Majority of Ninth Circuit Panel, in Opinion by Bumatay, Says District Court Can’t Find Common Issues of Fact or Law Predominate Without Determining How Many Putative Class Members Were Uninjured; Hurwitz Disagrees
By a MetNews Staff Writer
A District Court judge erred in certifying three class actions over price-fixing against the makers of two leading brands of canned tuna—StarKist and Chicken of the Sea—because she did not resolve factual disputes as to whether there were only an inappreciable number of class members who had suffered no injury, the Ninth U.S. Circuit Court of Appeals held yesterday.
Judge Patrick J. Bumatay authored the majority opinion, in which Senior Judge Andrew J. Kleinfeld joined. Judge Andrew D. Hurwitz wrote a concurring and dissenting opinion.
District Court Judge Janis L. Sammartino of the Southern District of California had certified the three classes after finding, pursuant to Federal Rules of Civil Procedure rule 23(b)(3), that “the questions of law or fact common to class members predominate over any questions affecting only individual members.”
But that determination could not be made, Bumatay declared, with determining the percentage of plaintiffs who had suffered no injury. One expert for the defense set that percentage at 28 percent.
“[T]the district court failed to resolve the factual disputes as to how many uninjured class members are included in Plaintiffs’ proposed class—an essential component of predominance,” the Ninth Circuit judge wrote.
He went on to say:
“…Rule 23(b)(3) requires that questions of law or fact be shared by substantially all the class members, and these common questions must be superior in strength or pervasiveness to individual questions within the class.”
“Although we have not established a threshold for how great a percentage of uninjured class members would be enough to defeat predominance, it must be de minimis.”
“While we do not set the upper bound of what is de minimis, it’s easy enough to tell that 28% would be out-of-bounds.”
Hurwitz said he agrees with the majority that a remand is necessary, observing that Sammartino merely found that common issues could predominate at trial. To certify the classes, he set forth, she must find that common issues “would” predominate.
“I part company, however, with the majority’s conclusion that, before certifying a class, the district court must find that only a ‘de minimis’ number of class members are uninjured,” the judge wrote, explaining:
“The text of Rule 23 contains no such requirement, nor do our precedents. The majority’s effective amendment of Rule 23 not only ignores our case law but also circumvents the established process for modifying a Rule of Civil Procedure—study and advice from the relevant committees, followed by the consent of the Supreme Court and Congress’s tacit approval.”
“The critical question is not what percentage of class members is injured, but rather whether the district court can economically ‘winnow out’ uninjured plaintiffs to ensure they cannot recover for injuries they did not suffer….If the district court can ensure that uninjured plaintiffs will not recover, their mere presence in the putative class does not mean that common issues will not predominate.”
Hurwitz provided this example:
“[I]f a telecommunications company were alleged to have erroneously charged many California customers double rates for certain interstate calls, a district court could certify a class of all the company’s California customers even if an expert testified that only 80 percent of them were likely to have made the calls in question. Determining who did, which likely could be done from available records, could be left to a damages stage.”
The three classes are retailers, purchasers of 40 ounces or more from any of six major retailers—Dot Foods, Sysco, US Foods, Sam’s Club, Wal-Mart, and Costco—and purchasers of less than 40 ounces from any of those retailers.
The case is Olean Wholesale Grocery Coop. v. Bumble Bee Foods, 19-56514.
Bumble Bee’s Bankruptcy
Although Bumble Bee’s name is in the caption, it was not a party to the appeal, although it was named as a defendant in the actions. Its bankruptcy has stayed the proceedings against it. Bumble Bee in 2017 pled guilty to price-fixing and was ordered to pay a $25 million criminal fine.
The company’s former president, Christopher Lischewski, was sentenced in 2000 to serve three years and three months in jail and pay a $100,000 criminal fine.
In 2019, a $100 million criminal fine was imposed on StarKist. Chicken of the Sea was not fined in light of it status as a “whistleblower.”
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