Defendants Challenge Class Action Decision in Poly Foam Litigation

 

Defendant Poly Foam manufacturers are requesting review of a class action decision in antitrust litigation, claiming the Supreme Court needs to resolve a split in the Circuit courts.

In light of a recent class action decision from the First Circuit Court of Appeals approving class certification in the Nexium antitrust litigation https://lawgsp.com/nexium-class-certification/, Poly Foam manufacturers accused of price-fixing violations in the sale of polyurethane foam are now claiming there is a deep split in the Circuits  over class member standing.  Plaintiffs in the antitrust litigation disagree.  The question now is whether the decision of the Sixth Circuit Court of Appeals to affirm certification of a class action in the Poly Foam case is appropriate for Supreme Court review.

Class Action Certification

In April 2014, U.S. District Judge Jack Zouhary certified two classes of direct and indirect purchasers in the Poly Foam antitrust class action litigation, holding that both classes met all necessary requirements under the Federal Rules of Civil Procedure.  In September 2014, the Sixth Circuit denied defendants’ request to appeal the decision pursuant to Federal Rule of Civil Procedure 23(f).

Split in Circuits?

Following denial of the appeal, in November the Poly Foam manufacturers filed a petition for a writ of certiorari requesting Supreme Court review of the class action decision certifying the classes, claiming a split in Circuit courts.

In that petition, the Poly Foam manufacturers argued that the classes contain “vast numbers of uninjured members,” causing the impossibility of utilizing a uniform system in making damage assessments.  Simply put, they are claiming that each member of the class must have standing to sue including proof that each member of the class suffered injury and incurred damages.

In support of their argument of the split in Circuits, the Poly Foam manufacturers noted that the 3rd, 7th, and 10th Circuit Courts have held that only one member of a class must have standing.  In converse, they stated that the 2nd, 8th, 9th and D.C. Circuit Courts require that all class members have standing.

 

 

Nexium

The Poly Foam manufacturers supplemented their brief in late January, adding that the recent 1st Circuit decision in Nexium deepened the split in Circuits when it determined that not every member of a class needs to have suffered an injury to have standing for class certification.

The Plaintiffs responded that the court of appeals used “the most stringent possible standard by using a definition of the class [that] is sufficiently narrow to exclude uninjured parties.”  The district court had used an “all or nearly all” standard in granting the class certification, the standard used by the First Circuit in the class action ruling in Nexium.  The Poly Foam manufacturers believe an “all” standard of review is required.

Standard for Supreme Court Review

The true standard for Supreme Court review of class certification is whether there was an abuse of discretion by the circuit court in affirming class action certification.  This is something to watch, as according to the plaintiff classes, “the Supreme Court has never before granted certiorari in the posture of a circuit court’s denial of a Rule 23(f) petition.”

 

Goldman Scarlato & Penny, P.C. serves as plaintiffs’ counsel in the Poly Foam case and on Plaintiffs’ Executive Committee in the Nexium litigation. Contact Brian Penny, Esq. if you have any questions about this matter or other generic drug “pay-for-delay” litigation like Nexium or the impact of this important class action ruling. (484) 342-0700 or penny@lawgsp.com.

 

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