Sullivan v. De Beers: Certification of Nationwide Class Affirmed

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An en banc Court of Appeals panel has affirmed the certification and settlement of a nationwide class action alleging monopolistic conduct by the South African diamond distributor De Beers.  See Sullivan v. DB Investments, Inc., No. 08-2784 (3rd Cir. Dec. 20, 2011) (order affirming class certification).  The decision is notable for its holding that potential recovery under different states’ antitrust laws does not preclude certification.  Additionally, the Third Circuit rejected arguments to the effect that certification requires a showing that each member of a prospective class has a “colorable claim.”

This ruling suggests a moderate approach to the predominance analysis required by Dukes v. Wal-Mart, 131 S. Ct. 2541, 2555-56 (2011).  Sullivan interpreted Dukes to stand for the proposition that “the focus is on whether the defendant’s conduct was common as to all of the class members, not on whether each plaintiff has a ‘colorable’ claim.”  See Sullivan v. DB Investments, Inc., No. 08-2784 (3rd Cir. Dec. 20, 2011) (order affirming class certification) at 42.  The majority found that the plaintiffs satisfied the predominance requirement by establishing that the putative class members shared common legal and factual questions arising from De Beers’ alleged anticompetitive conduct.  Id. at 44.

The Sullivan panel also identified three “guideposts” that direct a trial court’s predominance inquiry.  Id. at 37.  First, the decision holds that “commonality is informed by the defendant’s conduct as to all class members and any resulting injuries common to all class members.”  Id. at 37-38.  Second, “variations in state law do not necessarily defeat predominance.”  Id.  And, third, “concerns regarding variations in state law largely dissipate when a court is considering the certification of a settlement class.”  Id.

Owing to its closely reasoned analysis, Sullivan v. De Beers is likely to figure prominently in class certification briefing in state and federal courts throughout the country.