The Ninth Circuit’s “Tuna Case” Lets Uninjured Class Members Off the Hook at Certification but May Reel in the Supreme Court
Attorneys interested in class actions and antitrust law will read the Ninth Circuit’s recent opinion in the “tuna case”—Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC—with relish. 31 F.4th 651 (2022). The case contains important takeaways for class action and antitrust attorneys,[1] and also—the focus of this post—highlights a deepening circuit split, one which the Supreme Court may be angling to resolve.
In the tuna case, the district court certified classes of direct and indirect purchasers of canned tuna based on an alleged conspiracy among major tuna suppliers to fix the price for canned tuna in violation of antitrust law. The conspiracy was not in doubt; indeed, the Department of Justice had already prosecuted four executives, three of whom pleaded guilty to their roles in the conspiracy, and one of whom was convicted by a jury. However, class certification was fiercely contested. The parties jousted over how many uninjured members the proposed class contained and whether such bycatch class members should be thrown back before class certification.
Ultimately, the Ninth Circuit, sitting en banc, affirmed certification of the class and subclasses under review. The majority highlighted that the class put forth an expert’s model that estimated that the conspiracy resulted in a 10.28% overcharge on tuna for the entire class. Accordingly, the majority determined that the defendants’ expert’s assertion that the model did not show a statistically-significant price difference for 28% of the class was not sufficient to threaten certification.
The majority and dissent interpreted the defense expert’s finding differently: the majority highlighted that the 28%—for whom no statistically-significant difference in price was shown—had that result because they did not make enough pre-collusion purchases to serve as control prices, and that therefore the 28% figure did not necessarily represent the amount of uninjured class members. The dissent found that explanation fishy, seeing the lack of a demonstrated price increase for 28% of the class as indication that up to 28% of the class was potentially uninjured. The majority appeared to agree that injury had not yet been demonstrated for these 28%, but nevertheless believed that the 10.28% classwide overcharge was enough to demonstrate that injury could be proven through common proof. The dissent, discussing cases from the First and D.C. Circuits, argued that the majority “needlessly create[d] a split with other circuits that have endorsed a de minimis rule.”
The circuit split highlighted by the dissent has two lines of fracture: first, whether the presence of any uninjured class members poses a barrier to class certification, and second, if some uninjured class members can pass certification, how many uninjured class members is too many? We know, from TransUnion v. Ramirez, that every class member must have standing—and therefore be injured—in order to recover individual damages in a class action. But TransUnion left unanswered whether every member of the class must also show standing and injury at class certification, as Best in Class pointed out last year.
Contrary to the dissent’s warning in the tuna case that the majority would “create” a circuit split, based on our research the circuit courts are already split on this question, though the tuna case majority certainly deepened it. Six circuits have held that all class members must be injured for a class to be certified, five have held that there is some de minimis number of uninjured class members that will not preclude certification, and two circuits (the 10th and Federal Circuits) have yet to weigh in.
In one corner, six federal Circuits have held, either expressly or by implication, that there is no “de minimis” number of uninjured class members that will be allowed to sail by at class certification. These are the Second, Third, Fifth, Sixth, Eighth, and D.C. Circuits. See Barrows v. Becerra, 24 F.4th 116, 128 (2d Cir. 2022) (“[N]o class may be certified that contains members lacking Article III standing.”) (citing Denney v. Deutsche Bank AG, 443 F.3d 253, 263–64 (2d Cir. 2006)); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 311–12 (3d Cir. 2008), as amended (Jan. 16, 2009) (plaintiffs must prove that injury as to all members is able to be shown through common proof, or able to be presumed in certain circumstances); Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 302 (5th Cir. 2003) (“[W]here fact of damage cannot be established for every class member through proof common to the class, the need to establish antitrust liability for individual class members defeats Rule 23(b)(3) predominance.”); Rikos v. Procter & Gamble Co., 799 F.3d 497, 505 (6th Cir. 2015) (plaintiffs must be able to prove “that all members of the class have suffered the same injury” in order to satisfy Rule 23(a)(2)); Halvorson v. Auto-Owners Ins. Co., 718 F.3d 773, 779–80 (8th Cir. 2013) (“A district court may not certify a class … if it contains members who lack standing.”); In re Rail Freight Fuel Surcharge Antitrust Litig. – MDL No. 1869, 934 F.3d 619, 624 (D.C. Cir. 2019) (“[T]he plaintiffs, to establish predominance, must ‘show that they can prove, through common evidence, that all class members were in fact injured by the alleged conspiracy.’”) (citing In re Rail Freight Fuel Surcharge Antitrust Litig.-MDL No. 1869, 725 F.3d 244, 252 (D.C. Cir. 2013)).
In the other corner, five circuits have held that where a proposed class contains some de minimis number of uninjured plaintiffs, this fact will not hold up the certification of the class at the initial stage, even though these members will need to be picked off before ever collecting damages. Among these five, the Ninth Circuit’s majority in the tuna case does seem to have ventured the furthest in allowing a potentially substantial number of uninjured class members to pass certification, allowing as many as 28% uninjured class members in the putative class without compromising certification. Olean, 31 F.4th at 669.
However, the Ninth Circuit is not entirely alone: in the other four Circuits to address the issue, each has held (or signaled) that some undefined de minimis number of uninjured plaintiffs can exist in a class without threatening certification; these are the First, Fourth, Seventh, and Eleventh Circuits.[2] See In re Asacol Antitrust Litig., 907 F.3d 42, 58 (1st Cir. 2018) (Rule 23 does not “require that a plaintiff demonstrate prior to class certification that each class member is injured,” but at certification a district court must “offer a reasonable and workable plan for how” defendants will be able to challenge uninjured class members’ allegations); Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658–59 (4th Cir. 2019) (stating that it is not resolving this issue, but also rejecting argument that uninjured class members should preclude certification because “there is simply not a large number of uninjured persons included within the plaintiffs’ class.”) (emphasis added); Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012) (“[A] class should not be certified if it is apparent that it contains a great many persons who have suffered no injury at the hands of the defendant. There is no precise measure for ‘a great many.’”) (emphasis added) (internal citation omitted); Cordoba v. DIRECTV, LLC, 942 F.3d 1259, 1277 (11th Cir. 2019) (“[W]hen it appears that a large portion of the class does not have standing,” a district court “must consider under Rule 23(b)(3) before certification whether the individualized issue of standing will predominate over the common issues in the case”).
This split may yet be resolved, if the Ninth Circuit’s decision in the tuna case is appealed to the United States Supreme Court. The deadline for the defendants to file a petition for writ of certiorari has not elapsed, but it has been extended to August 8, signaling that the defendants intend to petition. This case would give the Court a chance to can the deepening split between the circuits, and to finally address the question left unanswered in TransUnion: what does the presence of uninjured class members mean for class certification? Class action attorneys will be watching to see whether the Court will take a bite, or whether the tuna case will be the one that got away.
[1] These takeaways have ably been covered by other commentators. The takeaways include that 1) the preponderance-of-the-evidence standard applies to class certification motions; 2) all evidence in support of class certification motions must be admissible; and 3) as discussed more extensively in this post, rejecting a rule precluding class certification where the proposed class includes more than a de minimis number of uninjured members. See, e.g., https://www.gibsondunn.com/ninth-circuit-issues-important-en-banc-opinion-regarding-class-certification-issues/.
[2] The Tenth Circuit would likely join this camp if given the opportunity. It has previously held similarly in class actions for injunctive relief, see Colorado Cross Disability Coal. v. Abercrombie & Fitch Co., 765 F.3d 1205, 1214 (10th Cir. 2014). Further, the District of Kansas recently “predict[ed] the Tenth Circuit would follow” the Seventh Circuit in allowing a de minimis number of uninjured class members to pass certification. In re EpiPen (Epinephrine Injection, USP) Mktg., Sales Pracs. & Antitrust Litig., No. 17-MD-2785-DDC-TJJ, 2020 WL 1873989, at *32 (D. Kan. Feb. 27, 2020) (unpub.).
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