DENNIS A. BLACK; ANITA C. DESELMS, as Trustee of the Anita C. Deselms Living Trust and for all similarly situated persons; GROSS WILKINSON RANCH LLC; JOHN G. WILLIAMS; THERESA M. WILLIAMS, Trustee for the John & Theresa Williams Trust dated July 18, 2019; RUSSELL I. WILLIAMS, JR., Trustee Russell I Williams Jr Revocable Trust U/A dated July 27, 1983; RABOU RESOURCES, LLC, by and through its manager, a/k/a Ron Rabou; JOLENE M. SIMKINS; NORMA JEAN SMITH; RICHARD BAGBY; TRACY BAGBY; PHYLLIS A. COONEY, Trustee of the Phyllis A Cooney Trust U/A dated September 22, 1995; JUSTIN W. MILLER; BRANDI J. MILLER; MINA BAYNE; KAREN BRYANT, Individually and as Trustee of the Karen Bryant Living Trust dated September 22, 2017; KAREN BLACK; PHILLIP BROCK CARL WILLIAMS, Trustee of the Williams Family Trust U/A dated July 21, 2014; SUZANNE LEE EKLUND, Trustee of the Suzanne Lee Eklund Revocable Trust UA April 25, 2011; JOHN K. MARQUARDT, Trustee of the John K Marquardt Revocable Trust UA dated May 1, 2008; GUST OF WIND, LLC, a Nebraska limited liability company; PARTY VIKINGS, LLC, a Colorado limited liability company; J & L LERWICK LIMITED PARTNERSHIP; JULIE JAYNE GOYEN; J. MICHAEL POWERS, Trustee of the J. Michael Powers Revocable Trust UA dated August 10, 1982; BENJAMIN D. ADKINSON, a/k/a Benjamin Adkison, a/k/a Benjamin D. Adkison; KELLI J. ADKISON, a/k/a Kelli Adkison; VAL D. EKLUND, a/k/a Val Eklund; SHARRON R. EKLUND, a/k/a Sharon Eklund; KAREN LESLIE EKLUND, a/k/a Karen Bryant; JOHN C. EKLUND, Trustee of the John C. Eklund Revocable Trust UA April 25, 2011; JOHN GILBERT WILLIAMS, Trustee of the John & Theresa Williams Trust dated July 18, 2019, a/k/a John G. Williams; THERESA M. WILLIAMS, Individually, Plaintiffs - Appellees, v. OCCIDENTAL PETROLEUM CORPORATION; ANADARKO PETROLEUM CORPORATION; ANADARKO E&P ONSHORE LLC; ANADARKO LAND CORP; ANADARKO OIL & GAS 5 LLC, Defendants - Appellants.
No. 22-8040
United States Court of Appeals for the Tenth Circuit
June 7, 2023
McHUGH, Circuit Judge.
PUBLISH. Appeal from the United States District Court for the District of Wyoming (D.C. No. 2:19-CV-00243-NDF)
Samuel Issacharoff, New York, New York (Robert Klonoff, Portland, Oregon; Robert P. Schuster, Bradley L. Booke, Adelaide P. Myers, Robert P. Schuster, P.C., Jackson, Wyoming; J.N. Murdock, Murdock Law Firm LLC, Casper, Wyoming; Cody L. Balzer, Balzer Law Firm, P.C., Loveland, Colorado; Thomas N. Long, Kris C. Koski, Aaron J.
Before McHUGH, EID, and CARSON, Circuit Judges.
McHUGH, Circuit Judge.
The district court certified a class action, for liability purposes only, comprised of “[a]ll persons . . . having ownership of Class Minerals during the Class Period.” App. Vol. II at 275. Class Minerals were further defined as oil and gas mineral interests that were not under lease to drill and operate wells during the Class Period and that were situated within specified geographic regions of Laramie County and adjacent to sections
Anadarko appeals the district court‘s class certification pursuant to
I. BACKGROUND
A. Factual History1
1. Wyoming Oil and Gas Leasing and Development
Mineral ownership in Laramie County follows a checkerboard pattern, consisting of odd- and even-numbered one-square-mile “sections.” App. Vol. I at 127. This pattern originated in the 1860s when the federal government granted fee simple title in land to railroad companies during the construction of the transcontinental railroad. During the Class Period, mineral interests in the odd-numbered sections of the checkerboard were predominantly owned by Anadarko. Mineral interests in the even-numbered sections were predominantly owned by other private landowners, including Plaintiffs.
Smaller mineral interest owners, such as the named Plaintiffs, generally lack the resources or expertise to develop and market their own minerals. Instead, such owners
Generally, the most economical method for recovering oil and gas in eastern Laramie County is through drilling two-mile horizontal wells. This entails drilling down to the depth of the target formation, then drilling horizontally through the formation for two miles. This dispute relates to two productive formations in eastern Laramie County, the Niobrara and Codell Formations, which are configured such that horizontal stretches run north and south rather than east and west. Because checkerboard sections are approximately one square mile, drilling two-mile horizontal wells necessarily involves drilling through more than one section and therefore impacts mineral interests belonging to multiple owners. Because Anadarko was the mineral interest owner and working interest owner for most of the odd-numbered sections during the Class Period, developing two-mile horizontal wells often required drilling through sections owned or leased by Anadarko.
When the holder of an APD decides to drill a well, it must coordinate with other owners of mineral and working interests in the DSU. To do this, the operator provides all owners in the DSU with information about the proposed well, including the anticipated costs. If all owners consent, they agree to pool their working interests, sharing drilling costs and revenues for the well. If some owners do not consent, the operator can seek an order from the WOGCC to “force[] pool[]” the non-consenting interests. Decl. of Mark Doelger at ¶¶ 30–31, Black v. Occidental Petroleum, No. 19-CV-243-NDF (D. Wyo., Mar. 3, 2022), ECF No. 190-4; see also
When interests are force pooled, the operator must pay the pro-rata share of drilling and completion costs attributable to non-consenting working interest owners and mineral owners. But the operator also receives the non-consenting owner‘s share of any resulting revenues until certain costs are recouped by the participating owners (“penalty
2. Anadarko‘s Intracompany Leases
During the Class Period, Anadarko was uniquely situated as both a mineral interest owner, working interest owner, and operator in Laramie County. Anadarko could, and did, lease mineral interests owned by one of its subsidiaries (Anadarko Land Corp.) to another of its subsidiaries (Anadarko E&P Onshore). Thus, Anadarko could set the terms of the intracompany leases that would govern the royalty it would be paid if another operator “force pooled” its mineral interests.
In November 2017, Anadarko began raising the royalty rates on its intracompany leases to 30%, above what Plaintiffs allege was the historically-prevailing 18–20% royalty rates for leases in Laramie County. Eventually, Anadarko placed 30% intracompany leases on all its non-producing mineral interests in Laramie County.
B. Procedural History
In November 2019, Plaintiffs filed suit against Anadarko in the United States District Court for the District of Wyoming. In their operative complaint, Plaintiffs seek damages in accordance with the Sherman Act § 2, the Clayton Act § 4, and Wyoming law for Anadarko‘s alleged antitrust violations. Plaintiffs allege Anadarko “obtained, maintained, and extended its dominance” in the “market for leasing of oil and gas mineral rights” in Laramie County by (1) creating intracompany oil and gas leases with anticompetitive 30% royalty rates and (2) filing APDs without engaging in drilling or having intent to drill. App. Vol. I at 99–100. Plaintiffs allege these actions constituted a “willful exercise of monopoly or monopsony power[,]” in violation of state and federal
Plaintiffs moved to certify a class of “[a]ll persons . . . having ownership of Class Minerals during the Class Period” subject to specified exclusions not at issue in this appeal. App. Vol. II at 12. Class Minerals were defined as:
Oil and gas minerals . . . . , as shown by the public records of the Clerk and Recorder of Laramie County, Wyoming, that were:
(a) Not under an oil and gas lease to drill and operate wells during the Class Period;
(b) Located in the Niobrara and/or Codell geologic formations in Laramie County, Wyoming, east of the eastern boundary of Range 67W having oil and gas pools that could be reasonably produced as demonstrated by industry‘s filing of drilling spacing applications or applications for drilling permits in at least 50% of the sections in the relevant township; and
(c) Located either:
a. Within one section of a section that had a 30% royalty Intracompany Lease covering at least 50% of the oil and gas minerals provided the lease or memorandum of the lease was filed in the Laramie County public records disclosing the royalty rate, or
b. In a section (or a part thereof) immediately bounded to the north, south, or both by a section in which Defendants had a 30% royalty Intracompany Lease as set forth in subparagraph a.
Id. at 12–13. The Class Period was defined as the time from July 1, 2016, through October 19, 2020. Plaintiffs argued the proposed class satisfied all the requirements of
Anadarko opposed Plaintiffs’ motion for class certification, arguing Plaintiffs had failed to meet their burden of satisfying the
The district court granted Plaintiffs’ motion in part and certified an issue class, “for liability purposes only[,]” pursuant to
II. DISCUSSION
Anadarko raises two main issues in its appeal of class certification. First, Anadarko argues the district court erred in holding Plaintiffs had met their burden of proving the predominance requirement of
We conclude the district court applied the correct standards for determining whether to certify a class under
A. Standard of Review
We review de novo the question of whether the district court applied the proper legal standard in granting class certification. See Shook v. El Paso Cnty., 386 F.3d 963, 967 (10th Cir. 2004). “When the district court has applied the proper standard in deciding whether to certify a class, we may reverse that decision only for abuse of discretion.” Adamson v. Bowen, 855 F.2d 668, 675 (10th Cir. 1988). “[W]e will not disturb the underlying decision unless we have a definite and firm conviction that the district court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances.” Thiessen v. General Electric Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001). “The district court abuses its discretion when it misapplies the
If the requirements of
B. District Court‘s Application of the Legal Standard
Before proceeding to review the district court‘s application of the
We conclude the district court applied the correct legal standard in conducting its
Having determined the district court applied the correct legal standard, we proceed to review Anadarko‘s arguments that the district court abused its discretion in granting class certification. Specifically, Anadarko objects to the district court‘s application of the
Sensibly, the predominance inquiry begins “with the elements of the underlying cause of action.” Id. at 1088 (quoting Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804, 809 (2011)). Plaintiffs allege Anadarko‘s 30% intracompany leasing program constituted monopolization or attempted monopolization in violation of the Sherman Act
Anadarko argues the district court failed to conduct the appropriately “rigorous”
Because market power is contextualized by the relevant market, inquiry into an antitrust defendant‘s market power necessarily begins with defining the relevant market. See Auraria Student Hous. at the Regency, LLC v. Campus Vill. Apartments, LLC, 843 F.3d 1225, 1236 (10th Cir. 2016) (explaining that both § 2 monopoly and attempted monopoly claims require proof of power in a relevant market). The relevant market is defined in terms of the product market, comprised of “products found to be sufficiently substitutable,” and the geographic market, encompassing “the terrain in which
a. Relevant market
Although both parties focus on leasing activity in the Niobrara and Codell geologic formations in Laramie County, Wyoming, they disagree as to how to define the relevant market within that area. Both in the district court and on appeal, Anadarko claims it does “not contest the market definition offered by Plaintiffs,” but characterizes the Niobrara and Codell Formations as consisting of “more than 500 relevant markets.” App. Vol. II at 235. In support, Anadarko points to the declaration of Plaintiffs’ expert, Dr. Wickelgren, opining that “the product market here should be restricted to sections that can create north-south, two-section, horizontal wells.” App. Vol. I at 251. From this, Anadarko claims Plaintiffs advance a definition of over 500 relevant markets each comprised of “particular one-square-mile section[s] of the Laramie County checkerboard
The district court was “unpersuaded” by Anadarko‘s argument that there were over 500 relevant markets. Id. at 262. The court acknowledged Dr. Wickelgren “recognize[d] that each section can be viewed as its own product market” but noted he went “on to opine that these sections can be grouped by competitive conditions, creating two distinct groups.” Id. Based on its understanding of the parties’ arguments and Dr. Wickelgren‘s declaration, the court found the relevant market, for class certification purposes, consisted of the “eastern Laramie County market for mineral leases in the north/south-oriented two-section DSUs[,]” which could be further broken down into “two distinct product market groups.” Id. at 261–62.
The district court‘s market definition, for purposes of class certification, was not a clearly erroneous finding of fact and not an abuse of the district court‘s discretion. See Reazin v. Blue Cross & Blue Shield of Kan., Inc., 899 F.2d 951, 975 (10th Cir. 1990)
[T]he product market should be restricted to potential, contiguous two-section undeveloped oil and gas mineral leases that run north-south. . . . But, following the approach of the [Department of Justice and Federal Trade Commission’s Horizontal Merger] Guidelines, these [sections] can be grouped by competitive conditions, creating two distinct groups: sections with a 30% Anadarko royalty in an intra-company lease to both the north and south of the section and sections with a 30% Anadarko royalty only [to] the north or the south, but not both.
App. Vol. I at 238 (footnotes omitted). Anadarko’s proposed market definition stopped at the first half of Dr. Wickelgren’s conclusions and selectively omitted Dr. Wickelgren’s full submarket definition, based on his application of the Horizontal Merger Guidelines.6
In doing so, Anadarko’s proposed market definition failed to include products, here oil and gas leases, “found to be sufficiently substitutable,” or to encompass “the terrain in which competition takes place.” Buccaneer Energy (USA) Inc., 846 F.3d at 1312 (quotation marks omitted). The court’s decision to credit Plaintiffs’ definition of the relevant market and submarket groupings, based on the evidence presented, was not clearly erroneous and “falls within the bounds of rationally available choices given the facts and law involved.” Vallario, 554 F.3d at 1264.
In the district court, Plaintiffs argued measuring Anadarko’s market share would “turn[] on calculations achievable through generalized proofs . . . , namely, ‘[h]ow much of the market did [Anadarko] actually lease.’” App. Vol. II at 214 (quoting Id. at 172). Plaintiffs argued the relevant market could be analyzed in two subgroups: (1) where Anadarko had 100% monopoly power, corresponding to sections where Anadarko had a 30% intracompany lease to the north and south, and (2) where Anadarko had 67% monopoly power, corresponding to sections where Anadarko had a 30% intracompany lease to only the north or south. Anadarko responded that, based on its market definition, measuring market power would require individualized evidence regarding each of over 500 relevant markets. Thus, Anadarko argued market power would present an individualized issue, weighing strongly against certification.
Having reviewed and rejected Anadarko’s proposal of 500 relevant markets, the district court concluded that “there will be generalized class-wide evidence which focuses on the[] two distinct product market groups” and “individual questions will not arise in determining whether [] Anadarko [] possessed monop[oly] power in the relevant market.” Id. at 262. The district court acknowledged, but was ultimately unpersuaded by, Anadarko’s argument that determining market power will “require[] individualized inquiries . . . based on percentages of leased minerals in [] hundreds of markets.” Id. at 261–62. Instead, the court found that “Anadarko [] [could] advance common class-wide evidence in an attempt to disprove sufficient monop[oly] power and market share to exclude rivals and suppress competition.” Id. at 262.
On review, we perceive no abuse of discretion in the district court’s conclusion that market power presents a common question susceptible to generalized class-wide proof as to the two submarkets. Anadarko’s contentions, that Plaintiffs’ methodology overcalculates market share and that Anadarko lacked power to exclude competitors, both present class-wide rebuttal evidence. Where Anadarko’s primary defense is to show that Plaintiffs’ methodology is “unrepresentative or inaccurate,” “[t]hat defense is itself common to the claims made by all class members.” Tyson Foods, Inc., 577 U.S. at 457.
Additionally, Anadarko’s proposed individualized evidence addresses whether Anadarko had power to exclude competitors from each individual section, not whether Anadarko had power to exclude competitors or control prices in the relevant market. While market power depends on various market characteristics in addition to market share, those characteristics apply to the relevant market. For class certification purposes, the district court determined the relevant market was the mineral leasing market in the Niobrara and Codell Formations, divided into two submarkets. Evidence pertaining to barriers to entry, the number of competitors, or market trends must relate to that market, not to each separate section. Thus, the district court’s determination, that individual issues will not predominate in a determination of market power in the relevant market,
Considered overall, the district court applied the correct standard under Rule 23 in determining that Plaintiffs had proved that market definition and market power would “in fact” present common questions capable of class-wide resolution. Wal-Mart Stores, Inc., 564 U.S. at 350. Therefore, we may reverse only for abuse of discretion. See Adamson, 855 F.2d at 675. The court considered Anadarko’s proposed evidence, but ultimately determined “there will be generalized class-wide evidence which focuses on the[] two distinct product market groups.” App. Vol. II at 262. Anadarko’s rebuttal evidence took two forms: (1) evidence alleging a class-wide failure of proof as to the issue of market power and (2) evidence pertinent to Anadarko’s power to exclude competitors from individual sections rather than from the relevant market as a whole or from the two subgroupings of that market. The former presents common rather than individualized evidence, and the latter is irrelevant to a determination of Anadarko’s power in the relevant market. Therefore, the district court did not exceed the bounds of permissible choice in characterizing the question of market power as a common issue.
2. District Court’s Antitrust Impact Analysis
To maintain a private action and recover treble damages under the
In determining whether antitrust impact presented a common issue, the district court considered both parties’ evidence, but ultimately credited Plaintiffs’ expert evidence showing Anadarko’s anticompetitive conduct created “negative impacts to every mineral owner in the area” by “reduc[ing] [] the value for all mineral interests owned by the class” such that class members were “excluded from the market.” App. Vol. II at 265. In the court’s view, Anadarko’s proffered individualized evidence regarding antitrust impact showed the presence of uninjured class members or a general failure of Plaintiffs’ proof of antitrust impact, neither of which impeded class certification. Ultimately the court found Plaintiffs’ evidence and theory of antitrust
Anadarko contests the district court’s conclusion and argues individualized inquiries will be required to prove whether a causal connection exists between its alleged antitrust violation and Plaintiffs’ alleged injury. Anadarko argues the district court erred by disregarding its proffered individualized evidence of antitrust impact and that this error ensued from (a) the district court’s misinterpretation of In re Urethane Antitrust Litigation, 768 F.3d 1245 (10th Cir. 2014), to create an inference of class-wide impact and (b) its misstatement of Plaintiffs’ theory of impact as “reduction in value of [] mineral interests, rather than . . . a loss of lease bonuses and royalties.” Appellants’ Br. at 27. Plaintiffs respond that Anadarko’s individualized evidence could demonstrate the presence of uninjured class members or a failure of Plaintiffs’ proof of class-wide impact, but not that the issue of antitrust impact is unfit for class-wide resolution. Additionally, Plaintiffs assert the district court correctly understood In re Urethane as standing for the proposition that the presence of some uninjured class members does not defeat a finding of predominance and also correctly understood Plaintiffs’ theory of antitrust impact.
We begin by addressing Anadarko’s arguments regarding the district court’s interpretation of In re Urethane and its understanding of Plaintiffs’ theory of harm. We then turn to Anadarko’s assertion that the court erred by disregarding its individualized evidence and by determining that antitrust impact presented a common issue. Ultimately, we conclude the district court did not abuse its discretion in classifying antitrust impact as a common issue.
In re Urethane involved claims by industrial purchasers of polyurethane products that the defendant, together with a group of polyurethane manufacturers, conspired to fix prices for polyurethane chemical products in violation of the
The defendant appealed, contending the issue of antitrust impact “involved individualized questions because the class members experienced varying degrees of injury, with some avoiding injury altogether.” In re Urethane, 768 F.3d at 1254. Affirming class certification, this court noted that, “[u]nder the prevailing view, price fixing affects all market participants, creating an inference of class-wide impact even when prices are individually negotiated.” Id. Such an inference “is especially strong where . . . there is evidence that the conspiracy artificially inflated the baseline for price negotiations.” Id. Ultimately, this court concluded the district court “could reasonably
In the district court, Plaintiffs and Anadarko disputed the relevance of In re Urethane to the certification of Plaintiffs’ proposed class. Plaintiffs argued, similar to the In re Urethane plaintiffs, that Anadarko’s royalty rate “affected the entire market,” altering the baseline price for all negotiations. App. Vol. II at 157–58. Plaintiffs characterized their impact argument as the reverse of that in In re Urethane: rather than anticompetitive pricing inflating the baseline price for buyers, Plaintiffs alleged Anadarko’s 30% royalty rate deflated the baseline price for sellers. Anadarko sought to distinguish In re Urethane because “Plaintiffs’ claimed injury [was] not that they were offered lower lease prices . . . , but rather that [Anadarko] prevented them from leasing their Class Minerals altogether.” Id. at 240. Anadarko argued that “[e]ven if Plaintiffs could use common evidence to show a general effect on the leasing market,” they had not presented common evidence to show whether, but for Anadarko’s conduct, Plaintiffs would have leased their Class Minerals. Id.
The district court credited Plaintiffs’ expert evidence as providing common proof that Anadarko’s 30% intracompany leasing program created a reduction in the value of mineral interests in the class area. The district court concluded that, at the class certification stage, Plaintiffs were not required to present class-wide proof identifying, or demonstrating the absence of, “individual class members who were not injured by the alleged antitrust violation.” Id. at 265. The court opined that such a burden would be
On appeal, Anadarko argues the district court misread In re Urethane to justify a presumption of class-wide antitrust impact in all cases alleging anticompetitive conduct. We agree that In re Urethane does not endorse such a broad presumption. In re Urethane is limited to its facts, in particular plaintiffs’ evidence of the polyurethane industry’s standardized pricing structure, the defendant’s price-fixing conspiracy, and the artificially inflated baseline for pricing negotiations. See In re Urethane, 768 F.3d at 1251, 1254–55. This evidence supported a reasonable conclusion that “price-fixing would have affected the entire market.” Id. at 1255.
Although we reject an expansive reading of In re Urethane, we are not convinced the district court decision relied on In re Urethane to presume the existence of class-wide antitrust impact here. To be sure, the district court’s summary of the “prevailing view” identified in In re Urethane suggests antitrust impact could be inferred rather than proven. See App. Vol. II at 265–66. Considered in context, however, the court did not actually presume the existence of class-wide impact. Rather, the district court credited Plaintiffs’ expert evidence and concluded Plaintiffs could be expected to prove their
b. Plaintiffs’ theory of impact
Next, Anadarko argues the district court “misstated Plaintiffs’ theory of antitrust impact” and used that misstated theory to justify ignoring Anadarko’s individualized evidence. Appellants’ Br. at 41. Anadarko understands Plaintiffs’ theory of impact to be a “loss of lease royalties and loss of lease bonus payments that they otherwise would likely have received.” Id. at 41–42 (quoting App. Vol. I at 108). Anadarko asserts the district court erred in stating the theory of impact as “a reduction of the value for all mineral
Plaintiffs respond that they never contended that “the level of production or non-production of oil and gas in eastern Laramie County sets the value of the underlying minerals.” Appellees’ Br. at 32. That is, Plaintiffs have never claimed Anadarko’s alleged anticompetitive conduct affected the monetary value that oil and gas, once extracted from eastern Laramie County, would have when offered for sale. Rather, Plaintiffs argued, and the court found, that common proof could be used to prove antitrust impact based on “a reduction of the value of all mineral interests owned by the class.” Id. at 33 (quoting App. Vol. II at 265) (emphasis added). Plaintiffs clarify that their claimed reduction of the value of mineral interests is, in turn, “based on the inability to exploit the mineral deposits [or] . . . to lease minerals to those who might more effectively realize the value of the underlying minerals.” Id. In short, Plaintiffs argue Anadarko fundamentally misunderstood Plaintiffs’ theory of impact as affecting “the value of the minerals themselves.” Id.
We agree with Plaintiffs and conclude that the district court’s statement of Plaintiffs’ antitrust impact theory was not clearly erroneous. First, there is nothing in the district court’s opinion to support Anadarko’s suggestion that the court understood
c. Antitrust impact is a common issue
Having addressed Anadarko’s precursory arguments, we now reach Anadarko’s claim that the district court abused its discretion in concluding antitrust impact could be determined through class-wide evidence. Both in the district court and on appeal, Anadarko argues that, to prove antitrust impact, Plaintiffs must show that, but for Anadarko’s 30% intracompany leases, class members would have leased their working
Plaintiffs respond that Anadarko’s proposed but-for proof requirement would present “a virtually insurmountable burden of proof” by requiring each individual plaintiff to prove “the likely terms of a nonexistent exchange in a blocked market.” Appellees’ Br. at 29 (quotation marks omitted). Moreover, Plaintiffs argue that, by the class definition, all class members were unable to lease their mineral interests during the class period. And ultimately, if Plaintiffs fail to establish that Anadarko’s anticompetitive conduct “materially caused those losses,” that would constitute a failure of proof which would result in Anadarko’s class-wide victory. Id. at 31–32. Plaintiffs emphasize that the question at class certification is “whether the method by which plaintiffs propose to prove
In certifying the class, the district court considered Anadarko’s argument for requiring proof of what leasing decisions would occur in a but-for world and its evidence that such an inquiry would depend on highly variable, individualized factors. But the court rejected Anadarko’s argument and held that Plaintiffs’ theory of antitrust impact, and burden at class certification, “does not require proof that every mineral owner lost value due to the alleged antitrust violation.” App. Vol. II at 267. Rather than defeating predominance, the court viewed Anadarko’s proposed evidence of variable factors affecting Plaintiffs’ leasing outcome as relevant to “rebut the assumptions underlying Plaintiffs’ theories” or to challenge “the persuasiveness of Plaintiffs’ evidence.” Id.. The court concluded that Plaintiffs had proffered evidence in support of an impact theory that was “common to all class members” such that “proving [it] for a single class member would prove it for all without the need for individualized inquiry.” Id. at 267–68.
Contrary to Anadarko’s contention, the district court explicitly considered Anadarko’s individualized evidence but found it did not defeat predominance. Instead, the court considered Anadarko’s evidence as challenging the persuasiveness of Plaintiffs’ expert evidence or demonstrating the presence of uninjured class members. This was not an erroneous interpretation of the evidence. Plaintiffs bear the burden of proving antitrust impact, including that Anadarko’s alleged anticompetitive conduct was “a substantial factor” in Plaintiffs’ inability to lease their mineral interests. Comet Mech. Contractors, Inc., 609 F.2d at 406 (quotation marks omitted). Plaintiffs’ inability to do so would not
Considered overall, the district court applied the correct standard under Rule 23 in looking to whether Plaintiffs had demonstrated that the issue of antitrust impact presented common questions capable of class-wide resolution. See Wal-Mart Stores, Inc., 564 U.S. at 350 (explaining that a party seeking class certification “must affirmatively demonstrate” the proposed class satisfies the requirements of Rule 23). Therefore, we may reverse only for abuse of discretion. Adamson, 855 F.2d at 675. Contrary to Anadarko’s contention, the district court did consider its proffered individualized evidence, but ultimately decided such evidence either (1) challenged the persuasiveness or underlying assumptions of Plaintiffs’ common, expert evidence of antitrust impact or (2) demonstrated the potential existence of uninjured class members. The court weighed the parties’ evidence and concluded Plaintiffs could demonstrate through class-wide proof that Anadarko’s alleged anticompetitive conduct lowered the baseline value of all neighboring mineral interests to such an extent that class members were unable to lease their interests. Therefore, the district court did not exceed the bounds of permissible choice in determining the question of antitrust impact presented a common issue.
Having determined the district court did not abuse its discretion in categorizing the questions of market power and antitrust impact as common issues, we conclude the court likewise did not err in determining common questions would predominate in a determination of antitrust liability. Where all essential elements are susceptible to
D. Certification of an Issue Class Under Rule 23(c)(4)
Because the district court determined Plaintiffs had failed to demonstrate that common questions predominated the issue of damages, it declined to certify the class for all purposes under
We begin by addressing the applicable law for certification of an issue class under
1. Applicable Law
Within this circuit, the Districts of Colorado, Kansas, Wyoming, and Utah have all interpreted
We now join our sister circuits in holding that certification of an issue class under
2. District Court’s Application of the Legal Standard
Having clarified this circuit’s interpretation of
We are satisfied the district court applied the correct legal standard in determining whether certification of a liability issue class was appropriate. The district court’s certification order did not use the words “materially advance” or include a separate section addressing whether an issue class was appropriate. Nonetheless, it is apparent the court incorporated its analysis of whether an issue class was appropriate into its consideration of
[T]here are two common questions that could yield common answers at trial: the existence of an antitrust violation and the existence of impact. These questions will drive the litigation and generate common answers that will determine liability in a single stroke. Therefore, the Court finds that Plaintiffs have met their burden to show “that a class action [on liability] is superior to other available methods for fairly and efficiently adjudicating the controversy.”
App. Vol. II at 270 (quoting
Lastly, Anadarko argues certification of a liability issue class was not appropriate because much of the evidence critical for determining damages is also relevant to determining Anadarko’s liability. Anadarko argues “there are no efficiencies to be gained by certifying a class for liability when individual trials on damages—requiring analysis of much of the same evidence needed to determine liability—will follow.” Appellants’ Br. at 54–55. Plaintiffs respond that “[s]ome overlap between liability and damages is inevitable, but . . . determining liability issues on a class-wide basis is still far more preferable than requiring the filing of myriad individual cases for all purposes.” Appellees’ Br. at 39.8
Having determined that the district court applied the correct legal standard, we review its certification of an issue class for abuse of discretion. See Adamson, 855 F.2d at
As discussed, the district court considered the efficiencies of certifying a liability issue class when individualized damages issues would persist and concluded that resolution of the issue class would “generate common answers that [] determine liability in a single stroke.” App. Vol. II at 270. The court determined Plaintiffs had met their burden of showing resolution of a liability issue class, prior to individualized damages proceedings, would be “superior to other available methods for fairly and efficiently adjudicating the controversy.” Id. (quoting
We discern no abuse of discretion in this conclusion. While there may be some overlap in evidence relevant to determining liability and damages, it was not a clear error in judgment for the district court to conclude that it would advance judicial economy, and resolution of the dispute, to permit class-wide resolution of liability before determining individual class members’ damages. See In re Motor Fuel, 292 F.R.D. at 665. The district court clearly articulated its findings that common questions predominated an issue class
III. CONCLUSION
Because the district court applied the correct legal standard, and because it did not abuse its discretion in certifying an issue class, we AFFIRM the district court’s class certification.
Notes
- the type of claim(s) and issue(s) in question;
- the overall complexity of the case;
- the efficiencies to be gained by granting partial certification in light of realistic procedural alternatives;
- the substantive law underlying the claim(s), including any choice-of-law questions it may present and whether the substantive law separates the issue(s) from other issues concerning liability or remedy;
- the impact partial certification will have on the constitutional and statutory rights of both the class members and the defendant(s);
- the potential preclusive effect or lack thereof that resolution of the proposed issue class will have;
- the repercussions certification of an issue(s) class will have on the effectiveness and fairness of resolution of remaining issues;
- the impact individual proceedings may have upon one another, including whether remedies are indivisible such that granting or not granting relief to any claimant as a practical matter determines the claims of others;
- and the kind of evidence presented on the issue(s) certified and potentially presented on the remaining issues, including the risk subsequent triers of fact will need to reexamine evidence and findings from resolution of the common issue(s).