Ninth Circuit rules that class can be certified without considering whether there are more than a de minimis number of uninjured class members
Rule 23(b)(3) of the Federal Rules of Civil Procedure has been the basic mechanism for antitrust classes to obtain monetary damages. This is because antitrust violations usually meet the requirement of issues predominantly common to all class members. For more than a decade now, however, courts have struggled to define a plaintiff’s burden to establish injury to class members when seeking class certification.
Historical hurdles to rule 23(b)(3) class certification
Typically, antitrust defendants tend to focus much of their fire against class certification on arguing that questions of impact do not predominate across the class, as required by Rule 23(b)(3), because more than a de minimis number of putative class members assertedly have not been injured by the antitrust violation at issue.
Most recently, an en banc Ninth Circuit decision in Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC. (“Olean”), comprehensively analyzed a plaintiff’s burden on class certification under Rule 23(b)(3 and ruled 9-2 that the class could be certified without determining the exact percentage of uninjured class members.
The District Court opinion
Before delving into the Ninth Circuit’s opinion, some background in the district court is warranted. The district court’s approach to class certification in Olean is illustrative of district courts’ efforts to interpret the Supreme Court’s direction that courts must conduct a “rigorous analysis” of class certification prerequisites while also generally avoiding inquiring into the actual merits of claims. The district court held a three-day evidentiary hearing in January 2019 during which five experts were subjected to direct and cross examination. In determining whether common questions predominated with respect to the alleged antitrust violation, the district court heavily relied on the views of the direct purchaser plaintiffs’ (“DPPs”) economist expert, Dr. Russell Mangum.
Dr. Mangum opined that the price-fixing conspiracy impacted the class, and that all, or almost all, class members were injured based on various factors present in the canned tuna market. The court meticulously evaluated Dr. Mangum’s non-empirical and empirical analysis, ultimately concluding: ”[t]he evidence put forward by the DPPs, including Dr. Mangum’s regression model, supplemented by the correlation tests, the record evidence, and the guilty pleas and admissions entered in this case, is sufficient to show common questions predominate as to common impact.”
The district court also pointed out that the defendants only attacked Dr. Mangum’s methodology rather than asserting a Daubert challenge to Dr. Mangum and offering their own opinions on common impact. Defendants’ expert, Dr. John Johnson, disaggregated the relevant transactional data and re-ran Dr. Mangum’s model on a customer-by-customer basis. Dr. Johnson’s approach yielded substantial numbers of statistically insignificant results and, for many class members, no results at all because there was not enough customer data relating to those purchases. As a result, Dr. Johnson concluded that up to 28% of class members might not have been impacted by the alleged wrongdoing. By contrast, Dr. Mangum had conducted numerous robustness checks to ensure that his model was not concealing uninjured purchasers and was coupled with a holistic review of the evidence of conspiracy in the case.
The district court concluded that it was not enough for the defendants in the case to simply slice and dice plaintiffs’ model to find a problem with plaintiffs’ model only to raise questions about common impact across the class. “[V]irtually any regression model eventually will fail one or more tests if enough tests and specifications are run, even if nothing is wrong with the model. The tests run by Dr. Johnson, that purport to reject the DPPs’ model are ripe for use at trial but, at this stage, are not fatal to a finding of class-wide impact.”
The district court ultimately granted class certification on July 30, 2019 finding: “Defendants fail[ed] to persuade the Court that these potential individualized issues overwhelm the common ones . . . .”
The Ninth Circuit opinion
On April 8, 2022, the Ninth Circuit issued its 9-2 en banc opinion affirming the district court’s certification of all classes of tuna purchasers. Judge Ikuta, writing for the majority, affirmed the district court’s conclusion that plaintiffs’ evidence was capable of showing that defendants’ price-fixing conspiracy caused class-wide impact under Rule 23(b)(3). The majority explicitly rejected arguments that Rule 23(b)(3) does not allow for certification of a class that includes more than a de minimis number of uninjured members so long as they can be removed at an appropriate time.
There are four key takeaways from the Ninth Circuit’s opinion. First, the en banc court took this opportunity to join other circuits in holding that “plaintiffs must prove the facts necessary to carry the burden of establishing that the prerequisites of Rule 23 are satisfied by a preponderance of the evidence.”
Second, after noting that a district court “is not precluded from certifying a class even if plaintiffs may have to prove individualized damages at trial,” the majority ruled that the possible presence of uninjured class members is not a barrier to certification if uninjured class members can be removed from the class at an appropriate time. The question of injury is to be resolved by the trier of fact.
Third, the Ninth Circuit emphasized that the evaluation of antitrust impact should focus on whether plaintiffs’ proffer is capable of demonstrating impact on a class-wide basis, and not that it actually does so. Specifically, a district court’s role at class certification is to evaluate “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.”
The Ninth Circuit majority acknowledged Dr. Mangum’s rationale that a conspiracy among defendants Bumble Bee, StarKist, and Chicken of the Sea, who together sell over eighty percent of all packaged tuna in the United States, could have an impact on the entire tuna market in a manner that would understandably affect all purchasers of tuna products. The majority stressed that this particularly applied in a case where Defendants’ illegal conduct has already been acknowledged in a criminal suit.
Fourth, the Ninth Circuit explained that a plaintiff can sustain its burden of proof by using aggregated regression results in appropriate circumstances, and that plaintiffs need not separately analyze the impact on every direct purchaser when additional evidence could support a finding of common injury at trial. Plaintiffs should be able to meet their burden of proof without having to analyze impact on every single direct purchaser so long as they conduct sufficiently robust testing or offer sufficient evidence to establish that impact would be common across the class.
In this case, to support his opinion that the class was injured as a whole, Dr. Mangum evaluated various factors including the prior guilty pleas, defendants’ business records, publicly available information, economic supply and demand data, and customer preferences. The Ninth Circuit declared: “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, and that the impact was common to the DPPs during the collusion period.”
Ninth Circuit dissent
Two judges on the en banc panel dissented. First, the dissent noted concerns regarding certification of certain securities cases that the dissenters contended had led to settlements of hundreds of millions of dollars even when defendants may have had meritorious defenses. The dissent, however, identified no specific antitrust case about which it had this concern. Moreover, class certification in the antitrust context has not automatically resulted in settlements. Antitrust cases are more and more frequently resolved after summary judgment or during and after trial.
Second, while the dissenters did not necessarily take issue with class certification in this case, they suggested that the Ninth Circuit should require district courts to determine the number of uninjured class members at class certification and should limit the class definition accordingly. The dissenters cited to the de minimis injury approach adopted by the D.C. Circuit in In re Rail Freight Fuel Surcharge Antitrust Litig,. and by the First Circuit in In re Asacol. Those two courts denied class certification where it was shown in considering class certification that 10 % to 12% of class members could not have been injured. The dissenters suggested that the en banc decision in Olean was in direct conflict with these cases, however, Judge Ikuta had reiterated that the question at class certification is whether the evidence offered by the plaintiffs is capable of proving class-wide impact, adding that it is improper for district courts to make determinations about injury in fact when considering whether to certify a class.
The en banc decision in Olean helps practitioners understand the evidence they need to muster for and against class certification under Rule 23(b)(3) and provides guidance to district courts when analyzing that evidence. As to the question of impact, district courts are not tasked with determining whether the class was in fact injured, only whether the evidence proffered by the plaintiffs is capable of persuading the trier of fact that it was.
*Christopher L. Lebsock is a Partner in San Francisco and Halli E. Spraggins is an Associate in Washington, DC. The Hausfeld firm was among counsel to the plaintiffs in the case.
 993 F.3d 774 (9th Cir. 2022) (en banc).
 See Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982); Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974).
 In re Packaged Seafood Prods. Antitrust Litig., 332 F.R.D. 308, 320 (S.D. Cal. 2019).
 Packaged Seafood Prods., 332 F.R.D. at 328.
 Id. at 323.
 Id. at 325 (internal quotations and citations omitted).
 Packaged Seafood Prods., 332 F.R.D. at 346.
 See In re Lamictal Dir. 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).
 Olean, 31 F.4th at 665.
 Id. at 668-69; see also Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979, 988 (9th Cir. 2015); In re Urethane Antitrust Litig., 768 F.3d 1245, 1255 (10th Cir. 2014).
 Olean, 31 F.4th at 668.
 Id. at 667 (emphasis in original).
 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-00535-EMC (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. 3:18-cr-00513-EMC (N.D. Cal. Nov. 14, 2018), ECF No. 24.
 Id. at 673.
 Id. at 686.
 Some recent examples include In re Capacitors Antitrust Litig. (N.D. Cal. Dec. 15, 2021, ECF No. 2906) (settled during trial); In re Disposable Contact Lens Antitrust Litig. (M.D. Fl. May 9, 2022, ECF No. 1343) (settled on the eve of trial); In re Korean Ramen Antitrust Litig. (N.D. Cal. Dec. 17, 2018, ECF No. 920); In re Processed Eggs (E.D. Pa. June 15, 2018, ECF No. 1763) (tried to verdict in Defendant’s favor).
 See In re Rail Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619, 624–25 (D.C. Cir. 2019).
 See In re Asacol Antitrust Litig., 907 F.3d 42, 55-58 (1st Cir. 2018).
 Olean, 31 F.4th at 31, FN 13.