D.C. Circuit Applies Comcast v. Behrend To Overturn Class Certification In Rail Freight Fuel Surcharge Litigation

On Aug. 9, 2013, the D.C. Circuit Court of Appeals in a unanimous decision overturned the district court's order granting certification of a class of direct purchasers in In re Rail Freight Fuel Surcharge Antitrust Litigation, 2013 WL 4038561(D.C. Cir. 2013). Plaintiffs, shippers who purchased railroad freight shipping services, alleged that the defendants conspired for many years to fix prices in setting rate-based fuel surcharges. They sought and obtained certification of a class action under Fed. R. Civ. P. 23(a) and 23(b)(3), which is granted if the court finds that "the questions of law or fact common to class members predominate over any questions affecting only individual class members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy."

The D.C. Circuit reversed the district court's order based on the U.S. Supreme Court's recent decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). In Comcast, the Supreme Court overturned an order certifying a class action. The plaintiffs in Comcast had proposed four theories of antitrust impact, all but one of which was rejected by the district court. The sole basis for certifying the class under Rule 23(b)(3) was a damages model based on all four theories of impact. The Court held that basing class certification on a damages model divorced from the theory of liability was insufficient under Rule 23(b)(3).

The D.C. Circuit embraced the analysis in Comcast, explaining that "[it] is now indisputably...