A Year Later: Comcast’s Impact On Antitrust Class Actions

On March 27, 2013, the U.S. Supreme Court issued its decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), overturning an order certifying an antitrust class action under Federal Rule of Civil Procedure 23(b)(3), which requires that questions of law or fact common to class members predominate over questions affecting only individual members.

The Supreme Court held that the plaintiffs' expert's damages model was unable to measure classwide damages attributable to the only theory of antitrust impact found viable by the district court. Because of this flaw in the damages model, individual damages calculations would overwhelm questions common to the class, and the class therefore could not be certified under Rule 23(b)(3).1

On remand, plaintiffs filed a new motion for class certification, slicing several years off the class period and limiting the geographic market to only five of the 18 counties in the Philadelphia area for which they originally sought certification.2 The defendants opposed the motion and filed a new motion to exclude the opinions of plaintiffs' expert. The court then granted plaintiffs' unopposed request to stay the case while the parties conduct settlement discussions. Plaintiffs and Comcast recently agreed to de-certify the Chicago-area class based on the Supreme Court's decision, and plaintiffs filed an amended complaint limited to the five Philadelphia-area markets.3

It was not unexpected that class counsel in Comcast would narrow the class for which they sought certification, or that settlement discussions might take place after the Supreme Court's decision. But what effect is Comcast having on class certification in other antitrust cases?

The answer is that in some cases courts have applied Comcast to deny certification and/or class counsel have chosen to limit the scope of their alleged classes or their theories of classwide impact and damages. In other cases, however, courts have certified classes or effectively certified liability-only classes under Rule 23(c)(4), leaving the question of damages for another day. Thus, Comcast provides a useful tool to attack Rule 23(b)(3) certification, but class counsel have been working diligently to try to blunt it.

Some Interesting Decisions

Class certification decisions in antitrust and non-antitrust cases since Comcast have generally fallen into three groups: (1) decisions applying Comcast and denying class certification because Rule 23(b)(3) was not satisfied;4 (2) decisions distinguishing Comcast and finding Rule 23(b)(3) was satisfied;5 and (3) decisions certifying a liability-only class under Rule 23(c)(4) ("[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues.").6 See generally, e.g., Jacob v. Duane Reade Inc., 293 F.R.D. 578 (S.D.N.Y. 2013) (describing these groups of decisions), appeal pending, No. 13-cv-3873 (2d Cir.).

The following are some illustrative post-Comcast decisions in price-fixing, reverse payment and compensation suppression cases.

Price-Fixing Cases

Decisions in price-fixing cases run the gamut from denying certification based on a flawed damages model to granting certification after reviewing expert reports.

The leading decision since Comcast is In re Rail Freight Fuel Surcharge Antitrust Litigation, in which a class of direct purchaser shippers alleged that they paid inflated shipping prices due to price fixing of fuel rate surcharges by four freight railroads.7 The district court certified the class. On appeal, the defendants argued that plaintiffs' expert submitted a damages model that led to false positives, i.e., the model detected damages not just as to the purported class members, but also as to a control group of shippers that could not have been harmed because they were operating under legacy contracts that pre-dated the alleged conspiracy.8

The D.C. Circuit Court of Appeals concluded that it had "no way of knowing the overcharges the damages model calculates for class members is any more accurate than the obviously false estimates it produces for legacy shippers."9 Simply stated: "No damages model, no predominance, no class certification."10 The court vacated the district court's order and remanded the case for reconsideration in light of Comcast, and the parties are filing supplemental briefs and expert reports regarding certification.11 Rail Freight has prompted defense experts to focus on whether the plaintiffs' expert's damages model yields false positives or similar problems that may be fatal to certification.

The defendants' success in Rail Freight was not repeated in In re Cathode Ray Tube (CRT) Antitrust Litigation, where the court adopted the interim special master's (ISM) recommendation to certify a class of indirect purchasers, who allege that defendants engaged in a price-fixing conspiracy for cathode ray tubes used in televisions and computer monitors.12 The ISM recommended certifying the class after accepting briefing directed to Comcast.13

The court adopted the ISM's...