By Memorandum Opinion entered by The Honorable Sue L. Robinson in In Re Class 8 Transmission Indirect Purchaser Antitrust Litigation, Civil Action No. 11-00009-SLR (D.Del., October 21, 2015), the Court denied plaintiffs’ class certification motion, found the case does not present a case or controversy under Article III, and dismissed the case.
By way of background, the suit was filed on behalf of and the proposed plaintiffs class was a number of purchasers of Class 8 trucks from one or more of defendants’ authorized sales agents or dealers. Defendants in the action were Eaton Corporation (“Eaton”) and a number of Original Equipment Manufacturers (“OEMs”). Eaton manufactures transmissions for Class 8 trucks and the OEMs manufacture and sell Class 8 trucks. In order to assemble and sell Class 8 trucks, OEMs purchase component parts, such as transmissions, from suppliers like Eaton. Id. at 2.
Plaintiffs alleged that Eaton and the OEMs conspired to put Eaton’s main competitor, ZF Meritor, out of business thereby expanding Eaton’s monopoly in the Class 8 truck transmission market and permitting all defendants to share in the profits resulting from the monopoly. Id. at 3. Plaintiffs alleged that the conspiracy was achieved by Eaton entering into Long Term Agreements (“LTAs”) in the early 2000s with each of the four OEMs designed to eliminate ZF Meritor’s market share in the Class 8 transmission market. Plaintiffs ultimately alleged that they had to pay higher prices for transmissions and, in turn, for Class 8 trucks, as a result of defendants’ actions and had “less choice and suffered from a decrease in innovation.” Id. at 3-4.
In evaluating whether to certify the proposed class of indirect purchaser plaintiffs, the Court noted that a “district court has broad discretion to grant or deny a class certification.” Id. at 5. The Court also noted that a party seeking certification bears the burden of establishing that certification is warranted under the circumstances. In other words, plaintiffs bear the burden of establishing that all four requirements of Federal Rule of Civil Procedure 23(a) are met and that at least one part of Federal Rule of Civil Procedure 23(b) is met. Id. at 5-6. The requirements of Federal Rule of Civil Procedure 23(a) are: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy. Id. The two additional requirements of Federal Rule of Civil Procedure 23(b)(3) are: (1) predominance; and (2) superiority. Id.
In reaching its decision to deny the class certification motion, the Court found that plaintiffs failed to meet the adequacy requirement under Federal Rule of Civil Procedure 23(a) because plaintiffs failed to demonstrate that the class representatives could adequately represent the class. Id. at 10-13. The Court also found that plaintiffs failed to meet the predominance requirement of Federal Rule of Civil Procedure 23(b)(3) because plaintiffs were unable to demonstrate common evidence to show that all or nearly all members of the proposed class suffered antitrust injury as a result of defendants’ alleged conduct. Id. at 13-15. The Court did find that plaintiffs met the numerosity, commonality and typicality requirements of Federal Rule of Civil Procedure 23(a). Id. at 6-10. The Court did not making any findings concerning the superiority requirement of Federal Rule of Civil Procedure 23(b)(3) given its findings of failure to meet the adequacy and predominance requirements. Id. at 27.
A copy of the Memorandum Opinion is attached.