| Randy Stutz, Ellen Meriwether, Henry Visser Melville
Cartels, Private Enforcement, Section 1 of the Sherman Act
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
In In re Packaged Seafood Antitrust Litig., a district court certified three classes of purchasers, including direct purchasers and two groups of indirect purchasers, seeking to recover for the confessed price fixing of the three leading producers of packaged tuna, Bumble Bee Foods LLC, Starkist, and Chicken of the Sea. The defendants had either sought leniency or pled guilty after a Department of Justice Investigation, and several of their executives have been sentenced to prison.
Unable to contest liability given their admissions, the defendants focused extensive resources and attention on defeating class certification. In district court proceedings, they introduced rebuttal experts seeking to counter plaintiffs’ economic experts, which had introduced statistical analysis attempting to show that the price fixing caused widespread injury across the respective classes. The district court, after a three-day evidentiary hearing, found plaintiffs’ experts more persuasive and held that the plaintiffs’ common statistical evidence of impact was sufficient to help satisfy Rule 23’s predominance requirement, though it allowed that defendants could still challenge the admissibility and probative value of the common statistical evidence at trial.
On interlocutory appeal, the defendants, supported by the U.S. Chamber of Commerce and the Washington Legal Foundation, argued that the district court erred by refusing to definitively resolve the battle of the experts at class certification, and that plaintiffs’ expert statistical analysis was inherently problematic because it relied on the average overcharges to the classes, thereby masking the possibility that some of the class members were uninjured by the price fixing. The defendants maintained that, because plaintiffs’ expert evidence could not necessarily sustain a jury finding for every class member, it should not be a permissible means of establishing that common questions would predominate at a class trial.
The AAI brief argued that the defendants’ and their amici’s arguments must be rejected under binding precedent and sound principles of competition policy. First, the defendants conflated proof of actual impact to each class member with the required Rule 23 showing, which is satisfied by evidence that is capable of supporting a prima facie showing of impact. Under binding Supreme Court precedent, such evidence need only be relevant and reliable to be admissible; it does not have to assure that each plaintiff would prevail on the merits of impact in an individual action.
Second, in the Ninth Circuit, the plain meaning canon applies to the Federal Rules. And the plain meaning of Rule 23’s requirement that common “questions” must predominate over individual questions at trial cannot be read to suggest that the questions’ answers must be determined to permit class certification.
Finally, any uninjured class members, which the district court found to be de minimis, may be identified after trial, and longstanding case law prevents defendants from capitalizing on the uncertainty created by their own illegal conduct, including uncertain damages calculations.
The AAI brief also argued that the court should unequivocally reject the defendants’ effort to cast categorical doubt on statistical analysis, and specifically regression modeling, in antitrust cases. Regression models frequently rely on averaging techniques, but that is not where they begin and end. Such models are routinely accepted as reliable methods of proving widespread injury to antitrust classes because econometric techniques can control for price changes caused by supply and demand factors and then focus on the uniformity of differences across class members to reliably show common impact.
The brief was written by AAI Vice President of Advocacy Randy Stutz, with assistance from AAI Board Member Ellen Meriwether of Cafferty Clobes Meriwether & Sprengel and AAI Research Fellow Henry Visser Melville.
