Greenhaw v. Lubbock County Beverage Ass'n

721 F.2d 1019, 38 Fed. R. Serv. 2d 115
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 27, 1983
DocketNo. 82-1356
StatusPublished
Cited by24 cases

This text of 721 F.2d 1019 (Greenhaw v. Lubbock County Beverage Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greenhaw v. Lubbock County Beverage Ass'n, 721 F.2d 1019, 38 Fed. R. Serv. 2d 115 (5th Cir. 1983).

Opinion

PATRICK E. HIGGINBOTHAM, Circuit Judge:

I

This is an appeal from a judgment for a class of consumers entered after a jury found a conspiracy by members of the Lubbock County Beverage Association1 to fix the retail price of liquor in Lubbock County, Texas during the period June, 1970 to December, 1974. This private antitrust suit proceeding on the footing of section 4 of the Clayton Act, 15 U.S.C. § 15, followed a criminal antitrust complaint under the Sherman Act, 15 U.S.C. § 1, to which the defendants pled nolo contendere.

Greenhaw, a lawyer and former resident of Lubbock county, successfully sought certification of a class of all retail liquor purchasers who purchased from the defendants, for their own use, during the period of [1023]*1023the alleged price-fixing conspiracy.2 Notices were mailed to 6,734 identified class members, and an identical notice was run in the Lubbock newspaper.

The district court, at the request of the class, next bifurcated liability and damages pursuant to Fed.R.Civ.P. 42(b). Class certification anticipated that the first phase would include issues as to the existence of a conspiracy, its membership, and injury to the class as a whole, with the second phase devoted to the individual damages of class members,

The case was submitted to the jury in phase one on special interrogatories.3 The jury found that defendants had all partici[1024]*1024pated in a price-fixing scheme extending from June, 1970 through December, 1974 and fraudulently concealed its existence, and that the plaintiff class had no knowledge of the conspiracy until a date within the statute of limitations. The jury found defendants’ activities to have been “in” and “affecting” interstate commerce, and set total classwide “damages” at $927,078.

In the second phase, class members were invited to submit proofs of claims averring that they had made liquor purchases from the defendants during the conspiracy period, and that their claims were not barred by the statute of limitations. Claimants were told to supply estimated expenditure figures supported where possible by documentation such as receipts, cancelled checks, or credit card statements. The district court ordered all claimants to appear before a magistrate appointed by the district court to make findings and recommendations relating to claimants’ recovery and costs and attorneys’ fees. Any recovery by a class member failing to submit a claim and appear before the magistrate was barred. Those few claimants who appeared were ultimately determined to have suffered actual damages of $5,827. After trebling, the total damage award to plaintiff and all class members was $17,482.

The district court awarded to Greenhaw and his counsel costs of suit totaling $26,-903, and attorneys’ fees of $246,517. Defendants’ motions for J.N.O.V., amendment of judgment, or a new trial were denied, and this appeal followed. We affirm.

II

First, the liquor retailers contend that the trial court abused its discretion in certifying the class. The retailers’ charge is broadly stated. It is that this suit has been prosecuted for the purpose of filling lawyers’ purses, as evidenced by the small amount finally awarded the class. It was clear from the start, the retailers argue, that no member of the class stood to recover nearly as much as the class counsel if the suit was prosecuted to a successful conclusion.4 A class action brought for the sake of the attorneys is frivolous and unmeritorious, defendants insist, just the sort of ease the Supreme Court in Reiter v. Sonotone Corp., 442 U.S. 330, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979), urged district courts to weed out.'

That class counsel may recover more than any individual plaintiff is not an infallible predictor of abuse. A class action is appropriate when the individual claims are small. Small individual claims do not necessarily present the frivolous and unmeritorious cases that the Supreme Court disparaged in Reiter. The Court in Reiter recognized that lawyers might sometimes be the biggest winners in suits, at least in an immediate sense. We acknowledge that Rule 23 may galvanize claims that would never have been made and thus foster a litigious attitude that needs no fuel. On the other hand, the class device is an enforcing mechanism for congressionally sanctioned goals. The short answer to these real concerns and conflicts in social policy is that the rule expresses a legislative judgment we are not free to second guess. 442 U.S. at 346, 99 S.Ct. at 2334 (Rehnquist, J., concurring).

This said, we need add only that the district court properly considered whether the elements prescribed by Rule 23(a) & (b) were present. The only serious attack upon the class certification that remains is answered by our sustaining of the district court’s bifurcation of liability and damages, an issue we next discuss. We agree that the requisite conditions to support a class action were present, and are persuaded that the class certification was not an abuse of discretion.

III. Bifurcation

The district court sliced the case horizontally into two phases, pursuant to Fed.R. Civ.P. 42(b), with classwide injury and damages to be determined by the jury in the [1025]*1025first phase and with the amount of recovery by individuals to be determined by a magistrate in the second phase. The retailers argue vigorously that bifurcation was improper and that as a result of a mislocation of the horizontal slice the class prevailed without establishing fact of injury with respect to each class member, to the detriment of defendants’ right to a jury trial. The retailers point out that certain members of the plaintiff class — those who bought liquor by the case and received attendant volume discounts — were not injured by any price-fixing activity, but the bifurcation prevented proof of this absence of injury at phase one or phase two. The argument is that no individualized showing of injury was required of class members in phase one, and in phase two the magistrate ruled that fact of injury as to every member of the plaintiff class had been established by the jury verdict. Thus whipsawed, neither the jury nor the magistrate considered the retailers’ claim that one subset of the class suffered no injury. Retailers insist, therefore, that because the fact of injury is an element of liability that must be proved by a private antitrust plaintiff seeking money damages, the bifurcated proceeding enabled some plaintiffs to recover without proving a claim. In sum, the bifurcation slice is said to have relieved plaintiff of part of its burden of proof and violated the retailers’ right to jury trial.

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Bluebook (online)
721 F.2d 1019, 38 Fed. R. Serv. 2d 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greenhaw-v-lubbock-county-beverage-assn-ca5-1983.