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US Supreme Court Will Not Weigh In on Class Certification, Representative Evidence Questions | Chicago Popular

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The US Supreme Court has denied a certiorari petition aimed at resolving divisions of the circuit courts relevant to the litigation of class action issues, including whether and when class certification is appropriate where a significant portion of the class could be unharmed and on the use of representative evidence in class Actions.

Stemming from the United States Court of Appeals for the Ninth Circuit en banc decision in Olean vs. StarKist, [1] the Nov. 14, 2022 Supreme Court denial means the Ninth Circuit’s decision will stand, leaving divisions between the Ninth Circuit and other circuits over how and when to address the percentage of unharmed class members in class actions and the use of mean assumptions as representative evidence of injury in class actions.

BACKGROUND OF OLEAN

In the wake of a criminal investigation into the pricing practices of tuna producers, several recurring buyers of tuna products filed alleged class action suits alleging that major tuna producers had fixed prices. The plaintiffs sought certification of three separate classes.

The parties have presented expert reports on the scope of the alleged classes. With respect to the direct purchaser class, the defendant tuna producers argued that the large number of putative uninjured class members – up to 28% – was not de minimis, or not insignificant, and, therefore, the class could be certified. The defendants further argued that the averaging assumptions offered by the plaintiffs’ tuna buyers to prove harm did not provide sufficient evidence to meet Rule 23’s requirements for certification. However, the district court certified the direct purchaser class.

The defendants were allowed to appeal the class certification decision to the Ninth Circuit. A panel of three judges agreed with their arguments and concluded that the certification order could not stand, based in part on what is known as the “de minimis rule” – the view that the number of members of the potentially unharmed putative class defeated the dominance of rule 23 and precluded certification. The panel also said that averaging assumptions can only be used to satisfy predominance when the assumptions have been sufficiently analyzed to determine whether they mask relevant differences between individual class members.

The Ninth Circuit, on its own motion, granted an en banc hearing and affirmed the district court’s class certification decision. Rejecting the de minimis rule, the en banc majority held that the district courts He can not settle an expert dispute over the number of uninjured class members because it is necessarily a matter of “merit” for a jury.

The en banc majority continued to believe that representative evidence – in this case, “mediation hypothesis” of damages – could establish liability under Tyson feeds [2] as long as it is “plausible” to a jury.

APPLICATION TO THE SUPREME COURT

Defendant StarKist asked the Supreme Court to resolve circuit divisions on two key issues that arise during the certification stage of many class action suits; in particular: (1) how many uninjured members of the putative class are too many for a class to be certified (and, consequently, whether it is a matter of merit); and (2) can representative evidence, including averages, be used to support class harms?

Unharmed, de minimis rule and merit

The United States appellate courts for the DC circuit [3] and the First Circuit [4] they both argued that classes could not be certified where the number of class members presumed unharmed exceeded a de minimis number. Since more than an insignificant number of uninjured class members could result in individual determinations of injury, these circuit courts have argued that certification analysis necessarily requires that individual matters trump common ones, contrary to the requirement of Rule 23. Both courts have applied the de minimis and held that specific classes could not be certified where 10-12% of the putative classes may have been unharmed.

The initial Ninth Circuit panel, which embraced and adopted the de minimis standard used by DC and the First Circuit, argued that the direct buyer class in Olea it could not be certified because nearly a third of the class (28%) could be uninjured and, therefore, there was no class-wide evidence that could prove their claims. The en banc majority, however, subsequently rejected the de minimis standard. StarKist said in its petition to the Supreme Court that the en banc majority’s rejection of the de minimis rule, and approval of the certification of a class with as many as 28% of class members uninjured, created a circuit split that justified revision.

The en banc majority further argued that consideration of uninjured class members is ultimately a matter of “merit” for a jury. In its petition to the Supreme Court, StarKist argued that waiting to resolve the matter on the merits specifically contravenes DC’s First and Third Circuit decisions, which held that the class-wide injury issue is part of the “look hard” and rigorous analysis of Rule 23 required by the Supreme Court in Wal-Mart [5] And Comcast; [6] therefore, it must be resolved before certification. StarKist argued that the Ninth Circuit’s en banc holding created yet another circuit division that warranted the Supreme Court review.

Representative tests and averaging hypotheses

In applying for class certification, the complaining tuna buyers used and relied upon representative evidence Tyson feeds to do so. Based on the facts and law of that case, the Supreme Court held that evidence representative of harm was admissible in a class action to establish full class liability where it would have been “sufficient to support a jury decision. . . if it were introduced into each [class member’s] individual action”, pursuant to the law governing such action. [7]

Noting that the circuit courts have interpreted Tyson feeds otherwise, Starkist further argued in his petition that the Ninth Circuit’s decision allowing media guesses in that case creates a conflict with the Third Circuit, which rejected that approach. [8]

IMPLICATIONS OF DENIAL

The Supreme Court’s denial of Starkist’s certiorari petition in this matter carries important class action implications.

First, the Supreme Court appears to be pleased that the law develops further in the circuit courts regarding the assessment of uninjured class members at the class certification stage and the use of representative evidence to meet the requirements of Rule 23 .

Second, the Supreme Court’s refusal to address these issues now means that both litigants and the courts will be left without important guidance from the Supreme Court on these critical issues. This, in turn, creates further scope for widely divergent court of first instance and court of appeal decisions.

Finally, en banc majority participation on these matters is now the law in the Ninth Circuit, where plaintiffs may, in some cases, have an easier path to class certification than in other circuits for particular types of class actions.

[1] Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC31 F.4° 651 (9° Cir. 2022).

[2] Tyson Foods, Inc. v. Bouaphakeo577 US 442 (2016).

[3] In re Rail Freight Fuel Surcharge Antitrust Litigation., 934 F.3d 619, 624-25 (DC Cir. 2019).

[4] In re Asacol Antitrust Litigation.907 F.3d 42, 47, 51-58 (1st Cir. 2018).

[5] Wal-Mart Stores, Inc. v. Dukes564 U.S. 338, 350-51 (2011).

[6] Comcast Corp. v. Behrend569 US 27, 34 (2013).

[7] Tyson feeds577 US to 459.

[8] In re Lamictal Direct Purchaser Antitrust Litigation.957 F.3d 184 (3d Cir. 2020).

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Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

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