Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca3-15-03320/USCOURTS-ca3-15-03320-0/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 15-3320

_____________

MARK S. WALLACH, as Chapter 7 Trustee for the 

Bankruptcy Estate of Performance Transportation Services 

Inc., on behalf of the estate and all others similarly situated; 

TAURO BROTHERS TRUCKING COMPANY; 

TOLEDO MACK SALES & SERVICE INC.; JJRS LLC,

Appellants

v.

EATON CORPORATION; DAIMLER TRUCKS NORTH 

AMERICA LLC; FREIGHTLINER LLC; NAVISTAR 

INTERNATIONAL CORPORATION; INTERNATIONAL 

TRUCK AND ENGINE CORPORATION; PACCAR INC.; 

KENWORTH TRUCK COMPANY; PETERBILT MOTORS 

COMPANY; VOLVO TRUCK NORTH AMERICA; 

MACK TRUCKS INC.; NAVISTAR, INC.

_____________

On Appeal from the United States District Court

for the District of Delaware

(D.C. No. 1-10-cv-00260)

District Judge: Honorable Sue L. Robinson

_____________

Argued: June 7, 2016

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2

Before: CHAGARES, KRAUSE, and SCIRICA, Circuit 

Judges

(Opinion filed: September 14, 2016)

_____________

Glen DeValerio, Esq.

Berman DeValerio

One Liberty Square

Boston, MA 02109

Kyle G. DeValerio, Esq.

Marc J. Greenspon, Esq.

Berman DeValerio

3507 Kyoto Gardens Drive

Suite 200

Palm Beach Gardens, FL 33410

Manuel J. Dominguez, Esq.

Cohen Milstein

2925 PGA Boulevard

Suite 200

Palm Beach Gardens, FL 33410

Richard A. Koffman, Esq.

Emmy L. Levens, Esq. (Argued)

Daniel H. Silverman, Esq.

Cohen Milstein

1100 New York Avenue, N.W.

West Tower, Suite 500

Washington, DC 20005

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Jessica Zeldin, Esq.

Rosenthal Monhait & Goddess

919 North Market Street

Suite 1401

Wilmington, DE 19801

 Counsel for Appellants

Erik T. Koons, Esq.

Joseph A. Ostoyich, Esq.

Baker Botts

1299 Pennsylvania Avenue, N.W.

The Warner

Washington, DC 20004

Donald E. Reid, Esq.

Morris Nichols Arsht & Tunnell

1201 North Market Street

P.O. Box 1347

Wilmington, DE 19899

Benjamin F. Holt, Esq.

John R. Robertson, Esq.

Hogan Lovells

555 Thirteenth Street, N.W.

Columbia Square

Washington, DC 20004

John A. Sensing, Esq.

Potter Anderson & Corroon

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1313 North Market Street

6th Floor

Wilmington, DE 19801

Corey W. Roush, Esq.

Pratik A. Shah, Esq. (Argued)

James E. Tysse, Esq.

Akin Gump Strauss Hauer & Feld

1333 New Hampshire Avenue, N.W.

Suite 400

Washington, DC 20036

Brian P. Borchard, Esq.

Daniel E. Laytin, Esq.

James H. Mutchnik, Esq.

Kirkland & Ellis

300 North LaSalle Street

Suite 2400

Chicago, IL 60654

Kelly E. Farnan, Esq.

Richards Layton & Finger

920 North King Street

One Rodney Square

Wilmington, DE 19801

Thomas L. Boeder, Esq.

Cori G. Moore, Esq.

Perkins Coie

1201 Third Avenue

Suite 4900

Seattle, WA 98101

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Jeffrey B. Bove, Esq.

RatnerPrestia

1007 Orange Street

Suite 205

Wilmington, DE 19801

Catherine S. Simonsen, Esq.

Perkins Coie

1888 Century Park East

Suite 1700

Los Angeles, CA 90067

Eric J. Weiss, Esq.

1066 Clifton Avenue

Clifton, NJ 07013

Daniel J. Boland, Esq.

Michael J. Hartman, Esq.

Jeremy D. Heep, Esq.

Pepper Hamilton

18th & Arch Streets

3000 Two Logan Square

Philadelphia, PA 19103

M. Duncan Grant, Esq.

Pepper Hamilton

1313 Market Street

Suite 5100, P.O. Box 1709

Wilmington, DE 19899

 Counsel for Appellees

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_____________

OPINION OF THE COURT

_____________

KRAUSE, Circuit Judge.

In this case, we are called upon to determine, among 

other things, the fount and contours of federal common law 

applicable to the assignment of federal antitrust claims and 

the reach of the presumption of timeliness for motions to 

intervene as representatives of a class. Consistent with the

Restatement of Contracts and the doctrines undergirding

federal antitrust law, we hold that an assignment of a federal 

antitrust claim need not be supported by bargained-for 

consideration in order to confer direct purchaser standing on 

an indirect purchaser; such assignment need only be express, 

and that requirement was met here. We also hold that the

presumption of timeliness, that is, the presumption that a 

motion to intervene by a proposed class representative is 

timely if filed before the class opt-out date, applies not only 

after the class is certified, as we held in In re Community 

Bank of Northern Virginia, 418 F.3d 277, 314 (3d Cir. 2005), 

but also in in the pre-certification context. Because the 

District Court failed to apply that presumption and the 

intervenors’ motion here was timely considering the totality 

of the circumstances, we conclude the District Court abused 

its discretion in denying their motion to intervene on that 

basis. Accordingly, we will reverse and remand for 

proceedings consistent with this opinion.

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I. Background

Appellants seek to certify and represent a class of 

Class 8 truck purchasers to challenge an alleged conspiracy to 

monopolize among their immediate suppliers and those 

further up the market chain.

1

 The relevant market can be 

envisioned as a three-layer cake, with parts manufacturers at 

the top, Original Equipment Manufacturers (OEMs) in the 

middle, and Class 8 truck consumers at the base. Parts 

manufacturers are companies that make component parts of 

trucks, such as the transmissions at issue in this case. These 

companies sell their products to OEMs, which, in turn, take 

orders from the customers to build trucks customized to the 

customers’ needs. OEMs offer what are called “data books,” 

which list the various options for each part; the customer 

chooses among the parts and options; and the OEM sources 

the parts from the manufacturers and uses them to build the 

truck then sold to that consumer.

Eaton Corporation—a parts manufacturer—has long 

been a near monopolist in the market for supplying Class 8 

truck transmissions. In 1989, a company called ZF Meritor2

emerged as a competitor, offering transmissions that truck 

customers could select from the OEMs’ data books. 

 1 This same alleged conspiracy was the subject of our 

opinion in ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254 (3d 

Cir. 2012), where we explained the relevant market in detail. 

As that background is elsewhere available, we provide here a 

more limited overview.

2 ZF Meritor began as simply “Meritor” in 1989, not 

becoming “ZF Meritor” until a merger in 1999.

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According to Appellants, Eaton sought to sideline ZF Meritor 

and retain its hold on the market by conspiring with the 

OEMs to oust ZF Meritor from the market. It purportedly did 

so by entering Long Term Agreements with the OEMs that 

would offer increasingly large rebates on Eaton transmissions 

based on the percentage of transmissions a given OEM

purchased from Eaton as opposed to ZF Meritor. The OEMs

allegedly embraced this plan because, while they would 

benefit directly from rebates, they could pass on any increase 

in the price of Eaton’s transmissions to their customers

downstream, reaping extra profits without suffering detriment 

from monopoly-level prices. Per Appellants, the Long Term 

Agreements had their intended effect, ultimately forcing ZF 

Meritor to shutter in 2003 and giving Eaton an iron grip on 

the market for Class 8 truck transmissions.

But not without repercussions. In 2006, ZF Meritor 

sued Eaton for antitrust violations and won. See ZF Meritor, 

LLC v. Eaton Corp., 696 F.3d 254 (3d Cir. 2012) (affirming 

the jury’s verdict against Eaton). Separately, a group of 

indirect purchasers (i.e., customers who bought trucks from 

OEMs’ immediate customers) brought a class action against 

Eaton; that case was dismissed after the district court 

undertook a full class certification analysis pursuant to 

Federal Rule of Civil Procedure 23, though an appeal is 

pending. See generally In re Class 8 Transmission Indirect 

Purchaser Antitrust Litig., 140 F. Supp. 3d 339 (D. Del. 

2015). And we now confront on appeal the suit brought on 

behalf of the OEMs’ customers—i.e., “direct purchasers” of 

the Class 8 trucks—against both the OEMs and Eaton for 

damages arising from the alleged monopolization 

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conspiracy.3

 Wallach v. Eaton Corp., 125 F. Supp. 3d 487, 

492 (D.N.J. 2015).

 3 Specifically, Appellants brought a monopolization 

claim against Eaton under § 2 of the Sherman Act, 15 U.S.C. 

§ 2, and three claims against both Eaton and the OEMs: a 

conspiracy to monopolize claim, id., and two claims for 

entering exclusionary contracts, 15 U.S.C. §§ 1, 14. 

Importantly, Appellants may still be characterized as “direct 

purchasers” in relation to Eaton for purposes of this suit, even 

though the OEMs exist as middlemen between Eaton and 

Appellants. In 2010, Appellees filed motions to dismiss the 

case under Federal Rule of Civil Procedure 12(b)(6) in part 

for lack of statutory standing, arguing that because the 

putative class representatives (then Wallach and Tauro) did 

not directly purchase trucks from Eaton, they lacked standing 

under the so-called “direct purchaser rule.” See Ill. Brick Co. 

v. Illinois, 431 U.S. 720 (1977) (allowing antitrust suits for 

damages only by plaintiffs who directly purchased items from 

the alleged violator). The District Court rejected this 

argument, determining that Appellants had statutory standing 

to sue under the limited co-conspirator exception to the direct 

purchaser rule, which allows an entity to sue its supplier and

its supplier’s supplier if (1) it sues both at once, and (2) the 

immediate supplier (i.e., the middleman) was so wrapped up 

in the conspiracy that it would be barred from seeking 

antitrust relief against the top-level supplier in a suit of its 

own. Wallach v. Eaton Corp., 814 F. Supp. 2d 428 (D.N.J. 

2011); see also Howard Hess Dental Labs. Inc. v. Dentsply 

Int’l, Inc., 602 F.3d 237, 258-60 (3d Cir. 2010); Howard Hess 

Dental Labs. Inc. v. Dentsply Int’l, Inc., 424 F.3d 363, 378-84 

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Appellants here fall into two categories, each of which 

presents a different issue on appeal: those that brought suit as 

putative class representatives and those seeking to intervene 

to serve in that role. In the first group, the relevant party for 

purposes of appeal is Tauro Brothers Trucking Company 

(“Tauro”), the putative class representative that the District 

Court determined lacked standing.4

 Tauro never directly

purchased a Class 8 truck from the OEMs, but rather 

purchased trucks from R&R—a company that was a direct 

customer of the OEMs and that expressly assigned Tauro its 

direct purchaser antitrust claims stemming from the alleged 

conspiracy between the OEMs and Eaton.5

 Before the 

District Court, Appellees challenged the propriety and effect 

of this assignment, urging that it is invalid for lack of 

bargained-for consideration and that Tauro lacks standing to 

 

(3d Cir. 2005). Appellees do not challenge this ruling on 

appeal.

4 Performance Transportation Services, Inc. (PTS), a 

direct customer of the OEMs and a former putative class 

representative in this case, is in bankruptcy and is represented 

by Mark Wallach as its Chapter 7 Trustee. While this case 

bears Wallach’s name, PTS no longer seeks to represent the 

putative class and was dropped as a litigant in the case when 

the putative class redefined itself in briefing before the 

District Court.

5 It is beyond dispute that a validly assigned antitrust 

claim can give direct purchaser standing to an indirect 

purchaser. See, e.g., In re Fine Paper Litig. State of Wash., 

632 F.2d 1081, 1090 (3d Cir. 1980).

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bring this suit or serve as a class representative. The District 

Court agreed and dismissed Tauro from the suit.

In the second group are Toledo Mack Sales and 

Service, Inc. and JJRS, LLC, both of which directly 

purchased trucks from the OEMs. Concerned after Appellees 

sought to dismiss Tauro for lack of standing that Tauro could 

be dropped from the suit, thereby leaving no named

representative, Toledo Mack and JJRS filed motions under 

Federal Rule of Civil Procedure 24 to intervene as putative 

class representatives.6

 The District Court denied those

motions, holding that neither entity had moved to intervene in 

a timely manner.

Having ejected the named plaintiff on standing 

grounds and foreclosed intervention by Toledo Mack and 

JJRS, the District Court dismissed the case in its entirety on 

August 31, 2015, concluding that the motion for class 

certification must be denied for want of a case or controversy

necessary to sustain federal jurisdiction under Article III of 

the United States Constitution. On appeal, Appellants argue

that (1) consideration is not required for a valid assignment of 

antitrust claims, and (2) the District Court abused its 

discretion in denying Toledo Mack and JJRS’s motions to 

intervene. For the reasons that follow, we agree with these 

 6 Toledo Mack and JJRS’s motions to intervene were 

brought as “of [r]ight,” Fed. R. Civ. P. 24(a), and, in the 

alternative, “[p]ermissive[ly],” Fed. R. Civ. P. 24(b).

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arguments and conclude that the case should be remanded for 

further proceedings consistent with this opinion.

7

II. Standards of Review8

We first review the District Court’s decision that 

Tauro lacked standing9 de novo, with deference to its factual 

 7 Appellants argue, in the alternative, that if

consideration is required, R&R’s assignment was supported 

by such consideration. Because we conclude consideration is 

not required, we do not reach this alternative argument and do 

not opine on the District Court’s disposition of it.

8 The District Court had jurisdiction over Appellants’ 

antitrust claims pursuant to 15 U.S.C. §§ 4 and 15(a) and 28 

U.S.C. §§ 1331 and 1337. We have jurisdiction under 28 

U.S.C. § 1291 to review the District Court’s conclusions.

9 The standing inquiry in this case centers on the 

validity of R&R’s assignment of its antitrust claim to Tauro. 

The District Court effectively entertained a 12(b)(1) motion 

on this question and treated it as a question of Article III 

standing. But because the assignment is relevant to whether 

Appellants satisfy the direct purchaser rule, its validity is a 

question of statutory standing, not Article III standing. 

Hartig Drug Co. v. Senju Pharm. Co., --- F.3d ---, No. 15-

3289, 2016 WL 4651381, at *5-6 (3d Cir. Sept. 7, 2016). 

Unlike Article III standing, statutory standing is inherently 

non-jurisdictional, and—contrary to Appellants’ assessment 

at oral argument, Oral Arg. Tr. 18—challenges to it should be 

brought by way of a 12(b)(6) motion, a summary judgment 

motion, or arguments on the merits—not by way of a 12(b)(1) 

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findings unless clearly erroneous. White-Squire v. U.S. 

Postal Serv., 592 F.3d 453, 456 (3d Cir. 2010). We review

the District Court’s denial of Toledo Mack and JJRS’s Rule 

24 motions as untimely for abuse of discretion, Halderman v. 

Pennhurst State Sch. & Hosp., 612 F.2d 131, 134 (3d Cir. 

1979), which occurs where a “district court’s decision rests 

 

motion. See id. at *4; see also Lexmark Int’l, Inc. v. Static 

Control Components, Inc., 134 S. Ct. 1377, 1387 n.4 (2014). 

We also disagree with the parties’ suggestion at oral 

argument that we can infer the District Court addressed the 

validity of the assignment as a matter of statutory standing, 

rather than Article III standing. Oral Arg. Tr. 18, 36. Such 

an inference is not plausible. The District Court recited and 

employed the doctrinal standard applicable to questions of 

subject matter jurisdiction, foreclosing the possibility that it 

was treating the issue as a non-jurisdictional question of 

statutory standing. Wallach v. Eaton Corp., 125 F. Supp. 3d 

487, 491-92 (D.N.J. 2015). Moreover, because Appellees 

brought a 12(b)(6) motion in 2011, see Wallach, 814 F. Supp. 

2d at 432, they were prohibited under Federal Rule of Civil 

Procedure 12(g)(2) from bringing their current challenge to 

Tauro’s statutory standing as a 12(b)(6) motion in 2014, 

accord Leyse, 804 F.3d at 320-21. Despite the District 

Court’s procedural error in entertaining Appellees’ statutory 

standing challenge as a 12(b)(1) Article III challenge, 

however, Appellants failed to object in the District Court or in 

their briefs on appeal, and, at oral argument, asserted that the 

District Court acted properly, Oral Arg. Tr. 17-19. 

Accordingly, we deem any such challenge waived and 

address the statutory standing question on the merits.

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upon a clearly erroneous finding of fact, an errant conclusion 

of law or an improper application of law to fact,” In re Gen. 

Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 

55 F.3d 768, 783 (3d Cir. 1995) (hereinafter “In re GM 

Corp.”) (quoting Int’l Union, UAW v. Mack Trucks, Inc., 820 

F.2d 91, 95 (3d Cir. 1987)).

10

 10 While we have said that denials of motions to 

intervene as of right and by permission under Rule 24 for 

untimeliness are both reviewed for abuse of discretion, 

Mountain Top Condo. Ass’n v. Dave Stabbert Master Builder, 

Inc., 72 F.3d 361, 369 (3d Cir. 1995) (reciting standard for 

motions to intervene as of right under Rule 24(a)); Del. Valley 

Citizens’ Council for Clean Air v. Commonwealth of Pa., 674 

F.2d 970, 974 (3d Cir. 1982) (same for motions to intervene 

by permission per Rule 24(b)), we have also noted that our 

review of denials of motions to intervene as of right under 

Rule 24(a) generally “is more stringent than the abuse of 

discretion review accorded to denials of motions for 

permissive intervention,” meaning we will reverse if the 

district court “has applied an improper legal standard or 

reached a decision that we are confident is incorrect.” Harris 

v. Pernsley, 820 F.2d 592, 597 (3d Cir. 1987) (quoting United 

States v. Hooker Chems. & Plastics Corp., 749 F.2d 968, 992 

(2d Cir. 1984)). We need not delve into how this heightened 

standard might affect the “abuse of discretion” relevant to the 

District Court’s denial of the intervention motions here 

because we conclude the District Court abused its discretion 

even under the more forgiving standard generally applicable 

to Rule 24(b) motions. See Brody ex rel. Sugzdinis v. Spang, 

957 F.2d 1108, 1115 (3d Cir. 1992) (recognizing that rulings 

on Rule 24(b) motions are reviewed more deferentially).

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III. Tauro’s Standing

Tauro’s statutory standing to serve as a named 

representative of the putative class of direct purchasers of the 

OEMs’ Class 8 trucks hinges on the validity of R&R’s 

assignment of such direct purchaser claims to Tauro, and in 

particular whether the assignment of a federal antitrust claim 

requires consideration. To answer that question, we must 

ascertain the federal common law principles that govern such 

assignments and then apply those principles to the case at 

hand.

11

 

11 We acknowledge that the term and concept of “federal 

common law” may strike some as anathema to federal court 

jurisprudence in the wake of Erie Railroad Co. v. Tompkins, 

304 U.S. 64 (1938), but in some areas of the law, marked by 

pressing interests of the United States or by broad 

congressional statutes empowering federal courts to make 

governing rules of law, so-called “federal common law” still 

exists to provide direction, e.g., Tex. Indus., Inc. v. Radcliff 

Materials, Inc., 451 U.S. 630, 641-44 (1981). Federal 

antitrust law historically has been one such area. See, e.g., 

Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 

688 (1978). But cf. Tex. Indus., Inc., 451 U.S. at 641-45 

(indicating that while federal common law applies to some 

components of antitrust law, it does not apply to remedial 

provisions that Congress described with particularity). Here, 

we put aside the doctrinal debates that could be had because 

we are bound by our precedent, which identifies federal 

common law as the governing principle for assessing the 

validity of an assignment of a federal antitrust claim. 

Gulfstream III Assocs. v. Gulfstream Aerospace Corp., 995 

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A. Guiding Principles

By imposing the “direct purchaser” rule on antitrust 

claims and providing that only entities that purchase goods

directly from alleged antitrust violators have statutory 

standing to bring a lawsuit for damages, the Supreme Court

sought to avoid the complications that would flow from 

allowing suits by indirect purchasers. See generally Ill. Brick 

Co. v. Illinois, 431 U.S. 720 (1977). The Court observed that 

such indirect purchaser suits would force courts to ascertain 

how much of the supracompetitive prices charged by the 

violator were passed from the direct purchaser to indirect 

purchasers down the market chain, and concluded that “the 

antitrust laws will be more effectively enforced by 

concentrating the full recovery for the overcharge in the direct 

purchasers rather than by allowing every plaintiff potentially 

affected by the overcharge to sue only for the amount it could 

show was absorbed by it.” Id. at 735.

In reaching this conclusion, the Supreme Court 

elucidated three policy rationales, each of which is relevant to 

our assessment of whether the assignment of an antitrust 

claim necessitates bargained-for consideration. Specifically, 

the Court expressed concern regarding: (1) the difficulty 

courts (and litigants) would have in parsing how much of the 

harm caused by supracompetitive prices charged by an 

antitrust violator was incurred by the direct purchaser as 

opposed to being passed down to indirect purchasers, id. at 

731-32, 741-44; (2) the possibility that multiple lawsuits 

could result in inconsistent adjudications of liability or could 

 

F.2d 425, 437 (3d Cir. 1993) (Greenberg, J., concurring and 

speaking for the majority).

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result in an antitrust violator paying more than the injury it 

actually inflicted once both direct and indirect purchasers 

obtained recovery, id. at 730-31; and (3) the deleterious effect 

that the combination of uncertainty around damages and the 

likelihood that each individual indirect purchaser’s share of 

damages would be small would have on the incentive for 

private parties to initiate suits, id. at 745-47. We succinctly 

distilled these rationales in Gulfstream III Assocs. v. 

Gulfstream Aerospace Corp., explaining that Illinois Brick’s 

direct purchaser rule seeks to counteract “the difficulty of 

analyzing pricing decisions, the risk of multiple liability for 

defendants, and the weakening of private antitrust 

enforcement that might result from splitting damages for 

overcharges among direct and indirect purchasers.” 995 F.2d 

425, 439 (3d Cir. 1993) (Greenberg, J., concurring and 

speaking for the majority).

Of particular relevance to this case, an indirect 

purchaser may step into the shoes of a direct purchaser and 

bring an antitrust suit in that capacity if it receives a valid 

assignment of a direct purchaser’s antitrust claims. 

Gulfstream, 995 F.2d at 437-40; In re Fine Paper Litig. State 

of Wash., 632 F.2d 1081, 1090 (3d Cir. 1980). We have long 

required that such assignments be express, Gulfstream, 995 

F.2d at 437-39, explaining that, consistent with the rationales 

from Illinois Brick, that requirement ensures that only one

party has the authority to bring suit, that the damages 

calculations remain relatively straightforward, and that we do 

not divvy up damages to the point of reducing the incentive to 

bring private antitrust suits in the first place, Gulfstream, 995 

F.2d at 439-40. 

At issue in this case, however, is not whether the 

assignment was express. Rather, we are asked to determine 

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whether an assignment of a federal antitrust claim must also 

reflect consideration to be valid. Gulfstream makes clear that, 

in answering that question, we must apply federal common 

law, as opposed to the law of the state, for two reasons: first, 

to ensure the rules governing assignments of federal antitrust 

claims accord with the “overall purposes of the antitrust 

statutes,” and second, to avoid a patchwork of “differing state 

law standards, because such assignments may implicate the 

‘direct purchaser’ rule.” Id. at 438. But neither the Supreme 

Court nor our Court has defined the federal common law

governing consideration for the assignment of federal 

antitrust claims. Thus, we must do so before we can apply it 

to the assignment at issue in this case—an undertaking that 

requires us first to ascertain the appropriate sources of 

authority for federal common law in this context.

B. Source of Federal Common Law

Given that different authorities point to different 

outcomes, it is not surprising that the parties are at 

loggerheads over which we should consider. Appellees 

suggest that we ignore federal common law and simply apply 

the law of the state in which the assignment was made, or, in 

the alternative, that federal common law requires us to 

conduct what amounts to a fifty-state survey of the rules 

governing assignments in each state and then apply the most 

common rule. In contrast, Appellants urge that we apply the 

Second Restatement of Contracts, which they contend does 

not require consideration for a valid assignment.

We can dispense with Appellees’ proposed alternatives 

in short order: one contravenes our case law and the other is 

unworkable. Appellees’ proposal that we apply the law of the 

state in which the assignment was made is one we have 

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expressly rejected in the past for reasons that are just as sound 

today. As we observed in Gulfstream, “assignments of 

antitrust claims cannot appropriately be left to determination 

under possibly differing state law standards.” 995 F.2d at 

438. There, we declined to apply state law, explaining that 

because “federal common law governs the assignment of an 

antitrust cause of action, there is no issue as to what state’s 

law would apply.” Id. at 437 n.1. 

We likewise reject Appellees’ fifty-state survey 

approach as inefficient, unreliable, and subject to 

manipulation. In practice, it would have litigants and courts 

reinvent the wheel for every contract-related question arising 

under federal common law by conducting nationwide surveys 

and attempting to characterize the vagaries of state law in 

existence at any given time. The inconsistent results would 

not only generate uncertainty for would-be assignors and 

consternation for courts attempting to apply precedent, but 

also would run contrary to the twin rationales we identified in 

Gulfstream for applying federal common law to antitrust 

claim assignments in the first place—ensuring the law 

accords with the “overall purposes of the antitrust statutes” 

and avoiding a patchwork of standards. Id. at 438.

12

 12 Appellees’ reliance on In re Columbia Gas Systems 

Inc., 997 F.3d 1039, 1055 (3d Cir. 1993), for the proposition 

that we hew closely to state law so as to protect litigants’ 

“commercial expectations” reflects, at best, a misreading of 

that case. The discussion Appellees cite was our recitation of 

the Supreme Court’s test for ascertaining when to apply 

federal common law in the first instance, id. (citing United 

States v. Kimbell Foods, Inc., 440 U.S. 715, 727-78 (1979)), 

not a test for how to fashion federal common law thereafter. 

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Indeed, this appeal is illustrative of the shortcomings 

of this approach, with both sides having submitted lengthy 

and dueling appendices that purport to catalogue the 

applicable rule for each state with contradictory results. 

Moreover, while the parties and their able counsel here had 

the resources to undertake this laborious task, for some 

assignees, such a project may prove a disincentive to bringing 

suit—one of the very hazards the Supreme Court sought to 

avoid in adopting the direct purchaser rule. Ill. Brick, 431 

U.S. at 745-47.

In contrast, Appellants’ proposal that we look to the 

Restatement of Contracts as a starting point for fashioning

rules of federal common law finds support in our case law 

and the twin aims of Gulfstream. As the American Law 

Institute explained when it first launched the Restatement of 

Contracts in 1932, “the Restatement of this and other 

subjects” was designed to serve “as prima facie a correct 

statement of what may be termed the general common law of 

the United States,” notwithstanding “instances in which the 

law in one or more States may vary from the law stated in a 

particular section.” Restatement (First) of Contracts, 

Introduction (Am. Law Inst. 1932). And in the decades since, 

that aspiration has been realized with the Restatement 

functioning not only as an authoritative fifty-state survey of 

contract law, offering a consistent point of reference to parties 

and courts, but also as a proposed “correct statement,” 

 

Here, Gulfstream already dictates that we apply federal 

common law, rendering the considerations in Columbia Gas 

Systems inapposite.

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21

reflecting a synthesis and analysis of that law and the 

consensus of the states.

13

For those reasons, we have looked to the Restatement

in the past when applying the federal common law of 

contracts generally, and the law of antitrust assignments 

specifically. In Livingstone v. North Belle Vernon Borough, 

91 F.3d 515, 525-26 & n.11 (3d Cir. 1996), for example, we 

applied the federal common law of contracts in a suit brought 

under 42 U.S.C. § 1983 and cited to the Restatement (Second) 

 13 Indeed, the very cases upon which Appellees rely to 

advance their fifty-state survey approach cut in favor of 

applying the Restatement. As Appellees note, in Smith Land 

& Improvement Corp. v. Celotex Corp., 851 F.2d 86, 92 (3d 

Cir. 1988), we observed that “[t]he general doctrine of 

successor liability in operation in most states should guide 

the” district court in defining the federal common law 

relevant to that case on remand. While we left it to the 

district court to make that determination in the first instance, 

we did discuss the general precepts of successor liability and, 

in doing so, referenced only treatises on corporate law, id. at 

91, close cousins of the Restatement. Moreover, while 

Appellees cite to a recent Fifth Circuit case in which the court 

described its application of the federal common law of 

contracts as adhering to “the core principles of the common 

law of contracts that are in force in most states,” Excel 

Willowbrook, L.L.C. v. JP Morgan Chase Bank, Nat’l Ass’n, 

758 F.3d 592, 597 (5th Cir. 2014) (quoting Smith v. United 

States, 328 F.3d 760, 767 (5th Cir. 2003)), the court went on 

to identify those very principles by citing directly to the 

Restatement of Contracts, id. at 597 n.8.

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of Contracts for the proposition that the duty of good faith 

and fair dealing exists at federal common law. And in In re 

Fine Paper Litigation, we concluded that the Restatement of 

Contracts was “in accord” with the “general law” applicable 

to assessing the effect of one party’s assignment of its 

antitrust claims to another. 632 F.2d at 1091.14

Using the Restatement as a guidepost to define federal 

common law concerning the validity of assignments of 

antitrust claims also comports with one of the twin aims of

Gulfstream: promoting national uniformity. 995 F.2d at 438. 

The Restatement eliminates the risk of courts reaching 

inconsistent conclusions about the consensus of state law,

supplants the need for a would-be assignor or assignee to 

conduct her own fifty-state survey before assigning an 

antitrust claim to ensure it will be enforceable in federal 

court, and sets a baseline from which litigants may operate 

when challenging or defending the validity of such an 

assignment. This state of affairs is exactly what Gulfstream

envisioned a federal rule would provide. 

 14 Rather than consider the Restatement or the proper 

source of federal common law, the District Court noted that 

In re Fine Paper Litigation itself cited to a district court case 

called Mercu-Ray Industries, Inc. v. Bristol-Myers Co., 392 F. 

Supp. 16, 18 (S.D.N.Y.), aff’d, 508 F.2d 873 (2d Cir. 1974), 

which posited that consideration may be relevant to the 

assignment of an antitrust claim; upon inspection, however, 

the district court in that case merely noted that issues such as 

the giving of consideration were not even challenged in that 

case. In other words, Mercu-Ray Industries sheds no light on 

the federal common law of contracts.

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In sum, we agree with Appellants that the Restatement 

carries persuasive force in defining our federal common law, 

but we also caution that it serves only as a starting point. 

Gulfstream instructs not only that we avoid a patchwork of 

state standards, but also that we craft federal common law 

that pursues the “overall purposes of the antitrust statutes.” 

Id. For that reason, before adopting the Restatement’s 

approach to a given legal question as federal common law, we 

must confirm that the proposed rule comports with the 

underlying purpose and goals of federal antitrust law as 

outlined in Illinois Brick.

15 We thus turn to the Restatement

and the policy rationales undergirding the direct purchaser 

rule to determine whether bargained-for consideration is 

required for an assignment of an antitrust claim to have legal 

effect.

C. Defining Federal Common Law

We begin with the Restatement. Consistent with 

Gulfstream’s requirement that an “intention” to assign a 

federal antitrust claim be manifested expressly, 995 F.3d at 

438-39, the Restatement states: “It is essential to an 

assignment of a right that the obligee manifest an intention to 

transfer the right to another person . . . .” Restatement 

(Second) of Contracts § 324 (Am. Law Inst. 1981). And in 

discussing “Assignments and Delegation,” the Second 

 15 We also recognize that the Restatement may lose 

some of its persuasive force if it can be demonstrated that 

there has been a fundamental shift in the status of the law on a 

given topic in the years since the Second Restatement’s 

publication in 1981. We have not detected any such tectonic 

shift in the law of assignments at issue in this case.

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Restatement expressly addresses gratuitous assignments—

that is, assignments given without consideration.16 

Restatement (Second) of Contracts § 332. Specifically, it

provides: “Unless a contrary intention is manifested, a 

gratuitous assignment is irrevocable if . . . the assignment is 

in writing.” Id. In other words, so long as an assignment is 

written and express, it is valid under the Restatement, even 

absent consideration.

Appellees object that the Second Restatement’s 

discussion of assignments is “limited to rights, duties, and 

conditions arising under a contract or for breach of a 

contract” such as “debts, rights to non-monetary performance 

and rights to damages and other contractual remedies,” and 

does not extend to what were historically known as “choses in 

action,” which include “debts of all kinds, tort claims, and 

rights to recover ownership or possession of real or personal 

property”—i.e., non-contractual causes of action. 

Restatement (Second) of Contracts § 316 & cmt. a (“The 

 16 Appellees’ strained argument that “gratuitous” and 

“without consideration” are inherently different is foreclosed 

by the Restatement’s description of a gratuitous assignment, 

Restatement (Second) of Contracts § 332 (defining a 

gratuitous assignment as any assignment “unless it is given or 

taken . . . in exchange for a performance or return promise 

that would be consideration for a promise”), and by the 

definition of “gratuitous” in Black’s Law Dictionary, Black’s 

Law Dictionary 143, 816 (10th ed. 2009) (defining 

“gratuitous” as “given without consideration in circumstances 

that do not otherwise impose a duty” and “gratuitous 

assignment” as “[a]n assignment not given for value”).

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rules stated here may have some application to noncontractual choses in action, but the transfer of noncontractual rights is beyond the scope of the Restatement of 

this Subject.”).

The Restatement itself, however, makes clear that this 

limitation is based on an antiquated distinction between 

contractual rights and choses in action that no longer has a 

significant effect on the common law. In § 317, which 

defines “what can be assigned or delegated,” the Restatement 

explains that “the historical common-law rule that a chose in 

action could not be assigned has largely disappeared.” Id.

§ 317 cmt. c; accord id. Chapter 15 Introductory Note (“The 

historic rule in the common-rule courts of England was that a 

‘chose in action’ could not be assigned. The scope of that 

rule was progressively narrowed . . . . Little remains of it 

today.”). Moreover, while not citing the Restatement for this 

purpose, we similarly noted in In re Fine Paper Litigation, 

which dealt with the assignment of an antitrust claim, that 

“[a]lthough the common law did not favor the assignment of 

causes of action, by and large that attitude has been 

overcome.” 632 F.2d at 1090. Thus, what Appellees attempt 

to erect as a historical and definitional roadblock, we resolve 

with a short detour, concluding that the Second Restatement 

remains the most persuasive authority for assessing whether 

assignment of an antitrust claim requires consideration.

Having concluded that it does not, we proceed to 

consider whether such a rule comports with the underlying 

purposes of antitrust law generally and the doctrine of direct 

purchaser standing specifically. See Gulfstream, 995 F.2d at 

438. Illinois Brick directs us to prioritize three goals with 

regard to direct purchaser standing: avoiding duplicitous 

litigation, streamlining damages calculations, and preventing

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26

disincentives for private antitrust suits. 431 U.S. at 730-32, 

745-47. While our requirement that assignments of federal 

antitrust claims be express advances these goals, see 

Gulfstream, 995 F.2d at 440, requiring consideration does 

not. As such, adopting the Restatement rule as our federal 

common law rule in this context is in line with the “overall 

purposes of the antitrust statutes.” Id. at 438. 

Conversely, requiring consideration for the assignment 

of a federal antitrust claim could discourage private 

enforcement of the antitrust laws in derogation of Illinois 

Brick. Part of creating incentives for private antitrust suits is 

making federal courts a welcome forum for such litigation, 

and erecting the barrier of consideration threatens to shut out 

otherwise meritorious suits from resolution. True, in some 

circumstances, consideration could spur such private suits

because an assignee who pays valuable consideration for the 

right to sue might be more likely to actually bring suit in 

order to recoup its investment. But in situations like the one 

at issue in this case, if a direct purchaser is uninterested in 

pursuing its claims, whether because it deems them valueless 

or because it cannot afford the expense of litigation, an 

otherwise willing and interested assignee might be 

discouraged from pursuing the suit in the direct purchaser’s 

stead if it were required to provide consideration. Here, for 

example, the record reflects that R&R assigned its antitrust 

claim to Tauro in part because it believed—in error—that 

because it had sold its trucks to Tauro, it no longer had any 

claim itself. Had R&R not assigned its claim, it is far from 

clear that it ever would have pursued its direct purchaser 

claims. In short, because requiring consideration could 

hinder the private enforcement of antitrust laws, that rule 

would not accord with the goals Illinois Brick.

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Appellees counter that our requirement in Gulfstream

that assignments be express was intended to “create[] an 

additional obstacle for assigning direct-purchaser antitrust 

claims,” and, as a result, it would “flout the antitrust policy 

considerations animating Gulfstream’s holding” to allow

assignments to proceed absent consideration by “mak[ing] it 

easier for a direct purchaser to assign its claims.” Appellees’ 

Br. 20. Gulfstream, however, is not such a blunt tool. We 

imposed the “express assignment” requirement in that case

not to signal that courts should erect as many hurdles to 

assigning antitrust claims as possible, but rather in an effort to 

bring our case law in line with the rationales underlying 

Illinois Brick. See 995 F.2d at 438-40. Specifically, we 

reasoned that an effective assignment must directly reference 

antitrust claims in order to ensure that any transfer of direct 

purchaser status is crystal clear, thereby “eliminat[ing] any 

problems of split recoveries or duplicative liability.” Id. at 

440. While requiring an express assignment therefore

advances the Supreme Court’s goal to prevent duplicative 

liability (and, in so doing, advances another Illinois Brick

goal: streamlining damages calculations), we are not 

persuaded that requiring the parties to an assignment to 

exchange consideration has the same effect.

On the contrary, while Appellees point out the 

possibility of duplicitous liability in federal and state courts if 

federal common law does not require consideration yet state 

law does, their proposed requirement of consideration only 

gives rise to the mirror image of that same problem—i.e., an 

assignment given with consideration in a state that does not

require consideration would empower an assignee to bring a 

state antitrust claim and an assignor to bring any federal 

claims. Our disposition today thus does not eliminate the 

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28

possibility that an assignment in some instances will be valid 

for federal but not for state claims, but that is a necessary 

consequence of our federalist system of government, and the 

resolution we adopt better comports with the goals of federal 

antitrust law. Our task, after all, is to create a federal rule 

applicable regardless of the assignment’s state of origin. If 

we are constrained to rules that in no way impact or depart 

from state law, then federal common law would simply track

state law—an outcome foreclosed by Gulfstream’s 

exhortation to national uniformity.

In sum, we conclude that consideration has little role 

to play in advancing the goals of Illinois Brick and requiring 

it could affirmatively undermine one of them by, in certain 

circumstances, discouraging private enforcement of the 

federal antitrust laws. We therefore hold, consistent with the 

Second Restatement of Contracts, that consideration is not 

required under federal common law to give effect to an

otherwise express assignment.

D. Applying Federal Common Law

All that remains as to this issue is the simple matter of 

applying the federal common law we announce today to the 

facts of this case. Here, there is no dispute that R&R’s 

assignment of its antitrust claims to Tauro was both written 

and express, meaning that it is valid with or without 

consideration.17 Consequently, the District Court erred in 

 17 The relevant portion of the written assignment at 

issue in this case reads:

R&R hereby conveys, assigns and transfers to 

Tauro all rights, title and interest in and to all 

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concluding the absence of consideration invalidated the 

assignment upon which Tauros’ standing was predicated. 

Accordingly, we will reverse its dismissal of Tauro for lack of 

standing and its denial of the motion for class certification for 

lack of a named class representative.

IV. Timeliness of Proposed Intervenor’s Motions to 

Intervene

We now shift gears to consider the second issue on 

appeal: Toledo Mack and JJRS’s motions to intervene. With 

the specter of the putative class losing its named 

representatives, direct purchasers Toledo Mack and JJRS 

filed motions to intervene as representatives of the putative 

class both as a matter of right and permissively, pursuant to 

Federal Rules of Civil Procedure 24(a)(2) and 24(b), 

respectively. The District Court denied these motions as 

untimely, concluding that, despite the motions having been 

filed only two months after Appellees first asked the District 

Court to dismiss Tauro for lack of standing, interrogatories 

and depositions posed to Tauro months earlier should have 

put Toledo Mack and JJRS on notice of the potential for 

 

causes of action it may have against 

Defendants, under the antitrust laws of the 

United States or of any State, arising out of or 

relating to R&R’s purchases . . . of vehicles 

containing Class 8 transmissions which were 

subsequently resold to Tauro. This assignment 

includes R&R’s status as a direct purchaser of 

all vehicles containing Class 8 

transmissions . . . .

J.A. 137 (emphasis added).

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dismissal of the class certification motion and triggered 

intervention motions at that time. We agree with Toledo 

Mack and JJRS that the District Court’s denial of their 

motions to intervene was an abuse of discretion.

A district court’s timeliness inquiry for both types of 

Rule 24 motions requires considering the totality of the 

circumstances arising from three factors: “(1) the stage of the 

proceeding; (2) the prejudice that delay may cause the parties; 

and (3) the reason for the delay.” In re Cmty. Bank of N. Va., 

418 F.3d 277, 314 (3d Cir. 2005); In re Fine Paper Antitrust 

Litig., 695 F.2d 494, 500 (3d Cir. 1982) (treating the 

timeliness inquiry the same for both types of Rule 24 

motions). These three factors are necessarily bound up in one 

another, see, e.g., Mountain Top Condo. Ass’n v. Dave 

Stabbert Master Builder, Inc., 72 F.3d 361, 370 (3d Cir. 

1995) (“[T]he stage of the proceeding is inherently tied to the 

question of the prejudice the delay in intervention may cause 

to the parties already involved.”), and we maintain “a general 

reluctance to dispose of a motion to intervene as of right on 

untimeliness grounds because the would-be intervenor 

actually may be seriously harmed if not allowed to 

intervene,” Benjamin ex rel. Yock v. Dep’t of Pub. Welfare of 

Pa., 701 F.3d 938, 949 (3d Cir. 2012).

We also have recognized a presumption of timeliness 

for intervention motions filed by purported class members—

at least where the class has been certified and before the 

court-appointed opt-out deadline has passed, In re Cmty. 

Bank, 418 F.3d at 314, although we have not had occasion 

before today to opine whether that presumption applies precertification as well. The presumption, in any event, is not 

dispositive, and may be rebutted by a contrary determination 

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under the totality of the factors described above. See In re 

Cmty. Bank of N. Va., 622 F.3d 275, 312-13 (3d Cir. 2010).

Appellants make two arguments as to why the District 

Court abused its discretion in finding their motions untimely. 

First, they urge that the District Court should have applied the 

presumption of timeliness in this case, even though the 

putative class had not yet been certified. Second, they argue 

that the District Court erred in its application of the three 

timeliness factors, and had it properly applied them in the 

context of the presumption, it could not have discarded their 

motions as untimely. We are in agreement.

18

 18 Our jurisprudence requires a district court to 

consider four factors when ruling on a Rule 24(a)(2) motion: 

whether “(1) the application for intervention is timely; (2) the 

applicant has a sufficient interest in the litigation; (3) the 

interest may be affected or impaired, as a practical matter by 

the disposition of the action; and (4) the interest is not 

adequately represented by an existing party in the litigation.” 

Harris, 820 F.2d at 596. Because Appellees did not dispute 

the latter three factors, the District Court disposed of both the 

intervenors’ motions solely on the timeliness factor. Wallach, 

125 F. Supp. 3d at 495. Timeliness is thus the only issue 

presented to us on appeal. Although it may be that Toledo 

Mack and JJRS opt to withdraw their motions to intervene in 

view of Tauro’s standing to proceed as a class representative, 

should they choose to persist in their motions and dispute the 

remaining factors on remand, nothing in our opinion should 

be taken to suggest that the District Court may not take these 

factors into account in ruling on the Rule 24 motions. 

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A. Procedural History

We recount the procedural history of this case in some 

detail only because it is necessary for our review of the 

District Court’s denial of the motions to intervene. After it 

commenced and Tauro became a named representative in 

2010, this case wound its way through several years of 

litigation, resulting in over 2.5 million pages of discovery. 

In August 2014, Appellees served interrogatories on 

Tauro that asked, among many other things, about the nature 

of the assignment of R&R’s direct purchaser claim, and in 

November 2014, Appellees conducted related depositions. 

The goal of the assignment-related questions was to ascertain 

whether Tauro and R&R exchanged bargained-for 

consideration for the assignment in 2010. Appellees urge that 

these interrogatories and depositions put Tauro on notice that 

its standing in the case—predicated on a valid assignment of 

R&R’s claim—was in jeopardy. Also in November 2014, 

Appellants filed a Rule 23 motion for class certification, and 

the District Court scheduled evidentiary hearings for the 

following March.

In early January 2015, Appellees submitted a letter to 

the District Court seeking leave to file a motion to dismiss the 

case for lack of standing under Federal Rule of Civil 

Procedure 12(b)(1) based on their conclusion that R&R’s 

assignment of its antitrust claims was ineffective for lack of 

consideration. The District Court denied that request two 

weeks later, and instructed Appellees to present their standing 

arguments in their response brief to Appellants’ motion for 

class certification. Appellees submitted that response brief 

two days later, which addressed both their standing and class 

certification arguments.

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On March 6, 2015, Tauro filed its reply brief to 

Appellees’ brief on class certification and standing, which 

also redefined the class to drop PTS from the case. On the 

same day, concerned at this point that Tauro could be ousted 

and leave the suit without any named representative, Tauro’s 

attorney filed a Rule 24 motion on behalf of Toledo Mack, 

seeking to intervene as a putative class representative. On 

March 24, 2015, the same attorney filed an analogous motion 

on JJRS’s behalf, and the District Court held a hearing on all 

of the relevant motions the following day. By this point, 

discovery had closed, and the deadline for joinder had passed 

over a year earlier. The District Court thereafter denied the 

motions to intervene as untimely. Wallach, 125 F. Supp. 3d 

at 496.

B. Presumption of Timeliness

Appellants protest that the District Court erred in 

concluding that the presumption of timeliness announced in 

In re Community Bank does not apply to would-be 

intervenors where a class has yet to be certified and notice 

containing an opt-out date has yet to be mailed to the putative 

class members.19 See Wallach, 125 F. Supp. 3d at 495 n.9. 

While it is true that we fashioned this rebuttable presumption 

 19 While we review the District Court’s denial of the 

motions to intervene for abuse of discretion, “[w]hether an 

incorrect legal standard has been used is an issue of law to be 

reviewed de novo.” In re Hydrogen Peroxide Antitrust Litig., 

552 F.3d 305, 312 (3d Cir. 2008) (quoting In re Initial Pub. 

Offering Sec. Litig., 471 F.3d 24, 32 (2d Cir. 2006)). 

Whether the presumption applies pre-certification is just such 

an issue.

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in In re Community Bank for a class action at a different stage 

than the one before us, we agree with Appellants that the 

rationale that animated the presumption in In re Community 

Bank applies with equal force in the pre-certification context.

That rationale was that members of a class have no 

“duty to take note of the suit or to exercise any responsibility 

with respect to it” until “the existence and limits of the class 

have been established and notice of membership has been 

sent.” 418 F.3d at 314 (quoting McKowan Lowe & Co. v. 

Jasmine, Ltd., 295 F.3d 380, 384 (3d Cir. 2002)). Those 

concerns for fair notice and the rights of persons who may 

otherwise be bound by the judgment in a class action carry 

just as much weight for putative class members before a court 

has ruled on class certification. We thus decline to adopt the 

District Court’s bright-line rule distinguishing between preand post-certification motions to intervene.20

 20 The District Court grounded its distinction between 

a putative and a certified class on a 1975 Supreme Court case 

in which the Court noted that “[w]hen [a] District Court 

certifie[s] the propriety of [a] class action, the class of 

unnamed persons described in the certification acquire[s] a 

legal status separate from the interest asserted by the 

appellant.” Sosna v. Iowa, 419 U.S. 393, 399 (1975). The 

Court in Sosna, however, was addressing whether a class 

action challenging certain Iowa residency requirements for 

divorce was moot once the named plaintiff had satisfied the 

residency requirement over the course of the litigation. Its 

pronouncements in the context of mootness did not address 

the interests that give rise to the presumption of timeliness we 

recognized in In re Community Bank and do not suggest that 

the interests of putative class members seeking to intervene 

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In addition to relying on In re Community Bank itself, 

Appellants contend that American Pipe & Construction Co. v. 

Utah, 414 U.S. 538 (1974), supports their position on the 

presumption of timeliness. American Pipe established the 

rule that statutes of limitations toll while class certification 

motions are pending so that putative class members may

await resolution of such motions and retain their ability to 

intervene in the event such motions for class certification are 

denied after the limitations period would have run on their 

individual claims. See Am. Pipe & Constr. Co., 414 U.S. at 

545-53. In crafting this rule, the Supreme Court sought to 

relieve putative class members of the need “to file earlier 

individual motions to join or intervene as parties,” because 

such “multiplicity of activity” would run contrary to two key 

goals of the class action device: efficiency and judicial

economy. Id. at 551.

While they do not directly cite American Pipe in their 

brief, Appellees invoke its reasoning by forewarning that 

extending the presumption to the pre-certification context 

would expose courts to endless intervention motions, 

clogging the courts with the very “multiplicity of activity” 

American Pipe sought to avoid. Their point is well taken, and 

we cautioned in In re Community Bank that the presumption 

of timeliness should not be read to authorize a flurry of 

intervention or joinder motions unrelated to the merits of the 

class action because such a result would “seriously hamper[]” 

the “goals of Rule 23” as outlined in American Pipe. 418 

F.3d at 315. 

 

are so different from those of members of a certified class as 

to justify altering the presumption’s application.

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That word of warning, however, did not preclude our 

invocation of the presumption in In re Community Bank. 

And, as Appellants point out, without the presumption of 

timeliness, “class members would be compelled to intervene 

in every class action to protect their interests in the event the 

proposed class representatives are ultimately deemed 

inadequate”—giving rise to inefficiencies “[t]he class action 

device was designed to avoid . . . both before and after class 

certification.” Reply Br. 16. Denying the presumption to 

putative class members also could result in great 

inefficiencies and reductions in judicial economy in cases like 

the one before us, which would be dismissed after years of 

motion practice and discovery, only to be filed anew by 

plaintiffs who were unable to simply intervene and carry the 

motion for class certification through to its conclusion. 

Further, if the presumption of timeliness applied only to 

certified classes, then motions to intervene brought prior to 

class certification might be deemed untimely, even though 

those same motions would be timely if brought years later, 

after a class was certified. The illogic of such result and the 

goals of efficiency and judicial economy emphasized by the 

Supreme Court in American Pipe militate that we extend the

presumption of timeliness from In re Community Bank to the 

pre-certification context.

Not having had the benefit of our holding today, the 

District Court understandably failed to apply that presumption 

to Toledo Mack and JJRS’s motions to intervene. As it turns

out, however, that omission amounted to a misapplication of 

the law, which necessarily constitutes an abuse of discretion. 

In re GM Corp., 55 F.3d at 783. Under these circumstances, 

we could remand for the District Court to apply the

presumption in the first instance and determine whether it was 

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37

rebutted by the totality of the timeliness factors. See, e.g., In 

re Cmty. Bank, 622 F.3d at 312-13. However, where, as here, 

the totality of those factors points only to one conclusion—

that the presumption is not rebutted and the District Court 

erred in concluding two of the three factors weighed against 

timeliness—we may proceed to address those factors here. 

See, e.g., Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 712 

(3d Cir. 2004) (“Although a district court’s application of an 

incorrect legal standard ‘would normally result in a remand, 

we need not remand’ if application of the correct standard 

could support only one conclusion.” (quoting Duraco Prods., 

Inc. v. Joy Plastic Enters., Ltd., 40 F.3d 1431, 1451 (3d Cir. 

1994))). For the sake of efficiency, we will proceed with that 

analysis here. 

C. The Timeliness Factors

The District Court concluded that all three of the 

timeliness factors weigh against Toledo Mack and JJRS’s 

motions to intervene. Wallach, 125 F. Supp. 3d at 495-96. In 

light of the presumption of timeliness, which necessarily 

raises the bar for a motion to intervene to be deemed 

untimely, and our conclusion that two of the three timeliness 

factors point strongly in favor of granting the motions, we 

will reverse the District Court’s denial of those motions.

As a threshold matter, we agree with the District Court 

that the first timeliness factor—the stage of the litigation—

counsels in favor of denial. While this factor requires us to 

assess “what proceedings of substance on the merits have 

occurred,” rather than considering “[t]he mere passage of 

time,” Mountain Top Condo. Ass’n, 72 F.3d at 369, we are 

satisfied that the proceedings here were advanced. Unlike in 

Mountain Top Condominium Ass’n, where there had been “no 

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38

depositions taken, dispositive motions filed, or decrees 

entered during the four year period in question,” id. at 370, 

the litigants here had briefed (and resolved) a dispositive 

motion to dismiss, undertaken “extensive fact discovery,” 

briefed the motion to certify the class, and submitted expert 

reports and depositions before the motions to intervene were 

filed, see Wallach, 125 F. Supp. 3d at 495. While Appellants 

pose some arguments to the contrary,21 we agree with the 

District Court that, on balance, the extensive briefing and 

years-long discovery already completed by the time the 

motions to intervene were filed rendered the suit sufficiently 

advanced to weigh against granting said motions.

However, the other two timeliness factors—reason for 

delay and prejudice to the parties—point decisively in the 

opposite direction, leading to the inexorable conclusion that 

the totality of the circumstances supported granting the 

motions to intervene.22 In assessing whether there was a 

legitimate reason for the proposed intervenors’ purported 

 21 For example, Appellants point out that discovery 

was ongoing in some respects, summary judgment had not yet 

been briefed, the parties were a year away from trial, and that 

they would not request additional discovery; at most, they 

argue, “intervention would have required [Appellees] to 

produce documents and possibly sit for two depositions.” 

Appellants’ Br. 26-27. 

22 Although a different sequence than that we provided 

in In re Community Bank, 418 F.3d at 314, we opt here to 

address the reason for delay factor before the prejudice factor 

because our conclusions as to the former inform the latter.

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39

delay in filing their motions, we consider the extent of the 

delay and whether there was good reason for it.

Our standard to measure any purported delay is clear: 

“To the extent the length of time an applicant waits before 

applying for intervention is a factor in determining timeliness, 

it should be measured from the point at which the applicant 

knew, or should have known, of the risk to its rights.” United 

States v. Alcan Aluminum, Inc., 25 F.3d 1174, 1183 (3d Cir. 

1994); accord Benjamin, 701 F.3d at 950 (“The delay should 

be measured from the time the proposed intervenor knows or 

should have known of the alleged risks to his or her rights or 

the purported representative’s shortcomings.” (emphasis 

added)). Less clear, and the subject of vigorous dispute 

between the parties, is when this point occurred.

Appellees insist that Toledo Mack and JJRS knew or 

should have known Tauro’s direct purchaser standing was at 

risk as of the August 2014 interrogatories that inquired 

whether R&R’s assignment was supported by valid 

consideration or the November 2014 depositions related to 

such interrogatories. The District Court agreed, concluding 

that the August interrogatories and November depositions 

were the proper “yardstick” from which the assess timeliness 

because the “caliber of representation and the significant 

amount of discovery” meant that the proposed intervenors

“should have become aware of potential challenges to the 

standing of the named class representatives” at that time. 

Wallach, 125 F. Supp. 3d at 495-96. Appellees’ argument 

relies heavily on the fact that Toledo Mack and JJRS were 

represented by the same counsel as Tauro, implying that 

counsel’s knowledge of the interrogatories should be imputed 

to Toledo Mack and JJRS. Appellees further contend that 

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40

even if January 2015 is the proper benchmark, two months 

was an unreasonable delay.

Appellants, on the other hand, contend that the letter 

that Appellees submitted to the District Court in January 

2015, seeking leave to file a 12(b)(1) motion to dismiss for 

lack of standing, is the moment they were first made aware of 

the possibility that Tauro would be dropped from the suit, and 

they aver they were confident in the validity of the

assignment until that time. From that vantage point, they 

argue, the delay of two months until Toledo Mack’s March 6 

motion to intervene—filed on the same day Tauro itself filed 

its reply brief to Appellees’ standing challenge—and two-plus 

months for JJRS’s March 24 motion were not meaningful 

delays. 

We agree with Appellants that the interrogatories and 

depositions, directed as they were at Tauro, should not be 

viewed as having put Toledo Mack and JJRS—or the counsel 

they shared with Tauro—on notice of the need to intervene as 

class representatives, and thus August and November 2014

did not start the running of the hourglass. Moreover, even 

accepting Appellees’ theory of imputed knowledge, the 

interrogatories at issue were phrased in general terms, and 

only two of the twenty-nine questions posed to Appellants in 

August 2014 were related to the validity of R&R’s 

assignment; similarly, only a small fraction of the November 

depositions raised questions about whether consideration was 

exchanged. It cannot be said that general questions about the 

assignment should have triggered concerns about Tauro’s 

standing sufficient to induce counsel to find alternative 

plaintiffs, particularly where Appellees had not challenged 

the validity of the assignment over the course of the 

preceding five years, including in their 2010 motion to 

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dismiss the suit. Cf. Mountain Top Condo. Ass’n, 72 F.2d at 

370 (affirming grant of motion to intervene in part where 

plaintiffs alleged they had “reasonably concluded” their 

money was safe for a long time and took prompt action once 

they were informed otherwise, even though it was late in the 

grand scheme of the lawsuit (emphasis added)). At base, 

timeliness cannot hinge on requiring litigants and their 

attorneys to divine the intent behind each of their opponent’s 

questions in discovery and defensively file motions based on 

conceivable uses their answers might provide. 23 We 

 23 Appellants make two additional observations, upon 

which we need not rely. First, they urge that the 

interrogatories and depositions were not public documents, 

meaning Toledo Mack and JJRS had no way of being put on 

notice regarding their contents (and the concomitant risk to 

the class action) and further supporting a later date as the 

proper benchmark. While lack of access to these documents 

would be a legitimate additional reason to reject the 

interrogatories and depositions as the relevant moment in 

time, we need not and do not rely on this fact, which was not 

made plain in the record. Second, for the first time in their 

reply brief on appeal, Appellants assert that Toledo Mack and 

JJRS did not retain class counsel until after Appellees filed 

their response to Appellants’ motion for class certification in 

late January 2015 (which included Appellees’ challenge to 

Tauro’s standing), implying that the proposed intervenors 

were ignorant of any risk to the litigation until that time. 

Appellees retort that Toledo Mack and JJRS fail to explain 

whether they had previous contact with Tauro’s counsel 

before retaining him for the intervention motions that would 

have put them on notice of the risk to Tauro’s standing and 

that counsel’s knowledge of the potential risks to Tauro’s 

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conclude, therefore, that the earliest moment at which Toledo 

Mack and JJRS were on notice of the serious risk that the 

named representative might lack standing was the submission 

of Appellees’ January 2015 letter advising of their intent to 

challenge the validity of R&R’s assignment. 

Appellees rely on NAACP v. New York, 413 U.S. 345, 

366-67 (1973), to argue that the two months that elapsed 

between the January letter and Toledo Mack’s motion to 

intervene nonetheless amounted to an unreasonable delay. 

We disagree. While the Court there did affirm a denial of a 

motion to intervene filed three weeks after the intervenors 

claimed to have become aware of the issue in that case, its

rationale was tied more to the stage of the litigation factor, 

not the reason for delay factor. In addition, the NAACP in 

that case had strong reason to believe the case was going to 

imminently come to an end because the United States 

government—the opposing party—was expected to consent 

to entry of summary judgment. See id. Here, Toledo Mack 

and JJRS had no reason to suspect Tauro would capitulate to 

the challenge to its standing, and it was therefore reasonable 

for them to file their motions to intervene alongside Tauro’s 

reply.

Moreover, here, the District Court specifically directed

Appellees to brief their standing challenge in their response to 

Appellants’ motion for class certification, making it all the 

more reasonable for the proposed intervenors to seek to 

intervene in conjunction with Tauro’s reply. Given that 

Tauro, Toledo Mack, and JJRS were all represented by the 

 

standing should be imputed to Toledo Mack and JJRS in any 

event. We decline to consider these arguments, as they are 

not based on facts in the record.

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same counsel and that the District Court had expressed a clear 

preference for the issues to be consolidated, intervenors did 

not unduly delay in filing their motions in coordination with 

Tauro’s reply rather than filing them piecemeal.

The District Court’s erroneous assessment of the 

alleged delay in this case also infected its analysis of 

prejudice. District Courts are instructed to assess the 

prejudice that would befall either party that is “attributable to 

any time delay.” Mountain Top Condo. Ass’n, 72 F.3d at 

370. Having concluded there was no meaningful delay here, 

we are skeptical of the alleged prejudice to Appellees. The 

grounds identified by the District Court do not, in any event, 

withstand scrutiny. 

The District Court concluded that “allowing 

intervention at this stage in the litigation would require reopening discovery to explore the suitability of the intervening 

plaintiffs as a class representatives [sic] and re-briefing class 

certification issues specific to the intervening plaintiffs.” 

Wallach, 125 F. Supp. 3d at 496. But Appellants have not 

sought to re-open discovery or re-brief class certification, and 

additional discovery Appellees may require would be limited 

to Toledo Mack and JJRS’s standing, typicality, and 

adequacy as class representatives. The District Court further 

stated that Appellees “would additionally be required to 

respond to the proposed complaint. After five years of 

litigation, these additional hurdles will result in further delays 

as well as burdensome costs to the defendants.” Wallach, 125 

F. Supp. 3d at 496. But Appellees did not bring their 

challenge to Tauro’s standing until five years into the 

litigation, thereby bringing upon themselves any prejudice 

stemming from late-arising additional answers and discovery 

on Toledo Mack and JJRS’s adequacy to serve as class 

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44

representatives. On balance, then, because there was no 

significant delay from which prejudice could stem and 

because the nature of the burdens facing Appellees does not 

amount to significant prejudice, this factor, too, weighs in 

favor of granting the motions to intervene.

For these reasons, we conclude that the totality of the 

timeliness factors clearly weighs in favor of granting Toledo 

Mack and JJRS’s motions to intervene and cannot rebut the 

presumption of timeliness the District Court erroneously 

failed to afford to those motions. Because the District Court 

applied the wrong legal standard and misapplied the law to 

the facts, it abused its discretion in denying them. See In re 

GM Corp., 55 F.3d at 783.

V. Conclusion

For the foregoing reasons, we will reverse the District 

Court’s decisions to dismiss Tauro for lack of standing,

to deny Toledo Mack and JJRS’s motions to intervene as 

class representatives, and to—as a result—dismiss 

Appellants’ motion for class certification for lack of Article 

III standing. In light of these reversals, we will remand this 

case for proceedings consistent with this opinion.

Case: 15-3320 Document: 003112406895 Page: 44 Date Filed: 09/14/2016