Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Mercedes-Benz Antitrust Litigation

February 19, 2003

IN RE MERCEDES-BENZ ANTITRUST LITIGATION.


The opinion of the court was delivered by: Wolin, Senior District Judge.

OPINION

This matter is opened before the Court upon the motion of plaintiffs for certification of this action as a class action pursuant to Federal Rule of Civil Procedure 23. Defendants have filed a related motion to strike the testimony of plaintiffs' expert Dr. John C. Beyer pursuant to Federal Rule of Evidence 702, as interpreted by the United States Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). The Court has decided these submissions on the written submissions of the parties pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, plaintiffs' motion will be granted and this matter will be certified as a class action pursuant to Rule 23(b)(3). Defendants' motion to strike the testimony of Dr. Beyer will be denied, without prejudice.

DISCUSSION

Familiarity with the basic facts in this case is assumed. They are set forth in this Court's opinion reported at 157 F.Supp.2d 355 (D.N.J.2001). In short, plaintiffs allege that Mercedes-Benz USA, the national distributor of Mercedes-Benz automobiles, each of its local dealers in New York City and the southern New York, western Connecticut and northern New Jersey suburbs, and the accountant Sheft Kahn conspired to fix the prices of new automobiles sold or leased by them to consumers from February 1992 to August 1999. The complaint has survived a motion to dismiss. See id. The named plaintiffs now move for an Order certifying this matter as a class action on behalf of all persons similarly situated to them.

Federal Rule of Civil Procedure 23 sets forth a two-part scheme for class certification. The first part, subsection (a), states the threshold requirements for all class actions. The second, subsection (b), sets forth the three varieties of class actions contemplated by the Rule and the special requirements peculiar to each in addition to those of subsection (a). The content of each of the criterion is illuminated by substantial case law.

Rule 23(a) states that a class action may be certified only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

These requirements are known familiarly as "numerosity," "commonality," "typicality," and adequacy of representation.

Plaintiffs invoke two of the three alternatives of subsection (b), paragraphs (b)(2) and (b)(3). They argue that certification under Rule 23(b)(2) is appropriate, because "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief necessary with respect to the class as a whole[.]" Plaintiffs also contend that the Court should certify the class under Rule 23(b)(3), finding that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." The Rule gives a non-exhaustive list of factors that would weigh in favor of such findings and certification under paragraph (b)(3).

The law places the burden of establishing each of these elements on the party seeking class certification. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613-14, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). It must be recalled, however, that Rule 23 and modern class action practice in the federal courts have their roots in equity, Ortiz v. Fibreboard Corp., 527 U.S. 815, 832-33, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999), and this Court must exercise its discretion in ruling on a motion to certify. In re Fine Paper Antitrust Litig., 685 F.2d 810, 822 (3d Cir.1982), cert. denied sub nom., Alaska v. Boise Cascade, 459 U.S. 1156, 103 S.Ct. 801, 74 L.Ed.2d 1003 (1983).

The Third Circuit has held that the "interests of justice require that in a doubtful case ... any error, if there is to be one, should be committed in favor of allowing a class action." Eisenberg v. Gagnon, 766 F.2d 770, 785 (3d Cir.), cert. denied, 474 U.S. 946, 106 S.Ct. 342, 343, 88 L.Ed.2d 290 (1985). The Eisenberg court made this statement with reference to securities class actions and expressly linked it to the lack of alternatives to enforcing the securities laws. However, this holding of Eisenberg has been relied upon in other areas as well, including antitrust. E.g., In re Flat Glass Antitrust Litig., 191 F.R.D. 472, 476 (W.D.Pa.1999); In re Chlorine & Caustic Soda Antitrust Litig., 116 F.R.D. 622, 624-25 (E.D.Pa.1987); see also In re The Prudential Ins. Co. of Am. Sales Practices Litig., 962 F.Supp. 450, 508 (D.N.J.1997), aff'd, 148 F.3d 283 (3d Cir.1998), cert. denied sub nom., Krell v. Prudential Ins. Co. of Am., 525 U.S. 1114, 119 S.Ct. 890, 142 L.Ed.2d 789 (1999).

Indeed, it has been held that price fixing cases may be well-suited for class certification, in the right circumstances. Alabama v. Blue Bird Body Co., 573 F.2d 309, 322 (5th Cir.1978); Transamerican Refining Corp. v. Dravo Corp., 130 F.R.D. 70, 75 (S.D.Tex.1990) ("[m]ost price-fixing cases are suitable for class action"); Alabama v. Chevron USA, 1980 WL 1808, *1 (M.D.Ala. Jan.11, 1980) ("widely recognized that antitrust price-fixing cases are particularly suitable for class action treatment"); see Sheldon R. Shapiro, Annotation: Propriety under Rules 23(a)and 23(b) of Fed.R.Civ.P., as amended in 1966, of class action for violation of federal antitrust laws, 6 A.L.R. Fed. 19, 24 (1971) ("a substantial majority of the cases have held that under the circumstances antitrust class actions were maintainable"). While this Court will not apply a presumption in favor of certification, it must bear in mind that the rationale of Eisenberg with respect to class actions as necessary to enforce the securities laws also applies here, and that the antitrust class action is an important component in the federal scheme for deterring anti-competitive behavior.

1. The 23(a) Requirements

The numerosity requirement is intended to limit the class action device to those cases in which the number of parties makes traditional joinder of parties unworkable. By modern, complex litigation standards the minimum number of parties is not large; in Eisenberg the Court of Appeals approved a class of 90 plaintiffs. 766 F.2d at 785-86. One defendant estimates, without citation, that the class members in this case will number "over a hundred thousand," although this may be an exaggeration. Globe Brf. at 1 (arguing class certification will involve the Court in "over a hundred thousand 'mini trials' "). By this admission, and as an intuitive matter, the proposed class of all Mercedes-Benz purchasers in the tri-state area for seven and one-half years, easily satisfies the numerosity requirement.

The Rule also requires that there be "questions of law or fact common to the class." Commonality does not require an identity of claims or facts among class members; instead, "[t]he commonality requirement will be satisfied if the named plaintiffs share at least one question of fact or law with the grievances of the prospective class." Johnston v. HBO Film Management, Inc., 265 F.3d 178, 184 (3d Cir.2001)(quoting In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283, 310 (3d Cir.1998)). In this case, common questions exists concerning the existence of the alleged conspiracy and how it worked. The involvement of each defendant dealer is relevant to each plaintiff class member, regardless of which defendant sold an automobile to that plaintiff, because each defendant was allegedly an agent of the conspiracy that victimized the plaintiff. See DeLoach v. Philip Morris Cos., 206 F.R.D. 551, 558 (M.D.N.C.2002). As is generally held to be the case, here the allegation of conspiracy in a class action context raises a central issue that will establish common questions of both law and fact. See 4 Herbert B. Newberg & Alba Conte, Newberg on Class Actions s 18.05 (3d ed.1992).*fn1

Under Rule 23(a), the claims of the representative parties must be typical of the claims of the class. "The typicality requirement is said to limit the class claims to those fairly encompassed by the named plaintiff's claims." General Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 330, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980). Typicality lies where there is a strong similarity of legal theories, or where the claims of the representative plaintiffs and the rest of the class arise from the same alleged conduct by the defendants. In re Prudential, 962 F.Supp. at 518. The typicality requirement ensures that the named plaintiff, in seeking to maximize her or his own recovery, will also maximize the recovery by the class.

Defendants contend that the automobile purchase transaction is too complex for any group of plaintiffs to be representative of the claims of a class. This argument merely illustrates that typicality, like commonality, overlaps with the analysis of whether common issues predominate under Rule 23(b)(3). See DeLoach, 206 F.R.D. at 555. But "overlap" of issues does not mean that the issues are the same. The majority of defendants' arguments based on the inherent nature of the automobile purchase transaction will be addressed infra in the section dealing with the predominance of common issues. Likewise an argument by defendants that the complaint is not sufficiently specific with regard to the factual basis for plaintiffs' claims has been addressed elsewhere, in the Court's opinion on the motion to dismiss.

Typicality does not require that the claims of the named plaintiffs be identical to those of the proposed class members. In re Prudential, 148 F.3d at 311. " '[F]actual differences will not render a claim atypical if the claim arises from the same event or practice or course of conduct that gives rise to the claims of the class members, and if it is based on the same legal theory.' " Baby Neal v. Casey, 43 F.3d 48, 58 (3d Cir.1994) (quoting Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 923 (3d Cir.1992)). Typicality will be lacking on the ground of intra-class conflict where the legal theories of the named plaintiffs are at odds with those of the class members. Baby Neal, 43 F.3d at 57-58. However, while the Court must ensure that the interests of the plaintiffs are congruent, the Court will not reject the plaintiffs' claim of typicality on speculation regarding conflicts that may arise in the future. In re Toilet Seat Antitrust Litig., 1976 WL 1265, *3 (E.D.Mich., May 26, 1976).

It follows from the foregoing that the typicality requirement is satisfied in this case. The central claim for the named plaintiffs is that they were harmed by an illegal price-fixing conspiracy. This will be the same for all of the class members. The amount of damages due the named plaintiffs should their allegations prevail will not be disproportionate to that of the other class members. In short, the named plaintiffs are typical of the class. Potential differences in the individual class members' transactions will be discussed elsewhere in this opinion.

The Court will not long delay over whether the class representatives and their counsel will adequately represent the interests of the class. Plaintiffs' counsel's conduct of this case to date has led to a sophisticated and professional exposition of the issues to the Court. Counsel has cooperated with the Court's case management directives. No conflict of interest has been alleged that would impede the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.