Funeral Consumers Alliance, Inc. v. Service Corp. International , 695 F.3d 330 ( 2012 )

Case: 10-20719 Document: 00511985977 Page: 1 Date Filed: 09/13/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 13, 2012
No. 10-20719 Lyle W. Cayce
Clerk
FUNERAL CONSUMERS ALLIANCE INC; GLORIA JACCARINO
BENDER; ANTHONY J. JACCARINO; JOHN CLARK; MARIA MAGSARILI;
TONY MAGSARILI; FRANCES H. ROCHA; MARSHA BERGER; SANDRA
GONZALEZ; DEBORAH WINCH; ANNA KAIN; GAY HOLTZ
Plaintiffs-Appellants
v.
SERVICE CORPORATION INTERNATIONAL; ALDERWOODS GROUP
INC.; HILLENBRAND INDUSTRIES INC.; BATESVILLE CASKET CO.
Defendants-Appellees
Appeal from the United States District Court
for the Southern District of Texas
Before DENNIS, CLEMENT, and HIGGINSON, Circuit Judges.
STEPHEN HIGGINSON, Circuit Judge:
Plaintiffs-Appellants, the Funeral Consumers Alliance, Inc. (“FCA”) and
eleven consumers (“Consumer Appellants”), brought a class action suit under §
4 of the Clayton Act, 15 U.S.C. § 15, against the largest United States casket
manufacturer, Batesville Casket Company, and its owner Hillenbrand
Industries, Inc. (collectively, “Batesville”); and against the three largest United
States funeral home chains and distributors of Batesville caskets, Service
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Corporation International (“SCI”), Alderwoods Group, Inc. (“Alderwoods”),1 and
Stewart Enterprises, Inc (“Stewart”). Plaintiff-Appellants alleged that
Defendant-Appellees conspired to foreclose competition from independent casket
discounters (“ICDs”) who sold caskets directly to consumers at discounted prices
and maintained artificially high consumer casket prices in violation of §§ 1 and
2 of the Sherman Act, 15 U.S.C. §§ 1, 2, by engaging in a group boycott to
prevent ICDs from selling Batesville caskets and dissuading consumers from
purchasing caskets from ICDs. Plaintiff-Appellants also alleged that Defendant-
Appellees used concerted efforts to restrict casket price competition, including
coordinating prices, limiting the advertisement of pricing, and engaging in sham
discounting. Plaintiff-Appellants sought damages to remedy the overpayment
for Batesville caskets and sought to enjoin Defendants’ allegedly anti-
competitive conduct. The district court denied class certification and later, after
Plaintiff-Appellants settled their claims with Stewart, dismissed Plaintiff-
Appellants’ action against the non-settling remaining Defendant-Appellees for
lack of subject matter jurisdiction.
For the following reasons, we reverse and remand the dismissal of
Plaintiff-Appellants’ § 4 claims for lack of subject matter jurisdiction, affirm the
dismissal of Consumer Appellants’ and FCA’s action for injunctive relief for lack
of subject matter jurisdiction, and affirm the denial of class certification.
FACTS AND PROCEEDING
FCA is a non-profit consumer rights organization devoted to advocating
consumers’ right to choose a meaningful, dignified, and affordable funeral that
claims 400,000 individuals as members of its national organization or its local
1
Service Corporation International and Alderwoods Group, Inc. merged several years after
the lawsuit was filed but before the present appeal.
2
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affiliates. Consumer Appellants are eleven individuals who each purchased a
Batesville casket from SCI, Alderwoods, or Stewart. No ICD is a party to this
matter.
On November 24, 2008, Magistrate Judge Calvin Botley recommended
that the Plaintiffs’ Motion for Class Certification be denied in a 30-page
Memorandum and Recommendation (“M&R”). On December 29, 2008, Plaintiffs
filed objections to the M&R, attaching two additional expert reports from Dr.
Gregory Vistnes.
On March 26, 2009, United States District Judge Kenneth Hoyt adopted
the M&R denying class certification.
Following the denial of class certification, Plaintiffs settled their claims
against Stewart on June 15, 2010 (the “Stewart settlement”). In response,
Defendants filed an expedited motion to strike Plaintiffs’ jury demand, which
was denied by Judge Hoyt on July 13, 2010. Two days later, Plaintiffs filed an
expedited motion to dismiss for lack of subject matter jurisdiction. After briefing
and oral argument on August 2, 2010, the district court granted Plaintiffs’
motion on September 27, 2010. The district court determined that because of the
settlement with Stewart, Plaintiffs had lost standing to continue to sue the
remaining Defendants.
DISCUSSION
A. Subject Matter Jurisdiction
When reviewing a dismissal for lack of subject matter jurisdiction, we
review factual findings for clear error and legal conclusions de novo. Krim v.
pcOrder.com, Inc., 402 F.3d 489, 494 (5th Cir. 2005).
Article III standing requires: (1) that Appellants have suffered an injury-
in-fact; (2) a causal connection between the injury-in-fact and Appellees’ conduct;
and (3) that it is likely, not merely speculative, that a favorable decision will
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redress the injury-in-fact. James v. City of Dallas, 254 F.3d 551, 563 (5th Cir.
2001) (internal citations omitted).
1. Damages claims
The record is clear that Appellants are not seeking compensatory damages
beyond those agreed to in the Stewart settlement. Appellants argue,
nonetheless, that the Stewart settlement did not cover the attorneys’ fees and
costs available to them under § 4 of the Clayton Act in this ongoing suit against
multiple Defendants other than Stewart. Appellants seek to proceed with this
cause of action to prove that the remaining Defendants, Appellees herein,
violated federal antitrust laws triggering Appellants’ statutory right to
attorneys’ fees and costs whether or not the Consumer Appellants seek further
compensatory damages. The district court held that Appellants did not have
standing to recover such attorneys’ fees and costs because:
Here, the consumer plaintiffs alleged overcharges by the defendants
in an amount less than $22,000 each. They settled their suit for an
amount far greater than each could recover were the case
successfully tried to conclusion. Hence, there are no damages that
the consumer plaintiffs could recover against the remaining
defendant [sic]. And, because the consumer plaintiffs’ damages are
quantifiable, as evidenced by their settlement, no irreparable injury
is articulated even if a Clayton Act violation occurred. . . . The result
is that the consumer plaintiffs’ claim for actual injury under the
Clayton Act is rendered moot by their settlement . . . .
Under our precedent, however, Consumer Appellants have standing to resolve
§ 4 antitrust claims to decide entitlement to attorneys’ fees and costs even if a
settlement with one defendant means that no additional compensatory damages
will be assessed.
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The Clayton Act provides any successful plaintiff a mandatory award of
costs and attorneys’ fees. 15 U.S.C. § 15(a). Section 4 of the Clayton Act states
that, “any person who shall be injured in his business or property by reason of
anything forbidden in the antitrust laws may sue therefor . . . and shall recover
threefold the damages by him sustained, and the cost of suit, including a
reasonable attorney’s fee.” Id.
The plaintiffs have a right under § 4 to sue for the statutorily mandated
costs and reasonable attorneys’ fees even if a settlement with one defendant
means that no additional compensatory damages actually will be recovered. The
plaintiffs’ right to recover attorneys’ fees from the defendants depends on
whether the plaintiffs can succeed in “demonstrating that the defendant[s]
violated the antitrust laws and can establish the fact of damage.” Sciambra v.
Graham News (Sciambra II), 892 F.2d 411, 415 (5th Cir. 1990). The plaintiffs’
settlement with one defendant does not prevent them from recovering costs and
attorneys’ fees to which they may be entitled from the remaining defendants
because, by entering into a settlement agreement, “a party releases only those
other parties whom he intends to release.” Zenith Radio Corp., 395 U.S. at
130–31; see also Sciambra v. Graham News (Sciambra I), 841 F.2d 651, 656 (5th
Cir. 1988). This court has held that plaintiffs have standing under analogous
circumstances, “recogniz[ing] that . . . the actual recovery of compensatory
damages [is] irrelevant to the recoverability of attorneys’ fees,” Sciambra II, 892
F.2d at 413–17, and this court and other courts have recognized that a plaintiff’s
right to attorneys’ fees under the Clayton Act “is accorded to the injured party,
not his counsel.” Carpa, Inc. v. Ward Foods, Inc., 536 F.2d 39, 52 (5th Cir. 1976);
accord First Iowa Hydro Elec. Coop. v. Iowa-Illinois Gas & Elec. Co., 245 F.2d
630, 632 (8th Cir. 1957); Farmington Dowel Prods. Co. v. Forster Mfg. Co., 421
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F.2d 61, 88 (1st Cir. 1970). Thus, the plaintiffs have standing to seek costs and
reasonable attorneys’ fees from the remaining defendants.
We addressed whether actual recovery of compensatory damages is
required for a plaintiff to recover attorneys’ fees and costs in Sciambra II, 892
F.2d at 413–14.2 As in the present case, the issue before us in Sciambra II was
whether an antitrust plaintiff was no longer entitled to attorneys’ fees and costs
after one defendant settled with the plaintiff for an amount greater than the
maximum amount of compensatory damages being sought. Id. Sciambra
brought an antitrust action against Graham News (“Graham”) and A.R.A.
Services, Inc. (“ARA”). Id. at 413. Sciambra settled his claims against Graham
but continued his suit against ARA. Id. Before trial, the district court held that
ARA had abused the discovery process, entered a default judgment against ARA,
ordered ARA to pay Sciambra’s attorneys’ fees and costs, and awarded damages.
Id. This court rejected the district court’s method of calculating damages and
remanded on the issue of damages. Sciambra I, 841 F.2d at 657–58. On remand,
Sciambra conceded that his trebled lost profits were less than the Graham
settlement. Sciambra II, 892 F.2d at 413. The district court awarded no
damages, affirmed its prior award of attorneys’ fees and costs from the default
2
Although Sciambra II dominated the parties’ discussion of this issue in briefing and during
the district court’s hearing, the district court did not mention Sciambra II in its decision.
Instead, the district court relied upon the general proposition stated by the Seventh Circuit
in Ortiz v. John O. Butler Co., 94 F.3d 1121 (7th Cir. 1996), that, “where a plaintiff has
received all of the requested relief to which she is legally entitled, there is no longer the
requisite case or controversy, and the court is without jurisdiction.” 94 F.3d at 1125 (emphasis
added). However, Appellants did not receive all of the relief they requested in this case;
consistent with the Clayton Act, they requested further monetary relief in the form of
mandatory attorneys’ fees and costs, if an antitrust action against any Defendant is
“sustained.” Additionally, Ortiz did not involve attorneys’ fees or the Clayton Act. The
Seventh Circuit determined that Ortiz was not “entitled to compensatory damages over and
above the lost wages and benefits that were offset by the NLRB settlement” because she
waived her arguments by failing to raise them before the district court. Id. at 1126.
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judgment, and awarded new attorneys’ fees and costs for the appeal and the
hearing on remand under § 4 of the Clayton Act. Id.
ARA claimed that Sciambra could not be awarded attorneys’ fees and costs
when an earlier settlement offset all compensatory damages. Id. at 413–14. We
rejected that argument, writing that, “if a plaintiff can prove an antitrust
violation and the fact of damage, the plaintiff is entitled to recover attorneys’
fees pursuant to section 4.” Id. at 415. “Our holding merely recognizes that the
structure of section 4 and the fact of damage analysis make the actual recovery
of compensatory damages irrelevant to the recoverability of attorneys’ fees.” Id.
at 415–16. We reiterated that the effect of a settlement on the plaintiff’s
recovery of compensatory damages has no effect on a plaintiff’s right to recover
attorneys’ fees. Id. at 416. This analysis remains persuasive, is consistent with
Congress’s statutory decision enacting the Clayton Act, and governs our case
above all when a settlement, however generous and comprehensive, is with one
but not all defendants.
Appellees argue that our holding in Sciambra II does not apply to the
present case because it is factually distinguishable. The default judgment
against Graham News established the existence of an antitrust violation and the
fact of damage before the district court determined that the Graham settlement
precluded a compensatory damage award. Id. Appellees point to a sentence of
ours in Sciambra II to support their contention that this factual discrepancy
distinguishes Sciambra II from the present case:
[i]n a case such as this where, as the previous panel noted, the
amount of potential damages was unclear when suit was instituted,
. . . an antitrust defendant that causes injury should not be spared
liability for attorneys’ fees simply because a previous settlement
turns out in retrospect to preclude a compensatory damage award.
Id. at 416–17. To be sure, unlike Sciambra II, antitrust liability has never been
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ascertained in this case. The Stewart settlement explicitly stated that no
liability was being admitted by Stewart, and no liability determination was
made by the district court. The settlement and subsequent stipulated dismissal
of plaintiffs’ claims against Stewart with prejudice precludes a liability finding,
and hence, any further recovery from Stewart. However, as to the remaining
Defendants, Appellees herein, Sciambra II’s logic applies for the narrow, but
decisive, reason that no clear amount or allocation of attorneys’ fees and costs
was assessed.3 Hence, these Defendants should not be spared liability for such
fees if the antitrust charges against them are sustained. The total amount
potentially due to the Consumer Appellants remains unclear because the record
contains disputed issues of fact as to the amount of attorneys’ fees and costs
associated with this litigation. Monetary damages under § 4 of the Clayton Act
include compensatory damages, attorneys’ fees, and costs, not, as Appellees
claim, merely compensatory damages.
Again, our reasoning in Sciambra II validated Congress’s imperative in §
4 for mandatory attorneys’ fees and costs. These attorneys’ fees and costs are
mandatory, Congress decided, in order to encourage individuals to bring suits
to enforce the antitrust laws and to discourage potential defendants from
violating antitrust laws. Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 129
& n.6 (1986) (citing Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100,
130–31 (1969)); Pfizer, Inc. v. Gov’t of India, 434 U.S. 308, 314 (1978); see also
3
Indeed, because there has been no determination of liability with respect to the alleged
antitrust violation on the part of any Appellees, a decision to the contrary would result in a
windfall not negotiated for by any party. Appellees would benefit from a settlement that they
had no role in and avoid any determination that they violated antitrust law even though the
Stewart settlement explicitly disclaimed resolution for or against antitrust liability even as
to Stewart. Further, new consumers with unsettled compensatory damages claims could begin
this case anew to determine liability.
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Sciambra II, 892 F.2d at 416. We explained in Sciambra II that, “[b]ecause of
the importance of the policy of encouraging private parties to bring antitrust
actions, recovery of their reasonable attorney’s fees must be sustained regardless
of the amount of damages awarded.” Id. at 417 (quoting U.S. Football League v.
Nat’l Football League, 887 F.2d 408, 412 (2d Cir. 1989)). This right to the
mandatory attorneys’ fees, when applicable, belongs to the plaintiff, and not the
plaintiff’s attorney. See, e.g., Carpa, Inc., 536 F.2d at 52 (explaining that a
successful plaintiff in a civil antitrust action has the right to a reasonable
attorneys’ fee that “is accorded to the injured party, not his counsel” and that
“the fee recovery [is] plaintiffs’ personal right” (citing First Iowa, 245 F.2d at
632); Farmington Dowel Prods. Co., 421 F.2d at 88 (“It seems clear to us that .
. . the court’s award [of attorneys’ fees] goes first to the plaintiff as part of his
recovery in accordance with the language of section 4. If he chooses to pass that
money on to his attorneys, that is his business.” (emphasis added)); First Iowa,
245 F.2d at 632 (“The provisions of the Clayton Act (15 U.S.C.A. § 15) provide[]
for recovery of an attorney fee in addition to treble damages but the right
accrues to the party injured and not to his attorney.” (citations omitted)); see also
IIA Phillip E. Areeda et al., Antitrust Law ¶ 330e, at 46–47 (3d ed. 2007)
(explaining that the Clayton Act “makes clear that the plaintiff, not the attorney,
is entitled to recover the attorneys’ fees and costs”). Additionally, a ruling to the
contrary would discourage plaintiffs from making early settlements with some
but not all defendants because a settlement could later operate to preclude full
recovery of fees and costs pursuant to the Clayton Act. Gulfstream III Associates
v. Gulfstream Aerospace (Gulfstream I), 995 F.2d 414, 419 (3d Cir. 1993)
(applying Sciambra II). This court and other courts have recognized that
another of “the purposes of section 4’s attorneys’ fees awards” is to “encourage[]
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private prosecution of antitrust violations by insulating plaintiffs’ treble damage
recoveries from the expense of legal fees.” Sciambra II, 892 F.2d at 416 (quoting
Home Placement Serv. v. Providence Journal Co., 819 F.2d 1199, 1210 (1st Cir.
1987) (internal quotation marks omitted) (citing U.S. Football League, 887 F.2d
at 412; Twin City Sportservice, Inc. v. Charles O. Finley & Co., 676 F.2d 1291,
1312 (9th Cir. 1982)). Appellants made it clear that they would not have settled
with Stewart if they had known there was a possibility that the settlement
would “have forfeited their right to seek mandatory costs and fees.”
The Third Circuit, in addition to highlighting the statutory priority of
encouraging private parties to settle, pointed out that, “[a]lthough in almost all
cases an award of compensatory damages will accompany an award of Section
4 attorneys’ fees, the latter is not dependent upon the former. . . . Any other
holding would not only deter the private prosecution of antitrust violations,
which is a critical element in the antitrust enforcement scheme and the primary
reason attorneys’ fees are mandatory under the statute, but could also deter
plaintiffs from early settlements with some defendants.” Gulfstream I, 995 F.2d
at 419; see also id. (“hold[ing] that the district court did not err in awarding
[plaintiffs] attorneys’ fees even though the trebled verdict was entirely offset by
the prior settlements”).4
Notably, on remand, Appellants’ claims may fail, in which case attorneys’
4
Indeed, even the concurrence observed that if one accepts that “Sciambra [was] rightly
decided, then it is clear that an antitrust plaintiff can proceed to trial for a determination of
liability and a potential fee award, even where prior settlements already have clearly negated
any actual receipt of further damages.” Gulfstream III Associates v. Gulfstream Aerospace
(Gulfstream II), 995 F.2d 425, 443 (3d Cir. 1993) (Greenberg, J., concurring). Judge Greenberg
cited several arguments to support his view, including that: (1) attorneys’ fees and costs are
mandatory under the Clayton Act; (2) the magnitude of attorneys’ fees and costs indicate they
are a “crucial component of a plaintiff’s recovery” that may exceed the compensatory damages
sought; and (3) a trial merely to determine whether to award attorneys’ fees and costs will be
extremely rare. Id. at 442–44.
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fees and costs would not be awarded at all.
Appellees cite Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998),
Lewis v. Cont’l Bank Corp., 494 U.S. 472 (1990), and Vermont Agency of Natural
Res. v. United States, 529 U.S. 765 (2000). The Supreme Court, in that line of
cases, however, clarified the well-settled proposition that plaintiffs cannot sue
merely for the “byproducts” of litigation, but neither the Supreme Court, nor
courts applying that case law, have extended “byproducts” reasoning to include,
indeed preclude, Congressionally mandatory attorneys’ fees and costs.
In Steel Co., Citizens for a Better Environment sued Steel Company under
the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA)
for failure to file reports as required under EPCRA. 523 U.S. at 86–88. Under
the EPCRA, any damages from an EPCRA violation are awarded to the United
States Treasury, not the party bringing suit. Id. at 106–07. The statute made
it permissible, but not mandatory, for the district court to award “the prevailing
or substantially prevailing party” the costs of litigation in a final order. Id. at
107 n.8. The Supreme Court determined that the plaintiff did not have standing
because the plaintiff was not seeking any relief that would remedy the injury it
suffered. Id. at 107–10. The Court explained that since Citizens for a Better
Environment was not eligible for any relief under the EPCRA, they could not
bring a suit merely to obtain discretionary attorneys’ fees and costs. In contrast,
Appellants are eligible for mandatory fees and costs under the Clayton Act if
their antitrust claims are proven valid. Again, under § 4 of the Clayton Act,
attorneys’ fees and costs are not left to the discretion of the judge. They are part
of a tripartite award Congress has mandated for plaintiffs to encourage private
enforcement of antitrust actions. Attorneys’ fees and costs are awarded even if
an otherwise successful plaintiff is awarded no compensatory damages by the
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jury. Ducote Jax Holdings LLC v. Bradley, 335 F. App’x 392, 402 (5th Cir. 2009)
(unpublished) (citing Sciambra II, 892 F.2d at 414–16). The award is mandatory
and not limited to merely litigation costs.
In Lewis, the plaintiff secured an injunction and declaration that a Florida
banking law violated the Commerce Clause and then brought a separate
statutory claim for attorneys’ fees under 42 U.S.C. § 1988, contending that it had
prevailed on its 42 U.S.C. § 1983 claim because the state’s prior enforcement of
the law deprived the plaintiff of its constitutional rights. 494 U.S. at 474–76.
Section 1988 allows courts, again, in their discretion, to grant parties who
prevail on certain federal claims to obtain attorneys’ fees as part of their costs.
The Supreme Court held that the plaintiff was no longer a “prevailing party”
and, thus, no longer entitled to attorneys’ fees because the underlying § 1983
claim became moot on appeal.5 Id. at 476, 483. Here, the Stewart settlement
5
The Appellees mistakenly rely upon the following language in Lewis: “[t]his interest in
attorney’s fees is, of course, insufficient to create an Article III case or controversy where none
exists on the merits of the underlying claim.” Id. at 480 (citing Diamond v. Charles, 476 U.S.
54, 70–71 (1986)). Both Lewis and Diamond are distinguishable from our case. Diamond
sought to defend the constitutionality of part of an Illinois abortion law based on his personal
objection to abortions and his status as a pediatrician and as a parent of an unemancipated
minor daughter. 476 U.S. at 56–58. He appealed the Seventh Circuit’s grant of a permanent
injunction after the State of Illinois chose not to appeal. Id. at 61. Because Diamond had no
judicially cognizable interest in the statute’s defense, the Supreme Court dismissed for want
of jurisdiction. Id. at 56. The Court held that Diamond did not have standing to appeal simply
because the district court had assessed the plaintiffs attorneys’ fees against him under § 1988
and he would have to pay those fees unless the State’s regulations were reinstated on appeal.
Id. at 69–70. It was not the case that Diamond “‘personally has suffered some actual or
threatened injury as a result of the putatively illegal conduct of the defendant,’ and that the
injury ‘fairly can be traced to the challenged action’ and ‘is likely to be redressed by a favorable
decision,’” as required by Article III. Id. at 70 (internal citations omitted). The Court
determined that:
[a]ny liability for fees is, of course, a consequence of Diamond’s decision to
intervene, but it cannot fairly be traced to the Illinois Abortion Law. The fee
award is wholly unrelated to the subject matter of the litigation, and bears no
relation to the statute whose constitutionality is at issue here.
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only resulted in the dismissal with prejudice of Appellants’ antitrust claims
against Stewart, not as against Appellees. Second, the Appellants’ entitlement
to attorneys’ fees is not discretionary if they prevail; it is a statutory mandate.
And third, unlike the plaintiff in Lewis, Appellants in this case have not yet had
assessed and received the full amount that could be due to them under § 4 of the
Clayton Act. See also Church of Scientology of Cal. v. United States, 506 U.S. 9,
12–13 (1992) (“[A] court does have power to effectuate a partial remedy . . . . The
availability of this possible remedy is sufficient to prevent this case from being
moot.”).
Finally, in Vermont Agency, the defendant challenged the standing of a qui
tam relator to bring suit. 529 U.S. at 771–72. The Supreme Court held that,
“[a]n interest unrelated to injury in fact is insufficient to give a plaintiff
standing. The interest must consist of obtaining compensation for, or
preventing, the violation of a legally protected right.” Id. at 772–73 (internal
citations omitted). The qui tam relator had not suffered an invasion of any
right; he was suing on behalf of the United States for a violation of one of its
rights. Id. at 773. As a result, he was suing for a mere “byproduct” of the suit
that would not materialize until the relator prevailed at the end of litigation. Id.
In the present case, Appellants have alleged that they directly have suffered an
invasion of their right to be free from violations of federal antitrust laws. The
interest at issue (mandatory attorneys’ fees and costs) is related to this injury-in-
fact because the plain language and undisputed purpose of the mandatory
Id. By contrast, Appellants in the instant case allege that they were injured by the “putatively
illegal conduct of the defendant.” Attorneys’ fees and costs are part of the compensation
mandated in § 4 as a result of a defendant’s provable violation of federal antitrust laws. Thus,
the mandatory fee award is a part of the subject matter of the litigation and must be awarded
to every successful plaintiff.
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attorneys’ fees and costs provision (to discourage potential defendants from
violating antitrust laws) helps prevent the violation of the legally protected right
(the violation of federal antitrust laws). Sciambra II, 892 F.2d at 416. Therefore,
adhering to the law of this circuit and the Clayton Act, and in the absence of any
prior attorneys’ fees and costs assessment, Consumer Appellants have standing
to proceed to trial against the non-settling Defendants to attempt to prove an
antitrust violation. If Consumer Appellants prove a statutory violation, then the
trier of fact will determine what attorneys’ fees, costs, and any exact
compensatory damages amount would be awarded.
2. Injunctive relief
To have standing to sue for injunctive relief, a party must: (1) have
suffered an injury-in-fact; (2) establish a causal connection between the injury-
in-fact and a complained-against defendant’s conduct; (3) show that it is likely,
not merely speculative, that a favorable decision will redress the injury-in-fact;
and (4) “demonstrate either continuing harm or a real and immediate threat of
repeated injury in the future.” James, 254 F.3d at 563 (internal citations
omitted); Soc’y of Separationists, Inc. v. Herman, 959 F.2d 1283, 1285 (5th Cir.
1992); see also City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983). The threat
of injury must be “concrete and particularized; the threat must be actual and
imminent, not conjectural or hypothetical . . . .” Summers v. Earth Island Inst.,
555 U.S. 488, 493 (2009) (internal citations omitted).6
6
Appellants argue the “capable of repetition, yet evading review” doctrine should apply to
allow for Article III standing. However, even in the mootness context, “the
capable-of-repetition doctrine applies only in exceptional situations, and generally only where
the named plaintiff can make a reasonable showing that he will again be subjected to the
alleged illegality.” City of Los Angeles v. Lyons, 461 U.S. 95, 108 (1983) (citing DeFunis v.
Odegaard, 416 U.S. 312, 319 (1974)). Here, as explained below, none of the eleven individual
consumer appellants has made this demonstration.
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The district court determined Consumer Appellants did not have standing
to sue for injunctive relief because they could not “establish an irreparable injury
or a future threat.” Specifically, the district court concluded that (1) any harm
would be reparable by a monetary award, like the Stewart settlement, and (2)
based on the particular allegations here, the chance of one of the Consumer
Appellants purchasing another Batesville casket or his or her family purchasing
a Batesville casket upon the Consumer Appellant’s death did not create a “‘real’
immediate” or potential future injury.
Consumer Appellants did not establish that there was a real and
immediate threat that any of the eleven remaining Consumer Appellants will
purchase an allegedly overpriced Batesville casket from a SCI or Alderwoods
funeral home.7 In order for the remaining Consumer Appellants to have a future
injury, they would have to (1) purchase a Batesville casket that was overpriced
and (2) that purchase would have to be from a SCI or Alderwoods funeral home.
Batesville makes less than half of the caskets sold in the United States, and SCI
and Alderwoods together own and operate less than 10% of funeral homes in the
United States. The Consumer Appellants could purchase a non-Batesville
casket or purchase a casket from an ICD or from a funeral home not owned by
Consumer Appellees when, if ever, they might need to purchase a casket in the
7
Appellants refer to Credit Bureau Reports, Inc. v. Retail Credit Co., 476 F.2d 989 (5th Cir.
1973), and Supreme Beef Processors, Inc. v. U.S. Dep’t of Agric., 275 F.3d 432 (5th Cir. 2001),
for the proposition that possible or potential harm is sufficient to establish injunctive standing.
Credit Bureau Reports did not discuss whether a past harm is sufficiently likely to occur in the
future to warrant an injunction but instead discussed whether the plaintiff was close enough
to entering a market to argue the defendant’s monopolization kept the plaintiff from entering.
476 F.2d at 993. In Supreme Beef Processors, we decided that the plaintiff could still seek an
injunction because it was possible that the defendant would not be forced to close its business
after bankruptcy proceedings; if this was not possible, an injunction would have been
unnecessary. 275 F.3d at 436–37. The case was mooted during proceedings; standing was not
lacking from the outset. Id. at 436–38.
15
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future. Appellants admit that ICDs sell “similar or superior” caskets at lower
prices. Appellants cite no evidence that they specifically sought out a Batesville
casket or confined their casket purchase to a SCI or Alderwoods funeral home
in the past.
The fact that death is inevitable is not sufficient to establish a real and
immediate threat of future harm.8 Appellants did not cite any evidence that any
of the eleven named individuals are even charged with the task of purchasing
a casket for a friend or relative upon his or her passing. “Such ‘some day’
intentions—without any description of concrete plans, or indeed any
specification of when the some day will be—do not support a finding of the
‘actual or imminent’ injury that our cases require.” Summers, 555 U.S. at 496
(quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 564 (1992)); see also In re
N.J. Title Ins. Litig., 683 F.3d 451, 461 (3d Cir. 2012) (holding that consumer
plaintiffs failed to establish standing for antitrust injunction claim alleging anti-
competitive conduct in the setting of title insurance rates where, inter alia, they
did not allege any “plans to buy title insurance in the future, thus failing to raise
their claims above the speculative level”); McCray v. Fid. Nat’l Title Ins. Co., 682
F.3d 229, 243–44 (3d Cir. 2012) (reaching the same conclusion where, inter alia,
plaintiffs in a similar action likewise had not alleged that they had “‘actual or
imminent’ plans to purchase title insurance”); In re New Motor Vehicles
Canadian Exp. Antitrust Litig., 522 F.3d 6, 14–15 (1st Cir. 2008) (holding that
consumer plaintiffs lacked standing to pursue antitrust injunction action
alleging anti-competitive action by automobile company defendants where “the
8
Although Appellants contend that one of the Consumer Appellants purchased another casket
from SCI after the suit was filed, as the district court held, it is not clear that she purchased
a Batesville casket. Further, this contention was stated by Plaintiff-Appellants’ counsel in oral
argument for the motion to dismiss, and no substantiating evidence was presented in the
record.
16
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complaint [did not] make any allegation regarding a named plaintiff’s intention
to buy or lease another new vehicle within such a time frame as could be deemed
imminent”).
3. FCA’s associational standing to pursue injunctive relief
It is well-established law that an association has Article III standing to
bring a suit on behalf of its members when “(a) its members would otherwise
have standing to sue in their own right; (b) the interests it seeks to protect are
germane to the organization’s purpose; and (c) neither the claim asserted nor the
relief requested requires the participation of individual members in the lawsuit.”
Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977). The
Supreme Court has held that in order to satisfy the first prong of the Hunt test,
“an organization suing as representative [must] include at least one member
with standing to present, in his or her own right, the claim (or the type of claim)
pleaded by the association.” United Food and Commercial Workers Union Local
751 v. Brown Group, Inc., 517 U.S. 544, 555 (1996) (citing Simon v. E. Ky.
Welfare Rights Org., 426 U.S. 26, 40 (1976) (An “association ‘can establish
standing only as representatives of those of their members who have been
injured in fact, and thus could have brought suit in their own right.’”)). An
organization lacks standing if it fails to adequately “allege[] that there is a
threat of [] injury to any individual member of the association” and thus “fail[s]
to identify even one individual” member with standing. Nat’l Treasury
Employees Union v. U.S. Dep’t of Treasury, 25 F.3d 237, 242 (5th Cir. 1994).
“Past exposure to illegal conduct does not in itself show a present case or
controversy regarding injunctive relief . . . if unaccompanied by any continuing,
present adverse effects.” Lujan, 504 U.S. at 564 (quoting Lyons, 461 U.S. at 102)
(internal quotation marks omitted). To make this showing when seeking an
17
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injunction, the organization “must show [an individual who] has sustained or is
immediately in danger of sustaining some direct injury as the result of the
challenged official conduct, and the injury or threat of injury must be both real
and immediate, not conjectural or hypothetical.” Nat’l Treasury Employees
Union, 25 F.3d at 242 (quoting Lyons, 461 U.S. at 101–02) (internal quotation
marks omitted). The Supreme Court has rejected the contention that standing
can be established by “accepting the organization’s self-description of the
activities of its members” and determining that “there is a statistical probability
that some of those members are threatened with concrete injury.” Summers, 555
U.S. at 497.
Appellants alleged in their first amended consolidated class action
complaint only that, “FCA’s members include consumers that have purchased,
or in the future will likely purchase, caskets from funeral homes owned and
operated by Stewart, Alderwoods, and SCI.” Because Appellants do not allege
that there was a real and immediate threat that any of FCA’s members will
purchase an allegedly overpriced Batesville casket from a SCI or Alderwoods
funeral home, FCA lacks injunctive standing on behalf of its members.9
9
If the association seeking standing does not have traditional members, as here, the
association establishes its standing by proving that it has “indicia of membership”: its
members elect leadership, serve as the organization’s leadership, and finance the
organization’s activities, including the case’s litigation costs. Hunt, 432 U.S. at 344–45. The
organization must represent the individuals it claims as members and provide “the means by
which [those individuals] express their collective views and protect their collective interests.”
Id. at 345. Appellees argue that FCA does not have standing to pursue injunctive relief
because FCA does not have any members. We do not determine whether FCA has members
as defined by Hunt because even assuming the FCA has members, the FCA has not, on the
record before us, met the first prong of the Hunt test. Compare id. at 344–45, with Friends of
the Earth, Inc. v. Chevron Chem. Co., 129 F.3d 826 (5th Cir. 1997), and Assoc. for Retarded
Citizens of Dallas v. Dallas Cnty. Mental Health & Mental Retardation Ctr. Bd. of Trustees,
19 F.3d 241 (5th Cir. 1994).
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B. Class Certification Denial10
We review a denial of class certification for abuse of discretion and legal
questions implicated by that decision are reviewed de novo. Alaska Elec. Pension
Fund v. Flowserve Corp., 572 F.3d 221, 227 (5th Cir. 2009) (per curiam); Vizena
v. Union Pac. R.R. Co., 360 F.3d 496, 502 (5th Cir. 2004). “‘The district court
maintains great discretion in certifying and managing an action.’” Vizena, 360
F.3d at 502 (quoting Berger v. Compaq Computer Corp., 257 F.3d 475, 478 (5th
Cir. 2001)).
The requirements for certifying a class action are set forth in Fed. R. Civ.
P. 23. “To obtain class certification, parties must satisfy Rule 23(a)’s four
threshold requirements, as well as the requirements of Rule 23(b)(1), (2), or (3).”
Maldonado v. Ochsner Clinic Foun., 493 F.3d 521, 523 (5th Cir. 2007).11
Appellants contest the district court’s findings that they failed to meet
10
Because the district court erred in dismissing Appellants’ claims for lack of subject matter
jurisdiction, it is undisputed that we have jurisdiction to review the district court’s denial of
class certification.
11
Fed. R. Civ. P. 23(a) states:
(a) Prerequisites. One or more members of a class may sue or be sued as
representative parties on behalf of all members only if: (1) the class is so
numerous that joinder of all members is impracticable; (2) there are questions
of law or fact common to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses of the class; and (4)
the representative parties will fairly and adequately protect the interests of the
class.
Fed. R. Civ. P. 23(b)(3) states class certification is allowed only if:
(3) the court finds that the questions of law or fact common to class members
predominate over any questions affecting only individual members, and that a
class action is superior to other available methods for fairly and efficiently
adjudicating the controversy. The matters pertinent to these findings include:
(A) the class members’ interests in individually controlling the prosecution or
defense of separate actions; (B) the extent and nature of any litigation
concerning the controversy already begun by or against class members; (C) the
desirability or undesirability of concentrating the litigation of the claims in the
particular forum; and (D) the likely difficulties in managing a class action.
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Rule 23(a)(3)’s typicality threshold requirement and Rule 23(b)(3)’s
predominance and superiority requirements.12 Because we find that the district
court did not err in holding that Appellants failed to meet Rule 23(b)(3)
predominance and superiority requirements, we do not reach Appellants’ Rule
23(a)(3) typicality challenge.
1. Scope of Rule 23 analysis
To determine whether class certification is appropriate, courts “must
conduct intense factual investigation.” Robinson v. Texas Auto. Dealers Ass’n,
387 F.3d 416, 420 (5th Cir. 2004). Notably, “there are no hard and fast rules .
. . regarding the suitability of a particular type of antitrust case for class action
treatment.” Id. at 420–21 (quoting Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294,
301 (5th Cir. 2003)). Rather, “[t]he unique facts of each case will generally be
the determining factor governing certification.” Id. “The party seeking class
certification bears the burden of demonstrating that the requirements of rule 23
have been met.” O’Sullivan v. Countrywide Home Loans, Inc., 319 F.3d 732,
737–38 (5th Cir. 2003) (citing Allison v. Citgo Petroleum Corp., 151 F.3d 402, 408
(5th Cir. 1998)).
“A district court must rigorously analyze Rule 23’s prerequisites before
certifying a class.” Spence v. Glock, Ges.m.b.H., 227 F.3d 308, 310 (5th Cir. 2000)
(internal citation omitted). This requires an understanding of “the relevant
claims, defenses, facts, and substantive law presented in the case.” Allison, 151
F.3d at 419 (citing Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir. 1996)).
Appellants contend the district court’s Rule 23 analysis inappropriately
12
Appellants do not contest the district court’s denial of Rule 23(b)(2) injunctive class
certification in their briefing, so we will not address that issue. See Cinel v. Connick, 15 F.3d
1338, 1345 (5th Cir. 1994) (“An appellant abandons all issues not raised and argued in its
initial brief on appeal.”).
20
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assessed likelihood of success on the merits. We find, however, that the district
court’s merits inquiries were appropriate for Rule 23 analysis.
“[C]lass determination generally involves considerations that are
enmeshed in the factual and legal issues comprising the plaintiff’s cause of
action.” General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 160 (1982)
(internal quotation marks and citations omitted); Oscar Privacy Equity Invs. v.
Allegiance Telecom, Inc., 487 F.3d 261, 268 (5th Cir. 2007), abrogated on other
grounds by Erica P. John Fund, Inc. v. Halliburton Co.(Halliburton), 131 S. Ct.
2179 (2011) (holding that a district court “must give full and independent weight
to each Rule 23 requirement, regardless of whether that requirement overlaps
with the merits.”). Ultimately, the court must consider “how a trial on the
merits would be conducted if a class were certified.” Bell Atl., 339 F.3d at 302
(internal citations omitted). When there are disputed facts relevant to Rule 23
requirements, overlap with the merits “should not be talismanically invoked to
artificially limit a trial court’s examination of the factors necessary to a reasoned
determination of whether a plaintiff has met her burden of establishing each of
the Rule 23 class action requirements.” Castano, 84 F.3d at 744 n.17 (quoting
Love v. Turlington, 733 F.2d 1562, 1564 (11th Cir. 1984)).
Appellants contend that the Supreme Court’s June 6, 2011 decision in
Halliburton, 131 S. Ct. 2179, precludes district courts from rendering merits-
based conclusions at the class stage. We disagree. In Halliburton, the Supreme
Court does not state that merits inquiries or conclusions cannot occur, or must
be ignored, in the fact-intensive Rule 23 analysis. Instead, the Supreme Court’s
holding was specific to the securities fraud context in Halliburton. 131 S. Ct. at
2183 (holding that we erred by requiring securities fraud plaintiffs to prove loss
21
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causation in order to obtain class certification).13 This distinction, in fact, was
expressly stated when the Supreme Court later observed in Wal-Mart Stores,
Inc. v. Dukes that rigorous Rule 23 analysis frequently will “entail some overlap
with the merits of the plaintiff’s underlying claim.” 131 S. Ct. 2541, 2551–52
(2011) (holding that where proof of commonality necessarily overlapped with the
merits contention that defendant had engaged in a pattern or practice of
discrimination, inquiry into that merits contention was appropriate for Rule 23
analysis). The Supreme Court in Wal-Mart noted that in Halliburton, plaintiffs
were required to prove a merits issue (efficient market) at class certification, “an
issue they will surely have to prove again at trial in order to make out their case
on the merits.” Wal-Mart, 131 S. Ct. at 2552 n.6.
At the same time that Appellants argue that the district court’s Rule 23
analysis too rigorously assessed merits issues, they separately contend that the
district court’s Rule 23 analysis was not rigorous enough and flawed because the
district court allegedly ignored the market definition, conspiracy, and class-wide
injury opinions of their liability and damages expert, Dr. Vistnes, and failed to
review the evidence and issues de novo. To support this contention, Appellants
point to “the perfunctory, two-paragraph order adopting” the M&R. Appellants
contend that because the district court’s order denying class certification does
not list evidence reviewed by the district court, this evidence was not reviewed.
We disagree.
First, Dr. Vistnes’ reports were included as Exhibits 1 and 2 to Plaintiffs’
13
The Court explained that it had “never mentioned loss causation as a precondition for
invoking Basic’s rebuttable presumption of reliance,” known as the “fraud-on-the-market”
theory and that, therefore, securities fraud plaintiffs seeking class certification are only
required to prove common questions of law or fact relating to the characteristics of an alleged
misrepresentation, not common reliance by all class members on that misrepresentation.
Halliburton, 131 S. Ct. at 2185–86.
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Objections to Judge Botley’s Memorandum and Recommendation Denying Class
Certification and were filed on December 29, 2008, after the magistrate judge’s
M&R was filed on November 24, 2008, but well before the district court’s March
26, 2009 Order Denying Class Certification. The district court’s Order Denying
Class Certification states, “[t]he Court has reviewed the plaintiff’s objections .
. . .” The district court had almost three months to do so, and we find no reason
to assume this review did not include the exhibits containing Dr. Vistnes’ reports
that were filed with Plaintiffs’ objections.
Second, on close analysis, Appellants’ speculation that Dr. Vistnes’
opinions were “ignored” is not supported. A review of the portions of Dr. Vistnes’
December 29, 2008 reports cited by Appellants in their briefs and in their
objections to the M&R reveals that cited portions of the reports contain little new
quantitative analysis and restate facts already covered by Appellants and their
expert, Mr. Romaine.14 Also, the M&R, adopted in full by the district court,
refers to portions of Dr. Vistnes’ reply report that were reviewed by Magistrate
Judge Botley before he issued the M&R, undercutting Appellants’ complaint that
their expert, Dr. Vistnes, did not have a chance to be heard.
Third, Appellants’ contention that the district court erred by not reviewing
the evidence and issues de novo is unsupported. It is only required that, “‘[a]
judge of the court shall make a de novo determination of those portions of the
[magistrate’s] report or specified proposed findings or recommendations to which
objection is made.’” Hernandez v. Estelle, 711 F.2d 619, 620 (5th Cir. 1983)
14
It is also worth noting that the evidence that Appellants refer to most in their substantive
arguments concerning class certification (presumably that which they believe to be most
probative) is the Consumer Plaintiffs’ Class Certification Post-Hearing Brief, including a table
summarizing expert testimony, not the Dr. Vistnes’ reports they contend were ignored by the
district court.
23
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(quoting 28 U.S.C. § 636(b)(1)).15 Here, the language of the district court’s order
denying class certification mirrors the statute: “The Court has reviewed the
plaintiffs’ objections, the defendants’ response to the plaintiffs’ objections, as well
as made a de novo review of the Memorandum and Recommendation and
specified findings or recommendations to which objection is made and has
otherwise reviewed the Memorandum for plain error.”
2. Rule 23(b)(3) predominance and superiority requirement analysis
Rule 23(b)(3) requires a party seeking class certification to “demonstrate
‘both (1) that questions common to the class members predominate over
questions affecting only individual members, and (2) that class resolution is
superior to alternative methods for adjudication of the controversy.’” Steering
Comm. v. Exxon Mobil Corp., 461 F.3d 598, 600 (5th Cir. 2006) (quoting Bell Atl.,
339 F.3d at 301). “[T]he predominance and superiority requirements are ‘far
more demanding’” than Rule 23(a)(2)’s commonality requirement. Robinson, 387
F.3d at 421 (quoting O’Sullivan, 319 F.3d at 738). The predominance inquiry
requires courts “to consider ‘how a trial on the merits would be conducted if a
class were certified.’” Bell Atl., 339 F.3d at 302 (internal citations omitted).
“Considering whether ‘questions of law or fact common to class members
predominate’ begins, of course, with the elements of the underlying cause of
action.” Halliburton, 131 S. Ct. at 2184.
In the 30-page M&R adopted by the district court, the magistrate judge
correctly began the predominance and superiority analysis by laying out the
15
Appellants’ reliance on our decision in Hernandez to contend that the district court must
have reviewed all the evidence in the case is misplaced. Hernandez involved an order from the
district court adopting a magistrate judge’s M&R that was issued before transcripts of the
parts of the class certification hearing that were objected to were available for the district
court’s review. 711 F.2d at 620. Here, Appellants made no argument that relevant portions
of evidence or the record were unavailable to Judge Hoyt at the time he issued his order.
24
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elements of Appellants’ claims and what must be shown to prove antitrust
liability in a class action context. The magistrate judge continued his Rule
23(b)(3) analysis by finding that Appellants failed to present class-wide proof of
the various elements of their private antitrust claims. Ultimately, the
magistrate judge concluded that individualized issues affecting each of the
roughly one million purported class members nationwide would predominate
over common ones, given the lack of a national market or a nationwide
conspiracy.
Appellants contend that they should not have been required to prove
national market or nationwide conspiracy at the class certification stage because
these are not required elements of their antitrust claims. Recovery under § 4 of
the Clayton Act, however, requires proof of antitrust impact, which in turn
requires proof of the relevant market. Ala. v. Blue Bird Body Co., Inc., 573 F.2d
309, 328 (5th Cir. 1978) (“we do not understand how the plaintiffs can make this
proof [of anti-trust impact] without examining the relevant school bus market
where each individual plaintiff is located”); see Heerwagen v. Clear Channel
Comms., 435 F.3d 219, 229 (2d Cir. 2006) (holding that “a plaintiff claiming
monopolization is obligated to establish the relevant market because the power
to control prices or exclude competition only makes sense with reference to a
particular market”); Republic Tobacco Co. v. N. Atl. Trading Co., Inc., 381 F.3d
717, 737 (7th Cir. 2004) (holding that “[e]conomic analysis [in anti-trust context]
is virtually meaningless if it is entirely unmoored from at least a rough
definition of a product and geographic market”). Because Appellants brought
this case as a nationwide class action, the recovery they seek under § 4 of the
Clayton Act requires that they show the relevant geographic market is national
(i.e., that it corresponds with the geographic scope of the proposed class). See
Heerwagen, 435 F.3d at 229, 235 (affirming denial of certification of national
25
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antitrust plaintiff class in part because relevant markets were local and
therefore proof specific to individual class members in different geographic
markets would predominate). Defining the relevant market is also an element
of Appellants’ § 1 Sherman Act claim. Wampler v. Sw. Bell Tel. Co., 597 F.3d
741, 744 (5th Cir. 2010). Finally, Appellants’ nationwide conspiracy claim must
be proven with common, class-wide evidence for the Rule 23(b)(3) predominance
requirement to be satisfied. Blue Bird, 573 F.2d at 321 (reversing the district
court’s grant of class certification because the court was “presently unable to
agree” with the district court’s conclusion that “proof of national conspiracy is a
question common to the class”).
The factual determinations pertaining to national market and national
conspiracy, detailed in the extensive M&R, were necessary for the district court
to decide whether to certify a class for Appellants’ antitrust claims. The M&R
analysis applied our well-settled approach set forth in Blue Bird, where the
district court’s certification of a national class was in fact reversed because
“neither the products involved nor the purchasers appear to be standardized.”
573 F.2d at 322. In Blue Bird, while recognizing that antitrust price-fixing cases
are particularly suitable for class action treatment, we determined that plaintiffs
failed to prove that common issues of law or fact predominated over individual
issues because the proposed national class included different sizes of buyers
operating under different conditions in various regions throughout the United
States and the products involved, school bus bodies, were marketed under
different arrangements at different times. Id. at 321–23.
Following our analysis in Blue Bird, the M&R here noted that caskets may
be sold separately or as part of a bundled package; buyers may purchase caskets
either on a “pre-need” basis (before death) or “at-need” basis; consumer casket
preferences vary by region, religion, ethnicity, age, and community tradition;
26
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prices vary significantly across geographic markets and even within the same
funeral home chain; and caskets are generally sold and marketed locally.
Specifically, Appellees’ expert, Dr. Sibley, testified “that most consumers shop
for caskets locally; ICDs rarely shipped their products out of state; ICDs
generally sold and advertised locally; and ICDs did not consider internet prices
in setting their own prices.” The M&R also noted the differences in marketing
arrangements between funeral home defendants (“FHDs”), observing that some
FHDs offer package discounts for caskets and funeral services but other do not,
that not all locations require the purchase of a casket, and that the package
discounts vary among locations. Appellants attempt to distinguish the instant
case from Blue Bird by contending that we denied class certification in Blue Bird
because the Blue Bird plaintiffs planned “to proceed state by state and prove by
varying evidence fifty different price-fixing conspiracies.” Here, however, the
magistrate judge found Appellants’ evidence to be similarly localized, stating
that “[p]laintiffs fail to explain how statements made by one association in one
area of the country equates to a nationwide conspiracy.”
Appellants also rely on United States v. Grinnell Corp., 384 U.S. 563
(1996), to show that “the Supreme Court flatly rejected the argument . . . that
localized sales activity defeated [the] key features of national markets.” This
reliance, however, is misplaced. In Grinnell, the Supreme Court affirmed a
finding of national market where a company that supplies fire and burglar alarm
services had national operations, a national schedule of prices, rates and terms,
national contracts, and national agreements with competitors, even though the
company could sell its product only to local customers. 384 U.S. at 575–76. In
contrast, here the evidence shows that (1) the prices FHDs charged were not
national and instead varied considerably by funeral home; (2) each of the FHDs
and independent funeral homes have different contracts with Batesville and
27
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with consumers; and (3) that marketing strategies vary greatly among FHDs.
See Heerwagen, 435 F.3d at 230 (distinguishing Grinnell by noting that there
was no evidence that Heerwagen defendants sold products pursuant to national
contracts or marketed products on a national basis). Furthermore, Grinnell is
distinguishable from the instant case because the Grinnell defendants had near-
complete (87%) control of the industry. 384 U.S. at 571. Here, FHDs own less
than 10% of funeral homes in the United States and Batesville sells only 45% of
caskets in the United States. This court has repeatedly followed the Blue Bird
analysis employed by the magistrate judge in the M&R adopted by the district
court. See Robinson, 387 F.3d at 419, 422 (reversing a district court’s
certification of a plaintiff class consisting of millions of consumers who had
purchased automobiles in Texas and been charged a Vehicle Inventory Tax); Bell
Atl., 339 F.3d at 296, 302–03 (affirming the denial of certification of two plaintiff
classes allegedly injured by defendants’ refusal to permit passage of caller ID
data across its long-distance telephone network).
Appellants contend separately that the district court “ignored” the
evidence of national market and nationwide conspiracy presented by their
expert.16 As endorsed by the district court, the magistrate judge here found,
“[Appellees’ expert’s] opinions to be well-reasoned and supported by concise
reliable testimony as to why the correct geographic market is localized and not
16
Similarly, Appellants assert that the district court erroneously rejected and failed adequately
to discuss their expert’s proffered common methodology for calculating class members’
damages. Appellants do not dispute that a court must find a common methodology for
computing class-wide damages in order to certify a class. Bell Atl., 339 F.3d at 304; Blue Bird,
573 F.2d at 317; Piggly Wiggly, 100 F. App’x at 297 (“The necessity of calculating damages on
an individual basis, by itself, can be grounds for not certifying a class.”). However, a district
court is not obligated to discuss or accept Appellants’ expert’s proffered common damages
formula. See Piggly Wiggly, 100 F. App’x at 299 (affirming a denial of class certification despite
the plaintiffs’ complaints that the district court failed even to discuss their expert’s view that
class members’ damages could be calculated in a straightforward manner).
28
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nationwide as well as why each claim is not susceptible to class-wide proof.
[Appellees’ expert] supported his testimony with references to analytical data
and other specialized work which he has performed as an economist.” (Notably,
the testimony of Appellees’ expert, Dr. Sibley, at the class certification hearing
was extensive, covering over 150 pages of the certification hearing transcript.)
In contrast, the magistrate judge found “[Appellants’ expert’s] opinions [were]
based on speculation and guesswork, causing his testimony to be unreliable.”
The magistrate judge explained that this is why he gave “less weight to
[Appellants’ expert’s] opinions.” Most tellingly, the M&R is explicit that
Appellants’ expert testimony and documentary support were thoroughly
considered yet were found to contain “mischaracterizations,” “overstatements,”
as well as “references to surveys created by third-parties with no connection to
the Funeral Home Defendants.” Regardless, a district court does “not abuse its
discretion in failing to give the expert’s view more discussion or credence.” Piggly
Wiggly Clarksville, Inc. v. Interstate Brands Corp., 100 F. App’x 296, 299 (5th
Cir. 2004) (unpublished).
In sum, the district court is given great discretion in certifying a class, and
the district court’s adoption of the M&R in this case does not amount to an abuse
of that discretion.
CONCLUSION
We REVERSE and REMAND the district court’s dismissal for lack of
subject matter jurisdiction of the claim for attorneys’ fees and costs, AFFIRM the
district court’s dismissal of Consumer Appellants’ and FCA’s injunctive relief
claims for lack of subject matter jurisdiction, and AFFIRM the district court’s
denial of class certification.
29
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EDITH BROWN CLEMENT, Circuit Judge, concurring in part and dissenting
in part.
Although I agree with the majority holding affirming the district court’s
denial of class certification, I do not agree we have jurisdiction to reach that
issue. Because the plaintiffs have received all they are entitled to, this case is
moot with respect to plaintiffs’ claims for statutory attorneys’ fees. As the
majority correctly observes, the plaintiffs also lack standing to pursue injunctive
relief. Consequently, I respectfully DISSENT from Section A1 and Section B and
CONCUR in Sections A2 and A3.
STANDARD OF REVIEW
Defendants successfully moved to dismiss in the district court due to a lack
of subject-matter jurisdiction. We review the factual findings of the trial court
for clear error and the legal conclusions de novo. MDPhysicians & Assocs. v.
State Bd. of Ins., 957 F.2d 178, 181 (5th Cir. 1992). Plaintiffs are “required to
prove the existence of subject-matter jurisdiction by a preponderance of the
evidence.” Middle S. Energy, Inc. v. City of New Orleans, 800 F.2d 488, 490 (5th
Cir. 1986).
DISCUSSION
The facts and procedural history are unique and complex. Plaintiffs
concede that they are no longer seeking damages but are instead seeking only
statutory attorneys’ fees. At this point in the litigation, three things are
abundantly clear. First, the named plaintiffs have received well over their
claimed treble damages through the Stewart Settlement. Second, the only thing
that can be gained in continuing this litigation is attorneys’ fees and costs, which
plaintiffs’ attorneys admit will not go to the plaintiffs themselves. And third, any
trial to award attorneys’ fees and costs would only exponentially increase the
attorneys’ fees in question—with no more awarded to the plaintiffs.
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Standing is a constitutional requirement under Article III. See Fla.
Contractors v. Jacksonville, 508 U.S. 656, 663 (1993). “Mootness is the doctrine
of standing in a time frame. The requisite personal interest that must exist at
the commencement of the litigation (standing) must continue throughout its
existence (mootness).” United States Parole Comm’n v. Geraghty, 445 U.S. 388,
397 (1980). In other words, a party must have standing at all points in the
litigation to continue to litigate the case, or else it becomes moot. To have Article
III standing a plaintiff must show an “injury in fact” and “must have a personal
stake in the outcome.” Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)
(internal quotation marks omitted). To avoid mootness, the plaintiffs’ personal
stake must continue throughout the litigation. Envtl. Conservation Org. v. City
of Dallas, 529 F.3d 519, 524-25 (5th Cir. 2008).
Here, plaintiffs cannot demonstrate any personal stake in the continuance
of the litigation following the Stewart Settlement because they have none. Their
claimed damages have been met multiple times over by the Stewart Settlement.
The case, as it relates to the plaintiffs, is moot because their injury has been
remedied.
The Supreme Court has previously stated that “a plaintiff cannot achieve
standing to litigate a substantive issue by bringing suit for the cost of bringing
suit.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 107-08 (1998). The
plaintiffs’ attorneys’ argument for continuing this case for fees is nearly identical
to that which was rejected in Steel Co., where the Court ruled that attempting
to recoup statutory costs was not enough to confer standing. In that case, the
money recovered would have gone to the United States Treasury, whereas here,
any further money recovered would go to the attorneys. That distinction is of
little merit because the Court has already stated that an “interest in attorney’s
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fees is . . . insufficient to create an Article III case or controversy where none
exists on the merits of the underlying claim.” Lewis v. Cont’l Bank Corp., 494
U.S. 472, 480 (1990) (citing Diamond v. Charles, 476 U.S. 54, 70-71 (1986)). To
have a case or controversy, “[t]he litigation must give the plaintiff some other
benefit besides reimbursement of costs that are a byproduct of the litigation
itself.” Steel Co., 523 U.S. at 107. Where “the only concrete interest in the
controversy has terminated, reasonable caution is needed to be sure that mooted
litigation is not pressed forward, and unnecessary judicial pronouncements . . .
obtained, solely in order to obtain reimbursement of sunk costs.” Lewis, 494 U.S.
at 480 (emphasis added).
Although there is no Supreme Court precedent dealing with this issue in
the context of a Clayton Act violation, the plaintiffs bear the burden of
demonstrating that the litany of Supreme Court cases on similar statutory costs
and attorneys’ fees are inapplicable. They fail to do so. Their strongest argument
for continuing with this litigation is a misreading of a prior case in this circuit,
Sciambra, which sat in a markedly different procedural posture from the case
now before us. Sciambra v. Graham News, 892 F.2d 411 (5th Cir. 1990).
Sciambra dealt with statutory costs and attorneys’ fees under the Clayton Act,
but the court had already found antitrust liability against the defendants
through a default judgment. Since liability was already established, statutory
attorneys’ fees were awarded. Despite arguments to the contrary by the
plaintiffs and the majority, Sciambra is not controlling of the outcome of this
case. What the attorneys here request is completely different from Sciambra
because liability, and the right to be awarded attorneys’ fees, has yet to be
ascertained. To be clear, the plaintiffs’ attorneys are not asking for a hearing to
determine the amount of their fees, a perfectly reasonable request. They are
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asking for a trial to determine liability itself, and therefore any right they may
or may not have to be awarded fees in the first place. Unlike in Sciambra, here,
the attorneys ask to hold a trial that will involve thousands of attorneys’ hours,
exorbitant costs, and an untold amount of judicial expense, all to determine
whether or not the attorneys can get paid more than they have already
received—with the result having zero impact on the plaintiffs themselves one
way or another.
The majority rests much of its argument on the fact that statutory
attorneys’ fees are part of the tripartite scheme created by the Clayton Act.
While this is certainly a true characterization of the Clayton Act, and would give
plaintiffs mandatory attorneys’ fees where liability was determined, the majority
overlooks the clear limit of any act of Congress including the Clayton Act—the
Constitution. Congress cannot confer standing on the plaintiffs and their
attorneys outside the bounds of Article III. It is axiomatic that Article III
requires that federal courts may only decide actual cases or controversies and
the Supreme Court has clearly established that attorneys’ fees—a byproduct of
litigation—are “insufficient to create an Article III case or controversy.” Lewis,
494 U.S. at 480. If the majority is right, and the Clayton Act requires a trial to
determine liability in order to award statutory fees, then as applied, the Act is
unconstitutional because it exceeds Congress’ power. The plaintiffs have no
personal stake in the outcome of this litigation. The case filed on plaintiffs’
behalf is moot and the plaintiffs’ attorneys have no independent standing to
continue the suit. Any attempt to confer such standing on them exceeds the
constitutional limits set by Article III.
Unable to point to one Supreme Court case that supports this request for
a trial solely for attorneys’ fees, and therefore not able to meet their burden to
demonstrate jurisdiction by a preponderance of the evidence, the plaintiffs’
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attorneys rest their argument on a warped notion of judicial efficiency under the
theory that dismissing this case will deter future settlements. Although such a
policy consideration is essentially irrelevant to the constitutional issue of Article
III justiciability, the majority adopts this reasoning whole, all while ignoring the
multitude of other policy rationales that counsel against letting this suit go
forward merely to secure an award of additional attorneys’ fees.
The most damning argument against the plaintiffs’ theory is that, even
after all remedies and recovery have been provided by the settlement to
plaintiffs, the plaintiffs’ attorneys will continue racking up attorneys’ fees for
their personal reimbursement all in an effort to find liability and recoup their
spent and on-going costs, with nothing more to be gained for their clients. Once
removed from the attorney-client relationship, the lawyers could litigate this
case unchecked by any responsibility to represent their clients’ interests. The
attorneys here—devoid of the need to placate their clients’ interests or heel at
their clients’ orders—could litigate this issue unfettered in pursuit of their
personal windfall, and could continue to do so long after they have relinquished
any meaningful relationship with the plaintiffs. While plaintiffs’ attorneys’
litigation efforts in the quest for continuous ongoing and reimbursable fees
would certainly help deter future anti-competitive actions, it is inconceivable
that this is the public benefit scheme intended by the Clayton Act or permitted
by the Court’s Article III jurisprudence. One could hardly imagine a greater
cudgel to be wielded by plaintiffs’ attorneys to force unmeritorious settlements
than the threat of never-ending litigation by attorneys seeking attorneys’ fees
for litigating a case about attorneys’ fees.
CONCLUSION
The majority takes great pains to try to distinguish Supreme Court
precedent. To get around the clear parallels between this case and that
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precedent, the majority states in conclusory fashion that this case is different
because “the Stewart Settlement only mooted Appellant’s antitrust claims
against Stewart, not as against appellees.” Yet the mootness of this appeal, in
toto, is exactly the issue before the court and one that the majority glosses over.
Because the plaintiffs have no further “personal stake in the outcome” of this
case and their attorneys are seeking a trial merely for their own self-interested
“byproducts” of litigation, the Constitution and Supreme Court precedent clearly
indicate that this case is moot. I respectfully DISSENT.
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