A class action seeking $9 billion from various flexible polyurethane foam manufacturers will proceed without an immediate interlocutory review from the Supreme Court. In a case touted by the Defendants as a class action so large that it is “likely the largest ever certified,” the Court denied the Defendants’ petition for certiorari to review class certification.
In re Polyurethane Foam Antitrust Litigation is a multidistrict litigation consolidated in 2010 in the Northern District of Ohio, No. 10-02196. Plaintiffs allege that Defendants, manufacturers of flexible polyurethane foam, conspired to fix the price of polyurethane foam that they manufactured and sold in various forms, including fabricated forms.
On April 9, 2014, the district court certified two classes—direct and indirect purchasers of foam products from Defendants since January 1, 1999. See In re Polyurethane Foam Antitrust Litigation, 1:10 MD 2196, 2014 WL 6461355, at *1 (N.D. Ohio Nov. 17, 2014). Together, the classes include potentially hundreds of millions of class members and seek $9 billion in treble damages. Defendants petitioned the Sixth Circuit for permission to appeal class certification under Fed. R. Civ. P. 23(f). The Sixth Circuit denied the petition on November 13, 2014, stating that the class-certification order is not “appropriate review at this time.” SeeBrief in Opposition of Respondent Direct Purchaser Class, Carpenter Co. v. Ace Foam, Inc., 2014 WL 7336438 at *6 (U.S.).
Defendants sought a writ of certiorari four days later, presenting the questions: (1) Whether the standing requirements of Article III apply to all members of a certified class under Rule 23; and (2) Whether certifying a class under Rule 23(b)(3) is improper where individualized damages issues predominate, and where plaintiffs rely exclusively on aggregate damages models that calculate damages purportedly incurred by the class as a whole, rather than by individual class members. Petition for a Writ of Certiorari, Carpenter Co. v. Ace Foam, Inc.et al., 2014 WL 6467870 (U.S.).
Petitioners argued that standing requirements apply equally to all class members, otherwise Rule 23 violates the Rules Enabling Act and impermissibly expands the jurisdiction of the federal courts. Additionally, they argued that the Sixth and other Circuits have contravened the Court’s Comcast decision by disregarding its holding that individualized issues related to the calculation of damages can preclude a finding that common issues predominate. Immediate review was necessary, they urged, to ensure that important issues such as the questions presented did not evade scrutiny. The coercive effect of certifying such a large class and the risk of treble damages creates tremendous pressure to settle claims, thus avoiding judicial review of erroneous class certifications. Id.
Six amici supported the petition.
The Direct Purchaser and Indirect Purchaser Classes responded that petitioners could not proceed directly to the question whether class certification was proper because the court of appeals denied permission to take an interlocutory appeal. See, e.g. Brief in Opposition of Respondent Direct Purchaser Class. Instead, the proper question for the Court was whether the court of appeals acted within its discretion in denying permission to take an interlocutory appeal. They also argued that the questions presented by petitioners were not worthy of review.
The Supreme Court denied the petition on March 2, 2015, without comment,Carpenter, Co. v. Ace Foam, Inc., 14-577, 2015 WL 852426 (U.S. Mar. 2, 2015), leaving for another day the question of whether this class certification was improper—unless Defendants indeed succumb to the tremendous pressure and coercive effect of the massive class certification.