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December 20, 2018 by Steven J. GreenfogelDownload PDF

An Eye-Opening Class Certification RulingSteven J. Greenfogel

Earlier this month, Judge Harvey Schlesinger of the Middle District of Florida granted class certification in a 178-page opinion in the Contact Lens Antitrust Litigation. The case alleges that the four major manufacturers conspired with one another and with their distributors and independent eye care professionals to establish minimum pricing for certain types of contact lenses. Plaintiffs sought class certification for a horizontal conspiracy as well as a series of classes as to each defendant alleging a vertical conspiracy between each defendant and its distributors and eye care professionals.

In August 2018, the Court held a two-day evidentiary hearing in Jacksonville and heard testimony from two experts from each side. At the conclusion of the hearing, defendants moved, to preclude certain testimony from Plaintiffs’ liability expert as well as all of the testimony of Plaintiffs’ expert on impact and damages.

In denying preclusion of Plaintiffs’ liability expert, the Court found that there was nothing wrong in allowing an expert to testify regarding behavior that was, from an economic perspective, consistent with collusion. The Judge concluded that, if that type of testimony might help a jury, it should be permitted and the jury could give the testimony its proper weight.

Similarly, in analyzing whether to preclude the expert on antitrust impact, the Court found that the testimony might be helpful to a jury, who would give it proper weight after Defendants had an opportunity to cross-examine the expert. The judge determined that using a multiple regression analysis to determine whether there was an antitrust impact was sound economics. In rejecting defendants’ arguments that the expert had omitted important independent variables in constructing his model, the Court once again stated that, even if the model was imperfect, so long as the major variables were accounted for, and any flaws in the model could be attacked by Defendants on cross-examination, the jury could then give the testimony its proper weight.

The Court went on to consider whether Plaintiffs had standing to bring the claims, in that they were not direct purchasers from the manufacturer defendants. The fact that the alleged conspiracy was a “hub and spoke” agreement where Defendants required the retail sellers of their products (who were their co-conspirators) to sell at a minimum retail price set by the manufacturers obviated, according to Judge Schlesinger, the need for the class to have purchased directly from a manufacturer.

Following his ruling on standing, the Court began its consideration of the Rule 23 factors. Recently, certain courts have found that the numerosity requirement cannot be met when there is no ability to determine who are the members of the class. Here, the Court find that there were sufficient objective criteria to determine who the injured class members were. Another issue that was raised by Defendants was the predominance requirement of Rule 23(b)(30), which the Court found to have been met since the key issue in the case was the conspiracy claim, one that would be common to everyone in the class and was, therefore, the issue that overrode all individual issues that might exist.

If this all sounds complex, it is. Since the advent of Rule 23 in the 1960’s, where the thought was to make it easier for injured parties to get resolution of common claims in a single suit as well as to make it easier on the administration of the courts’ dockets, lobbyists and defendants have been pressing for a tightening of the Rule. This has resulted in ever-expanding hurdles in getting a class certified. The expert costs that parties must bear at this point are staggering, and aggrieved parties are finding ever more roadblocks being put up by defendants (and the courts) to chill the class action device. Still, many judges recognize the utility of a class action to promote justice and grant relief to those many individuals who have been injured in small amounts, such that they could never find an attorney willing to take on such a case on an individual basis. Here’s hoping that the overall court system will once again recognize the value of this critical tool in the battle against corporate malfeasance.