United Food & Commercial Workers Unions v. Warner Chilcott Ltd. (In Re Asacol Antitrust Litig.), 907 F.3d 42

Background

Warner Chilcott withdrew Asacol shortly before its patents expired and simultaneously introduced Delzicol, a similar DBP-free product with later patent protection; plaintiffs allege this foreclosed generic entry and forced a "hard switch."
Putative class: indirect purchasers in 25 states + D.C. who bought Asacol before July 31, 2013 and then purchased Delzicol or Asacol HD after that date; named plaintiffs are union-sponsored benefit plans that purchased in only a subset of those jurisdictions.
Plaintiffs asserted state-law antitrust and consumer-protection claims (Illinois-Brick-repealer states) because indirect purchasers cannot recover under federal antitrust law.
District court certified the class under Fed. R. Civ. P. 23(b)(3), estimating ~10% of class members would be uninjured (brand-loyal) and proposing a claims-administrator process to remove uninjured members post-judgment.
Defendants appealed, challenging (1) Article III standing to represent claims arising under states where no named plaintiff purchased, and (2) certification given the presence of many potentially uninjured class members and lack of an administratively feasible mechanism to resolve individual injury.
First Circuit reversed class certification: it found standing generally satisfied for most state-law claims but held the district court failed to provide a workable, rights-protective method to adjudicate or exclude uninjured class members prior to or at trial.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Article III standing to represent class claims under states where no named plaintiff purchased	Named plaintiffs can represent materially similar claims under other states' laws; standing questions are for Rule 23, not Article III	Named plaintiffs lack standing to represent claims under states where they never purchased	Court: Standing satisfied for all but NY §349 claims; named reps may assert claims under materially parallel state laws, but plaintiffs waived opposition re: NY deception element
Whether class may include uninjured members absent plan to identify them	Unrebutted affidavits or expert common proof (Dr. Conti) can establish class-wide impact; any residual overinclusion is de minimis and can be handled by claims administrator or netted out in aggregate damages	Presence of thousands of potentially uninjured members makes individual injury an individualized issue that predominates; proposed claims-administrator scheme denies defendants' rights to challenge claims and violates Seventh Amendment/Rule 23	Court: Reverse certification; Nexium allows unrebutted affidavits only if reliable and defendants can meaningfully contest them; here plaintiffs offered no workable, rights-protective mechanism to cull uninjured members
Use of representative/statistical expert proof to establish individual injury at trial	Expert market-share model (≈90% generic penetration) can support class-wide proof of injury analogous to Tyson Foods representative evidence	Statistical group proof cannot substitute for proof that each class member was injured; Tyson is distinguishable and does not authorize inferring each individual's injury from a class-average penetration estimate	Court: Expert statistical proof does not suffice to prove individual injury for each class member; plaintiffs failed to show admissible legal rule or substantive law that would make such proof sufficient
Permissibility of post-judgment claims-administrator to remove uninjured class members	Claims-administrator can evaluate claims and remove uninjured members post-judgment; practical mechanism to manage and allocate damages	Post-judgment culling and administrative review would deprive defendants of opportunity to litigate individual defenses and violates evidentiary and Seventh Amendment protections	Court: Rejected post-judgment/administrative culling as insufficiently protective; Rule 23 requires a feasible plan at certification to address individual injury issues

Key Cases Cited

Warth v. Seldin, 422 U.S. 490 (1975) (Article III standing principles for representatives)
Blum v. Yaretsky, 457 U.S. 991 (1982) (limits on representing claims where named plaintiffs lack a stake in some class claims)
Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) (direct purchaser rule in federal antitrust actions)
In re Nexium (Esomeprazole) Antitrust Litig., 777 F.3d 9 (1st Cir. 2015) (affidavits/unrebutted testimony may identify injured class members in certain circumstances)
In re New Motor Vehicles Canadian Exp. Antitrust Litig., 522 F.3d 6 (1st Cir. 2008) (predominance inquiry requires prediction of how issues will be tried)
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (permitting representative statistical proof under controlling substantive law; limited to contexts where such proof suffices for individual claims)
Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (plaintiff bears burden to show admissible methodology for classwide damage proof under Rule 23)
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (class certification cannot eliminate defendants' right to litigate individualized defenses)
Halliburton Co. v. Erica P. John Fund, 134 S. Ct. 2398 (2014) (limitations on individualized rebuttal to classwide presumptions)
New York ex rel. Schneiderman v. Actavis PLC, 787 F.3d 638 (2d Cir. 2015) (condemning similar hard-switch conduct as anticompetitive)