Mark Wallach v. Eaton Corp, 837 F.3d 356

Background

Plaintiffs (putative class of Class 8 truck purchasers) allege Eaton and OEMs conspired via rebate-based long-term agreements to oust competitor ZF Meritor and monopolize Class 8 transmissions, harming truck buyers.
The class action was brought by putative direct purchasers (buyers from OEMs). Tauro was a putative class representative that purchased trucks from R&R, which executed a written assignment of its direct-purchaser antitrust claims to Tauro.
District Court held Tauro lacked standing because the assignment allegedly lacked bargained-for consideration and dismissed Tauro; it also denied timely intervention motions by two OEM direct purchasers (Toledo Mack and JJRS) as untimely, and then dismissed the case for lack of a named plaintiff.
On appeal, the Third Circuit considered (1) whether federal common law requires consideration for assignments of federal antitrust claims and (2) whether the presumption of timeliness for motions to intervene by putative class members applies pre-certification.
The Third Circuit concluded federal common law (guided by the Restatement (Second) of Contracts) does not require consideration for an otherwise express written assignment of an antitrust claim, and that the pre-/post-certification presumption of timeliness applies pre-certification; it reversed the District Court on standing and intervention rulings and remanded.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal common law requires bargained-for consideration for assignment of federal antitrust claims	Assignment need not be supported by consideration; Restatement §324/§332 governs and allows written gratuitous assignments	Consideration is required; state-law variation or fifty-state survey should control	Held: No consideration required under federal common law; an express written assignment suffices (adopting Restatement as persuasive baseline)
Proper source for federal common law on antitrust assignments	Apply Restatement (Second) of Contracts to create uniform federal rule	Apply state law of assignment or conduct a fifty-state survey	Held: Restatement is the appropriate and persuasive starting point to define federal common law in this area (subject to Illinois Brick policies)
Whether expressness plus lack of consideration invalidated R&R→Tauro assignment (standing)	Tauro: written, express assignment conferred direct-purchaser standing despite no consideration	Defendants: assignment invalid without bargained-for consideration, so Tauro lacks statutory standing	Held: Assignment was written and express; valid under federal common law; Tauro has statutory standing; District Court erred to dismiss on that basis
Whether presumption of timeliness for intervention applies pre-certification	Proposed intervenors: presumption applies pre-certification; they timely sought intervention once standing challenge crystalized	Defendants: presumption limited to post-certification before opt-out; interrogatories/depositions earlier should have put intervenors on notice so motions were untimely	Held: Presumption of timeliness extends to pre-certification; intervenors filed timely (measured from Jan 2015 letter) and District Court abused discretion denying intervention

Key Cases Cited

Ill. Brick Co. v. Illinois, 431 U.S. 720 (1977) (establishes the direct-purchaser rule and underlying policy rationales)
Gulfstream III Assocs. v. Gulfstream Aerospace Corp., 995 F.2d 425 (3d Cir. 1993) (federal common law governs assignment of antitrust claims; assignments must be express)
In re Fine Paper Litig. State of Wash., 632 F.2d 1081 (3d Cir. 1980) (assignments of antitrust claims recognized; Restatement consistent with federal common law)
In re Community Bank of N. Va., 418 F.3d 277 (3d Cir. 2005) (recognizes a rebuttable presumption of timeliness for class-member intervention motions)
ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254 (3d Cir. 2012) (prior appellate opinion addressing the same market and related antitrust claims)
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) (statutes of limitations tolling during class-certification pendency to preserve putative class members’ rights)
Mountain Top Condo. Ass’n v. Dave Stabbert Master Builder, Inc., 72 F.3d 361 (3d Cir. 1995) (timeliness inquiry for intervention considers stage of proceedings and prejudice)
NAACP v. New York, 413 U.S. 345 (1973) (timeliness considerations where intervenors sought to protect important rights in an advanced case)