Whether the district court abused its discretion in denying class certification without conducting the "rigorous analysis" required by Comcast Corp. v. Behrend, 569 U.S. 27 (2013), based on the plaintiff 's failure to provide sufficient evidence of a common class-wide injury.
On January 7, 2007, Apple announced that it had entered into an exclusivity agreement with AT&T. Under the terms of the agreement, AT&T would be the only authorized provider of wireless voice and data services for Apple iPhones in the United States for five years. In exchange, the two companies agreed to share revenue for voice and data services received from iPhone customers. Apple further agreed to install SIM card "Program Locks" on all phones, to prevent customers from using other cellular networks.13
On March 21, 2012, a group representing individuals who had purchased iPhones between 2008 and 2012 filed suit against Apple, alleging violations of antitrust laws and requesting class certification. The putative class alleged that Apple's agreement with AT&T and subsequent actions amounted to anticompetitive behavior and conspiracy to engage in anticompetitive behavior.14
In February 2018, a district judge denied plaintiffs' motion for class certification for failure to meet the predominance requirement of Rule 23(b)(3). The court focused primarily on the testimony of the plaintiffs' expert witness, who had presented testimony intended to show that "all (or nearly all) members of the class suffered damage as a result of Defendants' alleged anti-competitive conduct."15 However, the court found that the expert had failed to provide "any data-driven analysis," and referred "generically to . . . 'common methodology and data'" offered by an expert in another case involving Apple.16 The court found that the expert had offered "only theories of impact and damages," and stated that "theory alone 'is not sufficient to satisfy Rule 23(b)(3)'s requirements.'"17 Given plaintiffs' failure to provide sufficient evidence of injury and damages, the court found that it was unable to conduct a "rigorous analysis" to determine whether the predominance requirement was met, as is required under the Supreme Court's holding in Comcast.18
In October 2019, the plaintiffs appealed the denial of class certification to the Ninth Circuit.
In an unpublished opinion, a divided Ninth Circuit panel affirmed the district court's decision to deny class certification. The majority found that the lower court had not abused its discretion in determining that plaintiffs' evidence was insufficient, concluding that "[p]laintiffs' expert did not provide a workable method for classwide determination of the impact of the alleged antitrust violation."19 The expert's "mere" assertion that he would develop a model some point in the future was not enough for class certification under the Supreme Court's holding in Comcast, which requires that the plaintiff offer a model that "measure[s] damages resulting from the particular antitrust injury on which [defendants'] liability" was premised.20 The court concluded that "plaintiffs here have done even less than the Comcast plaintiffs: Instead of providing an imperfect model, they have provided only a promise of a model to come."21 The court thus disagreed with plaintiffs' argument that the district court had abused its discretion by failing to conduct the requisite "rigorous analysis" of whether the Rule 23 criteria were satisfied, finding that such analysis was impossible "because plaintiffs gave the court little to analyze."22
In her dissent, Judge Jacqueline Nguyen argued that the district court should have still conducted the "rigorous analysis" required under Comcast. The judge found that even if plaintiffs' evidence was "wholly insufficient," the district court was still required to analyze it. In particular, the court should have considered "whether the antitrust impact identified by the [expert's] but-for worlds is consistent with plaintiffs' aftermarket theory."23 The court also should have analyzed Apple's criticisms of the expert and the expert's rebuttal in its order. Judge Nguyen thus stated that she would reverse and remand for the district court to conduct the required analysis.24
This case sheds light on how the Ninth Circuit reads the "rigorous analysis" requirement under Comcast, and on what degree of expert evidence may be needed to prove a class-wide injury in antitrust class action cases. If plaintiffs' submissions are seriously deficient, the opportunity to deny class certification without undertaking a "rigorous analysis" may be welcomed by district court judges. Nevertheless, this is a non-precedential decision from a divided panel, suggesting that the Ninth Circuit is not unified on the question of when a "rigorous analysis" is required under Comcast.
Read the order here.
13. Order Denying Without Prejudice Defendant's Motion To Compel Arbitration; Granting In Part Defendant's Motion To Dismiss at 2, In re Apple iPhone Antitrust Litig., No. C 11-06714 JW (N.D. Cal. July 11, 2012), ECF No. 75.
14. Id. at 4.
15. Order Denying Motion for Class Certification at 4, Ward v. Apple Inc., No. 12-cv-05404-YGR (N.D. Ca. Feb. 16, 2018), ECF No. 193.
16. Id. at 5 (citation omitted).
17. Id. (citation omitted).
18. Id. at 4-5.
19. Memorandum at 3, Ward v. Apple Inc. , No. 18-16016 (9th Cir. Nov. 13, 2019), ECF No. 57-1.
22. Id. at 3-4.
23. Id. at 6 (Nguyen, J., dissenting).
24. Id. at 5-6.