Olean Wholesale Grocery Co-Op v. Bumble Bee Foods LLC ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
OLEAN WHOLESALE GROCERY No. 19-56514
COOPERATIVE, INC.; BEVERLY
YOUNGBLOOD; PACIFIC GROSERVICE, D.C. No.
INC., DBA Pitco Foods; CAPITOL 3:15-md-02670-
HILL SUPERMARKET; LOUISE ANN JLS-MDD
DAVIS MATTHEWS; JAMES WALNUM;
COLIN MOORE; JENNIFER A. NELSON;
ELIZABETH DAVIS-BERG; LAURA OPINION
CHILDS; NANCY STILLER; BONNIE
VANDERLAAN; KRISTIN MILLICAN;
TREPCO IMPORTS AND
DISTRIBUTION, LTD.; JINKYOUNG
MOON; COREY NORRIS; CLARISSA
SIMON; AMBER SARTORI; NIGEL
WARREN; AMY JOSEPH; MICHAEL
JUETTEN; CARLA LOWN; TRUYEN
TON-VUONG, AKA David Ton; A-1
DINER; DWAYNE KENNEDY; RICK
MUSGRAVE; DUTCH VILLAGE
RESTAURANT; LISA BURR; LARRY
DEMONACO; MICHAEL BUFF; ELLEN
PINTO; ROBBY REED; BLAIR HYSNI;
DENNIS YELVINGTON; KATHY
DURAND GORE; THOMAS E.
WILLOUGHBY III; ROBERT FRAGOSO;
SAMUEL SEIDENBURG; JANELLE
ALBARELLO; MICHAEL COFFEY;
JASON WILSON; JADE CANTERBURY;
NAY ALIDAD; GALYNA
2 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
ANDRUSYSHYN; ROBERT BENJAMIN;
BARBARA BUENNING; DANIELLE
GREENBERG; SHERYL HALEY; LISA
HALL; TYA HUGHES; MARISSA
JACOBUS; GABRIELLE KURDT; ERICA
PRUESS; SETH SALENGER; HAROLD
STAFFORD; CARL LESHER; SARAH
METIVIER SCHADT; GREG STEARNS;
KARREN FABIAN; MELISSA
BOWMAN; VIVEK DRAVID; JODY
COOPER; DANIELLE JOHNSON;
HERBERT H. KLIEGERMAN; BETH
MILLINER; LIZA MILLINER; JEFFREY
POTVIN; STEPHANIE GIPSON;
BARBARA LYBARGER; SCOTT A.
CALDWELL; RAMON RUIZ; THYME
CAFE & MARKET, INC.; HARVESTERS
ENTERPRISES, LLC; AFFILIATED
FOODS, INC.; PIGGLY WIGGLY
ALABAMA DISTRIBUTING CO., INC.;
ELIZABETH TWITCHELL; TINA
GRANT; JOHN TRENT; BRIAN LEVY;
LOUISE ADAMS; MARC BLUMSTEIN;
JESSICA BREITBACH; SALLY
CRNKOVICH; PAUL BERGER;
STERLING KING; EVELYN OLIVE;
BARBARA BLUMSTEIN; MARY
HUDSON; DIANA MEY; ASSOCIATED
GROCERS OF NEW ENGLAND, INC.;
NORTH CENTRAL DISTRIBUTORS,
LLC; CASHWA DISTRIBUTING CO. OF
KEARNEY, INC.; URM STORES, INC.;
WESTERN FAMILY FOODS, INC.;
ASSOCIATED FOOD STORES, INC.;
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 3
GIANT EAGLE, INC.; MCLANE
COMPANY, INC.; MEADOWBROOK
MEAT COMPANY, INC.; ASSOCIATED
GROCERS, INC.; BILO HOLDING, LLC;
WINNDIXIE STORES, INC.; JANEY
MACHIN; DEBRA L. DAMSKE; KEN
DUNLAP; BARBARA E. OLSON; JOHN
PEYCHAL; VIRGINIA RAKIPI; ADAM
BUEHRENS; CASEY CHRISTENSEN;
SCOTT DENNIS; BRIAN
DEPPERSCHMIDT; AMY E.
WATERMAN; CENTRAL GROCERS,
INC.; ASSOCIATED GROCERS OF
FLORIDA, INC.; BENJAMIN FOODS
LLC; ALBERTSONS COMPANIES LLC;
H.E. BUTT GROCERY COMPANY;
HYVEE, INC.; THE KROGER CO.;
LESGO PERSONAL CHEF LLC; KATHY
VANGEMERT; EDY YEE; SUNDE
DANIELS; CHRISTOPHER TODD;
PUBLIX SUPER MARKETS, INC.;
WAKEFERN FOOD CORP.; ROBERT
SKAFF; WEGMANS FOOD MARKETS,
INC.; JULIE WIESE; MEIJER
DISTRIBUTION, INC.; DANIEL
ZWIRLEIN; MEIJER, INC.; SUPERVALU
INC.; JOHN GROSS & COMPANY;
SUPER STORE INDUSTRIES; W. LEE
FLOWERS & CO. INC.; FAMILY
DOLLAR SERVICES, LLC; AMY
JACKSON; FAMILY DOLLAR STORES,
INC.; KATHERINE MCMAHON;
DOLLAR TREE DISTRIBUTION, INC.;
JONATHAN RIZZO; GREENBRIER
4 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
INTERNATIONAL, INC.; JOELYNA A.
SAN AGUSTIN; ALEX LEE, INC.;
REBECCA LEE SIMOENS; BIG Y
FOODS, INC.; DAVID TON; KVAT
FOOD STORES, INC., DBA FOOD
CITY; AFFILIATED FOODS MIDWEST
COOPERATIVE, INC.; MERCHANTS
DISTRIBUTORS, LLC; BROOKSHIRE
BROTHERS, INC.; SCHNUCK
MARKETS, INC.; BROOKSHIRE
GROCERY COMPANY; KMART
CORPORATION; CERTCO, INC.;
RUSHIN GOLD, LLC, DBA The Gold
Rush; UNIFIED GROCERS, INC.;
TARGET CORPORATION; SIMON-
HINDI, LLC; FAREWAY STORES, INC.;
MORAN FOODS, LLC, DBA Save-A-
Lot; WOODMAN’S FOOD MARKET,
INC.; DOLLAR GENERAL
CORPORATION; SAM’S EAST, INC.;
DOLGENCORP, LLC; SAM’S WEST,
INC.; KRASDALE FOODS, INC.;
WALMART STORES EAST, LLC; CVS
PHARMACY, INC.; WALMART STORES
EAST, LP; BASHAS’ INC.; WAL-MART
STORES TEXAS, LLC; MARC
GLASSMAN, INC.; WAL-MART
STORES, INC.; 99 CENTS ONLY
STORES; JESSICA BARTLING; AHOLD
U.S.A., INC.; GAY BIRNBAUM;
DELHAIZE AMERICA, LLC; SALLY
BREDBERG; ASSOCIATED
WHOLESALE GROCERS, INC.; KIM
CRAIG; MAQUOKETA CARE CENTER;
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 5
GLORIA EMERY; ERBERT &
GERBERT’S, INC.; ANA GABRIELA
FELIX GARCIA; JANET MACHEN;
JOHN FRICK; PAINTED PLATE
CATERING; KATHLEEN GARNER;
ROBERT ETTEN; ANDREW GORMAN;
GROUCHO’S DELI OF FIVE POINTS,
LLC; EDGARDO GUTIERREZ;
GROUCHO’S DELI OF RALEIGH;
ZENDA JOHNSTON; SANDEE’S
CATERING; STEVEN KRATKY;
CONFETTI’S ICE CREAM SHOPPE;
KATHY LINGNOFSKI; END PAYER
PLAINTIFFS; LAURA MONTOYA;
KIRSTEN PECK; JOHN PELS; VALERIE
PETERS; ELIZABETH PERRON; AUDRA
RICKMAN; ERICA C. RODRIGUEZ,
Plaintiffs-Appellees,
and
JESSICA DECKER; JOSEPH A.
LANGSTON; SANDRA POWERS;
GRAND SUPERCENTER, INC.; THE
CHEROKEE NATION; US FOODS, INC.;
SYSCO CORPORATION; GLADYS,
LLC; SPARTANNASH COMPANY;
BRYAN ANTHONY REO,
Plaintiffs,
v.
BUMBLE BEE FOODS LLC; TRI-
UNION SEAFOODS, LLC, DBA
6 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
Chicken of the Sea International,
DBA Thai Union Group PCL, DBA
Thai Union North America, Inc.;
STARKIST CO.; DONGWON
INDUSTRIES CO., LTD.; THAI UNION
GROUP PCL,
Defendants-Appellants,
and
KING OSCAR, INC.; THAI UNION
FROZEN PRODUCTS PCL; DEL
MONTE FOODS COMPANY; TRI
MARINE INTERNATIONAL, INC.;
DONGWON ENTERPRISES; DEL
MONTE CORP.; CHRISTOPHER D.
LISCHEWSKI; LION CAPITAL
(AMERICAS), INC.; BIG CATCH
CAYMAN LP, AKA Lion/Big Catch
Cayman LP; FRANCIS T.
ENTERPRISES; GLOWFISCH
HOSPITALITY; THAI UNION NORTH
AMERICA, INC.,
Defendants.
Appeal from the United States District Court
for the Southern District of California
Janis L. Sammartino, District Judge, Presiding
Argued and Submitted October 9, 2020
Pasadena, California
Filed April 6, 2021
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 7
Before: Andrew J. Kleinfeld, Andrew D. Hurwitz, and
Patrick J. Bumatay, Circuit Judges.
Opinion by Judge Bumatay;
Partial Concurrence and Partial Dissent by Judge Hurwitz
SUMMARY *
Class Certification
The panel vacated the district court’s order certifying
three classes in a multi-district antitrust case alleging a price-
fixing conspiracy by producers of packaged tuna.
The panel held that statistical or “representative”
evidence, finding classwide impact based on averaging
assumptions and pooled transaction data, can be used to
establish the “predominance” requirement of Fed. R. Civ. P.
23(b)(3), under which a putative class must establish that
“the questions of law or fact common to class members
predominate over any questions affecting only individual
members.” Agreeing with other circuits, the panel held that
a district court must find by a preponderance of the evidence
that the plaintiff has established predominance under Rule
23(b)(3). The panel concluded that plaintiffs’ representative
evidence could be used to establish predominance because
plaintiffs’ evidence could have been used to establish
liability in a class member’s individual suit by demonstrating
the antitrust impact of their price-fixing claims; the
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
8 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
representative evidence sufficiently linked plaintiffs’
injuries to their theory of antitrust violation; and plaintiffs’
use of averaging assumptions in their regression models did
not defeat predominance.
The panel nonetheless concluded that the district court
abused its discretion by not resolving the factual disputes
necessary to decide the predominance requirement before
certifying the classes. Accordingly, the panel vacated the
district court’s order and remanded for the court to determine
the number of uninjured parties in the proposed class based
on the dueling statistical evidence, and only then to rule on
whether predominance has been established.
Concurring in part and dissenting in part, Judge Hurwitz
agreed with the majority’s conclusions that the district court,
not the jury, must resolve factual disputes bearing on
predominance; that a district court’s “rigorous analysis” of
whether a putative class has satisfied Rule 23’s requirements
should proceed by a preponderance of the evidence standard;
and that the district court must conclude not that common
issues could predominate at trial, but that they do
predominate before certifying the class. Judge Hurwitz
disagreed with the majority’s conclusion that, before
certifying a class, the district court must find that only a de
minimis number of class members are uninjured.
COUNSEL
Gregory G. Garre (argued) and Samir Deger-Sen, Latham &
Watkins LLP, Washington, D.C.; Christopher S. Yates,
Belinda S. Lee, and Ashley M. Bauer, Latham & Watkins
LLP, San Francisco, California; John Roberti, Allen &
Overy LLP, Washington, D.C.; Kenneth A. Gallo, Paul
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 9
Weiss Rifkind Wharton & Garrison LLP, Washington, D.C.,
for Defendants-Appellants.
Christopher L. Lebsock (argued), Michael P. Lehmann,
Bonny E. Sweeney, and Samantha J. Stein, Hausfeld LLP,
San Francisco, California; Jonathan W. Cuneo (argued), Joel
Davidow, and Blaine Finley, Cuneo Gilbert & Laduca LLP,
Washington, D.C.; Thomas H. Burt (argued), Wolf
Haldenstein Adler Freeman & Herz LLP, New York, New
York; Betsy C. Manifold, Rachele R. Byrd, Marisa C.
Livesay, and Brittany N. Dejong, Wolf Haldenstein Adler
Freeman & Herz LLP, San Diego, California; for Plaintiffs-
Appellees.
Robert S. Kitchenoff, President, Committee to Support the
Antitrust Laws, Washington, D.C.; Warren T. Burns and
Kyle K. Oxford, Burns Charest LLP, Dallas, Texas; for
Amicus Curiae Committee to Support the Antitrust Laws.
Ashley C. Parrish and Joshua N. Mitchell, King & Spalding
LLP, Washington, D.C.; Anne M. Voigts and Quyen L. Ta,
King & Spalding LLP, San Francisco, California; Steven P.
Lehotsky and Jonathan D. Urick, U.S. Chamber Litigation
Center, Washington, D.C.; for Amicus Curiae Chamber of
Commerce of the United States.
Randy M. Stutz, American Antitrust Institute, Washington,
D.C.; Ellen Meriwether, Cafferty Clobes Meriwether &
Sprengal, Media, Pennsylvania; for Amicus Curiae
American Antitrust Institute.
Scott L. Nelson and Allison M. Zieve, Public Citizen
Litigation Group, Washington, D.C., for Amicus Curiae
Public Citizen.
10 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
Corbin K. Barthold and Cory L. Andrews, Washington
Legal Foundation, Washington, D.C., for Amicus Curiae
Washington Legal Foundation.
OPINION
BUMATAY, Circuit Judge:
StarKist Company and Tri-Union Seafoods d/b/a
Chicken of the Sea (collectively, “Defendants”), 1 producers
of packaged tuna, appeal an order certifying three classes in
a multidistrict antitrust case alleging a price-fixing
conspiracy. Defendants challenge the district court’s
determination that Rule 23(b)(3)’s “predominance”
requirement was satisfied by expert statistical evidence
finding classwide impact based on averaging assumptions
and pooled transaction data.
We ultimately conclude that this form of statistical or
“representative” evidence can be used to establish
predominance, but the district court abused its discretion by
not resolving the factual disputes necessary to decide the
requirement before certifying these classes. We thus vacate
the district court’s order certifying the classes and remand
for the court to determine the number of uninjured parties in
the proposed class based on the dueling statistical evidence.
Only then should the district court rule on whether
predominance has been established.
1
As a result of Appellant Bumble Bee Foods LLC’s bankruptcy
proceeding, appellate proceedings against Bumble Bee Foods have been
held in abeyance due to the automatic stay imposed by 11 U.S.C. § 362.
Dkt. No. 51.
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 11
I. FACTUAL AND PROCEDURAL BACKGROUND
A. The Price-Fixing Conspiracy
Various purchasers of tuna products (“Plaintiffs”)
brought this class action alleging a price-fixing conspiracy
by Defendants, the three largest domestic producers of
packaged tuna. Together, Defendants account for over 80%
of all branded packaged tuna sales in the country. Plaintiffs
allege that Defendants colluded to artificially inflate the
prices of their tuna products by engaging in various forms of
anti-competitive conduct, including agreeing to (1) fix the
net and list prices for packaged tuna, (2) limit promotional
activity for packaged tuna, and (3) exchange sensitive or
confidential business information in furtherance of the
conspiracy. There is little dispute over the existence of a
price-fixing scheme. Soon after this action was commenced,
the Department of Justice initiated criminal charges against
Defendants for their price-fixing conspiracy. Bumble Bee
and StarKist have since pleaded guilty to federal, criminal
price-fixing charges, as have several of their current and
former executives. Chicken of the Sea has also admitted to
price fixing and agreed to cooperate with the federal
investigation.
B. Certifying the Classes
Plaintiffs proposed three classes of purchasers who
bought packaged tuna products between November 2010
and December 2016.
The first proposed class, called the Direct Purchaser
Plaintiff (“DPP”) Class, consists of retailers who directly
purchased packaged tuna products during the relevant
period. In support of certification, the Plaintiffs submitted
the expert testimony and report of econometrician
12 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
Dr. Russell Mangum III. Dr. Mangum “primarily” relied on
statistical evidence “in the form of a regression model which
purports to prove that the price-fixing conspiracy harmed all,
or nearly all, of the Class members.” First, Dr. Mangum
calculated what the price for wholesale tuna would have
been “but for” the alleged price fixing. To do so, he
compared the prices during the period of the alleged price-
fixing scheme to prices either before or after the alleged
impacted period, while controlling for other factors that
affect price differences. Comparing that but-for price to a
“clean” benchmark period with no anticompetitive activity,
Dr. Mangum concluded that the DPP Class was overcharged
by an average of 10.28% because of the price fixing. Finally,
assuming each class member experienced the same 10.28%
average overcharge, Dr. Mangum ran a regression analysis
and concluded that 1,111 out of 1,176 direct purchasers (or
94.5%) were injured by Defendants’ actions.
The Defendants’ expert econometrician, Dr. John
Johnson, posed several objections to Dr. Mangum’s
methodology. First, Dr. Johnson contended that because
Dr. Mangum used an average estimated overcharge, his
model incorrectly assumed “every direct purchaser was
injured—and necessarily in the same way.” Dr. Johnson
instead calculated a unique overcharge coefficient for 604
individual class members and concluded that only 72% paid
an inflated price, meaning 28% of the class members
suffered no injury at all. Second, Dr. Johnson argued that
Dr. Mangum found “false positives” because his equation
identified overcharges during the “clean” benchmark period
by both Defendants and by packaged tuna sellers who are
not Defendants. Additionally, Dr. Johnson claimed that
Dr. Mangum relied on faulty economic assumptions. For
example, Dr. Mangum’s report purportedly assumed that all
Defendants would respond identically to changes in supply
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 13
and demand factors, and therefore costs would rise or fall
identically across all producers. Dr. Johnson also
commented that Dr. Mangum’s model failed a “Chow Test,”
which examines the stability of coefficients among separate
subgroups of a data set to determine if pooling them together
to create an average is appropriate.
In rebuttal, Dr. Mangum noted that Dr. Johnson did not
keep the average overcharge coefficient constant but rather
allowed that coefficient to vary by customer. According to
Dr. Mangum, this created too small sample sizes of
customers with each coefficient, and this explained why
Dr. Johnson was unable to create any results for some
members of the DPP Class. Dr. Mangum claimed that, even
under Dr. Johnson’s analysis, 98% of DPP customers were
overcharged if those customers who showed no result
whatsoever were excluded. 2
The district court certified the class, concluding that the
Defendants’ challenges to Dr. Mangum’s methods were
“ripe for use at trial” but “not fatal to a finding of classwide
impact.” In re Packaged Seafood Prod. Antitrust Litig.,
332 F.R.D. 308, 325 (S.D. Cal. 2019). The district court
stressed that although Dr. Johnson’s “criticisms are serious
and could be persuasive to a finder of fact . . . determining
which expert is correct is beyond the scope” of a class
certification motion. Id. at 328. The court instead thought
the critical issue was to determine whether Dr. Mangum’s
method is “capable of showing” impact on all or nearly all
class members. Id. Because it was not persuaded that
“Dr. Mangum’s model is unreliable or incapable of proving
2
This is compared to Dr. Mangum’s view that 94% of DPP
customers were overcharged if only statistically significant results were
considered.
14 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
impact on a class-wide basis,” the court found predominance
established for the DPP Class. Id.For the next two proposed classes, Plaintiffs offered
expert reports and testimony that proceeded similarly to
Dr. Mangum’s statistical analysis. The Commercial Food
Service Product (“CFP”) Class consists of those who
purchased packaged tuna products of 40 ounces or more
from six major retailers (Dot Foods, Sysco, US Foods, Sam’s
Club, Wal-Mart, and Costco). The End Payer Plaintiffs
(“EPP”) Class is defined as consumers who bought
Defendants’ packaged tuna products in cans or pouches
smaller than 40 ounces for end consumption from any of the
six major retailers. Defendants’ expert, Dr. Laila Haider,
objected to Plaintiffs’ experts’ methodology largely for the
same reasons raised in opposition to the DPPs’
methodology, focusing on benchmark selection, averaging,
and false positives. Finding only “subtle differences”
between the methodologies of Plaintiffs’ experts’ and
Defendants’ objections in these two classes and the DPP
Class, the district court certified the CFP and the EPP
Classes. Despite finding “potential flaws” in Plaintiffs’
experts’ methodology, the court nonetheless concluded it
was “reliable and capable of proving impact” and that the
jury could determine whether liability and damages were
proven.
A motions panel granted Defendants’ petition for
permission to appeal the class certification order under
Federal Rule of Civil Procedure Rule 23(f) and 28 U.S.C.
§ 1292(e).
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 15
II. LEGAL STANDARDS
A. Standard of Review
We review a district court’s decision to certify a class
under Rule 23 for abuse of discretion and review the factual
findings for clear error. Torres v. Mercer Canyons Inc.,
835 F.3d 1125, 1132 (9th Cir. 2016).
B. The Predominance Requirement
Class actions are “an exception to the usual rule that
litigation is conducted by and on behalf of the individual
named parties only.” Comcast Corp. v. Behrend, 569 U.S.
27, 33 (2013) (simplified). To police this exception, Rule 23
imposes “stringent requirements” for class certification. Am.
Express Co. v. Italian Colors Rest., 570 U.S. 228, 234
(2013). A party seeking class certification must first meet
Rule 23(a)’s four requirements: numerosity, commonality,
typicality, and adequacy of representation. Leyva v. Medline
Indus., 716 F.3d 510, 512 (9th Cir. 2013); see Fed. R. Civ.
P. 23(a). “To obtain certification of a class action for money
damages under Rule 23(b)(3),” a putative class must also
establish that “the questions of law or fact common to class
members predominate over any questions affecting only
individual members.” Amgen Inc. v. Conn. Ret. Plans & Tr.
Funds, 568 U.S. 455, 460 (2013); see Fed. R. Civ. P.
23(b)(3).
When considering whether to certify a class, it is
imperative that district courts “take a close look at whether
common questions predominate over individual ones.”
Comcast, 569 U.S. at 34. The Supreme Court has made clear
that district courts must perform a “rigorous analysis” to
determine whether this exacting burden has been met before
certifying a class. Id. at 35; Wal-Mart Stores, Inc. v. Dukes,
16 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
564 U.S. 338, 350–51 (2011). This “rigorous analysis”
requires “judging the persuasiveness of the evidence
presented” for and against certification. Ellis v. Costco
Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011). Courts
must resolve all factual and legal disputes relevant to class
certification, even if doing so overlaps with the merits. Wal-
Mart, 564 U.S. at 351. A district court abuses its discretion
when it fails to adequately determine predominance was met
before certifying the class. See Valentino v. Carter-Wallace,
Inc., 97 F.3d 1227, 1234 (9th Cir. 1996).
C. The Burden of Proof for Predominance
Although we have not previously addressed the proper
burden of proof at the class certification stage, we hold that
a district court must find by a preponderance of the evidence
that the plaintiff has established predominance under Rule
23(b)(3). See In re Lamictal Direct Purchaser Antitrust
Litig., 957 F.3d 184, 191 (3d Cir. 2020) (holding that district
courts must find by a “preponderance of the evidence that
the plaintiffs’ claims are capable of common proof at trial”);
In re Nexium Antitrust Litig., 777 F.3d 9, 27 (1st Cir. 2015)
(holding that plaintiffs must show “each disputed
requirement has been proven by a preponderance of
evidence”); Messner v. Northshore Univ. HealthSystem,
669 F.3d 802, 811 (7th Cir. 2012) (“Plaintiffs bear the
burden of showing that a proposed class satisfies the Rule 23
requirements, but they need not make that showing to a
degree of absolute certainty. It is sufficient if each disputed
requirement has been proven by a preponderance of
evidence.”); Alaska Elec. Pension Fund v. Flowserve Corp.,
572 F.3d 221, 228 (5th Cir. 2009) (“[A]n issue of
predominance must be established at the class certification
stage by a preponderance of all admissible evidence.”)
(simplified); Teamsters Loc. 445 Freight Div. Pension Fund
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 17
v. Bombardier Inc., 546 F.3d 196, 202 (2d Cir. 2008) (“[We]
hold that the preponderance of the evidence standard applies
to evidence proffered to establish Rule 23’s requirements.”);
see also Newberg on Class Actions, § 7:21 (5th ed.) (“The
trend in recent cases has been a move . . . towards adoption
of a preponderance of the evidence standard to facts
necessary to establish the existence of a class.”). 3
Aside from joining our sister circuits, employing a
preponderance of the evidence standard supports the district
court’s role as the gatekeeper of Rule 23’s requirements. See
Wal-Mart, 564 U.S. at 351; Crutchfield v. Sewerage &
Water Bd. of New Orleans, 829 F.3d 370, 375 (5th Cir. 2016)
(holding the predominance inquiry envisions “what a class
3
A number of district courts in our circuit have likewise applied a
preponderance of the evidence standard to establish a class. See, e.g.,
Gomez v. J. Jacobo Farm Labor Contractor, Inc., 334 F.R.D. 234, 248
(E.D. Cal. 2019) (“Federal courts throughout the country require the
movant to demonstrate by a preponderance of the evidence that class
certification is appropriate.”); Martin v. Sysco Corporation, 325 F.R.D.
343, 354 (E.D. Cal. 2018) (“While Rule 23 does not specifically address
the burden of proof to be applied, courts routinely employ the
preponderance of the evidence standard.”); Valenzuela v. Ducey, 2017
WL 6033737, at *3 (D. Ariz. Dec. 6, 2017) (“[The preponderance of the
evidence] standard appears to be the trend in federal courts and will be
applied in this case.”) (simplified); Southwell v. Mortg. Inv’rs Corp. of
Ohio, 2014 WL 3956699, at *1 (W.D. Wash. Aug. 12, 2014) (“[T]his
Court finds itself in need of such a standard and chooses to align itself
with the emerging trend in other districts towards the adoption of a
preponderance of the evidence standard[.]”); Smilovits v. First Solar,
Inc., 295 F.R.D. 423, 427 (D. Ariz. 2013) (“[The preponderance]
standard appears to be the trend in federal courts[.]”); Keegan v.
American Honda Motor Co., Inc., 284 F.R.D. 504, 521 n.83 (C.D. Cal.
2012) (“[D]efendants cite no Ninth Circuit authority that directs use of a
preponderance standard in deciding class certification motions. Because
that is the general standard of proof used in civil cases, however, the
court applies it here.”).
18 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
trial would look like”). It best accords with the Supreme
Court’s warning that class certification is “proper only if the
trial court is satisfied, after a rigorous analysis, that the
prerequisites of Rule 23(a) have been satisfied.” Wal-Mart
Stores, 564 U.S. at 349–51 (emphasis added). And a
preponderance standard is more faithful to Rule 23(b)(3)’s
text, which provides that courts can certify a class “only if
. . . the court finds that the questions of law or fact common
to class members predominate” over individual ones. Fed.
R. Civ. P. 23(b)(3) (emphasis added).
The preponderance standard also flows from the
Supreme Court’s emphasis that the evidence used to satisfy
predominance be “sufficient to sustain a jury finding as to
[liability] if it were introduced in each [plaintiff’s] individual
action.” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036,
1048 (2016) (emphasis added). Establishing predominance,
therefore, goes beyond determining whether the evidence
would be admissible in an individual action. Instead, a
“rigorous analysis” of predominance requires “judging the
persuasiveness of the evidence presented” for and against
certification. Ellis, 657 F.3d at 982 (vacating class
certification because the district court “confused the Daubert
standard” for admissibility of expert evidence “with the
‘rigorous analysis’ standard to be applied when analyzing”
the Rule 23 factors). 4
4
We acknowledge that Tyson Foods stated that once a district court
finds representative evidence “admissible, its persuasiveness is, in
general, a matter for the jury,” and class certification should only be
denied if “no reasonable juror” could have found the plaintiffs’
representative evidence persuasive. 136 S. Ct. at 1049. But that
discussion was in the context of a wage-and-hour class action where
representative evidence is explicitly permitted to establish liability in
individual cases. Id. (citing Anderson v. Mt. Clemens Pottery Co.,
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 19
D. The Use of Representative Evidence
The acceptance of representative evidence at the class
certification stage is nothing new. The Supreme Court has
held that representative evidence can be relied on to establish
a class, but it has also declined to adopt “broad and
categorical rules governing” its use. Tyson Foods, 136 S. Ct.
at 1049. Instead, whether a representative sample can
“establish classwide liability” at the certification stage “will
depend on the purpose for which the sample is being
introduced and on the underlying causes of action.” Id.While consideration of representative evidence may be
flexible, it must be scrutinized with care and vigor. See
Comcast, 569 U.S. at 35 (rejecting the use of representative
evidence to establish predominance); Wal-Mart, 564 U.S.
328 U.S. 680, 687 (1946)). Such an evidentiary rule exists because
defendants often fail to keep proper records of hours worked by
employees. Id.; see also Lamictal, 957 F.3d at 191–92 (discussing how
representative evidence is particularly appropriate in wage-and-hour
suits since “a representative sample of employees may be the only
feasible way to establish liability” in a wage-and-hour case due to the
defendant’s own “inadequate record keeping”).
Given that representative evidence can be used to infer harm in
individual wage-and-hour suits, Tyson Foods reasoned that
representative evidence was presumptively usable at the class
certification stage as well. See Tyson Foods, 136 S. Ct. at 1049; see also
id. at 1046 (stating that representative evidence can be used to establish
predominance if “each class member could have relied on that sample to
establish liability if he or she had brought an individual action.”). But
the “no reasonable jury” standard is cabined to wage-and-hour suits and
doesn’t apply here. See Senne v. Kan. City Royals Baseball Corp.,
934 F.3d 918, 923, 947 & n.27 (9th Cir. 2019) (“Tyson expressly
cautioned that this rule should be read narrowly and not assumed to apply
outside of the wage and hour context.”).
20 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
at 350–51 (rejecting the use of representative evidence to
establish commonality).
There is reason to be wary of overreliance on statistical
evidence to establish classwide liability. Academic
literature abounds observing that “judges and jurors, because
they lack knowledge of statistical theory, are both overawed
and easily deceived by statistical evidence.” United States
v. Veysey, 334 F.3d 600, 604 (7th Cir. 2003). 5 If “highly
consequential evidence emerges from what looks like an
indecipherable” statistical model to most “non-statisticians,”
it is “imperative that qualified individuals explain how the
[model] works,” and courts must “ensure that it produces
reliable information.” United States v. Gissantaner, — F.3d
—, 2021 WL 834005, at *3 (6th Cir. 2021). 6
Moreover, the use of representative evidence cannot
“abridge, enlarge or modify [a plaintiff’s] substantive
right[s].” See 28 U.S.C. § 2072(b). Otherwise, its use would
5
See, e.g., Douglas H. Ginsburg & Eric M. Fraser, The Role of
Economic Analysis in Competition Law (May 16, 2010) (“[Courts]
almost certainly will not have the assistance of even one staff economist,
nor will the judges likely be familiar with the economic concepts about
the application of which [the parties] are debating.”); Laurence H. Tribe,
Trial by Mathematics: Precision and Ritual in the Legal Process,
84 Harv. L. Rev. 1329, 1342 n.40 (1971) (discussing how courts
misunderstand and misapply statistical evidence); G. Alexander Nunn,
The Incompatibility of Due Process and Naked Statistical Evidence,
68 Vand. L. Rev. 1407 (2015) (discussing how the use of statistical
evidence in certain circumstances can constitute a due process violation).
6
As Mark Twain famously popularized, “[t]here are three kinds of
lies: lies, damn lies, and statistics.” See Mark Twain, Chapters from My
Autobiography—XX, 186 N. Am. Rev. 465, 471 (1907). Although we
welcome the use of statistical evidence when appropriate, it would be
injudicious to swallow it uncritically.
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 21
contravene the Rules Enabling Act. Id. Class actions are
merely a procedural tool aggregating claims, Sprint
Commc’ns Co. v. APPCC Servs., Inc., 554 U.S. 269, 291
(2008), and Rule 23 “leaves the parties’ legal rights and
duties intact and the rules of decision unchanged,” Shady
Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S.
393, 408 (2010) (plurality opinion). The use of
representative evidence at the class certification stage must
therefore be closely and carefully scrutinized, and “[a]ctual,
not presumed, conformance” with Rule 23’s requirements is
“indispensable.” Wal-Mart, 564 U.S. at 351 (simplified).
With these background legal principles in mind, we turn
to Defendants’ contentions on appeal.
III. DEFENDANTS’ CLAIMS
Defendants raise two challenges to the district court’s
reliance on Plaintiffs’ representative evidence. First,
Defendants argue that this type of representative evidence—
especially the use of averaging assumptions—cannot be
used to establish predominance. Second, Defendants claim
that, even if this type of evidence can show predominance,
Plaintiffs’ econometric analysis does not in fact establish
predominance because a significant percentage of the class
may have suffered no injury at all under Plaintiffs’ experts’
statistical modeling. We consider each argument in turn.
A. Whether Plaintiffs’ Representative Evidence Can
Establish Predominance
The threshold consideration is whether Plaintiffs’
representative evidence can be used to establish
predominance. We believe this question raises several
considerations.
22 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
First, we address whether the representative evidence
could be used to establish liability in an individual suit.
Tyson Foods, 136. S. Ct. at 1048. Second, we ensure that
classwide liability is “capable of proof” through the
representative analysis. Comcast, 569 U.S. at 30. Finally,
we assess whether the use of averaging assumptions masks
the predominance question itself “by assuming away the
very differences that make the case inappropriate for
classwide resolution.” Tyson Foods, 136 S. Ct. at 1046.
We conclude that Plaintiffs’ representative evidence can
prove the classwide impact element of Plaintiffs’ price-
fixing theory of liability and, thus, may be used to establish
predominance.
1. Plaintiffs’ Evidence Could Have Been Used to
Establish Liability in a Class Member’s
Individual Suit
To establish predominance, the representative evidence
must be capable of use at trial in individual—not just class
action—antitrust cases. See Tyson Foods, 136 S. Ct. at 1046(Representative evidence is permissible to establish
predominance if “each class member could have relied on
that sample to establish liability if he or she had brought an
individual action.”). This is because plaintiffs and
defendants cannot have “different rights in a class
proceeding than they could have asserted in an individual
action.” Id. at 1048. If the representative evidence could not
be “relied on . . . to establish liability” in an “individual
action,” id. at 1046, then it cannot establish predominance at
the class certification stage.
The District Court held that to meet the predominance
requirement on their antitrust claims, Plaintiffs had to
establish: (1) the existence of an antitrust conspiracy; (2) the
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 23
existence of individual injury, also referred to as “antitrust
impact,” as a result of the conspiracy; and (3) resultant
damages. Packaged Seafood, 332 F.R.D. at 320; see
1 McLaughlin on Class Actions § 5:33 (17th ed. 2020); see
also In re New Motor Vehicles Canadian Exp. Antitrust
Litig., 522 F.3d 6, 19 n. 18 (1st Cir. 2008).
Plaintiffs rely on their representative evidence to
establish the “antitrust impact” of their price-fixing claims
against the Defendants. Statistical evidence has long been
used to prove antitrust impact in individual suits. To
establish impact in any antitrust action, plaintiffs must
“delineate a relevant market and show that the defendant
plays enough of a role in that market to impair competition
significantly.” Metro Indus., Inc. v. Sammi Corp., 82 F.3d
839, 847–48 (9th Cir. 1996). Even in individual suits, doing
so often requires comparing the actual world with a
“hypothetical” world that would have existed “‘but for’ the
defendant’s unlawful activities.” See LePage’s Inc. v. 3M,
324 F.3d 141, 165 (3d Cir. 2003); see, e.g., MM Steel, L.P.
v. JSW Steel (USA) Inc., 806 F.3d 835, 851–52 (5th Cir.
2015) (holding that the district court didn’t abuse its
discretion by using a “yardstick” calculation of damages in
an antitrust suit where the individual plaintiffs did a but-for
analysis by comparing their profits with “a study of the
profits of business operations that are closely comparable to
the plaintiff’s”).
In individual cases, constructing these “but-for”
comparisons usually requires the use of statistical evidence.
See Manual of Complex Litigation (Fourth) § 23.1, at pp.
470–71 (“[S]tatistical evidence is routinely introduced . . . in
antitrust litigation.”). And injury may be inferred from
statistical evidence. See Zenith Radio Corp. v. Hazeltine
Research, Inc., 395 U.S. 100, 125 (1969) (stating that
24 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
antitrust impact can be inferred from “circumstantial
evidence”); see also ABA Section of Antitrust Law,
Econometrics: Legal, Practical, and Technical Issues
§ 13.B.1.c. (2d ed. 2014) (discussing the use of regression
models in antitrust actions).
Here, each class member could have relied on
Dr. Mangum’s models to show classwide impact in each of
their individual suits. By constructing a clean, “benchmark”
period and comparing it to market price before and after the
benchmark, Dr. Mangum created a “yardstick” comparison
to isolate the “but-for” effect of the price-fixing conspiracy,
similar to the type of evidence relied upon in individual
antitrust actions. See, e.g., LePage’s Inc., 324 F.3d at 165;
MM Steel, 806 F.3d at 851–52. And the regression analysis
Dr. Mangum ran to calculate that 94% of the DPP Class
suffered an injury is consistent with the use of regression
models to prove price-fixing impact in other cases. See, e.g.,
In re Linerboard Antitrust Litig., 305 F.3d 145, 153 (3d Cir.
2002) (affirming use of plaintiffs’ “multiple regression
analysis” to prove “impact on a class-wide basis” in price-
fixing suit). In short, Plaintiffs’ statistical evidence is not
materially different than the type of evidence that would be
used against Defendants in individual cases brought by each
class member.
2. Plaintiffs’ Representative Evidence
Sufficiently Links Their Injuries to Their
Theory of Antitrust Violation
Plaintiffs’ representative evidence must also be
consistent with their underlying theory of liability. Comcast,
569 U.S. at 35 (“[A]ny model supporting a plaintiff’s
damages case must be consistent with its liability case,
particularly with respect to the alleged anticompetitive effect
of the violation.”). We have interpreted Comcast to require
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 25
that plaintiffs “show that their damages stemmed from the
defendant’s actions.” Pulaski & Middleman, LLC v. Google,
Inc., 802 F.3d 979, 987–88 (9th Cir. 2015) (simplified). Put
another way, the evidence must be capable of linking the
harm from the defendant’s conduct to the class members.
In this case, there is a sufficient nexus between Plaintiffs’
representative evidence and their price-fixing theory of
liability. See Allied Orthopedic, 592 F.3d at 996.
Dr. Mangum’s regression model can show antitrust impact
by isolating the but-for effect of the price inflation
attributable to Defendants’ alleged anticompetitive price list
(the 10.28% average overcharge), and by using a regression
model to calculate how much of the class would have been
impacted by that overcharge. Plaintiffs thus present a
“theory of injury and damages” that is “provable and
measurable by an aggregate model relying on class-wide
data.” In re Suboxone Antitrust Litig., 967 F.3d 264, 272 (3d
Cir. 2020) (affirming representative evidence in an antitrust
class action).
Accordingly, this is unlike cases where courts have
disapproved of representative evidence. In Comcast, for
example, the Court rejected representative evidence because
the posited regression analysis showed common injury that
did not track the plaintiffs’ underlying theory of liability.
569 U.S. at 35–38. There, the plaintiffs’ regression model
accounted for four different antitrust theories of harm, even
though the district court had only allowed the plaintiffs to
proceed on one of these theories. Id. at 31–32, 35. Such a
model “failed to measure damages resulting from the
particular antitrust injury on which” the class premised its
claim and “identifie[d] damages that are not the result of the
wrong” suffered by the certified class. Id. at 36–37. By
contrast, here Plaintiffs’ regression models test only one
26 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
theory of liability: the but-for impact of Defendants’ price-
fixing conspiracy.
3. Plaintiffs’ Use of Averaging Assumptions
Does Not Defeat Predominance
Defendants also argue that the representative evidence at
issue here is categorically impermissible because Plaintiffs’
experts used averaging assumptions in their regression
models. But the Supreme Court rejected “categorical
exclusion” of representative evidence. Tyson Foods, 136 S.
Ct. at 1046. Instead, Tyson approved the use of averaging
assumptions so long as the statistical evidence was “reliable
in proving or disproving the elements of the relevant cause
of action.” Id.The use of averaging assumptions in a regression
analysis may be inappropriate “where [a] small sample size
may distort the statistical analysis and may render any
findings not statistically probative.” Paige v. California,
291 F.3d 1141, 1148 (9th Cir. 2002). Indeed, Dr. Mangum’s
rebuttal to Dr. Johnson’s testimony was that varying the
overcharge value in his regression analysis resulted in too
small sample sizes that were not statistically robust.
Here, we see no issue with Plaintiffs’ use of averaging
assumptions in its regression models. Dr. Mangum averaged
the overcharge calculation using Defendants’ own data, and
then used that average in a regression model to calculate
what percentage of the class was impacted. Presuming the
reliability of Plaintiffs’ statistical methodology (which we
discuss later), the representative evidence can show that
virtually all class members suffered an injury due to
Defendants’ alleged wrongdoing.
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 27
According to Defendants, Plaintiffs’ averaging
assumptions papered over the very individualized
differences that make classwide resolution of this case
inappropriate. Defendants stress that “innumerable
individualized differences” among the class members make
it impossible to show class-wide impact through “common
proof.” For instance, direct purchasers often individually
negotiate prices, and the prices retailers actually pay may
vary based on purchasing power, retail price strategy, and
other factors. Some retailers may have even sold
Defendants’ tuna products as a loss leader to drive customers
to their stores. Defendants also contend that these averaging
assumptions are even more inappropriate when applied to
the indirect-purchaser class, which contains “even more
disparate” class members, including millions of individuals
who bought billions of tuna products from “countless stores
across the country over a four-year period.”
But even assuming the existence of these individualized
differences, a higher initial list price as a result of
Defendants’ price-fixing scheme could have raised the
baseline price at the start of negotiations and could have
affected the range of prices that resulted from negotiation.
Even Walmart, which as the largest retailer in the country
would have had the strongest bargaining power of any class
member, was shown to have suffered overcharges as a result
of Defendants’ conduct. This relieves concerns that the class
members were not “similarly situated,” and would allow the
“reasonable inference of class-wide liability.” See Tyson
Foods, 136 S. Ct. at 1045 (citations omitted).
Moreover, even if class members suffered individualized
damages that diverged from the average overcharge
calculated by Plaintiffs’ expert, “the presence of
individualized damages cannot, by itself, defeat class
28 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
certification under Rule 23(b)(3).” Leyva, 716 F.3d at 514.
Indeed, we have consistently distinguished the existence of
injury from the calculation of damages. See Vaquero,
824 F.3d at 1155; Senne, 934 F.3d at 943. Consequently,
individualized damages calculations do not, alone, defeat
predominance—although, as we discuss below, the presence
of class members who suffered no injury at all may defeat
predominance.
*****
Because this type of representative evidence can be used
to prove injury in individual antitrust suits, is consistent with
Plaintiffs’ underlying cause of action, and doesn’t
necessarily mask a lack of predominance, we hold it is
permissible to rely on Plaintiffs’ representative evidence at
the class certification stage.
B. Whether the District Court Must Rule on the
Presence of Uninjured Class Members
Even if Plaintiffs’ representative evidence could be used
to satisfy predominance, we cannot embrace their
conclusions and averaging assumptions uncritically.
Statistical evidence is not a talisman. Courts must still
rigorously analyze the use of such evidence to test its
reliability and to see if the statistical modeling does in fact
mask individualized differences.
As stated earlier, reliability is the touchstone for
establishing predominance through representative sampling.
See Tyson Foods, 136 S. Ct. at 1046. It is thus necessary for
courts to consider “the degree to which the evidence is
reliable in proving or disproving” whether a common
question of law or fact predominates over the class members.
Id. (emphasis added); see also Vaquero, 824 F.3d at 1155.
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 29
To do so, courts must “resolve any factual disputes necessary
to determine whether” predominance has in fact been met.
Ellis, 657 F.3d at 982–84. In other words, the threshold
predominance determination cannot be outsourced to a jury.
Lamictal, 957 F.3d at 191 (“[T]he court must resolve all
factual or legal disputes relevant to class certification[.]”)
(simplified).
When considering if predominance has been met, a key
factual determination courts must make is whether the
plaintiffs’ statistical evidence sweeps in uninjured class
members. As the district court recognized, Plaintiffs “must
establish, predominantly with generalized evidence, that all
(or nearly all) members of the class suffered damage as a
result of Defendants’ alleged anti-competitive conduct.”
Packaged Seafood, 332 F.R.D. at 320 (simplified). If a
substantial number of class members “in fact suffered no
injury,” the “need to identify those individuals will
predominate.” In re Asacol Antitrust Litig., 907 F.3d 42, 53
(1st Cir. 2018); see Halvorson v. Auto-Owners Ins. Co.,
718 F.3d 773, 779 (8th Cir. 2013). If injury cannot be
proved or disproved through common evidence, then
“individual trials are necessary to establish whether a
particular [class member] suffered harm from the [alleged
misconduct],” and class treatment under Rule 23 is
accordingly inappropriate. In re Rail Freight Fuel
Surcharge Antitrust Litig.-MDL No. 1869, 725 F.3d 244, 252
(D.C. Cir. 2013); see also Tyson Foods, 136 S. Ct. at 1045. 7
7
The presence of uninjured parties in a certified class also raises
serious standing implications under Article III. The federal court system
is reserved only for those that have suffered an injury. See Lujan v. Defs.
of Wildlife, 504 U.S. 555, 566 (1992). To that end, standing requires
each plaintiff provide “a factual showing of perceptible harm.” Id. A
30 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
In this case, the district court abused its discretion in
declining to resolve the competing expert claims on the
reliability of Plaintiffs’ statistical model. Defendants’ expert
provided testimony and alternative statistical modeling that
suggested Plaintiffs’ data was methodologically flawed and
was unable to show impact for up to 28% of the class—not
5.5%, as Plaintiffs’ expert insists. Rather than resolving the
dispute, however, the district court merely considered
whether Plaintiffs’ statistical evidence was “plausibly
reliable” and otherwise left determination of this question to
the jury. It concluded that “determining which expert is
correct is beyond the scope” of class certification and was
“ultimately a merits decision” for the jury to decide. 8
But resolving this dispute is of paramount importance to
certification of the class. If Plaintiffs’ model indeed shows
that more than one-fourth of the class may have suffered no
class action should be no different. See Tyson Foods, 136 S. Ct. at 1053(Roberts, C.J., concurring) (“Article III does not give federal courts the
power to order relief to any uninjured plaintiff, class action or not.”).
Accordingly, as the Fifth Circuit recently expressed, we are skeptical that
Article III permits certification of a class where “[c]ountless unnamed
class members lack standing.” Flecha v. Medicredit, Inc., 946 F.3d 762,
768 (5th Cir. 2020). But we do not reach this issue because, as we lay
out, class certification fails under Rule 23(b)(3), which is dispositive of
the matter. In re Hyundai & Kia Fuel Economy Litig., 926 F.3d 539, 565
n.12 (9th Cir. 2019).
8
Courts cannot relocate the predominance inquiry to the merits
stage of the trial. Rule 23 requires this determination be made at the pre-
trial stage. And for good reason. Suppose the jury ultimately decides
Defendants’ expert is right and Plaintiffs’ model sweeps in 28%
uninjured class members. Too late: the damage has been done. By then,
Defendants would have possibly weathered years of litigation at untold
costs, only to discover that the case never should have reached the merits
at all. Rule 23’s objective—that only cases suitable for class
adjudication be certified—would have been effectively undermined.
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 31
injury at all, the district court cannot find by a preponderance
of the evidence that “questions of law or fact common to
class members predominate over any questions affecting
only individual members.” Fed. R. Civ. P. 23(b)(3).
Rule 23(b)(3)’s choice of wording matters. The word
“common” means “belonging to or shared . . . by all
members of a group.” 9 Meanwhile, “predominate” means
“to hold advantage in numbers or quantity.” 10 Similarly,
when used as a noun, the word “predominance” means “the
state of . . . being most frequent or common.” 11 Thus, Rule
23(b)(3) requires that questions of law or fact be shared by
substantially all the class members, and these common
questions must be superior in strength or pervasiveness to
individual questions within the class.
If 28% of the class were uninjured, common questions of
law or fact would not be shared by substantially all the class
members, nor would they prevail in strength or
pervasiveness over individual questions. This would raise
concerns that Plaintiffs’ experts’ use of average assumptions
did mask individual differences among the class members,
9
Common, Merriam-Webster’s Collegiate Dictionary (11th ed.
2007).
10
Predominate, Merriam-Webster’s Collegiate Dictionary; see also
Predominate, Oxford English Dictionary,
https://www.oed.com/view/Entry/149893 (defining “predominate” as
“[t]o have or exert controlling power; to be of greater authority or
influence, to be superior”).
11
Predominance, Merriam-Webster’s Collegiate Dictionary; see
also Predominance, Oxford Online English Dictionary,
https://www.oed.com/view/Entry/149888 (defining “predominance” as
“preponderance, prevalence; prevailing or superior influence, power, or
authority”).
32 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
such as bargaining power, negotiation positions, and
marketing strategies.
Although we have not established a threshold for how
great a percentage of uninjured class members would be
enough to defeat predominance, it must be de minimis. Even
though “a well-defined class may inevitably contain some
individuals who have suffered no harm,” Torres, 835 F.3d
at 1136, the few reported decisions involving uninjured class
members “suggest that 5% to 6% constitutes the outer limits
of a de minimis number,” In re Rail Freight Fuel Surcharge
Antitrust Litig., 934 F.3d 619, 624–25 (D.C. Cir. 2019)
(simplified) (finding no predominance where 12.7% of class
members were conceded to be uninjured by plaintiffs’ own
expert). The First Circuit reversed certification where the
district court had concluded that “around 10%” of the
proposed class was uninjured. See In re Asacol, 907 F.3d
at 47, 51–58. And even the district court recognized that the
inclusion of 28% uninjured class members would
“unquestionably” defeat predominance. Packaged Seafood,
332 F.R.D. at 325. Contrary to the dissent’s suggestion, we
do not adopt a numerical or bright-line rule today. 12 But
under any rubric, if Plaintiffs’ model is unable to show
impact for more than one-fourth of the class members,
predominance has not been met. 13 While we do not set the
12
The dissent also claims that we ignore Ninth Circuit case law.
Dissent at 36. Not so. We agree with Torres v. Mercer Canyons Inc.,
835 F.3d 1125, 1136 (9th Cir. 2016) that the mere presence of some non-
injured class members does not defeat predominance, but we hold that
the number of uninjured class members must be de minimis. As Torres
stated, the “existence of large numbers of class members” who were
never exposed to injurious conduct may defeat predominance. Id.13
This is over double the percentage of uninjured class members
considered sufficient to defeat predominance in In re Rail Freight
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 33
upper bound of what is de minimis, it’s easy enough to tell
that 28% would be out-of-bounds.
The district court’s gloss over the number of uninjured
class members was an abuse of discretion. Rule 23(b)(3)
requires courts “to make findings about predominance and
superiority before allowing the class.” Wal-Mart, 564 U.S.
at 363 (emphasis added). Deferring determination of
classwide impact effectively “amounts to a delegation of
judicial power to the plaintiffs, who can obtain class
certification just by hiring a competent expert.” West v.
Prudential Sec., Inc., 282 F.3d 935, 938 (7th Cir. 2002). If
“savvy crafting of the evidence” were enough to guarantee
predominance, there would be little limit to class
certification in our modern world of increasingly
sophisticated aggregate proof.” See Richard A. Nagareda,
Class Certification in the Age of Aggregate Proof, 84 N.Y.U.
L. Rev. 97, 103 (2009). In Ellis, we vacated the district
court’s certification of a class for the failure to resolve
“critical factual disputes” in a “battle of the experts”
regarding commonality. 657 F.3d at 982, 984. So too here,
the district court failed to resolve the factual disputes as to
how many uninjured class members are included in
Plaintiffs’ proposed class—an essential component of
predominance.
Plaintiffs emphasize that the district court stated its
inquiry went beyond a Daubert analysis and that the court
recognized it was required to determine whether the expert
evidence was “in fact persuasive.” The district court even
walked through the strengths and weaknesses of the experts’
(12.7%), almost triple the percentage disapproved of in In re Asacol
(10%), and around five times greater than the percentages at issue in the
district courts cited (5–6%).
34 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
competing testimony. Yet despite acknowledging there
were “potential flaws” in the Plaintiffs’ expert’s
methodology, the district court made no finding. A district
court that “has doubts about whether the requirements of
Rule 23 have been met should refuse certification until they
have been met.” Brown v. Electrolux Home Prods., Inc.,
817 F.3d 1225, 1233–34 (11th Cir. 2016) (simplified). 14
Despite admirably and thoroughly marshaling the
evidence in this difficult case, the district court needed to go
further by resolving the parties’ dispute over whether the
representative evidence swept in only 5.5% or as much as
28% uninjured DPP Class members. The district court also
needed to make a similar determination for the other putative
classes. Deciding this preliminary question is necessary to
determine whether Plaintiffs have established
predominance.
IV. CONCLUSION
Accordingly, we vacate the district court’s order
certifying the classes and remand with instructions to resolve
the factual disputes concerning the number of uninjured
14
Compounding these concerns, the burden of persuasion may have
been improperly shifted to Defendants to affirmatively disprove the
claims made by Plaintiffs’ expert. In certifying the classes, the district
court reasoned that “Defendants have not persuaded the Court that
Dr. Mangum’s model is unreliable.” Packaged Seafood, 332 F.R.D.
at 326. Additionally, the district court concluded that the predominance
requirement was met because Defendants had not shown that Plaintiffs’
models were “glaringly erroneous.” Id. But the “party seeking class
certification has the burden of affirmatively demonstrating that the class
meets the requirements of [Rule] 23.” Mazza v. Am. Honda Motor Co.,
666 F.3d 581, 588 (9th Cir. 2012).
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 35
parties in each proposed class before determining
predominance. 15
VACATED and REMANDED.
HURWITZ, Circuit Judge, concurring in part and dissenting
in part:
The majority is faithful to the plain text of Rule 23 in
concluding that the district court, not a jury, must resolve
factual disputes bearing on predominance. See Fed. R. Civ.
P. 23(b)(3) (permitting a class action to be maintained if “the
court finds that the questions of law or fact common to class
members predominate over any questions affecting only
individual members”) (emphasis added). I also agree with
the majority that a district court’s “rigorous analysis” of
whether a putative class has satisfied Rule 23’s requirements
should proceed by a preponderance of the evidence standard.
See Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th
Cir. 2011). And, the majority correctly holds that the
question for the district court is not whether common issues
could predominate at trial; the court must determine that they
do predominate before certifying the class. See Comcast
Corp. v. Behrend, 569 U.S. 27, 34 (2013). I therefore agree
that remand is required.
I part company, however, with the majority’s conclusion
that, before certifying a class, the district court must find that
only a “de minimis” number of class members are uninjured.
15
Pursuant to Federal Rule of Appellate Procedure 39(a) and Ninth
Circuit General Order 4.5(e), each party shall bear its own costs on
appeal.
36 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
The text of Rule 23 contains no such requirement, nor do our
precedents. The majority’s effective amendment of Rule 23
not only ignores our case law but also circumvents the
established process for modifying a Rule of Civil
Procedure—study and advice from the relevant committees,
followed by the consent of the Supreme Court and
Congress’s tacit approval. See Rules Enabling Act,
28 U.S.C. § 2072; Shady Grove Orthopedic Assocs., P.A. v.
Allstate Ins. Co., 559 U.S 393, 407 (2010) (describing the
Supreme Court’s rulemaking power). I therefore
respectfully dissent from Part III.B of the majority opinion. 1
I
As an initial matter, our caselaw squarely forecloses the
majority’s approach. The critical question is not what
percentage of class members is injured, but rather whether
the district court can economically “winnow out” uninjured
plaintiffs to ensure they cannot recover for injuries they did
not suffer. See Torres v. Mercer Canyons, Inc., 835 F.3d
1125, 1137 (9th Cir. 2016). If the district court can ensure
that uninjured plaintiffs will not recover, their mere presence
in the putative class does not mean that common issues will
1
The majority also notes that “[a]cademic literature abounds
observing that ‘judges and jurors, because they lack knowledge of
statistical theory, are both overawed and easily deceived by statistical
evidence.’” Op. at 20 (quoting United States v. Veysey, 334 F.3d 600,
604 (7th Cir. 2003)). But even assuming that academic literature does
so “abound,” see Op. at 20, n.5, that doesn’t establish that Article III
judges in general, or the distinguished district judge in this case, are so
easily fooled. The cited literature is, for better or worse, based on the
observations of the authors, not on a rigorous scientific survey of the lack
of knowledge of statistical theory by district judges (or even federal
appellate judges).
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 37
not predominate. See Yokoyama v. Midland Nat’l Life Ins.
Co., 594 F.3d 1087, 1089 (9th Cir. 2010).
The plain text of Rule 23 requires only that “questions of
law or fact common to the class predominate over any
questions affecting only individual members.” Fed. R. Civ.
P. 23(b)(3) (emphasis added). The noun “predominant”
means “[m]ore powerful, more common, or more
noticeable.” Predominant, Black’s Law Dictionary (11th ed.
2019). In Rule 23(b)(3), the subject of the verb
“predominate” is “common questions of law or fact.” The
Rule therefore simply instructs the district court to determine
whether common questions exceed others. See Pavelic &
LeFlore v. Marvel Ent. Grp., 493 U.S. 120, 123 (1989)
(applying statutory interpretation maxims to a Federal Rule
of Civil Procedure); see also Weyerhauser Co. v. U.S. Fish
and Wildlife Serv., 139 S. Ct. 361, 368 (2018) (reading
statutory text “[a]ccording to the ordinary understanding of
how adjectives work” to determine how the statute
“modif[ies] nouns”).
We have therefore stressed that “[t]he potential existence
of individualized damage assessments . . . does not detract
from the action’s suitability for class certification.”
Yokoyama, 594 F.3d at 1089; see also Advisory Comm. Note
to 1966 Amendment, Rule 23 (“It is only where this
predominance exists that economies can be achieved by
means of the class-action device. In this view, a fraud
perpetrated on numerous persons by the use of similar
misrepresentations may be an appealing situation for a class
action, and it may remain so despite the need, if liability is
found, for separate determination of the damages suffered by
individuals within the class.”). In Levya, for example, we
stated that although “plaintiffs must be able to show that
their damages stemmed from the defendant’s actions that
38 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
created the legal liability,” the presence of putative class
members “allegedly entitled to different damage awards” did
not defeat predominance. Levya v. Medline Indus., 716 F.3d
510, 513–14 (9th Cir. 2013); see also Vaquero v. Ashley
Furniture Indus., Inc., 824 F.3d 1150, 1155 (9th Cir. 2016),
Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979,
988 (9th Cir. 2015) (holding that Comcast did not disturb
Yokoyama). Even in a properly certified class, “[d]amages
may well vary, and may require individualized calculations.”
Senne v. Kansas City Royals Baseball Corp., 934 F.3d 918,
943 (9th Cir. 2019).
Most importantly, we have held that because “even a
well-defined class may inevitably contain some individuals
who have suffered no harm,” the same approach governs
even if there are uninjured plaintiffs. Torres, 835 F.3d at
1136–37. Rather, the presence of some plaintiffs not harmed
by the defendants’ conduct merely highlights the “possibility
that an injurious course of conduct may sometimes fail to
cause injury.” Id. at 1136. And, no Ninth Circuit case
imposes a cap on the number of uninjured plaintiffs as a
prerequisite to class certification.
Our settled law is consistent with the basic principles
underlying Rule 23. A class plainly may be certified solely
on discrete issues. See Fed. R. Civ. P. 23(c)(4). So, in the
case before us, the district court could well certify a class on
liability, followed by a more narrowly defined class (or even
individual trials, if necessary) on damages. As the majority
recognizes, there is little dispute the defendants engaged in
an antitrust conspiracy. I perceive no bar in Rule 23 to
certifying a liability class, while leaving open which
members of the class suffered damage from the defendants’
illegal conduct.
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 39
As the Fifth Circuit has recognized, the predominance
inquiry focuses on “what a class trial would look like.”
Crutchfield v. Sewerage & Water Bd. of New Orleans,
829 F.3d 370, 375 (5th Cir. 2016). The crucial question, left
to the district court’s sound discretion, is whether “common
questions present a significant aspect of the case and they
can be resolved for all members of the class in a single
adjudication.” True Health Chiropractic, Inc. v. McKesson
Corp., 896 F.3d 923, 931 (9th Cir. 2018). Certification
should fail only when the individual questions “threaten to
become the focus of the litigation.” Torres, 835 F.3d
at 1142.
II
A numerical cap on uninjured class members is not very
helpful to district courts analyzing predominance. To be
sure, a large percentage of uninjured plaintiffs may raise
predominance concerns. See In re Asacol Antitrust Litig.,
907 F.3d 42, 53–54 (1st Cir. 2018). Our cases plainly
recognize that concern. See Torres, 835 F.3d at 1142.
But, as written, the Rule is not categorical with respect
to the number of uninjured plaintiffs. If the questions of law
or fact about whether a defendant breached a legal duty to a
class are common, and identifying the uninjured members
would be relatively simple, there is likely no reason to deny
Rule 23 certification on liability. For example, if a
telecommunications company were alleged to have
erroneously charged many California customers double rates
for certain interstate calls, a district court could certify a
class of all the company’s California customers even if an
expert testified that only 80 percent of them were likely to
have made the calls in question. Determining who did,
which likely could be done from available records, could be
left to a damages stage.
40 OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS
This variation among cases is why we review decisions
on class certification for abuse of discretion. Torres,
835 F.3d at 1132. We give the district court “noticeably
more deference” when it certifies a class than when it denies
certification. Abdulla v. U.S. Sec. Assocs., Inc., 731 F.3d
952, 956 (9th Cir. 2013) (cleaned up). That deference is
appropriate because Rule 23 certification is at bottom a trial
management decision; it simply allows the class litigation to
continue under the district court’s ongoing supervision. The
district court retains the power to alter or amend a class
certification order at any time before final judgment. Fed.
R. Civ. P. 23(c)(1)(C).
I recognize that one of our sister Circuits has suggested
that “5% to 6%” is the “outer limit[]” of an acceptable
number of uninjured class members. In re Rail Freight Fuel
Surcharge Antitrust Litig., 934 F.3d 619, 625 (D.C. Cir.
2019). 2 While disclaiming any particular numerical cap, the
majority suggests that something between 5 and 10 percent
approaches the outer limit. Op. at 32. But this effectively
rewrites Rule 23. If the Supreme Court finds that approach
wise, after the usual input and recommendations from the
advisory committees, and Congress does not see fit to act to
the contrary, then so be it. But we should not legislate from
the appellate bench based on our personal concerns with the
class action device. Under the Rule as currently written, we
should instead leave fact-based decisions on predominance
2
Although the First Circuit has adopted a “de minimis” rule, it has
defined it in “functional terms,” asking whether there is a “mechanism
that can manageably remove uninjured persons.” Asacol Antitrust Litig.,
907 F.3d at 53–54 (cleaned up). That rule corresponds in practical
application to Ninth Circuit precedent. See Torres, 835 F.3d at 1137.
OLEAN WHOLESALE GROCERY COOP. V. BUMBLE BEE FOODS 41
and case management to the sound discretion of the district
courts.
Nor is a “de minimis” rule necessary to address Article
III concerns. “[O]nly the representative plaintiff need allege
standing at the motion to dismiss and class certification
stages.” Ramirez v. TransUnion LLC, 951 F.3d 1008, 1023
(9th Cir. 2020). Class members “must satisfy the
requirements of Article III standing at the final stage of a
money damages suit when class members are to be awarded
individual monetary damages.” Id. at 1017 (emphasis
added). To be sure, Torres instructs the district court to
“winnow out” uninjured class members, 835 F.3d at 1137,
but their presence at the certification stage is not a barrier to
standing. Put simply, the de minimis rule is a solution in
search of a problem.
III
Defendants may well be correct that Plaintiffs’ data was
“methodologically flawed and was unable to show impact
for up to 28% of the class.” Op. at 30. And, in the exercise
of its discretion, the district court might find that such a large
percentage of uninjured class members means that common
issues of law or fact do not predominate in this case. But, by
the same measure, the district court could find that Plaintiffs’
aggregated proof could establish liability to a predominant
portion of the class, and that uninjured members could be
identified in future (perhaps non-class) proceedings.
Because the majority removes from the district court the
broad discretion Rule 23 provides and instead replaces it
with a “de miminis” requirement found nowhere in the Rule
or our precedents, I respectfully dissent from Part III.B.3 of
the majority opinion.