, insisting that plaintiffs must plead and prove a causal link between the hotels’ licensing agreements and a “restraint” in the relevant market. The panel concluded that the licensing agreements were not vertical agreements but “ordinary sales contracts” which need not be reviewed under the rule of reason.

In its brief supporting rehearing en banc, AAI points out fundamental errors in the panel’s reasoning. By insisting on a causal link between the licensing agreements and a restraint in the relevant market, the panel confused proof of an agreement with proof of the agreement’s effects on competition. As AAI’s brief explains, black letter antitrust law dating back over one hundred years holds that all agreements restrain trade, such that insisting on a causal connection between “an agreement and a restraint” makes no sense. Instead, the panel should have focused on whether there was a causal link between the licensing agreements and anticompetitive effects in the relevant market. The panel’s confusion between a restraint and its effects caused it to disregard the plaintiffs’ well-pleaded allegations that the licensing agreements caused prices to increase and occupancy to decrease in the relevant market. And it leads to the absurd conclusion that, because they do not “cause a restraint” in the relevant market, vertical agreements can never violate Section 1.

AAI also argues that, beyond the fundamental errors in the panel’s reasoning, the opinion merits en banc rehearing because it conflicts with Supreme Court precedent on an issue of exceptional public importance. By creating a new category of agreements which are not subject to rule-of-reason analysis, the panel opinion conflicts with Board of Trade of the City of Chicago v. United States, 246 U.S. 231 (1918), which held that that an agreement must be tested under the rule of reason to determine whether it restrains trade unreasonably in violation of Section 1. AAI also explains that competitors’ use of the same third-party pricing software is an increasingly common feature of the economy, and that the panel opinion would exempt this practice from antitrust scrutiny despite a consensus among experts that it can raise prices and facilitate collusion.

The brief was written by AAI Senior Counsel David O. Fisher, with assistance from AAI President Randy Stutz and AAI Vice President and Director of Legal Advocacy Kathleen Bradish.

Read the full brief: AAI Amicus Brief in Gibson v. Cendyn

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From Labor Market Theory to Antitrust Policy: A Conversation with Ioana Marinescu

On this episode of Ruled by Reason, AAI Senior Counsel David O. Fisher talks with leading economist Ioana Marinescu about the theoretical frameworks underpinning labor monopsony and how they apply in various antitrust law and policy contexts.

The conversation centers on Marinescu’s recent paper with coauthor José Azar, Monopsony Power in the Labor Market: From Theory to Policy, which lays out the theoretical frameworks underlying monopsony power in labor markets and develops a theory-informed discussion of antitrust law and policy. The conversation begins with an examination of Marinescu’s background and her research on labor markets and monopsony power (3:15). She then explains the three main theoretical frameworks underpinning labor monopsony as reflected in the literature: oligopsony, differentiated jobs, and search-and-matching frictions (10:04).

The conversation then moves to a discussion of how economists determine which models to apply in which context (18:47). In the enforcement context, Marinescu examines the usefulness of each framework in the context of enforcing against no-poach and wage fixing agreements (21:24), and underscores the significance of a 2023 study by Tania Babina and co-authors which finds that antitrust enforcement against anti-competitive conduct tends to increase overall employment and business formation (26:48). Marinescu also discusses merger enforcement, and how each of the three theoretical frameworks apply in the merger context as reflected in the 2023 Merger Guidelines (30:53). Finally, she examines the theoretical work supporting the FTC’s Noncompete Rule, and whether it supports the agency’s current approach of addressing noncompete clauses on a case-by-case basis (35:24).

GUEST

Ioana Marinescu is an associate professor at the University of Pennsylvania School of Social Policy & Practice, with secondary appointments in the Economics Department and the Wharton School of Business (BEPP), and a research associate at the National Bureau of Economic Research. Her pioneering research on wages and monopsony power led to her appointment as principal economist at the U.S. Department of Justice Antitrust Division (2022-2024).

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AAI Files Tunney Act Comments Questioning Unusual HPE/Juniper Settlement

AAI has filed Tunney Act comments urging the District Court for the Northern District of California to conduct additional discovery before considering whether it can approve the Department of Justice’s controversial settlement allowing the merger of Hewlett Packard Enterprise Co. (HPE) and Juniper Networks, Inc. (Juniper).

After suing to block the HPE/Juniper merger in January, the Department of Justice (DOJ) reversed course in June, agreeing to settle the merger only twelve days before trial in exchange for a combination of structural and behavioral relief. For a variety of reasons, the settlement is controversial. Most notably, two of Assistant Attorney General Abigail Slater’s top deputies were fired after reportedly opposing it. Last month, one of the deputies, Roger Alford, delivered a speech revealing numerous troubling developments, including that political appointees in the Justice Department overruled the experts in the Antitrust Division after a lobbying campaign by the merging parties. According to news reports, Assistant Attorney General Slater herself opposed the settlement.

Under the Antitrust Procedures and Penalties Act (APPA), more commonly known as the Tunney Act, DOJ settlements embodied in consent decrees must meet certain requirements before being entered by a court. First, the DOJ must file a Competitive Impact Statement (CIS) and Proposed Final Judgment (PFJ) with the court. The public then has a 60-day period to comment on the settlement. After the public comment period, the DOJ must file a response to public comments, along with the comments themselves, with the court. The court must then determine whether entering the consent decree is in the public interest. The Tunney Act authorizes the court to conduct additional discovery, including to hold hearings, appoint a special master, take witness testimony, appoint consultants and experts, and hear from amici curiae, before determining whether the settlement is in the public interest.

AAI’s public comments argue that the CIS does not fulfill the DOJ’s Tunney Act obligation to provide “an explanation of any unusual circumstances” giving rise to the PFJ. Most immediately, it does not address the credible allegations of Alford, who was the second-highest ranking official in the Antitrust Division. Specifically, it does not address the overruling of the Antitrust Division, the firings, or the reports of extensive lobbying activity by non-antitrust lobbyists.

Moreover, the DOJ’s complaint expressly states that the merger “should be blocked,” which signals that it believes the merger is incurable using remedies. The CIS does not explain what led the DOJ to reverse this substantive conclusion. Although news reports quoting DOJ spokespeople have said the reversal was motivated by a desire to strengthen HPE’s international competitiveness for national security reasons, that approach would contravene longstanding DOJ policy holding that protecting and promoting domestic competition—rather than stabilizing or reducing it through anticompetitive mergers—is the best way to promote international competitiveness. Moreover, the CIS itself undermines that justification by asserting that the settlement would effectively remedy the merger’s anticompetitive effects. If the remedy will do what the CIS claims it will do, then it will not strengthen HPE’s hand internationally.

AAI’s comments also identify and explain omissions in the DOJ’s recitation of legal standards governing public interest review under the Tunney Act. The CIS fails to meet the Tunney Act’s reasonableness standard because it fails to provide a factual foundation for its prediction that the proposed remedy will lead to entry or repositioning, which itself contravenes the complaint’s allegations that entry and repositioning are not viable.

Finally, AAI’s comments review the legislative history of the Tunney Act, which had its origins in a Nixon administration scandal in which lobbyists persuaded White House officials to overrule Antitrust Division experts. AAI argues that the Tunney Act was made for cases like one, because it ensures disclosure of information to the public though fact discovery when there are (1) unusual circumstances giving rise to the consent decree; (2) public reports of extensive lobbying activity and credible allegations that government antitrust specialists were overruled; and (3) a remedy proposal that is facially dubious because it lacks a factual foundation.

The comments were written by AAI President Randy Stutz, with assistance from AAI Vice President and Director of Legal Advocacy Kathleen Bradish and AAI Senior Counsel David O. Fisher.

Read the full comments here: AAI Tunney Act Comments

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AAI Counsels Ninth Circuit on Trial Courts’ Broad Powers to Enjoin Monopolistic Conduct (Epic Games v. Apple)

The American Antitrust Institute (AAI) recently filed an amicus brief in Epic Games v. Apple encouraging the Ninth Circuit Court of Appeals to affirm a district court’s order modifying an injunction against Apple for violating California’s Unfair Competition Law (UCL).

In a 2021 order, Judge Yvonne Gonzalez Rogers ruled that Apple’s “anti-steering” policies preventing app developers from directing users to outside payment options violated the UCL. The court enjoined Apple from charging a supracompetitive 30% commission on all in-app purchases. Aided by an AAI amicus brief on the merits, the Ninth Circuit affirmed.

This April, after evidentiary hearings, the district court found that Apple’s response to the 2021 injunction—which included imposing a new 27% commission on out-of-app purchases and new restrictions designed to dissuade app customers from making purchases outside of the App Store—were in direct defiance of the injunction. The court held Apple in civil contempt and issued a new, modified injunction that prohibits Apple from impeding app developers’ communications with users and from charging any commission on out-of-app purchases. Apple appealed.

AAI’s amicus brief explains that Apple’s replacement practices achieved the same anticompetitive ends as its original practices, using the same economic mechanism. Rather than contractual provisions, it used pricing and design tactics to raise rivals’ costs by making it more difficult for users to discover and substitute to lower-cost sellers. Because such tactics can often achieve the same ends as contractual provisions, courts must be able to enjoin them to prevent end-runs around competition remedies.

Addressing Apple’s argument that its general expenditures developing and maintaining the App store entitle it to a commission on out-of-App purchases, AAI explained that a defendant’s procompetitive justifications for otherwise harmful conduct must be specific to that conduct, and that “ruinous competition” is not a cognizable defense.

In response to Apple’s argument that the court’s modified injunction violates its First Amendment rights by ordering it to stop limiting or refusing to display information from third Parties, AAI explained that First Amendment rights are not absolute. Antitrust and unfair competition remedies prohibiting certain kinds of speech are common and often necessary, particularly where, as here, a defendant refuses to permit certain communications that would have increased competition.

Finally, addressing Apple’s argument that the court cannot issue a new injunction without first adjudicating liability as to the newly enjoined conduct, AAI pointed to Supreme Court precedent holding that a court’s remedial powers extend well beyond the particular conduct found to be illegal at the liability stage. AAI argued that allowing  antitrust defendants to relitigate liability at the remedy and compliance stages would considerably compound the administrative costs of antitrust litigation.

The brief was written by AAI Advisory Board member John M. Newman, who is Professor and Herbert Herff Chair of Excellence in Law at the University of Memphis Cecil C. Humphreys School of Law. AAI President Randy M. Stutz assisted.

Read the full amicus brief: AAI Amicus Brief in Epic Games v. Apple

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Monopolizing by Conditioning: A Conversation Between Jack Kirkwood and Daniel Francis, Jerry S. Cohen Award Winner for Antitrust Scholarship

In this episode of Ruled by Reason, guest host John B. “Jack” Kirkwood, Professor of Law and the William C. Oltman Professor of Teaching Excellence at Seattle University School of Law, sits down with Daniel Francis, Assistant Professor of Law at NYU Law School. The two discuss Francis’s award-winning article, Monopolizing by Conditioning, 124 Colum. L. Rev. 1917 (2024).

Professor Francis’s article won the 23rd Annual Jerry S. Cohen Memorial Fund Writing Award, presented on May 29 at AAI’s 2025 Annual Policy Conference, The State of the Antitrust Technocracy. The article demonstrates that conditional dealing should be recognized as its own, separate form of monopolistic conduct rather than squeezed into ill-fitting categories in existing monopolization law. It provides a new analytical framework for evaluating conditional dealing, including a definition of conditioning and standards for gauging its exclusionary impact, contribution to power, and procompetitive justifications. It also explains why courts’ current criteria for evaluating claims based on conditional dealing should be jettisoned.

Professor Kirkwood and Professor Francis discuss the basic idea of monopolizing by conditioning and past efforts to squeeze it into “shoe boxes” under existing monopolization law (7:01); horizontal versus vertical conditioning and raising rivals’ costs (12:43); how “conditioning” compares and contrasts with above-cost pricing, volume discounts, market share discounts, requirements contracts, and refusals to deal (15:57); Francis’s proposed legal standard and how it aligns with the goals of antitrust law (29:43); error-cost analysis (37:05); and the prospect of “quick-look” monopolization (40:21).

The Jerry S. Cohen Award recognizes antitrust scholarship that reflects a concern for principles of economic justice, the dispersal of economic power, the maintenance of effective limitations on economic power, or the federal statutes designed to protect society from various forms of anticompetitive activity. Selected scholarship reflects an awareness of the human and social impacts of economic institutions upon individuals, small businesses and other institutions necessary to the maintenance of a just and humane society—values and concerns Jerry S. Cohen dedicated his life and work to fostering.

GUESTS:

John B. “Jack” Kirkwood, Professor of Law and the William C. Oltman Professor of Teaching Excellence at Seattle University School of Law

Daniel Francis, Assistant Professor of Law at NYU Law School

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New AAI White Paper Analyzes Causation Standards for Monopolization Remedies

During the first two decades of the twenty-first century, the federal government brought few monopolization cases, and only a tiny fraction resulted in litigated, court-ordered remedies. However, the last five years has seen an uptick in monopolization cases, including against major digital platforms. Several cases have resulted in early enforcement victories, including during the liability phase at trial, and they have now entered the remedy phase, where the trial court will be tasked with ordering equitable relief.

In this context, applying the correct standard for evaluating monopolization remedies has lasting and broad importance. An overly demanding standard will not just frustrate justice in any particular case but will have a significant impact on antitrust law’s ability to rein in monopolistic conduct in much of the modern economy. In a new White Paper, AAI’s Vice President and Director Legal Advocacy, Kathleen Bradish, addresses a key, recurring issue in legal battles over monopolization remedies: causation standards. The White Paper, entitled Unrealistic Causation Standards Put Effective Monopolization Remedies at Risk, explains why certain problematic causation standards suggested by defendants and their supporting amici threaten a core principle of monopolization remedies—the need to put “effectiveness first.”

Read the full white paper: Unrealistic Causation Standards Put Effective Monopolization Remedies at Risk

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AAI Urges Supreme Court to Recognize an Independent Misrepresentation Exception to Noerr-Pennington Immunity (Chatham Primary Care, P.C. v. Merck & Co.)

On August 11, 2025, AAI filed an amicus brief in the Supreme Court supporting a petition for certiorari in Chatham Primary Care, P.C. v. Merck & Co. (In re Merck Mumps Vaccine Antitrust Litigation), No. 25-45.

Relying on the Noerr-Pennington doctrine, a Third Circuit panel overturned a district court’s denial of summary judgment on the plaintiffs’ allegations that Merck violated Section 2 of the Sherman Act by misrepresenting the potency of its mumps vaccine on the vaccine’s FDA labelling. As a result of Merck’s alleged false labelling, competing vaccines could not show equivalence and were delayed from entering the market by several years. The court reasoned that Merck’s labelling representations, even if intentionally false, were government petitioning activity protected by the First Amendment. AAI had filed an amicus brief in support of en banc rehearing in the Third Circuit, but the petition was denied.

In its Supreme Court brief, AAI argues that Third Circuit caselaw granting Noerr-Pennington immunity for knowing misrepresentations to adjudicatory bodies reflects a minority position that has been rejected by every other circuit to consider it. The brief urges the Court to grant certiorari, resolve the circuit split in favor of the other circuits, and formally adopt a misrepresentation exception to Noerr-Pennington that stands apart from the “sham litigation” exception identified in Pro. Real Est. Invs., Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993).

AAI’s brief explains that the majority view in the circuits better protects both constitutional rights and consumers. Knowingly false statements to adjudicatory bodies harm competition, distort markets, and undermine adjudicatory processes while serving no lawful purpose that could warrant constitutional protection.

The brief was written by Berger Montague Associate Matt Summers, with assistance from Berger Montague Shareholder Josh Davis, Berger Montague Paralegal & Office Manager Connor Rowe, AAI President Randy Stutz, and AAI Vice President & Director of Legal Advocacy Kathleen Bradish.

Read the full brief here: AAI Amicus Brief in Chatham Primary Care, P.C. v. Merck & Co.

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AAI Warns Ninth Circuit Against Robotic Application of Kodak/Epic in Aftermarket Monopolization Cases (Surgical Instrument Service Co., Inc. v. Intuitive Surgical, Inc.)

The American Antitrust Institute (AAI) recently filed an amicus brief in Surgical Instrument Service Co., Inc. v. Intuitive Surgical, Inc. urging the Ninth Circuit to reverse the district court’s order requiring proof of the so-called “Kodak/Epic” lock-in factors for aftermarket tying claims when the defendant has a monopoly in the foremarket.

Plaintiff SIS alleged that the defendant Intuitive holds a near-total monopoly (99%) in the market for minimally invasive surgical robots. According to the complaint, Intuitive used that power to force hospitals to purchase Intuitive’s own expensive replacement parts for the robots, blocking SIS’s lower-cost repair and refurbishing services. The district court issued a ruling requiring SIS to show that the Kodak/Epic factors were satisfied. These include: (1) consumers in the foremarket must not generally be aware of the aftermarket restrictions; (2) consumers cannot price the aftermarket restrictions accurately because of significant information costs; (3) the cost of switching to a different brand in the foremarket is high; and (4) the aftermarket is itself a well-defined market.

AAI’s brief argues that the district court erred because the Kodak/Epic factors can logically apply only when anticompetitive behavior in the aftermarket is constrained by a robustly competitive foremarket. AAI explains that when the primary market is monopolized, requiring the Kodak/Epic factors is both redundant and illogical because customer choice is already constrained. In this scenario, customer coercion is inherent and aftermarket restrictions cannot be considered voluntary or informed. Accordingly, applying the Kodak/Epic factors in monopolized markets creates a dangerous loophole that allows entrenched monopolists to extend their dominance without meaningful antitrust scrutiny.

AAI’s brief also points out that common policy concerns about expanded aftermarket liability are not implicated in this scenario. Efforts to protect efficient lifecycle pricing, contractual remedies, and incentives to compete in the foremarket only make sense when foremarket competition exists—something absent in this case. As a result, there is no policy justification for requiring proof of the Kodak/Epic factors in a case like this. Worse, insisting on the Kodak/Epic factors in such a setting may incentivize monopolists to shift anticompetitive behavior to the aftermarket to evade scrutiny, effectively stripping vulnerable consumers—such as the surgery patients who are the ultimate customers here—of any antitrust protections.

The brief was written by Kathleen Bradish, AAI’s Vice President and Director of Legal Advocacy, with assistance from AAI President Randy Stutz.

Read the full brief: AAI Amicus Brief in Surgical Instrument Service Co., Inc. v. Intuitive Surgical, Inc.

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New AAI Analysis Finds Changes Are Needed to Criminal Antitrust Plea Bargains

In new findings, AAI identifies changes that are needed to harmonize the Department of Justice’s Model Corporate Plea Agreement with its Corporate Leniency Policy and to respond to recent case law developments.

In antitrust criminal plea agreements, the Department of Justice (DOJ) includes provisions that forego criminal restitution when private civil damages actions challenging the same conduct are pending. The DOJ’s current practice, as reflected in its Model Corporate Plea Agreement, is to waive restitution so long as such civil actions have been filed. However, notwithstanding their filing, these civil actions may not actually lead to the recovery of private damages. When damages are not recovered and restitution is also waived, guilty criminal defendants keep ill-gotten gains (sometimes billions of dollars) and avoid making victims while.

When private civil actions following criminal guilty pleas do not lead to the recovery of damages, it is usually because the actions must be pursued as class actions to be economically viable, and the defendants are able to successfully challenge class certification. The doctrine of collateral estoppel prevents guilty criminal defendants from contesting liability in overlapping civil damages actions, but nothing—including the DOJ’s plea agreement—prevents them from challenging class certification. Accordingly, guilty defendants who confess to antitrust crimes often devote exorbitant amounts of time and resources trying to prevent class certification.

AAI finds that the DOJ’s current policy of waiving restitution prior to class certification in plea agreements exacerbates this problem and creates inefficient incentives. Defendants need not litigate class certification any differently when they have confessed guilt relative to when they profess innocence, but confessed guilt changes class certification dynamics in important respects. Certain recurring arguments defendants marshal to defeat class certification, while understandable in the absence of liability, become frivolous once liability is confirmed. In particular, guilty criminal defendants often attempt to defeat class certification on grounds that the class is defined to include uninjured members.

As AAI explains in its paper, such arguments are not only frivolous but can become absurd in antitrust cases where plaintiffs are forced to rely on aggregate damages calculations because of market uncertainties created by a confessed antitrust violation. When these inappropriate class certification challenges nonetheless succeed, they undermine plea agreements, the broader criminal enforcement mission, and the antitrust class action mechanism. Moreover, such class certification challenges are in danger of becoming far more prevalent and effective because of recent developments in class action law.

In a detailed letter to the DOJ, AAI recommends three changes to the Model Corporate Plea Agreement that would help discourage inappropriate class certification challenges and align the restitution provisions in the DOJ’s criminal plea bargains with the restitution provisions in its Corporate Leniency Policy. The latter requires cooperating defendants to assume an affirmative obligation to make victim restitution unless doing so is “impossible,” and it requires that such defendants provide “reasonably achievable” plans for making restitution and encourages them to do so through settlements that streamline damages determinations and make victims whole as swiftly as possible.

AAI makes the following recommendations in its letter:

  1. When a guilty criminal defendant chooses to rely on civil damages as a substitute for victim restitution in a corporate plea agreement, the Department should clarify that only the actual payment of damages, and not merely the filing of civil suits that “potentially provide for a recovery,” fulfills the defendant’s restitution obligation.
  2. When a guilty criminal defendant chooses to rely on a civil class action as a substitute for victim restitution in a corporate plea agreement, the Department should condition the waiver of restitution on class certification being granted.
  3. If the guilty criminal defendant wishes to contest class certification despite relying on the class action as a substitute for victim restitution, the Department should require the defendant to provide a “reasonably achievable” alternative plan for making restitution if class certification is denied.

The letter was written by AAI President Randy Stutz.

Read the Letter to DOJ.