Class Action Tying Cases: A Framework for Certification Decisions
37 Pages Posted: 9 Jul 2011 Last revised: 30 Jul 2011
Date Written: January 1, 1982
Emerging from humble beginnings in which a product was leased or sold on the condition that the lessee or purchaser also accept a separate and distinct second product, the claim of a tying arrangement as a violation of the antitrust laws has been expanded and adapted to cover the gamut of business dealings. Courts have applied the tying rubric to such varied activities as financing arrangements, franchise agreements, and funeral services in an effort to ensure that the definitional contours of tying arrangements kept pace with marketing innovations and technological advances.
Parallel to this expansion of the law of tying claims has been a significant increase in the use of distribution arrangements designed to achieve a semblance of vertical integration without actual acquisition. Franchising agreements have emerged as the primary vehicle for achieving this end. These arrangements typically involve the sale or lease of multiple products, or a combination of products and services, as part of a package agreement or continued course of dealing. This pattern of distributive relationships provides an ideal setting for the purchasers to allege tying in violation of the antitrust laws. The scale of these distributive arrangements is often very large, involving numerous purchasers of the products or services. Buyers, therefore, frequently attempt to convert individual tying claims into class actions on behalf of themselves and other similarly situated putative plaintiffs.
The combined result of the expansion of tying claims and the transformation of business relationships is that over the past decade the courts have had to make numerous class certification determinations in tying cases. Because these courts have labored without any explicit guidance from the Supreme Court, and because of the variety of business relations and arrangements to which the tie-in claim has been applied, it is not surprising that the resulting decisions appear to lack congruity. As one prominent practitioner has phrased it, while this area of the law is “certainly one of the more fertile fields for class action litigation,” the judicial precedent is a “bewildering morass.”
This uncertainty has been exacerbated by confusion regarding the concept of coercion as a substantive element of tying law, and in particular, the role of individual coercion as a consideration in class certification decisions. The debate over this issue has produced a decisive split between the courts and the commentators. While the commentators have almost universally recommended rejection of coercion as a necessary element of a tying violation, the courts generally have embraced it as a necessary tool in their analysis.
This Article suggests a general framework for analyzing certification decisions in tying cases. After identifying the elements of substantive tying liability which may result in variations in proof among class members, the Article proposes guidelines for determining commonality for each of these elements. The key to this approach is the recognition that, even though the courts describe coercion as a separate substantive element of a tie-in claim, they have never applied the concept in this manner. Rather, courts use coercion language to cover a variety of situations – substantively and in the class action context – which reflect an analysis of either the burden of producing evidence of liability or the commonality of proof on the traditional elements of the tying claim. This recognition reconciles the commentators’ rejection of the coercion doctrine with the courts’ reliance on it, resulting in a coherent and consistent class certification analysis.
Suggested Citation: Suggested Citation