Class Actions -- 2016

Dow Chemical Co. v. Industrial Polymers, Inc.   (U.S. Supreme Court)

Commonality of damages suffered by purchasers in antitrust class actions

NAM joined with the US Chamber of Commerce, Business Roundtable, American Tort Reform Association and National Council of Farmer Cooperatives in an amicus brief urging the U.S. Supreme Court to review a decision out of the Tenth Circuit involving an antitrust class action. At issue in the case is whether the court properly denied the defendant, Dow Chemical, the opportunity to rebut a presumption that all plaintiffs, purchasers of urethane foam, suffered the same damages as a result of the antitrust conspiracy even though each purchaser negotiated an individual price with the manufacturers. Even if some buyers were injured, others were not. The Tenth Circuit certified the class anyway, reasoning that, by definition, “price-fixing affects all market Participants.”

Our brief argues that the Tenth Circuit’s decision conflicts with both historical and contemporary understanding of due process, as well as Rule 23 and the Rules Enabling Act. In class actions, parties have the right to raise any claim or defense specific to the individual class members. The “inference of class-wide impact” adopted by the Tenth Circuit, however, deprives class action defendants of the right to prove that individual plaintiffs were not harmed. Applying this “inference,” or using “extrapolation” to calculate classwide damages, does violence to the principles that have undergirded the class suit for generations.

We also argue that the decision threatens to permit any conspiracy to be certified as a class action, thus potentially expanding the scope of class liability.

This case settled on February 26, 2016.

Related Documents:
NAM brief  (April 13, 2015)


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