Duane Morris Class Action Review - 2023 - Report - Page 49
individualized inquiry. Id. at 39-42. The court held that individualized broker differences
did not defeat predominance because they were not as important as the “more relevant
question of whether the Challenged Rules create the need to offer buyer broker
commissions in the first place.” Id. at 40.
The certification of classes in Olean and Burnett should not be interpreted to mean that
a proposed class will always satisfy the predominance requirement of Rule 23(b)(3)
when the cause of action is an alleged price fixing conspiracy in violation of Section I of
the Sherman Act. Antitrust litigation is fact intensive and if factual aspects of the
affected markets, alleged conspiracy, and other elements of the cause of action create
enough indeterminacy about a proposed class, a court may find that common questions
do not predominate over significant individualized issues.
For example, in Nypl, et al. v. JP Morgan Chase & Co., 2022 U.S. Dist. LEXIS 48727
(S.D.N.Y. Mar. 18, 2022), the court denied a class certification for all consumers and
business in the United States who directly purchased supracompetitive foreign currency
at Benchmark exchange rates from the defendants. The plaintiffs in Nypl alleged that
the defendant banks conspired to fix two foreign currency benchmark exchange rates
from 2007 to 2013 following the defendants’ guilty pleas based on the same conduct in
2015. While evidence of conspiracy would be common to the class, the court found that
commonality could not be established in regard to injury, causation, and damages
because of the nature of the conspiracy which involved “intermittent, up-and-down
manipulation of foreign exchange rates resulting in a proposed class of retail
purchasers, each of whom may have been benefitted, harmed or unaffected by the
alleged manipulated prices.” Id. at *23. The court held that the necessity of individual
determinations of validity of class member claims defeated predominance. Id. at *23-24.
The court went on to explain that the plaintiffs had not proposed any methodology that
could identify whether class members had purchased foreign currency on a day that the
conspiracy was in effect and prices were manipulated; whether any given transaction
resulted in benefit or detriment; or, crucially, who “was or was not overcharged,” on a
generalized basis. Id. In contrast to the Ninth Circuit’s holding in Olean, where
individualized issues of damages calculations were held not to defeat predominance,
the court in Nypl credited the lack of reliable methodology for calculating damages
through common proof as an additional factor in denying certification. Id. at *27-28.
Finally, the court rejected class certification because the proposed class definition was a
“fail safe” class. Id. at *28. A fail-safe class is one that is defined by those who are
entitled to relief and thus membership cannot be established without resolving the entire
case on the merits. The court held that the fail-safe class definition suffered from the
same fatal flaw that individualized inquiries would predominate and the class would
become unmanageable. Id. at *29-31.
Another example of insufficiency of evidence to establish Rule 23(b)(3) predominance
comes from the denial of class certification in Value Drug Co., et al. v. Takeda
Pharmaceuticals, U.S.A., Inc., 2022 U.S. Dist. LEXIS 212260 (E.D. Penn. Nov. 23,
2022). The plaintiffs in Value Drug alleged that Takeda Pharmaceuticals entered into
several deals that delayed the entry of generic versions of Takeda’s gout medication,
causing pharmacies like the plaintiff to pay inflated prices. Id. at *4-14. Fatal to the
48
© Duane Morris LLP 2023
Duane Morris Class Action Review – 2023