Class Actions Brief Blog

The extent to which the presence of uninjured class members may defeat class certification remains unsettled. While, standing alone, the existence of some uninjured class members may not be not fatal (depending on the circuit), just how many is too many to satisfy the predominance requirement of Rule 23(b)(3) is still in flux.

The Ninth Circuit waded into this debate earlier this year in Olean Wholesale Grocery Coop. Inc. v. Bumble Bee Foods LLC. Before the case made its way to the appellate court, the U.S. District Court for the Southern District of California certified three classes of purchasers of packaged tuna, each alleging a long-running price-fixing conspiracy among the nation’s largest tuna producers in violation of federal and state antitrust laws.

In support of their motion for class certification, the putative classes of tuna purchasers offered expert testimony to show that all (or nearly all) of the purchasers paid higher tuna prices because of the producers’ alleged anticompetitive conduct. The purchasers’ experts used a statistical regression model to estimate the average percentage by which the producers’ anticompetitive conduct increased the price of tuna. After calculating the estimated percentage, the experts assumed that all purchasers in each putative class overpaid for tuna by the same average percentage.

The tuna producers challenged this testimony as insufficient evidence of predominance because it did not show that the alleged anticompetitive behavior impacted all (or nearly all) purchasers. In support of their challenge, the producers offered their own experts, who proffered statistical analyses showing that only 72% of purchasers overpaid for tuna as a result of the alleged wrongdoing—meaning that 28% of purchasers suffered no injury at all. Although the district court found the producers’ critiques “serious” and acknowledged that they “could be persuasive to a finder of fact,” it concluded that “determining which expert is correct is beyond the scope of” class certification. Instead, the court considered only whether the purchasers’ proffered method of establishing predominance was “capable of showing [impact] to all, or nearly all of the Class members.” The district court certified all three purchaser classes.

The producers appealed. In a 2-1 decision issued in April 2021 [], the Ninth Circuit decertified the classes. Although the majority agreed that statistical or “representative” evidence—as well as average assumptions—may be used to establish predominance, it held that the district court abused its discretion by failing to decide which of the parties’ experts was correct about the percentage of putative class members who suffered no injury.

The majority agreed with the general principle that the presence of some uninjured plaintiffs does not imperil class certification. But it stated that when a “substantial number of class members” have not been injured, the need to identify those class members predominates and defeats certification. In an attempt to provide guidance on how many uninjured class members is too many, the majority advised that more than a “de minimis” number of uninjured plaintiffs defeats predominance. According to the majority, 28% of uninjured class members was more than de minimis and defeated certification. The majority indicated that a far lower percentage of uninjured plaintiffs likely would surpass the de minimis standard, citing cases from other circuit courts stating that 5-6% of uninjured class members, or at least around 10%, would fall at “the outer limits” of the de minimis threshold.

Although the dissenting opinion agreed that “a large percentage of uninjured plaintiffs may raise predominance concerns,” it did not join the majority’s effort to place “a numerical cap on uninjured class members.” Instead, the dissent reasoned that the “critical question” is not the percentage of uninjured plaintiffs, but “rather whether the district court can economically ‘winnow out’ uninjured plaintiffs to ensure they cannot recover for injuries they did not suffer” at a later phase of the proceedings. If identifying uninjured plaintiffs “would be relatively simple,” the dissent wrote, then whether to certify the class and leave damages considerations for later in the case should remain in the district court’s discretion.

The majority opinion looked like a high-water mark for class action defendants in the Ninth Circuit—but the seas soon changed. In early August 2021, the Ninth Circuit voted to vacate the panel decision and rehear Olean en banc. Oral argument is scheduled for the week of September 20, 2021. But class action plaintiffs should not take the bait too quickly. The Ninth Circuit’s vacatur notwithstanding, courts (including the Supreme Court) have become increasingly wary—on both predominance and standing grounds—of permitting class actions to proceed when the putative class includes uninjured plaintiffs. While there may not yet be clear guidance regarding just how many uninjured class members is too many, class action defendants can continue to challenge certification on predominance grounds when the evidence indicates that the putative class includes uninjured individuals.