Court Opinion

ID: 616857
Source: CourtListenerOpinion
Date Created: 2011-11-08 01:01:41+00
Date Added: 2024-06-11T17:50:38.756316
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              NOV 07 2011

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

STEPHEN STETSON, individual and all              No. 08-55818
others similarly situated; et al.,
                                                 D.C. No. 2:08-cv-00810-R-E
             Plaintiffs - Appellants,

  v.                                             MEMORANDUM *

WEST PUBLISHING CORPORATION, a
Minnesota Corporation doing business as
BAR/BRI; et al.,

             Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                     Manuel L. Real, District Judge, Presiding

                           Argued September 30, 2009
                           Submitted November 7, 2011
                              Pasadena, California

Before: PREGERSON, REINHARDT, and WARDLAW, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Stetson, et. al. (“the Stetson plaintiffs”) appeal the dismissal of their class

action complaint against West and Kaplan (collectively “Defendants”) for alleged

violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. We have

jurisdiction pursuant to 28 U.S.C. § 1291. We reverse.

      1. The district court erred in concluding that the Schall lawsuit precludes the

Stetson plaintiffs from filing a claim for damages and prospective relief against

Defendants. Schall was brought on behalf of two individual law students. The

Stetson plaintiffs were not a party to that action. Because their interests in a

monetary recovery and injunctive relief were not represented by the Schall

plaintiffs, they cannot be bound by the disposition of that case.

      2. The district court erred in concluding that the Rodriguez settlement

precludes the Stetson plaintiffs from bringing their claim. Rodriguez was brought

on behalf of an earlier class of purchasers. Because the Stetson plaintiffs’ interests

in a monetary recovery were not represented by the plaintiffs in Rodriguez, they

are not now barred from filing a claim for damages.1

      Nor are the Stetson plaintiffs precluded from seeking injunctive relief for

alleged conduct that took place before that settlement was entered. They were not

      1
         The only Stetson plaintiffs whose claims for damages may be precluded
are those who purchased bar review courses in July 2006, because they may have
been included in the Rodriguez settlement.

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virtually represented by the Rodriguez plaintiffs, and thus are entitled to their day

in court. Because they were not part of the Rodriguez class, the Stetson plaintiffs

could not have participated in or controlled that litigation. See Irwin v. Mascott,

370 F.3d 924, 929 (9th Cir. 2004) (discussing doctrinal requirements for a finding

of virtual representation). Although they shared a lawyer and some interests with

the Rodriguez class, the Rodriguez settlement did not necessarily address all their

potential interests, nor are those similarities sufficient for a finding of virtual

representation. Without greater privity, “the mere fact that a litigant in another

case represented ‘essentially identical’ interests to those of the plaintiff [cannot]

pose a bar to a separate plaintiff pursuing his own cause of action.” Green v. City

of Tucson, 255 F.3d 1086, 1101 (9th Cir. 2001) (en banc) (citing Richards v.

Jefferson County, 517 U.S. 793, 796 (1996)), overruled on other grounds by

Gilbertson v. Albright, 381 F.3d 965, 968–69 (9th Cir. 2004) (en banc).

       Although the Rodriguez settlement does not preclude the Stetson plaintiffs

from seeking prospective relief on the allegations contained in their complaint, the

Stetson plaintiffs must also satisfy the standing requirements of City of Los

Angeles v. Lyons, 461 U.S. 95, 101–02 (1983) (setting forth test for standing to

seek prospective relief). Plaintiffs’ claims that they will be injured by BAR/BRI’s

continuing monopolistic behavior have been adequately pled for standing

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purposes. We need not determine whether, as a result of the reforms in the

Rodriguez settlement, plaintiffs’ standing claim will ultimately fail on the merits.

      3. The district court also erred in concluding that the Stetson plaintiffs’

complaint failed to satisfy the pleading requirements articulated in Bell Atlantic

Corp. v. Twombly, 550 U.S. 544 (2007). The factual allegations contained in the

Stetson plaintiffs’ complaint nudge their claims across the line from conceivable to

plausible. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). The complaint in

Twombly contained allegations of parallel conduct that were accompanied by

nothing more than naked and conclusory assertions that an anti-competitive

agreement had been made. Twombly, 550 U.S. at 551–55. By contrast, the

complaint here sets forth detailed facts about the dealings between BAR/BRI and

Kaplan – including those that took place shortly after Kaplan demonstrated an

interest in entering the bar review market, which allegedly resulted in BAR/BRI

paying Kaplan large annual sums to refrain from doing so. These facts set forth a

claim that, if proven, would entitle plaintiffs’ to relief. See id. at 556; see also

Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).

      4. Because the parties have indicated their desire to resolve this matter

through settlement, we refer this appeal to the Ninth Circuit Mediation Office to

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explore a resolution through mediation. The mandate shall not issue until further

order of this Court.

      REVERSED and REMANDED; issuance of mandate STAYED.

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