In Re Modafinil Antitrust Litigation

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 15-3475

_____________

IN RE: MODAFINIL ANTITRUST LITIGATION

Mylan Laboratories, Inc.; Mylan Pharmaceuticals Inc.;

Ranbaxy Laboratories, Ltd; Ranbaxy Pharmaceuticals, Inc.,

Appellants

_____________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

District Court No. 2-06-cv-01797

District Judge: The Honorable Mitchell S. Goldberg

Argued July 12, 2016

Before: SMITH, JORDAN, and RENDELL,

Circuit Judges

(Filed: September 13, 2016)

Daniel Berger

Daniel C. Simons

David F. Sorensen

Berger & Montague

1622 Locust Street

Philadelphia, PA 19103

Erin C. Burns

Dianne M. Nast

NastLaw

1101 Market Street

Suite 2801

Philadelphia, PA 19107

Russell A. Chorush

Connelly Baker Wotring

600 Travis Street

JPMorgan Chase Tower, Suite 700

Houston, TX 77002

Neill Wilson Clark

Peter Kohn, Esq.

Faruqi & Faruqi

101 Greenwood Avenue

Suite 600

Jenkintown, PA 19046

Stuart E. Des Roches

Andrew W. Kelly

Chris Letter

Odom & Des Roches

650 Poydras Street

Suite 2020, Poydras Center

New Orleans, LA 70130

2

Bruce E. Gerstein [ARGUED]

Dan Litvin

Joseph Opper

Garwin Gerstein & Fisher

Wall Street Plaza

88 Pine Street, 10th Floor

New York, NY 10036

Miranda Y. Jones

Heim Payne & Chorush

600 Travis Street

Suite 6710

Houston, TX 77002

Linda P. Nussbaum

Nussbaum Law Group

570 Lexington Avenue

19th Floor

New York, NY 10022

Counsel for Appellees

Evan R. Chesler

David R. Marriott

Rowan D. Wilson [ARGUED]

Cravath Swaine & Moore

825 Eighth Avenue

Worldwide Plaza

New York, NY 10019

3

David L. Comerford

Katherine M. Katchen

Akin Gump Strauss Hauer & Feld

2001 Market Street

Two Commerce Square, Suite 4100

Philadelphia, PA 19103

Catherine E. Creely

Cohn & Marks

1333 New Hampshire Avenue, N.W.

Washington, DC 20036

C. Fairley Spillman

Akin Gump Strauss Hauer & Feld

1333 New Hampshire Avenue, N.W.

Suite 400

Washington, DC 20036

J. Douglas Baldridge [ARGUED]

Christopher K. Diamond

Danielle R. Foley

Molly Geissenhainer

Venable

575 7th Street, N.W.

Washington, DC 20004

John J. O’Malley

Anthony S. Volpe

Volpe & Koenig

30 South 17th Street

Suite 1600

4

Philadelphia, PA 19103

Erin C. Dougherty

Lathrop B. Nelson, III

Montgomery McCracken Walker & Rhoads

123 South Broad Street

28th Floor

Philadelphia, PA 19109

Katherine R. Katz

Karen N. Walker

Gregory L. Skidmore

Kirkland & Ellis

655 15th Street, N.W.

Suite 1200

Washington, DC 20005

James C. Burling

Mark A. Ford

WilmerHale

60 State Street

Boston, MA 02109

Frank R. Emmerich, Jr.

Nancy J. Gellman

John A. Guernsey

Conrad O’Brien

1500 Market Street

West Towers, Suite 3900

Philadelphia, PA 19102

5

Emily R. Whelan

Whatley Kallas

60 State Street

7th Floor

Boston, MA 02109

Jeffrey B. Korn

William H. Rooney

Willkie, Farr & Gallagher

787 Seventh Avenue

New York, NY 10019

Joseph E. Wolfson

Stevens & Lee

620 Freedom Business Center

Suite 200

King of Prussia, PA 19406

Counsel for Appellants

Anna T. Neill

Scott E. Perwin

Lauren C. Ravkind

Kenny Nachwalter

1441 Brickell Avenue

Four Season Tower, Suite 1100

Miami, FL 33131

Moira E. Cain-Mannix

Bernard D. Marcus

Marcus & Shapira

301 Grant Street

6

One Oxford Centre, 35th Floor

Pittsburgh, PA 15219

Monica L. Rebuck

Barry L. Refsin

Hangley Aronchick Segal Pudlin & Schiller

4400 Deer Path Road

Suite 200

Harrisburg, PA 17110

Eugene P. Endress

Matthew M. Holub

Thomas J. Maas

Brian Sodikoff

Katten Muchin Roseman

525 West Monroe Street

Suite 1600

Chicago, IL 60661

James W. Matthews

Foley & Lardner

111 Huntington Avenue

Boston, MA 02199

Counsel for Amicus Appellee

________________

OPINION

________________

7

SMITH, Circuit Judge.

“The class action is an ingenious device for

economizing on the expense of litigation and enabling small

claims to be litigated. The two points are closely related. If

every small claim had to be litigated separately, the

vindication of small claims would be rare. The fixed costs of

litigation make it impossible.” Thorogood v. Sears, Roebuck

and Co., 547 F.3d 742, 744 (7th Cir. 2008). But not every

group of plaintiffs should be granted class action status,

because “[t]he class action is an ‘exception to the usual rule

that litigation is conducted by and on behalf of the individual

named parties only.” Wal-Mart Stores, Inc. v. Dukes, 564

U.S. 338, 348 (2011) (quoting Califano v. Yamasaki, 442

U.S. 682, 700-01 (1979)).

When thinking of a class action brought under Rule

23(b)(3), we typically think of a large aggregation of

individuals (hundreds or even thousands), each with small

claims. This case is quite different from that. Here, we are

faced with a putative class of twenty-two large and

sophisticated corporations, most of which have multi-million

dollar claims, who wish to take advantage of the class action

device. While we do not foreclose the possibility of class

status in this case, or where the putative class is of similar

composition, Plaintiffs have not met their burden of showing

that the numerosity requirement of Rule 23(a)(1) has been

satisfied. We now provide a framework for district courts to

apply when conducting their numerosity analyses, and we

will remand to the District Court to allow such an analysis in

this case.

8

I.

A. Regulatory Framework

The 1984 Drug Price Competition and Patent Term

Restoration Act (the “Hatch-Waxman Act”), 98 Stat. 1585, as

amended, provides a regulatory framework designed in part to

(1) ensure that only rigorously tested drugs are marketed, (2)

incentivize drug manufacturers to invest in new research and

development, and (3) encourage generic entry into the

marketplace. The Hatch-Waxman Act requires a drug

manufacturer wishing to market a new brand-name drug to

first submit a New Drug Application (“NDA”) to the federal

Food and Drug Administration (“FDA”), and then undergo a

long, complex, and costly testing process. See 21 U.S.C.

§ 355(b)(1) (requiring, among other things, “full reports of

investigations” into safety and effectiveness; “a full list of the

articles used as components”; and a “full description” of how

the drug is manufactured, processed, and packed); see also

F.T.C. v. Actavis, Inc., 133 S. Ct. 2223, 2228-29 (2013)

(describing the statutory framework). If this process is

successful, the FDA will grant the drug manufacturer

approval to market the brand-name drug. After this approval,

a generic manufacturer can obtain similar approval by

submitting an Abbreviated New Drug Application (“ANDA”)

that “shows that the generic drug has the same active

ingredients as, and is biologically equivalent to, the brand-

name drug.” Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S,

132 S. Ct. 1670, 1676 (2012) (citing 21 U.S.C.

§§ 355(j)(2)(A)(ii), (iv)). This way, a generic manufacturer is

not required to undergo the same costly approval procedures

to develop a drug that has already satisfied the FDA. Actavis,

9

133 S. Ct. at 2228 (“The Hatch-Waxman process, by allowing

the generic to piggy-back on the pioneer’s approval efforts,

‘speed[s] the introduction of low-cost generic drugs to

market,’ thereby furthering drug competition.” (quoting

Caraco, 132 S. Ct. at 1676)).

The FDA will not give final approval to produce a

generic version of a drug that is entitled to non-patent

exclusivity under the Hatch-Waxman Act, and it “cannot

authorize a generic drug that would infringe a patent.”

Caraco, 132 S. Ct. at 1676. Thus, among other things, an

ANDA’s approval will depend on “the scope and duration of

the patents covering the brand-name drug.” Id. Brand

manufacturers are required to include the patent number and

expiration date of the patent that covers the drug or that

covers a method of using that drug in their NDAs, which are

then published by the FDA in the Orange Book, more

formally known as the Approved Drug Products with

Therapeutic Equivalence Evaluations. Id. (citing 21 U.S.C.

§ 355(b)(1) and 21 C.F.R. §§ 314.53(c)(2)(ii)(P)(3), (3)

(2011)). Once a patent has been listed in the Orange Book,

the generic manufacturer is free to file an ANDA if it can

certify that its proposed generic drug will not actually violate

the brand manufacturer’s patents. Id. Under 21 U.S.C.

§ 355(j)(2)(A)(vii), there are four ways in which a generic

manufacturer can make this certification:

(I) that such patent information has not been

filed,

(II) that such patent has expired,

10

(III) of the date on which such patent will

expire, or

(IV) that such patent is invalid or will not be

infringed by the manufacture, use, or sale of the

new drug for which the application is

submitted.

An ANDA with a paragraph IV certification may only be

filed after the expiration of the fourth year of the New

Chemical Entity (“NCE”) five-year exclusivity period. 1 21

U.S.C. § 355(j)(5)(E)(ii). The “‘paragraph IV’ route[]

automatically counts as patent infringement.” Actavis, 133 S.

Ct. at 2228 (citing 35 U.S.C. § 271(e)(2)(A)). As a result,

this often “means provoking litigation” instituted by the brand

manufacturer. Caraco, 132 S. Ct. at 1677.

If the brand manufacturer initiates a patent

infringement suit, the FDA must withhold approval of the

generic for at least 30 months while the parties litigate the

validity or infringement of the patent. Actavis, 133 S. Ct. at

2228 (citing 21 U.S.C. § 355(j)(5)(B)(iii)). If the suit has

concluded at the end of this 30-month period, then the FDA

will follow the outcome of the litigation. Id. However, if the

litigation is still proceeding, the FDA may give its approval to

the generic drug manufacturer to begin marketing a generic

version of the drug. Id. The generic manufacture then has

1

This exclusivity period is granted via the Hatch-Waxman

Act, and has nothing to do with whether the drug is covered

by a patent.

11

the option to “launch at risk,” meaning that if the ongoing

court proceeding ultimately determines that the patent was

valid and infringed, the generic firm will be liable for lost

profits despite the FDA’s approval. C. Scott Hemphill,

Paying for Delay: Pharmaceutical Patent Settlement as a

Regulatory Design Problem, 81 N.Y.U. L. Rev. 1553, 1609

(2006).

In order to incentivize a generic drug manufacturer to

challenge weak patents, the Hatch-Waxman Act provides that

the first generic manufacturer to file a paragraph IV

certification will enjoy a 180-day exclusivity period. 21

U.S.C. § 355(j)(5)(B)(iv). This means that during this

exclusivity period, “no other generic can compete with the

brand-name drug,” Actavis, 133 S. Ct. at 2229, an opportunity

that can be “‘worth several hundred million dollars,’” to the

first-filer, id. (quoting Hemphill, supra, at 1579). 2 It is during

this generic exclusivity period that the “vast majority of

potential profits for a generic drug manufacturer materialize.”

Id. (internal quotation marks omitted). That is because once

2

It is a common practice for a brand manufacturer to market

its own generic version of the drug when generic entry

occurs. Unlike an ANDA filer, the brand manufacturer is not

barred from entering the generic market during the 180-day

exclusivity period to which the first paragraph IV filer is

entitled. See Teva Pharm. Indus. Ltd. v. Crawford, 410 F.3d

51, 54 (D.C. Cir. 2005) (holding that 21 U.S.C.

§ 355(j)(5)(B)(iv) did not prevent the filer of the original

NDA from launching its own generic during the 180-day

exclusivity period).

12

the exclusivity period has expired other generic

manufacturers are free to enter the market, bringing the price

down to competitive levels. Importantly, this 180-day

exclusivity period belongs only to the first generic

manufacturer to file; if the first-filer forfeits its exclusivity

rights, no other generic manufacturer is entitled to it. Id.

(citing 21 U.S.C. § 355(j)(5)(D)).

B. Facts

In April 1997, the United States Patent and Trademark

Office issued U.S. Patent No. 5,618,845 (“the ′845 patent”) to

Cephalon, Inc. (“Cephalon”), a pharmaceutical company.

The ′845 patent claimed a specific particle-size distribution of

modafinil, a wakefulness-promoting agent used to treat

narcolepsy and other sleep disorders, and Cephalon later

applied for a reissue of the patent, resulting in the issuance of

U.S. Reissue Patent No. 37,516 (“the ′516 patent”) in January

2002. Thus, Cephaolon’s use of modafinil was protected by a

patent until October 6, 2014, to be later extended until April

6, 2015.

In December 1998, the FDA approved Cephalon’s

NDA for the brand-name drug Provigil and granted it NCE

exclusivity. This five-year period of exclusivity was

extended until December 24, 2005, due to Cephalon’s status

as an orphan drug. 3 In March 2006, Cephalon obtained

3

An orphan drug is used to treat a rare disease or ailment.

Because pharmaceutical companies may lack the financial

incentive to develop such drugs, the Orphan Drug Act

13

pediatric exclusivity, which added an additional six months of

exclusivity. 21 U.S.C. § 355a(c). Thus, in the absence of the

‘516 patent, Cephalon’s exclusivity period for modafinil

would have ended on June 24, 2006.

On December 24, 2002, the first day that an ANDA for

modafinil could be filed, four generic drug manufacturers –

Teva Pharmaceutical Industries, Ltd. and Teva

Pharmaceuticals, USA, Inc. (collectively “Teva”); Ranbaxy

Laboratories, Ltd. and Ranbaxy Pharmaceuticals, Inc.

(collectively “Ranbaxy”); Mylan Pharmaceuticals, Inc. and

Mylan Inc. (collectively “Mylan”); and Barr Laboratories,

Inc. (“Barr”) – each independently filed an ANDA with

paragraph IV certifications seeking to sell generic modafinil

products. Due to FDA guidance promulgated after the

paragraph IV certifications in this case were filed, all four

generic manufacturers were treated as being the first filer, and

thus all four would have shared in the 180-day exclusivity

period, making it less valuable to each individual generic

manufacturer. See Guidance for Industry on 180-Day

Exclusivity when Multiple Abbreviated New Drug

Applications are Submitted on the Same Day, 68 Fed. Reg.

45252, 45255 (Aug. 1, 2003).

Because the filing of the paragraph IV certification

“automatically counts as patent infringement,” Actavis, 133 S.

Ct. at 2228 (citing 35 U.S.C. § 271(e)(2)(A)), Cephalon sued

the four generic manufacturers for patent infringement in the

provides the brand manufacturer with a seven-year period of

non-patent exclusivity. See 21 U.S.C. § 360cc(a).

14

District of New Jersey on March 28, 2003. While motions for

summary judgment were pending, Cephalon entered into

what are known as “reverse-payment settlements” 4 with each

of the four generic manufacturers. First, Cephalon settled

with Teva on December 9, 2005. This agreement ended the

patent litigation between Cephalon and Teva, and as a result

Teva was granted a license to sell modafinil in October 2012,

which was before the expiration of Cephalon’s patent but

several years later than Teva could have entered the market if

it had launched its generic “at-risk.” In exchange for its

agreement to settle, Teva was paid millions of dollars to stay

out of the market via royalty agreements, supply agreements,

and other contractual provisions. Importantly, the only term

of the deal that was publicized was what is known as the

“contingent launch provision.” This provision allowed Teva

to enter the generic modafinil market if any other company

entered the market for any reason.

Almost two weeks later, on December 22, 2005,

Ranbaxy entered into a similar reverse-payment settlement

agreement with Cephalon on slightly less favorable terms, but

also with a contingent launch provision. Again, the

4

In a reverse-payment settlement, “a party with no claim for

damages (something that is usually true of a paragraph IV

litigation defendant) walks away with money simply so that it

will stay away from the patentee’s market.” F.T.C. v.

Actavis, Inc. 133 S. Ct. 2223, 2233 (2013). Such agreements

are subject to antitrust scrutiny under the “rule of reason”

inquiry because such settlements, “where large and

unjustified, can bring with it the risk of significant

anticompetitive effects.” Id. at 2237.

15

contingent launch provision was publicized via press release.

Two weeks after the Ranbaxy settlement, on January 9, 2006,

Mylan entered into a similar agreement – on less favorable

terms than Ranbaxy – but also with a publicized contingent

launch provision. The final remaining paragraph IV filer,

Barr, settled on the least favorable terms on February 1, 2006.

It too had a contingent launch provision, which was

publicized as well. Because no subsequent paragraph IV filer

would be entitled to the 180-day exclusivity period, there was

no incentive for another generic manufacturer to unilaterally

bear the litigation expenses for the reward that it would have

to share with any other generic manufacturer who wanted to

enter the market. See 21 U.S.C. § 355(j)(5)(D). 5

The Direct Purchaser Plaintiff (“DPP”) putative class,

appellees in this case, filed suit on April 27, 2006, alleging a

global conspiracy involving Cephalon and all four generic

5

Generic manufacturer Apotex Inc. nonetheless filed a

declaratory judgment action in the Eastern District of

Pennsylvania in June 2006 alleging non-infringement,

invalidity, and unenforceability of the ′516 patent. Apotex

Inc. v. Cephalon, Inc., No. 2:06-cv-2768, 2011 WL 6090696,

at *1 (E.D. Pa. Nov. 7, 2011). The District Court held that

the patent was invalid and unenforceable on November 7,

2011, a ruling which was upheld on appeal. Apotex Inc. v.

Cephalon, Inc., 500 F. App’x 959 (Fed. Cir. 2013) (per

curiam). The District Court, in a separate opinion, also held

that Apotex would not infringe the ′516 patent. Apotex, Inc.

v. Cephalon, Inc., No. 2:06-cv-2768, 2012 WL 1080148, at

*1 (E.D. Pa. Mar. 28, 2012)

16

defendants under 15 U.S.C. § 1; four separate conspiracies

between Cephalon and each generic defendant under the same

statute; and a monopolization claim against Cephalon under

15 U.S.C. § 2. The DPP class is made up of wholesalers who

purchased Provigil directly from Cephalon. 6

The District Court, with the full support of the parties,

ordered that motions regarding class certification were not to

be filed until after fact and expert discovery and the motions

for summary judgment had been filed. Thus, the DPP class

did not file its motion for class certification until May 12,

2014, after more than eight years of litigation.

Approximately one month later, on June 23, 2014, the District

Court granted summary judgment in favor of all of the

defendants on the DPP class’ global antitrust conspiracy

claim. Over the next 13 months, several letter motions and

hearings were held on the class certification issue, and the

District Court certified the DPP class on July 27, 2015.

During this period, Cephalon, Teva, and Barr settled with the

DPP class for $512 million on April 17, 2015. A settlement

6

Other parties challenging the reverse-payment settlement

agreements are a putative class of end-payors, generic

competitor Apotex Inc., several retail plaintiffs, and the

F.T.C., which originally filed suit in the District Court for the

District of Colombia before being transferred to Judge

Goldberg’s docket. The FTC sued only Cephalon. Teva

purchased Cephalon on October 14, 2011, and on May 18,

2015, the F.T.C. settled with Teva for $1.2 billion. The

remaining suits are consolidated for purposes of liability, and

they have all been stayed pending our ruling on the DPP class

certification issue.

17

class, which has the exact same composition as the putative

DPP class at issue here, was also certified on July 27, 2015,

and the settlement itself was approved by the District Court

on October 15, 2015. Thus, the only defendants remaining at

the time of the DPP certification decision being appealed

were Ranbaxy and Mylan (collectively “Defendants”).

II.

Defendants challenge two aspects of the District

Court’s class certification decision – numerosity and

predominance. Thus, even though other issues were

contested at the District Court level, we focus only on the

District Court’s numerosity analysis under Rule 23(a)(1) and

its predominance analysis under Rule 23(b)(3).

Plaintiffs argued before the District Court that the class

was comprised of twenty-two members. Defendants

challenged the inclusion of four of these members. Thus, the

District Court began its numerosity analysis by determining

the proper class size because “relevant precedent makes

significant distinctions between classes containing more than

twenty class members and those containing twenty or fewer.”

King Drug Co. of Florence, Inc. v. Cephalon, Inc., 309

F.R.D. 195, 204 (E.D. Pa. 2015). Defendants challenged two

class members’ inclusion solely for numerosity purposes

because they were partial assignees of two other class

members. They argued that counting the partial assignees

would essentially allow the DPP class to “double dip” and

artificially inflate the class size. Defendants next challenged

the inclusion of a class member that ceased operations prior

to generic entry actually occurred, arguing that there was no

18

way to know whether it would have actually purchased

generic modafinil. Lastly, Defendants challenged the class

status of a class member that only purchased branded Provigil

from Cephalon after generic modafinil had already entered

the market. Defendants argued that there was no overcharge

as a result of this. The District Court rejected all of

Defendants’ challenges to the class size. Id. at 204-06.

The District Court next considered whether joinder of

these twenty-two class members was impracticable such that

class certification was appropriate under Rule 23(a)(1).

While the District Court acknowledged that a class of twenty-

two members was small compared to most class actions, the

District Court found persuasive several district court cases in

the reverse-payment settlement context with similarly-

situated classes where the numerosity requirement was found

to be satisfied. Id. at 204 (collecting cases)

In analyzing whether joinder was impracticable, the

District Court examined five factors: “(1) judicial economy,

(2) geographic dispersion, (3) financial resources of class

members, (4) the claimant’s ability to institute individual

suits, and (5) requests for injunctive relief that could affect

future class members.” Id. at 203-04 (quoting In re

Wellbutrin XL Antitrust Litig., No. 08-2431, 2011 WL

3563385, at *3 (E.D. Pa. Aug. 11, 2011)). The District Court

placed great weight on the judicial economy factor, with

particular emphasis on the late stage of the litigation.

Specifically, the Court stated: “Considering the extensive

history of this litigation and the exhaustive discovery that has

been conducted, . . . judicial economy is best served by

trying this case as a class action. Joinder of the absent class

19

members would likely require additional rounds of discovery,

which would only further delay a trial date.” Id. at 206-07.

Relatedly, the District Court also expressed the

concern that if the class was not certified at this late date,

unnamed class members would bring individual suits in other

jurisdictions instead of seeking to be joined in the suit before

him. Id. at 207 (“Further, if cases were brought within other

jurisdictions, additional discovery is certainly a possibility,

and separate trials could result in inconsistent verdicts.”).

The other primary factor that the District Court found to

weigh in favor of numerosity was the geographic dispersion

of the class members, who were spread out over thirteen

states and Puerto Rico. Id.

On the other hand, the Court noted that some factors

weighed against class certification. First, the class members’

vast financial resources weighed against certification, as each

was a sophisticated corporation. Id. The District Court also

looked to their incentive to bring individual claims, stating

that the class members’ ability to bring individual suits

generally weighed against certification, but equivocating

somewhat because the six class members with claims below

$1 million “likely do not have the same incentive to engage in

costly antitrust litigation on their own.” Id. It is not clear

what weight was ultimately placed on the parties’ financial

incentive to bring suit, and the District Court appeared to treat

this as either a neutral factor or one that weighed in favor of

Defendants. Ultimately, the District Court held that the

requirements of Rule 23(a)(1) were satisfied and the class was

sufficiently numerous such that joinder was impracticable.

Id.

20

The District Court next addressed Defendants’

predominance argument that, after the District Court’s grant

of summary judgment on the global conspiracy claim,

common issues of law and fact did not predominate over

individualized inquiries under Rule 23(b)(3). Id. at 209.

Defendants argued that the damages model of Plaintiffs’

expert, Dr. Leitzinger, no longer matched Plaintiffs’ theory of

liability because it did not isolate the harm caused by each

individual reverse-payment settlement. Defendants claimed

that this mismatch is analogous to the problem at issue in the

Supreme Court’s decision in Comcast Corp. v. Behrend, 133

S. Ct. 1426 (2013). Related to this argument, Defendants

relied upon the doctrine of antitrust standing to support the

view that, in the absence of a global conspiracy, each class

member would have to show which agreement harmed him,

and that this would necessarily be an individualized inquiry.

The District Court rejected these arguments, concluding that

Plaintiffs had antitrust standing and that the doctrine of joint

and several liability was appropriate. Thus, it concluded that

Comcast was not controlling because Dr. Leitzinger’s

damages model “matches Plaintiffs’ remaining theory of

liability and impact.” Id. at 214.

III.

“The class action is an exception to the usual rule that

litigation is conducted by and on behalf of the individual

named parties only.” Wal-Mart, 564 U.S. at 348 (internal

quotation marks omitted). In order to justify this exception to

the rule, “every putative class action must satisfy the four

requirements of Rule 23(a) and the requirements of either

Rule 23(b)(1), (2), or (3).” Marcus v. BMW of N.A., LLC,

21

687 F.3d 583, 590 (2012). In order to satisfy Rule 23(a), a

plaintiff must show:

(1) the class must be “so numerous that joinder

of all members is impracticable” (numerosity);

(2) there must be “questions of law or fact

common to the class” (commonality); (3) “the

claims or defenses of the representative parties”

must be “typical of the claims or defenses of the

class” (typicality); and (4) the named plaintiffs

must “fairly and adequately protect the interests

of the class” (adequacy of representation, or

simply adequacy).

In re Cmty. Bank of N. Va., 622 F.3d 275, 291 (3d Cir. 2010)

(quoting Fed. R. Civ. P. 23). Rule 23(b)(3), which is the

basis for certification here, “requires that (i) common

questions of law or fact predominate (predominance), and (ii)

the class action is the superior method for adjudication

(superiority).” Marcus, 687 F.3d at 591 (quoting In re Cmty.

Bank of N. Va., 622 F.3d at 291). “The party seeking

certification bears the burden of establishing each element of

Rule 23 by a preponderance of the evidence.” Id.

We have held that “the decision to certify a class calls

for findings by the court, not merely a ‘threshold showing’ by

a party, that each requirement of Rule 23 is met,” and that

“[f]actual determinations supporting Rule 23 findings must be

made by a preponderance of the evidence.” In re Hydrogen

Peroxide Antitrust Litig., 552 F.3d 305, 307 (3d Cir. 2008).

In addition, a court “must resolve all factual or legal disputes

relevant to class certification, even if they overlap with the

22

merits – including disputes touching on elements of the cause

of action.” Id. Class certification will thus be “proper only

‘if the trial court, is satisfied, after a rigorous analysis, that the

prerequisites’ of Rule 23 are met.” Id. (quoting Gen. Tel. Co.

of Sw. v. Falcon, 457 U.S. 147, 161 (1982)); see also Newton

v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154,

166 (3d Cir. 2001) (“A class certification decision requires a

thorough examination of the factual and legal allegations.”).

Thus, while a district court “possesses broad discretion

to control proceedings and frame issues for consideration

under Rule 23,” such discretion “does not soften the rule

[that] a class may not be certified without a finding that each

Rule 23 requirement is met.” Hydrogen Peroxide, 552 F.3d

at 310. This is particularly true because, acknowledging the

practicalities of class litigation, we have said that class

certification “is often the defining moment in class actions

(for it may sound the ‘death knell’ of the litigation on the part

of plaintiffs, or create unwarranted pressure to settle

nonmeritorious claims on the part of defendants).” Newton,

259 F.3d at 162.

“We review a class certification order for abuse of

discretion, which occurs if the district court’s decision rests

upon a clearly erroneous finding of fact, an errant conclusion

of law or an improper application of law to fact.” Hydrogen

Peroxide, 552 F.3d at 312 (internal quotation marks omitted).

Although Defendants raise the issue of predominance first,

the requirements of Rule 23(a) are “threshold requirements,”

Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997),

and we therefore address them first.

23

A. Numerosity

Rule 23(a)(1) sets forth what is commonly known as

the numerosity requirement. The text is, however,

conspicuously devoid of any numerical minimum required for

class certification. Instead, the rule simply states that the

numerosity requirement is satisfied when “the class is so

numerous that joinder of all members is impracticable.” Fed

R. Civ. P. 23(a)(1). “Impracticable does not mean

impossible,” Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir.

1993), and refers rather to the difficulties of achieving

joinder. This calls for an inherently fact-based analysis that

requires a district court judge to “take into account the

context of the particular case,” thereby providing district

courts considerable discretion in making numerosity

determinations. Pa. Pub. Sch. Emps. Ret. Sys. v. Morgan

Stanley & Co., 772 F.3d 111, 120 (2d Cir. 2014). A district

court abuses that discretion, however, when it considers

issues that have no place in the numerosity requirement.

Hydrogen Peroxide, 552 F.3d at 312. In this case, the District

Court abused its discretion by improperly emphasizing the

late stage of the proceeding and by not considering the ability

of individual class members to pursue their cases through the

use of joinder. 7

While “[n]o minimum number of plaintiffs is required

to maintain a suit as a class action,” our Court has said that

“generally if the named plaintiff demonstrates that the

7

Despite this conclusion, we recognize the thoughtful work

of the District Court, which was diligently done even though

there is a paucity of precedent on the numerosity issue.

24

potential number of plaintiffs exceeds 40, the first prong of

Rule 23(a) has been met.” Stewart v. Abraham, 275 F.3d

220, 226-27 (3d Cir. 2001); see also Robidoux, 987 F.2d at

936 (“[T]he difficulty in joining as few as 40 putative class

members should raise a presumption that joinder is

impracticable.”). At the other end of the spectrum, the

Supreme Court has stated in dicta that a class of fifteen was

“too small to meet the numerosity requirement.” Gen. Tel.

Co. of the Nw, Inc. v. EEOC, 446 U.S. 318, 331 (1980).

Leading treatises have collected cases and recognized the

general rule that “[a] class of 20 or fewer is usually

insufficiently numerous . . . [a] class of 41 or more is usually

sufficiently numerous . . . . [while] [c]lasses with between 21

and 40 members are given varying treatment. These mid-

sized classes may or may not meet the numerosity

requirement depending on the circumstances of each

particular case.” 5 James Wm. Moore, et al., Moore’s

Federal Practice § 23.22; see also 5 William B. Rubenstein,

Newberg on Class Actions § 3:12 (“As a general guideline . . .

a class that encompasses fewer than 20 members will likely

not be certified absent other indications of impracticability of

joinder, while a class of 40 or more members raises a

presumption of impracticability of joinder based on numbers

alone.” (internal footnotes omitted)); Cox v. Am. Cast Iron

Pipe Co., 784 F.2d 1546, 1553 (3d Cir. 1986) (citing Moore

favorably).

At this point, we need not specify a “floor” at which a

putative class will fail to satisfy the numerosity requirement.

Instead, we simply note that the number of class members is

the starting point of our numerosity analysis. Although

district courts are always under an obligation to ensure that

25

joinder is impracticable, their inquiry into impracticability

should be particularly rigorous when the putative class

consists of fewer than forty members. Because the District

Court certified a class of twenty-two members, which is only

slightly above the twenty-member floor suggested by the

leading treatises, we first address Defendants’ challenge to

the size of the putative class concerning the partial

assignment of some claims. After determining that the class

is comprised of twenty-two members, we scrutinize the

District Court’s numerosity reasoning in this case. Because

the District Court erred in its analysis of the two most

important factors applicable here, we see no need to examine

the other factors and will remand for the District Court to

again engage in a numerosity inquiry consistent with the

reasoning in this opinion.

1. The Size of the Class

The District Court rejected Defendants’ argument that

two class members should not be included in the class for

numerosity purposes because they were partial assignees of

two other class members. If Defendants were correct, the

class would be comprised of only twenty class members, not

twenty-two. On the other hand, for the first time on appeal,

Plaintiffs argue that they have uncovered three more

assignees of claims, and that the class consists of twenty-five

members.

Defendants appear to have abandoned their partial

assignment argument on appeal, arguing in one sentence that

“four of the 22 potential class members were improperly

26

included in the class.” Appellant Br. at 48. 8 Defendants

make no reference to case law and rely simply on cursory

citations to the record. We could, for good reason, deem

these arguments abandoned and waived on appeal. Kost v.

Kozakiewicz, 1 F.3d 176, 182 (3d Cir. 1993). However,

because we are remanding the numerosity issue to the District

Court, we think it appropriate to consider this issue pertaining

to the size of the class because the partial assignability issue

impacts whether the three additional class members should be

included in the class on remand. See Bagot v. Ashcroft, 398

F.3d 252, 256 (3d Cir. 2005) (“This Court has discretionary

power to address issues that have been waived.”).

8

Defendants raised two other challenges to the size of the

class before the District Court and in a cursory manner on

appeal. They argue (1) that named plaintiff King Drug

Company of Florence, Inc. (“King Drug”) should not be

included in the class because it went out of business before

generic modafinil entered the market in 2012, and thus there

is no way of knowing if it would have even purchased generic

modafinil, and (2) that Drogueria Betances should not be

included in the class because all of its brand modafinil

purchases were made after generic entry. We see no need to

question the inclusion of these two class members. King

Drug presented testimony showing that it would have

purchased generic modafinil instead of Provigil if it had been

on the market. Similarly, the experts of both parties agreed

that it takes several months before prices fall to competitive

levels after generic entry. Because Drogueria Betances made

its brand modafinil purchases only one month after generic

entry, it is conceivable that it paid an overcharge.

27

Initially, Defendants’ partial assignment argument

makes intuitive sense. Why should Plaintiffs be able to take

one claim and turn it into two for numerosity purposes? How

is this not a form of “double dipping”? Nevertheless, no

matter how intuitively appealing this argument may be, it

lacks legal support. The text of Rule 23(a)(1) says nothing

about the number of claims; instead, it refers to the number of

class members. Fed. R. Civ. P. 23(a)(1) (requiring an inquiry

into whether “the class is so numerous that joinder of all

members is impracticable” (emphasis added)).

Moreover, as the District Court recognized, there is

persuasive circuit precedent establishing that partial assignees

are appropriately considered to be members of a class. In In

re Fine Paper Litigation, 632 F.2d 1081, 1089 (3d Cir. 1980),

the state of Washington was the recipient of partial

assignments of antitrust claims. It sought to be excluded from

the settlement class, and the district court held, among other

reasons for denying the right to opt out, that “the state’s

assertion of the assigned claims would result in an

impermissible fragmentation of the . . . causes of action.” Id.

We reversed and “reject[ed] the defendant’s position that the

partial assignments improperly fragment the claim.” Id. at

1090. We looked to section 156 of the Restatement of

Contracts for guidance and concluded that “[a]n assignment

of a fractional part of a single and entire right against an

obligor is operative as if the part had been a separate right.”

Id. at 1091; Restatement (First) of Contracts § 156 (“An

assignment of either a fractional part of a single and entire

right against an obligor . . . is operative as to that part or

28

amount to the same extent and in the same manner as if the

part had been a separate right.”). 9

At the same time, we held that when the “collective

right to the entire claim” is split, “the partial assignee may not

maintain the original suit” unless the obligor has consented in

order to protect the “right[] of the obligor to be free of

successive and repeated suits growing out of the same basic

facts.” In re Fine Paper Litig., 632 F.2d at 1091. When the

obligor does not consent to these separate suits, then these

rights are protected by the use of the joinder rules or the class

action mechanism. Id. Thus, the state of Washington could

be made a party that, unlike other class members, did “not

have the right to opt out.” Id. In our case, Defendants are

really seeking the opposite of what we said was permissible

in Fine Paper Litigation: they want us to say that these two

partial assignees must proceed independent of the class.

While Fine Paper Litigation did not address

numerosity, we consider its reasoning instructive. Crucially,

we held there that a partial assignment “is operative as if the

part had been a separate right.” Id. at 1091. Moreover, Fine

Paper Litigation envisioned the class action mechanism as a

proper tool for partial assignees to participate in the lawsuit,

9

Nearly identical language is found in the Second

Restatement of Contracts, which was pending approval at the

time of In re Fine Paper Litigation. Restatement (Second) of

Contracts § 326 (“[A]n assignment of a part of a right . . . is

operative as to that part to the same extent and in the same

manner as if the part had been a separate right.”).

29

albeit with fewer individual rights than other claimants. We

agree with the District Court that, unless there is evidence that

the class plaintiffs are seeking to artificially inflate the

number of claimants, partial assignees may properly be

treated as class members. On remand, the District Court will

need to consider whether the three new assignees that

Plaintiffs first mention on appeal should be considered as

class members. 10 Thus, at this point, we assume that the class

consists of twenty-two members.

2. Impracticability of Joinder

In Marcus, we recognized the three core purposes of

the numerosity requirement:

10

Although normally “Rule 23(a)(1) does not require a

plaintiff to offer direct evidence of the exact number and

identities of the class members,” Marcus v. BMW of N.A.,

LLC, 687 F.3d 583, 596 (3d Cir. 2012), when the number of

class members is so small that any deviation may impact the

district court’s numerosity analysis, plaintiffs must provide

evidence of each class member’s identity or risk having that

member not counted. The declaration of the settlement

administrator that there are three more class members is not

enough in this case, where we are at the low end of what is

deemed to be a sufficient number of class members. This is

particularly true where all assignees – partial or otherwise –

are large corporations whose identity is easily ascertainable.

On remand, Plaintiffs will need to provide more evidence

concerning these three potential class members if they wish to

have them counted for numerosity purposes.

30

First, it ensures judicial economy. It does so by

freeing federal courts from the onerous rule of

compulsory joinder inherited from the English

Courts of Chancery and the law of equity.

Courts no longer have to conduct a single,

administratively burdensome action with all

interested parties compelled to join and be

present. The impracticability of joinder, or

numerosity, requirement also promotes judicial

economy by sparing courts the burden of having

to decide numerous, sufficiently similar

individual actions seriatim. As for its second

objective, Rule 23(a)(1) creates greater access

to judicial relief, particularly for those persons

with claims that would be uneconomical to

litigate individually. Finally, the rule prevents

putative class representatives and their counsel,

when joinder can be easily accomplished, from

unnecessarily depriving members of a small

class of their right to a day in court to

adjudicate their own claims.

687 F.3d at 594-95 (internal citations omitted). However, in

Marcus, we had no need to provide a list of factors that

should be considered in the numerosity analysis, because it

was “[m]ere speculation” that anyone other than the named

plaintiff was a class member. Id. at 596-97.

We have not had occasion to list relevant factors that

are appropriate for district court judges to consider when

determining whether joinder would be impracticable. We do

so now. This non-exhaustive list includes: judicial economy,

31

the claimants’ ability and motivation to litigate as joined

plaintiffs, the financial resources of class members, the

geographic dispersion of class members, the ability to identify

future claimants, and whether the claims are for injunctive

relief or for damages. See 5 Moore’s Federal Practice

§ 23.22; 5 Newberg on Class Actions § 3.12 (“These factors

include: judicial economy arising from avoidance of a

multiplicity of actions, geographic dispersion of class

members, size of individual claims, financial resources of

class members, and the ability of claimants to institute

individual suits.”); Pa. Pub. Sch. Emps. Ret. Sys., 772 F.3d at

120 (“However, the numerosity inquiry is not strictly

mathematical but must take into account the context of the

particular case, in particular whether a class is superior to

joinder based on other relevant factors including: (i) judicial

economy, (ii) geographic dispersion, (iii) the financial

resources of class members, (iv) their ability to sue

separately, and (v) requests for injunctive relief that would

involve future class members.” (citing Robidoux, 987 F.2d at

936)).

These factors are only relevant to a binary choice at

the certification stage: a class action versus joinder of all

interested parties. At this point, we do not consider the

possibility that plaintiffs may bring individual suits. After all,

the text of Rule 23(a)(1) refers to whether “the class is so

numerous that joinder of all members is impracticable,” 11 not

11

The superiority analysis required under Rule 23(b)(3)

similarly calls for an inquiry into judicial economy and places

great weight on whether the individual members can bring

their own claims. However, superiority, unlike numerosity,

32

whether the class is so numerous that failing to certify

presents the risk of many separate lawsuits.

While all factors are relevant, we note at the outset that

not all are created equal. Instead, both judicial economy and

the ability to litigate as joined parties are of primary

importance. As we have held, judicial economy is one of the

purposes behind Rule 23(a)(1) and class actions in general.

Marcus, 687 F.3d at 594. The same is true of ensuring that

small-value claims have a mechanism by which they can be

economically litigated. Id.; Deposit Guaranty Nat’l Bank,

considers alternatives to class actions other than joinder. See

Fed. R. Civ. P. 23(b)(3) (requiring an inquiry into whether “a

class action is superior to other available methods for fairly

and efficiently adjudicating the controversy”); In re Warfarin

Sodium Antitrust Litig., 391 F.3d 516, 533-34 (3d Cir. 2004)

(“The superiority requirement ‘asks the court to balance, in

terms of fairness and efficiency, the merits of a class action

against those of alternative available methods of

adjudication.’” (quoting In re Prudential Ins. Co. Am. Sales

Practice Litig. Agent Actions, 148 F.3d 283, 316 (3d Cir.

1998))); id. at 534 (finding superiority to be satisfied because

“there are a potentially large number of class members in this

matter . . . . [and] each consumer has a very small claim in

relation to the cost of prosecuting a lawsuit. Thus, from the

consumers’ standpoint, a class action facilitates spreading of

the litigation costs among the numerous injured parties and

encourages private enforcement of the statutes.”).

Numerosity, of course, is a prerequisite to all class actions,

while a finding of superiority is necessary only in a (b)(3)

suit.

33

Jackson, Miss. v. Roper, 445 U.S. 326, 339 (1980) (“Where it

is not economically feasible to obtain relief within the

traditional framework of a multiplicity of small individual

suits for damages, aggrieved persons may be without any

effective redress unless they may employ the class action

device.”). If we were to say that judicial economy and the

ability of class members to bring their own suits as named

parties weighed in favor of class certification, how could the

other factors outweigh these considerations even though the

core purposes of a class action were being advanced? 12 In

this case, the District Court’s judicial economy analysis was

incorrect, as it improperly placed great weight on the late

stage of the proceeding. Additionally, the District Court did

not fully explore the ability of class members to join as

plaintiffs.

a. Judicial Economy

Judicial economy, a primary factor frequently cited,

looks to the administrative burden that multiple or aggregate

claims place upon the courts. Marcus, 687 F.3d at 594

(stating that the numerosity requirement “also promotes

judicial economy by sparing the courts the burden of having

12

The third purpose behind class actions mentioned in

Marcus, the due process concern of protecting the ability of

individual members to bring their own claims, Marcus, 687

F.3d at 594-95, is not present in Rule 23(b)(3) actions where

members have the right to opt out of the class and where the

identity of all class members is ascertainable such that there

will be no difficulties in ensuring that they receive notice of

the representative action. See Fed. R. Civ. P. 23(c)(2)(B)(v).

34

to decide numerous, sufficiently similar individual actions

seriatim”); id. (“Courts no longer have to conduct a single,

administratively burdensome action with all interested parties

compelled to join and be present.”). This factor takes into

account any efficiency considerations regarding the joinder of

all interested parties that the district court deems relevant,

including the number of parties and the nature of the action.

See 5 Moore’s Federal Practice § 23.22 (instructing a court

to consider “the actual, practical difficulties of joining all of

the potential class members” by inquiring whether joinder

“would be expensive, time-consuming, and logistically

unfeasible”). In analyzing judicial economy, we focus on

whether the class action mechanism is substantially more

efficient than joinder of all parties.

Here, the District Court “conclude[d] that judicial

economy [was] best served by trying this case as a class

action.” King Drug Co., 309 F.R.D. at 206. It made this

decision by looking to “the extensive history of the litigation

and the exhaustive discovery that ha[d] been conducted.” Id.

It expressed concern that further discovery would delay the

case even more, or that unnamed class members would opt to

file suit elsewhere, resulting in other civil actions with

additional discovery and the potential for inconsistent

verdicts. Id. at 206-07 (“Joinder of the absent class members

would likely require additional rounds of discovery, which

would only further delay a trial date. Further, if cases were

brought within other jurisdictions, additional discovery is

certainly a possibility.”). 13 While these predictions may

13

The dissent does not “read the District Court’s analysis [of

the judicial economy factor] as turning upon a consideration

35

come true, the late stage of litigation is not by itself an

appropriate consideration to take into account as part of a

numerosity analysis. 14

In complex cases such as this antitrust suit, the class

certification decision is often delayed until after years of fact

and expert discovery have been conducted and dispositive

motions have been litigated. See Hydrogen Peroxide, 552

F.3d at 324 (“But even with some limits on discovery and the

extent of the hearing, the district judge must receive enough

evidence, by affidavits, documents, or testimony, to be

satisfied that each Rule 23 requirement has been met.”

(quoting In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24,

of the late stage of the proceeding.” However, this analysis

consisted of three sentences in a single paragraph, each of

which focused on the late stage of the proceeding. King Drug

Co. of Florence, Inc. v. Cephalon, Inc., 309 F.R.D. 195, 206-

07 (E.D. Pa. 2015). We also note that the District Court’s

entire numerosity section spanned three pages, one of which

is nothing more than a summary of the parties’ arguments.

14

The dissent cites several cases that it claims “recognize that

it is appropriate for courts to consider the stage of the

proceedings when weighing judicial economy.” None of

these cases are class actions though, which we again

emphasize are the “exception to the usual rule that litigation

is conducted by and on behalf of the individual named parties

only.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348

(2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01

(1979)).

36

41 (2d Cir. 2006))). Courts routinely refuse to certify classes

based on the need to conduct further discovery before being

able to properly rule on a class certification motion. See In re

New Motor Vehicles Canadian Export Antitrust Litig., 522

F.3d 6, 26-27 (1st Cir. 2008) (noting that the district court

erred in preliminarily certifying the class because of the

“novelty and complexity of the theories advanced and the

gaps in the evidence proffered”); Valley Drug Co. v. Geneva

Pharm., Inc., 350 F.3d 1181, 1192 (11th Cir. 2003) (“[T]he

record needed to decide [the class certification] issue remains

incomplete because the district court improperly denied

Abbott’s request to conduct so-called ‘downstream

discovery.’”). However, such decisions do not prejudice a

plaintiff; the class certification motion is not denied, but only

deferred until after further discovery is conducted.

Conversely, a rule that would allow courts to consider

the late stage of litigation and the sunk costs already incurred

in their numerosity analyses would place a thumb on the scale

in favor of a numerosity finding for no reason other than the

fact that the complex nature of a case resulted in the class

certification decision being deferred for years. Our view is

consistent with the 2003 amendments to Rule 23(c)(1)(A)

which state that the class certification decision should be

made “a[t] an early practicable time after a person sues or is

sued as a class representative” as opposed to the previous rule

which said that the decision be made “as soon as practicable

after commencement of an action.” See Fed. R. Civ. P. 23

advisory committee’s notes to 2003 amendment (noting that

the “as soon as practicable” designation does not “capture[]

the many valid reasons that may justify deferring the initial

certification decision”). We have recognized that the rule

37

was modified in order to discourage “premature certification

determinations.” Richardson v. Bledsoe, __F.3d__, 2016 WL

3854216, at *4 (3d Cir. July 15, 2016) (quoting Weiss v.

Regal Collections, 385 F.3d 337, 347 (3d Cir. 2004)). 15

As the Advisory Committee noted, there are “many

valid reasons that may justify deferring the initial certification

decision,” including the need to conduct discovery, a

determination of what issues would be presented at trial, and

the defendant’s desire to “win dismissal or summary

judgment as to the individual plaintiffs without certification

and without binding the class that might have been certified.”

Fed. R. Civ. P. 23 advisory committee’s notes to 2003

amendment. Thus, while Rule 23(c)(1)(A) now encourages

further discovery so that all of the information and evidence

relevant to certification is before a district judge before she

makes the certification decision, the District Court’s analysis

here would seem to consider any lengthy period following the

filing of a putative class action as weighing in favor of

finding numerosity. This cannot be right. Judicial economy

does not permit consideration of the sunk costs from past

15

Weiss was abrogated on other grounds by Campbell-Ewald

Co. v. Gomez, 136 S. Ct.663 (2016). However, its reasoning

concerning the impropriety of “premature certification

decisions” was reaffirmed in Richardson, 2016 WL 3854216,

at *4.

38

discovery and litigation, or the need to conduct further

discovery if the class is not certified. 16

Moreover, while the District Court expressed concern

that “[j]oinder of the absent class members would likely

require additional rounds of discovery,” King Drug, 309

F.R.D. at 206, this does not mean that the litigation would

have to begin anew for the unnamed class members. If the

members all opted to join the case as individual plaintiffs, the

District Court could, in its discretion, limit discovery where

“is unreasonably cumulative or duplicative, or can be

obtained from some other source that is more convenient, less

burdensome, or less expensive.” Fed. R. Civ. P.

26(b)(2)(C)(i). At this point, Defendants have not shown

what further discovery they are entitled to; they only claim

that they are entitled to further discovery as a matter of due

process. 17 In addition, as a class, Plaintiffs have been using

16

The District Court also considered the effects on judicial

economy if individual suits in separate jurisdictions would be

filed absent class certification. However, the text of Rule

23(a)(1) envisions only two scenarios: joinder of all class

members or a class action. Fed R. Civ. P. 23(a)(1) (inquiring

whether “joinder of all members is impracticable”). The

possibility of individual suits filed in separate jurisdictions is

not a consideration that a district court should entertain in

deciding numerosity vel non.

17

In the District Court, Defendants never asked for discovery

from unnamed class members. Defendants claim that a

request for discovery of unnamed class members would have

been futile because it is highly circumscribed. However, the

39

the same experts. It is not clear that there would be a need for

that to change merely because Plaintiffs would be joined as

individual parties instead of moving forward as a class.

On remand, when considering the judicial economy

factor of the numerosity analysis, the District Court should

not take into account the sunk costs of the litigation or the

need to further delay trial were the class not to be certified. 18

citations that they provide in support of this view make clear

that this is merely a heightened standard, and if they could

show a need for discovery from unnamed class members the

District Court would allow it. See 5 Moore’s Federal

Practice § 33.20 (“Reasonable discovery . . . should be

permitted from unnamed class members when the special

circumstances of the case justify it.”); Clark v. Universal

Builders, Inc., 501 F.2d 324, 341 (7th Cir. 1974) (“The taking

of depositions of absent class members is – as is true of

written interrogatories – appropriate in special

circumstances.”).

18

The dissent suggests that we proclaim this rule “without

any citation to authority.” Of course, our dissenting colleague

fails to provide any citation to authority to support a contrary

rule. In fact, the only authorities that we can find to support

the dissent’s position are the District Court’s opinion in this

case, and another district court opinion from the Eastern

District of Pennsylvania upon which the District Court here

relied, In re Wellbutrin XL Antitrust Litig., No. 08-2431, 2011

WL 3563385, at *3 (E.D. Pa. Aug. 11, 2011). This is a

matter of first impression for any court of appeals. Indeed,

our Court has never even identified the factors that a district

40

In other words, without considering the late stage of the

litigation, it should determine whether a class action would

have been a substantially more efficient mechanism of

litigating this suit than joinder of all parties. This primarily

involves considerations of docket control, taking into account

practicalities as simple as that of every attorney making an

appearance on the record. At the same time, the District

Court is free to rely on its superior understanding of how the

case has proceeded to date for the purpose of determining

whether the class mechanism would have actually been a

substantially more efficient use of judicial resources than

joinder of the parties at the onset of the litigation.

b. Ability and Motivation to be Joined as

Plaintiffs

The second purpose behind the numerosity

requirement is to further the broader class action goal of

providing those with small claims reasonable access to a

court should consider in its numerosity analysis despite the

dissent’s assertion that the District Court in this case

“properly considered every factor we have ever held to be

relevant” in this analysis. We cannot abdicate our

responsibility to conduct a de novo review of legal issues.

See In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305,

312 (3d Cir. 2008) (recognizing that although class

certification decisions are reviewed for abuse of discretion,

“[w]hether an incorrect legal standard has been used is an

issue of law to be reviewed de novo” (internal quotation

marks omitted)).

41

judicial forum for the resolution of those claims. Thus, the

ability and motivation of Plaintiffs to pursue their litigation

via joinder is the second factor upon which we focus. See

Marcus, 687 F.3d at 594 (stating that the numerosity

requirement “creates greater access to judicial relief,

particularly for those persons with claims that would be

uneconomical to litigate individually”). 19

This primarily20 involves an examination of the stakes

at issue for the individual claims and the complexity of the

litigation, which will typically correlate with the costs of

pursuing these claims. Though joinder is certainly more

19

We read Marcus’s language about the ability “to litigate

individually,” Marcus, 687 F.3d at 594, to refer to each

plaintiff appearing on the record as a joined party, and not

whether each individual plaintiff can litigate his or her own

claim as the sole plaintiff. While the latter concern is

certainly a policy justification for the class device generally,

as we emphasize, Rule 23(a)(1) requires only the binary

choice between class actions and joinder of all parties.

20

Other considerations may be relevant to a district court in

determining class members’ ability and motivation to be

joined as named plaintiffs. For example, the District Court

here recognized that a fear of retaliation may hinder the

ability and motivation of a party to appear as a named

plaintiff. In this case, the District Court noted that there was

no proof of any fear of retaliation, and we do not disturb that

factual finding on appeal. King Drug Co. of Florence, Inc. v.

Cephalon, Inc., 309 F.R.D. 195, 207 (E.D. Pa. 2015).

42

economical for most plaintiffs than pursuing the case alone, it

is often still uneconomical for an individual with a negative

value claim to join a lawsuit. 21 After all, each plaintiff may

need to hire his own counsel to protect his individual interests

– although total litigation costs would still likely be lower due

to joint litigation agreements. Similarly, each plaintiff would

be subject to discovery, whereas the defendants would have

to show a greater need for discovery from unnamed plaintiffs

in a class action. 22 See Clark v. Universal Builders, Inc., 501

F.2d 324, 340-41 (7th Cir. 1974) (placing the burden on

defendants to show the need for discovery from unnamed

class members to ensure that the discovery is not requested

“as a tactic to take undue advantage of the class members or

as a stratagem to reduce the number of claimants” (internal

quotation marks omitted)).

The District Court did not properly consider this

factor, as it focused instead on whether the individual

21

A negative value claim is a “claim[] that could not be

brought on an individual basis because the transaction costs

of bringing an individual action exceed the potential relief.”

In re Baby Prods. Antitrust Litig., 708 F.3d 163, 179 (3d Cir.

2013).

22

While discovery from joined parties is not subject to the

heightened discovery standard of unnamed class members,

even in a non-class action a district court has the discretion to

limit unnecessary discovery pursuant to Rule 26(b)(C).

43

plaintiffs could have brought their own, individual suits. 23

However, the numerosity rule does not envision the

23

The dissent contends that we misread the District Court’s

analysis, and argues that “the focus of the District Court’s

opinion is on joinder throughout.” Yet every reference to

joinder that the dissent cites comes from portions of the

District Court opinion that were not about the ability of the

plaintiffs to litigate via joinder. Instead, these references are:

“[j]oinder of the absent class members would likely require

additional rounds of discovery,” which appears in the judicial

economy section; “[t]he considerable geographic dispersion

of the parties would certainly present challenges to plaintiffs

in attempting to coordinate the litigation if all class members

were joined,” which obviously is in the geographic dispersion

section; and “Plaintiffs have demonstrated by a

preponderance of the evidence that the parties are sufficiently

numerous so as to make joinder impracticable,” which is in

the conclusion of the numerosity analysis. Even a cursory

look at the section on the ability and incentive of the class

members to litigate reveals that the District Court was

focused on the alternative of individual suits, not on joinder.

See King Drug, 309 F.R.D. at 207 (“Two factors that may

weigh against Plaintiffs are the financial resources of the class

members and the parties’ abilities to bring individual suits.”)

(emphasis added); id. (“These prospective class members

likely do not have the same incentive to engage in costly

antitrust litigation on their own.”) (emphasis added). To the

extent that the District Court did properly consider the

alternative of joinder, as the dissent contends, on remand the

District Court has the opportunity to more clearly state this

44

alternative of individual suits; it considers only the alternative

of joinder. Here, the class members, based on the record

before us, appear likely to have the ability and incentive to

bring suit as joined parties, thus preventing the alleged

wrongdoers from escaping liability. 24 In fact, three class

when it conducts its rigorous numerosity analysis. At this

point, the references to “individual suits” and “on their own”

prominently stand out when surrounded by the references to

“joinder” in the other sections.

24

Most of the dissent’s possible reasons why the class

members would not be likely to join as named plaintiffs –

“desire to have one’s self and own law firm control the

litigation, choice of favorable forum, familiarity with the

local jurisdictions laws and procedures, [and] fear of being

dragged into settlement” – are equally applicable to the

decision of whether to opt out of the class. See Phillips

Petroleum Co. v. Shutts, 472 U.S. 797, 813 (1985) (discussing

the importance of allowing opt outs because if a “plaintiff’s

claim is sufficiently large or important that he wishes to

litigate it on his own, he will likely have retained an attorney

or have thought about filing suit, and should be fully capable

of exercising his right to ‘opt out’”). Moreover, these reasons

do not show why joinder is “impracticable”; they simply

show that joinder may not be the preferred method of

proceeding with the case. If a plaintiff wants to proceed

individually, it has that choice. The plaintiff does not need to

join the suit – just as it need not remain a member of a

certified class – if it wants to control its own litigation,

choose a more favorable forum, select a jurisdiction whose

45

members, none of whom are named plaintiffs, each have

claims estimated at over $1 billion – even before the trebling

of damages. These three make up over 97% of the total value

of the class claims, and can hardly be considered as

candidates who need the aggregative advantages of the class

device. While this factor could weigh in favor of class status

if the remaining class members had very small claims, that is

simply not the case here. Thirteen of the other nineteen class

members have claims that are greater than $1 million, the

value that the two parties seem to agree is the appropriate

figure at which point bringing one’s own suit becomes

economical. On the other hand, there are only six class

members with claims below $1 million each. While it may be

uneconomical for these claims to be pursued in individual

litigation, there has been no showing that it would be

uneconomical for these six class members to be individually

joined as parties in a traditional lawsuit. On remand, the

District Court should consider this issue. Even if it were

uneconomical for some or all of these six individual plaintiffs

to join the suit, the District Court must still determine

whether, considering all the other relevant factors, class status

– which is “an exception to the usual rule that litigation is

laws and procedures it is familiar with, or avoid being

dragged into a settlement. Cf. In re Diet Drugs Prods.

Liability Litig., 369 F.3d 293, 308 (3d Cir. 2004) (“By

waiving an initial opt-out, the class member surrenders what

may be valuable rights, in return for countervailing

benefits.”).

46

conducted by and on behalf of the individual named parties

only,” Wal-Mart Stores, 564 U.S. at 348 – is appropriate here.

The District Court abused its discretion in analyzing

the two most important numerosity factors when it considered

the late stage of the litigation as relevant to the judicial

economy factor and failed to properly consider the ability and

motivation of the plaintiffs to proceed as joined, as opposed

to individual, parties. We therefore remand for the District

Court to conduct a rigorous numerosity analysis for this class

of twenty-two (or twenty-five) members. In conducting this

rigorous analysis, factors that the District Court may consider

include the financial resources of the class members, the

geographic dispersion of the class members, the ability to

identify future claimants, together with the fact that these

claims are for damages, and not injunctive relief.

Contrary to the dissent’s assertion, we are not

“erecting roadblocks that do not exist.” Although the dissent

suggests that Defendants have not yet shown why joinder is

practicable, that suggestion is beside the point. The burden is

on Plaintiffs to show why joinder is impracticable. Marcus,

687 F.3d at 591 (“The party seeking certification bears the

burden of establishing each element of Rule 23” – including

the numerosity requirement – “by a preponderance of the

evidence.”); id. at 595 (“Critically, numerosity—like all Rule

23 requirements—must be proven by a preponderance of the

evidence.”). Moreover, the dissent would have Defendants’

inability to articulate an argument against finding numerosity

obviate a district court’s obligation to conduct “a rigorous

analysis” and determine “that the prerequisites of Rule 23(a)

have been satisfied.” Wal-Mart, 564 U.S. at 351 (internal

47

quotation marks omitted); Hydrogen Peroxide, 552 F.3d at

310 (“[A] class may not be certified without a finding that

each Rule 23 requirement is met.”).

Finally, the dissent makes the extravagant claim that

“nothing about [this case] cries out for anything but class

treatment.” Yet this is not the typical class action where

hundreds or thousands of claims are aggregated in order to

ensure that the wrongdoer is held accountable and that small

claims are vindicated. See Thorogood, 547 F.3d at 744.

Putting aside the small number of class members in this case,

the judges in the majority have never seen a class action

where three class members, each with billions of dollars at

stake and close to 100% of the total value of class claims

between them, have been allowed to sit on the sidelines as

unnamed class members. Plaintiffs must satisfy their burden

of showing why we should allow this unique putative class to

take advantage of this “exception to the usual rule that

litigation is conducted by and on behalf of the individual

named parties only.” Wal-Mart, 564 U.S. at 348 (internal

quotation marks omitted). At this point, they have failed to

meet that burden, and any suggestion that this is a run-of-the-

mill class action ignores the facts of this case. 25

25

The dissent makes the argument that if the class were not

certified, then several individual judges would have to

address what it terms “the real issues before the Court.” Yet

the only other issue before the Court is the Comcast

predominance issue. If the class were not certified because of

a failure to satisfy the numerosity requirement, there would

be no Comcast argument, as predominance is a question that

48

B. Predominance.

Although we remand for the District Court to

reconsider its numerosity analysis, we also see a need to

address Defendants’ predominance argument. This argument

makes selective use of language from the Supreme Court’s

recent decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426

(2013). The interpretation of Comcast advanced by

Defendants is overly broad and simplistic, and, if the class

were to meet the numerosity requirement on remand, the

predominance argument advanced by Defendants is

untenable.

Under Rule 23(b)(3), “questions of law or fact

common to class members [must] predominate over any

questions affecting only individual members.” 26 This

“inquiry tests whether proposed classes are sufficiently

cohesive to warrant adjudication by representation.” Amchem

Prods., 521 U.S. at 623. “If anything, Rule 23(b)(3)’s

predominance criterion is even more demanding than Rule

23(a),” Comcast, 133 S. Ct. at 1432, as it is “[f]ramed for

situations in which ‘class-action treatment is not as clearly

arises only in the class action context. Additionally, the fact

that there is a “key issue” that the parties seek to litigate does

not justify class status.

26

Rule 23(b)(3) also states that “a class action [must be]

superior to other available methods for fairly and efficiently

adjudicating the controversy.” This second requirement –

superiority – is not at issue in this appeal.

49

called for’ as it is in Rule 23(b)(1) and (b)(2) situations.”

Amchem Prods., 521 U.S. at 615 (quoting Fed. R. Civ. P. 23

advisory committee’s notes to 1966 amendment). This

“inquiry is especially dependent upon the merits of a

plaintiff’s claim, since the nature of the evidence that will

suffice to resolve a question determines whether the question

is common or individual.” In re Constar Int’l Inc. Sec. Litig.,

585 F.3d 774, 780 (3d Cir. 2009) (internal quotation marks

omitted)). The Supreme Court has noted that “[a]n individual

question is one where members of a proposed class will need

to present evidence that varies from member to member,

while a common question is one where the same evidence

will suffice for each member to make a prima facie showing

[or] the issue is susceptible to generalized, class-wide proof.”

Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045

(2016) (internal quotation marks omitted).

The predominance requirement applies to damages as

well, because the efficiencies of the class action mechanism

would be negated if “[q]uestions of individual damage

calculations . . . overwhelm questions common to the class.”

Comcast, 133 S. Ct. at 1433. This does not mean, however,

that damages must be “susceptible of measurement across the

entire class for purposes of Rule 23(b)(3).” Neale v. Volvo

Cars of N.A., LLC, 794 F.3d 353, 374 (3d Cir. 2015) (internal

quotation marks omitted).

Defendants contend that Plaintiffs cannot satisfy the

predominance requirement of Rule 23(b)(3). They make two

interrelated arguments: (1) Plaintiffs’ theory of liability runs

afoul of Comcast because, after the grant of summary

judgment on the global conspiracy claim, Plaintiffs’ damages

50

model no longer corresponds to their remaining theory of

liability that there were four independent Section 1

conspiracies; and (2) predominance cannot be demonstrated

because Plaintiffs’ remaining theory of liability must isolate

the harm that each individual reverse-payment settlement

agreement caused each individual class member under the

doctrine of antitrust standing. 27

1. Comcast Argument

Comcast was an antitrust suit brought by a class of

Comcast subscribers. The plaintiffs initially had four theories

27

Plaintiffs argue that we should exercise our pendent

appellate jurisdiction and review the District Court’s grant of

summary judgment on the global antitrust conspiracy claim

because reversal on this claim would moot the Comcast issue.

The use of the pendent appellate jurisdiction doctrine “is an

exercise of discretion by a Court of Appeals and should be

used sparingly.” United States v. Spears, 859 F.2d 284, 287

(3d Cir. 1988). If we were to reverse on the Comcast issue,

we would deem it prudent to examine the global antitrust

conspiracy claim. However, because we would affirm on

predominance grounds, we do not deem the class certification

order and the summary judgment order to be so “inextricably

intertwined” that the exercise of our pendent appellate

jurisdiction would be appropriate. CTF Hotel Holdings, Inc.

v. Marriott Int’l, Inc., 381 F.3d 131, 136 (3d Cir. 2004)

(internal quotation marks omitted). Accordingly, we express

no view on the merits of Plaintiffs’ global antitrust conspiracy

claim.

51

of antitrust impact: (1) “Comcast’s clustering made it

profitable for Comcast to withhold local sports programming

from its competitors”; (2) “Comcast’s activities reduced the

level of competition from ‘overbuilders’”; (3) “Comcast

reduced the level of ‘benchmark’ competition on which cable

customers rely to compare prices”; and (4) “clustering

increased Comcast’s bargaining power relative to content

providers.” 133 S. Ct. at 1430-31. Their damages model “did

not isolate damages resulting from any one theory of antitrust

impact,” id. at 1431, and simply “assumed the validity of all

four theories of antitrust impact,” id. at 1434. The district

court limited its certification order to the overbuilding theory

because it was the only antitrust theory capable of classwide

proof, but found the predominance requirement to be satisfied

even though the damages model was not altered to reflect the

only theory of harm remaining. Id. at 1431. A divided panel

of our Court affirmed, Behrend v. Comcast Corp., 655 F.3d

182 (3d Cir. 2011), with Judge Jordan writing separately to

say that he “would vacate the certification order to the extent

it provides for a single class as to proof of damages,” id. at

209 (Jordan, J., concurring in the judgment in part and

dissenting in part), because the model of plaintiffs’ expert “no

longer fits Plaintiffs’ sole theory of antitrust impact, and,

instead, produces damages calculations that are not the certain

result of the wrong,” id. at 217 (internal quotation marks

omitted).

The Supreme Court reversed, holding that while the

damages model does not need to be exact, “a model

purporting to serve as evidence of damages in [a] class action

must measure only those damages attributable to that theory.

If the model does not even attempt to do that, it cannot

52

possibly establish that damages are susceptible of

measurement across the entire class for purposes of Rule

23(b)(3).” Comcast, 133 S. Ct. at 1433. Because the

plaintiffs’ damages model reflected injury from all four

alleged antitrust violations, and because only the overbuilding

theory of harm remained, the damages model was unable to

“bridge the differences between supra-competitive prices in

general and supra-competitive prices attributable to the

deterrence of overbuilding.” Id. at 1435. The Supreme Court

explained “[p]rices whose level above what an expert deems

‘competitive’ has been caused by factors unrelated to an

accepted theory of antitrust harm are not ‘anticompetitive’ in

any sense relevant here.” Id.

In the case before us, Plaintiffs’ expert, Dr. Leitzinger,

created a damages model that calculated the savings to the

class if generic entry had occurred earlier. He noted the

prices and overcharges actually paid by the class members

and compared that to but-for worlds that included the launch

of anywhere between one and five generic competitors.

Crucially, this model did not allocate damages amongst the

five original defendants (Cephalon and the four generic

manufacturers), attribute a certain amount of harm from each

individual reverse-payment settlement, or identify which class

members were harmed by which reverse-payment settlement.

In Defendants’ view, because only individual conspiracies

remain, any damages model must reflect the harm caused by

each individual conspiracy to each individual class member,

and the use of the same damages model that envisioned a

53

global conspiracy “does not even attempt,” Id. at 1433, to

correspond to this remaining theory of liability. 28

However, Plaintiffs’ theory of liability is not that each

individual agreement caused an individual harm, such that a

new damages model would be required under Comcast.

Instead, their theory of liability is that each individual

agreement contributed to the market-wide harm, and that all

five original defendants are jointly and severally liable 29 for

this harm as concurrent tortfeasors. This theory may

ultimately be proven wrong, but it does match Plaintiffs’

damages theory. Defendants next try to argue that Plaintiffs’

theory of liability must isolate the harm from each individual

28

Defendants have not challenged the substance of Dr.

Leitzinger’s methodology.

29

Under the doctrine of joint and several liability, “[i]f the

tortious conduct of each of two or more persons is a legal

cause of harm that cannot be apportioned, each is subject to

liability for the entire harm, irrespective of whether their

conduct is concurring or consecutive.” Restatement (Second)

of Torts § 879 (1979); United States v. Alcan Aluminum

Corp., 964 F.2d 252, 268 (3d Cir. 1992) (applying the

doctrine of joint and several liability to an environmental

statute when the harm was indivisible amongst the

tortfeasors). The Third Restatement of Torts provides no

guidance. Restatement (Third) of Torts: Apportionment of

Liability § 17 (stating that “the law of the applicable

jurisdiction determines whether” whether concurrent

tortfeasors “are jointly and severally liable”).

54

agreement, and that any reliance on joint and several liability

conflicts with the requirements of antitrust standing.

2. Antitrust Impact

Defendants argue that Plaintiffs are attempting to

circumvent the doctrine of antitrust standing by asserting the

theory of joint and several liability. In essence, they are

arguing that the joint and several theory of liability is not

“plausible in theory,” Hydrogen Peroxide, 552 F.3d at 325,

because under the doctrine of antitrust standing Plaintiffs

must show how each individual agreement harmed each

individual class member.

In an antitrust class action, “impact often is critically

important for the purpose of evaluating Rule 23(b)(3)’s

predominance requirement because it is an element of the

claim that may call for individual, as opposed to common,

proof.” Id. at 311. A district court must thus undertake a

“rigorous assessment of the available evidence and the

method or methods by which plaintiffs propose to use the

evidence to prove impact at trial.” Id. at 312. The class

should only be certified “if such impact is plausible in theory

[and] it is also susceptible to proof at trial through available

evidence common to the class.” Id. at 325. This inquiry

often involves an overlap into the merits. Id. at 324.

Defendants argue that, in the absence of the global

conspiracy claim, Plaintiffs must prove which class members

suffered an injury under a specific bilateral agreement. They

state that under the doctrine of antitrust standing, a class

member who would have purchased generic modafinil from

55

Ranbaxy cannot hold Mylan liable; a class member who

would have purchased generic modafinil from Mylan cannot

hold Ranbaxy liable; and a class member who would have

purchased generic modafinil from Teva cannot hold either

Ranbaxy or Mylan liable. If correct, such individualized

inquiries would defeat predominance, and Plaintiffs’ joint and

several liability theory would not be plausible. We agree with

the general proposition that an antitrust plaintiff cannot defeat

the doctrine of antitrust standing by resort to common-law

tort principles untethered to antitrust law. But Defendants’

objection is misplaced in this case because the common law

principle of joint and several liability is being invoked by

Plaintiffs for the proper purpose of establishing antitrust

impact and therefore antitrust standing.

The doctrine of antitrust standing requires a plaintiff to

“prove more than injury causally linked to an illegal presence

in the market.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

429 U.S. 477, 489 (1977). 30 This inquiry instead looks to

whether the plaintiff suffered an antitrust injury, i.e., an

30

Antitrust standing, unlike Article III standing, is not a

jurisdictional requirement. Associated Gen. Contractors of

Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519,

535 n.31 (1983) (“Harm to the antitrust plaintiff is sufficient

to satisfy the constitutional standing requirement of injury in

fact, but the court must make a further determination whether

the plaintiff is a proper party to bring a private antitrust

action.”); Ethypharm S.A. France v. Abbott Labs., 707 F.3d

223, 232 (3d Cir. 2013) (describing antitrust standing as a

prudential limitation that “does not affect the subject matter

jurisdiction of the court, as Article III standing does”).

56

“injury of the type the antitrust laws were intended to prevent

and that flows from that which makes defendants’ acts

unlawful.” Id. In Associated General Contractors of

California, Inc. v. California State Council of Carpenters

(AGC), 459 U.S. 519, 537-38 (1983), the Supreme Court

stated that many factors go into this determination. We have

condensed these factors into a multi-part test:

(1) the causal connection between the antitrust

violation and the harm to the plaintiff and the

intent by the defendant to cause that harm, with

neither factor alone conferring standing; (2)

whether the plaintiff’s alleged injury is of the

type for which the antitrust laws were intended

to provide redress; (3) the directness of the

injury, which addresses the concerns that liberal

application of standing principles might

produce speculative claims; (4) the existence of

more direct victims of the alleged antitrust

violations; and (5) the potential for duplicative

recovery or complex apportionment of

damages.

Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, 232-33

(3d Cir. 2013) (quoting In re Lower Lake Erie Iron Ore

Antitrust Litig., 998 F.2d 1144, 1165-66 (3d Cir. 1993)). We

have said that the “directness of injury” is “the focal point by

which the remainder of the AGC factors are guided.” Lower

Lake Erie, 998 F.2d at 1166 n.19 (citing Holmes v. Sec.

Investor Prot. Corp., 503 U.S. 258, 269 (1992)).

57

Defendants rely solely on a pre-AGC case of ours,

Mid-West Paper Products Co. v. Continental Group, Inc., 596

F.2d 573 (3d Cir. 1979), which concerned the “all-important[]

directness factor,” in support of their position that Plaintiffs

lack antitrust standing to bring claims against generic

manufacturers from whom they would not have purchased.

Lower Lake Erie, 998 F.2d at 1167-68 (conducting an

analysis of the AGC factors and discussing Midwest-Paper in

the directness of injury section). 31 In Mid-West Paper, the

plaintiff claimed that it “suffered as a direct purchaser of

consumer bags from competitors of the defendants, who

allegedly were able to charge artificially inflated prices as a

consequence of defendants’ price-fixing.” 596 F.2d at 580

(footnote omitted). We held that the plaintiff, who was not a

customer of any member of the conspiracy, lacked antitrust

standing to sue the conspiracy members even though it paid

higher prices as a result of the conspiracy. In other words, the

customer of a competitor of conspiracy members was not

“one whose protection is the fundamental purpose of the

antitrust laws.” Id. at 583 (internal quotation marks omitted).

In reaching this conclusion in Mid-West Paper, we

took several factors into consideration. First, we noted that it

would be “almost impossible, and at the very least unwieldy”

to calculate the harm to the plaintiff from the conspiracy,

because so many variables went into the competitor’s price

31

Because the parties only dispute the relevance of Mid-West

Paper and the “directness” factor, and we reject Defendants’

understanding of Mid-West Paper, we will not analyze the

other factors of antitrust standing.

58

calculation irrespective of the existence of the monopoly. Id.

at 584. The value of any harm caused by the anticompetitive

conduct would be speculative and “would transform this

antitrust litigation into the sort of complex economic

proceeding” that the direct-purchaser rule 32 was adopted in

part to prevent. Id. at 585. In addition, the defendants were

“not in a direct or immediate relationship” to the plaintiff, and

they gained no advantage from the plaintiff’s injury. Id. at

583. Moreover, there was another group of victims who were

more likely to sue the conspiracy members – those who

purchased directly from them – and one of the purposes of the

antitrust standing doctrine is to “compensate[] those victims

who are most likely to assume the mantle of private attorneys

general for the injuries that they suffered.” Id. at 585. For

that reason, we “concentrate[] the entire award in the hands of

the direct purchasers in all but unusual circumstances and

thereby giv[e] them an incentive to sue.” Id. If we were to

allow the customer of a competitor to sue for treble damages

when the “causal link to defendants’ activities is [so]

tenuous,” it would “subject antitrust violators to potentially

ruinous liabilities, well in excess of their illegally-earned

profits, because . . . [violators] would be held accountable for

higher prices that arguably ensued in the entire industry.” Id.

at 586.

32

The direct-purchaser rule states that only immediate

customers of a supplier have antitrust standing to sue for

damages as customers even if the direct purchaser passes the

entirety of the higher price down the supply chain. Illinois

Brick Co. v. Illinois, 431 U.S. 720, 746 (1977)

59

As is clear from the above description, Defendants’

argument that Mid-West Paper means that a customer of a

non-defendant cannot have antitrust standing is an

oversimplification. Mid-West Paper reached its result

because it wanted to ensure that only those who are most

directly harmed by the anticompetitive conduct can sue to

remedy the antitrust violation. When, as in Mid-West Paper,

the anticompetitive conduct is price-fixing, the only

customers who will have antitrust standing are the direct

customers of the conspiracy members. The case before us is

not about price-fixing. It is, instead, a case about market

exclusion, as it concerns conduct that prevents a competitive

market from forming at all. 33 In such a scenario all market

customers should have antitrust standing to sue those engaged

in the allegedly anticompetitive conduct because all suffer

equally from the foreclosure of choice. See AGC, 459 U.S. at

538 (“[T]he Sherman Act was enacted to assure customers the

benefits of price competition, and our prior cases have

emphasized the central interest in protecting the economic

freedom of participants in the relevant market.”).

In fact, in Lower Lake Erie, we addressed market

exclusion in the market for the unloading of iron ore from

ships. Traditionally, iron ore was shipped across the Great

33

Preventing a market from forming differs from an attempt

to suppress competition in an established market. See Blue

Shield of Va. v. McCready, 457 U.S. 465, 483 (1982) (stating

that, in a conspiracy to suppress competition in the

psychotherapy market by restricting access to psychologists

(as opposed to psychiatrists), customers of the psychologists

would only be indirectly injured).

60

Lakes, unloaded at railroad-owned docks onto a railroad, and

then transported to the steel mills. Lower Lake Erie, 998 F.2d

at 1153-55. Large cranes called “huletts” were affixed to the

docks and were needed to unload the iron ore from the ships,

and, because the non-railroad-owned docks were not

equipped with huletts, they “were not competitors for this

segment of the ore business.” Id. at 1153. A new, less

expensive technology was developed that would allow the

iron ore to be unloaded without the use of huletts, and thus

open the transshipment market to non-railroad-owned docks.

Id. The railroad companies suppressed this new technology

by threatening non-railroad-owned docks with higher rates,

among other measures. Id.

The issue of antitrust standing arose when the steel

companies sued the railroad companies for higher rates paid

to the vessel companies. Id. at 1167. We held that this injury

was sufficiently direct, despite the railroad company’s

reliance on Mid-West Paper. Specifically, we noted that even

though the steel companies paid higher rates than it otherwise

would have to several ore transportation companies – both

defendants and non-defendants – “it was unquestionably the

steel companies who bore the brunt of the increased costs

attributed to the railroad’s agreement to thwart development

of the less expensive technology.” Id. at 1168; id. (“The steel

companies were the sole customers of the industry involved

in the transshipment of ore; indeed, the industry existed for

them.”). Although there were other victims of the harm, such

as the vessel companies, the dock companies, and trucking

companies, this did “not diminish the directness of the steel

companies’ injury.” Id. at 1168-69.

61

Unlike in Mid-West Paper, where there was a market

for consumer bags and we knew who was buying from whom,

there was no market in this case due to Defendants’ allegedly

anticompetitive conduct in delaying the availability of generic

modafinil. Just as the railroad docks and their older, more

expensive technology were the steel companies’ only choice

in Lower Lake Erie, Cephalon’s brand-name version of

modafinil – Provigil – was the only option available to the

DPP class. All other options were prevented from entering

the market by the allegedly anticompetitive conduct of the

railroad companies and the drug manufacturers, respectively.

Under Plaintiffs’ theory, each of the four generic

manufacturers allegedly entered into separate anticompetitive

arrangements with Cephalon. 34 If any one of them had

34

Defendants argue that either Teva – as the first company to

settle with Cephalon – or Barr – as the last to do so – caused

all of the injury, and that Mylan or Ranbaxy cannot be held

liable. While we have delved deep into the merits in order to

opine on the predominance question, this argument by

Defendants is inappropriate at the class certification stage. It

has nothing to do with whether common questions of law and

fact predominate, and instead goes to the issue of liability.

See Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1047

(2015) (“When, as here, ‘the concern about the proposed class

is not that it exhibits some fatal dissimilarity but, rather, a

fatal similarity—[an alleged] failure of proof as to an element

of the plaintiffs’ cause of action—courts should engage that

question as a matter of summary judgment, not class

certification.’” (quoting Richard A. Nagareda, Class

62

refused to enter into this arrangement, there would have been

no antitrust injury for anyone, as the market would have

worked as envisioned by the Hatch-Waxman Act: there

would have been between one and five generic manufacturers

competing with the brand-name modafinil during the 180-day

exclusivity period, after which there would have been a fully

competitive market. However, because all four entered into

these reverse-payment settlement agreements and prevented a

competitive market from forming, each contributed to the

market-wide harm, and each can be held jointly and severally

liable for such harm. This is not the sum of four separate

individual harms emanating from each agreement; instead, it

is a harm that all four agreements work jointly to produce,

even if there was no conspiracy between the generic

manufacturers. The class member who would have purchased

from Teva is harmed by the Ranbaxy and Mylan agreements

to the same extent that a Ranbaxy or Mylan customer would

be. Thus, any class member would have antitrust standing to

sue any or all of the four generic companies individually.

There is no need to pursue an individualized inquiry into the

harm caused by each agreement, and “questions of law or fact

common to class members predominate over any questions

affecting only individual members.” Fed. R. Civ. P. 23(b)(3).

Defendants’ attempt to dictate Plaintiffs’ theory of liability

based on the doctrine of antitrust standing should fail.

IV.

Certification in the Age of Aggregate Proof, 84 N.Y.U. L.

Rev. 97, 107 (2009)).

63

For the reasons stated above, we will vacate the

District Court’s class certification order, and we will remand

to the District Court for further consideration of whether

joinder of all class members is impracticable.

64

In re: Modafinil Antitrust Litigation

No. 15-3475

RENDELL, Circuit Judge, concurring in part and dissenting

in part.

Today, the Majority concludes that the able District

Court judge abused his discretion by purportedly focusing on

a consideration that we have never—indeed, by my research,

no court has ever—stated it should not consider. How can that

be? Furthermore, how can it be that the Majority

mischaracterizes the late stage of the proceedings as being the

focus of Judge Goldberg’s ruling when his reasoning actually

focuses on the considerations that our case law dictates it

should? Also how can it be that in analyzing judicial

economy district courts are prohibited from considering the

stage of the proceedings? I am perplexed. I am similarly

perplexed as to why the Majority is directing the District

Court on remand to figure out whether joinder is practicable

when the appellants have failed to make that case themselves.

I therefore respectfully dissent from part III.A of the

Majority’s opinion.

The District Court Correctly Applied Rule 23(a)(1)

The text of Rule 23(a)(1) provides the standard by

which a district court determines if a putative class is

numerous enough to be certified—the district court must

determine if “joinder of all members is impracticable.” See

also Newberg on Class Actions § 3:11 (5th ed.) (“[Rule

23(a)(1)’s] core requirement is that joinder be

1

impracticable.”). Because the focus of Rule 23(a)(1) is on the

practicability of joinder, it is well-established that “[t]he

numerosity requirement requires examination of the specific

facts of each case and imposes no absolute limitations.” Gen.

Tel. Co. of the Nw. v. EEOC, 446 U.S. 318, 330 (1980); see

also Stewart v. Abraham, 275 F.3d 220, 226 (3d Cir. 2001)

(“No minimum number of plaintiffs is required to maintain a

suit as a class action . . . .”); Newberg on Class Actions § 3:11

(“Numerousness—the presence of many class members—

provides an obvious situation in which joinder may be

impracticable, but it is not the only such situation; thus, Rule

23(a)(1)’s analysis may, in specific circumstances, focus on

other factors as well.”). In examining the “specific facts of

each case,” Gen. Tel. Co., 446 U.S. at 330, we have instructed

courts to bear in mind the underpinnings of the numerosity

requirement. The first of these is “judicial economy by

sparing courts the burden of having to decide numerous,

sufficiently similar individual actions seriatim.” Marcus v.

BMW of N. Am., LLC, 687 F.3d 583, 594 (3d Cir. 2012). The

second is “greater access to judicial relief, particularly for

those persons with claims that would be uneconomical to

litigate individually.” Id. 1

Here, the District Court, after making a careful finding

that the putative class consisted of 22 members, had to make

a close call. Our cases have recognized that “[w]hile there are

1

As the Majority notes, the third underpinning, to

“prevent[] putative class representatives and their counsel,

when joinder can be easily accomplished, from unnecessarily

depriving members of a small class of their right to a day in

court to adjudicate their own claims,” id., is not relevant to

23(b)(3) actions. See Majority Op. 34 n.12.

2

exceptions, numbers under twenty-one have generally been

held to be too few.” Weiss v. York Hosp., 745 F.2d 786, 808

n.35 (3d Cir. 1984) (quoting 3B J. Moore, Moore’s Federal

Practice ¶ 23.05[1], at 23–150 (2d ed. 1982)). This

recognition, however, does not stem from any mechanical

numerical requirement, but rather from an understanding that

the considerations bearing on the practicability of joinder are

less likely to be met in classes with fewer than 21 members.

See Newberg on Class Actions § 3:11 (“Numerousness—the

presence of many class members—provides an obvious

situation in which joinder may be impracticable, but it is not

the only such situation; thus, Rule 23(a)(1)’s analysis may, in

specific circumstances, focus on other factors as well.”).

Recognizing the closeness of the issue, the District Court did

exactly as we have instructed it to do and looked to factors

bearing on the objectives we cited in Marcus. 2 Indeed, the

District Court examined the very factors that the Majority

embraces: judicial economy, the geographic dispersion of

class members, the claimants’ ability and motivation to

litigate as joined plaintiffs, and the financial resources of

class members.

The District Court first considered whether judicial

economy weighs in favor of finding joinder to be

impracticable:

2

The Majority asserts that the factors we should

consider have not been previously set forth. But Marcus’s

recitation of the policies that animate numerosity provides a

helpful standard from which the factors to consider are

readily discernible.

3

Considering the extensive history of this

litigation and the exhaustive discovery that has

been conducted, I conclude that judicial

economy is best served by trying this case as a

class action. Joinder of the absent class

members would likely require additional rounds

of discovery, which would only further delay a

trial date. Further, if cases were brought within

other jurisdictions, additional discovery is

certainly a possibility, and separate trials could

result in inconsistent verdicts.

JA-021. The reasons cited for finding judicial economy to

favor certification of the class are entirely appropriate.

“Judicial economy” means “[e]fficiency in the operation of

the courts and the judicial system; esp., the efficient

management of litigation so as to minimize duplication of

effort and to avoid wasting the judiciary’s time and

resources.” Judicial Economy, Black’s Law Dictionary (9th

ed. 2009). The District Court here noted that the additional

discovery and potential separate trials would further delay

litigation that was already near its end stages, wasting the

judiciary’s time and resources and requiring the duplication

of efforts.

The District Court next considered the geographic

dispersion of the class members, a factor widely recognized

as vital in determining whether joinder is practicable. See,

e.g., Pa. Pub. Sch. Emps. Ret. Sys. v. Morgan Stanley & Co.,

772 F.3d 111, 120 (2d Cir. 2014) (listing “geographic

dispersion” as a factor in the numerosity analysis); Newberg

on Class Actions § 3:12 (same); 7A Charles Allen Wright &

Arthur R. Miller, Federal Practice & Procedure § 1762 (3d

4

ed.) (same); 1 Moore’s Federal Practice § 23.22 (Matthew

Bender 3d ed.) (same). The District Court found this factor to

weigh heavily in favor of finding joinder impracticable,

noting that the “class members are spread out over thirteen

states and Puerto Rico.” JA-021. This, the District Court

found, “would certainly present challenges to Plaintiffs in

attempting to coordinate the litigation if all class members

were joined, particularly if additional discovery was

required.” JA-021. Again, this finding is certainly reasonable,

is supported by the record, and is in accordance with our

instructions as to the relevant considerations in the

numerosity calculation.

Against these concerns about judicial economy and, in

particular, geographic dispersion, the District Court

considered that many of the class members were sophisticated

corporations with strong incentives to bring their own

lawsuits. But this was not true for every class member, as six

had claims below $1 million which might not be enough

incentive “to engage in costly antitrust litigation on their

own.” JA-022. This wholly appropriate consideration bears

upon the objective to provide “greater access to judicial relief,

particularly for those persons with claims that would be

uneconomical to litigate individually.” Marcus, 687 F.3d at

594.

Ultimately, the District Court found the factors

favoring the plaintiffs’ position (judicial economy and

geographic dispersion) to be more compelling than the factor

favoring the defendants’ position (the financial resources of

the class members). In short, the District Court considered the

policies we outlined in Marcus and made a thoughtful

determination in a close case. Our abuse-of-discretion

5

standard compels us to affirm that thoughtful determination.

Moreover, our clearly erroneous standard compels us to not

disturb the factual findings on which it was based.

The District Court Did Not Err in Considering the Stage of

the Proceedings

The Majority, however, concludes that the District

Court erred in its analysis of the “judicial economy” factor by

taking into consideration the stage of the proceedings. As an

initial note, I do not read the District Court’s analysis as

turning solely upon a consideration of the late stage of the

proceedings. Rather, the District Court examined many

factors, most notably the additional discovery and judicial

resources that would have to be expended were the cases to

be litigated outside of the class action mechanism, regardless

of how far advanced the classwide proceedings were.

At any rate, it is appropriate—indeed, necessary—for a

district court to consider the stage of the proceedings when

examining whether judicial economy favors class litigation or

individual litigation. In considering judicial economy, a

district judge must predict how the options before him will

play out. This prediction becomes nonsensical, however, if

the district judge cannot take into consideration the amount of

effort already expended. If you want to determine whether the

path you are following is the most economical, is it not

important to consider how far along that path you have

already traveled? 3

3

The Majority’s references to “sunk costs” are inapt.

See Majority Op. 37, 39, 40. Sunk costs are costs that have

already incurred and cannot be recovered. See Verizon

6

Unsurprisingly, then, courts widely—if not

universally—recognize that it is appropriate for courts to

consider the stage of the proceedings when weighing judicial

economy. See, e.g., Carnegie-Mellon Univ. v. Cohill, 484

U.S. 343, 350 (1988) (“[A] federal court should consider and

weigh in each case, and at every stage of the litigation, the

values of judicial economy, convenience, fairness, and comity

in order to decide whether to exercise jurisdiction over a case

brought in that court involving pendent state-law claims.”

(emphasis added)); Zambelli Fireworks Mfg. Co. v. Wood,

592 F.3d 412, 420-21 (3d Cir. 2010) (“However,

considerations of efficiency, fairness, and judicial economy

weigh against a wholesale dismissal of the action at this

stage.” (emphasis added)); Parker & Parsley Petroleum Co.

v. Dresser Indus., 972 F.2d 580, 587 (5th Cir. 1992) (“At the

stage of the proceedings when the motion was filed, judicial

economy would have been better served by dismissal.”

(emphasis added)); Park S. Hotel Corp. v. N.Y. Hotel Trades

Council, 851 F.2d 578, 582 (2d Cir. 1988) (“[J]udicial

economy would not be served by remanding the case at this

late stage for arbitration, which almost certainly would be

followed by further judicial proceedings.” (emphasis added));

United States v. Timmons, 672 F.2d 1373, 1380 (11th Cir.

1982) (“The district judge appropriately considered that

joinder would not serve the interests of judicial economy in

Commc’ns, Inc. v. FCC, 535 U.S. 467, 499 (2002) (“‘Sunk

costs’ are unrecoverable past costs . . . .” (emphasis added)).

The District Court’s analysis did not consider sunk costs, but

rather the relative costs, going forward, of joinder and class

litigation. To determine the relative costs, going forward, of

joinder and class litigation, one needs to know how much

remains to be done under either alternative.

7

view of the late stage of the proceedings . . . .” (emphasis

added)).

The Majority asserts, however, without citation to any

authority, that a district court cannot consider “the fact that

the complex nature of a case resulted in the class certification

decision being deferred for years,” see Majority Op. 37, or

“the need to further delay trial were the class not to be

certified,” see Majority Op. 40, or even “the need to conduct

further discovery if the class is not certified,” see Majority

Op. 39. But these are precisely the type of practicalities—how

long it would take, how complex it would be, how expensive

it would be—that help determine the practicability of joinder.

The Majority’s directive as to what a district court should

consider turns the issue into an exercise in abstraction. 4 If a

district judge cannot consider the practicalities of cost and

time, then judicial economy will be poorly served indeed, and

one of the core purposes of the class action mechanism—to

“save[] the resources of both the courts and the parties by

4

The Majority instructs district courts to consider

whether, in a hypothetical world, joinder would have been

more efficient than the class mechanism. Cf. Majority Op. 41

(“In other words, without considering the late stage of the

litigation, it should determine whether a class action would

have been a substantially more efficient mechanism of

litigating this suit than joinder of all parties. . . . At the same

time, the District Court is free to rely on its superior

understanding of how the case has proceeded to date for the

purpose of determining whether the class mechanism would

have actually been a substantially more efficient use of

judicial resources than joinder of the parties at the onset of the

litigation.”).

8

permitting an issue potentially affecting every [class member]

to be litigated in an economical fashion under Rule 23”—will

be undercut. See Califano v. Yamasaki, 442 U.S. 682, 701

(1979).

The District Court Properly Considered the Ability of

Plaintiffs to Litigate via Joinder

The Majority also characterizes the District Court’s

ruling as focusing not on the ability of the plaintiffs to litigate

via joinder but “focus[ing] instead on whether the individual

plaintiffs could have brought their own, individual suits.” See

Majority Op. 44. I disagree. To the contrary, the focus of the

District Court’s opinion is on joinder throughout. 5 See, e.g.,

5

The Majority, citing references to “individual suits”

in the District Court’s opinion, posits that “[e]ven a cursory

look at the section on the ability and incentive of the class

members to litigate reveals that the District Court was

focused on the alternative of individual suits, not on joinder.”

See Majority Op. 44 n.23. But the two concepts are not

exclusive of each other, as the Majority itself recognizes in

footnote 19, when it “read[s] Marcus’s language about the

ability ‘to litigate individually,’ to refer to each plaintiff

appearing on the record as a joined party, and not whether

each individual plaintiff can litigate his or her own claim as

the sole plaintiff.” See Majority Op. 42 n.19 (citation

omitted). Litigation not pursued on a classwide basis is

individual litigation, even if pursued via joinder, and the

parties joined in a proceeding remain responsible for the

individual litigation of their claims. See 7 Wright & Miller,

supra, § 1652 (“Consequently, rights that are separate and

distinct under the governing law are not transformed into joint

9

JA-020-22 (“Joinder of the absent class members would

likely require additional rounds of discovery, which would

only further delay a trial date.”); (“The considerable

geographic dispersion of the parties would certainly present

challenges to plaintiffs in attempting to coordinate the

litigation if all class members were joined, particularly if

additional discovery was required.” (emphasis added));

(“Accordingly, Plaintiffs have demonstrated by a

preponderance of the evidence that the parties are sufficiently

numerous so as to make joinder impracticable.”).

The Majority makes its own contrary finding,

surmising that the class members “appear likely to have the

ability and incentive to bring suit as joined parties.” See

Majority Op. 45. 6 It directs the District Court on remand to

consider whether it would be “uneconomical” for the six

smaller class members to be joined. It thus instructs the

District Court to make the case for joinder—a case the

defendants failed to support themselves. The defendants

offered little argument (let alone evidence) before the District

Court that, notwithstanding the vast geographic dispersion of

the plaintiffs, surely joinder would be practicable. Indeed, at

oral argument, counsel for Ranbaxy was asked whether

joinder was impracticable and responded, “I don’t know.”

rights when plaintiffs join under Rule 20 in a federal court

action; each plaintiff’s right of action remains distinct, as if it

had been brought separately.”).

6

This assertion stems from the defendants’ argument

that “[e]ach of the 16 absent class members has the ability

and the financial incentive to file its own claim.” See

Appellants’ Br. 45. The Majority adopts this speculation as

fact, but it is mere argument and speculation.

10

Oral Arg. at 9:30-10:00. 7 The Majority is erecting roadblocks

that do not exist.

Moreover, if one were to speculate as to the likelihood

of these plaintiffs, many competitors in a relatively small

market, agreeing to come together—for surely they couldn’t

be forced to do so—the speculation would be to the contrary.

Experience would dictate that many obvious practical reasons

stand in the way of joinder: desire to have one’s self and own

law firm control the litigation, choice of favorable forum,

familiarity with the local jurisdiction’s laws and procedures,

fear of being dragged into settlement, and concerns about the

costs of litigating in a far-flung locale. Further, the larger

plaintiffs could clearly afford to go their own way. Even in

cases that come before the Judicial Panel on Multidistrict

Litigation for joinder, where the issue involves only pre-trial

proceedings, 8 plaintiffs invariably raise reasons for opposing

joinder. 9 How can we possibly assume that the plaintiffs

7

An audio recording of the oral argument is available

online at

http://www2.ca3.uscourts.gov/oralargument/audio/15-

3475InReModafinil.mp3

8

This case would not be appropriate for an MDL as it

is ready for trial and pre-trial proceedings are largely

completed.

9

See, e.g., In re: Sci. Drilling Int’l, Inc., FLSA Litig.,

24 F. Supp. 3d 1364, 1364-65 (J.P.M.L. 2014) (“Plaintiffs

oppose centralization as unnecessary, stating that they

recognize the overlap in the actions and they already have

agreed to coordinate pretrial proceedings to avoid duplicative

discovery and inconsistent rulings.”); In re: Standard &

Poor’s Rating Agency Litig., 949 F. Supp. 2d 1360, 1361

11

would have the “ability and incentive” to bring suit as joined

parties? If the defendants had supported such a notion, that

would be another matter. But the Majority asks the District

Court to make its own record as to practicability. That is not

our role, nor the role of the District Court.

* * *

Lastly, I am struck by the inescapable fact that this

case has proceeded as a class action for years and nothing

about it cries out for anything but class treatment. 10 One has

(J.P.M.L. 2013) (“Plaintiffs oppose centralization and argue,

inter alia, that the Panel has never centralized litigation of

this type, that transfer to a distant forum will inconvenience

the states, and that transfer is unnecessary in light of the

historic cooperation among state attorneys general.”); In re

Le-Nature’s, Inc., Commercial Litig., 609 F. Supp. 2d 1372,

1373-74 (J.P.M.L. 2009) (“Plaintiffs opposed to

centralization argue, inter alia, that (1) the allegations

pertaining to the bottling actions make up only a minimal part

of the Trustee’s case; (2) all active parties to the bottling

actions have admitted that Le–Nature’s perpetrated a

systematic fraudulent scheme and, therefore, a large portion

of the allegations set forth in the Trustee’s action is

insignificant to the bottling actions; (3) the bottling actions

are straightforward fraud cases that can readily be handled by

their respective district courts; and (4) discovery can be

coordinated in the bottling actions without centralization.”).

10

The Majority contends that this is no “run-of-the-

mill class action” given the top-heavy distribution of the

claims among the class members. See Majority Op. 48. But

whether the class looks like other classes is not controlling as

12

only to read the Majority’s analysis of the real issues before

the Court to conclude that it is unimaginable that this case

should be torn apart at this late date and sent to the far corners

of the United States to start over again as separate actions

before several judges, each deciding anew the identical issues

facing each plaintiff’s claims. It should not be remanded at

this late date.

This should not happen because Judge Goldberg has

ably managed this case for a decade and properly considered

every factor we have ever held to be relevant in determining

whether a class is so numerous that joinder would be

impracticable. He has not abused his discretion in so doing or

made clearly erroneous findings of fact. I would therefore

affirm the judgment of the District Court in its entirety.

Accordingly, I respectfully dissent from Part III.A of the

Majority’s opinion.

to whether the requirements of Rule 23 have been met. Rule

23 was “designed to allow an exception to the usual rule that

litigation is conducted by and on behalf of the individual

named parties only.” Califano, 442 U.S. at 700-01 (emphasis

added). The plaintiff’s burden under Rule 23 is merely to

demonstrate compliance by a preponderance of the

evidence—not to establish “proof beyond any doubt.” Reyes

v. Netdeposit, LLC, 802 F.3d 469, 485 (3d Cir. 2015). Here,

given the evidence the plaintiffs have adduced regarding,

inter alia, the impracticability of joinder and the

predominance of common questions of law and fact, and

given the paucity of contrary evidence adduced by the

defendants, I reiterate that nothing about this case cries out

for anything but class treatment.

13