Donald Wortman v. Amy Yang
701 F. App'x 554
| 9th Cir. | 2017Background
- Appellant Amy Yang appealed the district court’s final approval of eight class-action settlement agreements involving multiple airlines and defendants.
- The district court certified a settlement class covering purchasers of both U.S.-originating and foreign-originating travel, and both direct and indirect purchasers of airline tickets.
- Defendants had not raised affirmative defenses based on the Foreign Trade Antitrust Improvements Act (FTAIA) or Illinois Brick at the time of settlement/ certification.
- The settlement notice program reached roughly 80% of potential U.S. class members and ~70% in Japan; notice and opt-out deadlines were set at least 35 days before the fairness hearing.
- The Ninth Circuit reviewed the certification and notice rulings for abuse of discretion and affirmed the district court’s approval of the settlements.
Issues
| Issue | Plaintiff's Argument (Yang) | Defendant's Argument (Defendants/Appellees) | Held |
|---|---|---|---|
| Whether district court erred by certifying a single settlement class without subclasses for foreign-originating travel purchasers | Class contains members (foreign travel purchasers) barred by FTAIA and thus cannot be fairly represented together | Subclassing was unnecessary because defendants had not raised FTAIA as an affirmative defense at settlement; certification need not apportion damages claim-by-claim | Affirmed: court need not create speculative subclasses or value individual claims at certification |
| Whether district court erred by lumping direct and indirect purchasers in one class | Indirect purchasers barred by Illinois Brick cannot be adequately represented with direct purchasers | Defendants did not assert those defenses at settlement stage; certification of settlement class does not require claim-by-claim merit adjudication | Affirmed: no requirement to subdivide based on speculative conflicts absent raised defenses |
| Whether notice to class members satisfied Rule 23 | Yang argued notice period and procedures were inadequate, particularly while class membership period remained open on appeal | Defendants implemented comprehensive notice reaching large percentages and provided opt-out/object deadlines at least 35 days before fairness hearing | Affirmed: notice complied with Rule 23 and was sufficient to elicit objections |
| Standard of review for settlement-class certification and approval | Yang urged stricter scrutiny given potential intra-class conflicts | Defendants relied on Ninth Circuit precedent that settlement-class certification has limited merits inquiry | Affirmed: abuse-of-discretion review; district court acted within discretion |
Key Cases Cited
- In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir.) (abuse-of-discretion review of settlement approval)
- Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir.) (settlement-class certification need not assign monetary value to each claim)
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (Supreme Court) (limits recovery to direct purchasers under federal antitrust law)
- In re Online DVD-Rental Antitrust Litig., 779 F.3d 934 (9th Cir.) (subclasses may not be created on speculative conflicts)
- Sullivan v. DB Invs., Inc., 667 F.3d 273 (3d Cir.) (limited authority to examine merits at certification)
- Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370 (9th Cir.) (notice must be sufficient to surface reasonable objections)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (Supreme Court) (class settlement requires adequate representation and may need subclasses for conflicting interests)
- Ortiz v. Fibreboard Corp., 527 U.S. 815 (Supreme Court) (division into homogeneous subclasses may be required for divided classes)
- Somers v. Apple, Inc., 729 F.3d 953 (9th Cir.) (Illinois Brick bars indirect purchaser antitrust suits)
- In re Korean Air Lines Co., Ltd. Antitrust Litig., 642 F.3d 685 (9th Cir.) (definition of indirect purchasers of airline tickets)
- Hesse v. Sprint Corp., 598 F.3d 581 (9th Cir.) (inadequate representation when subgroup claims differ from representative)
- Zonowick v. Baxter Healthcare Corp., 850 F.3d 1090 (9th Cir.) (district court abuses discretion when it makes legal errors)