across the united states the central problem is that the members of those classes varied widely in highly individualized ways such as in their size organ in power retail strategies that affected the prices that they paid for tuna and ultimately whether or not they were impacted at all by the alleged conspiracy of paper plaintiffs tried to paper over that problem by adopting averaging assumptions that wiped out these individualized differences by assuming that every single member of the class same suffered the same average over charge as the class as a whole and that in the case of the indirect purchasers question at this stage is whether there's common proof of injury to the class not whether each member of the class was damaged in the same way and so why wasn't there common proof you can see that averaging can be used to show common proof why wasn't there is sufficient evidence here of common proof with respect to injury to each of the individual classes even if later on we might have to sort out how much damage each individual quest member had or or indeed whether it each individual class member was damaged and so more point on this you or your expert says for example with respect to the i think it's the wholesale class if you will he thinks only seventy percent of the class maybe it's the direct buyer class he thinks only seventy percent of the class actually sever damage but it strikes me that that means that there's probably a common way of proving the aggregate damage to the class so if you respond to that for me if you want to give you an open ended up into trouble so st your honor you're right there's a difference between impact whether they've been harmed at all by the conspiracy and the extent of that impact and damages but to establish predominance your honor with respect to impact they have the burden of coming forward to show that they can show that all or nearly all of the class member no went nowhere or gets stopped there where do where do i find that in it is your honor to establish dominance with respect to impact and i think the railfreight case the d c circuit addresses this most clearly but we cite other cases in our briefs that to establish predominance with respect impact they have to show impact with respect to all or nearly all now he now that the district court conceded that if twenty eight percent of the class you were talking about the direct purchaser class did not suffer injury as dr johnson testified then that class could not be certified plaintiff's own model with respect to the direct purchaser class couldn't establish injury with respect to five point five percent that itself is right he goes to the so your honor it's governing because it is stablished is the general rule which is that representative evidence isn't allowed in a class action unless that evidence will be allowed to sustain a principle in an individual d action what was unique about tyson's food your honor was the substantive rule of law that allowed the addition the introduction of representative evidence in that case which was the mount clemens rule and that rule is limited to the f l there as a context on other courts of recognize far i did that the district court comply with tyson's food in this case are you arguing she did not we're absolutely arguing that she did not and that that that the representative evidence cannot be allowed in this case because it could not be allowed to establish the element of impact in any individual action no individual member of the class regardless of their purchasing power strategies or anything else could come into court in an individual action and say i've been impacted because if you look at all  hundreds of direct purchasers and you take the average of all of them the class as a whole suffered a ten point to a ten twenty eight percent overcharge they couldn't do that they would have to show that they themselves suffered that overcharge and that's why i guess rose that's that's my question about the type of what's the rule that comes out you just have to be used at individual trial does it just have to be admissible in individual trial or does it actually if the impact individual trial or is it i think it tightens even suggested that no the court in tyson's food tyson foods look to substantive law and held it under the mount clemens case individual action the workers in that case would be allowed to rely on the representative evidence there that the averag the eighteen minutes time spent dawned and often but here we don't have any substantive rule of law that would allow the introduction of representative evidence in individual actions and here's something critical is missing in tyson's foods a court distinguish between the workers in tyson's food who worked in the same plant under the same conditions and under the same policy and workers in the wal mart case who worked at stores all across the country under different supervisors and individual life circumstances and the court explained that in wal mart there's no way that the individuals there could have relied on the representative evidence which was it's a statistical studies of the disparity between promotions for women and men because the plaintiffs there were not similarly situated in our case is exactly like wal mart and unlike what isis militants had what concerns me it's not exactly like wal mart because we're talking here about what is going to trust law tells us is forbidden which is a fixed price which means that people in the chain of consumption are going to pay more than they would have had to have been free and open competition and the expert says i can tell how big the overcharge was to each of these classes because i can look at what the charge would have been in the absence of price fixing and see what the charges were after price fixing down each individual person may not be able to show that he was overcharge that's a damage claim but if we're looking for damage to the honor to the real for a case of the d c circuit which discusses that in terms of the the extent of an injured members of the class and again in five point five percent which is undisputed here with respect to the direct purchaser class is you know just close to the the line but they have to come forward with that common means and here it's undisputed that some members of the class you were talking about direct purchasers suffered no harm at all all of these prices were individually negotiated and then we set forth the pages sixty nine dollars of our opening brief you know all washing about does that i have a question about that it looked to me as though there would be a big difference between people who paid less price and people who paid negotiated prices i was thinking walmart they're never going to pay a fee a list price i think they've even opted out in this case but not all of the big direct purchasers of opted out on the other hand some little bodega with just one owner they're either going to pay the list price or if there's a special promotion going on maybe they'll buy a little more tuna fish at the promotional price big difference there i would think that for the bodegas the harm from a conspiratorially fixed list price would be obvious in common and lumping them in with people that never pa list they never pay retail as a war would be distorting and i can't figure out exactly who is lumped in with who and whether we have to concern ourselves with the risk of lumping in people who never pay retail with people who always be a retail iran i think you're exactly right about the the risk of london and because these classes are extraordinarily broad now with respect to the direct purchasers that class includes mega conglomerates like amazon target costco and includes corner delis across the united states local grocery stores those those those purchasers very quaintly in terms of their bargaining power their promotions that the retail strategies they pursued whether beah a loss leader strategy a sticky price strategy the way that you know some some companies and some purchasers didn't start with the list price at all that they were they were negotiated some were negotiated through a bi and all of that is lumped together and those individualized differences would preclude class certification but the way that they tried to get around it was to drop these crude adoptees crude averaging assumptions that simply assumes that notwithstanding all these individual differences among these purchasers that they all suffered the same average overcharges even so that's that's my that's my problem and i keep coming back to it i don't think they were arguing that everybody suffered the same average with they were arguing was that there was an aggregate harm on the class and that now and that the average person in the class would suffer that harm you have that may not be sufficient when i don't think they i don't think their argument was that every person's damages were hussein they were arguing that it was a common method of proof of injury as opposed to a common method of proof of damages in my mind wrong  show a common method of showing that the class was impacted suffering impact and they haven't done that and i would disagree with your honor's premise which is that this averaging assumption doesn't apply to the methodology it absolutely does it applies in calculating who was impacted and when our expert your honor allowed the average over charge to vary by purchaser he found this dr johnson the case of drug purchasers that cleaners model couldn't establish impact with respect to twenty eight percent of the class and again the difference there was he allowed the average overcharge to vary by purchaser and because you know another thing that's important understand about this case this isn't a case where the data was somehow missing all of the sales data was purchased plaintiffs who had that data so again this wasn't at all like tyson foods where the data was absent because plainest defendants failed to keep records plaintiffs have the data they manufactured a model where they tried to bring together common impact by adopting of these averaging assumptions which would not be allowed in individual action and even them with all that they couldn't establish impact with respect to five five percent but when our expert ran the model and they allowed the average over charge to vary by purchaser established that they couldn't establish impact with respect to twenty eight percent of the class and even the district court acknowledged a page sixteen of her decision that that failing to show impact with respect to twenty eight percent of the class would autumn would of course  doom certification of the class and so this was a critical issue your honor and i think it applied not only with respect to the direct purchasers but in the case of the indirect purchasers you had sort of like the dual they tallaght here because not only did they assume the average overcharge for the whole class but they assumed that that average over charge was passed on in its entirety to the end consumer no matter whether the end consumer bought it it can see convenience store down the street or to costco or store that sold it and bolt and there is no basis how don't you can you explain how the ten percent overcharge number was arrived at did they just aggregate all the impact and just divide it by number of numbers is that correct in as since it was it was old regression your honor for the direct purchasers and in the case of the other classes as well so that's how they arrived at that temp ten twenty eight percent again it would be like saying that because scoring in the n f l is up ten point two eight percent on average for the entire n f l we can assume that scoring was up percent for every team or that in the case of even the lowly washington football club scoring was up by that much or that was up at all now that makes no sense and these averaging assumptions represent of evidence you know allow a means of circumventing the strict requirements for closet sort of occasion including the predominance requirement that the supreme court has specifically cautioned against and both want to is a right in thinking t prices or did it go beyond that it was about the timing of liz prices you're on a bit but there are critical differences about this action and the criminal guilty pleas one is that the criminal guilty pleas did not involve the element of and i trust impact which is part of the civil requirement under the clayton act in which what is it issue here another is that the time periods covered were years different and in some cases the products were different and so i list that came out that here in this is a critical point your honor the record establishes that even though the defendants publish list from time to time the price is actually paid or individually negotiated some defendants some purchasers like wal mart i know know i don't know if i'm making my question clear i must not be the whole case flows from an a price fixing agreement partly admitted in the criminal cases and i want to know what prices they agreed to fix that the lawsuit is based on because that affects how the classes should be defined and i'm not totally clear on what prices they're supposed to have agreed to fix and i'm sorry if i'm not answering your question your honor but there were there were alleged agreement on the timing of releasing list prices for various package tuna products and again in the criminal conspiracy involved different periods of time but that's the allegation but under the clayton act they have to show in the civil action that members of the action every member was was impacted by that conspiracy and important you know although i want to keep coming back to you keep going back to this and i'm looking at  kero case just at a circuit not very long ago and i'm quoting defendants argued when damage calculations cannot be performed on a quest wide basis predominance has not been reached and the court rejects that argument and says and says instead if you can prove question why damages on that kind of basis because white impact on that basis would deal with damages separately so right  going about the difficulty in proving damages we're talking about whether or not they can establish that class members have been harmed at all impacted by the alleged conspiracy which is different and you know many courts have held that these problems don't apply i would suspect the damages no one is held that you don't want to meet predominance with respect to impact at all and so the care is completely different the care does say though that in order to use representative evidence you have to show that it would be permissible  regression analysis and therefore were already way above my my pay well i can determine what the prices would have been but for the price fixing conspiracy and i can determine the prices that people actually paid on it average and there's a difference between because your expert says they have a difference of small or in some cases your methods are wrong but the judge whose discretion we have to respect here finds the plaintiff's expert reliable it is method so assuming that those facts that he if he properly applying to that why does why isn't that enough to establish damage impact on the class members even if some individual ones may not have paid the precise price that he talks about because your honor that that whole analysis begins and uses throughout the premises that the  analysis your honor was to use his average over charge and then to explain attempt to explain through the model what percent of the class was actually impacted by by the the alleged conspiracy and ok and now  question which wasn't the the the conclusion about what percent of the class was impacted entirely separate analysis from the average amount that he came up with no it wasn't your honor because when i walked through his over charge and then he can compares that to the actual actual price and so every step of the way he's baked in that ten percent not that average as much as it gets wiped that's my problem if he has the app the real price and he's arrived at a price that he thinks was inflated because of the in a trust conspiracy let's assume he's right for nd isn't that enough to show him that there's not enough to show injury to the class it may be that an individual member paid less or more but that is not a common proof of injury to the class no with no more than then this cisco analysis in the wal mart case was common proof that different planets and different stores of his different supervisors were injured your honor because here you've got purchasers with fiat widely different bargaining power negotiating power retail strategies a costco is going to approach pricing completely different then you know a deli corner market is you know all of these differences to which planets do not respond in their brief we lay them out pages six dollars to twelve dollars of our brief explains how they're completely different secure situations as to how individual purchasers would arrive at the price is actually paid and again when dr johnson applied mr magnums model you ran it and  there's no such rule and nd of all the plaintiffs here are not at all similarly situated which was the key distinction that the court drew between the plaintiffs in tyson's food that worked at the same plant and the plaintiffs and wal mart that worked and under widely different situations so it wouldn't be the case in your honor i mean here is the kicker there have been one hundred direct one hundred individual actions filed by direct purchasers against the pendants in none of those cases did any of the plaintiffs attempt to rely on the the average over charge for the class as a whole to show how they had been impacted by the conspiracy and that's because there's a whole do you agree though that this evidence would be admissible in an individual trial that you could use it to manufacture predominance in a class action because that evidence would not have been admissible to establish that all those individual plaintiffs actually suffered discrimination through the school analysis and that's that's i mean i think that's laid plant under the same condition under the same policy and here like wal mart you have widely different circumstances as to bargaining power retail strategy procurement strategies whether where you do what you buy that you're able and i think you've answered judgment  decided to take an individual vacation and you can't fairbanks next year stated the hotel you pay rack rate list price if you went on a cruise and you stayed in fairbanks the rack rate would be totally irrelevant princess is what can they get for their cruise customers in this hotel versus what can they get for their customers and some other hotel and it seems to me that that analogy applies here if if sale just the way you might stall some open purchases till there's a sale but if a big buyer is buying to an official specially as soft as the tuna industry is the list price doesn't even matter fixing the l prices doesn't matter so weighing issuing the new list prices doesn't matter what matters is what they can get tuna fish for in this company compared to what they can get tuna fish for from another company compared to what they can get substitutes for for example you go to walgreens the twin officiers on the same mile is the peanut butter and jelly at least in my local walgreens and other snack foods that people might get for cheap dinners your cheap lunches so you look at substitutes as all the economists did in this case i don't understand why direct purchasers who pay less price so that the fixing of list prices or delay in issuing list price list would matter i don't see why they should be in the same quest as people who never paid retail people and they were paid less price explained to me i well ok so let's  really complicated but it really isn't he just compares what prices were in a span of years before the fixed price fixing agreement to what they were afterwards corrects for factors that would naturally affect them and says the difference must be caused were owner occupied i offered fifty cash no financing needed and got the condo list price just didn't matter to me what mattered was comparable living facilities available ok so dr  district court actually i don't see that i don't see that if all the tourists were as an aggregate paying more because the hotel keepers had gotten together in illegal deal to raise their  among them he ran a different sub or aggression either that is poor regression he ran a different stock regression based on customer five as that and guns themselves categorize their customers into the local markets to the big aggression did he look at the prices those customers were paying before the conspiracy and look at the prices those customers were paying after the conspiracy that whether or not they were negotiated prices or not he said they're higher and having taken out all the other factors my opinion is the the higher number is because of the conspiracy is that essentially what he did that's true and there is one more very very important thing that we need to realize here dr johnson's methodology that's the defense expert remember he ran customer specific regressions that's what we're talking about just how finely do you run those regression and  before the conspiracy but i can see what they're paying after the conspiracy i've tried to remove all other factors and what i'm left with is a delta that i attribute to the conspiracy that's correct ok that's really important tell me where to re read in mangum i just skimmed the thing because there are just too much to read so tell me what piece of mangled to read that will explain that to me pedro yeah well i customer by customer and what the judge stammered you know fine i disputed that ninety four percent of those customers that included wal mart all the big ones and all the small ones all showing positive physically significant overture while positive overtures and they were actually sad if you only consider the statistically significant results that dr johnson was getting ninety eight point five percent of the class always d a price dispersion from me you know the mask merchandiser route to the you know that the local deli on the corner and and it is just normal price distribution the point of doing the  know is what do your experts say i assume you've read all this stuff more carefully than i have one of they say is the explanation for why the buyer direct purchasers who never pay retail are nevertheless affected by the alleged manage your time here a little but let me try to help out judge kleinfeld question is if you can tell me is there anything in this record under which there's some evidence contrary to our intuitions that list price somebody say that list prices affect eventual negotiated prices or not it may not be important i just want to know well that was the point of the sandbox how they are ok and so i got i'm not asking you whether you made the sandbox comment i'm asking whether somebody directly said that list prices affect negotiated prices well we can see that from the regressions all the way down to johnson dr johnson customer going up i'd do it with respect now look it made i make a difference there regressions maybe know i'm just trying to find out what the record says in this case and you may know it better than i so my question is did somebody directly say i know these your class members they go shit prices  are fixed that's all that that means when you say regression analysis that's all it proves it doesn't prove anything about the people that never pay retail it sure does because if you run or not just because they're part of a group that on the whole a group consisting of those who never pay retail and those who always pay retail if the retail price is criminally raised the aggregate for the group will be more that's all it proves if you  those conclusion was that the delta in each of these cases could only be attributed to the end i trust conspiracy because he had removed from he had removed from his analysis all the during last period and they did it was a slightly different overcharge from overcharge everybody else but it did drop outs even wal mart with all of their power comes all of their size how come there must have been an explanation is what you're saying is very helpful and very important at least to me tell me more about what the theory was for why wall markets stuck with the overcharge this year and i would have thought wal mart doesn't care they have  more or bargaining power than any other purchaser in the world well the series for white check walmart separately is that there are no more than twenty percent of market there huge and they might have so much for getting power that they're over towards zero but i'm estimate based on data we didn't assume that that's that it has to i understand the empirical result that you're describing what i want to know is what the economists theory was for why that result example when when the cruise line organs for the hotel rack rate it what they end up with is if the price if you know the list price but don't know anything else you don't really know anything but if you look at the net price say  burke it's a long record and i can't pretend that i remember every bit of it when i saw it there was also some expert testimony that one reason that people who negotiated prices were paying a higher price was because of the absence of competition on price as a result of the price fixing agreement in the am i wrong in remembering that your record was that if your argument as opposed to the evidence i think that's also that what you chose nine different models on different data sources taking that for a real flashlight and looking for a place where the pastor might drop out and in fact doesn't drop out anywhere and feld was referring to and our situation has some similarities but it also has some differences we purchase today in the large stars they are  products they are are either forty two arounds or sixty six ounce packages and that's so that if you're making one hundred sandwiches you don't have to open a lots and lots of now because this is how would you go about defining commercial purchasers well the answer is that there is a special food service channel that each of the retailers gives it's a separate department in effect that markets to us and what we did it we defined it as the st purchaser fromm each of the six largest distributors so it is a very conspired and class of strictly defined class now because these are commercial trans actions there is an unusually rich data source and so that for really the vast vast vast majority ninety percent about our class go through five of the six retailers for cisco and u s foods that comprises sixty percent of our class but six percent something like that now in that case we have transaction by trans action data d that goes right through to the ultimate purchase by our class member and our experts of that case found over ninety nine percent have experienced an over charge now let's take a bit talk about the rest they buy from a for the most part from wal mart sam's club and cosco and i think we all know that you can't really negotiate with wal mart at the cash register or the same thing with costco they charge list prices and they say that their annual reports discounting is not a factor now let's talk about so that's how it is in my judgment shoots down and i want to make the court to the canards that are put up against our class which were made only in a very muted way the st is average you know our case is based for the most part one hundred percent coverage of individual transactions nd is negotiating power of individual a protest it's individual commercial food preparers well that is all in the net prices though that is fully accounted for in the trans actual data of our of of our customers and so there is in our case for coverage is over whelming and even the defense expert dr hader this is on page thirty eight i think the opinion below found that she found positive statistical passthrough effects just like we don't it's just a question of how much and is i when it comes down to pay and i think that i've addressed your questions and i can even give back the nine seconds of my time unless the court has something for the way you know why wouldn't it be done in an individual action right well st the most telling thing is is st response which is the st thing i would do is present the individual and she would tell you everything about how she purchased it that's completely absent in this model it's been wiped out by no i'm into the model so the question is would the model be admissible in an individual should even if it wouldn't be enough to entirely make out the individual's case and the answer is no what what tyson's food says your honor is and i'm quoting from pages and forty six to forty seven if the sample could have sustained a reasonable jury finding then in individual action it would be allowed in a class action i think if you look at how the court distinguished the wal mart case where it acknowledged that the statistical study would have been admissible but it said it in an individual action but it said it wouldn't been sufficient to establish that there was discrimination among all the different plaintiffs and stores in that case and therefore the representative evidence couldn't have been allowed to actions didn't they come in and say before the conspiracy we paid this after the conspiracy we've paid that we've taken out of the prices inflation in all the other things that might have might have otherwise given rise to the larger one and this is our damage is not what they say the key point of your question runners they paid based on their individual circumstances all of that is wiped out by the average in assumption the averaged lumps in the bodegas and the amazons and the that they nord costco amazon dollar general you know countless others and again when our expert ran the model and allowed the average over charge to vary based on purchaser he found that they couldn't establish impact for twenty eight percent of the class the ninety eight percent figure is just math games your honor that ninety eight percent figure is backing out one hundred and sixty members of the class for which they could not establish impact when dr johnson ran was too close to the line both below a negative overcharge and above so those were precisely the class members were most likely not have to have been impacted and they simply back them out and talk about the other ones they haven't come close to establishing impact on  classified basis and that's why they had to use these gross averaging assumptions taking the information as a class to hold your honors i would like to give you some citations to help you out of that be possible for mr magnum