United States: Third Circuit Affirms Denial Of Class Certification Because Expert's Exclusion Of Relevant Data From Analysis Of Classwide Antitrust Impact Precluded A Finding Of Predominance

Last Updated: March 4 2017
Article by Clifton R. Gruhn and Gail E. Jankowski

The Third Circuit affirmed an order denying class certification because the plaintiffs failed to provide sufficient evidence of classwide antitrust impact, and thus, could not satisfy Rule 23(b)(3)'s predominance requirement. The plaintiffs alleged a conspiracy among truck manufacturers and transmission suppliers to monopolize the heavy-duty truck transmission market, resulting in artificially inflated prices for Class 8 trucks. Specifically, the plaintiffs asserted that the defendants conspired to overcharge certain truck manufacturers for Class 8 transmissions, those truck manufacturers passed the overcharge on to direct purchasers, and direct purchasers passed the overcharge on to the plaintiffs. The plaintiffs moved for class certification, relying on testimony from an economist to establish classwide antitrust injury. In particular, the plaintiffs' economist included an "overcharge" regression, a "direct pass-through" regression, and an "indirect pass-through" regression.

In addressing the Rule 23(b)(3) predominance requirement, the district court analyzed the plaintiffs' attempt to prove antitrust impact through their economist. The district court found that the expert's analysis did not test classwide impact because his data excluded critical sales information relevant to and representative of the class, such as performance transmission sales and sales from two large truck manufactures that comprised over 40 percent of the market. The district court also found that the data used by the plaintiffs' economist was not representative of the putative class because a portion of the analysis was based on data only reflecting the purported injury to California class members. Consequently, the district court determined that the plaintiffs did not show antitrust impact on a classwide basis, thus precluding a finding of predominance under Rule 23(b)(3). The plaintiffs appealed.

The Third Circuit affirmed the district court's holding, beginning its analysis by noting that "Rule 23(b)(3)'s predominance element required that Appellants demonstrate that common evidence could prove: (1) [the transmission supplier] overcharged the truck manufacturers for Class 8 transmission; (2) the truck manufacturers passed on this overcharge to direct purchasers; and (3) direct purchasers passed on the overcharge to Appellants." The Third Circuit found the district court properly conducted a rigorous assessment in finding that the expert's analysis fell short of establishing that the plaintiffs could demonstrate classwide impact due to, among other things, its exclusion of pertinent data. Additionally, despite the plaintiffs' proposed explanations for the exclusion of certain data in their expert's analysis, the Third Circuit held that the district court correctly evaluated the available evidence in determining whether the plaintiffs could prove classwide impact.

In re: Class 8 Transmission Indirect Purchaser Antitrust Litigation, No. 15-3791 (3rd. Cir. Feb. 9, 2017)

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