Wednesday, March 3, 2010
Of Vulnerable Monopolists?: Questionable Innovation in the Standard for Class Certification in Antitrust Cases
Posted by D. Daniel Sokol
Joshua P. Davis, University of San Francisco - School of Law and Eric L. Cramer, Berger & Montague have an interesting new paper titled Of Vulnerable Monopolists?: Questionable Innovation in the Standard for Class Certification in Antitrust Cases.
ABSTRACT: Some courts appear to have begun to revise the standard for granting class certification, including in antitrust cases. The new standard, if there is one, may empower courts to find facts relevant to the merits in a way that historically they have not been permitted to do. If courts are ratcheting up the standard at class certification by forcing plaintiffs to make a showing on the merits, then it seems an unfortunate development for various reasons. First, the rationale for the change is unsubstantiated and implausible. Neither theory nor evidence supports the claim that corporations settle meritless class actions with any frequency, particularly in antitrust. Second, a heightened certification standard fits poorly in the existing procedural framework, potentially forcing a decision on the merits prematurely and possibly violating the Seventh Amendment. Third, such a standard may distort other aspects of the class certification decision. In particular, it may encourage courts to put undue emphasis on methods of proving class-wide injury, or “common impact,” at class certification. Fourth, the new standard would involve a back-door change to the procedural rules. Rule 23 does not contemplate that judges will rule on merits issues at class certification. If some modification of the class certification process is in order - if a procedural decision is going to morph into a merits determination - courts should follow the right method of effecting that change, including careful deliberation, empirical study, and a formal amendment to the Federal Rules of Civil Procedure.