Blawgletter wrote a paper class cert in antitrust cases for a Practising Law Institute program that went webinar last month. Read it here if you dare:
Where to file. From a plaintiff’s perspective do you have favorite courts to file antitrust class actions. What are the undesirable courts from a defense perspective. Are there circuits that are relatively more plaintiff or defense friendly?
The rules on changing venue[1] and centralizing multidistrict litigation[2] of course restrict choices among district courts. The MDL process creates more uncertainty due to the weight the Judicial Panel on Multidistrict Litigation[3] gives to parties’ preferences; individual judges’ case loads, experience, and willingness to take on extra work; the locations of grand juries; and other factors that don’t often figure into regular motions to transfer venue.
Within those limits, the circuit’s law on the substantive issues matters as much as, or more than, any sense that one circuit treats class actions more favorably than others do. You wouldn’t bring a reverse-payment settlement case, for example, in the Second, Eleventh, or Federal Circuit but would instead bring one, if at all, in the Sixth.[4]
Beyond that, most lawyers who represent antitrust plaintiffs would likely gravitate to the circuits that have the most expertise in antitrust class actions – the Second, Third, Seventh, Ninth, and D.C. Circuits. The Third and Seventh stand out, partly due to their strong historical interest in class actions and antitrust law. Recent examples include Hydrogen Peroxide and its progeny[5] in the Third Circuit and Text Messaging[6] in the Seventh.
The Fifth Circuit seems to have won a reputation for using “license” to toughen class certification standards, at least in securities law cases.[7]
Pleading: How has the Twombly pleading test impacted antitrust class certification cases? Have there been changes in the types of antitrust class actions you are seeing? Are nearly all cases section 1 price fixing cases?
The courts of appeals have just started grappling with how Twombly and Iqbal affect class certification. None seems to have addressed the question yet. In at least one case, a district court rejected a defense motion to deny class certification under Twombly and Iqbal, holding that the complaint does not “fail[] to plausibly allege fact consistent with a class action.”[8]
But the question remains of how Twombly’s plausibility test intersects with Hydrogen Peroxide, In re IPO,[9] and other decisions that require some delving into the merits. The Third Circuit hinted at an answer in In re Ins. Brokerage Antitrust Litig., where the court noted that “Twombly aligns the pleading standard with the summary judgment standard” by requiring “evidence of record . . . of ‘something more than merely parallel behavior’ . . . something ‘plausibly suggest[ive of] (not merely consistent with) agreement’”.[10] If Twombly defines the summary judgment standard, doesn’t it also set the test for whether plaintiffs have shown, by a preponderance of the evidence, that they have satisfied the predominance requirement of Rule 23(b)(3)? Common issues can’t predominate, the reasoning goes, if the class-wide evidence that plaintiffs offer (to show, for example, antitrust impact) fails to support a plausible antitrust claim. As a formal matter, plaintiffs may have to show under Rule 23 that they can support their Twombly-plausible antitrust claims with evidence common to all, or almost all, class members.
Case management/scheduling. Does dividing discovery into class and merits phases make sense — for judicial economy? For plaintiffs? For the defense? What is the common practice now — concurrent class and merits work or staggered? Have you seen any innovations in case management or scheduling?
Putting discovery into class and merits phases never did make much sense for plaintiffs, and it makes even less sense now. Under Hydrogen Peroxide, IPO, and like decisions, plaintiffs must furnish evidence that shows, by a preponderance, their ability to support plausible antitrust claims with proof common to the class. They can’t get away with saying we think we can establish, for example, that almost all class members sustained antitrust injury/impact and that they can calculate damages using a class-wide methodology. And of course the Supreme Court in Twombly pooh-poohed the very idea of phasing discovery in antitrust cases, deeming it “an undertaking not easily susceptible to the kind of line drawing and case management that the dissent envisions.”[11]
But plaintiffs shouldn’t shy from limiting discovery to what they need. Lawyers in my firm routinely offer to restrict each side’s initial production of electronic documents to the five custodians that the other side chooses. The Seventh Circuit’s pilot project on e-discovery and the Sedona Conference also favor phasing discovery to start with the easy stuff – the most accessible and relevant documents and information.[12] And Rule 26 requires courts to impose limits where the discovery “can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Fed. R. Civ. P. 26(b)(2)(C)(i).
Experts. What are best and worst practices in managing experts? Also, are there any innovations in managing costs generally? In antitrust cases, what types of experts are used in class certification — is it always economists?
Managing experts in antitrust cases means quality and cost control. Lead counsel needs to take responsibility for both. That will require him or her to interview candidates in order to make judgments about their suitability for the subject matter and their skill at giving persuasive testimony at hearings and trial; to minimize duplication of effort; to require each expert to do, or closely supervise, the grunt work; to monitor billings; and to encourage concise reports, which cost less and avoid errors.
Experts generally work on an hourly basis, but many will take on discrete projects for flat fees. The flatness of the fee tends to lower costs. Chances to negotiate flat fees present themselves most often at the start of a case. You should at all events require a budget. You should also consider agreeing with the other side not to depose any expert who submits a report that fully covers all opinions.
Economists account for most of the experts who work on antitrust cases. Econometricians and statisticians come in second, usually either to support or rebut opinions of economics experts or to present their own opinions on damages. Industry experts may also prove necessary to provide...
