Opinion ID: 789495
Heading Depth: 1
Heading Rank: 4

Heading: District Court's Ruling and Discussion

Text: 16 The record is extensive. The district court made a careful analysis of the evidence and came up with the following resolution rejecting the argument that all members of the class would be able to use the same evidence to prove that they sustained some damage from the alleged conspiracy: Rule 23(b)(3): Predominance 17 Plaintiffs must meet all requirements of Rule 23(a) and fall within one of the categories of Rule 23(b) to certify their antitrust claims as a class action. Amchem Products, Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). As stated above, plaintiffs seek to certify their antitrust classes under Rule 23(b)(3), the so-called common question or damages class action. To certify a class action under Rule 23(b)(3), the Court must find that: 1) common questions predominate over any questions affecting only individual members; and 2) class resolution is superior to other available methods for the fair and efficient adjudication of the controversy. Fed. R.Civ.P. 23(b)(3); Amchem, 521 U.S. at 615, 117 S.Ct. 2231. Because plaintiffs cannot meet the predominance requirement, I am not authorized to certify the proposed classes. 18 In seeking class certification, plaintiffs have the burden of demonstrating that, as required by Rule 23(b)(3), questions of law or fact common to the members of the class predominate over any questions affecting only individual members. This necessarily requires an examination of the underlying elements necessary to establish liability for plaintiffs' claims. See Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154,4, 172 (3d Cir.2001). A plaintiff seeking treble damages under of [sic] § 4 of the Clayton Act, 15 U.S.C. § 15, must establish an antitrust violation (here, the alleged conspiracy to fix prices) and the fact of damage or injury, i.e., impact. Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483, 1490 (8th Cir.1992); In re MSG, 205 F.R.D. at 232. Thus, to satisfy the predominance standard, plaintiffs must show that both conspiracy and impact can be proven on a systematic, class-wide basis. Plaintiffs cannot satisfy either of those prongs. 19 Plaintiffs have not Demonstrated that Antitrust Impact can be Measured on a Class-Wide Basis with Common Proof 20 To establish cognizable injury under Section 4 of the Clayton Act, plaintiffs must prove that the class members suffered injury to their business or property, i.e., impact, as a result of the violation. See State of Alabama v. Blue Bird Body Co., Inc., 573 F.2d 309, 317 (5th Cir.1978); Midwestern Machinery v. Northwest Airlines, Inc., 211 F.R.D. 562, 571 (D.Minn.2001). The importance of the impact requirement cannot be understated, as noted by the court in Blue Bird: 21 In making the determination as to predominance, of utmost importance is whether impact should be considered an issue common to the class and subject to generalized proof, or whether it is instead an issue unique to each class member, and thus the type of question [that] might defeat the predominance requirement of Rule 23(b)(3). 22 573 F.2d at 320. [P]roof of injury in a price-fixing case will generally consist of some showing by the plaintiff that, as a result of this conspiracy, he had to pay supracompetitive prices. . . . Id. at 327. To establish antitrust impact, an expert is required to construct a hypothetical market, a but-for market, free of the restraints and conduct alleged to be anticompetitive. Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1055 (8th Cir.2000) (internal quotation marks omitted). 23 To meet their burden of proof, plaintiffs offered up expert testimony from Dr. Leitzinger. Defendants have asked me to apply the test of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and to disregard his testimony. I will deny defendants' motion in limine as I believe it is appropriate for me to consider all evidence at this stage of the proceedings. I have considered all expert testimony offered by both sides in support of or in opposition to class certification and have afforded that testimony such weight as I deemed appropriate. However, Dr. Leitzinger's testimony does not show that impact can be demonstrated on a class-wide basis. 24 Simply put, plaintiffs presume class-wide impact without any consideration of whether the markets or the alleged conspiracy at issue here actually operated in such a manner so as to justify that presumption. Dr. Leitzinger assumes the answer to this critical issue and plaintiffs, in turn, have asked the Court to rely on this conclusion as support for class certification. I cannot presume or assume — much less conclude — class-wide impact here because the evidence submitted during the class certification hearing demonstrates that such a presumption would be improper. 25 First, the genetically modified seeds are not homogenous products. The market for seeds is highly individualized depending upon geographic location, growing conditions, consumer preference and other factors. 26 Second, plaintiffs allege that only the premium portion of the seed product is the result of the price-fixing scheme, but the germplasm component of the seed cannot be segregated from the rest of the seed. The evidence demonstrated that defendants and their distributors often lowered the overall price of certain seeds, or gave discounts or rebates to certain farmers to offset any alleged premium, and that some farmers in fact paid no premium. 27 Another reason that the actual prices paid by farmers cannot be determined with common proof is that the GM seeds were not offered for sale at a uniform price. Plaintiffs suggested that defendants' nationwide price lists could be used for this purpose, but the evidence offered during the certification hearing demonstrated that these lists did not reflect the actual price paid by farmers. Plaintiffs also suggested that this issue could be resolved through a claims procedure that would be implemented after the class certification process. This argument is meritless. The amount of premiums paid, if any, is relevant to a determination of impact, an essential element of a price-fixing claim, and is not merely an assessment of the amount of damages, which may be properly ascertained at a later time. It is clear that this determination cannot be made on a class-wide basis, but would involve a fact-intensive inquiry unique to each potential class member. 28 Dr. Leitzinger attempted to measure the premium by comparing the price of GM seeds to conventional seeds, but in many instances the GM seeds have no conventional counterpart. Therefore, it would be impossible to determine the amount of premium paid. In addition, Dr. Leitzinger conceded that even this calculation might not accurately affect the amount of the premium because insertion of the GM trait might affect other agronomic characteristics of the seed which might otherwise affect the price. 29 Plaintiffs cannot determine the but-for marketplace necessary to establish antitrust impact without a reliable methodology to determine the premiums paid by farmers. In fact, the evidence presented at the class certification hearing showed that supply-and-demand conditions for seed sales vary to such a great extent that the but-for prices could be determined only through individualized inquiries for each potential class member. These factors include growing seasons and conditions, regional varieties and farmer preferences. Common proof simply cannot be used to establish a but-for marketplace in this situation, particularly where the evidence showed that the actual prices paid by many farmers was well below Monsanto's technology fee. 30 Finally, I am not persuaded that the alleged conspiracy could even be proven with common evidence. The dynamics of this localized industry make it highly unlikely that the existence and workings of the alleged conspiracy could be shown through common proof. 31 In sum, after carefully considering all the evidence submitted during the class certification hearing, I am convinced that the impact of defendants' alleged antitrust violations cannot be shown on a class-wide basis with common proof. Instead, it is a highly individualized, factintensive inquiry that necessarily requires consideration of factors unique to each potential class member. The variety of GM seeds purchased, geographic location, growing conditions and the terms of purchase are all relevant to a determination of impact and cannot be shown with common proof on a class-wide basis. Plaintiffs did not meet their burden of establishing the necessary elements of Rule 23(b)(3) through the testimony of Dr. Leitzinger, whose assumptions, presumptions and conclusions fall far short of actually establishing antitrust impact on a class-wide basis through common proof. 32 J.A. at 70-76 (emphasis in original) (footnote omitted).