Fishy Results for Class Action Defendants in the Ninth Circuit

Last September, we wrote about the Ninth Circuit’s opinion in Olean Wholesale Grocery v. Bumble Bee Foods and the court’s decision to rehear the case en banc.  The en banc Ninth Circuit has now waded back into the class certification waters, with mixed results for defendants.  While the en banc court tossed back the panel’s holding that the presence of more than a de minimis number of uninjured class members is fatal to certification, it also clarified certain procedural matters under Rule 23 that may lead to smoother sailing for defendants at the certification stage.

As we explained in our earlier post, Olean centers on a long-running price-fixing conspiracy by several large tuna suppliers.  The fact of the conspiracy is not at issue.  Several defendants pleaded guilty in criminal cases brought by the U.S. Department of Justice.  The issue is whether alleged victims of the conspiracy can pursue their civil claims on a class-wide basis.  During the certification phase of the trial court proceedings, dueling statistical experts disagreed over the number of potentially uninjured class members.  The defendants’ expert analysis showed that as many as 28% of the putative class might be uninjured, while the plaintiffs’ expert analysis showed that only 5% of class members were potentially uninjured.  Injury—or antitrust impact—is a required element of the plaintiffs’ claim under section 1 of the Sherman Antitrust Act.

In July 2019, the U.S. District Court for the Southern District of California certified three classes, concluding that the number of uninjured class members—even if potentially substantial—need not be resolved at the certification stage.  In April 2021, a three-judge panel of the Ninth Circuit reversed and remanded, concluding that more than a de minimis number of uninjured class members rendered the putative class uncertifiable.  Shortly thereafter, the Ninth Circuit vacated the decision and voted to rehear Olean en banc.  The April 2022 en banc opinion reversed again, holding that the district court did not abuse its discretion in concluding that the plaintiffs’ statistical evidence was capable of proving class-wide antitrust impact (i.e., class-wide injury) and, thus, did not preclude certification.

In a lengthy majority opinion, the Ninth Circuit adopted and clarified a number of general class certification rules about which defendants should be aware.  

  1. The court joined its sister circuits in adopting a preponderance of the evidence standard for class certification.
  2. The court held that evidence (including statistical evidence) used at the certification stage must be admissible and pass muster under Daubert.  This is a departure from Ninth Circuit precedent in Sali v. Corona Regional Medical Center, 909 F.3d 996 (9th Cir. 2018), which indicated that the trial court may (and, in some cases, must) consider inadmissible evidence at the class certification stage.
  3. The court clarified a distinction regarding Article III standing for class action plaintiffs.  In particular, for a damages class action, every putative class member must have Article III standing (as required by TransUnion LLC v. Ramirez,141 S. Ct. 2190 (2021)).  But for class actions seeking only injunctive or equitable relief, the Ninth Circuit clarified that only the class representative must have Article III standing.  This aspect of Olean partially overrules Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012), which indicated that all putative class members must have Article III standing and did not distinguish between damages and injunctive relief classes.

In addition to announcing these general rules, the Ninth Circuit firmly rejected a categorical de minimis rule and held that the existence of more than a de minimis number of uninjured putative class members does not automatically preclude class certification.  This holding conflicts with cases from the First and D.C. Circuits.

In rejecting the de minimis rule, the majority adopted a more lenient approach to class certification.  While some of this leniency may be a result of the applicable abuse-of-discretion standard of review, the opinion endorsed the view that even fundamental disputes about whether a claim can be resolved on a class basis need not be decided at the certification stage.  The opinion held that the test is whether evidence reveals a question capable of class-wide resolution—not whether evidence establishes that the plaintiffs will prevail on the question at trial.  This framing applies even to the fundamental question of whether the putative class has suffered an injury redressable on a class-wide basis.  It is difficult to reconcile this conclusion with the court’s reaffirmation that class action plaintiffs must carry their burden of proof—including as to commonality, predominance, and superiority—before a class can be certified.  Indeed, it is not clear how the question of whether a class member is injured could be resolved through any means other than an individual examination at trial, turning a class claim into an impermissible series of mini-trials requiring the presence and participation of each individual class member.

Olean further muddied the waters by acknowledging that the existence of a “great number” of uninjured class members could still result in a fatally overbroad class that cannot be certified on predominance grounds.  Unfortunately, the contours of the distinction between the rejected de minimis rule and the reemphasized predominance standard are not yet clear.  As the dissenting opinion noted, it is difficult to imagine that common questions of fact could predominate if nearly 30 percent of class members are uninjured—as the defendants’ expert in Olean suggested they would be. 

The majority opinion does offer some safe harbor for class action defendants.  For example, the majority stated that trial courts must not take it upon themselves to create impermissible “fail safe” classes defined carefully to include only injured class members.  The opinion also highlighted that defendants may still object to expert evidence on a variety of grounds—and that failure on one ground may not signal an inability to defeat class certification.  In particular, even if a plaintiff’s expert evidence passes muster under Rule 702 and Daubert, the trial court still must evaluate the evidence (upon a proper objection) to ensure that it is capable of answering a common question on a class-wide basis.  The majority opinion offered a number of examples of admissible expert evidence that would not aid a plaintiff in meeting her burden under Rule 23, including evidence that fails to prove an element of a claim for the entire putative class (citing Wal-Mart v. Dukes, 564 U.S. 338 (2011)), damages evidence that is inconsistent with the plaintiff’s theory of liability (citing Comcast Corp. v. Behrend, 569 U.S. 27 (2013)), and evidence with nonsensical results, such as evidence showing injuries to class members who by definition are incapable of being injured (citing In re Rail Freight Fuel Surcharge Antitrust Litigation, 725 F.3d 244 (D.C. Cir. 2013)).

Class action defendants in the Ninth Circuit should be familiar with Olean’s statements of law concerning class action practice and standards of proof.  They should also carefully preserve all objections to expert evidence—particularly damages evidence—at class certification, objecting (when appropriate) based on Rule 702 and Daubert, as well as arguing that the expert evidence does not aid the plaintiffs in establishing predominance or otherwise satisfying Rule 23.  And keep an eye on the horizon. The defendants have forecasted that they will file a petition for writ of certiorari in the U.S. Supreme Court.


Clara Nieman, a rising third-year student at Duke University School of Law and summer associate at Robinson Bradshaw, contributed to this post.