Court Opinion

ID: 4180835
Source: CourtListenerOpinion
Date Created: 2017-06-26 20:04:06.696716+00
Date Added: 2024-06-11T14:38:58.986631
License: Public Domain

FILED
                                 NOT FOR PUBLICATION
                                                                           JUN 26 2017
                       UNITED STATES COURT OF APPEALS                   MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                                 FOR THE NINTH CIRCUIT

In re: TRANSPACIFIC PASSENGER                    No.   15-16280
AIR TRANSPORTATION ANTITRUST
LITIGATION,                                      D.C. Nos.    3:07-cv-05634-CRB
                                                              3:08-md-01913-CRB
------------------------------

 DONALD WORTMAN, individually and                MEMORANDUM*
on behalf of all others similarly situated,

               Plaintiff-Appellee,

 v.

AMY YANG,

               Objector-Appellant,

 v.

SOCIETE AIR FRANCE; MALAYSIAN
AIRLINE SYSTEM BERHAD;
SINGAPORE AIRLINES LIMITED;
VIETNAM AIRLINES COMPANY
LIMITED; JAPAN AIRLINES
COMPANY, LTD.,

               Defendants-Appellees.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                    Appeal from the United States District Court
                      for the Northern District of California
                    Charles R. Breyer, District Judge, Presiding

                       Argued and Submitted April 21, 2017
                            San Francisco, California

Before: SCHROEDER and RAWLINSON, Circuit Judges, and LOGAN,** District
Judge.

      Appellant Amy Yang (“Yang”) appeals the grant of Donald Wortman’s

motion for final approval of eight class action settlement agreements with

Defendants-Appellees. We review for abuse of discretion. In re Bluetooth

Headset Prods. Liab. Litig., 654 F.3d 935, 940 (9th Cir. 2011). We affirm.

      1. The district court properly certified the settlement class and was not

obligated to create subclasses for purchasers of U.S.-originating travel and direct

purchasers of airfare. Federal Rule of Civil Procedure 23(a) does not require a

district court to weigh the prospective value of each class member’s claims or

conduct a claim-by-claim review when certifying a settlement class. See Lane v.

Facebook, Inc., 696 F.3d 811, 823 (9th Cir. 2012) (reasoning that it would be

“onerous” and “impossible” to attribute a specific monetary value to each of the

class members’ asserted claims).

      **
              The Honorable Steven Paul Logan, United States District Judge for
the District of Arizona, sitting by designation.
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      Yang argues that purchasers of foreign-originating travel and indirect

purchasers of airfare should not be entitled to an equal pro rata share of the

settlement funds, in light of Illinois Brick and the Foreign Trade Antitrust

Improvements Act. See 15 U.S.C. § 6a (barring claims arising out of foreign

injury); Illinois Brick Co. v. Illinois, 431 U.S. 720, 728–29 (1977) (providing that

only customers who purchase directly from defendants may recover under federal

antitrust law). But, at the time of settlement, Defendants-Appellees had not raised

these affirmative defenses, and the district court had not ruled on them. Subclasses

may not be created “on the basis of speculative” conflicts of interests. In re Online

DVD-Rental Antitrust Litig., 779 F.3d 934, 942 (9th Cir. 2015) (internal citation

and quotation marks omitted); see also Sullivan v. DB Invs., Inc., 667 F.3d 273,

305 (3d Cir. 2011) (establishing that “a district court has limited authority to

examine the merits when conducting the [class] certification inquiry”).

      2. The settlements provided sufficient notice to class members under Rule

23. See Fed. R. Civ. P. 23(c)(2)(B), 23(e)(1), & 23(e)(5). Potential class members

were notified of the opportunity to opt out or object to the settlements no later than

thirty-five days before the fairness hearing. While the class membership period

has remained open for the duration of this appeal, “the class as a whole” was given

sufficient notice to “flush out whatever objections might reasonably be raised to

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the settlement[s].” Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir.

1993). Indeed, Defendants-Appellees implemented a comprehensive notice

program that has reached approximately eighty-percent of potential class members

in the United States, and at least seventy-percent in Japan.

      AFFIRMED.

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                                                                                FILED
Wortman v. Yang, Case No. 15-16280
                                                                                 JUN 26 2017
Rawlinson, Circuit Judge, dissenting:
                                                                           MOLLY C. DWYER, CLERK
                                                                               U.S. COURT OF APPEALS
      I respectfully dissent. In my view, the district court abused its discretion

when it certified a settlement class containing members with divergent interests.

      Rule 23 of the Federal Rules of Civil Procedure provides in pertinent part:

                    One or more members of a class may sue or be
             sued as representative parties on behalf of all members
             only if . . . the representative parties will fairly and
             adequately protect the interests of the class.

Fed. R. Civ. P. 23(a)(4) (emphasis added).

      The settlement class certified by the district court ignored the requirements

of Rule 23 by lumping together class members with fundamentally different

interests. The Japan Airlines Company, Ltd. (JAL) settlement lumps together

purchasers of domestic travel and purchasers of foreign travel for the same pro

rata distribution of settlement proceeds, despite the fact that the Foreign Trade

Antitrust Improvements Act (FTAIA) precludes federal courts from exercising

jurisdiction over claims of overcharges associated with foreign travel. See 15

U.S.C. 6a (providing that the prohibitions against monopolies and restraint of trade

do not apply to “trade or commerce . . . with foreign nations”). With such an

apparent conflict within the class, it is virtually impossible for the class

representatives to adequately represent a class that includes members who may be

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entitled to absolutely no recovery. See Amchem Prods., Inc. v. Windsor, 521 U.S.
591, 627 (1997) (“[T]he adversity among subgroups requires that the members of

each subgroup cannot be bound to a settlement except by consents given by those

who understand that their role is to represent solely the members of their respective

subgroups.”) (citation omitted) (emphasis added); see also Ortiz v. Fibreboard

Corp., 527 U.S. 815, 856 (1999) (“[I]t is obvious after Amchem that a [divided]

class requires . . . homogenous subclasses under Rule 23(c)(4)(B), with separate

representation to eliminate conflicting interests of counsel. See Amchem, 521 U.S.

at 627, 117 S. Ct. 2231 (class settlements must provide ‘structural assurance of fair

and adequate representation for the diverse groups and individuals affected. . . .’”)

(citations omitted).

      In a similar vein, the settlement agreement lumped together passengers who

purchased tickets directly from the airlines and passengers who purchased tickets

through an intermediary, such as a travel agent or ticket broker. We have explicitly

recognized that the “indirect purchaser rule” articulated by the United States

Supreme Court in Illinois Brick Co. v. Illinois, 431 U.S. 720, 746-47 (1977) “bars

suits for antitrust damages by customers who do not buy directly from a

defendant.” Somers v. Apple, Inc., 729 F.3d 953, 961 (9th Cir. 2013). And we

have defined “indirect purchasers of airline tickets” as individuals who “did not

                                           2
purchase tickets directly from [the airlines] but instead bought them from direct

purchasers such as travel agents and consolidators.” In re Korean Air Lines Co.,

Ltd. Antitrust Litig., 642 F.3d 685, 689 (9th Cir. 2011). Yet again, these disparate

claims prevent adequate representation of the class. See Amchem Prods., 521 U.S.

at 627; see also Hesse v. Sprint Corp., 598 F.3d 581, 589 (9th Cir. 2010)

(concluding that representation of class was inadequate and conflicting when “one

group within a larger class possesse[d] a claim that is neither typical of the rest of

the class nor shared by the class representative”) (citing Amchem, 521 U.S. at 625-

27).

       In sum, the district court abused its discretion by lumping together disparate

claimants, failing to comply with Rule 23 and our governing precedent. See

Zonowick v. Baxter Healthcare Corp., 850 F.3d 1090, 1093 (9th Cir. 2017) (noting

that the district court abuses its discretion when it commits an error of law).

Unfortunately, the district court took the easy way out rather than sorting through

the various claims and claimants. See Ortiz, 527 U.S. at 856 (requiring “division

into homogenous subclasses” when there are conflicting claims within the class).

       Rather than affirming, I would reverse and remand for the district court to

create the necessary subgroups to ensure adequate representation of all claimants.

See Amchem, 521 U.S. at 627.

                                           3
      Because I would reverse on the class certification issue, I would not address

the notice issue. However, as my colleagues in the majority have included that

issue in their discussion, I simply note that it is patently unreasonable to end the

notice period before all prospective class members are identified, thereby

completely depriving those class members of any notice. See Fed. R. Civ. P.

23(c)(2)(B), (e)(1) (requiring reasonable notice to prospective class members).

      I respectfully dissent.

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