Arandell Corp. v. Cantera Resources, Inc. ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 6 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: WESTERN STATES WHOLESALE No. 17-16227
NATURAL GAS ANTITRUST
LITIGATION, D.C. No.
2:03-cv-01431-RCJ-PAL
------------------------------
MEMORANDUM
ARANDELL CORP.; et al., and
ORDER*
Plaintiffs-Appellants,
v.
CANTERA RESOURCES, INC.; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Nevada
Robert Clive Jones, District Judge, Presiding
Argued and Submitted July 12, 2018
San Francisco, California
Before: GRABER and HURWITZ, Circuit Judges, and LEMELLE, ** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Ivan L.R. Lemelle, United States District Judge for the
Eastern District of Louisiana, sitting by designation.
The plaintiffs in each of these actions are commercial and industrial
purchasers of natural gas, who allege that the defendant natural gas traders conspired
between 2000 and 2002 to manipulate prices. The original complaints were filed in
various state courts between 2007 and 2010. The defendants removed each case to
federal court, invoking diversity jurisdiction under the Class Action Fairness Act, 28
U.S.C. § 1332(d)(2). The cases were consolidated as Multidistrict Litigation (MDL)
No. 1566 and transferred to the District of Nevada.
In 2007, this court reversed dismissals premised on the filed rate doctrine in
various actions arising out of MDL No. 1566. Sinclair Oil Corp. v. OneOK Energy
Servs. Co., L.P., 377 F. App’x 622, 623 (9th Cir. 2010) (unpublished). In 2013, we
reversed summary judgment orders in several MDL No. 1566 actions, holding that
the Natural Gas Act, 15 U.S.C. § 717 et seq., did not preempt the plaintiffs’ state law
claims. See In re W. States Wholesale Nat. Gas Antitr. Litig., 715 F.3d 716 (9th Cir.
2013), aff’d sub nom. Oneok, Inc. v. Learjet, Inc., 135 S. Ct. 1591 (2015). This third
appeal is from the district court’s order denying motions for class certification in
four actions. We have appellate jurisdiction under 28 U.S.C. § 1292(e); we vacate
and remand to the district court.
1. After citing and quoting caselaw, the district court’s order denying class
certification devoted only a few sentences to its analysis of why the predominance
requirement of Rule 23(b)(3) was not satisfied in the Kansas Learjet action. The
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court then simply incorporated that discussion by reference—without more—into
the portions of its order denying class certification in the other three actions. The
centerpiece of the district court’s brief rationale was that the “class members in these
cases are not small consumers whose damages constitute a straightforward
calculation” but rather are “sophisticated industrial and commercial consumers who
used varying and complex strategies for purchasing natural gas such that it is difficult
to calculate their damages in most cases.” However, “the amount of damages is
invariably an individual question and does not defeat class action treatment.”
Yokoyama v. Midland Nat’l Life Ins. Co., 594 F.3d 1087, 1094 (9th Cir. 2010)
(quoting Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir. 1975)).
To the extent that the district court’s order can be read as finding that common
questions of law or fact did not predominate with respect to antitrust injury, it was
similarly sparse. The court simply noted, without citation to the record or further
explanation, that “Plaintiffs’ own experts have used different methods to calculate
injury resulting in disparate estimations of what percentage of class members were
even harmed.” The court then concluded by stating that “[a]lthough there are some
common questions of law and fact, they simply do not predominate over individual
issues,” without clearly identifying either the common or the individual issues.
The court’s terse order with respect to Rule 23(b)(3) predominance does not
provide a sufficient analysis to permit us to engage in “[m]eaningful appellate
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review.” Narouz v. Charter Commc’ns, LLC, 591 F.3d 1261, 1266 (9th Cir. 2010).
It is not enough for a district court to “paraphrase” the requirements of Rule 23 and
simply “indicate the court’s conclusion that those provisions were not satisfied.”
Loc. Joint Exec. Bd. of Culinary/Bartender Tr. Fund v. Las Vegas Sands, Inc., 244
F.3d 1152, 1161 (9th Cir. 2001). Although we review district court orders denying
class certification for abuse of discretion, we cannot perform even that deferential
review without determinations keyed to the particular facts and issues in these cases.
See id. (vacating and remanding the district court’s denial of class certification
because the district court failed, in the “four operative sentences” of its order, to
“explain why the court concluded that the provisions were not satisfied on the facts
of this case”).
The deficiencies in the district court’s order concerning predominance are
exacerbated by the failure to acknowledge, let alone discuss, the differences in the
governing state laws in the four actions. Those differences are particularly acute with
respect to the Wisconsin Arandell and NewPage actions. Under Wisconsin antitrust
law, both direct and indirect purchasers may seek remedies for antitrust injury, Wis.
Stat. § 133.18(1)(a), and direct purchasers may seek full disgorgement, id. § 133.14.
The district court, however, simply incorporated its brief discussion from the portion
of its order dealing with the Kansas Learjet action when finding an absence of
predominance in the Wisconsin action. The district court also failed to discuss
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differences in the number and nature of the plaintiffs and the defendants in each
action, foregoing any analysis, for instance, of how classwide resolution of the issues
in the Breckenridge action, in which only two defendants remained at the time of
this appeal, would differ from the cases involving more defendants.1
The plaintiffs ask us to order class certification. We decline to do so. These
cases are decades old, with extensive records, and the issue is better analyzed by the
district court in the first instance. We therefore vacate the orders denying class
certification and remand to the district court to conduct an appropriate analysis of
the Rule 23(b)(3) issue in the first instance, with particular focus on the potential
differences between each of the four actions.
2. At oral argument, the plaintiffs suggested that, because of differences in
state antitrust laws in each of the four actions, the issue of class certification would
be considered most appropriately by the transferor courts. The plaintiffs asked that
we instruct the district court to request that the Judicial Panel on Multidistrict
Litigation (“the Panel”) remand the cases to their transferor courts.
There is some facial merit to the plaintiffs’ suggestions. If determination of a
motion “rests on application of the transferor court’s conflicts-of-law and
1
The district court’s order is also inconsistent with respect to the typicality
requirement of Rule 23(a). The court initially concluded that the claims of the named
plaintiffs in the Learjet action are “typical of the class members’ claims,” but later
suggested that the typicality requirement was not met.
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substantive law rules, the transferor judge may be able to decide the motions most
efficiently.” Manual for Complex Litig., Fourth § 22.36 at 372. We decline,
however, to instruct the district judge to request a remand. The authority to order
remand to the transferor court lies with the Panel, not with this court or the district
court. 28 U.S.C. § 1407(a). The Panel’s rules permit the parties to make a request
for remand either to the transferee court (whose recommendation the Panel can then
consider) or directly to the Panel. Rules of Procedure of the Judicial Panel on
Multidist. Litig. 10.1(b). No direction or permission from this court is required for
such motions. Indeed, the plaintiffs have previously filed several requests to
recommend remand with the district court. See Order Denying Remand, In re W.
States Wholesale Nat. Gas Antitr. Litig (MDL 1566), No. 2:03-cv-01431-RCJ (PAL)
(D. Nev. Aug. 5, 2015), ECF No. 2142; Motion for Suggestion of Remand, In re W.
States Wholesale Nat. Gas Antitr. Litig (MDL 1566), No. 2:03-cv-01431-RCJ (PAL)
(D. Nev. Jan. 13, 2017), ECF No. 2765; Motion for Suggestion of Remand, In re W.
States Wholesale Nat. Gas Antitr. Litig (MDL 1566), No. 2:03-cv-01431-RCJ (PAL)
(D. Nev. Sept. 8, 2017), ECF No. 2961. In denying the most recent request, the
district court expressly suggested renewal after the mandate issued in this appeal.
See Order Denying Motion for Suggestion of Remand, In re W. States Wholesale
Nat. Gas Antitr. Litig (MDL 1566), No. 2:03-cv-01431-RCJ (PAL) (D. Nev. Nov.
20, 2017), ECF No. 2987. We therefore remand without prejudice to the plaintiffs’
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pursuing, either before the district court or the Panel, their requests for remand to the
transferor courts to decide the class certification motions.
VACATED and REMANDED. Costs on appeal awarded to Plaintiffs-
Appellants.2
2
Appellee Dynegy’s motion for judicial notice, Dkt. 86, is GRANTED.
Appellants’ opposed motion to correct the record, Dkt. 29, is DENIED.
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