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Fond du Lac Bumper Exchange Inc. v. Jui Li Enterprise Co. Ltd.

United States District Court, E.D. Wisconsin

June 24, 2016

FOND DU LAC BUMPER EXCHANGE, INC., on Behalf of itself and others similarly situated, Plaintiff,
JUI LI ENTERPRISE COMPANY, LTD., et al., Defendants. DZIDRA FULLER, et al., Plaintiffs,
JUI LI ENTERPRISE COMPANY, LTD., et al., Defendants. FIREMAN’S FUND INSURANCE, CO., on Behalf of itself and others similarly situated, Plaintiff,
JUI LI ENTERPRISE COMPANY, LTD., et al., Defendants. NATIONAL TRUCKING FINANCIAL RECLAMATION SERVICES LLC, on behalf of itself and others similarly situated, Plaintiff,
JUI LI ENTERPRISE COMPANY, LTD., et al., Defendants.


          LYNN ADELMAN District Judge.

         This is an antitrust case under The Sherman Act, 15 U.S.C. § 1. Before me now is a motion for class certification, numerous motions to seal, and several miscellaneous motions.

         I. Background

         Defendants are manufacturers of aftermarket automotive sheet metal parts. Cars require replacement parts as they age. Replacement parts can be either original equipment manufacturer parts (“OEM” parts), which are often distributed through the auto manufacturers’ own service channels (like dealerships) and sold under their brand names, or aftermarket parts, which have the same specifications as OEM parts but are usually not manufactured by OEMs or sold with the auto manufacturers’ certification. The aftermarket sheet metal parts at issue in this litigation include hoods, doors, fenders, bonnets, floor panels, trunk assemblies, tailgates, roof panels, and reinforcement parts. Plaintiffs allege that defendants conspired to fix, raise, maintain, and stabilize the prices of aftermarket sheet metal parts in violation of The Sherman Act.

         Plaintiffs propose two classes: direct purchaser plaintiffs (“DPPs”) and indirect purchaser plaintiffs (“IPPs”). The DPPs filed the class certification motion at issue. They wish to certify the following class:

All persons and entities in the United States, and its territories and possessions, that purchased AM Sheet Metal Parts directly from a Defendant between at least as early as January 1, 2003, and September 4, 2009 (“the Class Period.”). Excluded from the Class are any judicial officer who is assigned to hear any aspect of this action, governmental entities, Defendants, co-conspirators, and the present and former parents, predecessors, subsidiaries and affiliates of the foregoing.

         Mem. in Supp. of DPPs’ Mot. for Class Certification at 6 (ECF No. 711).[1] The named DPPs are Fond du Lac Bumper Exchange Inc. (“Fond du Lac Bumper”) and Roberts Wholesale Body Parts Inc. (“Roberts”), two wholesale auto part distributors who directly purchased from at least one named defendant during the class period. Originally, defendants included Jui Li Enterprise Company Ltd., Tong Yang Industry Co. Ltd., Taiwan Kai Yih Industrial Co. Ltd. (“TKY”), Gordon Auto Body Parts, Auto Parts Industrial Ltd., Cornerstone Auto Parts LLC, and several subsidiary companies affiliated with these main defendants. However, DPPs reached a class-wide settlement with Tong Yang, TKY, and Gordon, which I approved on August 13, 2015.[2] Thus, the only defendants remaining are Auto Parts Industrial and Cornerstone, which are represented by the same counsel and which I understand are affiliated, and Jui Li. The remaining defendants oppose class certification.

         II. Evidentiary Objections

         I first address defendants’ evidentiary objections to certain documents which DPPs rely on to support their motion for class certification. Defendants object to DPPs use of documents produced by the settling defendants, arguing that they are hearsay and have not been properly authenticated as business records. See Fed. R. Evid. 803(6). Defendants also object to documents used by DPPs’ expert, documents not directly related to the alleged conspiracy, and 17 specific documents submitted by DPPs.

         Defendants cite no authority in support of their claim that evidence submitted in support of class certification must first be found admissible under the Federal Rules of Evidence. The cases that defendants cite deal with the admissibility of evidence at trial, see, e.g., United States v. Gomez, 763 F.3d 845 (7th Cir. 2014); Wheeler v. Sims, 951 F.2d 796 (7th Cir. 1992); Datamatic Servs., Inc. v. United States, 909 F.2d 1029 (7th Cir. 1990); Rambus, Inc. v. Infineon Techs. AG, 348 F.Supp.2d 698 (E.D. Va. 2004); in a bankruptcy proceeding, see, e.g., Matter of James Wilson Assocs., 965 F.2d 160 (7th Cir. 1992); or at summary judgment, see, e.g., Eisenstadt v. Centel Corp., 113 F.3d 738 (7th Cir. 1997); Matthews v. Waukesha Cty., 937 F.Supp.2d 975 (E.D. Wis. 2013). Seventh Circuit case law does not require that authenticity and admissibility be established prior to class certification. See, e.g., Blihovde v. St. Croix Cty., 219 F.R.D. 607, 618 (W.D. Wis. 2003); Perkins v. Dart, No. 12-cv-00577, 2014 WL 866166, at *2 (N.D. Ill. Mar. 5, 2014); Coan v. Nightingale Home Healthcare, Inc., No. 1:05-CV-0101-DFH-TAB, 2005 WL 1799454, at *1 n.1 (S.D. Ind. June 29, 2005); Dicker v. Allstate Life Ins. Co., No. 89 C 4982, 1990 WL 106550, at *6 (N.D. Ill. July 12, 1990). Class certification must be considered “[a]t an early practicable time, ” Fed.R.Civ.P. 23(c)(1)(A), making objections based on admissibility and authenticity premature. See Dicker, 1990 WL 106550, at *6. The questions of authenticity and admissibility raised by defendants are pertinent to the merits of DPPs’ claims, not the Rule 23 analysis. Perkins, 2014 WL 866166, at *2.

         Further, DPPs have not yet conducted discovery on admissibility and authenticity issues. Defendants, themselves, argued that I should not permit DPPs to conduct such discovery until after class certification because it would be “premature.” See, e.g., May 2015 Status Conference Statement at 16 (ECF No. 688) (“[S]tipulations as to authenticity and admissibility of documents will not be utilized until the trial on the merits of this matter. . . . Therefore, the exercise remains premature and should take place closer to trial.”); April 2015 Status Conference Statement at 3 (ECF No. 617) (same); September 2015 Status Conference Statement at 6 (ECF No. 767) (refusing to discuss admissibility issues “before it has had an opportunity to oppose class certification”). Thus, at this preliminary stage, I will not require DPPs to establish the admissibility and authenticity of documents supporting class certification. See Coan, 2005 WL 1799454, at *1 n.1 (Hamilton, J.) (“At this preliminary stage and for these preliminary [class certification] purposes, plaintiffs need not come forward with evidence in a form admissible at trial.”).

         Even if I were to consider defendants’ evidentiary objections, they are too vague and conclusory to merit much discussion. For example, defendants assert that the declarations from settling defendants establishing authenticity and admissibility filed by DPPs are inadequate as “blanket assertion[s], ” but they cite no supporting authority. See Defs. Jui Li Enter. Co. Ltd., Auto Parts Indus. Ltd., and Cornerstone Auto Parts, LLC’s Objs. to DPPs’ Evid. in Supp. of Mot. for Class Certification at 2 (ECF No. 880). And in objecting to the 17 documents, defendants merely recite a laundry list of objections without any argument or explanation as to how they apply to the specific document at issue. See Id. at 3–11. The objections fail for this reason as well. See Davis v. Carter, 452 F.3d 686, 691–92 (7th Cir. 2006) (stating that perfunctory and undeveloped arguments not supported by pertinent authority are waived).

         III. Class Certification

         Turning to class certification, Fed.R.Civ.P. 23(a) requires DPPs to show that (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. DPPs must also show that the litigation falls into one of the categories listed in Rule 23(b), and they argue that, under Rule 23(b)(3), it is a suit in which (1) questions of law or fact common to the class predominate over questions affecting only individual members, and (2) a class action is superior to other available methods for adjudicating the controversy.

         A. Numerosity

         In DPPs’ settlement with the Tong Yang, TKY, and Gordon defendants, 468 settlement class members filed claims, and the class DPPs seek to certify will include roughly the same number of members. This is sufficiently numerous to render joinder of all class members impracticable. See, e.g., Hubler Chevrolet, Inc. v. Gen. Motors Corp., 193 F.R.D 574, 577 (S.D. Ind. 2000) (concluding that joinder of over 200 plaintiffs would be impracticable) Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181, 183–84 (N.D. Ill. 1992) (concluding that joinder of an estimated 120 to 300 plaintiffs would be impracticable). Thus, DPPs satisfy the numerosity requirement.

         B. Typicality and Adequacy of Representation

         DPPs must also establish typicality and adequacy of representation, which often overlap. Typicality requires a showing that the “claims or defenses of the representative parties are typical of the claims or defenses of the class.” Fed.R.Civ.P. 23(a)(3). “A claim is typical if it arises from the same event or course of conduct that gives rise to the claims of the other class members and her claims are based on the same legal theory.” Oshana v. Coca-Cola Co., 472 F.3d 506, 514 (7th Cir. 2006) (internal quotations and citation omitted). Establishing typicality “simply requires a showing . . . that others suffer from similar grievances.” Eggleston v. Chi. Journeymen Plumbers’ Local Union No. 130, U.A., 657 F.2d 890, 896 (7th Cir. 1981). Some variation in the claims is acceptable as long “the named plaintiff’s claim and the class claims [are] so interrelated that the interests of the class members will be fairly and adequately protected in their absence.” Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157 n.13 (1982); see also Oshana, 472 F.3d at 514 (“[S]ome factual variations may not defeat typicality.”); In re Ready-Mix Concrete Antitrust Litig., 261 F.R.D. 154, 168 (S.D. Ind. 2009) (“[T]he representatives’ claims need not be identical to the class members; rather, it is sufficient if they are substantially similar.”).

         Closely related to typicality is Rule 23(a)’s requirement that “the representative parties will fairly and adequately protect the interests of the class.” In connection with this requirement, I consider whether the putative class representatives (1) have antagonistic or conflicting claims with other class members, (2) have a sufficient interest in the outcome of the case to ensure vigorous advocacy, and (3) have competent, qualified, and experienced counsel capable of vigorously litigating the suit. Herkert v. MRC Receivables Corp., 254 F.R.D. 344, 350–51 (N.D. Ill. 2008). The purpose of the typicality and adequacy of representation requirements is to ensure that the class representative’s interests are aligned with the class’s interests “‘so that the [class representative] will work to benefit the entire class through pursuit of their own goals.’” Ready-Mix Concrete, 261 F.R.D. at 168 (quoting In re Prudential Ins. Co. of Am. Sales Practice Litig., 148 F.3d 283, 311 (3d Cir. 1998)).

         Defendants argue that DPPs do not satisfy these requirements. First, they assert that different class members had different bargaining power. They point to class member, LKQ, which apparently makes up 60 percent of the purchaser market and cite such cases as Deiter v. Microsoft Corp., 436 F.3d 461 (4th Cir. 2006) and In re Graphics Processing Units Antitrust Litig., 253 F.R.D. 478 (N.D. Cal. 2008), which involved classes including both wholesale buyers of a product, who negotiated prices with the seller, and retail buyers, who paid prices set in advance. The present case, however, is distinguishable in several respects. First, while some class members in the present case may have had increased bargaining power, unlike in Deiter and Graphics Processing Units, there is no sub-set of class members who had no bargaining power and simply paid prices set by defendants. Second, the Deiter and Graphic Processing Units courts concluded that the class representatives’ claims were atypical of a large portion of the putative class. In the present case, however, only LKQ had substantially more bargaining power than other class members. This is not enough to show that Fond du Lac Bumper and Roberts’ claims are atypical of the class. Further, defendants offer no reason to believe that some difference in bargaining power would create antagonism between the class representatives and the class or otherwise render Fond du Lac Bumper and Roberts inadequate as class representatives, and I fail to see how it would.

         Defendants also point to certain facts which they contend render the putative class representative atypical and inadequate, such as the fact that Fond du Lac Bumper only purchased from one defendant, a distributor rather than a manufacturer. This, however, does not make Fond du Lac Bumper atypical or inadequate. Fond du Lac Bumper purchased directly from a named defendant, TYG Products Inc., thus it is within the class definition. See Am. Compl. at 4, 25 (ECF No. 217) (defining the class as “[a]ll persons and entities . . . that purchased AM Sheet Metal Parts directly from a Defendant” and naming “TYG Products Inc.” as a defendant). It is, thus, a typical DPP. Further, the class definition requires only one purchase, id., and because defendants are subject to joint and several liability, Fond du Lac Bumper has an incentive to proceed against all defendants in order to maximize the recovery. See In re Linerboard Antitrust Litig., 203 F.R.D. 197, 208 (E.D. Pa. 2001), aff’d, 305 F.3d 145 (3d Cir. 2002).

         As to Roberts, defendants argue that it knew about certain tooling agreements[3]and that such knowledge renders it atypical and inadequate. While prior knowledge of a conspiracy may create a conflict of interest with the class, the defendants’ leap from knowledge of tooling agreements to knowledge of a price-fixing conspiracy is tenuous at best. Roberts’ representative testified that Roberts did not see tooling agreements as indicative of a price-fixing conspiracy but understood them to mean simply that a vendor was “producing [a particular tool] out of one warehouse.” Servais Decl. Ex. C at 6 (ECF No. 813-3). Roberts had no knowledge of how vendors negotiated tooling agreements. Id. at 8–11. There is no evidence that Roberts knew of a price-fixing conspiracy, and defendants provide no reason to believe that knowledge of tooling agreements creates a conflict of interest between Roberts and other class members, and I fail to see how it would.

         Defendants also argue that Fond du Lac Bumper and Roberts made indirect purchases of aftermarket sheet metal from non-defendants, unlike other class members. The class representatives, however, made direct purchases from defendants, and defendants do not explain how the existence of other purchases creates antagonism with class members, and I fail to see how they would.

         Defendants also contend that they have unique, individual defenses against the putative class members which preclude a finding of typicality and adequacy of representation. The existence of individual defenses, however, does not defeat typicality. “Typicality under Rule 23(a)(3) should be determined with reference to the company’s actions, not with respect to particularized defenses it might have against certain class members.” Wagner v. NutraSweet Co., 95 F.3d 527, 534 (7th Cir. 1996).

         With regard to adequacy of representation, claimants vulnerable to unique defenses are not allowed to be representative plaintiffs if they might be “distracted by a relatively unique personal defense.” Koos v. First Nat’l Bank of Peoria, 496 F.2d 1162, 1165 (7th Cir. 1974); see also J.H. Cohn & Co. v. Am. Appraisal Assocs., Inc., 628 F.2d 994, 999 (7th Cir. 1980). Defendants argue that Fond du Lac Bumper and Roberts are subject to potential unique defenses such as lack of standing, absence of damages, and statute of limitations, but they do not elaborate on these arguments and fail even to specify which defense would apply to which named representative. I assume that the lack of standing defense relates to defendants’ argument that Fond du Lac Bumper is not a “direct” purchaser because it purchased from a distributor subsidiary of defendant Tong Yang. As noted above, however, this is a weak argument because Fond du Lac Bumper directly purchased from a named defendant. I assume the statute of limitations defense is related to defendants’ argument that Roberts knew about the conspiracy before 2000, but again, this is also a weak argument because of the absence of a link between knowledge of tooling agreements and knowledge of a price-fixing ...

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