In Re New Motor Vehicles Canadian Export Antitrust Litigation

see geoffrey p. miller, review of the merits in class action certification, 33 hofstra l. it is proposed that the adoption of a weak-form rule would also 128 rule conserves resources at the certification stage.103 damages at 37, in re new motor vehicles canadian exp. antitrust litig., 335 f. supp. 2d 126 (d. 576 delaware journal of corporate law [vol. 34 "efficiency implications of the weak-form rule are . . . ambiguous"). 61 id.; see also robert g. bone & david s. evans, class certification and the substantive dominion breached a stockholder agreement.63 "restrictions on toronto-dominion's ability to propose or effectuate a going private transaction with c. proposals for a unified rule: the pros and cons of strong-form, 578 delaware journal of corporate law [vol. 34 the court failed to address "what evidence could be used to assess the rule 23 requirements"). 572 delaware journal of corporate law [vol. 34 86 motor vehicles, 522 f.3d at 10-11. requirements); mulford v. altria group, inc., 242 f.r.d. 615, 626-27 (d.n.m. 2007) (discussing vehicles. vital elements of the plaintiffs' antitrust claim clearly overlapped id. at 19 n.18 (citing sullivan v. nat'l football league, 34 f.3d 1091, 1103 (1st cir. that when a rule 23 requirement relies on a novel or complex two major camps have class certification context is similar to the first circuit's scrutiny of the an inquiry into the merits when the merits overlap with rule 23 criteria, one id. at 157. such an argument have arguably misinterpreted the eisen decision.90 motor vehicles was correct because it supports the adoption of a 80 merits of the case in td banknorth overlapped with the rule 23 criterion is id. at 27; see also expert report of professor robert e. hall, ph.d., on impact and class would avoid this problem. a defendant would not feel pressure to settle a and rule 23 criteria overlap). see fed. r. civ. p. 23(b); see also chamblee, supra note 12, at 1046 (discussing the was general telephone co. of the southwest v. falcon.26 "[e]valuation of many of the questions entering into determination of class 103 6 the trial judge, in determining the eighth circuit, however, allegations as a "fail[ure] to comply adequately with the procedural requirements of rule 23"); claim, and sometimes it may be necessary for the court to probe 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 575 merits of the case was necessary to ensure proper class certification and issue before the eisen court was substantiallydifferent from issues involving inquiry regarding the rule 23 criteria."35 form rule would likely weed out cases with such theories. the costs of id. motor vehicles, 522 f.3d at 20; see also hall expert report, supra note 115, at 37 economy.102 weigh potential settlement options. overall, however, a plaintiff gains a broad theory of liability overlap rule 23 requirements); bell v. ascendant solutions, inc., 422 f.3d the eisen decision, surprisingly, made no mention of what question.30 court's preliminary assessment of issues relevant to certification, theydo offer some information that 15 a second example is the fourth circuit's decision in gariety v. grant eisen to falcon mandatory weak-form rule in the class certification setting. and provides court's decision in motor vehicles should be upheld in the wake of an plaintiffs alleged that "individual class without an inquiry into the merits, prospective litigants might be more with the merits.") (quoting in re initial pub. offerings sec. litig., 471 f.3d 24, 34 (2d cir. 2006)); 23 2005. id. toronto-dominion and banknorth executed a stockholders' agreement which included begun by or against class members; (c) the desirability or the first circuit correctly decided the rule 23 issue in motor (2) providing an opportunity for persons with small claims to assert their generalized proof, and thus applicable to the class as a whole,' and that these clearly establish the rule 23 requirements when overlapped with the merits. overarching question. 33 when they overlap with rule 23 class certification id. at 30. the trial judge concluded: "in order to pass muster, plaintiffs--who have the during the class certification stage.23 plaintiffs' antitrust theory available material information regarding the company and its business. . . . 59 jacquelin, 417 u.s. 156, 177-79 (1974). canadian export antitrust litigation is illustrative. "to establish an 98 id. at 160. miller, supra note 71, at 52 (stating that eisen "concerned notice costs and not certification"). unfair settlement pressure.105 mason l. rev. 1, 9-10 (2002) (stating, in accordance with falcon, that a "judge should not merely although the court's language was unclear, it seemed to have thornton, llp.46 make "findings" when the merits of a case overlap with rule 23 other class action, may only be certified if the trial court is satisfied, after a though not an acknowledged practice, the court 100 requirements); david s. evans, class certification, the merits, and expert evidence, 11 geo. this conclusion, this note will detail the language of federal rule of civil 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 565 see id. at 65-67. professor miller argues that weak-form rules are better at reducing dollar and the cheaper canadian dollar."2 actions or if there was a rational means of establishing impact. issues within id. at 575. 73 id. at 469 n.12 (quoting 15 charles alan wright et al., federal practice and in re new motor vehicles canadian exp. antitrust litig., 522 f.3d 6, 24 (1st cir. 2008). 52 how these two approaches would satisfy the antitrust requirements or how rule 23 criteria.104 representative plaintiff must not hold interests antagonistic to the class, retain 101 118 faced with determination of any particular rule 23 requirement or a requirement that overlapped the theories set forth to satisfy elements two and three of the accept plaintiff's allegation that [rule 23] is satisfied"). 8 rights."12 inquiry into the merits.38 rule 23 requirements, it is more likely to rule correctly on certification.79 deciding whether to certify a class). see also carnegie v. household int'l, inc., 376 f.3d 656, 661 the court stated that the rule 23(a) & lee l. rev. 1423, 1424 n.2 (1993). regarding the appropriate degree of inquiry differ.36 id. at 360. 109 will be provided with valuable information, but this information will not encouraged to organize a class based on an unproven theory to pursue id. at 10. 53 bone & evans, supra note 19, at 1268. were less effective in imposing them, they would [have] lower[ed] u.s. [dealer] invoice prices and 522 f.3d 6 (1st cir. 2008). td banknorth, 2008 wl 2897102, at *2, reprinted in 34 del. j. corp. l. at 425. this proposition may come across as counterintuitive. strong-form rule.89 id. at *3-5, reprinted in 34 del. j. corp. l. at 426-31. a b. interpretation of delaware's class action (explaining the theory and uses of nash equilibriums). 94 the (describing the falcon holding as "[t]he principal supreme court decision on determining rule 23 but is inferior to a super-weak rule in the certification error context.88 78 of the case.18 ii. background (2001). like rule 23, delaware's class action certification rule requires numerosity, commonality, 116 themselves at the "more rigorous end" of the merits spectrum.41 evans, supra note 30, at 6 (discussing the economic pressures felt by defendants to settle success at trial. id. at 74-75. united states.115 that "toronto-dominion would acquire the remaining banknorth common stock for $32.33 per inquiries.34 564 delaware journal of corporate law [vol. 34 the supreme court stated that an export antitrust litigation1 professor hall proposed approaches could prove that the plaintiffs suffered injuryas well as establish argument in favor of the adoption of a super-weak rule is the potential court must be certain that the rule 23 requirements are satisfied when it was critical for the court to note when a court looks at the merits of a case at certifi- relevant united states supreme court jurisprudence. it continues by class action.16 circuit decision in johnson v. georgia highway express, inc., stating that "any victim of racial disastrous for any defendant because a defendant may be inclined to settle a inquiry into the merits of a case would "allow[] a representative plaintiff to attempts. if the first circuit approved the district court's certification of a 227 f.r.d. 65, 93 (s.d.n.y. 2004)). (7th cir. 2004) (discussing class action policy considerations and its benefits to smaller claims the probability of success is high and would likelypursue a different tactic or the mandatory requirement imposed upon a court to inquire the trial judge, limited by eisen, found that when see miller, supra note 71, at 59 (citing in re unioil sec. litig., 107 f.r.d. 615, 618 (c.d. was also correct in requiring an inquiry into the merits because its failure to id. this notion was one of the concerns of the eisen court. see eisen v. carlisle & on inadequate information and therefore unreliable.")). certification rule in a corporate setting 1. a closer look at camp a attractive because they promote judicial economy.74 in re new motor vehicles canadian export antitrust second, professor hall proposed a benchmark method in after automobile manufacturers engaged in business practices, both legal and necessary for the theory to succeed.9 25 this note concludes that this decision was meritorious. to support 49 of the case when it decided that the plaintiffs satisfied rule 23. for instance, delaware court of chancery appeared to permit such an inquiry in in re td involved class actions against underwriters, issuers, securities exchange act and fraud against an accounting firm.47 organized to restrict the flow of canadian automobiles into the united include litigation, opportunity, and other private costs, of strong-form and weak-form rules). 57 "opt-out" of the litigation if the probability of success is low.86 the eighth circuit's subdivisions of rule 23(b)). rule 23 criterion is met."100 a rule 23 setting, see bell atl. corp. v. at&t corp., 339 f.3d 294, 302 (5th cir. 2003). burden of proof at class certification--must make 'some showing.' that showing maytake the form at the class certification stage a court the opportunity to gain a preliminary glimpse into the relevant facts the court also stated that a party's pleadings will sometimes be sufficient to 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 567 13 "statistical models . . . used in the auto industry to predict market should not, rule on the probability of success of a plaintiff's claim. a court's alleged racial discrimination and sought to certify a "class of all hourly certification stage.20 "incontestable allegations" is "injurious to other class members [and] . . . defendants"). thornton, llp, 368 f.3d 356, 365 (4th cir. 2004) (describing certifying a class based on plaintiffs' strong-form rules are of maine after remand from the first circuit. livesay.22 cir. 1969)). eisen, 417 u.s. at 177-79; see also bone & evans, supra note 19, at 1264-65 (explaining delaware case law makes clear that in order to meet this requirement "a no. 2557-vcl, 2008 wl 2897102, at *1 (del. ch. july 29, 2008), reprinted in 34 del. representatives failed to demonstrate sufficient knowledge of the litigation.65 lawsuits premised on unsubstantiated theories of culpability. the court finds that the questions of law or fact common to 566 delaware journal of corporate law [vol. 34 nature of any litigation concerning the controversy already representative parties will fairly and adequately protect the interests of the class. cir. 2007) (stating that "[i]n deciding whether . . . [the rule 23 predominance prong] is met, the the court's requirement of a showing of evidence that all class members suffered economic loss to 24 381-82 (5th cir. 2007) (taking notice that plaintiffs' reliance on the fraud-on-the-market theory and district court must make a 'definitive assessment of rule 23 requirements, notwithstanding their see supra notes 72-74 and accompanying text. id. rev. 51, 55-62 (2004) (arguing that a weak-form rule is superior to a strong-form or super-weak the court, however, concluded that the plaintiffs met the rule 23(a)(4) it is debatable which proposal offers the best unified rule to the discrimination." id. at 151-52 (citing johnson v. ga. highway express, inc., 417 f.2d 1122 (5th but the most noteworthy aspect of [regarding the merits of the case] may be resolved only insofar as resolution id. (quoting o'malley v. boris, no. 15,735, 2001 wl 50204, at *5 (del. ch. jan. 11, 2001)). at trial, however, is intertwined with a rule 23 requirement, a weak-form rule would be inferior to a recognized the necessity for some level of inquiry into the merits of a case nonetheless, it is clear that the td banknorth court inquired case even though he or she is likely to prevail at trial as there is a fear of a gen. tel. co. of the sw. v. falcon, 457 u.s. 147, 160-61 (1982). id. at 86 ("weak-form rules provide some protections to defendants against the risk of allowed them "to maintain artificially inflated national [manufactured to a strong-form rule with regard to the reduction of errors in certification, a drawback to a super-weak rule is the possible unfair advantage it circuit court rejected the district court's legal standard and held that, when 54 the justifications for the eisen holding). inquires into the merits of a case at the certification stage fall within three merits of a case when intertwined with rule 23 requirements. id. at 67. if the probabilityof success 10 impacted members of the potential class.126 the trial supply of canadian cars in the united states."4 and procedures applicable to civil trials," and (3) allowing a preliminary 92 court reversed the judgment of the court of appeals that allowed the mination generally involves considerations that are 'enmeshed id. at 71. share." id. developed securities market, the price of a company's stock is determined by the motor vehicles, 522 f.3d at 24; see also blades v. monsanto co., 400 f.3d 562, 567 (8th isolates the issue concerning the appropriate level of inquiry into the merits states."6 bone & evans, supra note 19, at 1318. a. a court must make a rigorous inquiry into the merits 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 577 the defendants claimed that id. at 27. 58 the nature of the evidence the plaintiff would require."58 all circuits faced with this dilemma have agreed "that when in falcon, the court asserted that a trial judge must theory as to injury, as the predominance inquiry does in this "rigorous" analysis. it is difficult to formulate a claim in which the pleadings 21 99 satisfy the rule 23 requirements when they overlap with the merits.98 the relevant portion states that a no less significant than in the case of direct reliance on misrepresentations. on "the currency exchange rate differential between the strong united states the court considered h. louis farmer's (one of the plaintiffs who sought class member was affected.127 undesirability of concentrating the litigation of the claims in the 105 to appropriately address the certification question rule and discussing recent cases implementing the weak-form model). --i.e., the judge does not need to waste precious time "hearing aside from the aforementioned policyconsiderations, the first circuit formed among the circuits.37 costs.92 plaintiff's theory is meritorious. thus, under a weak-form rule, a plaintiff illegal, designed to restrict the flow of canadian cars into the united states" buspirone patent litig., 210 f.r.d. 43, 56 (s.d.n.y. 2002); in re vitamins antitrust litig., 209 way to determine whether all class members were impacted by defendants' procedure § 3911, at 485 n.45 (1976)). action.'" sometimes the issues are plain enough from the f.r.d. 251 (d.d.c. 2002)). as discussed above, the plaintiffs in case when ruling on class certification,55 60 17 this case is the fact that the court expressed caution when such inquiries into determine whether [the suit] may be maintained as a class action," (2) "a economy through the efficient resolution of multiple claims in one case, and interpretation of eisen" by subsequent cases and arguing that arkansas courts should not follow into the merits (when overlapped with rule 23 requirements) would dissuade in the factual and legal issues comprising the plaintiff's cause of 104 paid by individual consumers."7 this undertaking is arduous because of the overlap 16 delaware court of chancery rule 23(b) is similar to the language set forth in rule 23(b). compare burden.66 in the class action context once a class is certified). of a case during the rule 23 class certification stage of a court proceeding. it is true that the adoption of a weak-form rule may give plaintiffs an representative 'fairly and adequately protect the interests of the class.'" id. the trial court in eisen held a id. toronto-dominion bank bought a fifty-one percent interest in banknorth in march of stated that "a court may [sometimes] be required" to analyze the merits of a the third and eighth circuits have positioned themselves at the "less 91 purchasers do not directly rely on the misstatements. . . . the causal connection their submission of expert testimony to prove that the defendants' actions id. at 151. the respondent's argument in favor of certification was supported by the fifth action questions is intimately involved with the merits of the claims."24 18 szabo v. bridgeport machs., inc., 249 f.3d 672, 677 (7th cir. 2001) (opining that using plaintiffs' 22 class action can be utilized if: court went on to observe that "[t]he more complex determinations required for the class."57 cir. 2006)); regents of the univ. of cal. v. credit suisse first boston (usa), inc., 482 f.3d 372, reduce certification errors without introducing the pros and cons that are the miller, supra note 71, at 82. nonmeritorious class action because such a claim would not pass rule 23 35 greater advantage than a defendant. violations of section 1 of the sherman act. id. at 12. the court vacated this class due to the "lack certification errors than strong-form rules because weak-form rules allow some inquiry into the potential catastrophic result.106 in (2d cir. 2001)). respect to any issues relating to the merits, but must instead accept as true 96 87 pressure. in defense of the shareholder wealth maximization norm: a reply to professor green, 50 wash. to satisfy rule 23(a)(4).64 which will prove or disprove [the] injury element on a simultaneous class-wide basis' because this class certification was inappropriate in this case because the plaintiffs failed demonstrates the court's viewpoint on rule 23 class certification. of the case are inseparable from a rule 23 requirement. furthermore, the 90 for further this goal, possibly more so than a strong-form rule. a strong-form as a unified response and was appropriate in merits at class certification. (a) the class members' interests in individually controlling the 70 l. elizabeth chamblee, between "merit inquiry" and "rigorous analysis": using 457 u.s. 147 (1982). id. at 62. see generally bone & evans, supra note 19 (arguing that a super-weak rule id. at 20. 79 because a change in these prices would shift the entire negotiating range, benefiting (or harming) certifying a class, a trial judge must conduct a thorough analysis of the rule the merits75 particular forum; and (d) the likely difficulties in managing a (quoting initial pub. offering, 471 f.3d at 39; gariety, 368 f.3d at 366). plaintiffs' class, without further inquiry into the merits, would have been in the "rigorous analysis" language should be interpreted to mean that a district a weak- principles: (1) "the language [and] history of rule 23" did not give a court see in re new motor vehicles canadian exp. antitrust litig., 522 f.3d 6, 29 (1st cir. an imminent class action suit is potentially (1978)); see also bone & evans, supra note 19, at 1267-68 (discussing the falcon decision and 111 see evans, supra note 30, at 35 (discussing the arguable misinterpretations of eisen by an overlap between the merits and rule 23.91 and individual officers of the issuing companies which alleged a violation of merits of a case a court should make at the class certification stage. the first agreeing that a plaintiff may not rely on a mere allegation to satisfy rule 23's certification del. ct. ch. r. 23(b) (listing maintainable class actions), with fed. r. civ. p. 23(b) (listing "types the final supreme court decision to set the stage for the circuit split range, benefiting . . . essentially all consumers."116 class criteria and merits overlap, the district court must conduct a searching offered in the going private transaction to be inadequate by at least $10 per 43 iii. different interpretations of rule 23 of, for example, expert opinions, evidence (by document, affidavit, live testimony, or otherwise), or cons.72 judge failed to look beyond the plaintiffs' pleadings to determine whether the 45 class actions have two principal purposes: "(1) promoting judicial 123 motor vehicles, 522 f.3d at 24. prices.121 although the court's language does not imply that a district court must make the defendants' actions.117 miller, supra note 71, at 82-84 (comparing the merits of judicial economy in the strong- the class certification stage comes to the heart of the claim, the more cautious plaintiffs utilized an expert witness, stanford universityprofessor robert e. noted in coopers & lybrand v. livesay, "the class deter- 30 88 td banknorth involved a suit brought 127 a party 34 approach to class certification, 61 ark. l. rev. 707, 726-28 (2009) (discussing the "prevailing commentators, and describe important policy considerations. interpretation 46 3 experienced common impact from the changed msrps and dealer invoice decision is eisen v. carlisle & jacquelin.17 the court went on to state that "[t]he closer any dispute at the note begins by detailing the language of rule 23 and by discussing the should not have been erroneouslyhindered byeisen or other unsubstantiated id. at 156-58 (describing how evidence of racial discrimination under title vii vis-á-vis a the first circuit could not constitute a 'significant part'" of a claim to establish predominance.123 'findings' in this context should not be confused with binding findings on the merits." in re new id. differential created an "opportunit[y] in the gray market to sell lower-priced a weak-form rule allows courts to make preliminaryinquiries into the 44 prices because a change in these prices would shift the entire negotiating that rule 23 is satisfied without an inquiry into the merits (when the merits contrast, the second camp (camp b) "sometimes require[s] an inquiry into such claims.128 based on this definition of predominance, the first circuit was correct is necessary to determine the nature of the evidence that would be sufficient, form rule with the other forms' more rigorous inquiry procedure). mimics federal rule 23.60 when it insisted that an inquiry into the merits was necessary to satisfy the one camp (camp a) favors a more "rigorous" should be adopted during the class certification stage based on an analysis of the costs and benefits a brief look at the first circuit's inquiry in in re new motor vehicles conduct a "rigorous analysis" into each requirement of rule 23.97 2. a closer look at camp b between the rule 23 requirements and the prohibition on preliminary but see miller, supra note 71, at 83-84 (discussing judicial economy and stating that that he is a proper class representative under rule 23(a). as we recovery. this slippery slope would be unduly burdensome to the courts, as arguments and deliberating on the merits."76 but a major issue in the case was whether 67 miller, supra note 71, at 68. decrease in errors at trial.81 plaintiffs relied on a "fraud-on-the-market theory" to satisfythe commonality first circuit decision in in re new motor vehicles canadian export the merits appear to be necessary.56 in sum, the expert believed that one or both of these novel factfinder, whether judge or jury, must still reach its own determination on these issues." id. 41 knox county, 365 f.3d 1, 4 (1st cir. 2004)). suggested retail prices (msrps)] and dealer invoice prices within the united securities litigation42 of class actions" in virtually identical language). 40 single plaintiff is insufficient to certify a class of plaintiffs under rule 23). 23 criteria.32 id. at 55 (citing caridad v. metro-n. commuter r.r., 191 f.3d 283 (2d cir. 1999); in re was prohibited when the merits overlap with the rule 23 requirements.95 in rule 23(b)(3) class actions entail even greater entanglement with the opinion regarding a plaintiff's probability of success at trial.85 id. "rigorous" analysis language of falcon. the plaintiffs relied primarily on 63 if the plaintiff's general allegations were true, to make out a prima facie case 108 totally convinced that these methods could even prove injuryand measurable miller, supra note 71, at 65-66. 417 u.s. 156 (1974). eisen involved a class of odd-lot traders on the new york stock sentatives' testimony.67 (1996) ("[p]reliminary assessments could be verytroublesome--and misleading--if theywere based the court recognized that farmer's testimony provided a basis for the claims of a case should a court make at the class certification stage: possess a basic familiarity with the facts and issues involved in the lawsuit." cardizem cd antitrust litig., 200 f.r.d. 326, 339 (e.d. mich. 2001)). seth h. yeager collective issues predominate over issues that require individualized 112 commencing a preliminary inquiry into the merits of the case at the act.53 caused injury and measurable damages.125 84 19 canadian cars in the united states."3 and in our view a court has the power to test disputed premises early on . . . .") (quoting tardiff v. cation, a plaintiff is bound to learn some valuable information. this jurisprudence. a trial judge cannot satisfy the "rigorous analysis" language weak-form rule would also create fewer advantages for plaintiffs than a motor vehicles canadian exp. antitrust litig., 522 f.3d 6, 24 (1st cir. 2008) (quoting in re initial the probability of success at trial at the class certification stage. see miller, supra note 71, at 85. under a strong-form the fraud on the market theory is based on the hypothesis that, in an open and 115 of inquiry into the merits of a case 95 super-weak rule, but would increase such an advantage when compared to a evidence could be used to satisfy the rule 23 requirements.94 id. see id. the second, fourth, fifth, and seventh circuits require an inquirywhile the third motor vehicles, 522 f.3d at 20; see also hall expert report, supra note 115, at 49-69 563 20 on plaintiffs' allegations of sufficiently common proof and require[s] the blades, 400 f.3d at 565-66. both federal rule of civil procedure 23(b)(2) and section 16 of the clayton act for suspected common proof and requir[e] the courts to make specific findings that each 9 the second case to address this issue was coopers & lybrand v. a court implementing a super-weak rule will issue an the expert's basic proposition was "but for" the defendants' forbid "district courts from relying on plaintiffs' allegations of sufficiently 72 14 daubert to navigate the gray areas of federal class action certification, 31 fla. st. u. l. rev. properly resolved as a class action.") (emphasis added). competent and experienced counsel to act on behalf of the class and, finally, the authority to carry out a preliminary inquiry into the merits of a case "to evaluate carefully the legitimacy of the named plaintiff's plea consumer action that accused automobile manufacturers of illegallyblocking certifying a class. it is truly a rare case in which the district court is certain the district courts' implementation of strong-form rules and require the use note's proposition, a court need not establish "hard factual proof" that a claim of the rule. the note ultimately concludes that the first circuit's ruling in case are often intertwined with the requirements of rule 23.78 (motor vehicles) involved a multidistrict 117 first, the professor relied on nash equilibriums-- discrimination in employment may maintain an 'across the board' attack on all unequal employment consideration of this testimony by the court in a 11 stage. are these savings, however, worthwhile if a class is certified based on tage cuts both ways, however. a defendant could potentially benefit from a available methods for fairly and efficiently adjudicating the parties are fairly encompassed within the named plaintiff's the uncontested allegations of the complaint." id. (quoting in re initial pub. offering sec. litig., the a super-weak form rule permits a court to assess the plaintiff's rigorous inquiry into the merits before a class may be certified. thus, the most interpretations of supreme court jurisprudence concerning 7 miller, supra note 71, at 68. essentially all consumers." id. satisfying rule 23(a), the potential class must meet the criteria of one of the a weak-form rule.96 these rules, identified by professor geoffrey miller as the merits.93 this conclusion was largely based on the potential class repre- plaintiffs and allocated ninety percent of the notice costs to the defendants.19 prosecution or defense of separate actions; (b) the extent and 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 573 probability of success at trial during the class certification stage.80 provide an absolute answer as to how the court will rule on the merits at trial. additionally, professor hall failed to state with anyparticularity class members predominate over any questions affecting only public policy concerns. plaintiff must further prove that the issues in the class action 'are subject to whether rule 23(a)(4) was satisfied. banknorth before march 1, 2007." id. on november 20, 2006, banknorth officially announced this group "forbid[s] district courts from relying established" will suffice.110 with the predominance prong of rule 23(b)(3). the court's inquiry into the court to make specific findings that each rule 23 criterion is met."39 102 pleadings to determine whether the interests of the absent 28 37 85 "explanation of how the pivotal evidence behind plaintiff's theory can be mexican[-]american employees who have been employed, are employed, or as stated earlier, a purported advantage of a strong-form rule is judicial of falcon unless he or she makes an inquiry into the merits when the merits 83 (1) the class is so numerous that joinder of all members is impractical; (2) there are id. at *2, reprinted in 34 del. j. corp. l. at 425. "rule 23(a)(4) requires that a class the federal courts have labored to square eisen's prohibition of a restraint on competition, the importation of canadian cars would have federal rule and delaware is the preeminent corporate law jurisdiction. see stephen m. bainbridge, (comparing similar events in the european union with those that occurred in motor vehicles). a defendant, since of necessity it is not accompanied by the traditional rules 23 criteria. this proposition is supported by united states supreme court in contrast, a strong-form rule is unattractive because it increases the (explaining the concerns of "unilateral imposition of restraints" in gray markets and concluding that super-weak rule because the latter permits an inquiry into a case's probability of success at trial. id. rule 23 analysis.33 exchange who alleged that brokerage firms violated antitrust and security laws. id. at 160. 110 id.; see also evans, supra note 30, at 9 (discussing the facts of eisen and concluding that undue advantage.107 a strong-form rule); see also defendants' opposition to exemplar state plaintiffs' motion for class 74 there is power in numbers. a majority of the circuits have rejected direct conflict with falcon. procedure 23 (rule 23), explore the relevant rule 23 jurisprudence, discuss greater, theoretically, than the costs of making a preliminary inquiryinto the and preliminary resolution of disputes, but [it does] not require findings and 42 form rule can be best described as a compromise between a strong-form rule a case overlap with the class certification requirements, courts must make a the court's hands were tied because it had no probability of success] may improve the accuracy of [a] trial"82 the merits of a case were "enmeshed" with rule 23 criteria, the plaintiff was the expert "opined that class members would have 82 which he would compare the u.s.-canadian automobile market with a consideration of merits issues at the class certification stage pertains only to that stage; the ultimate mar. 20, 1998)). id. at 74. professor miller argues that "[b]ecause . . . [weak-form rules] disclose the trial controversy. the matters pertinent to these findings include: id. cal. 1985)). no tightening occurred in the class period involved in this case). id. and eighth circuits, at times, require an inquiry. id. eisen v. carlisle & jacquelin, 54 f.r.d. 565, 567 (s.d.n.y. 1972). the district court's error in this case . . . is the failure to appeal.11 curiously, also concluded that "[e]ven though retail sales of cars are individually negotiated . . . class members see cordes & co. fin. servs., inc. v. a.g. edwards & sons, inc., 502 f.3d 91, 108 (2d see motor vehicles, 522 f.3d at 22-23. td banknorth, 2008 wl 2897102, at *3, reprinted in 34 del. j. corp. l. at 427. [plaintiff] could use to her advantage when deciding whether to opt out." id. in contrast, unlike the viability of that theory and the existence of the facts and predominance of common issues prong under rule 23(b)(3).48 id. at *3, reprinted in 34 del. j. corp. l. at 427. behind the pleadings before coming to rest on the certification similar market not affected by defendants' actions.119 b. how "searching" an inquiry into the merits requirements.50 weak-form, and super-weak rules 574 delaware journal of corporate law [vol. 34 within each form). falcon, 457 u.s. at 161. falcon, 457 u.s. at 160 (quoting coopers & lybrand v. livesay, 437 u.s. 463, 469 the judge concluded that the merits inquiry favored the this certainly saves time and money at the certification 368 f.3d 356 (4th cir. 2004). professor the fourth circuit held that the trial court erred bynot if the supreme court is faced squarelywith this well as to potential defendants who incur substantial costs when defending in re new motor vehicles canadian export antitrust litigation motor vehicles, 522 f.3d at 26. to prove injury, the plaintiffs relied on submissions by subsequent cases); see also f. ehren hartz, certify now, worry later: arkansas's flawed motor vehicles, 522 f.3d at 11. fed. r. civ. p. 23(a)(1)-(4). three united states supreme court decisions have set the stage for me. 2006) (no. 03-md-1532), 2005 wl 3725975 [hereinafter brief for the defendant] (arguing that 437 u.s. 463 (1978). this case involved securities purchasers who alleged that an 113 id. at 8. motor vehicles also involved a challenge to a nationwide class certification under the respondent estimated measure of damages."111 typicality, and adequacy of representation. del. ct. ch. r. 23(a). the language expressed in 126 id. at 363 (quoting basic inc. v. levinson, 485 u.s. 224, 241-42 (1988)). promote judicial economy and protect defendants from unfair settlement motor vehicles, 522 f.3d at 27-29. prong of rule 23. therefore, a decision by the first circuit to certify the 122 id. at 469. id. eisen v. carlisle & jacquelin, 417 u.s. 156, 168 (1974). iv. why a weak-form rule should be adopted that professor hall was unable to explain how his approaches actually a. dissention among circuits see motor vehicles, 522 f.3d at 29. for a judicial discussion of establishing causation in 5 see motor vehicles, 522 f.3d at 21, 29; see also hall expert report, supra note 115, at for it."21 29 del. ct. ch. r. 23. make a rigorous inquiry into the merits whenever they overlap with the rule merits of a case when the merits overlap with the rule 23 criteria.87 the comparative handling of the issue within different circuits and between based on this assessment, a court would not, and a 48 obviously, a 472 (5th cir. 1986); payne v. don bohn ford, inc., no. 96-1671, 1998 wl 131737, at *8 (e.d. la. respondent's class certification.28 32 do[es] not hold that such inquiry will always be necessary."40 this rule alleviates the this advan- eisen and its progeny). requirements were not satisfied by the "mere fact that a complaint alleges seeking class certification must first meet four requirements.14 under this burden placed upon a court at certification by eliminating any inquiry into federal court that relies on eisen to prohibit such an inquiry is likelyin error. certification stage is warranted when the merits of the case overlap the rule banknorth shareholders litigation.61 merits . . . ."25 motor vehicles, 522 f.3d at 20; see also hall expert report, supra note 115, at 41-49 see bone & evans, supra note 19, at 1317-19 (discussing process costs of parties, which 119 will be victorious at trial.109 class representative certification), statement that "he considered the price 12 resulted in lower dealer invoice prices and msrps of automobiles sold in the required to make "some showing" that such requirements were met.44 but cf. exemplar state plaintiffs' replymemorandum of law in support of their motion affecting large groups of claimants). certification at 16, in re new motor vehicles canadian exp. antitrust litig., 235 f.r.d. 127 (d. 125 see brief for the defendant, supra note 95, at 16 ("[c]lass action machineryis expensive the supreme court, however, rejected the trial court's inquiry into states.112 39 damages.120 decision in blades v. monsanto co.52 the plaintiffs argued on appeal that "the district court improperly 23 requirements and resolve factual disputes relevant to each requirement.45 id.; see, e.g., in re initial pub. offerings sec. litig., 471 f.3d 24, 32-33 (2d cir. 2006) 69 "requir[ing] district courts to conduct a rigorous analysis of rule 23 prerequisites"); garietyv. grant case" when it ruled on class certification.54 fed. r. civ. p. 23. of a weak-form rule.99 three prongs contained in rule 23(b).15 share based on his familiarity with the stock as a longtime stockholder."68 applied or would have applied for employment had the defendant not adoption of a unified weak-form rule in the class certification context would but the court was not federal securities law.43 of a live controversy between the parties such as would justify an injunctive remedy." id. at 16. preliminary inquiry into the merits with falcon's requirement of a thorough j. corp. l. 421, 423 (2009). fed. r. civ. p. 23(b)(3). against td banknorth, inc. by former investors in the company.62 for class certification pursuant to rule 23 of the federal rules of civil procedure at 4, in re new requirements"); unger v. amedisys inc., 401 f.3d 316, 320 (5th cir. 2005) (construing falcon as proof."124 unfair settlements."). a measure of damages. 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 579 id. at *1, *4-5, reprinted in 34 del. j. corp. l. at 422, 427, 430-31. 38 class certification motion "may not go beyond the face of the pleadings with id. at 177-79. court held: id. at 9. the class action analysis should include an assessment of the merits, 168 f.r.d. 366, 402-03 judicial economy.101 the eisen court forbids a court's determination of the merits of a case during class certification). inc., 259 f.3d 154, 168 (3d cir. 2001) ("in reviewing a motion for class certification, a preliminary practices alleged to have been committed by the employer pursuant to a policy of racial a unified weak-form rule should be adopted requiring trial courts to blades, the plaintiffs alleged that defendant corporations conspired to inflate super-weak rules, weak-form rules do not allow a preliminary determination of the probability of 568 delaware journal of corporate law [vol. 34 see miller, supra note 71, at 63 (arguing that eisen does not require the implementation of 89 the well-pleaded allegations in the complaint."73 36 antitrust claim, plaintiffs typically must prove (1) a violation of the antitrust one might argue that eisen forbids a weak-form rule. proponents of overlap with merits issues'") (quoting in re initial pub. offerings sec. litig., 471 f.3d 24, 41 (2d 114 id. but cf. id. at 68 n.99 (quoting bartlett h. mcguire, the death knell for eisen: why 56 motor vehicles claimed that the defendant automobile manufacturers example, the second circuit's decision in in re initial public offerings a strong-form rule stands for the proposition that a court ruling on a id. (quoting wright et al., supra note 24, § 3911, at 485 n.45). certification ruling should only provide information discussing whether hall, to establish that defendants' actions caused injury and measurable 81 falcon makes clear that some inquiry into the merits during the class alleged in the complaint.69 rule 23 governs federal class action certification.13 id. would have experienced common impact from the changed msrps and dealer invoice prices accounting firm had violated the federal securities laws. id. at 465-66. strong-form, weak-form, and super-weak rules, all possess distinct pros and while not directly speaking about the inquiry into the merits issue, the do so could lead to an abundance of non-meritorious class certification 47 2 blades, 400 f.3d at 567. this note examines the recent united states court of appeals for the apparently considered portions of the testimony which dealt with the merits 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 571 id. preliminary hearing on the merits to determine who should pay notice plaintiffs' expert in motor vehicles. but unlike motor vehicles, whether the certainty, how a trier of fact will ultimately decide at trial.108 of delaware's class action certification rule by its courts in the corporate questions of law or fact common to the class; (3) the claims or defenses of the proclaim in good faith that the predominance prong of rule 23 was satisfied id. the adoption of a mandatory weak-form rule analysis will promote gariety, 368 f.3d at 366-67. the first circuit has noted that "circuits' use of the term plaintiff would be more inclined to remain in litigation if a court determines exploring the dissention among circuits and commentators' interpretations the court should be in ensuring that it must be resolved in order to determine the court went on to articulate that "a title vii class action, like any antitrust litigation (motor vehicles), specifically the court's treatment of rule proposals.71 merits, 51 duke l.j. 1251, 1264-65 (2002) (discussing the trial judge's opinion in eisen). id. at 29. must wonder when reliance on a party's pleadings would be considered a id. at 41. the defendants alleged that the plaintiffs' class the supreme court's holding was premised on three 580 delaware journal of corporate law [vol. 34 1994)). resolved disputes between the parties' experts that go to the merits of the certifying the class.49 49 (comparing the effect of the antitrust elements on a similar situation in europe). and asserted "that these business practices had the effect of suppressing the quells any 'need to examine each class member's individual circumstances . . . .'") (quoting in re id. rule, a court is not permitted to look beyond a party's pleadings to satisfy the the district court inquired into the relevant merits of the lawsuit when it and super-weak rule that balances the need for a fair trial with the need to rigorous end" of the inquiry into the merits spectrum.51 compare this to super-weak form rules which allow trial judges to make an inquiry into 121 practiced racial discrimination in its employment practices."27 400 f.3d 562 (8th cir. 2005); see also newton v. merrill lynch, pierce, fenner & smith, into, and considered, the merits of the plaintiffs' claim when it determined 124 laws, (2) an injury they suffered as a result of that violation, and (3) an looking outside of the plaintiffs' pleadings and required the trial court to abstract see in re new motor vehicles canadian exp. antitrust litig., 522 f.3d 6, 24 (1st cir. this note proposes that when the merits of pub. offerings sec. litig., 471 f.3d 24, 39 (2d cir. 2006); gariety, 368 f.3d at 366). "the judge's the predominance requirement of rule 23(b)(3) was the prong under requirements 2008). 76 may in the future be employed and all those mexican-americans who have first, the conspiracybetween automobile manufacturers court's early examination of the plaintiff's case, thus allowing that party to inherent in the other rule forms. for instance, a weak-form rule is superior these methods could show how the purchases were affected by these higher id. at 361. the "fraud-on-the-market" theory has been described as follows: 55 120 individual members, and that a class action is superior to other 2008). the prices of corn and soybean seeds in violation of section 1 of the sherman context will also be discussed.10 utilized two stages.5 secure the benefits of a class action without first satisfying the requirements inquiry into the merits is sometimes necessary to determine whether the alleged claims can be delaware's class action certification rule is discussed because it is modeled after the 2009] inrenewmotorvehiclescanadianexportantitrustlitigation 569 william b. rubenstein, a transactional model of adjudication, 89 geo.l.j. 371, 382-83 representative parties are typical of the claims or defenses of the class; and (4) the a unified adoption of a weak-form rule would protect defendants from and, second, the inflated prices "resulted in higher purchase prices the second, fourth, fifth, and seventh circuits have positioned id. at 567. requirements). the four requirements of rule 23(a) are: rigorous analysis, that the prerequisites of rule 23(a) have been satisfied."31 a key certified the classes under federal rule of civil procedure 23(b)(3).8 62 107 damages.114 component of the plaintiffs' complaint alleged that defendant toronto- scrutiny in this case.122 "searching" of an inquiry is required. the supreme exemplifies camp b's theory. in the federal circuit courts, however, are split as to how 71 it is well established that the merits of the and law of a case to enable improved rulings.83 "the me. 2006) (no. 1532), 2007 wl 2680372 [hereinafter hall expert report]. racial or ethnic discrimination."29 chamblee, supra note 12, at 1057 (citing jenkins v. raymark ind., inc., 782 f.2d 468, antitrust requirements were novel and hotly contested between the parties.113 organizing a trial (court costs, attorney's fees, discovery, etc.) are much outcomes."118 two approaches to prove that the potential class members were damaged by cir. 2005) (suggesting caution when "the class certification stage comes to the heart of the claim"). id. id. at 161. in gariety, the plaintiffs alleged violations of the 106 case, the district court must engage in a searching inquiry into federal rule of civil procedure 23 (rule 23) in an antitrust context. it expert witnesses, which concluded that "if defendants were unable to impose export restraints or the language within the supreme court's decision in falcon supports 66 a. rule 23: class actions plaintiffs argued that this motor vehicles, 522 f.3d at 20. see generally hall expert report, supra note 115. motor vehicles canadian exp. antitrust litig., 466 f. supp. 2d. 364 (d. me. 2006) (no. 1532), 27 64 litigation: examining the requisite levels 77 issue, it should certainly be persuaded by this majority. miller argues that when a court is permitted to look beyond a party's v. conclusion 307, 311-14 (5th cir. 2005) (discussing the overlap of the merits of the case and rule 23 50 eisen, 417 u.s. at 177-78. 4 570 delaware journal of corporate law [vol. 34 miller, supra note 71, at 66. when the plaintiffs failed to set forth an explanation of how each potential 471 f.3d 24 (2d cir. 2006). delaware's class action certification rule59 id. at 23(a); see also chamblee, supra note 12, at 1045 (discussing the rule 23(a) msrps for most, if not all, of their vehicles." id. at 20. professor robert hall, a plaintiff expert, 68 2005 wl 4708392 ("plaintiffs meet their burden on common impact '[i]f generalized evidence exists the questionable or nonmeritorious theories? a court's utilization of a weak- 31 between the defendants' fraud and the plaintiffs' purchase of stock in such a case is the plaintiffs' antitrust claim were clearlyenmeshed within the predominance eisen court did not explicitly state that an inquiry into the merits of a case 75 the court stated that "such disputes 97 51 affords plaintiffs.84 satisfy the predominance prong of rule 23). thus, the fraud-on-the-market presumption of reliance applied to the case when information, however, will not allow a plaintiff to predict, with anydegree of the split between circuits regarding how "searching" of an inquiry into the how to allocate notice costs, conducted a preliminary hearing on the merits potentially biased pleadings and examine the merits of a case along with the a court's "accurate assessment of . . . [a case's 1 see infra notes 108-22 and accompanying text. the i. introduction on appeal, the united states supreme court held that the trial court erred by b. a rigorous inquiry into the merits is necessary but the circuit courts' views id. at 10. misleading statements will therefore defraud purchasers of stock even if the 93 the second, fourth, fifth, and seventh circuits id. at 364, 367. a plaintiff must prove that "common issues . . . this note agrees with the first circuit that an an muster. debatable.70 id. at 1057-58 (citing in re visa check/mastermoney antitrust litig., 280 f.3d 124, 136 preliminary determination of the merits mayresult in substantial prejudice to the implementation of a weak-form rule 1041, 1044 (2004) (noting that trial judges "should be ever mindful of these" purposes when see hartz, supra note 90, at 727 ("the point is that the supreme court [in eisen] was not id. at 161. see id. at 82, 84. id. at 62-84. an oft-cited portion of the opinion clearly 26 likelihood of certification errors.77 the motor vehicles litigation is pending in the united states district court for the district lower-priced imports from canada. plaintiffs' claim was significantlybased 65 the first circuit's decision in in re new motor vehicles canadian