United States: Third Circuit Jump-Starts Class Action, Holding That An Indirect Purchaser Can Bring Federal Antitrust Claims As A Direct Purchaser Based On Assignment Of The Claims Even Without Consideration

On September 15, 2016, the Third Circuit jump-started a federal antitrust class action involving truck transmissions, holding that a direct purchaser's assignment of its federal antitrust claims to an indirect purchaser is valid as long as the assignment was written and express—even if there was no consideration for the assignment. The Third Circuit also held that a proposed class representative's motion to intervene is presumptively timely if made before class certification. Wallach, et al. v. Eaton Corp., et al., No. 15-3320 (Sept. 15, 2016).

The named plaintiff, Tauro Brothers Trucking Group, was a purchaser of "class 8" build-to-order trucks from resellers of trucks manufactured by OEM truck manufacturers. The OEMs, in turn, bought various components for the trucks they manufactured from parts manufacturers like Eaton Corp. Eaton was alleged to be a monopolist in the supply of truck transmissions, and to have conspired with OEMs to maintain that status unlawfully by eliminating from the market a would-be competitor in the manufacture of transmissions, ZF Meritor. The result was alleged to be higher prices paid by purchasers such as Tauro.

Tauro was a direct purchaser from the resellers of trucks, but only an indirect purchaser from the OEMs and Eaton Corp. One of the resellers from which Tauro purchased trucks expressly assigned its direct purchaser claims to Tauro, and Tauro was the named plaintiff in a purported class action against Eaton and certain of the OEMs. Defendants opposed class certification, arguing that Tauro lacked direct purchaser standing under Illinois Brick v. Illinois, 431 U.S. 720 (1977), because it was not itself a direct purchaser of the transmissions, and the assignment to Tauro from its supplier was invalid because Tauro provided the supplier with no consideration for the assignment. And, defendants argued, if Tauro had no claim then class certification had to be denied for lack of a named class representative. The district court accepted defendants' argument, dismissed Tauro for lack of standing, and denied the motion for class certification.1

The Third Circuit reversed. The court noted that it "is beyond dispute that a validly assigned antitrust claim can give direct purchaser standing to an indirect purchaser." Slip. op. at 10, n.5. It emphasized that the assignment at issue was express, and the only issue was whether the assignment of a federal antitrust claim must also reflect consideration to be valid. The court rejected defendants' argument that federal common law was inapplicable, as well as their argument that a 50-state survey was required to determine federal common law on the issue. Instead, the court turned to the Restatement of Contracts as a "starting point for fashioning rules of federal common law . . .," recognizing the need to "confirm that the proposed rule comports with the underlying purpose and goals of the federal antitrust laws as outlined in Illinois Brick." Slip. op. at 23. The court found that under the Restatement an assignment is valid as long as it is written and express, even without consideration, and that requiring consideration could potentially undermine Illinois Brick by discouraging private enforcement of the antitrust laws. Accordingly, the Third Circuit held that "consideration is not required under federal common law to give effect to an otherwise express assignment." Slip. op. at 28.

The Third Circuit also addressed whether two pre-certification FRCP 24 motions to intervene by proposed class representatives were timely. Tauro was the sole plaintiff, and when it became clear that defendants sought to dismiss its claim based on the purportedly invalid assignment, counsel for Tauro filed motions to intervene on behalf of two new direct purchasers. The district court denied the motions to intervene as untimely, concluding that although they were filed only two months after the motion to dismiss Tauro, discovery sought months earlier should have put direct purchasers on notice and triggered intervention motions at that time. The Third Circuit disagreed and reversed the district court's ruling. The court noted that the Third Ciruit had previously recognized that a motion to intervene is presumptively timely if made after certification but before the opt-out deadline. And it agreed with plaintiffs that the rationale for the presumption after certification but before the opt-out deadline applies with "equal force in the pre-certification context." Slip. op. at 33-34.

Rather than simply remand to determine whether the presumption should apply, the Third Circuit analyzed on its own the applicable three-factor timeliness test: "(1) the stage of the proceeding; (2) the prejudice that delay may cause the parties; and (3) the reason for the delay." Slip. op. at 30 (citations omitted). It found that the first factor weighed against a finding of timeliness in light of several years of litigation, extensive briefing, and discovery that already had been completed. But the court also found that the other two factors—the reason for delay and prejudice to the parties—pointed "decisively" in the other direction. The court rejected defendants' argument that the fact that counsel for Tauro was also counsel for the two proposed intervenors was sufficient to put the intervenors on notice, because defendants had not challenged the validity of the assignment during the preceding five years and, in general, litigants cannot be required to "divine" the intent behind discovery requests. The Third Circuit also concluded that there was no prejudice because there was no meaningful delay.

The Third Circuit's decision contains several important takeaways:

  • The Third Circuit repeated its admonition in Hartig that a challenge to antitrust standing is properly brought under FRCP 12(b)(6) and not FRCP 12(b)(1).
  • The validity of an assignment of federal antitrust claims can be analyzed under federal common law, and at least in the Third Circuit courts can use the Restatement as the starting point for the analysis, informed by the purposes and goals of the antitrust laws.
  • Federal direct purchaser antitrust claims can be assigned as long as the assignment is written and express, even if no consideration was provided for the assignment.
  • A class member's motion to intervene before class certification is presumptively timely, but that presumption can be rebutted.
  • For purposes of the timeliness analysis, class members who seek to intervene as class representatives are not charged with knowing what has happened in discovery even if they are represented by the same counsel who represents the existing named plaintiffs.


1 The Third Circuit cited its recent decision in Hartig Drug. Co. v. Senju Pharm. Co., __ F.3d __, No. 15-3289, 2016 WL 4651381 (3d Cir. Sept. 7, 2016), to point out that the district court mistakenly treated defendants' motion as challenging Article III standing under Rule 12(b)(1) rather than antitrust standing under Rule 12(b)(6). We discussed Hartig in an earlier blog post available here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.