# Opposition — Windham v. American Brands, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition
- **Published:** January 1, 1978
- **Citation:** 435 U.S. 968

## Text

IN THE JAN 27 1978
Supreme Court of the United Stateg. on . cvwe
Ocronen Trem, 1977 LT
No. 77-925
Roy P. WinpHamM, et al, on behalf of themselves
and all others similarly situated,
Petitioners,
Ve

American Branns, Inc., et al, Respondents,

On Petition for Writ of Certiorari
To the United States Cour! of
Appeals for the Fourth Circuit

BRIEF OF COMPANY RESPONDENTS IN
OPPOSITION TO PETITION FOR
WRIT OF CERTIORARI

ee

J. Means MeFavpen lenny L. Kine
Rowinsox, MceFapven, Banrierry H. MeGuime
Moone & Pore Davis Pork & Warpwent,
P.O. Box O44 1 Chase Manhattan Plaza
Columbia, South Carolina 2202 New York, New Vork 10005

Attorneys for R. J, Reynolds Tobacco Company

Hven L. Wittcox Muneay Hl. Barre
Wiiicox, Harper, Pacer, Metvin Sparrn

O°’ arrens., MceLeoo & Boye Arnot & Porter
Willeox Building 1229 Nineteenth Street, N.W
248 W. Evans Street Washington, D.C, 20036

Florence, South Carolina 29501
Attorneys for Philip Morris Incorporated
[Counsel for Other Company Respondents

Listed at End of Brief]
January 1978

—o —

Peess of Byvaon S&S. Avams Punting, Inc, Wasuiweron, D. C.

Page
Queersom PRROBNTED ... 2... nce cece cc cc cece ccceces 2
so «PSP 2
1. The District Court Opinion ................. 3
DB Fad FERN GD oc cc cccsdceencoccaanuwans 5

3. The Decision of the Court of Appeals Sitting
> Pree eee 6
Reasons ron Denyinc THE Writ ................... 7

I. Tae Decisions or THE District CourT AND THE
Ew Bane Court or APPEALS ARE MANIFESTLY Cor-
nect awp Do Not Warrant Tuis Court’s Review 7

A. The Record Provides Overwhelming Factual
Support for the District Court’s Discretion-
ary ial of Class Treatment ............. 8

B. Petitioners’ Approach Would Eliminate the
Diseretion Vested in the District ——
Contrary to Rule 23 and the Decisions o
ee Se 11

Il. Tas Fovurrs Circurr’s En Banc Decision Dogs
Nor Cowruict Wits Any Decision or Tauis
Covrt on or Any Oruer Count or Appgals .... 14

GEERT oc ccccccsececésnecceneseneseee 17
CITATIONS
Cases:
American Pipe é Construction Co. v. Utah, 414 U.S.
ere 14

na petition for cert. pending sub nom. Gulf

Ou orp v. Bogosian, No. 77-740 .............. 15, 16
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S.

Gee GHBUUD occcecsccehetcceeccuaasunene 10

ii Citations Continued
Page
Clark v. Watchie, 513 F.2d 994 (9th Cir.), cert. denied,

IE han on nn6n 665 6690604000055
Coopers & Lybrand v. Livesay, cert. granted Nov. 14,

ee aioe ihn eh 05 66 64n0beneees6ens 7
East Texas Motor Freight System v. Rodriguez, 431
TT idue deen eechebeeeenenenee+ens ee 13

Eisen v. Carlisle @ Jacquelin, 417 U.S. 156 (1974) ...12-14

Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) ..10, 14-15

In re Cessna Aircraft Distributorship Antitrust Liti-
Te 518 F.2d 213 (8th Cir.), cert. denied, 423

ED hi eee nen cendns b¥.ces 7
In re Sugar Antitrust Litigation, 559 F.2d 481 (9th
ES Sree 15
International Brotherhood of Teamsters v. United
States, 431 U.S. 324 (1977) .............cce0e. 10
Kate v. Carte Blanche Corp., 496 F.2d 747 (3d Cir.),
cert. denied, 419 U.S. 885 (1974) ............... 7
New York v. International Pipe & Ceramics Corp., 410
Ee OE, BED nna wncccccsccsiescececse 8,11

Ott wh ne Pub. Co., 518 F.2d 1143 (6th Cir.

Schime v. Schine, 367 F.2d 685 (2d Cir. 1966) ......... 11
United Air Lines, Inc. v. McDonald, 432 U.S. 385
FES FE re ee een 14
Warr v. Butz, 379 F. “ys 268 (D.S.C. 1974) ...... 3
West v. Capitol Federal Savings and Loan Ass’n, 558
i. . £ | See 7
Wilcox v. Commerce Bank, 474 F.2d 336 (10th Cir.
tT CER RUUCELe Chbueedhiceecededéuscecess s 8
Statutes aNpD Rvuzgs:
Tee ed i ik as pcan eechcbese 10
A 7
I a 7
Federal Rule of Civil Procedure 23 ............ 6, 8, 10-15
Federal Rule of Civil Procedure 54(b) ............. 7
MISCELLANEOUS:
Advisory Committee Notes to 1966 Amendments to
Rule 23, 39 F.R.D. 73 (1966) .................. 12-13

Recent Development, 62 Cornell L. Rev. 177 (1976) ... 12

IN THE

Supreme Court of the United States

OcToBEeR TERM, 1977

No. 77-925

Roy P. WinpHa\, et al., on behalf of themselves
and all others similarly situated,
Petitioners,
v.

AMERICAN Branps, INc., et al., Respondents.

BRIEF OF COMPANY RESPONDENTS IN
OPPOSITION TO PETITION FOR
WRIT OF CERTIORARI

The company respondents * submit this brief in op-
position to a petition for a writ of certiorari filed De-
cember 28, 1977. The petition seeks review of a 5 to 1
en banc decision of the United States Court of Appeals
for the Fourth Circuit, dated October 11, 1977. That
decision affirmed an order of the United States District
Court for the District of South Carolina denying pe-
titioners’ motion for class certification.

? The Secretary of Agriculture is also a respondent.

2

QUESTION PRESENTED

Whether the Court of Appeals correctly concluded
that the District Court had not abused its discretion
in denying class certification based on the detailed fac-
tual record in this case.

STATEMENT

The petitioners, six South Carolina tobacco farmers,
brought this action in 1974, charging the respondent
tobacco companies and the Secretary of Agriculture
with conspiring to fix the prices paid for flue-cured
tobacco sold at auction markets throughout the State
of South Carolina. The complaint also alleged that the
respondents had monopolized or attempted or conspired
to monopolize commerce at the various markets, had
conspired to restrict the amount of flue-cured tobacco
that could be sold at auction, and had conspired to ap-
portion government tobacco inspectors inequitably be-
tween South Carolina and Georgia. The case was
brought as a class action, with the named plaintiffs pur-
porting to represent over 20,000 South Carolinians
with economic interests in the sale of flue-cured tobacco
in South Carolina during the period 1970 through
1974.

Petitioners moved for class certification in October
1974. The parties thereafter had full discovery on the
class action issues, and District Judge Robert F. Chap-
man received extensive documentary evidence and per-
sonally presided at the depositions of more than 20
witnesses. On September 26, 1965, Judge Chapman
rendered an opinion denying petitioners’ motion. That
opinion, as the en banc Court of Appeals commented,
‘carefully and thoughtfully reviewed’’ the record
(Ptn. App. 12a) and set forth factual findings later

3

described by the Court of Appeals panel and by the
entire Court as ‘‘full, precise, and apposite’’ (Ptn.
App. 8a, 28a).

1. The District Court Opinion

Briefly, the District Court found that the flue-cured
tobacco market was characterized by ‘‘[t]he non-stand-
ardization of product and producer’’ (Ptn. App. 59a).
Tobacco is a perishable commodity, the quality of
which is affected by many factors, including soil type,
weather conditions, the skill of the farmer, and the
method of picking and curing. As a reflection of the
many variations in quality, a given pile of tobacco sold
on the auction floor may fall within one of 161 differ-
ent grades utilized by government inspectors.

Prices paid for tobacco varied over a broad range as
well. Indeed, the evidence showed that prices even for
identically-graded tobacco varied from day to day,
month to month, year to year, warehouse to warehouse,
and market to market. The District Court found the
buyers’ conduct to be similarly disparate. Not all of the
respondents purchased tobacco at each of the 36 ware-
houses or in each of the 11 different geographic areas
in which the warehouses are located, and the percent-
age of tobacco purchased by each respondent varied
from area to area, warehouse to warehouse, day to day,
and year to year.

Further, the more than twenty thousand tobacco
producers who comprise the purported class were found
to include owners of land that had allotments,’ lessees

* All of the South Carolina tobacco farmers in the purported class
participate in the price-support program of the United States De-
partment of Agriculture. The program limits tobacco production
according to an ‘‘allotment’’ system. See generally Warr v. Butz,
379 F. Supp. 268 (D.S.C. 1974).

4

of allotments, sharecroppers and tenants—with each
category of producer having a different economic in-
terest in the:sale of tobacco.

Because of the non-uniformity of product, price, de-
fendants’ conduct, and class members’ economic inter-
ests, the District Court found that, even if a general-
ized conspiracy were established, there would be non-
uniformity in the impact of that conspiracy on the
purported class members, both as to fact and amount
of damage. Indeed, the nature of the tobacco auction
market was such that many farmers who produced
lower-quality tobacco actually benefitted from the auc-
tion practices complained of, thereby making it impos-
sible for them to satisfy the fact-of-damage element of
a private antitrust cause of action.

Moreover, the District Court found that individual
questions as to the amount of damage would predomi-
nate even as to class members who could prove injury,
because there is no formula or other method by which
the extent of any class member’s damages could readily
be determined. The necessity for analyzing thousands
of individual transactions of the class members was
further underscored by the fact (which petitioners con-
cede) that a large percentage of the total transactions
was not even subject to the alleged conspiracy—namely,
purchases by warehousemen, by the government stabili-
zation ‘‘pool,’’ and by companies which, for one reason
or another, petitioners did not choose to name as de-
fendants.

Based on these and other facts, the District Court
concluded that common questions did not predominate
over the many individual questions in the case. As a
result, Judge Chapman further concluded that a class
action would be plainly unmanageable, and would, if

ot ee

5

certified, necessarily consume years of the Court’s un-
divided attention.’

2. The Panel Opinion

A divided panel of the Court of Appeals for the
Fourth Circuit reversed. Neither the majority nor the
dissent questioned the District Court’s findings, and
both acknowledged that the denial of class certification
must stand absent an abuse of discretion by the District
Judge. Nevertheless, Senior District Judge Wyzanski
of the District of Massachusetts, sitting by designa-
tion, concluded on behalf of himself and Judge
Craven that the District Court should have certified a
class at least for the purpose of determining whether
the respondents had violated the antitrust laws. Judge
Wyzanski stated that “there is almost a rebuttable
presumption that ... a class action should be allowed
where there is a plausible claim of violation of the Sher-
man Act’’ (Ptn. App. 35a-36a).

In reaching this conclusion, Judge Wyzanski ex-
pressed the view that the case would not present un-
usual complexities ‘‘at least as long as only issues of
violation are before the tribunal’? (Ptn. App. 37a).
He did not, however, disagree with the District Court’s
determination that the case as a whole would be un-
manageable and would present questions which were
predominantly individual rather than common. Nor
did he suggest any workable basis for deciding the
myriad individual questions to which the District

* The District Court conservatively estimated that, were the case
to proceed as a class action, the determination of individual fact
issues would require 20,000 hours, or 10 years of judicial time,
assuming that the case was given undivided attention for 40 hours
per week and 50 weeks per year (Ptn. App. 69a-70a, n.9).

6

Court had referred. Senior Circuit Judge Bryan dis-
sented, citing the District Court’s ‘‘comprehensive and
closely scanned findings of fact and conclusions of law’’
(Ptn. App. 39a).

3. The Decision of the Court of Appeals Sitting En Banc

The Fourth Circuit granted rehearing en banc, re-
versed the panel, and affirmed the denial of class certi-
fication. The Court’s opinion (per Judge Russell) first
took note of a district court’s customary discretion in
deciding the practical and largely factual questions
involved in determining whether a proposed class ac-
tion is manageable (Ptn. App. 9a-10a). The Court then
undertook a thorough review of the factual situation
presented here, focused on the individual issues in the
case, and reaffirmed the District Court’s findings that
it would be impossible to presume class-wide injury in
this case or to compute damage to the individual class
members on the basis of any formula.

The resulting manageability problems, the Court
noted, were increased by ‘‘the variety of claims as as-
serted by the various plaintiffs’’ (Ptn. App. 12a), and
by the fact that proof of liability and proof of dam-
ages were inextricably intertwined in this case (Ptn.
App. 22a). Finding that a class action, even if limited
to the issue of antitrust violation, would ultimately
degenerate into a plethora of time-consuming, separate
‘*mini-trials’’—at odds with the purpose of Rule 23—
the Court of Appeals held that the District Court had
acted within its discretion in denying class certifica-
tion.‘ Petitioners seek review of this judgment.

* Judge Butzner dissented for the reasons stated in Judge
Wyzanski’s opinion for the panel (Ptn. App. 25a).

7

REASONS FOR DENYING THE WRIT

I. THE DECISIONS OF THE DISTRICT COURT AND THE EN
BANC COURT OF APPEALS ARE MANIFESTLY CORRECT
AND DO NOT WARRANT THIS COURT'S REVIEW

Despite petitioners’ scattershot arguments, this case
involves only the narrow question whether the District
Court abused its discretion by refusing to certify a
class and dismissing the complaint against unnamed
class members.’ That issue, decided by the District
Court and by the Court of Appeals en banc on the par-
ticular facts of this case, is of insufficient general im-
portance to merit Supreme Court review. In any event,
the decision below is correct.

* There is no dispute between the petitioners and the company
respondents as to the appealability of the District Court’s order.
Appellate jurisdiction was specifically based on the District Court’s
entry of an order under Rule 54(b) dismissing the complaint
against unnamed class members. Such an order is an appealable
‘final order’’ under 28 U.S.C. § 1291. See, e.g., Ott v. Speedwriting
Pub. Co., 518 F.2d 1143, 1149 (6th Cir. 1975) ; In Re Cessna Air-
craft Distributorship Antitrust Litigation, 518 F.2d 213, 216 (8th
Cir.), cert. denied, 423 U.S. 947 (1975); Katz v. Carte Blanche
Corp., 496 F.2d 747, 752 (3d Cir.), cert. denied, 419 U.S. 885
(1974) ; but see West v. Capitol Federal Savings and Loan Ass’n,
558 F.2d 977 (10th Cir. 1977). In any event, the order denying
certification in this case could be treated as appealable under
28 U.S.C. § 1292(b), for the opinions of the District Court and the
Court of Appeals panel indicate that § 1292(b) certification would
have been granted and accepted if necessary (Ptn. App. 32a, 75a).
This case is, therefore, wholly unrelated to Coopers & Lybrand v.
Tivesay, cert. granted Nov. 14, 1977, which involves neither Rule
54(b) nor a §1292(b) certification, but simply the question
whether an order denying class certification, without more, is a
‘final order’’ within the meaning of 28 U.S.C. § 1291 under the
so-called ‘‘death-knell’’ doctrine.

8

Rule 23(b)(3) provides, in part, that an action may
be maintained as a class action if the court finds that
‘the questions of law or fact common to the members
of the class predominate over any questions affecting
only individual members, and that a class action is
superior to other available methods for the fair and
efficient adjudication of the controversy.’’ Pertinent
to these findings are ‘‘the difficulties likely to be en-
countered in the management of a class action.”’

The law is clear that the evaluations of manage-
ability and predominance called for by the Rule, and
the ultimate decision whether to certify a class, are
matters within the sound discretion of the District
Court. See, e.g., Barnett v. W. T. Grant Co., 518 F.2d
543, 547 (4th Cir. 1975); Clark v. Watchie, 513 F.2d
994, 1000 (9th Cir.), cert. denied, 423 U.S. 841 (1975) ;
Wilcox v. Commerce Bank, 474 F.2d 336, 347 (10th
Cir. 1973) ; New York v. International Pipe & Ceramics
Corp., 410 F.2d 295, 298 (2d Cir. 1969). Petitioners
concede as much (e.g., Ptn. at 31, 35). Because the Dis-
trict Judge exercised his discretion against certifying
a class action in this case, petitioners must show not
merely that Judge Chapman could properly have cer-
tified the case but that the arguments favoring certifi-
cation were so overwhelming that he erred as a matter
of law when he failed to do so. Petitioners have made
no such showing, and, we submit, could not do so on
the basis of the record below.

A. THE Recorp Provipes OVERWHELMING FAcTUAL
SupPPorRT FOR THE District Court’s DISCRETIONARY
DENIAL OF CLAss TREATMENT

As the en banc Court of Appeals held, the District
Court’s factual findings have abundant support in the

9

record, and provide a solid basis for its determinations
as to the predominance of individual questions and the
unmanageability and inferiority of a class action in
this case. Those findings, which petitioners chose not
to discuss in their legal analysis, demonstrate conclu-
sively that class certification would have turned this
case into a procedural nightmare.

Against the background of an industry characterized
by non-uniform products, prices, and conduct, Judge
Chapman correctly concluded that the trial of the lia-
bility issue alone (i.e., violation and fact of damage)
on a class basis would quickly become unmanageable.
Thus, even as to the single element of conspiracy, the
trier of fact would have to determine whether one or
more conspiracies existed, and, if so, whether they op-
erated continually and extended to all South Carolina
producers and warehouses, or covered only certain mar-
kets, warehouses, farmers, types of sales, or grades of
tobacco. The difficulty in making evidentiary determi-
nations, sorting out disputed fact issues, and preserv-
ing a sensible order of proof would escalate according
to the scope of the claims.

The complications relating to the fact-of-damage ele-
ment of the liability issue would also be overwhelming,
in light of the District Court’s uncontradicted finding
that some class members actually benefitted from the
auction practices complained of—thereby precluding
a presumption that all class members were injured
even if one or more conspiracies could be proven. As
the District Court found, trial of the fact-of-damage
element alone would require individual analysis of
each class member’s sales over a four-year period—
hardly the type of factual setting necessary to satisfy

10

the predominance or manageability requirements of
Rule 23(b) (3).°

Even assuming liability could be established, there
would remain the staggering problem of fixing dam-
ages for those class members who could establish that
they were injured. The District Court’s finding, af-
firmed by the Court of Appeals, was that there is in
this case no workable formula or other mechanical
method of computing damages that could eliminate the
need for a virtually endless series of mini-trials to
adjudicate each putative class member’s claim.’

The District Court also found that a bifurcated trial
would not ease the formidable manageability problems
created by the presence of these individual issues. As
Judge Russell’s opinion for the Fourth Circuit en banc
states, bifurcation would be impractical because of the
intertwining in this case of the issues of violation, in-
jury, and amount of damage (Ptn. App. 21a-22a).
Moreover, bifurcation would be a temporary remedy
at best; the deluge of mini-trials required by class cer-

* Petitioners appear to contend that proof of individual injury is
no longer required under the antitrust laws. Citing this Court’s
decision in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), they
argue that ‘‘[d]amage is assumed .. . for those who deal directly
with the violators’’ (Ptn. at 19). Obviously, Illinois Brick did not
do away with the statutory requirement that the private antitrust
plaintiff must prove that he was ‘‘injured in his business or prop-
erty’’ by the alleged unlawful conduct. Clayton Act § 4, 15 U.S.C.
§ 15. See also Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429
U.S. 477 (1977).

’ While petitioners continue to insist, without any factual basis,
that a formula could be developed (Ptn. at 24-26), they have pre-
sented nothing to warrant this Court’s disturbing the concurrent
findings of both lower courts on this issue. See, e.g., International
Brotherhood of Teamsters v. United States, 431 U.S. 324, 343
(1977), and cases cited therein.

ee i nh ect cane ita hm RD tt 5 A - oo

11

tification would not disappear, but would only be post-
poned (Ptn. App. 22a-24a). The facts of this case,
therefore, vividly underscore the statement by the
Court of Appeals for the Second Circuit that whether
to grant a separate trial for part of a case ‘‘is a matter
of common, garden-variety district court housekeep-
ing, an exercise of the district court’s broad discretion
in controlling the order of developing facts and issues
at trial.’’ Schine v. Schine, 367 F.2d 685, 687 (2d Cir.
1966).

In view of the foregoing, Judge Chapman’s decision
to deny class certification was plainly within his dis-
cretion—a discretion that is entitled to particular def-
erence here because the Judge personally supervised
and was intimately familiar with the development of
the complex facts on which his judgment rests. See,
e.g., New York v. International Pipe & Ceramics Corp.,
410 F.2d 295, 298 (2nd Cir. 1969).

B. Petir1oners’ APPROACH WouLD ELIMINATE THE
DISCRETION VESTED IN THE District Courts, Con-
TRARY TO RULE 23 AND THE DECISIONS OF THIS COURT

Petitioners argue in effect that district courts must
grant automatic class certification in virtually every
private treble-damage action that includes an allega-
tion of conspiracy. Petitioners are forced to such an
approach by the absence in the record of any evidence
indicating that this case satisfies the requirements of
Rule 23(b) (3). Indeed, if a district court were held to
have abused its discretion by denying class status on
the facts of this case, then class certification must be
virtually automatic.

This was the implication of the panel opinion written
by Judge Wyzanski, upon which the petitioners so

12

heavily rely. The panel majority attempted to create
a “‘presumption”’ in favor of class certification ‘‘where
there is a plausible claim of violation of the Sherman
Act”? (Ptn. App. 36a). While the presumption pur-
ported to be ‘‘rebuttable,’’ and while the opinion stated
that a class action need not be maintained in every case
(Ptn. App. 35a), it is difficult, if not impossible, to
imagine a case that would not fall within Judge Wy-
zanski’s expansive doctrine." Thus, as one commen-
tator concluded, the panel—*‘ [u]ndaunted by a lack of
precedent’’—would have in effect created ‘‘an anti-
trust exception to the requirements of Rule 23.’’ 62
Cornell L. Rev. 177, 198, 199 (1976).

Such an approach would be wholly inconsistent
with the language and meaning of Rule 23 and the
decisions of this Court. Since class certification is
to be granted under Rule 23(b) only if common
questions ‘‘predominate’’ over individual ones, Judge
Chapman need not have certified a class simply be-
cause this case, like all antitrust conspiracy cases, may
involve some common questions regarding the exist-
ence of a conspiracy. The resolution of the predomi-
nance issue must depend on the facts of each case. As
the Advisory Committee’s Note to Rule 23(b)(3)
states: ‘‘Private damage claims by numerous indi-
viduals arising out of concerted antitrust violations

* Certainly the requirement of a ‘‘plausible claim’’ of Sherman
Act violation is no real limitation. Since Judge Wyzanski con-
ceded in the same paragraph of his opinion that there was no basis
even to intimate that respondents were wrongdoers, a ‘‘plausible
claim of violation’’ apparently means nothing more than the allega-
tions of a well-pleaded complaint. Furthermore, this Court has held
that class certification may not turn on a preliminary inquiry into
the substantive merits of the underlying claim, Lisen v. Carlisle &
Jacquelin, 417 U.S. 156, 197-98 (1974).

13

may or may not involve predominating common ques-
tions.’’ 39 F.R.D. 73, 103 (1966) (emphasis added).

Petitioners attempt tc circumvent the language of
Rule 23 by stressing the importance of the class action
device in vindicating the claims of individual class
members who may lack the means or the incentive to
initiate separate proceedings. The short answer to this
argument is that it cannot be relied upon to justify
the creation of an unmanageable litigation or the de-
parture from the plain letter and meaning of the Rule.

We do not suggest that class certification should be
denied in all complex antitrust cases. By the same
token, there is no support for the notion that a case
is to be deemed certifiable as a class action simply be-
cause it is an antitrust case. Indeed, the concept of
presumptive certification in certain types of cases has
already been rejected by this Court. Only last Term, the
Court unanimously emphasized that in cases involving
racial discrimination—where class treatment is fre-
quently appropriate—certification is not automatic
and ‘‘careful attention to the requirements of Fed.
Rule Civ. Proc. 23 remains nonetheless indispensable.’’
East Tezas Motor Freight System v. Rodriguez, 431
U.S. 395, 405 (1977). Similarly, the Court in Eisen v.
Carlisle & Jacquelin, supra, 417 U.S. at 175-76, en-
forced the ‘‘best notice practicable’’ language of Rule
23(c)(2), despite petitioner’s contention in that case
that to do so would end the suit and frustrate his
attempt to vindicate the antitrust and securities claims
of individual class members.’ As the Court held in

* In this connection we note the District Court’s finding, affirmed
by the Court of Appeals, that several of the named plaintiffs have
the financial incentive to continue this suit even if class certification
is denied (Ptn. App. 72a-73a, 18a).

14

Eisen, Rule 23 must be read as written, and should not
be modified or short-circuited to accommodate any par-
ticular group of plaintiffs or type of action.

Petitioners’ reliance upon a theory of automatic or
presumptive certification for antitrust cases is, in ef-
fect, a concession that the record here contains no
support for a conclusion that the District Court abused
its discretion in denying class certification. As the en
bane Court of Appeals held, the record compels the
conclusion that Judge Chapman was correct in holding
that common questions would not predominate, and
that the case could not be managed as a class action.

Il. THE FOURTH CIRCUIT’S EN BANC DECISION DOES NOT
CONFLICT WITH ANY DECISION OF THIS COURT OR OF
ANY OTHER COURT OF APPEALS

Apart from being correct on its own terms, the de-
cision below accords with the body of law that has
developed in antitrust cases initiated under Rule 23.
While petitioners have cited some 16 instances in which
the Court of Appeals’ en bane decision purportedly
departs from the precedents of this Court and other
Courts of Appeals, these supposed ‘‘conflicts’’ are non-
existent. This case, for example, has nothing to do with
the tolling problems the Court considered in American
Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974),
and United Air Lines, Inc. v. McDonald, 432 U.S. 385
(1977). Similarly, this Court’s decision in Illinois

*° Petitioners also seem to claim that American Pipe and Mc-
Donald are inconsistent with the en banc Court’s dictum concern-
ing a ‘‘test case’’ and collateral estoppel approach (Ptn. App. 17a,
18a & nn. 30-32). Since that discussion was speculative and not
critical to the Court’s reasoning, we do not address it here, except
to state that the Court of Appeals did not, as the petitioners sug-
gest, hold that denial of certification was appropriate because the

anal, Ri Mpnes ele > hah. ant BAe ON tea Ot i Bt ee eh ee Nl VR le is RO OE eens 2 BL ON EN OL CINE et et ty ee. Le

15

Brick Co. v. Illinois, 431 U.S. 720 (1977), is wholly un-
related to the Rule 23 questions presented here.

With regard to claimed conflicts with the decisions
of other Courts of Appeals, the en bance decision below
correctly observed that these so-called ‘‘conflicts’’
‘“*seem to reflect more a factual difference in the cases
themselves than a difference over legal principles’’
(Ptn. App. 15a). Unlike the situation here, in many of
the cases cited by petitioners, classes were certified be-
cause the facts permitted a presumption of common
injury. Further, the amount of damages could be com-
puted by a formula or other workable method short of
individual ‘‘mini-trials.’’ Hence these cases, rather than
pinpointing a need for Supreme Court review, empha-
size the folly of automatic class certification of anti-
trust cases and the wisdom of an approach that allows
district courts the discretion to decide class action
questions in light of the particular circumstances of
each case.

Finally, the Fourth Circuit’s en bane decision does
not conflict with either In re Sugar Antitrust Intiga-
tion, 559 F.2d 481 (9th Cir. 1977), or Bogosian v.
Gulf Oil Corp., 561 F.2d 434 (3d Cir. 1977), petition
for cert. pending sub nom. Gulf Oil Corp. v. Bogosian,
No. 77-740. The Ninth Circuit in In re Sugar Antitrust
Litigation decided only that the order certifying a class
in that case was not reviewable by mandamus. The
Court expressly disavowed any opinion on the merits
of the certification, and cited Judge Wyzanski’s panel

test case approach was superior. Rather, the Court held that the
case was not certifiable because it failed to meet the requirements
of Rule 23(b) (3). The Court then noted, in passing, the possibility
that a ‘‘test case’’ approach might be utilized.

Ee

16

opinion in Windham simply to show that the District
Court’s certification was not such ‘‘clear and indis-
putable errdér’’ that mandamus would lie. 559 F.2d at
483.

Bogosian is a Sherman Act ‘‘tying’’ case, and the
Third Circuit Court of Appeals devoted most of its
opinion to issues involving the substantive elements of
plaintiff’s cause of action—none of which is relevant
here. Significantly, the Court did not order certifica-
tion of a class, but remanded the case to the District
Court to reconsider whether in light of the Court of
Appeals’ substantive rulings, the fact-of-damage issue
could be viewed as a common question. In this connec-
tion, the Court of Appeals observed that ‘‘[w]hether
or not fact of damage can be proven on a common
basis ... depends upon the circumstances of each case.’’
561 F.2d at 454. Regarding the further possibility of
bifurcation, the Third Circuit cited—but, contrary to
note 35a in the Windham en banc opinion (Ptn. App.
21a, n.35a), did not ‘‘approve’’—Judge Wyzanski’s
panel opinion in the present case. The Court in Bogo-
sian never reached the bifurcation issue; if and when
it does so, it will have the benefit of Judge Russell’s en
banc opinion in Windham.

17

CONCLUSION

For all the foregoing reasons, the petition for a writ
of certiorari should be denied.

Respectfully submitted,

J. Means McFadden
Rosrnson, McFappen,
Moore & Pops EP écuddnccddccatadesaneeudencees
P.O. Box 944 Henry L. King
Columbia, South Carolina 29202 Bartlett H. McGuire
1 Chase Manhattan Plaza
New York, New York 10005

Attorneys for R. J. Reynolds Tobacco Company
Hugh L. Willcox Arnoitp & Porter
Wu.tcox, Harper, PaLMEr,

O’Fannett, MoLaop & Buyox By ............ccccceccecccccces
Willcox Building Murray H. Bring
248 W. Evans Street Melvin Spaeth
Florence, South Carolina 29501 1229 Nineteenth Street, N.W.

Washington, D. C. 20036
Attorneys for Philip Morris Incorporated
Henry B. Smythe Paul G. Pennoyer, Jr.
Burst, Moorz, SMytHe & McGee Chester J. Hinshaw
P.O. Box 999 CHADBOURNE, PARKE, WHITESIDE
5 Exchange Street & Wo.rr
Charleston, S. C. 29402 30 Rockefeller Plaza
New York, N.Y. 10020

Attorneys for American Brands, Inc.
Richard E. Richards N. R. Coleman, Jr.

Davis Potk & WarDWELL

Ricuarps, Caskey & Ricnarps Muuuican, CoLEMAN, FLETCHER
West Meeting Street at York & Gasy
Lancaster, S. C. 29720 ! P.O. Box 717

Greenville, Tenn. 37743

Attorneys for The Austin Company, Inc. (Greenville, Tennessee)
and Mullins Leaf Tobacco Company, Inc.

18

E. LeRoy Nettles Norwood Robinson
Netties, Taomy, Frorp&Smira Hunpson, Petrez, Stockton,
120 pps Street Stockton & Rosrnson
Lake City, S. C. 29560 610 Reynolds Building
Winston-Salem, N. C. 27101

Attorneys for Brown & Williamson Tobacco Corporation and
Export Leaf Tobacco Company

Jack Nettles Howard Adler, Jr.
McGowan Nerties Ke.ier Larry D. Sharp
& Eaton Bercson BorKLtanp Marcouis
P.O. Box 109 & ADLER

Florence, S. C. 29501 21 Dupont Circle

Washington, D. C. 20036
Attorneys for Dibrell Brothers Inc. and C. W. Walters Co., Inc.

D. Laurence McIntosh Tommy W. Jarrett
Waicat, Scott, BLACKWELL Dess, Dezes, SmitH, PoweLu
& Powers & JARRETT
234 West Cheves Street 105 South John Street
Florence, S. C. 29501 P.O. Box 12
Goldsboro, N. C. 27530
William R. Glendon
Guy C. Quinlan
Rogers & WELLS
200 Park Avenue
New York, N.Y. 10017

Attorneys for Gallaher Limited

C. Weston Houck

C. Weston Hover, P.A.
292 West Evans Street
Post Office Box 1252
Florence, 8S. C. 29501

Z. Hardy Rose
Lucas, Ranp, Rose, Meyer,
Jones & OrncuTr
410-424 First Union National
Bank Building
113 East Nash Street
Wilson, N. C. 27893

19

Fred D. Turnage
Cieary Gotrtiies STEEN
& Hami.Lton
1250 Connecticut Avenue, N.W.
Washington, D. C. 20036

Attorneys for Imperial Group Limited

John W. Thomas Samuel W. Hixon, III
Roserts, Jenninos & THomas Wi.uraMs, Mutuen & Curistian
Barringer Building 510 United Virginia Bank

7th Floor Building
Columbia, S. C. 29202 Richmond, Va. 23219

Attorneys for J. P. Taylor Company, Inc., Universal Leaf Tobacco
Company, Inc.

Joseph O. Rogers, Jr. John Gould

Rocers, Rices & RickENBAKER Wesster & SHEFFIELD
23 W. Boyce Street 1 Rockefeller Plaza
Manning, S. C. 29102 New York, N. Y. 10020

Attorneys for Liggett € Myers Incorporated

Douglas McKay, Jr. Joseph Gelb
McKay, SHeprm., WALKER, Adam Prussin
Townsenp & WILKINS Wet, Gotsnat & Mancgs
1340 Bull Street 767 Fifth Avenue
Columbia, 8. C. 29201 New York, N. Y. 10022

Attorneys for Loew’s Theatres, Inc.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0271%3A2. Public record. Not legal advice.