289 F.R.D. 200
M.D. Penn.2012Background
- This MDL antitrust action involves Direct Purchaser plaintiffs alleging a conspiracy by Hershey, Mars, and Nestlé to fix prices of chocolate confectionery from 2002 to 2007.
- Plaintiffs contend the market is conducive to collusion due to high market concentration, barriers to entry, inelastic demand, and fungible product characteristics.
- Defendants argue the diverse direct-purchaser base and complex trade-spend/discount structures preclude class treatment because prices paid are not uniform across members.
- A three-day class certification hearing was held in 2011, after which plaintiffs moved for certification of a nationwide class of direct purchasers.
- The court undertook a rigorous Rule 23 analysis, considering expert testimony under Daubert at the certification stage, and ultimately granted class certification and denied motions in limine.
- Damages and antitrust injury would be proven on a class-wide basis using common evidentiary proof, including econometric analyses responding to defendants’ challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Daubert at class certification | Direct Purchasers argue Daubert applies to class certification to ensure admissible expert testimony supports common proof. | Defendants contend Daubert should govern expert testimony at certification to ensure reliability of class-wide proof. | A thorough Daubert review is appropriate at certification. |
| Rule 23(a) requirements | Direct Purchasers show numerosity, commonality, typicality, and adequacy through common conspiracy proof. | Defendants challenge each predicate based on individualized damages and pricing data. | All Rule 23(a) requirements satisfied by a preponderance of the evidence. |
| Predominance under Rule 23(b)(3) | Common evidence can prove antitrust impact for the class, with damages estimable on a class-wide basis. | Trade spend and customer-specific pricing defeat common proof of impact and damages. | Predominance satisfied; common proof supports class-wide antitrust injury. |
| Measurability and proof of damages | Econometric models can quantify class-wide overcharges using a before-after approach with controls. | Damages require highly individualized inquiries due to trade spend and net pricing variations. | Damages capable of class-wide estimation; models deemed reliable for class treatment. |
| Fraudulent concealment tolling | Concealment by defendants could toll the statute of limitations and support tolling for the class period. | Tolling is individualized and could defeat class certification. | Fraudulent concealment inquiry not fatal to class certification; tolling issues addressed on merits. |
Key Cases Cited
- In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2009) (rigorous analysis required for Rule 23 at certification)
- Behrend v. Comcast Corp., 655 F.3d 182 (3d Cir. 2011) (predominance and admissibility interrelate; merits may influence but not mandate mini-trial)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (Supreme Court 2011) (Daubert discussion at certification was obiter dictum)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (fundamental framework for Rule 23 analysis and predominance)
- In re Schering Plough Corp. ERISA Litig., 589 F.3d 585 (3d Cir. 2009) (commonality/typicality in complex class actions)
- In re Scrap Metal Antitrust Litig., 527 F.3d 517 (6th Cir. 2008) (admissible methods for class-wide damages evidence)
- In re Bulk (Extruded) Graphite, 2006 WL 891362 (N.D. Cal. 2006) (utilization of regression analyses for damages in antitrust class actions)
- In re Urethane Antitrust Litig., 237 F.R.D. 440 (D. Kan. 2006) (class-wide impact capable of proof with common evidence)