(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Alison Frankel
March 6 (Reuters) - In the latest case to pose the
question of precisely how rigorous trial courts must be in
certifying gargantuan class actions, Apple ( AAPL ) consumers on Tuesday
told a federal appeals court that there's no need to
double-check the decision allowing tens of millions of iPhone
and iPad users to bring classwide antitrust claims.
Apple ( AAPL ) asked the 9th U.S. Circuit Court of Appeals
last month to grant rare mid-case, or interlocutory, review of
the Feb. 2 class certification ruling by U.S. District Judge
Yvonne Gonzalez Rogers of Oakland, California, in a long-running
case alleging that Apple ( AAPL ) monopolized the market for iPhone apps
by banning purchases outside its App Store.
As my Reuters colleague Jonathan Stempel reported, Rogers
had previously refused in 2022 to certify the class because of
concerns that plaintiffs' economic model swept in millions of
consumers - nearly 20% of the originally proposed class - who
did not actually overpay for apps. But the judge held in her
decision last month that plaintiffs' lawyers adequately
addressed the issue of uninjured class members by limiting the
class to account holders who spent at least $10 on apps or
in-app purchases.
Apple ( AAPL ) told the 9th Circuit in its Feb. 16 petition for
interlocutory review that even with the narrowed class
definition, plaintiffs' own expert found that the class would
still contain "at least 10 million uninjured Apple App Store
accounts."
The 9th Circuit, as you may recall, has refused to set a
specific limit on the number or percentage of uninjured class
members in a certified class. But when the en banc appeals court
considered that question a couple of years ago in antitrust
class actions against tuna fish suppliers, the 9th Circuit told
trial judges that before they certify a class, they must
carefully weigh whether individual questions about class
membership will predominate over classwide issues.
Apple ( AAPL ) contended that Rogers wasn't sufficiently rigorous.
Its specific criticisms - including skepticism about the "crude
and ineffective" $10 minimum for class membership - are
particular to this case, but Apple ( AAPL ) lawyers at Gibson, Dunn &
Crutcher told the 9th Circuit that the judge's ruling shows why
the appeals court needs to offer more guidance on class
certification standards.
"This court should make clear that certification cannot be
premised on a model that flouts real-world evidence and
foundational tenets of economics," Apple ( AAPL ) said, "particularly
where the model itself has not been proven capable of screening
out uninjured members."
In their new brief opposing Apple's ( AAPL ) petition, plaintiffs'
lawyers from Wolf Haldenstein Adler Freeman & Herz and Kellogg,
Hansen, Todd, Figel & Frederick argued that in evaluating their
class certification motion, Rogers did just what the 9th Circuit
demanded in the tuna decision, exhaustively analyzing Apple's ( AAPL )
criticism of their classwide damages model before determining
that the model could reliably show the impact of Apple's ( AAPL )
allegedly monopolistic conduct across the class.
The 9th Circuit only recently clarified the rules for class
certification in the tuna case, the Apple ( AAPL ) plaintiffs said.
Rogers "faithfully applied" those rules, they argued, so there's
no reason for the appeals court to take the extraordinary step
of delving into the specifics of Rogers' analysis.
Plaintiffs' lawyer Mark Rifkin of Wolf Haldenstein said in
an email that the opposition brief "clearly lays out why
[Apple's ( AAPL )] petition is without merit." Neither an Apple ( AAPL )
spokesperson nor Apple ( AAPL ) counsel Ted Boutrous of Gibson Dunn
responded to my query.
Apple ( AAPL ) seems to be hoping that the 9th Circuit is still
hankering to refine its class certification rules after losing a
chance to revisit them in an antitrust case accusing Alphabet
subsidiary Google of monopolizing the Android app
market via its Google Play Store. In February 2023, the appeals
court granted Google's petition to review a class certification
ruling by U.S. District Judge James Donato of San Francisco.
Google, like Apple ( AAPL ), argued that the trial judge failed to
grapple with both the problem of uninjured class members and
real-world data undercutting plaintiffs' economic models. After
the 9th Circuit agreed to hear Google's case, the appellate
docket was swamped with amicus briefs from business-friendly
groups, including the U.S. Chamber of Commerce and the Business
Roundtable, that viewed the appeal as an opportunity to tighten
class certification standards.
The Google plaintiffs, like the plaintiffs in the Apple ( AAPL )
case, insisted that the trial judge applied requisite rigor when
he evaluated their economic model and concluded that it was
adequate to establish classwide injury, regardless of whether
some class members suffered no actual harm.
The 9th Circuit was scheduled to hear oral arguments last
September but the appeal was withdrawn when Donato decided in
August to decertify the Google Play class.
Apple ( AAPL ) told the 9th Circuit in its Feb. 16 petition that its
case "presents the same important issues this court was poised
to address" in Google's appeal.
The Apple ( AAPL ) plaintiffs countered in their new opposition brief
that any perceived problems with class certification in the
Google case are irrelevant because their economic model relies
on different (and better) methodology.
Regardless of what happens at the 9th Circuit, there's a
chance that the U.S. Supreme Court will revisit class
certification requirements in an appeal brought by Visa
and Mastercard ( MA ). As I told you in January, the credit card
companies' have petitioned for Supreme Court review of decisions
certifying three classes to proceed with $9 billion in antitrust
claims over ATM fees.
Visa and Mastercard ( MA ), like Apple ( AAPL ) and Google, told the
justices that too many lower courts are not rigorously policing
classes to be sure that classwide issues predominate over
individual questions about class members' injuries (or lack
thereof). They're calling on the Supreme Court to clear up
"rampant confusion" on class certification standards.
Plaintiffs' lawyers in those cases told me that the credit
card defendants are really carping about the fact-specific
outcome, not the process that resulted in class certification.
Like the Apple ( AAPL ) and Google plaintiffs, they said there's no need
to tinker with class action precedent.
Their Supreme Court brief opposing review is due next week.
Read more:
Judge certifies Apple ( AAPL ) app store class action
Visa, Mastercard ( MA ) ask U.S. Supreme Court to fix 'rampant
confusion' on class certification
US judge set to decertify Google Play class action