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Class Certification in Antitrust Cases: An Economic Framework

27 Pages Posted: 15 Mar 2010  

Hal J. Singer

Economists Incorporated

Robert B. Kulick

NERA Economic Consulting

Date Written: March 1, 2010

Abstract

A number of recent appellate court decisions pertaining to class certification in antitrust cases have spawned uncertainty and debate about the future course of antitrust enforcement through the class-action mechanism. One leitmotif of these decisions is that Federal Rule of Civil Procedure’s 23(b)(3) “predominance” standard can only be satisfied by “rigorous analysis.” Some antitrust practitioners have argued that these statements regarding rigorous analysis must indicate that many issues traditionally thought of as merits issues must now be resolved during the class-certification inquiry. Yet the same decisions by appellate courts have emphasized that the class-certification process is a limited inquiry and that plaintiffs are not required to prove the validity of their claims regarding violation and impact to achieve class certification.

In this article, we propose an economic framework for interpreting the rule 23(b)(3) predominance standard. We believe that our analysis resolves the apparent conflict between the principle of conducting a rigorous analysis during the class certification inquiry and the principle of conducting an inquiry that implicates the validity of allegations at issue. Our approach also gives a specific economic meaning to the principle articulated by the Supreme Court in Amchem that class certification ultimately comes down to a question of whether a proposed class is sufficiently cohesive to warrant certification. Furthermore, our approach provides a compelling economic justification for a specific puzzle in antitrust class-action jurisprudence: Plaintiffs seeking class certification have often been successful when they have been able to prove that (1) the prices paid by all class members are linked by a common element of pricing, and (2) this common element was altered by the challenged conduct in a way that harmed plaintiffs. Despite the fact that this argument is often advanced through economic expert testimony, some antitrust practitioners have suggested that this approach lacks an economic basis. We review several cases where plaintiffs successfully used this approach to certify a class and show how our framework provides an economic basis for the court’s affirmative decisions in these cases. Our framework also suggests a specific delineation of the responsibilities of class-certification experts, liability experts, and damages experts.

Suggested Citation

Singer, Hal J. and Kulick, Robert B., Class Certification in Antitrust Cases: An Economic Framework (March 1, 2010). George Mason Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1568993

Hal J. Singer

Economists Incorporated ( email )

2121 K Street N.W.
Suite 1100
Washington, DC 20037
United States
202-747-3520 (Phone)

HOME PAGE: http://www.ei.com/viewprofessional.php?id=71

Robert B. Kulick (Contact Author)

NERA Economic Consulting ( email )

1255 23rd Street NW
Suite 600
Washington, DC 20009
United States

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