Third Circuit affirms certification of Antitrust Class Action; Hydrogen Peroxide requirements held to be satisfied

In Behrend v. Comcast Corp., No. 10-2865, 2011 WL 3678805 (3d Cir. Aug. 23, 2011), the Third Circuit has shown that the “thorough examination of the factual and legal allegations” required under In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305, 317 (3d Cir. 2008), does not preclude class certification of antitrust claims if plaintiffs present sufficient evidence that antitrust impact and damages are susceptible of common, not individualized proof.  Plaintiffs in Behrend alleged that Comcast engaged in acquisitions and “swaps” of Philadelphia-area cable TV customers, deterring potential competitors from “overbuilding” Comcast’s territories and leaving it the sole provider.  Plaintiffs offered expert testimony on class certification that this enabled Comcast to charge supracompetitive prices across the region, and also described a model to estimate the damages the class members allegedly sustained.

Comcast argued that plaintiffs failed to carry their burden under Hydrogen Peroxide, but the Third Circuit disagreed and affirmed class certification.  Writing for the panel, Judge Aldisert noted that “[a]t the class certification stage, a court need only be satisfied that  issues . . . will be capable of proof through evidence common to the class;” all that is required is that the district court’s findings on the Rule 23 requirements not be clearly erroneous.  “We are not the jury,” and “[n]othing in Hydrogen Peroxide requires plaintiffs to prove their case at the class certification stage; to the contrary, they must establish by a preponderance that their case is one that meets each requirement of Rule 23.  To require more contravenes Eisen and runs dangerously close to stepping on the toes of the Seventh Amendment by preempting the jury’s factual findings with our own.”  2011 WL 3678805, at *7, *14.  And regarding damages, Judge Aldisert, echoing his opinion in In re Linerboard Antitrust Litigation, 305 F.3d 145, 155 (3d Cir. 2002), wrote that “[w]hen plaintiffs present multiple models created by expert witnesses that can show common evidence and those models are based on data, a district court does not have to determine which model should be used at the time of class certification.”  Id. at *19 n.13.  This drew a partial dissent from Judge Jordan, who stated that expert testimony on class certification should be assessed under Daubert, and that the plaintiffs had not offered a classwide damages model that “fit” the evidence.  Id. at *24.  Judge Jordan would have remanded for potential subclassing as to damages. Id. at *31.

Behrend is instructive for the continuing debate over establishing the line between “merits” and “class certification” questions.  The more a question is viewed as a “merits” determination unnecessary to answering a Rule 23 inquiry, the greater the latitude the district judge will have to certify a class.  In Behrend, the panel was persuaded that plaintiffs’ experts had shown that common proof would be used at trial of their substantive claims.  No more was required to answer the Rule 23 inquiries, and class certification was therefore affirmed.

Steve Larson

An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, environmental clean-up litigation, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve’s clients value his creative approach to resolving complex litigation matters.

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