Antitrust and Unfair Competition Law

En Banc Ninth Circuit Rejects de minimis Standard Established a Year Before in Certifying a Class That Includes Uninjured Members

May 2022

By Anthony Leon

On April 8, 2022, in an en banc decision, the Ninth Circuit affirmed the certification of classes of direct purchasers in the canned tuna antitrust litigation, effectively rejecting the argument that a class cannot be certified with more than a de minimis number of uninjured class members. See Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, No. 19-56514 (9th Cir. Apr. 8, 2022)(en banc). The Ninth Circuit’s en banc opinion follows an earlier panel decision, which had vacated the district court’s class certification orders.

This Ninth Circuit order goes further than simply adding a new chapter to the seafood antitrust litigation saga. As a short reminder of this long story, a few tuna purchasers—including consumers, retailers, wholesalers, and commercial food preparers—filed lawsuits against Bumble Bee Foods LLC (Bumble Bee), StarKist, and Chicken of the Sea, Inc. (COSI), accusing them of conspiring to fix and maintain prices of canned tuna. Consolidated in a multidistrict litigation (MDL), the Plaintiffs moved to certify classes under Rule 23(b)(3). One of these classes was for the Direct Purchaser Plaintiffs (DPP)—retailers and wholesalers, another was the End Payer Plaintiffs (EPP)—consumers, and the last one being the Commercial Food Service Product (CFP). In parallel, the U.S. DOJ brought criminal charges against the coconspirators, where notably Bumble Bee pled guilty.

As part of the prerequisites to obtaining class certification under Rule 23(b)(3), the plaintiffs must show that that there are “questions of law or fact common to the class,” and that those questions “predominate over any questions affecting only individual members.” Using expert testimony, Plaintiffs tried to establish common antitrust impact. Their expert argued that only 5.5% of the class members did not suffer an injury, while Defendants argued that about 28% of the class did not suffer any injury. Despite this dispute, the District Court for the Southern District of California certified the three classes.

On April 6, 2021, the Ninth Circuit vacated the certification, holding that the District Court abused its discretion when it refused to resolve the dispute on the uninjured class members between the two expert witnesses. Writing for the majority, Judge Patrick J. Bumatay considered that, at the class certification stage, a Court “find by a preponderance of the evidence that the plaintiff has established predominance under Rule 23(b)(3).” Olean Wholesale Grocery Coop. v. Bumble Bee Foods, No. 19-56514, at 16 (9th Cir. Apr. 6, 2021). In this case, the District Court considered that Plaintiffs’ statistical evidence exposed through their expert testimony was “‘plausibly reliable’ and otherwise left determination of this question to the jury” while this dispute is “of paramount importance to certification of the class.” Id. at 30. In Judge Bumatay’s words, “[a]lthough [the Ninth Circuit has] not established a threshold for how great a percentage of uninjured class member would be enough to defeat predominance, it must be de minimis.” Id. at 32. As a result, the Ninth Circuit remanded to the District Court “to resolve the factual disputes concerning the number of uninjured parties in each proposed class before determining predominance.” Id. at 34.

On August 3rd, 2021, the Ninth Circuit vacated the panel decision, ordering the case to be reheard en banc. In its extensive en banc opinion released on April 8th, 2022, the Ninth Circuit developed critical points on class certifications expected to be transposed to cases other than antitrust class actions. Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, No. 19-56514, 2022 U.S. App. LEXIS 9455 (9th Cir. Apr. 8, 2022).

The en banc court followed other circuit courts in establishing the burden of proof for satisfying Rule 23’s requirements. In Judge Sandra S. Ikuta’s words, 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.” Id. at 22. The Court also noted that only admissible evidence can be used to seek class certification. Id. at 23.

The Ninth Circuit then held that when evaluating whether evidence is persuasive to determine whether Rule 23(b)(3)’s predominance requirement has been met, courts may “weigh conflicting expert testimony and resolve expert disputes.” Id. at 25. Further, the en banc Court notes that district courts are not to assess whether the evidence establishes that Plaintiffs would win at trial, but only to determine “whether the ‘common question’ prerequisite is met . . . [by] resolving whether the evidence establishes that a common question is capable of class-wide resolution. . .” Id. at 26. As a result, “a district court cannot decline certification merely because it considers plaintiffs’ evidence relating to the common question to be unpersuasive and unlikely to succeed in carrying the plaintiffs’ burden of proof on that issue” Id. at 28.

Finally, and in contrast from the earlier panel decision, the Ninth Circuit rejected the per se argument that “Rule 23 does not permit the certification of a class that potentially includes more than a de minimis number of uninjured class members” Id. at 30. Instead, district courts must “after rigorous analysis” assess whether “the common question predominates over any individual questions, including individualized questions about injury or entitlement to damages.” Id. at 30.

This Ninth Circuit order offers a great level of clarification for practitioners on Courts’ expected standard on whether to certify or not a class comprised of uninjured members. It also reminds the plaintiffs side of their burden of proof in order to get their class certified.

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