Petition for Writ of Certiorari — StarKist Co., et al., Petitioners v. Olean Wholesale Grocery Cooperative, Inc., On Behalf of Itself and All Others Similarly Situated, et al.
Supreme Court briefAug 8, 2022
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No. ______
In the
Supreme Court of the United States
——————————
STARKIST CO.;
DONGWON INDUSTRIES CO., LTD.,
Petitioners,
v.
OLEAN WHOLESALE GROCERY
COOPERATIVE, INC., ET AL.,
Respondents.
——————————
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
——————————
PETITION FOR A WRIT OF CERTIORARI
——————————
CHRISTOPHER S. YATES
BELINDA LEE
ASHLEY M. BAUER
LATHAM & WATKINS LLP
505 Montgomery Street
Suite 2000
San Francisco, CA 94111
SAMIR DEGER-SEN
LATHAM & WATKINS LLP
1271 Avenue of the Americas
New York, NY 10020
GREGORY G. GARRE
Counsel of Record
BLAKE E. STAFFORD
LATHAM & WATKINS LLP
555 Eleventh Street, NW
Suite 1000
Washington, DC 20004
(202) 637-2207
gregory.garre@lw.com
Counsel for Petitioners
QUESTIONS PRESENTED
1. Whether, and in what circumstances, the
presence of uninjured class members precludes the
certification of a class under Federal Rule of Civil
Procedure 23(b)(3).
2. Whether, and in what circumstances, a
plaintiff may rely on representative evidence such as
averaging assumptions to establish classwide proof of
injury to satisfy Rule 23’s requirements.
ii
PARTIES TO THE PROCEEDING
Petitioners (defendant-appellants below) are
StarKist Co. and Dongwon Industries Co., Ltd.
Respondents (plaintiffs-appellees below) are:
• Olean Wholesale Grocery Cooperative, Inc.;
Pacific Groservice Inc. d/b/a PITCO Foods;
Piggly Wiggly Alabama Distributing Co., Inc.;
Central Grocers, Inc.; Trepco Imports and
Distribution Ltd.; and Benjamin Foods LLC
(collectively, the “Direct Purchaser Plaintiffs”);
• Louise Adams; Nay Alidad; Jessica Bartling;
Gay Birnbaum; Barbara Blumstein; Melissa
Bowman; Sally Bredberg; Barbara Buenning;
Michael Buff; Scott Caldwell; Jade Canterbury;
Laura Childs; Casey Christensen; Jody Cooper;
Kim Craig; Sundé Daniels; Elizabeth DavisBerg; Brian Depperschmidt; Vivek Dravid;
Gloria Emery; Robert Etten; Ana Gabriela Felix
Garcia; John Frick; Kathleen Garner;
Stephanie Gipson; Kathy Durand; Andrew
Gorman; Tina Grant; Edgardo Gutierrez; Lisa
Hall; Mary Hudson; Tya Hughes; Amy Jackson;
Marissa Jacobus; Danielle Johnson; Zenda
Johnston; Amy Joseph; Michael Juetten; Steven
Kratky; Kathy Lingnofski; Carla Lown;
Katherine McMahon; Diana Mey; Liza Milliner;
Laura Montoya; Rick Musgrave; Jennifer A.
Nelson; Corey Norris; Barbara Olson; Kirsten
Peck; John Pels; Elizabeth Perron; Valerie
Peters; John Peychal; Audra Rickman; Erica
Rodriguez; Joelyna A. San Agustin; Amber
Sartori; Rebecca Lee Simoens; Robert Skaff;
Greg Stearns; Nancy Stiller; Christopher Todd;
John Trent; Elizabeth Twitchell; Bonnie Vander
iii
Laan; Nigel Warren; Julie Wiese; Thomas E.
Willoughby
III;
and
Daniel
Zwirlein
(collectively, the “End Payer Plaintiffs”); and
• Capitol Hill Supermarket; Janet Machen;
Thyme Café & Market; Simon-Hindi LLC;
LesGo Personal Chef, LLC; Maquoketa Care
Center, Inc.; A-1 Diner; Francis T. Enterprises
d/b/a
Erbert
&
Gerbert’s;
Harvesters
Enterprises, LLC d/b/a Harvester’s Seafood and
Steakhouse; Dutch Village Restaurant; Painted
Plate Catering; GlowFisch Hospitality d/b/a
Five Loaves Café; Rushin Gold LLC d/b/a The
Gold Rush; Erbert & Gerbert, Inc.; Groucho’s
Deli of Raleigh; Sandee’s Catering; Groucho’s
Deli of Five Points; and Confetti’s Ice Cream
Shoppe (collectively, the “Commercial Food
Preparer Plaintiffs”).
Bumble Bee Foods LLC was a defendant in the
district court and an appellant in the court of appeals.
On September 16, 2020, the court of appeals
administratively closed the appeal as to Bumble Bee
Foods LLC pursuant to the automatic stay for
bankruptcy proceedings imposed by 11 U.S.C. § 362.
Tri-Union Seafoods LLC d/b/a Chicken of the Sea
International and Thai Union Group PCL were
defendants in the district court and appellants in the
court of appeals until their voluntary dismissal from
the appeal on May 5, 2021.
The following parties were defendants in the
district court that did not participate in the
proceedings in the court of appeals: Big Catch
Cayman LP a/k/a Lion/Big Catch Cayman LP; Del
Monte Corp.; Del Monte Foods Co.; Dongwon
Enterprises; King Oscar, Inc.; Lion Capital
iv
(Americas), Inc.; Thai Union Frozen Products PCL;
Thai Union North America, Inc.; Tri Marine
International, Inc.; and Christopher D. Lischewski.
The following parties were plaintiffs in the district
court that did not participate in the proceedings in the
court of appeals: 99 Cents Only Stores; Affiliated
Foods, Inc., Affiliated Foods Midwest Cooperative,
Inc.; Ahold U.S.A., Inc.; Albertsons Companies, LLC;
Alex Lee, Inc.; Associated Food Stores, Inc.;
Associated Grocers, Inc.; Associated Grocers of
Florida, Inc.; Associated Grocers of New England,
Inc.; Associated Wholesale Grocers, Inc.; Bashas’ Inc.;
Big Y Foods, Inc.; Bi-Lo Holding, LLC; Brookshire
Brothers, Inc.; Brookshire Grocery Co.; Cash-Wa
Distributing Co. of Kearney, Inc.; Certco, Inc.; The
Cherokee Nation; CVS Pharmacy, Inc.; Delhaize
America, LLC; Dolgencorp, LLC; Dollar General
Corp.; Dollar Tree Distribution, Inc.; Family Dollar
Services, LLC; Family Dollar Stores, Inc.; Fareway
Stores, Inc.; Giant Eagle, Inc.; Gladys, LLC; Grand
Supercenter, Inc.; Greenbrier International, Inc.;
H.E. Butt Grocery Company; Hyvee, Inc.; John Gross
& Co.; Kmart Corp.; Krasdale Foods, Inc.; The Kroger
Co.; K-VA-T Food Stores, Inc. d/b/a Food City; Marc
Glassman, Inc.; McLane Co., Inc.; Meadowbrook Meat
Company, Inc.; Meijer Distribution, Inc.; Meijer, Inc.;
Merchants Distributors, LLC; Moran Foods, LLC
d/b/a Save-A-Lot; North Central Distributors, LLC;
Publix Super Markets, Inc.; Sam’s East, Inc.; Sam’s
West, Inc.; Schnuck Markets, Inc.; Spartannash Co.;
Super Store Industries; SuperValu Inc.; Sysco Corp.;
Target Corp.; Unified Grocers, Inc.; URM Stores, Inc.;
US Foods, Inc.; W Lee Flowers & Co., Inc.; Wakefern
Food Corp.; Walmart Stores East, LLC; Walmart
Stores East, LP; Wal-Mart Stores, Inc.; Wal-Mart
v
Stores Texas, LLC; Wegmans Food Markets, Inc.;
Western Family Foods, Inc.; Winn-Dixie Stores, Inc.;
Woodman’s Food Market, Inc.; Janelle Albarello;
Galyna Andrusyshyn; Robert Benjamin; Paul Berger;
Marc Blumstein; Jessica Breitbach; Adam Buehrens;
Lisa Burr; Michael Coffey; Sally Crnkovich; Debra
Damske; Jessica Decker; Larry Demonaco; Scott
Dennis; Ken Dunlap; Karren Fabian; Robert Fragoso;
Danielle Greenberg; Sheryl Haley; Blair Hysni;
Dwayne
Kennedy;
Sterling
King;
Herbert
Kliegerman; Gabrielle Kurdt; Joseph A. Langston;
Carl Lesher; Brian Levy; Barbara Lybarger; Louise
Ann Davis Matthews; Kristin Millican; Beth Milliner;
Jinkyoung Moon; Colin Moore; Evelyn Olive; Ellen
Pinto; Jeffrey Potvin; Sandra Powers; Erica Pruess;
Virginia Rakipi; Robby Reed; Bryan Anthony Reo;
Jonathan Rizzo; Ramon Ruiz; Seth Salenger; Sarah
Metivier Schadt; Samuel Seidenburg; Clarissa Simon;
Harold Stafford; Truyen Ton-Vuong a/k/a David Ton;
Kathy Vangemert; James Walnum; Amy Waterman;
Jason Wilson; Edy Yee; Dennis Yelvington; and
Beverly Youngblood.*
CORPORATE DISCLOSURE STATEMENT
Petitioner StarKist Co. is a subsidiary of Dongwon
Industries Co., Ltd., which owns 10% or more of its
stock.
Petitioner Dongwon Industries Co., Ltd. is a
subsidiary of Dongwon Enterprise Co., Ltd., which
owns 10% or more of its stock.
*
Although some of these parties are designated as “plaintiffsappellees” on the court of appeals’ docket, none participated in
the proceedings in the court of appeals.
vi
RELATED PROCEEDINGS
United States Court of Appeals (9th Cir.):
Olean Wholesale Grocery Cooperative, Inc. v.
Bumble Bee Foods LLC, No. 19-56514 (Apr. 8,
2022)
Olean Wholesale Grocery Cooperative, Inc. v.
Bumble Bee Foods LLC, No. 19-80108 (Dec. 20,
2019)
United States District Court (S.D. Cal.):
In re Packaged Seafood Products Antitrust Litig.,
No. 3:15-md-2670-JLS-MDD (July 30, 2019)
vii
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ....................................... i
PARTIES TO THE PROCEEDING ........................... ii
CORPORATE DISCLOSURE STATEMENT ............v
RELATED PROCEEDINGS ..................................... vi
TABLE OF AUTHORITIES .......................................x
OPINIONS BELOW ....................................................1
JURISDICTION ..........................................................1
CONSTITUTIONAL, STATUTORY, AND
RULE PROVISIONS INVOLVED .......................1
INTRODUCTION .......................................................1
STATEMENT OF THE CASE ....................................3
A. Factual Background ........................................3
B. District Court Proceedings .............................7
C. Ninth Circuit Proceedings ............................12
REASONS FOR GRANTING THE PETITION .......15
I.
THE DECISION BELOW CONFLICTS
WITH THE DECISIONS OF OTHER
CIRCUITS ...........................................................16
A. The Circuits Are Divided Over The
First Question Presented ..............................16
B. The Circuits Are Divided Over The
Second Question Presented ..........................20
II. THE DECISION BELOW IS WRONG ..............23
viii
TABLE OF CONTENTS—Continued
Page
A. The Ninth Circuit Erred In Holding
That Class Certification Is Proper
Despite The Parties’ Dispute Over The
Extent Of Uninjured Class Members ...........23
B. The Ninth Circuit Erred In Allowing
Plaintiffs To Establish Classwide
Impact
Through
Averaging
Assumptions ..................................................28
III. THE QUESTIONS PRESENTED ARE
EXTRAORDINARILY IMPORTANT AND
WARRANT REVIEW IN THIS CASE ...............32
CONCLUSION ..........................................................35
APPENDIX
Opinion of the United States Court of Appeals
for the Ninth Circuit, Olean Wholesale
Grocery Cooperative, Inc. v. Bumble Bee
Foods LLC, 31 F.4th 651 (9th Cir. 2022) ...........1a
Opinion of the United States Court of Appeals
for the Ninth Circuit, Olean Wholesale
Grocery Cooperative, Inc. v. Bumble Bee
Foods LLC, 993 F.3d 774 (9th Cir. 2021) ........72a
Order of the United States District Court for
the Southern District of California
Granting Motions for Class Certification,
In re Packaged Seafood Products Antitrust
Litigation, 332 F.R.D. 308 (July 30, 2019) ....110a
ix
TABLE OF CONTENTS—Continued
Page
Order of the United States Court of
Appeals for the Ninth Circuit Regarding
Rehearing En Banc, Olean Wholesale
Grocery Cooperative, Inc. v. Bumble Bee
Foods LLC, No. 19-56514 (9th Cir. Apr. 28,
2021), ECF No. 101 .........................................188a
Order of the United States Court of Appeals for
the Ninth Circuit Granting Rehearing En
Banc,
Olean
Wholesale
Grocery
Cooperative, Inc. v. Bumble Bee Foods
LLC, 5 F.4th 950 (9th Cir. 2021) ....................190a
U.S. Const. art. III, §§ 1-2 .....................................195a
15 U.S.C. § 15 ........................................................196a
28 U.S.C. § 2072 ....................................................199a
Federal Rule of Civil Procedure 23 ......................200a
x
TABLE OF AUTHORITIES
Page(s)
CASES
Amchem Products, Inc. v. Windsor,
521 U.S. 591 (1997) ..............................................24
Anderson v. Mt. Clemens Pottery Co.,
328 U.S. 680 (1946) ..............................................29
In re Asacol Antitrust Litigation,
907 F.3d 42 (1st Cir. 2018) .......................... passim
Bell Atlantic Corp. v. AT&T Corp.,
339 F.3d 294 (5th Cir. 2003)................................20
Comcast Corp. v. Behrend,
569 U.S. 27 (2013) ........................................ passim
Cordoba v. DIRECTV, LLC,
942 F. 3d 1259 (11th Cir. 2019)...........................20
Denney v. Deutsche Bank AG,
443 F.3d 253 (2d Cir. 2006) .................................20
Dukes v. Wal-Mart Stores, Inc.,
603 F.3d 571 (9th Cir. 2010)................................25
Halvorson v. Auto-Owners Insurance Co.,
718 F.3d 773 (8th Cir. 2013)................................20
Johannessohn v. Polaris Industries Inc.,
9 F.4th 981 (8th Cir. 2021) ..................................20
In re Lamictal Direct Purchaser Antitrust
Litigation,
957 F.3d 184 (3d Cir. 2020) ............... 19, 20, 21, 22
Lytle v. Nutramax Laboratories, Inc.,
No. 19-cv-0835, 2022 WL 1600047 (C.D.
Cal. May 6, 2022) .................................................33
xi
TABLE OF AUTHORITIES—Continued
Page(s)
Messner v. Northshore University
HealthSystem,
669 F.3d 802 (7th Cir. 2012)................................20
In re Rail Freight Fuel Surcharge Antitrust
Litigation,
725 F.3d 244 (D.C. Cir. 2013) ..............................18
In re Rail Freight Fuel Surcharge Antitrust
Litigation,
934 F.3d 619 (D.C. Cir. 2019) ...... 12, 16, 17, 18, 24
Reinig v. RBS Citizens, N.A.,
912 F.3d 115 (3d Cir. 2018) .................................22
TransUnion LLC v. Ramirez,
141 S. Ct. 2190 (2021)............................................8
Tyson Foods, Inc. v. Bouaphakeo,
577 U.S. 442 (2016) ...................................... passim
Utne v. Home Depot U.S.A., Inc.,
No. 16-cv-01854, 2022 WL 1443338 (N.D.
Cal. May 6, 2022) .................................................33
Wal-Mart Stores, Inc. v. Dukes,
564 U.S. 338 (2011) ...................................... passim
STATUTES
15 U.S.C. § 15 ..........................................................1, 8
28 U.S.C. § 1254(1)......................................................1
28 U.S.C. § 2072(b)....................................................27
OTHER AUTHORITIES
2A Phillip E. Areeda & Herbert Hovenkamp,
Antitrust Law (5th ed. 2022) ...............................32
xii
TABLE OF AUTHORITIES—Continued
Page(s)
Fed. R. Civ. P. 23(b)(3) ..........................................9, 23
Fed. R. Civ. P. 23(f) ...................................................12
Richard A. Nagareda, Class Certification in
the Age of Aggregate Proof, 84 N.Y.U. L.
Rev. 97 (2009) ......................................................32
PETITION FOR A WRIT OF CERTIORARI
Petitioners StarKist Co. and Dongwon Industries
Co., Ltd. (collectively, “StarKist”) respectfully petition
this Court for a writ of certiorari to review the
judgment of the United States Court of Appeals for
the Ninth Circuit in this case.
OPINIONS BELOW
The opinion of the en banc court of appeals (App.
1a-71a) is reported at 31 F.4th 651. The opinion of
the court of appeals panel (App. 72a-109a) is reported
at 993 F.3d 774. The order of the district court (App.
110a-87a) is reported at 332 F.R.D. 308.
JURISDICTION
The en banc court of appeals entered its judgment
on April 8, 2022. On June 27, 2022, Justice Kagan
extended the time within which to file a petition for a
writ of certiorari to and including August 8, 2022.
This Court has jurisdiction under 28 U.S.C. § 1254(1).
CONSTITUTIONAL, STATUTORY, AND RULE
PROVISIONS INVOLVED
Relevant portions of Article III of the United
States Constitution; the Clayton Act, 15 U.S.C. § 15;
and Federal Rule of Civil Procedure 23 are
reproduced at App. 195a-208a.
INTRODUCTION
This petition presents two recurring questions of
foundational importance to class action law that have
divided the courts of appeals, split both the en banc
and three-judge panels of the Ninth Circuit below,
and urgently warrant resolution by this Court.
The first question concerns whether, or in what
circumstances, the presence of uninjured class
2
members precludes the certification of a class under
Federal Rule of Civil Procedure 23(b)(3)—an issue
this Court acknowledged as one of “great importance,”
but was unable to address due to case-specific reasons
in Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442,
460-61 (2016). Since Tyson Foods, the conflict among
the courts of appeals has only grown on this
important issue—as well as the subsidiary question
whether a district court must determine the extent of
uninjured class members before certifying any class.
That discord has been thrown into sharp relief by
the Ninth Circuit’s en banc decision in this case. That
decision upheld certification of a class even though a
third of that class may be uninjured, on the premise
that the extent of uninjured members is a “merits”
question that should be resolved by a jury. App. 17a18a, 46a-48a. As the dissent below explained, that
ruling squarely conflicts with the decisions of other
circuits. Id. at 70a-71a (Lee, J.). It flouts this Court’s
admonition that district courts must determine
whether Rule 23’s requirements are met before
certifying any class, even when doing so “overlap[s]
with the merits.” Wal-Mart Stores, Inc. v. Dukes, 564
U.S. 338, 350-51 (2011). And it contravenes the limits
imposed by Article III itself. See Tyson Foods, 577
U.S. at 466 (Roberts, C.J., concurring). Ultimately,
the Ninth Circuit’s approach will invite “monstrously
oversized classes designed to pressure and extract
settlements.” App. 71a (Lee, J., dissenting).
The second question is also critical, and likewise
implicates a clear conflict among the courts of
appeals. The decision below interprets this Court’s
decision in Tyson Foods as “establish[ing] the rule”
that a class may be certified based on the assumption
that each class member suffered the same injury as
3
the average person in the class, so long as a juror
might find that assumption “plausible.” Id. at 18a,
39a-40a. But other circuits have rejected that reading
of Tyson Foods and refused to allow the use of
representative evidence to satisfy Rule 23 in the same
circumstances as here. The limits recognized by these
courts are essential to ensuring that representative
evidence is not allowed to mask individualized
differences among class members or eliminate the
individualized defenses that defendants would have
in an individual action, in violation of the Rules
Enabling Act. The Ninth Circuit’s decision in this
case dramatically lowers the bar for using
representative evidence to satisfy Rule 23.
If allowed to stand, the Ninth Circuit’s decision
will “weaponize Rule 23 to impose an in terrorem
effect on defendants” by sanctioning the certification
of “grossly oversized classes.” Id. at 68a, 70a (Lee, J.,
dissenting). Certiorari is warranted.
STATEMENT OF THE CASE
A. Factual Background
This case tests the certification of three enormous
and widely divergent classes of direct and indirect
purchasers of packaged tuna products, including
hundreds of retailers ranging from mega-buyers like
Costco and Amazon to local grocery stores and delis,
and many millions of individual consumers. It arises
from antitrust suits brought against the three largest
suppliers of packaged tuna in the United States—
StarKist, Chicken of the Sea (“COSI”), and Bumble
Bee Foods LLC (collectively, “Defendants”). Id. at 5a.
Plaintiffs claim that Defendants conspired to
manipulate the list prices of hundreds of different
tuna products. Id. at 112a. But the list price for the
4
products at issue is virtually never the price paid by
direct purchasers, like a Costco, or passed through to
individual consumers downstream. Instead, the
actual price paid derives from purchaser-specific
negotiations and a host of other factors that often
result in variations from the list price.
1. The underlying market in this case is
characterized by numerous, highly individualized
factors affecting price. Defendants sell hundreds of
different packaged tuna products to an array of
different entities.
These products include both
branded products and private label products (e.g.,
store-brand products sold by Trader Joe’s and Costco),
packaged both for individual consumers and for food
preparers. The purchasers of Defendants’ products
vary greatly in size and negotiating power,
procurement and retail strategies, and other factors,
which influence the prices they actually pay.
The prices paid by direct purchasers are reached
through individualized negotiations, depending on
the type of product. Id. at 94a; see Defs.’ C.A. Br. 6
(collecting record cites). And certain products are sold
under a direct purchaser’s private label, like Costco’s
Kirkland brand, which are manufactured according to
specifications set by the purchaser, with prices set by
a bespoke bidding process. See, e.g., C.A. Excerpts of
Record (E.R.) 1713, 1717, 1944-47.
The direct purchasers range from nationwide
outlets like Target, Costco, and Amazon to local
supermarkets and convenience stores.
These
purchasers have significantly “different bargaining
power.” App. 54a. Large retailers wield significant
leverage to “fiercely negotiate the list price down.” Id.
at 64a (Lee, J., dissenting). They are also frequently
able to negotiate rebates and other promotional
5
concessions that offset any price increases. Id. at 64a65a; see Defs.’ C.A. Br. 6-7 (collecting cites).
Prices also vary based on differences in
procurement and retail strategies. For example, some
retailers use an everyday-low-price strategy that
requires persistent negotiation over prices, whereas
others may offer aggressive promotional deals for
short periods, sometimes using tuna as a loss-leader
by selling it below acquisition cost. C.A. E.R. 162728, 1662-63, 2204-05; see App. 94a. And private label
products—at least 15-20% of the packaged tuna
market—are subject to a distinct bidding process that
typically produces prices far lower than those for
branded products. See C.A. E.R. 1944-47.
All this results in broad variations in prices across
these stores and markets. For example, as the graph
below shows, the prices paid by different California
direct purchasers for the same 5-ounce can of branded
tuna during the same month varied by as much as 23
cents on cans that cost just 66 to 89 cents each:
C.A. E.R. 1018.
6
2. This variation in prices flows downstream to
indirect purchasers such as individual consumers.
Direct purchasers not only pay different prices for
packaged tuna, but the degree to which they pass
through any changes in those prices to consumers also
varies. Large retailers like Costco may choose to
absorb some or all of any price increase, whereas
small retailers are more likely to pass through some
or all of an increase in their wholesale cost. C.A. E.R.
1094-98, 1102-03, 1662-65, 1768-69; see App. 51a-53a.
Different retailers also use different pricing
strategies, such as focal point pricing (e.g., prices
ending in $0.99). As a result, the prices paid by
ordinary individual consumers vary significantly
based on where they buy their packaged tuna
products—e.g., from Amazon or a local deli. And large
indirect purchasers, such as restaurant chains, often
negotiate special price reductions unavailable to
ordinary consumers. Defs.’ C.A. Br. 9-12.
Because of highly individualized factors affecting
pricing down the line, and because buyers have
multiple (and varying) ways of resisting any price
increases in their individual case, a change in the list
price can and does leave many direct and indirect
purchasers entirely unaffected. In fact, the evidence
showed that numerous direct purchasers—including
Amazon, Trader Joe’s, and Food Lion—paid less than
the price Plaintiffs claimed would have been paid
absent the alleged price-fixing. C.A. E.R. 1076; see
Defs.’ C.A. Suppl. Record Cites (Doc. No. 99)
(collecting record cites). And, as noted, private label
products—accounting for some 20% of the packaged
tuna market—do not appear on any price list and,
instead, are negotiated separately. Supra at 4-5.
7
B. District Court Proceedings
1. This litigation follows on the heels of a federal
criminal investigation into price-fixing in the
packaged tuna market more than a decade ago. The
investigation revealed that, following an increase in
the cost of raw tuna in late 2010, sales executives
from Bumble Bee and COSI, and one former executive
from StarKist, coordinated the timing of when each
company would issue new list prices for tuna products
in late 2011 through 2013. See App. 6a. The
investigation ultimately led to guilty pleas and
criminal convictions for Bumble Bee and StarKist and
certain of their employees. Id.
Plaintiffs initiated this litigation in 2015. Id. at
111a. Three putative class actions were filed, along
with dozens of individual suits brought by large and
small retailers, grocery stores, and distributors. The
scope of the antitrust allegations in these cases
sweeps far beyond the scope of the government’s
criminal case in terms of both the conduct and time
period alleged. See id. at 6a-7a.
Following discovery, Plaintiffs sought to certify
three putative classes of packaged tuna purchasers:
• A Direct Purchaser Plaintiff (DPP) class of all
persons and entities that “directly purchased”
Defendants’ packaged tuna products from June
2011 to July 2015. Id. at 115a-16a. The direct
purchasers vary significantly, ranging from
major nationwide retailers like Amazon and
Walgreens, to regional grocery store chains, to
mom-and-pop stores and corner markets.
• An End Payer Plaintiff (EPP) class of millions of
individuals, spanning 30 States, D.C., and
Guam, who indirectly purchased Defendants’
8
packaged tuna for personal consumption from
June 2011 to July 2015. Id. at 170a-71a.
• And a Commercial Food Preparer Plaintiff
(CFP) class of individuals and commercial
entities from 27 States and D.C. that, between
June 2011 and December 2016, indirectly
purchased Defendants’ bulk-sized packaged
tuna products from one of six large direct
purchasers (Walmart, Sam’s Club, Costco,
Sysco, US Foods, and Dot Foods). Id. at 143a44a. This class ranges from local food preparers
like corner delis and restaurants to the nation’s
largest food service company, Aramark.1
As in any private antitrust case for damages,
Plaintiffs are required to demonstrate that they
suffered an “injur[y] in [their] business or property,”
15 U.S.C. § 15—here, in the form of overcharges
created by supra-competitive prices as a result of the
alleged price-fixing conspiracy. See App. 14a-15a.
This showing of injury is required both to establish an
element of the antitrust claim, where it is sometimes
called “antitrust impact,” Comcast Corp. v. Behrend,
569 U.S. 27, 30 (2013), and Article III standing,
TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 220708 (2021). In markets characterized by individualized
negotiations and the kinds of other factors discussed
above, injury does not automatically follow from a
price-fixing conspiracy, even when one exists.
Certain direct purchasers, for example, may have
sufficient market power to resist any attempted price
increase, and they may not pass through any price
1
The arguments in this petition apply to all three classes,
though—as in the decisions below—the focus is on the DPP class.
9
increase to the indirect purchasers. And private label
products do not even appear on a price list.
2. Plaintiffs sought class certification in this case
under Federal Rule of Civil Procedure 23(b)(3), which
permits certification only if the district court “finds
that the questions of law or fact common to class
members predominate over any questions affecting
only individual members.” Fed. R. Civ. P. 23(b)(3).
As is frequently the case, the crux of the
certification dispute turned on whether Plaintiffs’
statistical models actually showed classwide impact.
Although their methodologies differed slightly,
Plaintiffs’ experts all used regression models that
purported to calculate “average” overcharges that
would apply across-the-board to each member of the
putative classes. Thus, for the DPP class:
• Plaintiffs’ expert (Dr. Russell Mangum) pooled
all of the direct purchasers together and first
concluded that the average overcharge was
10.28%. App. 77a-78a. Dr. Mangum assumed
that all direct purchasers were overcharged by
this same 10.28% average overcharge, no
matter their circumstances or the prices they
actually paid. Id. at 78a.
• Dr. Mangum used a pooled regression to
compute a “predicted actual price” paid by all
direct purchasers. Id. He then subtracted the
assumed common overcharge of 10.28% from
the predicted actual price for every transaction
to get a predicted “but-for price”—i.e., the price
his model predicted each purchaser should have
paid but for the alleged conspiracy. Id.
• Dr. Mangum then compared the predicted butfor price with the actual prices that each direct
10
purchaser paid on their purchases. Id. If the
predicted but-for price was lower than the
actual price for even a single transaction, Dr.
Mangum deemed the purchaser “injured.” Id.
Even under this approach—which embedded his
assumed 10.28% overcharge into almost every step—
Dr. Mangum’s model showed injury only to 94.5% of
the DPP class. Id. For the remaining 5.5% of the
class, the actual price paid was lower—for every
transaction—than the price Dr. Mangum’s model
predicted the purchaser should have paid absent the
alleged conspiracy. In other words, 5.5% of the class
was uninjured even under Plaintiffs’ own expert’s
model. The models used to predict injury for the EPP
and CFP classes also used pooled regressions and
average overcharges. See id. at 50a, 53a, 80a.
In response, Defendants’ experts showed that
Plaintiffs’ models could not show classwide impact
due to their inability to establish injury for a
significant part of the class, and instead improperly
masked the realities of the marketplace—where
packaged tuna prices are individually negotiated, and
direct purchasers are differently situated in those
negotiations. Id. at 128a-29a; see id. at 64a (Lee, J.,
dissenting). To illustrate this flaw, Defendants’
expert (Dr. John Johnson) re-ran Dr. Mangum’s
model with one modification: Instead of calculating
only one average overcharge for all direct purchasers
(10.28%), Dr. Johnson allowed the overcharge to vary
by individual direct purchaser. Id. at 128a-29a. With
that one modification, Dr. Johnson explained, Dr.
Mangum’s model could not show injury to at least
11
28%—nearly a third—of the putative DPP class
members. Id. at 129a; see C.A. E.R. 718-24, 1479-81.2
Accordingly, Defendants argued that Plaintiffs’
models failed to show the classwide impact necessary
to meet Rule 23’s requirements.
3. The district court agreed with Defendants that
predominance was the “most important[]” issue at
class certification, and that this issue hinged on
whether the element of injury could be resolved on a
common basis. App. 120a-22a. The court also
acknowledged Defendants’ expert’s conclusion that,
after allowing for variation in the purported
overcharge, Dr. Mangum’s model could not show
impact for at least 28% of the putative DPP class. Id.
at 129a. And the court recognized that a “model
unable to show impact to over 28% of the class
members would unquestionably” fail to satisfy Rule
23(b)(3)’s predominance requirement. Id. The court
further recognized that “Defendants’ criticisms [of
Plaintiffs’ models] are serious.” Id. at 140a.
But instead of ruling on the parties’ dispute over
whether injury could be resolved on a classwide basis,
in light of Defendants’ expert’s criticisms of Dr.
Mangum’s model, the district court just deferred that
question to a jury at trial. The court reasoned that
“determining which expert is correct is beyond the
scope” of class certification and was, instead, “a
merits decision” for a jury. Id. at 140a-41a (citation
omitted). The district court thus certified the DPP
2
Dr. Mangum disputed Dr. Johnson’s findings. But even Dr.
Mangum conceded that, without his averaging assumption, his
model could not calculate any statistically significant overcharge
for 16.7% of the class. See App. 32a-33a; C.A. E.R. 627-29, 72023, 1351.
12
class. The court applied a similar analysis with
respect to the EPP and CFP classes—certifying the
classes on the premise that the parties’ dispute over
the experts’ models should be deferred to the jury at
a class trial. See id. at 149a-55a, 173a-77a.
C. Ninth Circuit Proceedings
1. The Ninth Circuit granted Defendants’ petition
for interlocutory review of the district court’s class
certification decision. See Fed. R. Civ. P. 23(f). And a
panel of the Ninth Circuit unanimously concluded, in
an opinion by Judge Bumatay, that the district court’s
certification order could not stand. App. 76a-109a.3
Agreeing with decisions from the First and D.C.
Circuits, the panel majority held that the significant
presence of uninjured class members may “defeat
predominance” by requiring individualized inquiries,
and that the district court erred by “fail[ing] to resolve
the factual disputes as to how many uninjured class
members are included in Plaintiffs’ proposed class”
before certification. Id. at 95a-102a (citing In re Rail
Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619,
624-25 (D.C. Cir. 2019); In re Asacol Antitrust Litig.,
907 F.3d 42, 47, 51-58 (1st Cir. 2018)). The court
likewise explained that the presence of a large
number of uninjured members also raises “serious”
Article III concerns. Id. at 96a-97a & n.7.
The panel further held that Plaintiffs’
representative evidence—their experts’ “averaging
assumptions”—could
“be
used
to
satisfy
predominance” only if the district court had
rigorously analyzed that evidence to determine if it
3
On appeal, Bumble Bee filed for bankruptcy, see App. 5a n.1,
and COSI voluntarily dismissed its appeal, see C.A. Doc. No. 102.
13
“does in fact mask individualized differences.” Id. at
95a. The panel then remanded for the district court
to resolve the experts’ dispute over the extent of
uninjured members in the putative classes and to
rigorously analyze whether Plaintiffs’ averaging
assumptions “mask[ed] individual differences among
the class members,” such that they could not be used
to show predominance. Id. at 99a-102a.
Judge Hurwitz concurred in part and dissented in
part. Id. at 102a-09a. He acknowledged that “a large
percentage of uninjured plaintiffs may raise
predominance concerns,” and he agreed with the
panel majority that the district court’s class
certification decision could not stand because of the
court’s failure to resolve the extent of uninjured class
members in the putative classes. Id. at 102a-03a,
106a-07a. But he disagreed that either Rule 23 or
Article III established any “de minimis” threshold for
uninjured class members. Id. at 107a-09a.
2. The Ninth Circuit sua sponte called for, and
granted, rehearing en banc.
Id. at 188a-94a.
Following argument, a divided, 11-judge en banc
panel then issued a decision affirming the district
court’s class certification order. Id. at 1a-71a.
The en banc majority squarely “reject[ed] the . . .
argument that Rule 23 does not permit the
certification of a class that potentially includes more
than a de minimis number of uninjured class
members.” Id. at 21a (italics added). It then went
further, and held that district courts are not
permitted to resolve expert disputes over the extent
of uninjured class members, because such disputes
are “merits” questions reserved for the jury. Id. at
18a, 46a-48a. In the majority’s view, a plaintiff need
only proffer “admissible” evidence that would be
14
“capable” of establishing injury on a classwide basis if
found persuasive by a jury. See id. at 40a-41a. Once
a plaintiff has satisfied that threshold, the majority
found, “a district court cannot decline certification . . .
because it considers plaintiffs’ evidence . . . to be
unpersuasive.” Id. at 18a (emphasis added); see id. at
27a n.16 (“[T]he persuasiveness of Dr. Mangum’s
analysis is not at issue at this phase of the
proceeding.”). Accordingly, the court held that “it is
for the jury, not the court,” to resolve the parties’
dispute over whether Dr. Mangum’s model in fact
provides classwide proof of harm, even though the
district court acknowledged that there are “serious[]”
challenges to Dr. Mangum’s model and, if that model
is rejected, the class would flunk the predominance
requirement. Id. at 35a, 40a-41a.
The en banc majority further held that
representative evidence—here, in the form of
“averaging assumptions” applied to “different
purchasers with different bargaining power” that pay
prices derived from “individualized negotiations”—
could establish liability on a classwide basis under
this Court’s decision in Tyson Foods. Id. at 38a-39a,
54a-55a; see id. at 18a-20a.
In reaching this
conclusion, the court overruled prior Ninth Circuit
precedent that had confined Tyson Foods to the “wage
and hour context” in which it arose. Id. at 19a n.11
(citation omitted). In the majority’s view, Plaintiffs’
averaging assumptions could be used to establish
classwide impact in order to satisfy Rule 23 as long as
it is “plausible” that the alleged conspiracy could have
had an effect on “baseline prices”—even if the
underlying “‘market involves diversity in products,
marketing, and prices,’” and even where prices are
15
subject to “individualized negotiations.” Id. at 39a41a (citation omitted).
Judge Lee, joined by Judge Kleinfeld, dissented.
Id. at 56a-71a. He disagreed with the majority’s
holding that a class with a more-than-de minimis
number of uninjured members could be certified,
explaining that this ruling contradicts “Rule 23’s
language, common sense, and precedent from other
circuits.” Id. at 69a-71a; see id. at 69a (“The
majority’s rejection of a de minimis rule creates a
circuit split.”). Judge Lee further noted that the
majority’s requirement that district courts must defer
to a jury at trial factual disputes critical to
determining compliance with Rule 23 “gives a free
pass to the intractable problem of highly
individualized [injury and] damages analyses” in a
way that “conflicts with the Supreme Court’s”
decisions. Id. at 66a. Indeed, as Judge Lee explained,
by affirming the grant of class certification despite the
presence of many “class members—perhaps almost a
third of the class—who may not have suffered any
harm,” the majority’s decision will plunge the parties
and the district court into “individualized mini-trials
to figure out who suffered an injury.” Id. at 68a.
Ultimately, Judge Lee concluded, the majority’s
decision has the potential to “unleash a tidal wave of
monstrously oversized classes designed to pressure
and extract settlements.” Id. at 71a.
REASONS FOR GRANTING THE PETITION
This petition readily satisfies the Court’s criteria
for certiorari. First, the questions presented each
implicate direct circuit conflicts. Second, the Ninth
Circuit’s resolution of those questions is deeply flawed
and directly contravenes this Court’s own precedent.
16
And, third, the questions presented are undeniably
important and, indeed, ones that this Court has
already recognized are critical to class action law.
I. THE DECISION BELOW CONFLICTS WITH
THE DECISIONS OF OTHER CIRCUITS
A. The Circuits Are Divided Over The First
Question Presented
The Ninth Circuit’s en banc decision in this case
squarely “reject[s]” any requirement that a class
cannot be certified when it “includes more than a de
minimis number of uninjured class members” (even
where up to a third of the class may be uninjured),
and holds that a district court must defer to a jury at
a class trial any dispute over the extent of uninjured
class members. App. 21a, 47a. As the en banc dissent
recognized, that decision “creates a circuit split.” Id.
at 69a-71a (Lee, J. dissenting); see id. at 101a & n.14
(initial panel) (discussing out-of-circuit cases); id. at
107a-08a & n.2 (Hurwitz, J., concurring in part and
dissenting in part) (acknowledging conflict).
1. First, the Ninth Circuit’s decision creates a
clear split with the D.C. Circuit’s decision in In re Rail
Freight Fuel Surcharge Antitrust Litigation, 934 F.3d
619 (D.C. Cir. 2019). Rail Freight involved an alleged
price-fixing conspiracy for fuel surcharges among
freight railroads. The district court found that the
“regression analysis” by plaintiffs’ expert was
“reliable enough to be admissible,” but that it did not
support class certification because it could not show
injury to 12.7% of the class. Id. at 621-23. As the
court explained, the “need for ‘individualized
inquiries to determine which of at least 2,037 (and
possibly more) class members were actually injured
17
by the alleged conspiracy,’ precluded a finding of
predominance.” Id. at 624 (citation omitted).
The D.C. Circuit affirmed, in a decision by Judge
Katsas, holding that a class cannot be certified in
circumstances virtually identical to those here. The
court of appeals first noted that, “to establish
predominance,” a plaintiff must “‘show that they can
prove, through common evidence, that all class
members were in fact injured by the alleged
conspiracy.’” Id. (emphasis added) (citation omitted).
That requirement, the court explained, is grounded in
the common-sense concern that, because “[u]ninjured
class members cannot prevail on the merits, . . . their
claims must be winnowed away as part of the liability
determination.” Id. And when there is no way to
“‘segregate the uninjured from the truly injured,’” the
court reasoned, then “the need for individualized
proof
of
injury
and
causation
destroy[s]
predominance.” Id. at 624-25 (citation omitted).
The D.C. Circuit further concluded that, even
assuming “[f]or the sake of argument” there was “a de
minimis exception to th[e] general rule” that a class
containing any uninjured members cannot be
certified, 12.7% uninjured class members was far
above any de minimis threshold. Id.; see also id. at
625 (suggesting that “5% to 6% constitutes the outer
limits of a de minimis number” (citation omitted)).
The court further held that district courts considering
class certification may not “defer questions about the
number and nature of any individualized inquiries
that might be necessary to establish liability.” Id. at
626. Such questions, the court explained, were “partand-parcel of the ‘hard look’ required by Wal-Mart
and Comcast,” and therefore could not simply be left
for resolution by the jury at trial. Id.
18
The decision below directly conflicts with Rail
Freight. While the D.C. Circuit found that a class
cannot be certified if it contains a more-than-de
minimis number of uninjured members, because the
need for “individualized” injury determinations will
defeat predominance, id. at 625, the Ninth Circuit
expressly “reject[ed]” any de minimis requirement,
App. 21a. And while the Ninth Circuit held that a
court must defer disputes regarding the extent of
uninjured class members to the jury, the D.C. Circuit
held that the inquiry over uninjured members was
“part-and-parcel of the ‘hard look’ required by” this
Court’s precedent before any class can be certified.
Rail Freight, 934 F.3d at 626; see also In re Rail
Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244,
253 (D.C. Cir. 2013) (A district court must “scrutinize
the evidence before granting certification”; “[i]f the
damages model cannot withstand this scrutiny then
that is not just a merits issue,” because the model is
“essential to the plaintiffs’ claim they can offer
common evidence of classwide injury.”).
2. The Ninth Circuit’s decision likewise conflicts
with the First Circuit’s decision in In re Asacol
Antitrust Litig., 907 F.3d 42 (1st Cir. 2018). Asacol
concerned antitrust claims against a drug
manufacturer that allegedly improperly blocked entry
of generic substitutes into the market. Id. at 45. The
district court found that approximately 10% of class
members would have opted for the defendant’s
branded products “even in the presence of a generic,”
and thus were uninjured. Id. at 47 (citation omitted).
But the court nonetheless certified the class. Id.
The First Circuit reversed. In a decision by Judge
Kayatta, the court of appeals held that the presence
of 10% uninjured class members defeated
19
predominance. As the court explained, “this is not a
case in which a very small absolute number of class
members might be picked off in a manageable,
individualized process at or before trial”; instead,
“there are apparently thousands who in fact suffered
no injury,” and the “need to identify those individuals
will predominate and render an adjudication
unmanageable.” Id. at 53-54; see also id. at 57 (citing
Rail Freight).
A contrary holding, the court
explained, would provide “no logical reason” against
the certification of a class with “forty-nine percent or
even ninety-nine percent” uninjured class members—
an untenable result. Id. at 55-56.
Just like Rail Freight, the First Circuit’s decision
in Asacol is irreconcilable with the Ninth Circuit’s
holding here. The First Circuit squarely held that a
class with 10% uninjured members could not be
certified given that the need for individualized
inquiries into injury would predominate at a class
trial, and the court resolved the dispute between the
parties’ experts regarding plaintiffs’ proffered
classwide proof (instead of deferring it to a jury). Id.
at 53-56. The decision below, by contrast, holds that
a class may be certified even if a third (or more) of its
members are uninjured, and that a district court must
refer this issue to a jury at a class trial. As in Rail
Freight, Asacol would have come out the opposite way
under the Ninth Circuit’s decision here.
3. The Ninth Circuit’s decision also conflicts with
the Third Circuit’s decision in In re Lamictal Direct
Purchaser Antitrust Litigation, 957 F.3d 184 (3d Cir.
2020).
Lamictal concerned an allegedly anticompetitive settlement between drug manufacturers
concerning the drug lamotrigine. Id. at 189. The
Third Circuit noted that “in a market characterized
20
by individual negotiations and a discounted-brand
competition strategy,” “up to one-third of the entire
class” may have “paid no more, or even less, for
lamotrigine than they would have” without the
allegedly anti-competitive conduct. Id. at 192. The
court further held that, “even though it touche[d] on
the merits,” the district court erred in declining to
resolve a battle of the experts over the extent of
uninjured class members before certifying the class,
since resolving that issue was “necessary in order to
determine whether the Direct Purchasers . . . could
show that common issues predominated by a
preponderance of the evidence.” Id. at 194.4
In short, the first question presented involves a
clear and acknowledged circuit conflict, and certiorari
is warranted on that basis alone.
B. The Circuits Are Divided Over The
Second Question Presented
The circuits are also split on the second question
presented and, in particular, the limits imposed by
Tyson Foods on the use of representative evidence to
satisfy Rule 23’s requirements.
1. The Ninth Circuit below found that
representative evidence—in the form of averaging
assumptions—is broadly permissible based on an
4
Other circuits have similarly recognized problems with
certifying classes with uninjured members. See, e.g., Denney v.
Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006); Bell Atl.
Corp. v. AT&T Corp., 339 F.3d 294, 302-05 (5th Cir. 2003);
Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 824
(7th Cir. 2012); Johannessohn v. Polaris Indus. Inc., 9 F.4th 981,
987 (8th Cir. 2021); Halvorson v. Auto-Owners Insurance Co.,
718 F.3d 773, 779-80 (8th Cir. 2013); Cordoba v. DIRECTV, LLC,
942 F. 3d 1259, 1273, 1277 (11th Cir. 2019).
21
expansive reading of this Court’s decision in Tyson
Foods—one that plaintiffs have been aggressively
pursuing in cases across the country (until now, with
little success).
In doing so, the Ninth Circuit
disavowed its prior precedent cabining Tyson Foods to
the “wage and hour context,” App. 19a n.11 (citation
omitted), and then adopted a sweeping rule that
would allow the use of representative evidence to
satisfy Rule 23’s requirements any time a minimal
“plausib[ility]” threshold is met, id. at 40a. Under the
Ninth Circuit rule, even when there is substantial
variation within a class as to the fact in question, the
only limitation on when an averaging assumption
may serve as “class-wide” proof is whether a jury
could find the assumption “plausible” at a class trial.
Id. at 40a-44a. Applying that rule, the court held that
the averaging assumptions here are permissible,
because it was “not implausible to conclude that a
conspiracy could have a class-wide impact, even when
the market involves diversity in products, marketing,
and prices,” and even where prices were subject to
“individualized negotiations.”
Id. at 39a-41a
(emphasis added) (citation omitted).
2. The Ninth Circuit’s ruling allowing the use of
such representative evidence here sharply conflicts
with the Third Circuit’s decision in Lamictal and the
First Circuit’s decision in Asacol.
In Lamictal, the plaintiffs, relying on Tyson Foods,
similarly claimed that there would be no need for
individualized inquiries, because their expert could
prove antitrust impact by relying on the average
impact to the class. In the plaintiffs’ view, “unless no
reasonable juror could believe the common proof at
trial,” the evidence was sufficient to satisfy the
predominance requirement. 957 F.3d at 191. But the
22
Third Circuit rejected that argument, explaining:
“Tyson Foods was discussing representative evidence
in the [Fair Labor Standards Act] context, a unique
labor situation in which, often due to inadequate
record keeping, ‘a representative sample . . . may be
the only feasible way to establish liability.’” Id.
(citation omitted). The court then rejected the
plaintiffs’ reliance on averaging assumptions to show
classwide impact in “a market characterized by
individual negotiations.” Id. at 192; see Reinig v. RBS
Citizens, N.A., 912 F.3d 115, 128-30 (3d Cir. 2018)
(similarly discussing limits imposed by Tyson Foods).
In Asacol, the plaintiffs, relying on the same
reading of Tyson Foods that the Ninth Circuit adopted
here, claimed that they could “prove ‘class-wide
impact’ with the testimony of their expert, Dr. Conti,”
who used a regression model to “estimate that a
generic drug would achieve roughly ninety percent
market penetration.” 907 F.3d at 54. But, just like
the Third Circuit in Lamictal, the First Circuit in
Asacol squarely rejected that argument, holding that
Dr. Conti’s study could not serve as classwide proof
because, unlike in Tyson Foods, “plaintiffs point to no
. . . substantive law that would make an opinion that
ninety percent of class members were injured both
admissible and sufficient to prove that any given
individual class member was injured.” Id. (emphasis
added). As in Lamictal, it was not sufficient that a
reasonable juror in a class trial might find the
averaging assumption plausible. Id. at 54-55.
Once again, this conflict is outcome-determinative
for purposes of class certification:
Plaintiffs’
averaging assumptions here would not have been
allowed in the First and Third Circuits. That conflict
also warrants this Court’s review.
23
II. THE DECISION BELOW IS WRONG
The Ninth Circuit’s en banc decision is also deeply
flawed and at odds with this Court’s precedent.
A. The Ninth Circuit Erred In Holding That
Class Certification Is Proper Despite The
Parties’ Dispute Over The Extent Of
Uninjured Class Members
Rule 23(b)(3) requires a plaintiff to make an
additional—and “even more demanding,” Comcast
Corp. v. Behrend, 569 U.S. 27, 34 (2013)—showing:
that common questions will “predominate over any
questions affecting only individual class members.”
Fed. R. Civ. P. 23(b)(3). That requirement applies to
the essential elements of a plaintiff’s claim, including
(as here) the injury required to establish antitrust
liability.
Where uninjured class members are
present, the need to determine which class members
have been injured—and, in turn, which may establish
liability—will predominate. See Asacol, 907 F.3d at
53-54; App. 62a (Lee, J., dissenting) (“If a large
number of class members ‘in fact suffered no injury,’
identifying those class members ‘will predominate.’”
(quoting Asocal, 907 F.3d at 53-54)); Tyson Foods, Inc.
v. Bouaphakeo, 577 U.S. 442, 463-64 (2016) (Roberts,
C.J., concurring) (“[I]t is undisputed that hundreds of
class members suffered no injury in this case. The
question is: which ones?” (citations omitted)). Yet,
under the decision below, a district court “cannot”
resolve the parties’ dispute over the extent of
uninjured members within the class—even if a third
of the class may be uninjured—before certification;
24
instead, that is a “merits” issue that must be referred
to a jury. App. 18a. That is error.5
As discussed, the First and D.C. Circuits have held
that the presence of a more-than-de minimis number
of uninjured class members indicates a fatal
predominance problem. Rail Freight, 934 F.3d at 62435 (“5% to 6% constitutes the outer limits of a de
minimis number”); Asacol, 907 F.3d at 54 (“around
10%”). This de minimis threshold is simply a rough
proxy for determining when individualized questions
of which class members are injured will predominate.
The presence of uninjured members is an obvious red
flag that everyone in the class has not “suffered the
same injury.” Wal-Mart Stores, Inc. v. Dukes, 564
U.S. 338, 349-50 (2011) (citation omitted). How could
a class be “sufficiently cohesive to warrant
adjudication by representation,” Amchem Prods., Inc.
v. Windsor, 521 U.S. 591, 623 (1997), if a substantial
portion of that class has not been injured by the
alleged misconduct? As Judge Lee explained, “[i]f
one-third—or half or two-thirds—of the class
members suffered no injury, it follows that ‘common’
issues would not ‘predominate,’ as required under the
text of Rule 23, because those uninjured class
members have little in common with those who have
been harmed.” App. 70a (dissenting). And, as Judge
Bumatay recognized in his initial panel decision,
regardless of the “upper bound of what is de minimis,
5
Whether a class member has been injured at all concerns a
necessary element of liability—antitrust impact—and the
existence of Article III standing. But to the extent that the
degree
of
injury
requires
individualized
damages
determinations, that presents its own predominance problem.
See Comcast, 569 U.S. at 35-36. As Judge Lee noted, this case
raises both problems. App. 66a (Lee, J., dissenting).
25
it’s easy enough to tell that 28% would be out-ofbounds.” Id. at 100a. Even the district court
acknowledged that if 28% of the class were uninjured,
then Plaintiffs would “unquestionably” fail to satisfy
the predominance requirement. Id. at 129a.
The en banc majority nonetheless found that the
class could be certified—despite the number of
uninjured members there may be within the class—
because determining the extent of uninjured class
members would impermissibly inquire into the
“merits.” Id. at 17a-21a. That rationale is sharply
inconsistent with this Court’s precedents. Indeed, it
is virtually identical to the reasoning this Court
rejected from a prior Ninth Circuit en banc panel in
Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir.
2010). In Wal-Mart, the Ninth Circuit certified a Title
VII class on the premise that the plaintiffs’ proffered
expert testimony was capable of proving liability on a
classwide basis. Similar to here, the Ninth Circuit
found that, “[w]hile a jury may ultimately agree with
Wal-Mart that . . . Dr. Bielby’s analysis [does not
show] Wal-Mart engaged in actual gender
discrimination, that question must be left to the
merits stage of the litigation.” Id. at 603. This Court
reversed, holding that a district court cannot simply
accept a plaintiff’s proffer of common harm, but
instead must engage in a “rigorous analysis” of
whether the prerequisites of certification have been
met, even if that analysis “overlap[s] with the merits
of the plaintiff’s underlying claim.” Wal-Mart, 564
U.S. at 350-51. And the Court concluded that the
class could not be certified because, notwithstanding
the plaintiff’s expert’s proffer to the contrary, the
claims at issue in Wal-Mart did not, in fact, “depend
26
upon a common contention” that was “capable of
classwide resolution.” Id. at 350.
Yet, here, the Ninth Circuit held that it was
enough for a plaintiff to proffer evidence that might
establish Rule 23’s requirements have been satisfied.
In the en banc majority’s view, so long as Plaintiffs’
evidence was “capable of” showing injury, “it [was] for
the jury, not the court, to decide” whether up to a
third of the class was, in fact, uninjured. App. 40a41a. But, as even the district court appeared to
recognize, the extent of uninjured members is a
predicate for determining whether the predominance
requirement is satisfied. Id. at 129a (recognizing that
if 28% of the class were uninjured, predominance
would “unquestionably” not be satisfied).
By
certifying a class where a third of its members may be
uninjured, the district court essentially certified a
class that may or may not satisfy the predominance
requirement—depending on what the jury later finds.
That “certify now, decide later” approach abdicates
the district court’s vital gate-keeping role in
determining whether Rule 23 is met. See Comcast,
569 U.S. at 35 (“[O]ur cases requir[e] a determination
that Rule 23 is satisfied, even when that requires
inquiry into the merits of the claim”).
The Ninth Circuit’s repeated use of the term
“capable of” classwide resolution to justify its rule was
misplaced. App. 43a. As this Court explained in WalMart, an issue is “capable of classwide resolution”
only if it can be “resolve[d]” for all class members “in
one stroke.” 564 U.S. at 350. It is not enough for a
district court simply to inquire whether the plaintiffs
have proffered evidence supporting a plausible
inference of classwide injury. Plaintiffs can virtually
always present an expert report proffering such
27
evidence, as the plaintiffs did in Wal-Mart itself. Id.
at 354-55. Rather, a court must also ask whether
there are individualized reasons—reasons that the
defendants are entitled to litigate—that particular
class members may have escaped injury. If so, the
issue of injury does not stand or fall for all class
members together, and cannot be resolved in “one
stroke” at a classwide trial based only on the success
or failure of the plaintiffs’ proposed common proof.
The district court thus was required to resolve the
experts’ dispute over whether Plaintiffs’ model
actually shows classwide injury. If Defendants’
expert is correct that Plaintiffs’ model fails to show
injury for a third of the class, that is not just a
“merits” problem to be deferred for trial—it is a red
flag that there is a fatal predominance defect. Yet,
the district court made clear that it declined to resolve
“which expert is correct,” even while recognizing that
Dr. Johnson’s “criticisms are serious.” App. 140a.
And the Ninth Circuit affirmed that ruling, declaring
that “the persuasiveness of Dr. Mangum’s analysis is
not at issue at this phase of the proceeding.” Id. at
27a n.16 (emphasis added). That ruling squarely
conflicts with the decisions of this Court, which
require a district court to determine whether Rule
23’s requirements are met before certifying a class.
See Wal-Mart, 564 U.S. at 350; Comcast, 569 U.S. at
35-36; App. 61a-62a (Lee, J., dissenting).
Deferring this critical issue to a class trial on the
merits also violates the Rules Enabling Act and its
“instruction that use of the class device cannot
‘abridge . . . any substantive right.’” Tyson Foods, 577
U.S. at 455 (quoting 28 U.S.C. § 2072(b)). Ordinarily,
a plaintiff who has not been injured cannot invoke the
power—and machinery—of the federal courts to
28
subject a defendant to the pain of litigation. But the
decision below allows a class including potentially
thousands of uninjured members to proceed to a class
trial, which could deprive defendants of the ability to
challenge liability on an individualized basis. That
discrepancy “violate[s] the Rules Enabling Act by
giving plaintiffs and defendants different rights in a
class proceeding than they could have asserted in an
individual action.” Id. at 458.
Likewise, certifying classes populated with
uninjured class members presents fundamental
Article III concerns. “Article III does not give federal
courts the power to order relief to any uninjured
plaintiff, class action or not,” and, accordingly, “if
there is no way to ensure that the jury’s damages
award goes only to injured class members, that award
cannot stand.” Id. at 466 (Roberts, C.J., concurring).
The Ninth Circuit’s approach flouts this principle by
permitting the certification of classes engorged with
uninjured individuals, with nothing to prevent
damages (or settlements) being directed to such
individuals—a particular concern given the enormous
pressures for settlement as soon as a class is certified,
regardless of how strong a defendant’s defenses to the
claims may be on the merits. See infra at 32-33.
The result will be “monstrously oversized classes”
that contravene Rule 23, this Court’s precedent, and
Article III itself. App. 71a (Lee, J., dissenting).
B. The Ninth Circuit Erred In Allowing
Plaintiffs To Establish Classwide Impact
Through Averaging Assumptions
The Ninth Circuit’s ruling that averaging
assumptions are broadly permissible under Tyson
29
Foods whenever a reasonable juror could find the
assumption “plausible” at a trial is also deeply flawed.
Tyson Foods involved a claim for overtime
payments under the Fair Labor Standards Act
(FLSA). This Court explained that, under Anderson
v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), when
an “employer[] [has] violate[d] their statutory duty to
keep proper records,” an FLSA claimant may
establish her hours worked from a representative
sample to prove her own injury. 577 U.S. at 456.
Moreover, in Tyson Foods, plaintiffs were similarly
situated—“each employee worked in the same facility,
did similar work, and was paid under the same
policy.”
Id. at 459.
For these reasons, the
representative study in Tyson Foods “could have been
sufficient to sustain a jury finding as to hours worked
if it were introduced in each employee’s individual
action.” Id. And reliance on that study did not
“deprive [the defendant] of its ability to litigate
individual defenses,” because “there w[as] no
alternative means for the employees to establish their
hours worked,” in light of their employer’s recordkeeping failures. Id. at 457 (emphasis added).
In so holding, the Tyson Foods Court contrasted
Wal-Mart, where the Court refused to permit the
plaintiffs to rely on representative evidence of alleged
discrimination across workplaces. In Wal-Mart, the
Court explained, “the experiences of the employees
. . . bore little relationship to one another.” Id. at 459.
Thus, because “the employees [there] were not
similarly situated,” they could not “have prevailed in
an individual suit by relying on [representative
evidence] detailing the ways in which other
employees were discriminated against.” Id. at 458
(emphasis added). Thus, even assuming it was
30
admissible, the representative evidence in Wal-Mart,
was not permissible classwide proof to satisfy Rule 23,
because it could not “sustain a jury finding” in each
class-member’s “individual action.” Id. at 459.
In the decision below, the Ninth Circuit en banc
majority disavowed the court’s prior precedent
holding that Tyson Foods is limited to the “wage and
hour context” and, in its place, adopted a rule of
astonishing breadth. App. 19a n.11 (citation omitted).
The court held that evidence that averages impact
across class members can justify class certification so
long as it would be “admissible” and “not
implausible.” Id. at 39a-41a. But as Wal-Mart shows,
admissibility is not sufficient to allow the use of
representative evidence to satisfy Rule 23. 564 U.S.
at 354 (noting that even if it were admissible,
plaintiffs’ expert’s “testimony does nothing to advance
respondents’ case”). Rather, under Tyson Foods, a
plaintiff must show that the representative evidence
“could have been sufficient to sustain a jury finding
. . . if it were introduced in each [class member’s]
individual action,” under the specific law governing
that claim. Tyson Foods, 577 U.S. at 459 (emphasis
added); see Asacol, 907 F.3d at 54 (evidence must be
both “admissible and sufficient to prove that any
given individual class member was injured”).
Here, the representative evidence plainly would
not have been “sufficient to sustain” a jury finding on
injury in an individual action. Unlike in Tyson Foods,
(1) there is no substantive rule allowing a plaintiff to
show
antitrust
impact
through
averaging
assumptions in an individual case, and (2) the class
members here are not similarly situated; there are
innumerable individualized factors differentiating
class members. The individual actions involving
31
purchasers who opted out of the class prove the point.
More than 100 direct purchasers opted out of the
proposed DPP class and filed their own individual
actions against defendants—yet none relied on
Plaintiffs’ averaging assumptions to attempt to show
injury. That confirms that the key assumption
underpinning Tyson Foods is inapplicable here. 577
U.S. at 456-57 (relying on the premise that “each
employee likely would have had to introduce” the
same representative study in their individual case).
The Ninth Circuit’s decision is flawed in another
important respect. As Judge Bumatay explained in
the initial panel decision, even if representative
evidence might be allowed in some circumstances, a
district court must rigorously analyze that evidence
to ensure that it is not masking individualized
differences among class members before certifying
any class. See App. 95a; Tyson Foods, 577 U.S. at 467
(Thomas, J., dissenting) (“Our precedents” require
that, “[b]efore class action plaintiffs can use
representative evidence in this way, district courts
must undertake a rigorous analysis to ensure that
such evidence is sufficiently probative of the
individual issue to make it susceptible to classwide
proof.”). The district court below, however, never
engaged in that critical analysis here.
The upshot is that, in the Ninth Circuit, a plaintiff
can now “prevail on class certification by merely
offering a well-written and plausible expert opinion.”
App. 63a (Lee, J., dissenting).
32
III. THE
QUESTIONS
PRESENTED
EXTRAORDINARILY IMPORTANT
WARRANT REVIEW IN THIS CASE
ARE
AND
1. This case is one of the most closely watched
class actions in more than a decade. Respondents
themselves have recognized that “[t]his case presents
questions of exceptional importance.” C.A. Resp. to
En Banc Order 13 (C.A. Doc. No. 117). And the Ninth
Circuit believed that the questions were so important
that it not only granted rehearing en banc, but
initiated en banc proceedings sua sponte. The rulings
in this case have already been cited more than sixty
times in judicial opinions, underscoring how quickly
the decision below can—and will—take root.
None of this is surprising.
The questions
presented “strike[] at the heart” of class certification
under Rule 23(b)(3). Asacol, 907 F.3d at 51. And class
certification is the seminal event in class litigation.
As Judge Lee observed, “[i]f a court certifies a class,
the potential liability at trial becomes enormous,
maybe even catastrophic, forcing companies to settle
even if they have meritorious defenses.” App. 56a
(Lee, J., dissenting); Richard A. Nagareda, Class
Certification in the Age of Aggregate Proof, 84 N.Y.U.
L. Rev. 97, 99 (2009) (“With vanishingly rare
exception[s], class certification sets the litigation on a
path toward resolution by way of settlement, not fullfledged testing of the plaintiffs’ case by trial.”).
Nowhere is this pressure greater than in the antitrust
context, where defendants face the threat of “massive
damages.”
2A Phillip E. Areeda & Herbert
Hovenkamp, Antitrust Law ¶ 331a (5th ed. 2022).
Indeed, Defendant Bumble Bee—a major tuna
supplier—already has been forced into bankruptcy.
33
The requirement that a district court rigorously
analyze whether Rule 23(b)’s requirements are met
before certification is a crucial “safeguard[]” for class
action defendants. Comcast, 569 U.S. at 34. By
permitting class certification without resolving the
extent of uninjured class members and vastly
lowering the threshold for use of averaging
assumptions, the decision below “create[s] an
unacceptable risk” that StarKist will “be held liable to
a large class without adequate proof that each
individual class member” was actually injured. Tyson
Foods, 577 U.S. at 472 (Thomas, J., dissenting). And
it “allow[s] plaintiffs to weaponize Rule 23 to impose
an in terrorem effect on defendants,” compounding
the pressure to settle. App. 68a (Lee, J., dissenting).
The questions presented are also frequently
recurring. “[A]round 10,000 class action lawsuits are
filed annually.” Id. at 59a (Lee, J., dissenting). The
issue of predominance will be at the forefront of a
large majority of those lawsuits, with district courts
frequently grappling with conflicting standards and
rules. Indeed, district courts in the Ninth Circuit are
already relying on the en banc majority’s decision in
this case to justify the certification of classes with
uninjured class members on the basis of dubious
expert evidence. See, e.g., Utne v. Home Depot U.S.A.,
Inc., No. 16-cv-01854, 2022 WL 1443338, at *8 (N.D.
Cal. May 6, 2022); Lytle v. Nutramax Lab’ys, Inc., No.
19-cv-0835, 2022 WL 1600047, at *14, *18 (C.D. Cal.
May 6, 2022).
Yet, class certification disputes
typically escape appellate review, as interlocutory
review is the exception and most defendants are
forced to capitulate to settlement following
certification rather than pursue final judgment.
34
The circuit splits alone are enough to warrant
review. But these conflicts are especially intolerable
given that the Ninth Circuit—the nation’s largest
judicial circuit—is an outlier on these issues. If the
decision below is allowed to stand, it will inevitably
spawn rampant forum-shopping, with plaintiffs
flocking to file the biggest cases—i.e., nationwide
class-actions—in the Ninth Circuit. Moreover, as
Judge Lee explained, the “implications” of the Ninth
Circuit’s decision are not limited to antitrust cases
but will wreak havoc on “a wide sea of class action
cases.” App. 71a (Lee, J., dissenting). It is thus
imperative for the Court to grant certiorari here.
2. This case is also an ideal vehicle to resolve the
questions presented. The questions were pressed and
passed upon at length in opinions by the district
court, the Ninth Circuit panel majority and
concurrence, and the Ninth Circuit en banc majority
and dissent. Well-respected judges at almost every
step of this case have sharply disagreed on the proper
outcome, underscoring the confusion that persists on
these issues. The questions presented are also
outcome-determinative on the crucial class
certification issue here. And because this case comes
to the Court on an interlocutory appeal of a class
certification decision, it does not present the
complications that often attend post-verdict appeals,
such as the problem of untangling damages awarded
to classes that should not have been certified in the
first place. Cf. Tyson Foods, 577 U.S. at 465-66
(Roberts, C.J., concurring). In short, this case cleanly
presents the Court with a much-needed opportunity
to address pressing issues of class action law.
35
CONCLUSION
The petition for a writ of certiorari should be
granted.
Respectfully submitted,
CHRISTOPHER S. YATES
BELINDA LEE
ASHLEY M. BAUER
LATHAM & WATKINS LLP
505 Montgomery Street
Suite 2000
San Francisco, CA 94111
SAMIR DEGER-SEN
LATHAM & WATKINS LLP
1271 Avenue of the Americas
New York, NY 10020
GREGORY G. GARRE
Counsel of Record
BLAKE E. STAFFORD
LATHAM & WATKINS LLP
555 Eleventh Street, NW
Suite 1000
Washington, DC 20004
(202) 637-2207
gregory.garre@lw.com
Counsel for Petitioners
August 8, 2022
APPENDIX
TABLE OF CONTENTS
Page
Opinion of the United States Court of Appeals
for the Ninth Circuit, Olean Wholesale
Grocery Cooperative, Inc. v. Bumble Bee
Foods LLC, 31 F.4th 651 (9th Cir. 2022) ...........1a
Opinion of the United States Court of Appeals
for the Ninth Circuit, Olean Wholesale
Grocery Cooperative, Inc. v. Bumble Bee
Foods LLC, 993 F.3d 774 (9th Cir. 2021) ........72a
Order of the United States District Court for
the Southern District of California
Granting Motions for Class Certification,
In re Packaged Seafood Products Antitrust
Litigation, 332 F.R.D. 308 (July 30, 2019) ....110a
Order of the United States Court of
Appeals for the Ninth Circuit Regarding
Rehearing En Banc, Olean Wholesale
Grocery Cooperative, Inc. v. Bumble Bee
Foods LLC, No. 19-56514 (9th Cir. Apr. 28,
2021), ECF No. 101 .........................................188a
Order of the United States Court of Appeals for
the Ninth Circuit Granting Rehearing En
Banc,
Olean
Wholesale
Grocery
Cooperative, Inc. v. Bumble Bee Foods
LLC, 5 F.4th 950 (9th Cir. 2021) ....................190a
U.S. Const. art. III, §§ 1-2 .....................................195a
15 U.S.C. § 15 ........................................................196a
28 U.S.C. § 2072 ....................................................199a
Federal Rule of Civil Procedure 23 ......................200a
1a
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
OLEAN
WHOLESALE
GROCERY
COOPERATIVE, INC., Beverly Youngblood,
Pacific Groservice, Inc., DBA Pitco Foods,
Capitol Hill Supermarket, Louise Ann Davis
Matthews, James Walnum, Colin Moore,
Jennifer A. Nelson, Elizabeth Davis-berg,
Laura Childs; Nancy Stiller; Bonnie
Vanderlaan;
Kristin
Millican;
Trepco
Imports and Distribution, Ltd.; Jinkyoung
Moon; Corey Norris; Clarissa Simon; Amber
Sartori; Nigel Warren; Amy Joseph; Michael
Juetten; Carla Lown; Truyen Ton-Vuong,
AKA David Ton; A-1 Diner; Dwayne Kennedy;
Rick Musgrave; Dutch Village Restaurant;
Lisa Burr; Larry Demonaco; Michael Buff;
Ellen Pinto; Robby Reed; Blair Hysni; Dennis
Yelvington; Kathy Durand Gore; Thomas E.
Willoughby III; Robert Fragoso; Samuel
Seidenburg; Janelle Albarello; Michael
Coffey; Jason Wilson; Jade Canterbury; Nay
Alidad;
Galyna
Andrusyshyn;
Robert
Benjamin; Barbara Buenning; Danielle
Greenberg; Sheryl Haley; Lisa Hall; Tya
Hughes; Marissa Jacobus; Gabrielle Kurdt;
Erica Pruess; Seth Salenger; Harold
Stafford; Carl Lesher; Sarah Metivier
Schadt; Greg Stearns; Karren Fabian;
Melissa Bowman; Vivek Dravid; Jody
Cooper; Danielle Johnson; Herbert H.
Kliegerman; Beth Milliner; Liza Milliner;
Jeffrey Potvin; Stephanie Gipson; Barbara
Lybarger; Scott A. Caldwell; Ramon Ruiz;
2a
Thyme Cafe & Market, Inc.; Harvesters
Enterprises, LLC; Affiliated Foods, Inc.;
Piggly Wiggly Alabama Distributing Co.,
Inc.; Elizabeth Twitchell; Tina Grant; John
Trent; Brian Levy; Louise Adams; Marc
Blumstein;
Jessica
Breitbach;
Sally
Crnkovich; Paul Berger; Sterling King;
Evelyn Olive; Barbara Blumstein; Mary
Hudson; Diana Mey; Associated Grocers of
New
England,
Inc.;
North
Central
Distributors, LLC; Cashwa Distributing Co.
Of Kearney, Inc.; Urm Stores, Inc.; Western
Family Foods, Inc.; Associated Food Stores,
Inc.; Giant Eagle, Inc.; Mclane Company, Inc.;
Meadowbrook
Meat
Company,
Inc.;
Associated Grocers, Inc.; Bilo Holding, LLC;
Winn-Dixie Stores, Inc.; Janey Machin;
Debra L. Damske; Ken Dunlap; Barbara E.
Olson; John Peychal; Virginia Rakipi; Adam
Buehrens; Casey Christensen; Scott Dennis;
Brian Depperschmidt; Amy E. Waterman;
Central Grocers, Inc.; Associated Grocers of
Florida,
Inc.;
Benjamin
Foods
LLC;
Albertsons Companies LLC; H.E. Butt
Grocery Company; Hyvee, Inc.; The Kroger
Co.; Lesgo Personal Chef LLC; Kathy
Vangemert; Edy Yee; Sunde Daniels;
Christopher Todd; Publix Super Markets,
Inc.; Wakefern Food Corp.; Robert Skaff;
Wegmans Food Markets, Inc.; Julie Wiese;
Meijer Distribution, Inc.; Daniel Zwirlein;
Meijer, Inc.; Supervalu Inc.; John Gross &
Company; Super Store Industries; W Lee
Flowers & Co Inc.; Family Dollar Services,
LLC; Amy Jackson; Family Dollar Stores,
3a
Inc.; Katherine Mcmahon; Dollar Tree
Distribution,
Inc.;
Jonathan
Rizzo;
Greenbrier International, Inc.; Joelyna A.
San Agustin; Alex Lee, Inc.; Rebecca Lee
Simoens; Big Y Foods, Inc.; David Ton; Kvat
Food Stores, Inc., DBA Food City; Affiliated
Foods Midwest Cooperative, Inc.; Merchants
Distributors, LLC; Brookshire Brothers, Inc.;
Schnuck Markets, Inc.; Brookshire Grocery
Company; Kmart Corporation; Certco, Inc.;
Rushin Gold, LLC, DBA The Gold Rush;
Unified Grocers, Inc.; Target Corporation;
Simon-Hindi, LLC; Fareway Stores, Inc.;
Moran Foods, LLC, DBA Save-A-Lot;
Woodman’s Food Market, Inc.; Dollar
General Corporation; Sam’s East, Inc.;
Dolgencorp, LLC; Sam’s West, Inc.; Krasdale
Foods, Inc.; Walmart Stores East, LLC; CVS
Pharmacy, Inc.; Walmart Stores East, LP;
Bashas’ Inc.; Wal-mart Stores Texas, LLC;
Marc Glassman, Inc.; Wal-mart Stores, Inc.;
99 Cents Only Stores; Jessica Bartling; Ahold
U.S.A., Inc.; Gay Birnbaum; Delhaize
America, LLC; Sally Bredberg; Associated
Wholesale Grocers, Inc.; Kim Craig;
Maquoketa Care Center; Gloria Emery;
Erbert & Gerbert’s, Inc.; Ana Gabriela Felix
Garcia; Janet Machen; John Frick; Painted
Plate Catering; Kathleen Garner; Robert
Etten; Andrew Gorman; Groucho’s Deli of
Five Points, LLC; Edgardo Gutierrez;
Groucho’s Deli of Raleigh; Zenda Johnston;
Sandee’s Catering; Steven Kratky; Confetti’s
Ice Cream Shoppe; Kathy Lingnofski; End
Payer Plaintiffs; Laura Montoya; Kirsten
4a
Peck; John Pels; Valerie Peters; Elizabeth
Perron; Audra Rickman; Erica C. Rodriguez,
Plaintiffs-Appellees,
and
Jessica Decker, Joseph A. Langston, Sandra
Powers, Grand Supercenter, Inc., The
Cherokee Nation, US Foods, Inc., Sysco
Corporation, Gladys, LLC, Spartannash
Company, Bryan Anthony Reo, Plaintiffs,
v.
BUMBLE BEE FOODS LLC; StarKist Co.;
Dongwon
Industries
Co.,
Ltd.,
Defendants-Appellants,
and
King Oscar, Inc.; Thai Union Frozen Products
PCL; Del Monte Foods Company; Tri Marine
International, Inc.; Dongwon Enterprises;
Del Monte Corp.; Christopher D. Lischewski;
Lion Capital (Americas), Inc.; Big Catch
Cayman LP, AKA Lion/Big Catch Cayman
LP; Francis T Enterprises; Glowfisch
Hospitality; Thai Union North America, Inc.,
Defendants.
No. 19-56514
Argued and Submitted En Banc September 22, 2021
Pasadena, California
Filed April 8, 2022
31 F.4th 651
Before: ANDREW J. KLEINFELD, SIDNEY R.
THOMAS, SUSAN P. GRABER, WILLIAM A.
FLETCHER, RONALD M. GOULD, RICHARD A.
PAEZ, CONSUELO M. CALLAHAN, SANDRA S.
IKUTA, PAUL J. WATFORD, MICHELLE T.
5a
FRIEDLAND and KENNETH K. LEE, Circuit
Judges.
Dissent by Judge LEE.
OPINION
IKUTA, Circuit Judge:
The primary suppliers of packaged tuna in the
United States appeal the district court’s order
certifying three classes of tuna purchasers who allege
the suppliers violated federal and state antitrust
laws. The main issue on appeal is whether the
purchasers’ statistical regression model, along with
other expert evidence, is capable of showing that a
price-fixing conspiracy caused class-wide antitrust
impact, thus satisfying one of the prerequisites for
bringing a class action under Rule 23(b)(3) of the
Federal Rules of Civil Procedure. Because the district
court did not abuse its discretion in concluding that
Rule 23(b)(3) was satisfied, we affirm.
I
1
Bumble Bee, StarKist, and Chicken of the Sea
(COSI), and their parent companies are the largest
suppliers of packaged tuna in the United States
(referred to collectively as the “Tuna Suppliers”).
Their products include packaged tuna sold to direct
purchasers like Costco and Walmart, and foodservice-size tuna products sold to various distributors
for resale. Together, the Tuna Suppliers sell over 80
percent of the packaged tuna in the country.
1
As a result of Appellant Bumble Bee Foods LLC’s
bankruptcy proceeding, appellate proceedings against Bumble
Bee Foods have been held in abeyance due to the automatic stay
imposed by 11 U.S.C. § 362. Dkt. No. 51.
6a
In late 2015, the United States Department of
Justice (DOJ) opened an investigation into the
packaged tuna industry for violations of federal
antitrust law. The DOJ investigation uncovered
evidence of a price-fixing scheme among the Tuna
Suppliers, which led the DOJ to enter multiple
indictments alleging a criminal conspiracy to fix
prices of canned tuna for the period from
approximately November 2011 through December
2013. Bumble Bee, StarKist, and three tuna industry
executives pleaded guilty to the conspiracy. Bumble
Bee’s former CEO was convicted by a jury of a
conspiracy to fix prices.2 COSI cooperated with the
DOJ and admitted to price fixing in exchange for
leniency.
A number of purchasers of the Tuna Suppliers’
products (referred to collectively as the “Tuna
Purchasers”) filed putative class actions against the
Tuna Suppliers alleging violations of various federal
and state antitrust laws. The Tuna Purchasers
alleged that the Tuna Suppliers engaged in a
conspiracy from November 2010 through at least
December 31, 2016 to fix prices of tuna, along with
other collusive activities in furtherance of the pricefixing conspiracy. The Tuna Purchasers alleged that
2
Plea Agreement, United States v. Bumble Bee Foods LLC,
No. 3:17-cr-00249-EMC (N.D. Cal. Aug. 2, 2017), ECF No. 32;
Plea Agreement, United States v. Worsham, No. 3:16-cr-00535EMC (N.D. Cal. Mar. 15, 2017), ECF No. 14; Plea Agreement,
United States v. Cameron, No. 3:16-cr-00501-EMC (N.D. Cal.
Jan. 25, 2017), ECF No. 18; Plea Agreement, United States v.
Hodge, No. 3:17-cr-00297-EMC (N.D. Cal. June 28, 2017), ECF
No. 13; Plea Agreement, United States v. StarKist Co., No. 3:18cr-00513-EMC
(N.D.
Cal.
Nov.
14,
2018),
ECF
No. 24.
7a
they were damaged by the conspiracy because they
paid supra-competitive prices for the Tuna Suppliers’
products.3
The Tuna Purchasers’ actions were consolidated in
a multidistrict litigation pretrial proceeding in the
Southern District of California. The Tuna Purchasers
consist of three putative subclasses: (i) direct
purchasers of the Tuna Suppliers’ products, such as
nationwide retailers and regional grocery stores, who
purchased packaged tuna between June 1, 2011 and
July 1, 2015 (the “DPPs”); (ii) indirect purchasers
of the Tuna Suppliers’ products who bought bulksized tuna products between June 2011 and
December 2016 for prepared food or resale (the
“CFPs”); and (iii) individual end purchasers who
bought the Tuna Suppliers’ products between June 1,
2011 and July 1, 2015 for personal consumption (the
“EPPs”).
In 2018, the Tuna Purchasers moved to certify the
three subclasses under Rule 23 of the Federal Rules
of Civil Procedure to proceed as a class action. See
Fed. R. Civ. P. 23(a), (b)(3). To demonstrate classwide antitrust impact, each subclass proffered
evidence from a different economist, each of whom
employed substantially similar methodologies, to
show that each member of the subclasses had paid an
overcharge caused by the Tuna Suppliers’ conspiracy.
The Tuna Suppliers contested this expert evidence
through their own economists. The district court held
3
Supra-competitive prices are those prices elevated “above
competitive levels” by a market participant who “exercise[s] [its]
market power” to do so. ABA Section of Antitrust Law,
Econometrics: Legal, Practical, and Technical Issues 252 (2d ed.
2014) (“Econometrics”).
8a
a three-day evidentiary hearing on the certification
motion, and heard substantial testimony from each
expert witness. In July 2019, the district court
certified all three subclasses.
The Tuna Suppliers timely appealed, and a panel
of this court vacated the district court’s order and
remanded. See Olean Wholesale Grocery Coop., Inc.
v. Bumble Bee Foods LLC, 993 F.3d 774, 794 (9th Cir.
2021), reh’g en banc granted, 5 F.4th 950 (9th Cir.
2021). We took the case en banc to consider whether
the district court erred in finding that each subclass
satisfied the requirement that “questions of law or
fact common to class members predominate over any
questions affecting only individual members.” Fed. R.
Civ. P. 23(b)(3).
We have jurisdiction under 28 U.S.C. § 1292(e)
and Rule 23(f) of the Federal Rules of Civil Procedure.
We review the decision to certify a class and “any
particular underlying Rule 23 determination
involving a discretionary determination” for an abuse
of discretion. Yokoyama v. Midland Nat’l Life Ins.
Co., 594 F.3d 1087, 1091 (9th Cir. 2010). We review
the district court’s determination of underlying legal
questions de novo, id., and its determination of
underlying factual questions for clear error, see Ruiz
Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1132
(9th Cir. 2016). The Supreme Court has indicated
that a court’s determination regarding what a
statistical regression model may prove or is capable of
proving is not a question of fact, even though there
may be disputed issues of fact raised by “the data
contained within an econometric model.” Comcast
Corp. v. Behrend, 569 U.S. 27, 36 n.5, 133 S.Ct. 1426,
185 L.Ed.2d 515 (2013). Accordingly, we review the
district court’s determination that a statistical
9a
regression model, along with other expert evidence, is
capable of showing class-wide impact, thus satisfying
one of the prerequisites of Rule 23(b)(3) of the Federal
Rules of Civil Procedure, for an abuse of discretion.
See Yokoyama, 594 F.3d at 1091.
II
A
Rule 23 provides a procedural mechanism for “a
federal court to adjudicate claims of multiple parties
at once, instead of in separate suits.” Shady Grove
Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S.
393, 408, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010). As
a claims-aggregating device, Rule 23 “leaves the
parties’ legal rights and duties intact and the rules of
decision unchanged,” id., and it does not affect the
substance of the claims or plaintiffs’ burden of proof,
see 28 U.S.C. § 2072(b).
To take advantage of Rule 23’s procedure for
aggregating claims, plaintiffs must make two
showings. First, the plaintiffs must establish “there
are questions of law or fact common to the class,” as
well as demonstrate numerosity, typicality and
adequacy of representation.4 Fed. R. Civ. P. 23(a). A
4
Rule 23(a) provides:
Prerequisites. One or more members of a class may sue
or be sued as representative parties on behalf of all
members only if:
(1) the class is so numerous that joinder of all members
is impracticable;
(2) there are questions of law or fact common to the
class;
(3) the claims or defenses of the representative parties
are typical of the claims or defenses of the class; and
10a
common question “must be of such a nature that it is
capable of classwide resolution—which means that
determination of its truth or falsity will resolve an
issue that is central to the validity of each one of the
claims in one stroke.” Wal-Mart Stores, Inc. v. Dukes,
564 U.S. 338, 350, 131 S.Ct. 2541, 180 L.Ed.2d 374
(2011). By contrast, an individual question is one
where members of a proposed class will need to
present evidence that varies from member to member.
See Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442,
453, 136 S.Ct. 1036, 194 L.Ed.2d 124 (2016).
Second, the plaintiffs must show that the class fits
into one of three categories. See Fed. R. Civ. P. 23(b).
To qualify for the third category, Rule 23(b)(3), the
district court must find that “the questions of law
or fact common to class members predominate over
any questions affecting only individual members, and
that a class action is superior to other available
methods for fairly and efficiently adjudicating
the controversy.” Fed. R. Civ. P. 23(b)(3).5 “The
predominance inquiry asks whether the common,
aggregation-enabling, issues in the case are more
prevalent or important than the non-common,
aggregation-defeating, individual issues.”
Tyson
Foods, 577 U.S. at 453, 136 S.Ct. 1036 (cleaned up).
(4) the representative parties will fairly and adequately
protect the interests of the class.
5
Rule 23(b)(3) provides in pertinent part:
A class action may be maintained if Rule 23(a) is
satisfied and if . . . (3) the court finds that the questions
of law or fact common to class members predominate
over any questions affecting only individual members,
and that a class action is superior to other available
methods for fairly and efficiently adjudicating the
controversy.
11a
The requirements of Rule 23(b)(3) overlap with the
requirements of Rule 23(a): the plaintiffs must prove
that there are “questions of law or fact common to
class members” that can be determined in one stroke,
see Wal-Mart, 564 U.S. at 349, 131 S.Ct. 2541, in order
to prove that such common questions predominate
over individualized ones, see Tyson Foods, 577 U.S. at
453–54, 136 S.Ct. 1036. Therefore, courts must
consider cases examining both subsections in
performing a Rule 23(b)(3) analysis.
B
Before it can certify a class, a district court must
be “satisfied, after a rigorous analysis, that the
prerequisites” of both Rule 23(a) and 23(b)(3) have
been satisfied. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.
147, 161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982);
Comcast, 569 U.S. at 35, 133 S.Ct. 1426. “[P]laintiffs
wishing to proceed through a class action must
actually prove—not simply plead—that their
proposed class satisfies each requirement of Rule 23,
including
(if
applicable)
the
predominance
requirement of Rule 23(b)(3),” and must carry their
burden of proof “before class certification.”
Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S.
258, 275–76, 134 S.Ct. 2398, 189 L.Ed.2d 339 (2014).
We have not yet prescribed the plaintiffs’ burden
for proving that the prerequisites of Rule 23 are
satisfied. In the absence of direction from Congress
or the Constitution, it is up to the court to prescribe
the burden of proof. See Herman & MacLean v.
Huddleston, 459 U.S. 375, 389–90, 103 S.Ct. 683, 74
L.Ed.2d 548 (1983). To do so, we must consider both
the allocation of “the risk of error between the
litigants” and “the relative importance attached to the
ultimate decision.” Id. at 389, 103 S.Ct. 683 (quoting
12a
Addington v. Texas, 441 U.S. 418, 423, 99 S.Ct. 1804,
60 L.Ed.2d 323 (1979)). The preponderance of the
evidence standard allows both parties to “share the
risk of error in roughly equal fashion,” id. at 390, 103
S.Ct. 683 (quoting Addington, 441 U.S. at 423, 99
S.Ct. 1804), while “[a]ny other standard expresses a
preference for one side’s interests,” id. Therefore, the
preponderance of the evidence standard is “generally
applicable in civil actions.” Id. By contrast, the Court
has “required proof by clear and convincing evidence
where particularly important individual interests or
rights are at stake,” such as termination of parental
rights or involuntary commitment proceedings. Id. at
389, 103 S.Ct. 683.
Applying this test here, the balance of interests in
this case favors prescribing the preponderance of the
evidence standard. The Supreme Court has made
clear that Rule 23 is consistent with the Rules
Enabling Act and does not “abridge, enlarge or modify
any substantive right.” Shady Grove, 559 U.S. at
406–07, 130 S.Ct. 1431 (citing 28 U.S.C. § 2072(b)).
Rule 23 does not “change plaintiffs’ separate
entitlements to relief nor abridge defendants’ rights”
and, instead, alters “only how the claims are
processed.” Id. at 408, 130 S.Ct. 1431. Therefore, the
Supreme Court has concluded that the authorization
of class actions is substantively neutral, even though
it may expose defendants to the imposition of
aggregate liability. Id. Because the application of
Rule 23 to certify a class does not alter the defendants’
rights or interests in a substantive way, there is no
basis for applying a heightened standard of proof
beyond the traditional preponderance standard. We
therefore join our sister circuits in concluding that
plaintiffs must prove the facts necessary to carry the
13a
burden of establishing that the prerequisites of Rule
23 are satisfied by a preponderance of the evidence.6
In carrying the burden of proving facts necessary
for certifying a class under Rule 23(b)(3), plaintiffs
may use any admissible evidence. See Tyson Foods,
577 U.S. at 454–55, 136 S.Ct. 1036 (explaining that
admissibility of evidence at certification must meet all
the usual requirements of admissibility and citing to
Rules 401, 403, and 702 of the Federal Rules of
Evidence). Plaintiffs frequently offer expert evidence,
including statistical evidence or class-wide averages,
to prove that they meet the prerequisites of Rule
23(b)(3). See id. at 455, 136 S.Ct. 1036. Where, as
here, a defendant did not raise a Daubert challenge to
the expert evidence before the district court,7 the
defendant forfeits the ability to argue on appeal that
the evidence was inadmissible, but may still argue
that the evidence is not capable of answering a
common question on a class-wide basis. See Comcast,
569 U.S. at 32 n.4, 133 S.Ct. 1426; Tyson Foods, 577
U.S. at 458–59, 136 S.Ct. 1036.
6
See In re Lamictal Direct Purchaser Antitrust Litig., 957
F.3d 184, 191 (3d Cir. 2020); In re Nexium Antitrust Litig., 777
F.3d 9, 27 (1st Cir. 2015); Messner v. Northshore Univ.
HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012); Alaska Elec.
Pension Fund v. Flowserve Corp., 572 F.3d 221, 228 (5th Cir.
2009); Teamsters Loc. 445 Freight Div. Pension Fund v.
Bombardier Inc., 546 F.3d 196, 202 (2d Cir. 2008)
7
In a class proceeding, defendants may challenge the
reliability of an expert’s evidence under Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d
469 (1993), and Rule 702 of the Federal Rules of Evidence. See
Tyson Foods, 577 U.S. at 459, 136 S.Ct. 1036; see also Comcast,
569 U.S. at 32 n.4, 133 S.Ct. 1426.
14a
In order for the plaintiffs to carry their burden of
proving that a common question predominates, they
must show that the common question relates to a
central issue in the plaintiffs’ claim. See Wal-Mart,
564 U.S. at 349–50, 131 S.Ct. 2541. Therefore,
“[c]onsidering whether ‘questions of law or fact
common to class members predominate’ begins, of
course, with the elements of the underlying cause of
action.” Erica P. John Fund, Inc. v. Halliburton Co.,
563 U.S. 804, 809, 131 S.Ct. 2179, 180 L.Ed.2d 24
(2011) (quoting Fed. R. Civ. P. 23(b)(3)).
The claims at issue here are violations of section 1
of the Sherman Antitrust Act, 15 U.S.C. § 15,
and California’s Cartwright Act, Cal. Bus. & Prof.
Code §§ 16700 et seq.8 The elements of a claim for
such antitrust action are (i) the existence of an
antitrust violation; (ii) “antitrust injury” or “impact”
flowing from that violation (i.e., the conspiracy); and
(iii) measurable damages. See Big Bear Lodging Ass’n
v. Snow Summit, Inc., 182 F.3d 1096, 1101–02 (9th
Cir. 1999); In re Hydrogen Peroxide Antitrust Litig.,
552 F.3d 305, 311 (3d Cir. 2008), as amended (Jan. 16,
2009) (citing 15 U.S.C. § 15). “Antitrust injury” is
8
The DPPs claim a violation of the Sherman Act, while the
CFPs and the EPPs allege violations of California’s antitrust
law, the Cartwright Act, Cal. Bus. & Prof. Code, § 16700 et seq.
The elements of a Cartwright Act claim are “(1) the formation
and operation of the conspiracy, (2) the wrongful act or acts done
pursuant thereto, and (3) the damage resulting from such act or
acts.”
Marsh v. Anesthesia Servs. Med. Grp., Inc., 200
Cal.App.4th 480, 132 Cal. Rptr. 3d 660, 670–71 (2011) (cleaned
up). Because the analysis of a claim under the Cartwright Act
“mirrors the analysis under federal [antitrust] law,” we do not
consider the Cartwright Act claims separately from the federal
antitrust claims. County of Tuolumne v. Sonora Cmty. Hosp.,
236 F.3d 1148, 1160 (9th Cir. 2001).
15a
“injury of the type the antitrust laws were intended to
prevent and that flows from that which makes
defendants’ acts unlawful.” Brunswick Corp. v.
Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct.
690, 50 L.Ed.2d 701 (1977). Damages are measured
only after each plaintiff has demonstrated that the
defendant’s conduct caused the plaintiff to suffer an
antitrust injury. See In re Hydrogen Peroxide, 552
F.3d at 311.
Therefore, to prove there is a common question of
law or fact that relates to a central issue in an
antitrust class action, plaintiffs must establish that
“essential elements of the cause of action,” such as the
existence of an antitrust violation or antitrust impact,
are capable of being established through a common
body of evidence, applicable to the whole class. Id.
(cleaned up). Here, the Tuna Purchasers claim that
they can establish the existence of antitrust impact
through common proof.
C
In making the determinations necessary to find
that the prerequisites of Rule 23(b)(3) are satisfied,
the district court must proceed “just as the judge
would resolve a dispute about any other threshold
prerequisite for continuing a lawsuit.” In re Initial
Pub. Offerings Sec. Litig., 471 F.3d 24, 42 (2d Cir.
2006), decision clarified on denial of reh’g, 483 F.3d
70 (2d Cir. 2007). This means that the court must
make a “rigorous assessment of the available evidence
and the method or methods by which plaintiffs
propose to use the [class-wide] evidence to prove” the
common question in one stroke. In re Hydrogen
Peroxide, 552 F.3d at 312. In addition, the court must
find that this common question (i.e., the “common,
aggregation-enabling” issue) predominates over
16a
individual issues. Tyson Foods, 577 U.S. at 453, 136
S.Ct. 1036.
The determination whether expert
evidence is capable of resolving a class-wide question
in one stroke may include “[w]eighing conflicting
expert testimony” and “[r]esolving expert disputes,”
In re Hydrogen Peroxide, 552 F.3d at 323–24, where
necessary to ensure that Rule 23(b)(3)’s requirements
are met and the “common, aggregation-enabling”
issue predominates over individual issues, Tyson
Foods, 577 U.S. at 453, 136 S.Ct. 1036.9
9
Not all expert evidence is capable of resolving a class-wide
issue in one stroke. Cf. Dissent at 688–89. Courts have
frequently found that expert evidence, while otherwise
admissible under Daubert, was inadequate to satisfy the
prerequisites of Rule 23. For instance, a class did not meet the
prerequisites of Rule 23 where the expert evidence was
inadequate to prove an element of the claim for the entire class,
see Wal-Mart, 564 U.S. at 354, 356, 359, 131 S.Ct. 2541 (holding
that class members failed to establish existence of common
question with respect to Title VII claims because they
“provide[d] no convincing proof of a companywide discriminatory
pay and promotion policy”); where the damages evidence was not
consistent with the plaintiffs’ theory of liability, see Comcast, 569
U.S. at 35, 133 S.Ct. 1426 (holding that at the class certification
stage, “any model supporting a plaintiff’s damages case must be
consistent with its liability case”); where the evidence contained
unsupported assumptions, see In re New Motor Vehicles
Canadian Exp. Antitrust Litig., 522 F.3d 6, 29 (1st Cir. 2008)
(criticizing the unsupported assumption that, absent the
defendants’ anti-competitive conduct, there would have been an
influx of cars from Canada to United States sufficient to
substantially decrease national prices); or where the evidence
demonstrated nonsensical results such as false positives, i.e.,
injury to class members who could not logically have been
injured by a defendant’s conduct, see In re Rail Freight Fuel
Surcharge Antitrust Litig.-MDL No. 1869 (Rail Freight I), 725
F.3d 244, 252–55 (D.C. Cir. 2013) (vacating a certification order
where the plaintiffs’ expert evidence predicted that certain
17a
In determining whether the “common question”
prerequisite is met, a district court is limited to
resolving whether the evidence establishes that a
common question is capable of class-wide resolution,
not whether the evidence in fact establishes that
plaintiffs would win at trial. While such an analysis
may “entail some overlap with the merits of the
plaintiff’s underlying claim,” Wal-Mart, 564 U.S. at
351, 131 S.Ct. 2541, the “[m]erits questions may be
considered [only] to the extent [ ] that they are
relevant to determining whether the Rule 23
prerequisites for class certification are satisfied,”
Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S.
455, 466, 133 S.Ct. 1184, 185 L.Ed.2d 308 (2013); see
also Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983
n.8 (9th Cir. 2011). “Rule 23 grants courts no license
to engage in free-ranging merits inquiries at the
certification stage.” Amgen, 568 U.S. at 466, 133 S.Ct.
1184.
A district court must also resolve disputes about
historical facts if necessary to determine whether the
plaintiffs’ evidence is capable of resolving a common
issue central to the plaintiffs’ claims.10 For instance,
in a case in which a nationwide class of plaintiff
employees alleged nationwide discrimination by their
employer, we held that a district court had to resolve
factual disputes at certification regarding whether
decisions regarding promotions were made at the
plaintiffs had been injured by a price-fixing conspiracy even
though they operated under fixed-price contracts and were not
exposed to overcharges caused by the conspiracy).
10 The district court’s findings at the certification stage “do not
bind the fact-finder on the merits.” In re Hydrogen Peroxide, 552
F.3d at 318.
18a
local level or by upper management. See Ellis, 657
F.3d at 983–84 & n.7. We reasoned that if such
decisions were made only at the local level, plaintiffs
“would face an exceedingly difficult challenge in
proving that there are questions of fact and law
common to the nationwide class.” Id. at 983–84.
Nevertheless, the district court was not required to
resolve factual disputes regarding ultimate issues on
the merits, such as “whether women were in fact
discriminated against” or whether the defendant
“does in fact have a culture of gender stereotyping and
paternalism.” Id. at 983; see also id. at 983 n.8.
Resolving such issues would “put the cart before the
horse” by requiring plaintiffs to show at certification
that they will prevail on the merits. Amgen, 568 U.S.
at 460, 133 S.Ct. 1184.
Therefore, a district court cannot decline
certification merely because it considers plaintiffs’
evidence relating to the common question to be
unpersuasive and unlikely to succeed in carrying the
plaintiffs’ burden of proof on that issue. See id. at
459–60, 133 S.Ct. 1184.
Rather, Tyson Foods
established the rule that if “each class member could
have relied on [the plaintiffs’ evidence] to establish
liability if he or she had brought an individual action,”
and the evidence “could have sustained a reasonable
jury finding” on the merits of a common question,
Tyson Foods, 577 U.S. at 455, 136 S.Ct. 1036, then a
district court may conclude that the plaintiffs have
carried their burden of satisfying the Rule 23(b)(3)
requirements as to that common question of law or
19a
fact.11 In Tyson Foods, for instance, the Court held
that if the class members had pursued individual
lawsuits, each could have relied on the expert
evidence purporting to show how long it took to don
and doff protective equipment. Tyson Foods, 577 U.S.
at 456–57, 136 S.Ct. 1036. Accordingly, the Court
concluded that such expert evidence was capable of
answering a common question for the entire class in
one stroke, and could reasonably sustain a jury
verdict in favor of the plaintiffs, even though a jury
could still decide that the evidence was not
persuasive. Id. at 459–60, 136 S.Ct. 1036; see also id.
at 457, 136 S.Ct. 1036 (explaining that the question
whether the expert’s “study was unrepresentative or
inaccurate” was “itself common to the claims made by
all class members”). The rule that the evidence need
merely be capable of resolving a common question on
a class-wide basis holds true whether the common
question concerns an element of plaintiffs’ claim, see
11 Senne
v. Kansas City Royals Baseball Corp. referenced
Tyson Foods’s rule that a district court may deny the use of
admissible expert evidence to meet the requirements of Rule
23(b)(3) only if “ ‘no reasonable juror’ could find it probative of
whether an element of liability was met,” and then stated in
passing that “Tyson expressly cautioned that this rule should be
read narrowly and not assumed to apply outside of the wage and
hour context.” 934 F.3d 918, 947 & n.27 (9th Cir. 2019) (citing
Tyson Foods, 577 U.S. at 459–60, 136 S.Ct. 1036). But Tyson
Foods contains no such limitation; rather, it declined to adopt
“broad and categorical rules governing the use of representative
and statistical evidence in class actions,” and indicated that
district courts should evaluate the sufficiency of plaintiffs’
evidence on a case-by-case basis, depending on the purpose for
which the expert evidence is being introduced and the
underlying cause of action. 577 U.S. at 459–60, 136 S.Ct. 1036.
Accordingly, we disapprove this dictum in Senne, 934 F.3d at 947
n.27.
20a
Amgen, 568 U.S. at 468–69, 133 S.Ct. 1184
(materiality in a Rule 10b-5 action), or a fact that
must be determined to establish liability, see Tyson
Foods, 577 U.S. at 450, 136 S.Ct. 1036 (time spent
donning and doffing protective equipment per week).
Nor can a district court decline to certify a class
that
will
require
determination
of
some
individualized questions at trial, so long as such
questions do not predominate over the common
questions. See Fed. R. Civ. P. 23(b)(3). “When one or
more of the central issues in the action are common to
the class and can be said to predominate, the action
may be considered proper under Rule 23(b)(3) even
though other important matters will have to be tried
separately, such as damages or some affirmative
defenses peculiar to some individual class members.”
Tyson Foods, 577 U.S. at 453, 136 S.Ct. 1036 (internal
quotation marks omitted).
Thus, Halliburton
concluded that so long as plaintiffs could show that
their evidence is capable of proving the prerequisites
for invoking the presumption of reliance (a key
element in a securities class action) on a class-wide
basis, the fact that the defendants would have the
opportunity at trial to rebut that presumption as to
some of the plaintiffs did not raise individualized
questions sufficient to defeat predominance. 573 U.S.
at 276, 134 S.Ct. 2398. “That the defendant might
attempt to pick off the occasional class member here
or there through individualized rebuttal does not
cause individual questions to predominate.” Id.
When individualized questions relate to the injury
status of class members, Rule 23(b)(3) requires that
the court determine whether individualized inquiries
about such matters would predominate over common
questions. See Cordoba v. DIRECTV, LLC, 942 F.3d
21a
1259, 1277 (11th Cir. 2019).12 In an analogous
context, we have held that a district court is not
precluded from certifying a class even if plaintiffs may
have to prove individualized damages at trial, a
conclusion implicitly based on the determination that
such individualized issues do not predominate over
common ones. Vaquero v. Ashley Furniture Indus.,
Inc., 824 F.3d 1150, 1155 (9th Cir. 2016); see also
Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d
979, 988 (9th Cir. 2015); In re Urethane, 768 F.3d
1245, 1255 (10th Cir. 2014) (“The presence of
individualized damages issues” does not preclude a
court from certifying a class because “[c]lass-wide
proof is not required for all issues”).
Therefore, we reject the dissent’s argument that
Rule 23 does not permit the certification of a class
that potentially includes more than a de minimis
number of uninjured class members. Dissent at 691–
92. This position is inconsistent with Rule 23(b)(3),
which requires only that the district court determine
after rigorous analysis whether the common question
predominates over any individual questions,
including individualized questions about injury or
entitlement to damages. See Fed. R. Civ. P. 23(b)(3).13
12 Because the Supreme Court has clarified that “[e]very class
member must have Article III standing in order to recover
individual damages,” TransUnion LLC v. Ramirez, ––– U.S.
––––, 141 S. Ct. 2190, 2208, 210 L.Ed.2d 568 (2021), Rule 23
also requires a district court to determine whether
individualized inquiries into this standing issue would
predominate over common questions, see Cordoba, 942 F.3d at
1277.
13 The dissent focuses on policy reasons why district courts
should refrain from certifying classes that may include more
than a de minimis number of uninjured class members. Dissent
22a
A district court is in the best position to determine
whether individualized questions, including those
regarding class members’ injury, “will overwhelm
common ones and render class certification
inappropriate under Rule 23(b)(3).” Halliburton, 573
U.S. at 276, 134 S.Ct. 2398; see also Ruiz Torres, 835
F.3d at 1137 (stating that “the district court is well
situated to winnow out” a fortuitously non-injured
subset of class members). We “uphold a district
court’s determination that falls within a broad range
of permissible conclusions.” Hung Lam v. City of San
Jose, 869 F.3d 1077, 1084 (9th Cir. 2017) (quoting
Kode v. Carlson, 596 F.3d 608, 612 (9th Cir. 2010)).14
at 685–86, 690–91, 691–92. But we are bound to apply Rule
23(b)(3) as written, regardless of policy preferences. And
contrary to the dissent’s assertion, our conclusion that courts
must apply Rule 23(b)(3) on a case-by-case basis, rather than
rely on a per se rule that a class cannot be certified if it includes
more than a de minimis number of uninjured class members, is
consistent with the approach taken by our sister circuits.
Dissent at 692. Neither of the two cases cited by the dissent, In
re Rail Freight Fuel Surcharge Antitrust Litig.-MDL No. 1869
(Rail Freight II), 934 F.3d 619 (D.C. Cir. 2019) and In re Asacol
Antitrust Litig., 907 F.3d 42 (1st Cir. 2018), adopted a per se
rule. Rather, based on the particular facts of the cases before
them, our sister circuits held that Rule 23(b)(3)’s predominance
requirement is not satisfied when the need to identify uninjured
class members “will predominate and render an adjudication
unmanageable.” In re Asacol Antitrust Litig., 907 F.3d at 53–54;
see also Rail Freight II, 934 F.3d at 625 (holding that a district
court did not abuse its discretion in denying class certification
where the plaintiffs “proposed no further way—short of fullblown, individual trials” to determine the common question of
whether class members were injured).
14 Nevertheless, a court must consider whether the possible
presence of uninjured class members means that the class
definition is fatally overbroad. When “a class is defined so
broadly as to include a great number of members who for some
23a
III
We now turn to the Tuna Suppliers’ arguments
and consider them in light of this legal framework.
We begin with the DPP class, which is the focus of the
Tuna Suppliers’ arguments. In order to prevail on
their antitrust claim, the DPP class must prove that
the Tuna Suppliers engaged in a conspiracy (an
antitrust violation), which resulted in antitrust
impact in the form of higher prices paid by each
reason could not have been harmed by the defendant’s allegedly
unlawful conduct, the class is defined too broadly to permit
certification.” Messner, 669 F.3d at 824; see also Mazza v. Am.
Honda Motor Co., 666 F.3d 581, 596 (9th Cir. 2012) (holding that
the class definition in a false advertising action was fatally
overbroad where many members learned that the advertising
was misleading before purchase or had never been exposed to
the allegedly misleading advertisements); In re Asacol, 907 F.3d
at 55–58 (holding that the class did not meet Rule 23(b)(3)
requirements because the plaintiffs’ evidence showed that
thousands of plaintiffs who were loyal to brand-name drugs
would not have purchased the generic drugs that were the
subject of the price-fixing conspiracy). In such a case, the court
may redefine the overbroad class to include only those members
who can rely on the same body of common evidence to establish
the common issue. See, e.g., Mazza, 666 F.3d at 596 (holding
that false advertising “class must be defined in such a way as to
include only members who were exposed to advertising that is
alleged to be materially misleading”). A court may not, however,
create a “fail safe” class that is defined to include only those
individuals who were injured by the allegedly unlawful conduct.
See Ruiz Torres, 835 F.3d at 1138 n.7 (internal quotation marks
omitted). “Such a class definition is improper because a class
member either wins or, by virtue of losing, is defined out of the
class and is therefore not bound by the judgment.” Messner, 669
F.3d at 825. But, ultimately, the problem of a potentially “overinclusive” class “can and often should be solved by refining the
class definition rather than by flatly denying class certification
on that basis.” Id.
24a
member of the class, which in turn led to measurable
damages. The question whether each member of the
DPP class suffered antitrust impact “is central to the
validity of each one of the [DPP] claims.” Wal-Mart,
564 U.S. at 350, 131 S.Ct. 2541.
The central
questions on appeal are whether the expert evidence
presented by the DPPs is capable of resolving this
issue “in one stroke,” id., and whether this common
question predominates over any individualized
inquiry. We conclude that the district court did not
abuse its discretion in certifying the class.
A
The centerpiece of the DPPs’ claim that each
member of the class suffered antitrust impact is
economist Dr. Russell Mangum’s expert testimony
and report. According to his testimony and report, Dr.
Mangum reviewed a comprehensive range of
available information to develop an understanding of
the nature of the market at issue and the details of
the Tuna Suppliers’ price-fixing conspiracy. That
information included court filings, the Tuna
Suppliers’ guilty pleas, discovery materials such as
the Tuna Suppliers’ business records concerning their
sales of packaged tuna, deposition testimony, publicly
available information regarding the tuna industry,
and data regarding supply and demand factors that
affect the manufacture, sale and consumption of
packaged tuna such as raw material prices and
details about customer preferences.
After examining the economic structure of the
tuna market and the available record evidence
concerning the Tuna Suppliers’ behavior, Dr.
Mangum determined that the packaged tuna market
was conducive to price-fixing, given the Tuna
Suppliers’ dominance in the market, the attendant
25a
barriers to entry for competitors, the Tuna Suppliers’
use of price lists for their products, and other
characteristics of the packaged tuna industry.
According to Dr. Mangum, these findings supported a
baseline economic theory that the Tuna Suppliers’
collusive behavior would affect the DPPs on a classwide basis. Dr. Mangum then used a number of
different econometric tools to evaluate whether
quantitative evidence supported this theory.15
Dr. Mangum first performed a pricing correlation
test, which demonstrated that the prices of the Tuna
Suppliers’ products moved up or down together
regardless of product or customer type, and thus
supported the proposition that the Tuna Suppliers’
collusion had a common, supra-competitive impact on
their prices. Based on this evidence, Dr. Mangum
concluded that the Tuna Suppliers’ collusion would
result in higher prices that would affect direct
purchasers on a class-wide basis, which was
consistent with his original theory. This finding is
also consistent with “the prevailing [economic] view
[that] price-fixing affects all market participants,
creating an inference of class-wide impact even when
prices are individually negotiated.” In re Urethane,
768 F.3d at 1254.
To further explore whether the DPPs were subject
to an overcharge caused by the price-fixing conspiracy
(rather than by other variables that could affect
15 Econometrics is “the application of statistical methods to
economic data . . . to draw inferences about economic
relationships from observed data on market outcomes [i.e.,
price], even when those outcome are the result of complex
interactions among numerous economic forces.” Econometrics
at 1.
26a
prices) on a class-wide basis, Dr. Mangum constructed
a statistical model using a multiple regression
analysis. Regression analyses are used to determine
“the relationship between an unknown [dependent]
variable [such as price] and one or more independent
variables [e.g., transaction characteristics, and
supply and demand factors] that are thought to
impact the dependent variable.”
Id. at 1260
(quotation marks omitted) (citing Michael J. Saks, et
al., Reference Manual on Scientific Evidence 179, 181
(2d ed. 2000)). If a regression model uses “appropriate
independent [or explanatory] variables,” it can test
and isolate the extent to which the actual prices paid
by plaintiffs are higher because of a defendant’s
collusive behavior. Id. Assuming Dr. Mangum’s
regression model met this standard, it could provide
further evidence that the DPPs were impacted by the
Tuna Suppliers’ collusion on a classwide basis.
In simple terms, Dr. Mangum first aggregated (or
“pooled”) the actual tuna sale transaction data for the
Tuna Suppliers’ sales to the DPPs during both the
alleged conspiracy period and during benchmark
periods before and after the conspiracy. Dr. Mangum
then identified a number of variables (referred to as
independent or explanatory variables) that could
affect the price of tuna, including product
characteristics, input costs, customer type, and
variables related to consumer preference and
demand, such as disposable income, seasonal effects,
and geography.
The model then isolated (or
“controlled for”) the effect of these explanatory
variables on the prices paid by DPPs, which allowed
the model to isolate the effect that the conspiracy by
itself had on the prices paid by DPPs. When all the
tuna sale transactions were aggregated, and the
27a
explanatory variables (other than the price-fixing
conspiracy) were controlled for, the model showed
that the DPPs paid 10.28 percent more for tuna
during the conspiracy period than they did during the
benchmark periods. Dr. Mangum labeled this 10.28
percent as the “overcharge,” meaning the common
amount paid by the DPPs resulting from the collusive
behavior alone.
This result was statistically
significant, meaning that there was a less than five
percent chance that the higher prices during the
price-fixing conspiracy was a product of chance.
Thus, by isolating the common overcharge amount,
Dr. Mangum’s regression model was further
confirmation of his theory that the Tuna Suppliers’
collusion had a class-wide effect.16
Dr. Mangum performed several tests (which he
referred to as “robustness checks”) to confirm that his
regression model was an appropriate tool to be used
by the entire DPP class to show common impact.
These tests were used to confirm the reliability of the
16 The
dissent argues that Dr. Mangum’s opinion is not
persuasive because large retailers have bargaining power and
can extract price discounts, promotional credits, and rebates.
Dissent at 689–90. As the dissent concedes, Dissent at 690 &
n. 5, Dr. Mangum took these issues into account (to the extent
that the Tuna Suppliers provided relevant data). After doing so,
Dr. Mangum ran the regression model using both gross and net
prices and determined that his regression model continued to
produce a statistically significant overcharge. Dr. Mangum
therefore reasoned that discounts and promotions did not affect
his pooled model or his conclusion of class-wide impact.
Although the dissent argues that (in the dissent’s view)
Dr. Mangum did not consider price discounts, promotional
credits, and rebates “adequately,” Dissent at 690 & n. 5, the
persuasiveness of Dr. Mangum’s analysis is not at issue at this
phase of the proceeding.
28a
model, and, according to Dr. Mangum, the test results
supported his ultimate conclusion that the
model could be used to show class-wide injury. First,
Dr. Mangum changed the model to evaluate the
overcharge specific to each individual defendant. The
results showed that prices were still elevated above
competitive levels during the collusion period.
Second, Dr. Mangum changed the model to evaluate
the overcharge specific to certain products with
different characteristics, such as fish type and
package type. These tests showed that each type of
product tested was impacted to a similar degree.
Third, Dr. Mangum changed the model to evaluate
the overcharge based on customer types.17 This test
showed that there were large, statistically significant
overcharges for every customer type.
These
robustness checks confirmed Dr. Mangum’s theory
that the DPPs paid an overcharge during the
conspiracy period. Finally, Dr. Mangum used the
output of the pooled regression model to predict the
but-for prices (i.e., what the price of tuna during the
conspiracy period would have been without the
overcharge caused by the conspiracy), and compared
these predicted but-for prices to the actual prices paid
by the DPP class. This comparison showed that 94.5
percent of the purchasers had at least one purchase
above the predicted but-for price, which again
provided further evidence that the conspiracy had a
common impact on all or nearly all the members of
17 Direct
purchasers were grouped into categories called
customer types, which included Retail, Club, Special Market,
Food Service, Mass Merchandise, Discount, and e-Commerce.
29a
the DPP class.18 Dr. Mangum therefore concluded
that his aggregated regression model provided
econometric evidence that the conspiracy resulted in
higher prices paid by all or nearly all DPPs.
According to Dr. Mangum, the results were strong
evidence of common, class-wide antitrust impact.19
In sum, Dr. Mangum’s findings about the tuna
market and the Tuna Suppliers’ collusive behavior,
his pricing correlation test, his regression model, and
his robustness checks all confirmed his theory that
the conspiracy resulted in substantial price impacts,
18 According to Dr. Mangum, the purpose of this robustness
test was to demonstrate that his regression model was sound.
Contrary to the dissent’s assertion, Dissent at 686, Dr. Mangum
did not “suggest” that 5.5 percent of the class were uninjured.
Rather, Dr. Mangum concluded that each class member was
injured by supra-competitive prices, and used a different
methodology for calculating damages for each member of the
class. See infra at n.19. The Tuna Suppliers do not develop the
argument that the results of this robustness test preclude
certification of the class as currently defined. Therefore, we do
not address this issue here. See United States v. SinenengSmith, ––– U.S. ––––, 140 S. Ct. 1575, 1578, 206 L.Ed.2d 866
(2020); see also Tyson Foods, 577 U.S. at 460, 136 S.Ct. 1036
(declining to reach a similar issue).
19 Although the regression model primarily served as evidence
of class-wide antitrust impact, Dr. Mangum used the overcharge
derived from the regression model to estimate class-wide
damages. This estimate was developed by multiplying the
overcharge estimate of 10.28 percent by the appropriate sales
volume for the defendants, adjusted by several pertinent factors.
Dr. Mangum used the same method to estimate damages for
each of the class representatives identified in the complaint. The
Tuna Suppliers do not challenge Dr. Mangum’s damages
methodology. Thus, the dissent’s contention that the court has
created a “sweeping rule that gives a free pass to the intractable
problem of highly individualized damages analyses” misses the
mark. Dissent at 690.
30a
and that the impact was common to the DPPs during
the collusion period.
B
The Tuna Suppliers attacked Dr. Mangum’s
expert report on multiple fronts, but primarily relied
on their rebuttal expert, economist Dr. John Johnson,
who made multiple criticisms of Dr. Mangum’s
methodology. The essence of Dr. Johnson’s critique
was that it was not statistically appropriate to use a
pooled regression model for transactions in the tuna
market, given the multiple individualized differences
among class members, such as disparities
in negotiating tactics and bargaining power. Dr.
Mangum’s use of pooled data, Dr. Johnson alleged,
masked these individual differences among class
members. Thus, Dr. Johnson claimed, Dr. Mangum’s
conclusion that the conspiracy had a class-wide
impact based on a uniform overcharge did not reflect
the real world.
Dr. Johnson supported this allegation on several
grounds. First, Dr. Johnson claimed that a statistical
tool called a Chow test20 shows that the data relating
to tuna transactions should not be pooled due to
individual
differences
in
each
purchaser’s
transactions. Second, Dr. Johnson criticized Dr.
Mangum’s calculation that 94.5 percent of DPPs
whose transactional data were included in the model
had at least one purchase at a price above the
predicted but-for price. According to Dr. Johnson, this
calculation was misleading because it was premised
20 A Chow test is a statistical test designed to “determine
whether it is appropriate to pool potential subgroups when
estimating the average effect of the alleged conspiracy.”
Econometrics at 358.
31a
on what Dr. Johnson characterized as the faulty
assumption that all direct purchasers paid the same
10.28 percent overcharge throughout the proposed
class period. Instead, Dr. Johnson performed his own
test of Dr. Mangum’s model. As part of this test, Dr.
Johnson changed the model to evaluate overcharge
based on each individual customer. According to Dr.
Johnson, the test showed that of the 604 direct
purchasers who bought from the Tuna Suppliers
during the proposed class period, the model did not
estimate a positive and statistically significant
overcharge (attributable to the conspiracy) for 169
direct purchasers (or 28 percent). Therefore, Dr.
Johnson argued that the plaintiffs could not rely on
the model to demonstrate class-wide impact of the
conspiracy.21
Dr. Johnson made several additional critiques in
arguing that Dr. Mangum’s model was not capable of
demonstrating class-wide impact. First, Dr. Johnson
argued that Dr. Mangum’s model showed false
positives. According to Dr. Johnson, an application of
Dr. Mangum’s regression model showed that several
DPP class members had paid an overcharge when
they purchased tuna products from non-defendants,
i.e., tuna suppliers who had not participated in the
conspiracy.
Second, Dr. Johnson attacked the
21 Dr. Johnson’s test attempted to show that Dr. Mangum’s
model was flawed because 169 direct purchasers could not rely
on the model to show antitrust impact due to the fact (as Dr.
Mangum subsequently explained) that some purchasers had no
or too few transactions during the pre-collusion benchmark
period to generate statistically significant results. Contrary to
the dissent’s claim, Dissent at 686, Dr. Johnson did not show
that 28 percent of the class potentially suffered no injury. See
infra Section IV.B.
32a
reliability of Dr. Mangum’s model because
Dr. Mangum’s model selected time periods that did
not precisely match the class periods in the DPPs’
complaint.
Finally, Dr. Johnson criticized Dr.
Mangum’s use of a cost index (a calculated measure
of costs for all the Tuna Suppliers) as one of the
explanatory variables in his model, rather than using
actual accounting cost data.
According to Dr.
Johnson, the use of a cost index inappropriately
assumed that the Tuna Suppliers’ costs responded in
a like way to supply and demand factors.
In rebuttal, Dr. Mangum rejected Dr. Johnson’s
premise that a pooled, aggregated model was
inappropriate to use in this case. Dr. Mangum
explained that his technique was a well-known and
well-accepted method for examining antitrust impact
in markets with individualized differences among
purchasers. According to Dr. Mangum, both of the
bases for Dr. Johnson’s challenges to the use of a
pooled regression model failed. First, Dr. Mangum
claimed that a Chow test should not be used in the
manner employed by Dr. Johnson in his report.
According to Dr. Mangum, Dr. Johnson’s Chow test
was “designed to fail,” meaning that in this context,
the test results would always show that the data
relating to tuna transactions should not be pooled.
Second, Dr. Mangum asserted that the record
contained insufficient transaction data for Dr.
Johnson’s test of the regression model to yield
meaningful results. For example, Dr. Mangum
acknowledged that the model, as changed by Dr.
Johnson to consider purchasers on an individual
basis, could not estimate a positive and statistically
significant overcharge for 169 direct purchasers. But
according to Dr. Mangum, no regression model could
33a
yield a statistically significant estimate for many of
those 169 direct purchasers on such an individual
purchaser-by-purchaser basis, because 61 of those
purchasers did not make any purchases during the
benchmark periods, and many of the other purchasers
had not undertaken a sufficient number of
transactions during either the benchmark periods or
collusion period to yield statistically significant
results. And logically, Dr. Mangum asserted, given
the evidence that the defendants were able to inflate
prices generally through the conspiracy, that the tuna
market was susceptible to collusion, and that the
model showed a robust, statistically significant
impact of the price-fixing scheme on the tuna market,
even the DPP class members for whom Dr. Johnson’s
test did not yield a positive, statistically significant
overcharge should be able to rely on the pooled
regression model as evidence of impact. Therefore,
according to Dr. Mangum, Dr. Johnson erred in
concluding that the regression model had no
relevance for that 28 percent of class members.
Dr. Mangum also rebutted Dr. Johnson’s
additional critiques. With respect to Dr. Johnson’s
claim that the regression model yielded false
positives, Dr. Mangum explained that overcharges
imposed by non-defendant tuna suppliers (who were
not part of the conspiracy) were not false positives but
were caused by the “umbrella effect.” This term refers
to an economic observation that when many suppliers
engage in a conspiracy to raise prices, nonconspirators may raise their prices to supracompetitive levels because of the conspirator’s
dominant market power.
See ABA Section of
Antitrust Law, Proving Antitrust Damages: Legal &
Economic Issues 226 (2d ed. 2010). Dr. Mangum also
34a
argued that Dr. Johnson’s claim of false positives was
based on an erroneous analysis of the tuna market.
According to Dr. Mangum, Dr. Johnson incorrectly
claimed that two of the individual DPPs (Sysco and
U.S. Foods) purchased tuna from non-defendant
suppliers because both of those class members
actually purchased tuna that was produced by the
Tuna Suppliers and merely sold through a
middleman. Dr. Mangum defended his selection of
time periods relating to the model, claiming he
narrowed the class period based on his analysis of the
evidence in the case. Finally, Dr. Mangum rejected
Dr. Johnson’s critique of his use of cost indexes. Dr.
Mangum asserted that costs indexes were
statistically superior to using individual cost
accounting data. He noted that one of the robustness
tests he performed on the data showed that using
defendant-specific cost structures confirmed the
results of the pooled model. And he asserted that it
was preferable to use his cost index for determining
competitive market prices based on market supply
and demand conditions, rather than relying on cost
data derived from the Tuna Suppliers’ individual
approaches to cost accounting.
C
In considering whether the DPPs’ evidence was
capable of establishing antitrust impact for the class
as a whole, the district court reviewed Dr. Mangum’s
expert testimony and report, the rebuttal testimony
and report by Dr. Johnson, and Dr. Mangum’s reply,
and then addressed the parties’ disputes. In doing so,
the district court did not make any legal or factual
error.
First, the district court considered Dr. Johnson’s
argument that Dr. Mangum’s pooled regression model
35a
masked differences between purchasers, and that
when the overcharge is determined for individual
DPP class members the model did not show a positive,
statistically significant impact for some 28 percent of
the class. After reviewing each of the experts’
analyses, the district court credited Dr. Mangum’s
rebuttal of Dr. Johnson’s critique. Even if the model
(when modified by Dr. Johnson to evaluate individual
purchasers) did not yield a positive, statistically
significant overcharge for some purchasers who had
no or too few transactions during the pre-collusion
benchmark period, the district court concluded that
those purchasers could still rely on the pooled
regression model as evidence of the conspiracy’s
impact on similarly situated class members. The
court further noted that other evidence in the record,
including the guilty pleas and market characteristics,
showed that class members suffered a common
impact.
The district court also considered Dr. Johnson’s
argument that the Chow test showed that Dr.
Mangum’s model cannot be applied to all defendants.
The court acknowledged that failure of a statistical
test used to determine whether a regression is
appropriate should be taken seriously, and could lead
a court to reject the model at the class certification
stage as not capable of providing class-wide proof.
But it also noted that most regressions models will
fail one or more tests if enough are run, even if the
model itself is statistically sound. Because there was
a rational basis for Dr. Mangum’s use of the pooled
regression model to demonstrate class-wide impact,
the court concluded the failure of the Chow test did
not require the court to reject the model.
36a
The district court rejected Dr. Johnson’s
additional arguments. With respect to Dr. Johnson’s
claim that the false positives in Dr. Mangum’s model
rendered the model unreliable, the court credited Dr.
Mangum’s explanation that the false positives could
be explained by the umbrella effect and that Dr.
Johnson had erroneously concluded that some tuna
was supplied by non-defendants when in fact the tuna
was supplied by defendants. The district court also
addressed the dispute over Dr. Mangum’s selection of
the time period for the class, and concluded that Dr.
Mangum’s narrowing of the time frame bolstered the
reliability of the model. Finally, the district court
rejected Dr. Johnson’s critique of Dr. Mangum’s use
of a cost index, rather than actual accounting cost
data. The court credited Dr. Mangum’s explanation
as to why the use of such an index provided more
reliable results than actual cost accounting data, and
concluded that his use of a cost index did not
undermine the reliability of his methodology or
model.
After resolving each dispute between the experts,
the district court acknowledged that the defendants’
critique of Dr. Mangum’s model could be persuasive
to a jury at trial. But the district court recognized
that at this stage of the proceedings, its task was to
determine whether Dr. Mangum’s evidence was
capable of showing class-wide impact, not to reach a
conclusion on the merits of the DPPs’ claims. After
weighing the evidence put forth by the DPPs,
including the regression model, the correlation tests,
the record evidence and the guilty pleas and
admissions entered in this case, the district court
concluded there was sufficient evidence to show
common questions predominated as to common
37a
impact. Therefore, it ruled that this prerequisite to
Rule 23(b)(3) was met.
We conclude that the district court did not abuse
its discretion in reaching this conclusion. The court
conducted a rigorous analysis of the expert evidence
presented by the parties. The district court did not
err legally or factually in concluding that Dr.
Mangum’s pooled regression model, along with other
evidence, is capable of answering the question
whether there was antitrust impact due to the
collusion on a class-wide basis, thus satisfying this
prerequisite of Rule 23(b)(3).
IV
We now turn to the Tuna Suppliers’ claims that
the district court abused its discretion in determining
that the evidence presented by the DPPs proved:
(1) that the element of antitrust impact is capable of
being established class-wide through common proof,
and (2) that this common question predominates over
individual questions.22
A
The Tuna Suppliers’ main argument is that the
district court abused its discretion in determining
that Dr. Mangum’s model is capable of proving
22 The Tuna Suppliers do not challenge the district court’s
gatekeeping function under Daubert, to ensure that Dr.
Mangum’s evidence was not “statistically inadequate or based on
implausible assumptions.” Tyson Foods, 577 U.S. at 459, 136
S.Ct. 1036. And contrary to the dissent’s argument, Dissent at
687–88, the district court did not merely determine that Dr.
Mangum’s evidence was admissible under Daubert. Rather, it
subjected the evidence to a rigorous examination with full
consideration of Dr. Johnson’s critique. Therefore, the dissent’s
assertion that the district court committed the same error as the
district court in Ellis is misplaced. Dissent at 687–88.
38a
common impact for all class members. According to
the Tuna Suppliers, Dr. Mangum’s evidence is not a
permissible method of proving class-wide liability
because the regression model uses “averaging
assumptions,” meaning that the model assumes that
all DPPs were overcharged by the same uniform
percentage (10.28 percent).
These averaging
assumptions, according to the Tuna Suppliers, “paper
over” individualized differences among class
members. Because the tuna market is characterized
by individualized negotiations and different
bargaining power among the purchasers, the Tuna
Suppliers claim it is fundamentally impossible to
show common proof of injury. To support this
argument, the Tuna Suppliers note that the DPPs
who pursued their antitrust claims individually did
not rely on a pooled regression model but used actual
cost data and claimed an individualized overcharge
rate. Given the nature of the tuna market, the Tuna
Suppliers conclude, Dr. Mangum’s model cannot meet
the prerequisites of Rule 23(b)(3).
To the extent that the Tuna Suppliers argue that
pooled regression models involve improper “averaging
assumptions” and therefore are inherently unreliable
when used to analyze complex markets, we disagree.
In antitrust cases, regression models have been
widely accepted as a generally reliable econometric
technique to control for the effects of the differences
among class members and isolate the impact of the
alleged antitrust violations on the prices paid by class
members.23 See, e.g., Econometrics at 1. Further,
23 See, e.g., Kleen Prod. LLC v. Int’l Paper Co., 831 F.3d 919,
929 (7th Cir. 2016); In re Urethane, 768 F.3d at 1263; Cordes &
Co. Fin. Servs. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 97,
39a
Tyson Foods rejected any categorical exclusion of
representative24 or statistical evidence. 577 U.S. at
459–60, 136 S.Ct. 1036. Therefore, any categorical
argument that a pooled regression model cannot
control for variables relating to the individualized
differences among class members must be rejected.
To the extent the Tuna Suppliers and the dissent
raise the more focused argument that, in this case,
the model’s output (estimating that the Tuna
Suppliers’ conspiracy resulted in a 10.28 percent
overcharge for the entire class) cannot plausibly serve
as common evidence for all class members given
the individualized differences among those class
members, we again disagree.25 It is not implausible
107 (2d Cir. 2007); Hemmings v. Tidyman’s Inc., 285 F.3d 1174,
1188–89 (9th Cir. 2002); In re Linerboard Antitrust Litig., 305
F.3d 145, 153 (3d Cir. 2002).
24 Although
the Tuna Suppliers refer to Dr. Mangum’s
regression model as “representative evidence,” that term is
imprecise. As explained in Tyson Foods, representative evidence
generally refers to a sample that represents the class as a whole.
See 577 U.S. at 454–55, 136 S.Ct. 1036. Thus, Tyson Foods
concluded that each individual in a class could rely on exemplars
of persons donning and doffing protective equipment to prove the
amount of time each spent donning and doffing; this sample was
claimed to be representative of all members of the class. See id.
By contrast, a regression model analyzes available data to
determine the degree to which a known variable, such as
collusion, affected an unknown variable, such as price, while
eliminating the effect of other variables.
25 To the extent the Tuna Suppliers challenged the model’s
inputs, the district court considered and rejected Dr. Johnson’s
critique that some of the model’s inputs (i.e., the use of a cost
index and Dr. Mangum’s selection of time periods) rendered the
model incapable of demonstrating class-wide impact. Cf. In re
Lamictal, 957 F.3d at 194 (holding that the district court abused
40a
to conclude that a conspiracy could have a class-wide
impact, “even when the market involves diversity in
products, marketing, and prices,” especially “where,
as here, there is evidence that the conspiracy
artificially inflated the baseline for price
negotiations.” In re Urethane, 768 F.3d at 1254–55.
As the Tenth Circuit explained, a district court could
reasonably conclude “that price-fixing would have
affected the entire market, raising the baseline prices
for all buyers.” Id. at 1255. In other words, it is both
logical and plausible that the conspiracy could have
raised the baseline prices for all members of the class
by roughly ten percent. The district court did not
abuse its discretion in so concluding.
The dissent argues that Dr. Mangum’s expert
opinion “flies against common sense and empirical
evidence,” because large retailers like Walmart likely
would have used their bargaining power to negotiate
lower prices, and thus may not have paid higher
prices because of the Tuna Suppliers’ collusion.
Dissent at 689. But the district court is not free to
prefer its own views about the economics of the tuna
market over the statistical evidence submitted by the
plaintiffs, and here the regression model controlled
for the variables identified by the dissent. Indeed, Dr.
Mangum provided an individualized overcharge
estimate for Walmart when he changed the model to
evaluate the overcharge based on customer types.
This test showed that Walmart paid statistically
significant overcharges because of the conspiracy.
Provided that the evidence is admissible and, after
rigorous review, determined to be capable of
its discretion in certifying class because it failed to scrutinize
each expert’s data).
41a
establishing antitrust impact on a class-wide basis, it
is for the jury, not the court, to decide the
persuasiveness of Dr. Mangum’s evidence in light of
“common sense and empirical evidence.”
The Tuna Suppliers rely on In re New Motor
Vehicles Canadian Export Antitrust Litigation, 522
F.3d 6 (1st Cir. 2008), for the proposition that a
market involving individualized negotiations is
inherently incompatible with common impact. This
reliance is misplaced.26 In New Motor Vehicles,
plaintiffs raised a “novel and complex” theory of how
consumers were injured by defendants’ alleged
horizontal conspiracy to discourage imports of lowercost cars from Canada into the United States. Id. at
27. Plaintiffs’ theory proceeded in two steps: (1) “but
for the defendants’ illegal stifling of competition,”
manufacturers would have set lower prices to
compete with Canadian imports; and (2) because the
manufacturers did not do so, consumers paid higher
retail prices. Id. The First Circuit rejected this
theory because plaintiffs failed to demonstrate they
had an approach for proving either step. For the first
step, plaintiffs had not shown how they would
establish that but for the horizontal conspiracy,
enough lower-priced Canadian cars would flood into
the American market so as to cause manufacturers to
decrease their prices. Id. As for the second step, the
plaintiffs had not proved their damages model was
26 As a threshold matter, the First Circuit held in New Motor
Vehicles that the district court lacked federal jurisdiction over
the plaintiffs’ claims, but went on to provide its thoughts on
certification of the class in the event the district court exercised
its discretion to exert supplemental jurisdiction over the state
damages claims. 522 F.3d at 17.
42a
capable of showing “which consumers were impacted
by the alleged antitrust violation and which were
not.” Id. at 28. In this regard, the plaintiffs relied on
an inference that “any upward pressure on national
pricing would necessarily raise the prices actually
paid by individual consumers.” Id. at 29. But the
First Circuit rejected this inference because “[t]oo
many factors play into an individual negotiation to
allow an assumption—at least without further
theoretical development—that any price increase or
decrease will always have the same magnitude of
effect on the final price paid.” Id. at 29 (emphasis
added).
The court contrasted the plaintiffs’
unsupported inference with cases allowing “a
presumption of class-wide impact in price-fixing cases
when ‘the price structure in the industry is such that
nationwide the conspiratorially affected prices at the
wholesale level fluctuated within a range which,
though different in different regions, was higher in all
regions than the range which would have existed in
all regions under competitive conditions.’ ”
Id.
(quoting In re Linerboard Antitrust Litig., 305 F.3d
145, 151 (3d Cir. 2002)). Despite rejecting the
plaintiffs’ theory at an early stage of the case, the
court did not rule out certification of a class but
instead concluded that “more work remained to be
done in the building of plaintiffs’ damages model and
the filling out of all steps of plaintiffs’ theory of
impact.” Id.
As this explanation of the case makes clear, New
Motor Vehicles‘ analysis is not applicable here. First,
the DPPs’ price-fixing theory is not “novel” or
“complex.” Id. at 27. Rather than adopting a theory
requiring multiple speculative steps, the DPPs have a
simple one-step theory: the Tuna Suppliers conspired
43a
to raise tuna prices, resulting in higher prices for all
buyers. Second, while the plaintiffs in New Motor
Vehicles had not provided a thorough explanation or
developed a model showing how they would establish
their theory, id. at 29, the DPPs have already offered
well-developed expert testimony and regression
modeling supporting common impact. The other
cases relied on by the Tuna Suppliers are equally
inapposite. See, e.g., Blades v. Monsanto Co., 400 F.3d
562, 572 (8th Cir. 2005) (affirming denial of class
certification because evidence of a conspiracy to raise
prices, without more, could not demonstrate impact
across highly localized and highly individualized
markets for hundreds of seed varieties, and the
plaintiffs had not offered a common method of
showing injury); Robinson v. Tex. Auto. Dealers Ass’n,
387 F.3d 416, 423 (5th Cir. 2004) (reversing class
certification where the plaintiffs lacked a plausible
theory of how the challenged conduct had consistently
affected purchase prices).
The Tuna Suppliers also argue that because the
individual plaintiffs pursuing their own antitrust
claims showed overcharges both above and below the
overcharge indicated by Dr. Mangum’s model, a
uniform 10.28 percent overcharge is implausible. We
also reject this argument, because it improperly
conflates the question whether evidence is capable of
proving an issue on a class-wide basis with the
question whether the evidence is persuasive. A lack
of persuasiveness is not fatal at certification. See
Amgen, 568 U.S. at 459–60, 133 S.Ct. 1184. For
purposes of determining whether each member of the
DPP class can rely on the model to prove antitrust
impact, it is irrelevant whether actual sales data
shows a specific class member was overcharged by
44a
more or less than 10.28 percent. Rather, the question
is whether each member of the class can rely on Dr.
Mangum’s model to show antitrust impact of any
amount. The district court did not abuse its discretion
in finding that each member could.
While
individualized differences among the overcharges
imposed on each purchaser may require a court to
determine damages on an individualized basis, see
supra Section III.C, such a task would not undermine
the regression model’s ability to provide evidence of
common impact. Accordingly, we reject the Tuna
Suppliers’ argument that the regression model could
not sustain liability in individual proceedings.
Rather, “each class member could have relied on [the
model] to establish liability if he or she had brought
an individual action.” See Tyson Foods, 577 U.S. at
455, 136 S.Ct. 1036. We therefore conclude that the
district court did not err legally or factually in
concluding that Dr. Mangum’s pooled regression
model does not fail on any of the grounds raised by the
Tuna Suppliers.27
B
The Tuna Suppliers and the dissent next contend
that the district court erred by failing to resolve a
dispute between the parties as to whether 28 percent
of the class did not suffer antitrust impact. Instead of
resolving the dispute between the parties’ experts, the
Tuna Suppliers claim, the district court improperly
27 The Tuna Suppliers do not “specifically and distinctly” raise
the argument that the district court abused its discretion in
resolving challenges to the inputs to the model which were raised
below, such as Dr. Mangum’s choice of benchmark period and
use of cost indexes, so that argument is deemed forfeited on
appeal. United States v. Kama, 394 F.3d 1236, 1238 (9th Cir.
2005)
45a
shifted the critical inquiry to the jury. In other words,
the Tuna Suppliers argue that to satisfy Rule
23(b)(3)’s predominance requirement, plaintiffs must
prove that all or nearly all class members were in fact
injured by the alleged conspiracy, i.e., suffered
antitrust impact.28
In raising this argument, the Tuna Suppliers focus
on Dr. Johnson’s critique of Dr. Mangum’s model,
which stated that when he tested Dr. Mangum’s
model by changing it to evaluate the overcharge
specific to each individual member of the DPP class,
the test showed that 28 percent of the DPPs could not
rely on the model to show an overcharge attributable
to the conspiracy. According to the Tuna Suppliers,
this evidence indicated that 28 percent of the DPP
class did not suffer antitrust impact. And in district
court, the Tuna Suppliers argued that “28% of a
class—nearly one-third—far exceeds the de minimis
number of uninjured class members that some courts
have permitted in certifying a class.” Therefore, the
Tuna Suppliers argue that the class should not have
been certified. Further, the Tuna Suppliers argue
that the existence of a large number of uninjured class
members raises a question as to whether the class has
Article III standing. The Tuna Suppliers contend that
because the class cannot be certified (and there are
Article III issues) if Dr. Johnson’s analysis is correct,
the district court abused its discretion in failing to
28 Because the Tuna Suppliers’ primary argument on appeal
is that the DPPs failed to prove class-wide antitrust impact, we
understand the Tuna Suppliers’ reference to injury as referring
to antitrust impact, an element of the class antitrust claims, not
that the class members would not be able to prove that they
suffered monetary damages.
46a
resolve the dispute regarding whether Dr. Johnson’s
conclusions about Dr. Mangum’s model were correct.
We disagree. First, the Tuna Suppliers and the
dissent mischaracterize the import of Dr. Johnson’s
critique. Dr. Johnson did not make a factual finding
that 28 percent of the DPP class or 169 class members
were uninjured. Instead, Dr. Johnson’s test was
aimed at undermining confidence in Dr. Mangum’s
pooled regression model, because class members with
no or limited transactions during the benchmark
period could not rely on the model to show that they
suffered overcharges. At most, this critique supports
the more attenuated argument that Dr. Mangum’s
model is unreliable, or would be unpersuasive to a
jury. But the district court considered and resolved
this methodological dispute between the experts in
favor of Dr. Mangum by crediting his rebuttal that
even class members with limited transactions during
the class period can rely on the pooled regression
model as evidence of impact on similarly situated
class members. In other words, the district court
determined that Dr. Mangum’s pooled regression
model was capable of showing that the DPP class
members suffered antitrust impact on a class-wide
basis, notwithstanding Dr. Johnson’s critique. This
was all that was necessary at the certification stage.
The DPP class did not have to “first establish that it
will win the fray” in order to gain certification under
Rule 23(b)(3). Amgen, 568 U.S. at 460, 133 S.Ct. 1184.
Nor is this a case such as Ellis, in which the court had
to resolve a dispute regarding an issue of historical
fact in order to determine whether the challenged
discriminatory conduct could affect a class as a whole.
See 657 F.3d at 983. There is no factual dispute that
the Tuna Suppliers engaged in a price-fixing scheme
47a
affecting the entire packaged tuna industry nationwide.
The district court’s conclusion that the Tuna
Suppliers could present Dr. Johnson’s critique at trial
did not improperly shift the burden of determining
whether the Rule 23(b)(3) prerequisites were met to
the jury.29 See Amgen, 568 U.S. at 459–60, 466, 133
S.Ct. 1184. The district court fulfilled its obligation
to resolve the disputes raised by the parties in order
to satisfy itself that the evidence proves the
prerequisites for Rule 23(b)(3), which is that the
evidence was capable of showing that the DPPs
suffered antitrust impact on a class-wide basis.
“Reasonable minds may differ as to whether the
[overcharge Dr. Mangum] calculated is probative” as
to all purchasers in the class, but that is a question of
persuasiveness for the jury once the evidence is
sufficient to satisfy Rule 23. See Tyson Foods, 577
U.S. at 459, 136 S.Ct. 1036.
Neither Dr. Mangum’s pooled regression model
nor Dr. Johnson’s critique required individualized
inquiries into the class members’ injuries. If the jury
found that Dr. Mangum’s model was reliable, then the
DPPs would have succeeded in showing antitrust
29 The
Tuna Suppliers do not “specifically and distinctly”
develop the argument that the district court failed to resolve the
parties’ dispute as to whether the evidence generated false
positives. Kama, 394 F.3d at 1238. In any event, as explained
above, Dr. Mangum rebutted these critiques by reference to the
umbrella effect, and by claiming that Dr. Johnson’s analysis was
itself flawed because Dr. Johnson thought DPP class members
had purchased non-defendant tuna, when they actually
purchased tuna supplied by defendants. The district court did
not abuse its discretion in resolving this issue by crediting Dr.
Mangum’s rebuttal.
48a
impact on a class-wide basis, an element of their
antitrust claim. On the other hand, if the jury were
persuaded by Dr. Johnson’s critique, the jury could
conclude that the DPPs had failed to prove antitrust
impact on a class-wide basis.30 In neither case would
the litigation raise individualized questions regarding
which members of the DPP class had suffered an
injury. Although such issues would have to be
addressed at the damages stage, the dissent’s
argument that the district court here erred by failing
to determine whether questions of individualized
damages predominate, Dissent at 690, misses the
mark. As noted above, the Tuna Suppliers have not
argued that the complexity of damages calculations
would defeat predominance here, and as previously
explained, there is no per se rule that a district court
is precluded from certifying a class if plaintiffs may
have to prove individualized damages at trial.31
We need not consider the Tuna Suppliers’
argument that the possible presence of a large
number of uninjured class members raises an Article
III issue, because the Tuna Purchasers have
30 Although Dr. Johnson argued that Dr. Mangum’s pooled
regression model was unreliable and so could not sustain a jury
finding of antitrust injury to the entire DPP class, the evidence
adduced at trial may nevertheless sustain a jury finding of
antitrust injury to all or part of the class.
31 In
any event, Dr. Mangum’s proposal for calculating
damages is a straightforward process of applying the class-wide
overcharge to the Tuna Purchasers’ net sales records. See supra
n.19. That proposal does not give rise to a concern about
individualized mini-trials to determine each class member’s
damage award. “That the defendant might attempt to pick off
the occasional class member here or there through
individualized rebuttal does not cause individual questions to
predominate.” Halliburton, 573 U.S. at 276, 134 S.Ct. 2398.
49a
demonstrated that all class members have standing
here.32 A plaintiff is required to establish the
elements necessary to prove standing “with the
manner and degree of evidence required at the
successive stages of the litigation.” Lujan v. Defs. of
Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119
L.Ed.2d 351 (1992). Here, the district court concluded
that the DPPs’ evidence was capable of establishing
antitrust impact on a class-wide basis. Because
antitrust impact—i.e., that the Tuna Suppliers’
collusion had a common, supra-competitive impact on
a class-wide basis—is sufficient to show an injury-infact traceable to the defendants and redressable by a
favorable ruling, the Tuna Purchasers have
32 The
Supreme Court expressly held open the question
“whether every class member must demonstrate standing before
a court certifies a class.” TransUnion, 141 S.Ct. at 2208 n.4
(emphasis omitted). Outside the class action context, the
Supreme Court has held that each plaintiff must demonstrate
Article III standing in order to seek additional money damages
and, therefore, a litigant must demonstrate Article III standing
in order to intervene as a matter of right. Town of Chester v.
Laroe Ests., Inc., ––– U.S. ––––, 137 S.Ct. 1645, 1651, 198
L.Ed.2d 64 (2017). But the Supreme Court has long recognized
that in cases seeking injunctive or declaratory relief, only one
plaintiff need demonstrate standing to satisfy Article III. See,
e.g., Baggett v. Bullitt, 377 U.S. 360, 366 n.5, 84 S.Ct. 1316, 12
L.Ed.2d 377 (1964); Rumsfeld v. F. for Acad. & Institutional Rts.,
Inc., 547 U.S. 47, 52 n.2, 126 S.Ct. 1297, 164 L.Ed.2d 156 (2006);
Horne v. Flores, 557 U.S. 433, 446–47, 129 S.Ct. 2579, 174
L.Ed.2d 406 (2009). We have likewise applied this rule where a
class sought injunctive or equitable relief. See Bates v. United
Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007) (en banc).
We therefore overrule the statement in Mazza that “no class may
be certified that contains members lacking Article III standing,”
666 F.3d at 594, which does not apply when a court is certifying
a class seeking injunctive or other equitable relief. We do not
overrule Mazza as to any other holding which remain good law.
50a
adequately demonstrated Article III standing at the
class certification stage for all class members,
whether or not that was required. See TransUnion,
141 S.Ct. at 2208 n.4.
Accordingly, we affirm the district court’s
certification of the DPP class.
V
We next turn to the Tuna Suppliers’ arguments
that the district court abused its discretion in
determining that the evidence presented by the CFPs
and EPPs was capable of proving the element of
antitrust impact under California’s Cartwright Act,
thus satisfying the prerequisites of Rule 23(b)(3).
A
The CFP subclass includes individuals and
commercial entities who purchased bulk sized
packaged tuna (packages of 40 ounces or more) from
six companies (direct purchasers) which had
purchased the tuna from the Tuna Suppliers. The
CFPs’ theo
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