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District Court Declines to Certify Damages Subclass in NCAA Case

by | Nov 20, 2013 |

On November 8, 2013, the Northern District of California certified a class of current and former student athletes seeking injunctive relief under the Sherman Act but declined to certify a damages subclass in the case In re NCAA Student-Athlete Name & Likeness Licensing Litig., 4:09-cv-01967-CW (N.D. Cal. November 8, 2013).  The plaintiffs, current and former NCAA Division I men’s football and basketball players, alleged that the National Collegiate Athletic Association (NCAA) conspired with a video game developer and a marketing firm in developing rules prohibiting student athletes from receiving compensation for the commercial use of their names, images and likenesses.

Plaintiffs sought certification of the injunctive relief class pursuant to Rule 23(b)(2) and certification of the damages class under Rule 23(b)(3).  The Court certified the injunctive relief class, rejecting defendants’ argument that certification under Rule 23(b)(2) is inappropriate where plaintiffs are also seeking monetary relief.  The court explained that plaintiffs generally may seek certification of multiple classes pursuant to different subdivisions of Rule 23(b).

The proposed damages subclass by definition included only those athletes who were depicted in video games or game footage after 2005.  The court declined to certify the damages class under Rule 23(b)(3), holding that plaintiffs failed to satisfy the manageability requirement because they did not provide a feasible way to identify class members that were actually harmed by the NCAA’s conduct.  One barrier to manageability was the “substitution effect:” if student athletes had not been prohibited from receiving compensation, many athletes who left college early to play professionally would have stayed in college and displaced other student athletes on their respective teams.  Therefore, some members of the damages class may have actually benefitted from the NCAA rules by earning roster spots that would not have otherwise been available.  Plaintiffs failed to provide a feasible method for determining which class members would have still played for Division I teams without the NCAA’s rules.

The court also identified two other barriers to manageability: plaintiffs did not provide a feasible method for determining on a classwide basis (1) which athletes were depicted in video games, or (2) which class members appeared in game footage during the relevant period.  With respect to the latter, plaintiffs referenced third-party sources such as team rosters, game summaries and televised game schedules, but the court found this inadequate because “they have not provided any formula for extracting the relevant information from each of these resources and using that information to identify putative class members.”



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Northern District of California Certifies Indirect Purchaser Class in CRT Case

by | Oct 18, 2013 | ,

On September 24, 2013, the Northern District of California certified a class of indirect purchasers in In re Cathode Ray Tube Antitrust Litig., No. 3:07-cv-5944 SC, 2013 WL 5391159 (N.D. Cal. September 24, 2013).  The case was brought by indirect purchasers of products containing cathode ray tubes (CRTs) against CRT manufacturers alleging a global conspiracy to fix prices.  In support of their motion for class certification (and specifically with respect to the predominance requirement of Rule 23(b)), the plaintiffs offered a damages model and expert testimony that “it is more probable than not that the cartel’s price increase impacted all, or nearly all, direct purchasers in a common way.”  The defendants countered that running the model resulted in calculations of no impact for certain members of the class and therefore the model was unable to show impact to each individual class member.  The Court relied on recent Supreme Court decisions on class certification for the proposition that “proving predominance does not require plaintiffs to prove that every element of a claim is subject to classwide proof: they need only show that common questions predominate over questions affecting only individual members.”  The Court further held that “[w]hen an expert’s testimony relates to damages calculations in a class certification case, the district court must undertake a rigorous analysis of the expert’s opinions in the class certification context, such as whether the opinions are consistent with the liability case and whether they demonstrate that case’s proposed damages are measurable on a classwide basis.”

The Court found that the plaintiffs’ expert made a sufficient showing to meet the predominance requirement and that class certification was appropriate.  Specifically, the Court found that the plaintiffs’ expert could establish that damages were measurable on a classwide basis, consistent with recent Supreme Court decisions, and that the plaintiffs’ expert demonstrated that “common influences on the price structure could be estimated using a formula, and by the same type of regression analysis, a very high percentage of sales prices could be determined by common variables.  Therefore, [the expert’s] declaration show[ed] that proof of harm to direct purchasers could be proved without individual inquiry.”  The Court also found that the expert was able to show that the pass-through rate to indirect purchasers was 100 percent.

The defendants’ main argument against plaintiffs’ proposed model was that it predicted no injury to individuals included in the class definition. The Court disagreed, however, and  held that its concern was to determine whether the indirect purchasers “showed that there is a reasonable method for determining, on a classwide basis, the antitrust impact’s effects on the class members,” which the Court found to be “a question of methodology, not merit.”  The Court cited other Supreme Court cases for the notion that none of the earlier cases changed the standard for class certification and none required a full merits analysis at the class certification stage.  Thus, according to the Court, the indirect purchasers “need not prove, at the class certification stage, that every single class member was [...]

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Detroit Nurses Object to Sixth Circuit Reviewing Class Certification Decision

by | Oct 15, 2013 | , ,

On October 11, 2013, the plaintiffs in the Detroit nurses litigation who have accused Detroit-area hospitals of conspiring to suppress their wages opposed VHS of Michigan, D/B/A Detroit Medical Center’s (DMC) petition to the Sixth Circuit for leave to appeal the district court’s decision granting class certification.

DMC had asked the Sixth Circuit to do an interlocutory appeal of a September ruling certifying a class of more than 20,000 registered nurses seeking more than $1.7 billion in damages based on a purported antitrust conspiracy among Detroit-area hospitals to reduce nurse wages.

The lawsuit was first filed in December 2006 and accuses the Detroit area hospitals of conspiring with one another to keep registered nurses’ wages low.  In particular, the lawsuit alleges that the hospitals agreed to exchange compensation information to reduce wages and competition to hire and retain Detroit nurses.  DMC is the only remaining defendant in the case.  The other seven defendants previously settled the litigation.

In September, a district court judge granted plaintiffs’ motion for class certification.  The hospital asked the Sixth Circuit to review that ruling a few weeks later.  In support of that request, DMC argued that the district court’s decision conflicts with the approach followed by other federal courts and raises important questions about the proper interpretation of the Supreme Court’s recent decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (Comcast).

In particular, DMC argued that plaintiffs should not have been able to establish predominance through a damages model that calculated damages based in part on a theory of liability (wage fixing claim) that had already been dismissed on a motion for summary judgment.  In addition, DMC argued that the district court failed to take a “close look” at the damages model before certifying the class.

Plaintiffs argued that DMC attempted to make a strained analogy to Comcast and also criticized DMC for raising arguments on appeal that were not raised with the district court.  Plaintiffs argued that this case does not present the sort of “novel or unsettled question” of “class litigation in general” that is worthy of the Sixth Circuit’s discretionary review.

The full case name is In re: VHS of Michigan, Inc., No. 13-113 (6th Cir. filed Sep. 27, 2013).



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Dow Chemical Co. Secures Stay, Will Challenge Calculation of Treble Damages on Appeal

by | Oct 8, 2013 | ,

by Lincoln Mayer

The U.S. District Court for the District of Kansas granted Dow Chemical’s request to stay a $1.06 billion verdict in an antitrust class action suit pending appeal.  The jury’s original $400 million verdict, for allegedly fixing prices of chemical inputs for urethane foam, was trebled to $1.2 billion before the court reduced the award to account for damages paid by other defendants.  Dow said that, among other arguments it will maintain on appeal, it plans to contend that each plaintiff—not the class as a whole—was entitled to trebling of damages.

This may be a novel argument and the district court declined to adopt it because it said it had been provided with no case law on point.  But if the argument, which relies on a very literal reading of the statute, were to gain more traction on appeal, it could give defendants in antitrust class actions a useful tool: the ability to stretch out payments over a longer period of time by forcing each specific plaintiff to prove its damages before receiving the treble portion of the award.  Defendants alternatively could use that ability as leverage to negotiate a reduced overall award.



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$20 Million Settlement in In re: High-Tech Employee Antitrust Litigation, a Non-Poaching Agreement Case

by | Oct 1, 2013 |

by Joseph F. Winterscheid and Nick Grimmer

Three of the seven companies defending allegations that they violated U.S. antitrust law by agreeing not to recruit each other’s employees agreed to settle all claims against them in In re: High-Tech Employee Antitrust Litigation for a total of $20 million. This putative class action and substantial settlement are important reminders of the caution required when considering any kind of agreement not to not to recruit or hire another company’s employees.

Read the full article here.



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Hotels and Online Travel Companies Move to Throw Out Class Action Suit

by | Sep 24, 2013 |

by Megan Morley

Last week, a group of hotels and online travel companies moved to dismiss an amended class action complaint alleging that they engaged in a price-fixing conspiracy to control hotel room prices.  Online Travel Company Hotel Booking Antitrust Litigation, case number 3:12-cv-03515.  The companies, which include Travelocity and Hilton Worldwide, argued that the plaintiffs abandoned the principle elements of the conspiracy alleged in the initial complaint.  First, plaintiffs no longer allege that individual agreements between a hotel and online travel companies violated antitrust laws.  Second, plaintiffs admit that they have no basis to prove a horizontal conspiracy among the hotel defendants.  According to the defendants, the plaintiffs’ case only relies on purported collusion between the online travel companies and hotels to implement similar distribution programs.  These factual allegations, however, are not sufficient to bring an antitrust claim under the Supreme Court’s decision of Bell Atlantic Corp. v. Twombly, 550 U.S.544, 557 (2007), which requires “allegations plausibly suggesting (not merely consistent with) agreement.”  The defendants contend that the plaintiffs’ allegations do not plausibly suggest that they entered individual distribution arrangements pursuant to a horizontal conspiracy at either the hotel or online travel company level.  Rather, the defendants argue that the facts demonstrate each company’s independent interest in implementing these individual hotel-online travel company arrangements in response to the development of the internet as a distribution channel for travel purchases.



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Egg Producer Agrees to Pay $28 Million to Settle Price-Fixing Claims

by | Jul 26, 2013 | ,

by Nicole Castle

On July 23, 2013, Cal-Maine Foods Inc., the largest producer of fresh shell eggs in the U.S., announced that it had agreed to pay $28 million to settlement the direct purchaser claims brought by plaintiffs in In re Processed Egg Products Antitrust Litigation, 08-cv-2002 (E.D. Pa.).  The direct purchaser plaintiffs alleged that Cal-Maine Foods and the other defendants engaged in a long-running scheme to limit egg supply in an effort to raise prices.  

Cal-Maine Foods will be the third defendant to settle with the direct purchasers in this case.  Defendants Sparboe Farms Inc. and Moark LLC previously settled the direct purchaser claims.

Cal-Maine Chairman, President, and CEO Dolph Baker said in a statement on Tuesday: 

We remain confident that our conduct has at all times been lawful, appropriate and fair to our customers.  The largest retailers and egg buyers in the country, including many of our customers, in fact, were fully aware of, and explicitly supported, the industry-wide animal welfare guidelines challenged in this litigation.  And, the USDA was fully aware of, and explicitly supported, these animal welfare guidelines as well as all the other conduct the plaintiffs challenged.  We were able to negotiate a settlement which would eliminate most of our exposure in the antitrust litigation against the Company for an amount that we believe is in the best interest of the shareholders, employees, customers and consumers.  It significantly reduces the distraction, expense, exposure and inconvenience of protracted litigation and potentially multiple appeals, and allows us to focus on executing the long-term strategy of our business.

The terms of the settlement are subject to approval by the court following notice to all class members.  The parties expect to file for preliminary approval of the settlement next week.  The settlement does not affect the class actions filed on behalf of the indirect purchasers. Cal-Maine has stated that it intends to continue to defend the remaining cases and believes that it has strong defenses.



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EU Commission Published Proposals for Private Antitrust Litigation

by | Jun 12, 2013 | , ,

by Lionel Lesur, Martina Maier and Philipp Werner

On 11 June, the European Commission (“Commission”) published its long-awaited package of proposals on private antitrust litigation. The package is divided into three sets: (1) a Draft Directive on actions for damages (2) a Draft Recommendation on promoting group claims (3) and a Draft Communication and Draft Guidelines on estimating the amount of loss suffered by victims of cartels.

To read the full article, click here.



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Supreme Court Comcast Decision Makes Antitrust Class Action Certification More Difficult

by | Apr 3, 2013 |

by David L. Hanselman, Stefan M. Meisner and Daniel Powers

The Supreme Court’s decision in Comcast Corporation v. Behrend, an antitrust case involving a class of more than two million current and former cable television subscribers in the Philadelphia area, raises the bar for plaintiffs to obtain certification of antitrust class actions.

To read the full article, click here. 



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China’s Anti-Monopoly Law Makes it Easier to Sue in Cases of Anti-Competitive Conduct

by | May 9, 2012 | , ,

by Henry L.T. Chen and Frank Schoneveld.   

Recently, the Supreme People’s Court of China issued final rules to build a working framework for civil anti-monopoly cases brought under the country’s Anti-Monopoly Law.  The rules will take effect on 1 June 2012.

To read the full article, please click here. 



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