Court Opinion

ID: 4455505
Source: CourtListenerOpinion
Date Created: 2019-11-13 21:00:27.230595+00
Date Added: 2024-06-11T14:26:52.616448
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       NOV 13 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

ZACK WARD; THOMAS BUCHAR, on                    No.    18-16016
behalf of themselves and all others similarly
situated,                                       D.C. No. 4:12-cv-05404-YGR

                Plaintiffs-Appellants,
                                                MEMORANDUM*
 v.

APPLE INC.,

                Defendant-Appellee.

                  Appeal from the United States District Court
                     for the Northern District of California
                Yvonne Gonzalez Rogers, District Judge, Presiding

                     Argued and Submitted October 16, 2019
                              Pasadena, California

Before: NGUYEN and MILLER, Circuit Judges, and VITALIANO,** District
Judge.

      Zack Ward and Thomas Buchar appeal the denial of class certification in

this action against Apple Inc. under Section 2 of the Sherman Act, 15 U.S.C. § 2.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Eric N. Vitaliano, United States District Judge for the
Eastern District of New York, sitting by designation.
They allege that Apple violated the antitrust laws by conspiring with AT&T

Mobility LLC to monopolize the aftermarket for iPhone wireless service through

certain undisclosed agreements, forcing iPhone purchasers to use AT&T even after

the expiration of their initial two-year service contracts. We have jurisdiction under

28 U.S.C. § 1292(e) and Federal Rule of Civil Procedure 23(f), and we review the

district court’s decision for abuse of discretion. Just Film, Inc. v. Buono, 847 F.3d
1108, 1115 (9th Cir. 2017). We affirm.

      When confronted with a motion for class certification, the district court

“must conduct a ‘rigorous analysis’” of whether the Rule 23 criteria are satisfied.

Comcast Corp. v. Behrend, 569 U.S. 27, 35 (2013) (quoting Wal-Mart Stores, Inc.

v. Dukes, 564 U.S. 338, 351 (2011)). That analysis requires looking beyond the

pleadings: “A party seeking class certification must affirmatively demonstrate his

compliance with the Rule—that is, he must be prepared to prove that there are in

fact sufficiently numerous parties, common questions of law or fact, etc.” Wal-

Mart, 564 U.S. at 350.

      In an effort to demonstrate that antitrust injury could be assessed on a

classwide basis, plaintiffs presented a declaration by an economist, Dr. Frederick

Warren-Boulton, who set out two different “but-for” worlds corresponding to two

different theories of the impact of Apple’s alleged anticompetitive conduct. Based

on his review of “techniques standard among economists,” as well as data analyzed

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by another expert in a separate litigation involving Apple, Dr. Warren-Boulton

stated that he did “not expect to encounter any insurmountable difficulty in

applying these techniques to form an estimate of the harm to consumers” in either

of the but-for worlds.

        The district court did not abuse its discretion in determining that plaintiffs’

submission was insufficient. Plaintiffs argue that the district court did not conduct

the requisite “rigorous analysis,” but as the district court recognized, the court was

“unable to fulfill its obligation” because plaintiffs gave the court little to analyze.

Plaintiffs’ expert did not provide a workable method for classwide determination

of the impact of the alleged antitrust violation. Instead, he merely asserted that he

would be able to develop a model at some point in the future.

        Comcast demonstrates why that is not enough. In that case, the Supreme

Court determined that certification was inappropriate because plaintiffs had offered

a model that “failed to measure damages resulting from the particular antitrust

injury on which [defendants’] liability in this action is premised.” 569 U.S. at 36.

The plaintiffs here have done even less than the Comcast plaintiffs: Instead of

providing an imperfect model, they have provided only a promise of a model to

come.

        This case has been going on for seven years, and it is an outgrowth of

litigation that began five years before that. Plaintiffs have had a long time to

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develop a workable method for classwide determination of antitrust injury. The

district court did not abuse its discretion in declining to certify a class based on

plaintiffs’ assurance that they would do so later.

      AFFIRMED.

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                                                                            FILED
Ward v. Apple Inc., 18-16016
                                                                                NOV 13 2019
NGUYEN, Circuit Judge, dissenting:                                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

       As the majority acknowledges, the district court failed to conduct the

required “rigorous analysis” of whether Rule 23 was satisfied. See Comcast Corp.

v. Behrend, 569 U.S. 27, 33–35 (2013) (quoting Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338, 351 (2011)). The district court stated that it was “unable to fulfill its

obligation” because “Dr. Warren-Boulton’s declaration [wa]s essentially lacking

any data-driven analysis” and plaintiffs did not provide “properly analyzed,

reliable evidence that a common method of proof exists to prove impact on a class-

wide basis.” (emphasis in original). Contrary to the district court’s conclusion,

plaintiffs presented evidence in support of their motion. The district court is free to

reject such evidence as wholly insufficient, but it is not free to ignore it.

      The district court should have considered whether plaintiffs’ evidence—

either in Dr. Warren-Boulton’s declaration or in Dr. Wilkie’s expert report from a

related case, which plaintiffs attached to their motion—was sufficient to show that

a common method of proof exists to prove classwide antitrust impact. In addition,

the district court summarized, but did not analyze, the but-for worlds posited by

Dr. Warren-Boulton. It should have considered, as required by Comcast, whether

the antitrust impact identified by the but-for worlds is consistent with plaintiffs’

aftermarket theory. Comcast, 569 U.S. at 35. Further, the district court should
have analyzed both the criticisms of Dr. Warren-Boulton’s declaration raised by

Apple’s expert—for example, that the benchmark approach is incorrect and

unreliable—and Dr. Warren-Boulton’s rebuttal.

       Plaintiffs ultimately may not have met their burden to satisfy Rule 23, but

the district court did not conduct the required “rigorous analysis” to find out. I

would therefore reverse and remand for the district court to conduct the required

analysis in the first instance.

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