CLASS ACTIONS
Materials Discussed
Background
When people think of an antitrust conspiracy among competitors they think of people sitting in a room, agreeing to raise the price of widgets by $1 - and then actually raising the price by a dollar to all of their customers.
That's a myth. It never happens that way.
Put aside antitrust complaints asserting bogus conspiracy claims - and they are common. Assume the defendant competitors actually had some illegal conversations. Assume that, as a result of those conversations, some of their customers suffered some economic damage. Even so, the damage is never uniform among customers:
- the terms of the conspiracy may have been a lot looser than "let's all raise the price by $1,"
- some cartel members, some of the time, likely failed to abide by their illegal agreement - e.g., due to market power on the buying side of the market,
- the conspiracy may have been reasonably effective in commodity widgets, but much less effective in specially designed widgets,
- the conspiracy may have been reasonably effective in some areas, but less effective in others, where regional competitors who were not cartel members drove prices down,
- etc., etc.
Or it may have been a conspiracy to allocate customers, to allocate markets, or to prevent market entry, where one would not even expect to find a uniform effect on all customers.
F.R.C.P. 23 requires that common issues must prevail over individual issues and that the claims of the named class plaintiff(s) must be representative of the claims of the class as a whole. They never are. What's a court to do - apply Rule 23 strictly and deny certification, or apply Rule 23 loosly and grant certification, on the assumption that rough justice for the injured customers is better than no justice?
Or maybe there is a third alternative: denying class certification (or at least requiring subclasses) where the lack of uniformity is extreme, but granting certification where class members were all treated in a roughly consistent way.
Those are the three logical alternatives. What about the real world? In the real world some courts take the first alternative, applying Rule 23 in a straightforward way; some take the rough justice approach; and some try to distinguish between cases that are manifestly wrong for class action treatment, as compared to cases where the class action route is only rough around the edges. Of the cases that try to draw such a distiction, few succeed in doing so in any persuasive way.
The Amchem Article
The preceding observations are a simplistic treatment of a subject that calls out for comprehensive scholarly analysis. I have not written such an article, and probably never will. Like others with some experience in the area, I do not know what decision I will need to rely on in my next case.
The article discussed here was a less ambitious undertaking. Amchem was a non-antitrust decision by the Supreme Court standing for the proposition that the same lawyers may not represent an entire umbrella settlement class made up of distinct sets of members with differing litigation goals and different substantive claims. I argued that Amchem's logic extends to antitrust cases, that it applies to litigation classes as well as settlement classes, and that its thrust is contrary to a fair number of antitrust class action decisions that assign a much higher priority to achieving rough justice than to applying Rule 23 strictly.
After the Article
Some cases seem to have taken Amchem's message on board. An example is the Third Circuit's unpublished decision in Wiesfeld v. Sun Chemical, 2004-1 Trade Cas. 74,258 (3d Cir. 2004).
Confusion Worse Confounded
The discussion above relates to actions brought by putative classes of direct purchasers. The difficulties of the class certification determination are squared or cubed
- when indirect purchasers are involved (suing under state antitrust law, or perhaps in a federal court that is unhappy with the Supreme Court's decision in Illinois Brick; see Injury), or
- when the class includes foreign as well as domestic plaintiffs (see International Cartels).