William Monts III, Aug 15, 2011
Class action lawsuits are a staple of private antitrust litigation in the United States. Over the last four decades, they have become particularly prevalent in price-fixing cases involving consumer products in which the number of potentially injured individuals is great but individual damage claims, as measured by the so-called “overcharge,” are relatively small even after trebling. These cases aggregate large numbers of relatively small claims with the aim of resolving them in an efficient, cost-effective manner. Such aggregation permits adjudication of claims in which the amount in controversy would otherwise be too trivial to justify the time and expense of litigation.
The class action has also become a potent legal weapon. Because antitrust defendants are jointly and severally liable for all damages caused by anticompetitive conduct, few antitrust class actions are ever tried. Most defendants simply are not willing to bear the risk of potentially massive liabilities, even when they believe that plaintiffs’ claims are weak. As a result, the outcome of an antitrust class action often turns on the question of class certification. If a class is certified, the case typically settles, often with substantial payments to the plaintiff class. If, on the other hand, a class is not certified, the case often ends. Thus, class certification has, as a practical matter, become the dispositive legal issue in virtually all antitrust class actions, as it is in many other types of class adjudications.
On June 20, the United States Supreme Court issued its decision in Wal-Mart Stores, Inc. v. Dukes, one of the most consequential opinions concerning class actions rendered by the Court in many years. Although Dukes was not an antitrust class action-the suit alleged that defendant Wal-Mart Stores, Inc. had engaged in a pattern and practice of sex discrimination in the promotion and discipline of employees-the Court’s decision has broad application to all class actions regardless of the substantive area of law from which the underlying claims arise. Dukes, therefore, is likely to have significant effect on the way antitrust class actions are litigated by heightening the focus on whether named plaintiffs can show with common evidence that an allegedly anticompetitive practice injured all members of the putative class. That has been a focus of antitrust class actions in the lower courts in recent years, and the Supreme Court’s holding in Dukes is likely to sharpen that inquiry.
