In re New Motor Vehicles Canadian Export Antitrust Litigation

241 F.R.D. 77, 2007 U.S. Dist. LEXIS 20563, 2007 WL 853117
CourtDistrict Court, D. Maine
DecidedMarch 21, 2007
DocketMDL Docket No. 1532
StatusPublished
Cited by7 cases

This text of 241 F.R.D. 77 (In re New Motor Vehicles Canadian Export Antitrust Litigation) is published on Counsel Stack Legal Research, covering District Court, D. Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re New Motor Vehicles Canadian Export Antitrust Litigation, 241 F.R.D. 77, 2007 U.S. Dist. LEXIS 20563, 2007 WL 853117 (D. Me. 2007).

Opinion

SUPPLEMENTAL ORDER ON CLASS CERTIFICATION OF STATE DAMAGE CLASSES

HORNBY, District Judge.

This case involves an alleged antitrust conspiracy to elevate or maintain U.S. car prices by preventing lower-priced Canadian cars from entering the American market. Remaining damage claims are based upon various state antitrust and consumer protection statutes. On May 12, 2006, I entered a [79]*79preliminary order that approved certification of separate Rule 23(b)(3) damage classes of retail purchasers in each of five “exemplar” states. Order on Mot. for Class Cert.: Exemplar State Damage Classes (“May 12 Order”) (Docket Item 361). Although the defendants had not challenged the plaintiffs’ proposed ending date (“the present”) for the class, I became concerned about the typicality of certain named plaintiffs’ claims. I reserved judgment on the ending date for membership in the five classes and permitted further discovery and briefing. After oral argument on February 21, 2007, I now conclude that the class period should end April 30, 2003. Cross-border arbitrage opportunities may have waxed and waned before that date, but their scope is a proper subject for antitrust impact and damage analysis when the record is complete. I also address the remaining proposed statewide damage classes, and direct the preparation of a certification order. Once it is entered, it will be final for appeal purposes under Fed.R.Civ.P. 23(f).

Ending Date

In my May 12 Order, I did not finally certify the five exemplar classes because under the typicality analysis I was uncertain that the named plaintiffs’ claims were “typical of the claims ... of the class.” Fed. R. Civ.P. 23(a)(3). The Supreme Court has said that if, at the time the class is certified it is clear that the named plaintiffs suffered no injury, they cannot represent the class. Gen. Tel. Co. v. Falcon, 457 U.S. 147, 156, 102 S. Ct. 2364, 72 L.Ed.2d 740 (1982) (discussing East Tex. Motor Freight Sys., Inc., v. Rodriguez, 431 U.S. 395, 403, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977)).1 Here, comments by the plaintiffs’ lawyers led me to conclude that at least one named plaintiff in Kansas had purchased his vehicle at a time when exchange rates made Canadian car prices higher than American cars, contrary to the overall theory of the plaintiffs’ case. From the exchange, I thought that my concern involved a narrow question of determining actual prices and exchange rates.2 As a result, I said in my May 12 Order:

One final issue that comes up under typicality ... raises concern about the ending date for the proposed classes: that particular named plaintiffs’ claims (or the defenses to those claims) may not be typical of those of the class. As I have already noted, the plaintiffs virtually concede that their Kansas plaintiff bought a ear at a time, 2005, when the exchange rates were such that Canadian cars were priced higher than American cars; since there was no arbitrage opportunity, the conspiracy could not have increased American prices. This concession calls into question the chronological scope of the damage class: when should the class end? The plaintiffs’ reply memorandum suggests that this is a discovery problem; that some defendants used data in their response to the plaintiffs’ certification motion that the plaintiffs had not seen previously; that the plaintiffs need to see comparable data for all the defendants; and that therefore I should not deny certification based on a merely “speculative conflict.” Essentially, the plaintiffs ask me to certify the class now at its broadest and worry later about its proper scope and whether the named plaintiffs’ claims are typical.
I do not believe that is the proper way to proceed. Instead, as to certification of the individual state damage classes, I defer decision until the pertinent discovery problems are resolved and I request Magistrate Judge Kravchuk to hold a prompt conference and set appropriate deadlines. Then I will determine the class definition (and whether the named plaintiffs are representative).

May 12 Order at 25-26 (footnotes omitted).

In retrospect, I believe that I should have confined my expression of concern to the [80]*80appropriateness of the particular named Kansas plaintiff, rather than raise a question about the class ending date; after all, the antitrust conspiracy to restrict supply is allegedly ongoing. Instead, I have provoked a debate over when the arbitrage window of opportunity closed, or whether it was ever open, or how far open it needed to be, a far broader controversy than I expected and one that would require a complete determination of the plaintiffs’ causation and damage case to resolve.3

Specifically, in response to my May 12 Order, the plaintiffs engaged their economic expert, Dr. Robert E. Hall of Stanford University and the Hoover Institution, to perform data analysis. Dr. Hall assessed the profitability of purchasing new cars and light trucks in Canada and re-selling them in the United States. Expert Rpt. of Prof. Robert E. Hall on the Timing of Profitability of Exporting New Vehicles from Canada to the U.S. (“Hall Arbitrage Rpt.”) (Docket Item 425). He examined various data and documents produced by the defendants, as well as some publicly available data and documents, id. If 3, and information he obtained from importers, id. H 35 n. 32. Dr. Hall concluded that for the time period in question, the percentage of Canadian vehicles (weighted by sales) that had price gaps larger than export costs (the arbitrage opportunity that the conspiracy allegedly sought to preempt) declined to less than 10% after April 30, 2003. Hall Arbitrage Rpt. 1146. As a result, the plaintiffs proposed that the class ending date be moved back from their original proposal (“the present”) to April 30, 2003. Pis.’ Mot. & Mem. of L. for Class Cert, of the Non-Exemplar States (“Pis.’ Mot.”) at 47 (Docket Item 418). The defendants, in turn, presented the analysis of their expert, Dr. Joseph P. Kalt of Harvard University’s John F. Kennedy School of Government. Expert Rpt. of Joseph P. Kalt (“Kalt Rpt.”) (Docket Item 461, Ex. 3 part 1). Dr. Kalt found fault with Dr. Hall’s computations on a variety of grounds (e.g., inadequate data and improper interpretation of data; improperly treating imported Canadian ears as “new”; failing to consider vertical unilateral restraints; choosing ten percent as the cutoff measure). Kalt Rpt. at 4-5. In response, the plaintiffs defended Dr. Hall’s data and analysis and pointed out that without his ten percent calculation, the class period would end January, 2004 4 Pis.’ Reply Mem. of L. Concerning Class Cert. (“Pis.’ Reply Mem.”) at 6 (Docket Item 475); See also Hr’g Tr., Feb. 21, 2007, pp. 15-16. They advanced that date as an alternate closing point for the class. Id.

The defendants’ primary unhappiness with Dr. Hall’s analysis flows from their continuing insistence that I determine now whether the alleged horizontal conspiracy actually impacted American car prices.

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Related

In re Opana ER Antritrust Litigation
162 F. Supp. 3d 704 (N.D. Illinois, 2016)
In Re New Motor Vehicles Can. Export Anti. Lit.
522 F.3d 6 (First Circuit, 2008)
Cole v. Chevron USA, Inc.
554 F. Supp. 2d 655 (S.D. Mississippi, 2007)

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241 F.R.D. 77, 2007 U.S. Dist. LEXIS 20563, 2007 WL 853117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-new-motor-vehicles-canadian-export-antitrust-litigation-med-2007.