United Food & Commercial Workers Unions v. Warner Chilcott Ltd. (In Re Asacol Antitrust Litig.)

United States Court of Appeals
For the First Circuit

No. 18-1065

IN RE: ASACOL ANTITRUST LITIGATION

UNITED FOOD & COMMERCIAL WORKERS UNIONS AND EMPLOYERS MIDWEST
HEALTH BENEFITS FUND, on behalf of itself and all others
similarly situated; MARK ADORNEY,

Plaintiffs,

TEAMSTERS UNION 25 HEALTH SERVICES & INSURANCE PLAN, on behalf
of themselves and all others similarly situated; NECA-IBEW
WELFARE TRUST FUND, on behalf of themselves and all others
similarly situated; WISCONSIN MASONS' HEALTH CARE FUND, on
behalf of itself and all others similarly situated; MINNESOTA
LABORERS HEALTH AND WELFARE FUND, on behalf of itself and all
others similarly situated; AFSCME HEALTH AND WELFARE FUND;
PENNSYLVANIA EMPLOYEES BENEFIT TRUST FUND; AHOLD U.S.A., INC.;
ROCHESTER DRUG CO-OPERATIVE, INC.; VALUE DRUG COMPANY; MEIJER,
INC.; MEIJER DISTRIBUTION, INC.,

Plaintiffs, Appellees,

v.

WARNER CHILCOTT LIMITED; ALLERGAN, INC., f/k/a Actavis, PLC;
ALLERGAN USA, INC.; ALLERGAN SALES, LLC; ALLERGAN, PLC, Formerly
known as Actavis, PLC,

Defendants, Appellants,

ZYDUS PHARMACEUTICALS USA INC.; CADILA HEALTHCARE LIMITED;
WARNER CHILCOTT (US), LLC; WARNER CHILCOTT SALES (US), LLC;
WARNER CHILCOTT COMPANY, LLC,

Defendants.
 APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Denise J. Casper, U.S. District Judge]

Before

Lynch, Kayatta, and Barron,
Circuit Judges.

J. Mark Gidley, with whom Peter J. Carney, Dana Foster,
Matthew S. Leddicotte, Jaclyn Phillips, Maxwell J. Hyman, Robert
A. Milne, Jack E. Pace III, Bryan D. Gant, Kelly Newman, and White
& Case LLP were on brief, for appellants.
Richard A. Samp and Marc B. Robertson on brief for Washington
Legal Foundation, amicus curiae.
Justin N. Boley, with whom Kenneth A. Wexler, Tyler J. Story,
Wexler Wallace LLP, Tyler W. Hudson, Eric D. Barton, David Barclay,
Wagstaff & Cartmell, LLP, Nathaniel L. Orenstein, Todd A. Seaver,
Berman Tabacco, Daniel E. Gustafson, Karla M. Gluek, Michelle J.
Looby, Joshua J. Rissman, Gustafson Gluek PLLC, Jeffrey L. Kodroff,
William G. Caldes, John A. Macoretta, Spector Roseman Kodroff &
Willis, P.C., Peter J. Mougey, Levin, Papantonio, Thomas,
Mitchell, Rafferty & Proctor, P.A., Jonathan D. Karmel, and Karmel
Law Firm were on brief, for appellees.

October 15, 2018
 KAYATTA, Circuit Judge. Drug manufacturer Warner

Chilcott Limited pulled one of its products -- Asacol -- from the

market just months before the drug's patent protection expired.

Warner simultaneously introduced a similar but not exactly

identical substitute drug called Delzicol, the patent protection

for which ran years longer. This coordinated withdrawal and entry

of the two drugs allegedly precluded generic manufacturers from

introducing a generic version of Asacol, which would have provided

a lower-cost alternative to Warner's drugs Delzicol and Asacol HD,

a version of Asacol that was also still under patent protection.

Crying foul, the named plaintiffs in this case filed a class action

alleging a violation of the consumer protection and antitrust laws

of twenty-five states and the District of Columbia. On plaintiffs'

motion, the district court certified a class of all Asacol

purchasers who subsequently purchased Delzicol or Asacol HD in one

of those twenty-six jurisdictions. In so doing, the court found

that approximately ten percent of the class had not suffered any

injury attributable to defendants' allegedly anticompetitive

behavior. Nevertheless, the district court determined that those

uninjured class members could be removed in a proceeding conducted

by a claims administrator. We find this approach to certifying a

class at odds with both Supreme Court precedent and the law of our

circuit. We therefore reverse.

- 3 -
 I.

Asacol is a pharmaceutical drug that treats mild to

moderate ulcerative colitis, a chronic inflammatory bowel

disorder. Developed and first manufactured by Procter and Gamble

Pharmaceuticals, Asacol debuted on the market in 1992 and received

the protection of two patents. Those patents expired on July 30,

2013. In 2008, Procter and Gamble brought a new variation of

Asacol to market, dubbed Asacol HD, which treated moderate, but

not mild, ulcerative colitis. This new drug differed from Asacol

in two key ways: it included twice the dosage, and it replaced

Asacol's single-layer coating with a dual-layer coating. Asacol

HD's patent protection extended years beyond that of Asacol. In

2009, Warner Chilcott purchased Procter and Gamble's

pharmaceutical portfolio, which included both Asacol and Asacol

HD.

On March 18, 2013, only a few months shy of the end of

Asacol's patent protection, Warner stopped selling and marketing

Asacol. On the same day, Warner introduced a new drug: Delzicol.

Delzicol, like Asacol, treats ulcerative colitis. The two drugs

contain the same active ingredient and dosage, and sold for the

same price. Unlike Asacol, Delzicol comes in a capsule that does

not contain dibutyl phthalate ("DBP"). DBP is a plasticizer, the

safety of which appears to have been the subject of a dialogue

between the FDA and Asacol's manufacturers.

- 4 -
 On June 22, 2015, several plaintiffs (collectively

"plaintiffs," "named plaintiffs," or "class representatives")

filed suit on their own behalf and on behalf of a putative class.

These plaintiffs are all union-sponsored benefit plans that paid

for the purchases of Asacol HD and Delzicol. In their operative

complaint, plaintiffs allege that Warner harbored an

anticompetitive motivation for its conduct. According to the

complaint, Warner's aim in pulling Asacol from the market and

introducing Delzicol was to preclude the possibility of market

entry of generic drugs, which would have cut into Warner's profits.

State law provides the mechanism for this preclusion. Under most

state substitution laws, pharmacists can fill a prescription by

substituting a generic drug for the prescribed brand drug, but

only if the brand drug is listed as a "reference" drug for the

generic. This automatic substitution, plaintiffs say, provides

the "only viable cost-efficient means" for new generics to

"compet[e] with brand drugs." But even a small alteration to the

brand drug, such as substituting a tablet form for a capsule form,

can prevent a generic equivalent from using the discontinued form

as a reference drug. Thus, by pulling Asacol, Warner effectively

prevented generic drugs that would have used Asacol as a reference

drug from entering the market after the expiration of Asacol's

- 5 -
patents.1 And the introduction of a similar, but not wholly

equivalent, drug -- Delzicol -- with the potential for longer-

lasting patent protection, allowed Warner to substantially retain

its market share. Thus, plaintiffs contend, Warner forced

consumers into a "hard switch" and maintained its monopoly power

unencumbered by competition from generic entry. Plaintiffs'

theory of liability rests on a Second Circuit decision that

condemns similar such conduct. See New York ex rel. Schneiderman

v. Actavis PLC, 787 F.3d 638 (2d Cir. 2015).

The named plaintiffs and the putative class members

purchased Warner's products not from Warner directly, but from

third party intermediaries. That means that they cannot sue Warner

for damages under the federal antitrust law. Illinois Brick Co.

v. Illinois, 431 U.S. 720, 736 (1977). Plaintiffs therefore seek

recovery under the laws of twenty-five states and the District of

Columbia that allow indirect purchasers to challenge

anticompetitive conduct by manufacturers whose products consumers

acquire through intermediaries.2 All twenty-six jurisdictions,

1 A number of our recent opinions provide comprehensive overviews
of the regulatory framework that governs the introduction of
generic drugs. See In re Nexium (Esomeprazole) Antitrust Litig.,
842 F.3d 34, 40-42 (1st Cir. 2016); In re Loestrin 24 Fe Antitrust
Litig., 814 F.3d 538, 542-43 (1st Cir. 2016); In re Nexium
Antitrust Litig., 777 F.3d 9, 15-16 (1st Cir. 2015).
2 Like the district court and the parties, we will use "states"

informally in the remainder of this opinion to refer to both states
and the District of Columbia.

- 6 -
according to plaintiffs, generally interpret state law restraints

on anticompetitive activity consistently with federal courts'

interpretation of federal antitrust law, but have "Illinois Brick

repealer" laws allowing antitrust damage actions by indirect

purchasers against manufacturers.

Plaintiffs moved for class certification on behalf of a

class of all similarly situated indirect purchasers, including any

individual consumers who purchased the relevant Warner products

from drug retailers in the twenty-six jurisdictions. Plaintiffs

designed the class to include only those persons or entities that

both purchased Asacol prior to July 31, 2013 -- the approximate

date on which Asacol's patent protection expired -- and also

purchased either Asacol HD or Delzicol after July 31, 2013. Both

sides introduced expert evidence regarding the propriety of class

certification.

The district court granted plaintiffs' motion for class

certification. Rejecting Warner's argument to the contrary, the

district court concluded that the named plaintiffs had standing to

prosecute claims on behalf of class members under various state

laws even if the named plaintiffs themselves had not made purchases

in all those states. Any difference between the claims of the

named plaintiffs and those of unnamed class members was a matter

for consideration under Rule 23, and not a matter of Article III

standing, the court ruled.

- 7 -
 Moving to the Rule 23 analysis, the district court first

found that plaintiffs' proposed class satisfied the four elements

of Rule 23(a): numerosity, commonality, typicality, and adequacy.

See Fed. R. Civ. P. 23(a). The district court also concluded that

the proposed class passed muster under Rule 23(b)(3) because

common questions predominated over individual questions and a

class action presented a superior method for resolving plaintiffs'

claims.

In making those determinations, the district court

grappled with a problem that has been the source of much debate

among the circuits: the presence of uninjured class members. The

district court presumed that approximately ten percent of class

members had not been injured by Warner's allegedly anticompetitive

conduct because, even had a lower-priced generic alternative been

available, these consumers would not have switched to it.3 The

court based this conclusion on the reports of both sides' experts.

Those experts used the experiences of similar pharmaceutical

products as benchmarks from which to infer likely market dynamics

had a lower-priced generic form of Asacol been introduced.

Defendants' expert, Dr. Bruce Strombom, pointed to a benchmark

product in which the prevalence of consumers who stuck with the

3 Plaintiffs make no explicit claim that the price of Delzicol and
Asacol HD would have been lower had generic versions of Asacol
been available.

- 8 -
higher-priced brand decreased to 10.6% within approximately three

years after generic entry. Dr. Rena Conti, plaintiffs' expert,

looked to different benchmark products, from which she concluded

that the market share of generic Asacol would have grown to

approximately 88.8% within a year of generic entry, and would then

have risen to about 91.4% thirty-one months after generic entry.

From these two reports, the district court presumed that "by the

end of the relevant period, somewhere around 10% of the class

members would have opted for Asacol HD or Delzicol even in the

presence of generic Asacol." In re Asacol Antitrust Litig., 323

F.R.D. 451, 482 (D. Mass. 2017).

The district court nevertheless concluded that the

number of these uninjured class members was "de minimis." The

district court also accepted plaintiffs' contention that they

could remove these uninjured persons from the class with the

assistance of a so-called claims administrator. Our opinion in

Nexium, plaintiffs argue, permitted such a process. See In re

Nexium Antitrust Litig., 777 F.3d 9 (1st Cir. 2015).

The district court's order certifying the class raises

issues on which circuits are split and that are likely to arise in

other cases in this circuit before an appeal from a final judgment

would -- if ever -- ripen in this case. A panel of this court

therefore found "special circumstances" justifying the grant of

leave to pursue an interlocutory appeal under Rule 23(f). See

- 9 -
Fed. R. Civ. P. 23(f); Waste Mgmt. Holdings, Inc. v. Mowbray, 208

F.3d 288, 293-94 (1st Cir. 2000). In accord with this grant,

Warner presents two primary challenges. First, it argues that,

because the named plaintiffs only made purchases in four states,

they lack Article III standing to assert claims under the laws of

states in which they did not make purchases. Second, Warner takes

issue with the district court's decision to certify a class

containing uninjured class members.

II.

We review de novo the existence of Article III standing

required to invoke the jurisdiction of a federal court. See

Anderson ex rel. Dowd v. City of Boston, 375 F.3d 71, 92 (1st Cir.

2004). The named plaintiffs in this case indisputably have

standing to litigate their own claims against Warner. They

plausibly allege an injury in the form of lost money fairly

traceable to an allegedly unlawful supra-competitive price, and

seek classic redress in the form of a damage award. See generally

Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). Nor does

the standing requirement of Article III erect any impediment to

the named plaintiffs' ability to litigate as class representatives

materially identical claims by other persons under the same laws

- 10 -
under which the named plaintiffs' claims arise. Gratz v.

Bollinger, 539 U.S. 244, 267 (2003).

Warner challenges, instead, the named plaintiffs'

standing to bring claims on behalf of class members whose claims

arise under the laws of the twenty-two states within which no named

plaintiff has either resided or purchased the relevant Warner

products during the class period. These states, apparently, apply

their relevant law only to claims that arise out of purchases made

within the state or by state residents. Therefore, says Warner,

because no named plaintiff can successfully bring a claim under

the laws of any of those twenty-two states, they necessarily lack

standing to bring such claims as representatives of persons who

might sue successfully in those states.

One might think that we could reject this argument merely

by observing that whether a plaintiff may represent persons who

themselves have standing to bring the claims alleged is a question

to be addressed under Rule 23, rather than a question of standing.

After all, that is how one would presumably proceed in seemingly

analogous situations outside of Rule 23. For example, in deciding

whether a fiduciary, a parent, a personal representative, or a

partner may prosecute a claim on behalf of another person, courts

generally focus not on whether the putative representative

independently satisfies Article III standing, but rather on

whether that party qualifies under the applicable law as a

- 11 -
representative of the one who does have standing. See, e.g., Sam

M. ex rel. Elliot v. Carcieri, 608 F.3d 77, 83 n.5 (1st Cir. 2010);

Goodwin v. C.N.J., Inc., 436 F.3d 44, 49 (1st Cir. 2006); Pérez v.

Clinica Dr. Perea, 915 F.2d 1556, 1990 WL 151307, at *3 (1st Cir.

July 9, 1990) (unpublished); Levin v. Berley, 728 F.2d 551, 555-

56 (1st Cir. 1984). And sometimes the authority for such a person

to bring a suit as a representative of another resides in the

Federal Rules of Civil Procedure. See, e.g., Fed. R. Civ.

P. 17(c)(2) (allowing a "next friend" to sue on behalf of a minor

with no requirement that the next friend possess standing to bring

such a claim on behalf of herself or himself).

Precedent, though, forecloses such a simple and quick

answer. See Warth v. Seldin, 422 U.S. 490, 502 (1975); Blum v.

Yaretsky, 457 U.S. 991, 1000-01 (1982); see also 1 William B.

Rubenstein, Newberg on Class Actions § 2:5 (5th ed. 2012) ("In a

class action suit with multiple claims, at least one named class

representative must have standing with respect to each claim.").

In Blum, the Supreme Court confronted an effort by two plaintiffs

to represent a class of Medicaid patients challenging the decisions

of a state committee to transfer them to different levels of

nursing home care, allegedly without sufficient procedural

safeguards. The two named plaintiffs, who had been threatened

with transfers to lower levels of nursing care, also sought to

press the claims of persons who might object to being transferred

- 12 -
to facilities providing higher levels of care. 457 U.S. at 1000-

02. The named plaintiffs had not been transferred or threatened

with transfers to facilities providing higher levels of care.

Furthermore, the conditions under which transfers to such

facilities occurred were sufficiently different from transfers to

facilities providing lesser care "that any judicial assessment of

their procedural adequacy would be wholly gratuitous and

advisory." Id. at 1001. For that reason, the plaintiffs lacked

"the necessary stake in litigating conduct . . . to which [the

plaintiffs] ha[d] not been subject." Id. at 999.

In keeping with this precedent, we have trained our

Article III focus in class actions on "the incentives of the named

plaintiffs to adequately litigate issues of importance to them."

Plumbers' Union Local No. 12 Pension Fund v. Nomura Asset

Acceptance Corp., 632 F.3d 762, 770 (1st Cir. 2011). This focus

is in many respects simply an application to aggregate litigation

of the basic Article III requirement that a plaintiff possess "such

a personal stake in the outcome of the controversy as to assure

. . . concrete adverseness." Baker v. Carr, 369 U.S. 186, 204

(1962).

Nothing in this precedent, though, suggests that the

claims of the named plaintiffs must in all respects be identical

to the claims of each class member. See Gratz, 539 U.S. at 262-

68. Requiring that the claims of the class representative be in

- 13 -
all respects identical to those of each class member in order to

establish standing would "confuse[] the requirements of

Article III and Rule 23." Fallick v. Nationwide Mut. Ins. Co.,

162 F.3d 410, 421 (6th Cir. 1998). Indeed, such an approach would

render superfluous the Rule 23 commonality and predominance

requirements because any case that survived such a strict

Article III analysis would by definition present only common

issues. So the question of standing is not: Are there differences

between the claims of the class members and those of the class

representative? Rather, the pertinent question is: Are the

differences that do exist the type that leave the class

representative with an insufficient personal stake in the

adjudication of the class members' claims? Here, with one

exception, we think not.

Importantly, the claims of the named plaintiffs parallel

those of the putative class members in the sense that, assuming a

proper class is certified, success on the claim under one state's

law will more or less dictate success under another state's law.

Even while arguing that there may be a few subtle differences in

the attitudes of some state courts toward such claims, Warner

concedes that the "parties do agree that Plaintiffs' liability

theories as to monopolization are limited to a construction of

state antitrust laws that parallel the federal Sherman Act." Under

those parallel laws, all plaintiffs who were forced to pay a higher

- 14 -
price in the absence of generic competition have a substantial and

shared interest in proving that the higher price was the result of

unlawful monopolizing conduct that is redressable by an award of

damages. And the fact that judgments for some class members will

nevertheless enter under the laws of states other than the states

under which any of the class representatives' judgments will enter,

where those laws are materially the same, has no relevant bearing

on the personal stake of the named plaintiffs in litigating the

case to secure such judgments. See Morrison v. YTB Int'l, Inc.,

649 F.3d 533, 536 (7th Cir. 2011) (holding that a state law's limit

to in-state events is an "application of choice-of-law principles

[that] has nothing to do with standing" (emphasis in original)).

Indeed, the fact that the judgments will enter under different

statutes is such a minor point of difference that in individual

actions it might not even preclude a finding of issue preclusion.

B&B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1306

(2015); see also Smith v. Bayer Corp., 564 U.S. 299, 310 (2011)

(rejecting the proposition "that the source of law is all that

matters" in determining whether two issues differ).

It is true that, in order to prevail on their claims,

the named plaintiffs need not prove where a class member resides,

or where the class member made a purchase. But that same thing

could be said of the named plaintiffs' need to prove that any class

member made a purchase anywhere, even in the states under which

- 15 -
the named plaintiffs' claims arise. As we have previously

observed, "[i]n a properly certified class action, the named

plaintiffs regularly litigate . . . claims of other class members

based on transactions in which the named plaintiffs played no

part." Plumbers' Union, 632 F.3d at 769.

Warner does argue that the applicable laws in a few

states actually do have added substantive elements that the named

plaintiffs will have no interest in proving: First, the laws of

three states require proving some effect on intrastate commerce,

see In re Flonase Antitrust Litig., 610 F. Supp. 2d 409, 415-16

(E.D. Pa. 2009) (Tennessee); Sun Dun, Inc. v. Coca-Cola Co., 740

F. Supp. 381, 396-97 (D. Md. 1990) (District of Columbia); In re

Microsoft Corp. Antitrust Litig., 2003 WL 22070561, at *2 (D. Md.

Aug. 22, 2003) (Maryland); Second, some states treble damages,

compare, e.g., Nev. Rev. Stat. § 598A.210(2) (providing for treble

damages); Wis. Stat. § 133.18(1)(a) (same) with Fla. Stat.

§ 501.211(2) (providing only for actual damages) and Mass. Gen.

Laws ch. 93A, § 11 (requiring proof of willful conduct as a

predicate to trebling); and, Third, New York's consumer protection

statute requires proof of deception, see Stutman v. Chem. Bank,

731 N.E.2d 608 (N.Y. 2000).

Warner, though, makes no showing that an effect on

intrastate commerce will even be a disputed issue. Trebling, in

turn, seems irrelevant to our inquiry unless it is not

- 16 -
automatically applied to the common surcharge that the named

plaintiffs have ample self-interest in proving. So that leaves

Warner's unopposed contentions that New York law may require proof

of deception, and that trebling in Massachusetts apparently

requires proof of willfulness. As to the latter, plaintiffs base

their relatively novel common monopolization claim on a theory

that expressly requires proof of a "specific intent to monopolize,"

as "distinguished from growth or development as a consequence of

a superior product, business acumen, or historic accident."

Actavis, 787 F.3d at 651 (quoting Verizon Commc'ns, Inc. v. Law

Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004)). They

expressly allege in pursuit of their own claims that Warner acted

willfully. Nor does Warner claim that plaintiffs need not prove

an intent to monopolize. So, whether or not such proof is

ultimately required, the named plaintiffs certainly have a

substantial stake in proving up a case that is, as a practical

matter, unreliably distinguishable from proving willfulness.

That leaves only Warner's contention that, under N.Y.

Gen. Bus. Law § 349(a), the named plaintiffs have an insufficient

stake in the claim of New York class members because that law

requires proof of deception. Plaintiffs offer no response to this

argument at all. The complaint's list of common issues and its

statement of its causes of action include no suggestion that they

intend to prove deception (suggesting that they indeed see no stake

- 17 -
in doing so). We therefore find that plaintiffs have waived any

opposition to Warner's argument that plaintiffs lack standing to

sue on behalf of those who can claim no basis for relief other

than under New York law. In so doing, we put off to another day

how to apply Article III standing principles to a case in which a

putative class representative has a personal stake in proving most

but not all of the elements of a class member's claim.

Finding Article III standing otherwise satisfied in this

case is in accord with the decisions of our sister circuits that

have considered similar issues. See Langan v. Johnson & Johnson

Consumer Cos., 897 F.3d 88, 92-96 (2d Cir. 2018); see also

Morrison, 649 F.3d at 536. Our conclusion is in line with our

prior precedent, in which we required only that a plaintiff make

a single purchase in order to satisfy standing for a claim brought

under multiple state laws. See Nexium, 777 F.3d at 31-32. It

also accords with direction from the Supreme Court that, once the

named plaintiff establishes injury and membership in the class,

the inquiry should shift "from the elements of justiciability to

the ability of the named representative to 'fairly and adequately

protect the interests of the class.'" Sosna v. Iowa, 419 U.S.

393, 403 (1975) (quoting Fed. R. Civ. P. 23(a)). Therefore, it is

to that inquiry that we now turn our focus.

- 18 -
 III.

Satisfied that we have subject matter jurisdiction, we

consider next the district court's finding that plaintiffs'

proposed class meets the requirement of Rule 23(b)(3) that

"questions of law or fact common to class members predominate over

any questions affecting only individual members." Fed. R. Civ.

P. 23(b)(3). We review that decision for abuse of discretion. In

re New Motor Vehicles Canadian Exp. Antitrust Litig., 522 F.3d 6,

17 (1st Cir. 2008). Within this ambit, we review pure issues of

law de novo and "fact-dominated" issues for clear error. Id.

In considering the propriety of class certification in

this case, we again deal with an issue that strikes at the heart

of the competing considerations raised by some class actions: the

proper treatment of uninjured class members at the class

certification stage. Proof of injury, also called "injury-in-

fact," is a required element of a plaintiff's case in an action

such as this one. New Motor Vehicles, 522 F.3d at 19 n.18.

Plaintiffs' class nevertheless includes consumers who would have

continued to purchase a brand drug for various reasons, even if a

cheaper, generic version had been available.

On appeal, both parties argue that the district court's

estimate that approximately ten percent of the class was uninjured

is wrong: Plaintiffs say it is too high and Warner says it is too

low. The district court record suggests that many of these

- 19 -
specific challenges were not preserved. See Clauson v. Smith, 823

F.2d 660, 666 (1st Cir. 1987) (stating that "points which were not

seasonably advanced below" are waived on appeal). In any event,

having reviewed the parties' competing critiques, we find no clear

material error in the district court's factual approximation. See

Nexium, 777 F.3d at 17 (reviewing factual findings for "clear

error"). So, the question thus becomes: Can a class be certified

in this case even though injury-in-fact will be an individual

issue, the resolution of which will vary among class members?

To answer this question, the parties agree that we must

direct our attention to the requirement of Rule 23(b)(3) that

common issues must predominate over individual issues in order to

certify a class. See Amgen, Inc. v. Connecticut Ret. Plans & Tr.

Funds, 568 U.S. 455, 469 (2013). The aim of the predominance

inquiry is to test whether any dissimilarity among the claims of

class members can be dealt with in a manner that is not

"inefficient or unfair." Id. (citing Richard A. Nagareda, Class

Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97,

107 (2009)). Inefficiency can be pictured as a line of thousands

of class members waiting their turn to offer testimony and evidence

on individual issues. Unfairness is equally well pictured as an

attempt to eliminate inefficiency by presuming to do away with the

rights a party would customarily have to raise plausible individual

challenges on those issues.

- 20 -
 In assessing efficiency and fairness, we have recognized

that a class may be certified notwithstanding the need to

adjudicate individual issues so long as the proposed adjudication

will be both "administratively feasible" and "protective of

defendants' Seventh Amendment and due process rights." Nexium,

777 F.3d at 19. In Nexium itself, the court found a possible

mechanism available to avoid both inefficiency and unfairness.

The court reasoned that, "if unrebutted," a consumer's testimony

that "given the choice, he or she would have purchased the generic"

would be "sufficient to establish injury in an individual suit."

Id. at 20. It therefore concluded that "similar testimony in the

form of an affidavit or declaration would be sufficient in a class

action" when introduced "at the liability stage." Id. at 20-21.

The district court in this case sought to track Nexium,

finding that "prior to judgment, it will be possible to establish

a mechanism for distinguishing the injured from the uninjured class

members." In re Asacol Antitrust Litig., 323 F.R.D. at 481

(quoting Nexium, 777 F.3d at 19). Pointing to a proposal advanced

by plaintiffs, the district court described the mechanism to which

it referred as follows: "[i]n a Court-approved notice, Class

members will be asked to submit a claim form, along with data and

documentation that may be deemed necessary for consideration. The

Claims Administrator will evaluate each claim pursuant to a formula

proposed by Plaintiffs and approved by the Court." Id. at 479.

- 21 -
Plaintiffs' actual proposed mechanism also noted that

"[i]ndividual Class members will have an opportunity to contest

the calculations, and the Court will review the Claims

Administrator's report, making any changes it believes are

necessary."

One can only guess what data and documentation may be

deemed necessary, what the formula will be, and how the claims

administrator will decide who suffered no injury. Nevertheless,

the district court was convinced that Nexium blesses such a scheme.

We disagree.

Nexium held that "unrebutted testimony" contained in

affidavits would suffice as a mechanism for identifying who was

injured and who was not injured. Id. at 21 (emphasis added). If

unrebutted, such testimony in an affidavit could be used prior to

trial to obtain summary judgment, thereby efficiently and fairly

removing the issue of injury-in-fact from the case for trial. See

Fed. R. Civ. P. 56(c)(1)(A), (c)(4); see also, e.g., Kuperman v.

Wrenn, 645 F.3d 69, 80 (1st Cir. 2011) (finding that a party

prevailed on an issue on summary judgment on the basis of an

unrebutted affidavit). In Nexium itself, neither our court nor

the district court ever learned whether the defendants would in

fact rebut any affidavits. The possibility that unrebutted

affidavits could be used was raised sua sponte for the first time

in the majority opinion. By the time that opinion was issued, the

- 22 -
case had been tried without the benefit of our holding and, having

won, the defendants indeed chose not to challenge the inclusion of

any class members, by that point presumably enjoying the breadth

of their win. See generally In re Nexium (Esomeprazole) Antitrust

Litig., 842 F.3d 34, 40-42 (1st Cir. 2016).

Here, though, the record is clear that plaintiffs do not

propose to rely on unrebutted testimony to eliminate the question

of injury-in-fact before trial. And, unlike in Nexium, defendants

have expressly stated their intention to challenge any affidavits

that might be gathered. Nor do plaintiffs point to any basis in

the record for deeming all such challenges to be so implausible as

to warrant a finding that we can consider the issue to be

uncontested. Warner has explained that some class members stopped

taking (and will therefore have no record of purchasing) Asacol

anywhere between 2009 and 2012, and some class members when asked

will admit a preference for DBP-free medication such as Delzicol.

Additionally, some class members would not have switched to a

generic because they had no co-pay, and therefore were not price

sensitive. So whatever one thinks of Nexium's sua sponte positing

in the face of the defendants' silence that unrebutted affidavits

might be both available and sufficient, see Nexium 777 F.3d at 36

(Kayatta, J., dissenting), here we have no basis for venturing

such a prediction (nor did the district court do so).

- 23 -
 Our inability to fairly presume that these plaintiffs

can rely on unrebutted testimony in affidavits to prove injury-

in-fact is fatal to plaintiffs' motion to certify this case.

Testimony that is genuinely challenged, certainly on an element of

a party's affirmative case, cannot secure a favorable summary

judgment ruling disposing of the issue. Fed. R. Civ. P. 56(a).

And the affidavits would be inadmissible hearsay at trial, leaving

a fatal gap in the evidence for all but the few class members who

testify in person. Nor have the plaintiffs provided any basis

from which we could conclude that the number of affidavits to which

the defendants will be able to mount a genuine challenge is so

small that it will be administratively feasible to require those

challenged affiants to testify at trial.

We also reject any invitation to rewrite Nexium as

sanctioning the use of inadmissible hearsay to prove injury to

each class member at or after trial. The fact that plaintiffs

seek class certification provides no occasion for jettisoning the

rules of evidence and procedure, the Seventh Amendment, or the

dictate of the Rules Enabling Act, 28 U.S.C. § 2072(b). See Tyson

Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1048 (2016) (evidence

may not be used in a class action to give "plaintiffs and

defendants different rights in a class proceeding than they could

have asserted in an individual action"). A "claims

administrator's" review of contested forms completed by consumers

- 24 -
concerning an element of their claims would fail to be "protective

of defendants' Seventh Amendment and due process rights." Nexium,

777 F.3d at 19. Plaintiffs' proposed claims process provides

defendants no meaningful opportunity to contest whether an

individual would have, in fact, purchased a generic drug had one

been available. A "class cannot be certified on the premise that

[the defendant] will not be entitled to litigate its statutory

defenses to individual claims." Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338, 367 (2011). Here, we have more than a statutory

defense; rather, we have a challenge to a plaintiff's ability to

prove an element of liability. And although Halliburton permitted

class certification based on a proper presumption furnished by the

applicable law, even if the presumption might be rebutted as to

individual plaintiffs in a few instances, Halliburton Co. v. Erica

P. John Fund, Inc., 134 S. Ct. 2398, 2412 (2014), here we have no

such presumption.

Relatedly, this is not a case in which a very small

absolute number of class members might be picked off in a

manageable, individualized process at or before trial. Rather,

this is a case in which any class member may be uninjured, and

there are apparently thousands who in fact suffered no injury.

The need to identify those individuals will predominate and render

an adjudication unmanageable absent evidence such as the

unrebutted affidavits assumed in Nexium, or some other mechanism

- 25 -
that can manageably remove uninjured persons from the class in a

manner that protects the parties' rights. See Nexium, 777 F.3d at

30 ("We thus define 'de minimis' in functional terms."). And, as

we have already explained, the process on which the district court

relied is not such a mechanism.

Plaintiffs' fallback argument, urged most prominently on

appeal, is that, at trial, they will prove "class-wide impact"

with the testimony of their expert, Dr. Conti, and with defendants'

own documents and admissions. But plaintiffs point to no documents

or admissions that would support a finding that all class members

suffered injury. So this argument on appeal comes down to their

claim that they will prove class-wide impact at trial with the

testimony of their expert, Dr. Conti.

To support this alternative approach, plaintiffs point

to the approval in Tyson Foods of the plaintiffs' use of an expert

report that calculated each individual employee's average time

spent "donning and doffing" protective equipment for the purpose

of establishing the employees' total hours worked in an overtime

compensation case under the Fair Labor Standards Act. 136 S. Ct.

at 1042-43. Here, plaintiffs contend that, "[c]onsistent

with . . . the guidance in Tyson Foods[], plaintiffs will prove

classwide antitrust impact at trial using representative

evidence." Such evidence relies on Dr. Conti's calculation that

a generic substitute drug would have achieved approximately ninety

- 26 -
percent market penetration in a but-for world, from which, in part,

the district court estimated that about ten percent of the class

was likely brand loyal and thus uninjured. For several reasons,

plaintiffs' reliance on Tyson Foods falls short of the mark.

To begin with, using the average time it takes a person

to don and doff clothes to estimate how long it takes a given

individual to do so (as in Tyson Foods) is quite different than

saying, for example, that a given person wore certain clothes

merely because most but not all others did so. If statistically

valid, an average multiplied by the total number of individuals

likely equals the actual total time spent by all. But Dr. Conti's

estimate that a generic drug would achieve roughly ninety percent

market penetration, if used to prove that each individual would

have likely purchased the generic drug and was thus injured by

defendants' conduct, leads to the demonstrably wrong conclusion

that one hundred percent of individuals were injured. And that is

a contention that Dr. Conti's opinion itself rejects.

In Tyson Foods, the Court pointed out that under the

controlling substantive law, the proffered representative evidence

would be admissible and sufficient to prove injury in any

individual class member's individual trial. See Tyson Foods, 136

S. Ct. at 1047 (quoting Anderson v. Mt. Clemens Pottery Co., 328

U.S. 680, 687 (1946), for the proposition that, under the Fair

Labor Standards Act, "an employee has carried out his burden" if

- 27 -
he produces evidence demonstrating the amount of improperly

compensated work "as a matter of just and reasonable inference").

Here, plaintiffs point to no such substantive law that would make

an opinion that ninety percent of class members were injured both

admissible and sufficient to prove that any given individual class

member was injured. And whether such evidence would actually be

"sufficient to sustain a jury finding," id. at 1048, is far from

self-evident. See, e.g., Guenther v. Armstrong Rubber Co., 406

F.2d 1315, 1318 (3d Cir. 1969) ("[A]s we see it there was no

justification for allowing plaintiff's case on that so-called

probability hypothesis to go to a jury."); see also United States

v. Veysey, 334 F.3d 600, 604-06 (7th Cir. 2003) (reviewing the

academic literature and case law surrounding the use of statistical

evidence); United States v. Hannigan, 27 F.3d 890, 896-901 (3d

Cir. 1994) (Becker, J., concurring in the judgment) (similar);

Laurence H. Tribe, Trial by Mathematics: Precision and Ritual in

the Legal Process, 84 Harv. L. Rev. 1329 (1971) (discussing the

use of statistical evidence in litigation). Indeed, plaintiffs do

not even grapple with the question of whether federal or state law

provides the relevant rule of decision. And without making such

showings, plaintiffs cannot meet their burden to "'affirmatively

demonstrate . . . compliance' with Rule 23." Comcast Corp. v.

Behrend, 569 U.S. 27, 33 (2013) (quoting Wal-Mart Stores, Inc.,

564 U.S. at 350).

- 28 -
 Plaintiffs argue that we should nevertheless approve of

their proposed approach because it protects Warner from any

practical harm that might otherwise be caused by removing questions

of individual injury-in-fact from the jury. Warner would only be

found liable and forced to pay damages if the jury found that

Warner's actions unlawfully raised the price paid by consumers by

a specified amount, and if the jury also determined the percentage

of sales for which that price surcharge would not have been paid

but for the illegal conduct. The total aggregate damages award

would therefore in theory net out all purchases by brand loyal

consumers as a group. The fact that some of that money might then

be paid to uninjured people should be of no concern to Warner, say

plaintiffs.

This argument confuses different types of aggregate

damages scenarios. See 4 William B. Rubenstein, Newberg on Class

Actions § 12:2 (5th ed. 2012). In some cases, the total damage

caused by the defendant is independent of the number and identity

of people harmed. Newberg gives as an example a trustee's theft

of money from a pension fund. Id. Such a case perhaps might be

tried as a class action without causing any harm to the defendant

no matter how the recovered funds are allocated among the

beneficiaries (although there would still be the question whether

Article III nevertheless precludes per se the knowing use of a

civil suit to make an award to an uninjured person, see Tyson

- 29 -
Foods, 136 S. Ct. at 1053 (Roberts, C.J., concurring). In many

other instances, as here, the aggregate damage amount is the sum

of damages suffered by a number of individuals, such that proving

that the defendant is not liable to a particular individual because

that individual suffered no injury reduces the amount of the

possible total damage. Furthermore, here the district court has

reasonably presumed that determining whether any given individual

was injured (and therefore has a claim) turns on an assessment of

the individual facts concerning that person. In such a case, the

defendant must be offered the opportunity to challenge each class

member's proof that the defendant is liable to that class member.

See Wal-Mart Stores, Inc., 564 U.S. at 366-67. Whether that

opportunity precludes class certification turns on whether such

challenges are reasonably plausible in a given case and whether

the plaintiff cannot demonstrate that allowing for such challenges

in a manner that protects the defendant's rights will be manageable

and superior to the alternatives. See Fed. R. Civ. P. 23(b)(3).

Accepting plaintiffs' proposed procedure for class

litigation would also put us on a slippery slope, at risk of an

escalating disregard of the difference between representative

civil litigation and statistical observations of tendencies and

distributions. Once one accepts plaintiffs' "no harm, no foul"

position there would be no logical reason to prevent a named

plaintiff from bringing suit on behalf of a large class of people,

- 30 -
forty-nine percent or even ninety-nine percent of whom were not

injured, so long as aggregate damages on behalf of "the class"

were reduced proportionately. Such a result would fly in the face

of the core principle that class actions are the aggregation of

individual claims, and do not create a class entity or re-apportion

substantive claims. See 1 William B. Rubenstein, Newberg on Class

Actions § 1:1 (5th ed. 2012) (stating that Rule 23 is

"fundamentally a procedural device" that allows a representative

to "litigate on behalf of many absent class members" but cannot

"abridge, modify, or enlarge any substantive right" (emphasis in

original)); see also Tyson Foods, 136 S. Ct. at 1048 (noting that

a class action cannot enlarge class members' substantive rights

and thus basing the availability of evidence in a class action on

what would be available "in an individual action"); In re Deepwater

Horizon, 739 F.3d 790, 828 (5th Cir. 2014) (Garza, J., dissenting)

("Rule 23's aggregation function cannot be used to create new

rights and then settle claims brought under them." (internal

quotation marks omitted)).

We recognize that there remains the problem of how to

deal with conduct that inflicts small amounts of damage on large

numbers of people. Certainly Rule 23 serves as an important tool

to address many such situations. See Mace v. Van Ru Credit Corp.,

109 F.3d 338, 344 (7th Cir. 1997) ("The policy at the very core of

the class action mechanism is to overcome the problem that small

- 31 -
recoveries do not provide the incentive for any individual to bring

a solo action."); Castano v. Am. Tobacco Co., 84 F.3d 734, 748

(5th Cir. 1996) (noting that "negative value" suits provide the

"most compelling rationale for finding superiority in a class

action"). But that fact grants us no license to create a

Rule 23(b)(3) class in every negative value case by either altering

or reallocating substantive claims or departing from the rules of

evidence. Moreover, there are other tools available to address

the problem of low-value, high-volume claims that pose individual

issues of causation. Regulators may sue, see, e.g., FTC v.

Actavis, Inc., 570 U.S. 136, 141 (2013); governments may bring

parens patriae claims, see, e.g., New Hampshire v. Purdue Pharma,

No. 17-cv-427, 2018 WL 333824, at *1 (D.N.H. Jan. 9, 2018);

substantive laws may provide presumptions available to all class

members, see, e.g., Halliburton, 134 S. Ct. at 2411-12; and private

lawyers may marshal the threats of res judicata and fee shifting

to induce aggregate settlements when liability is clear.

In reaching our conclusion, we acknowledge the

divergence evident in the manner in which our sister circuits have

addressed the treatment of uninjured putative class members.

Framing the issue of uninjured class members through the lens of

Article III, the Second Circuit opined that "no class may be

certified that contains members lacking Article III standing," and

required that the class "be defined in such a way that anyone

- 32 -
within it would have standing." Denney v. Deutsche Bank AG, 443

F.3d 253, 264 (2d Cir. 2006).4

In Halvorson v. Auto-Owners Insurance Co., 718 F.3d 773

(8th Cir. 2013), the Eighth Circuit announced the same standing

requirement articulated by the Second Circuit, but also seemed to

ground its analysis in the predominance requirement of

Rule 23(b)(3). It thus denied class certification because the

"individual inquiries" necessary to determine which class members

were uninjured would "overwhelm questions common to the class."

Id. at 779 (quoting Comcast Corp., 569 U.S. at 34); see Neale v.

Volvo Cars of N. Am., LLC, 794 F.3d 353, 366 (3d Cir. 2015) ("[I]t

is . . . not clear to us whether the Eighth Circuit's standing

analysis rests on Article III or Rule 23.").

More clearly viewing the issue of uninjured class

members through the prism of Rule 23(b)(3) predominance, the D.C.

Circuit vacated the certification of a class because the plaintiffs

had failed to "show that they can prove, through common evidence,

that all class members were in fact injured by the alleged

conspiracy." See In re Rail Freight Fuel Surcharge Antitrust

Litig.-MDL No. 1869, 725 F.3d 244, 252 (D.C. Cir. 2013) (emphasis

added); see also Nexium, 777 F.3d at 24 n.20 (characterizing Rail

4 In Denney, the Second Circuit found that each member of the class
had suffered an injury-in-fact, and thus held that the class
satisfied Article III standing. 443 F.3d at 265.

- 33 -
Freight as requiring that plaintiffs "'show that they can prove'

-- not that they have proved" -- that all class members were in

fact injured (emphasis in original)).

The Fifth Circuit has similarly held that "where fact of

damage cannot be established for every class member through proof

common to the class, the need to establish antitrust liability for

individual class members defeats Rule 23(b)(3) predominance."

Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 302 (5th Cir. 2003).

And the Third Circuit, expressly and closely following New Motor

Vehicles, has joined this majority view. See In re Hydrogen

Peroxide Antitrust Litig., 552 F.3d 305, 311 (3d Cir. 2008).5

The Seventh Circuit does appear to have signaled a

willingness to allow a district court to certify a damages class

containing not "a great many" uninjured members without requiring

that there be a mechanism for eventually culling out the uninjured.

Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th

Cir. 2012); Kohen v. Pac. Inv. Mgmt. Co. LLC, 571 F.3d 672, 677-

78 (7th Cir. 2009). The Ninth Circuit recently arguably adopted

5 Because our circuit precedent clearly requires that there exist
"some means of determining that each member of the class was in
fact injured," New Motor Vehicles, 522 F.3d at 28, we have been
able to finesse the question whether Article III's standing
requirement imposes any barrier to the certification of a class
that will at judgment have uninjured members. See Nexium, 777
F.3d at 32 ("To the extent that it is necessary that each and every
member of the class who secures a recovery also has standing, the
requirement will be satisfied -- only injured class members will
recover.").

- 34 -
a similar rule, although to some uncertain extent it seems to rely

in great part on a notion that being "exposed to" injurious conduct

can serve a proxy for common injury. See Torres v. Mercer Canyons

Inc., 835 F.3d 1125, 1137 (9th Cir. 2016). Neither circuit,

though, has explained what not "a great many" means. See, e.g.,

Messner, 669 F.3d at 825 ("There is no precise measure for 'a great

many.'"). And if it means only that there can be a few unusual

class members who can be picked off by the defendant, then neither

case rests too far outside the mainstream. See Halliburton, 134

S. Ct. at 2412.

In any event, in no case cited above, nor in any case to

which plaintiffs have directed our attention, has a federal court

affirmed a damages judgment in a class action against a defendant

who was precluded from raising genuine challenges at trial to the

assertion of liability by individual members of a class that was

known to have members who could not be presumed to be injured.

Nor has either party drawn to our attention any federal court

allowing, under Rule 23, a trial in which thousands of class

members testify. We see no reason to think that this case should

be the first such case.

IV.

The rule we reiterate today, consistent with our prior

holding in Nexium, strikes a balance that is faithful to the

requirements of Article III and Rule 23, while remaining cognizant

- 35 -
of the practical realities of class actions. We have not

previously required every class member to demonstrate standing

when a class is certified, nor do we do so today. See Nexium, 777

F.3d at 32; see also Neale, 794 F.3d at 362; DG ex rel. Stricklin

v. Devaughn, 594 F.3d 1188, 1197 (10th Cir. 2010); Kohen, 571 F.3d

at 676-77. We also agree that it would "put the cart before the

horse," Kohen, 571 F.3d at 676, to read Rule 23 to require that a

plaintiff demonstrate prior to class certification that each class

member is injured. But certainly where injury-in-fact is a

required element of a claim, as it is in an antitrust action, see

New Motor Vehicles, 522 F.3d at 19 n.18, a class cannot be

certified based on an expectation that the defendant will have no

opportunity to press at trial genuine challenges to allegations of

injury-in-fact. Cf. Wal-Mart Stores, Inc., 564 U.S. at 367. And

to determine whether a class certified for litigation will be

manageable, the district court must at the time of certification

offer a reasonable and workable plan for how that opportunity will

be provided in a manner that is protective of the defendant's

constitutional rights and does not cause individual inquiries to

overwhelm common issues. These plaintiffs have plainly not enabled

the district court to articulate such a plan. See New Motor

Vehicles, 522 F.3d at 20 ("Under the predominance inquiry, 'a

district court must formulate some prediction as to how specific

issues will play out in order to determine whether common or

- 36 -
individual issues predominate in a given case.'" (quoting Mowbray,

208 F.3d at 298)).

For the foregoing reasons, we reverse the decision of

the district court granting class certification, and remand for

further proceedings in accord with this opinion.

- Concurring Opinion Follows -

- 37 -
 BARRON, Circuit Judge (Concurring). The issues that

courts must address in deciding whether to certify a proposed class

action in a case like this are potentially vexing. The class is

large. It contains a non-trivial number of uninjured class

members. The nature of the injury is not easily proved through

common evidence. And the prospect of individualized recovery is

unlikely, even though the aggregate wrong may be great, given the

costs of litigation and the relatively minimal amount of loss each

plaintiff incurred. Should, then, such a class be certified?

On the one hand, Rule 23 was clearly written to

facilitate large consumer class actions. See, e.g., Amchem Prod.,

Inc. v. Windsor, 521 U.S. 591, 617 (1997) ("While the text of Rule

23(b)(3) does not exclude from certification cases in which

individual damages run high, the Advisory Committee had dominantly

in mind vindication of 'the rights of groups of people who

individually would be without effective strength to bring their

opponents into court at all.'"); In re New Motor Vehicles Canadian

Exp. Antitrust Litig., 522 F.3d 6, 8 (1st Cir. 2008) ("[A]n

erroneous failure to certify a class where individual claims are

small may deprive plaintiffs of the only realistic mechanism to

vindicate meritorious claims."). On the other hand, Rule 23 sets

forth requirements -- most particularly, the requirement that

common rather than individual issues predominate -- that raise

- 38 -
serious questions about whether a class of the sort I have just

described can be certified. See Fed. R. Civ. P. 23(b)(3).

Not surprisingly, appellate courts throughout the

country have struggled to develop a uniform mode of analyzing such

cases. In fact, our own precedent reflects a similar struggle,

given our holding rejecting certification of a consumer antitrust

class in New Motor, 522 F.3d at 9, and our holding affirming the

certification of one in In re Nexium Antitrust Litig., 777 F.3d 9,

14 (1st Cir. 2015).

Of course, because Nexium is our last word on the

subject, we are bound, as a panel, to follow it if it controls.

But, here, I agree with the majority that it does not, even though,

in my view, one could be forgiven for concluding -- as the District

Court did -- that Nexium does require certification of the class

proposed here.

In Nexium, we upheld the certification of a class where,

like here, the anticipated means by which plaintiffs would cull

uninjured class members would include the use of individual

affidavits attesting to the affiant's injury. See id. at 20-21.

Moreover, in Nexium, like here, the affidavits would be used to

resolve an inquiry into injury turning on whether the plaintiffs

would have hypothetically purchased a cheaper generic had one been

available rather than on any representations as to past purchases.

See id. at 20 n.17. And, finally, in Nexium, like here, the

- 39 -
overwhelming bulk of the class is purported to be injured, as only

a relatively small percentage of the class members in each case

are conceded to be uninjured. See id. at 27.

Nonetheless, I join our opinion reversing the order

certifying this class. As our opinion explains, the culling

process on which the plaintiffs rely -- and which the District

Court found to be sufficient -- is not one that Nexium blessed or

that we may bless, at least on this record. I do, however, want

to say more about my reasons for reaching that conclusion. In

particular, I wish to highlight two grounds for distinguishing

this case from Nexium.

First, in Nexium, it was perfectly clear that the

defendants would be able to challenge -- prior to a liability

finding -- the sufficiency of testimony to prove injury (whether

that testimony was offered at trial or pre-trial by affidavit) by

any class member that she would have purchased a generic version

of the drug had one been available. For that reason, we were

confident that "a mechanism would exist for establishing injury at

the liability stage of this case, compliant with the requirements

of the Seventh Amendment and due process." Id. at 21.

Here, in contrast, it is hard for me to see how the

plaintiffs' proposed claims processing mechanism for culling

uninjured class members could be deployed before there were any

claims to process. In fact, by the plaintiffs' own account, that

- 40 -
culling mechanism will be deployed only "post-judgment." Thus,

the reason that we gave in Nexium for concluding that there was no

Seventh Amendment problem with the culling mechanism that we

identified there does not appear to be one that we may rely on

here.

Second, insofar as the plaintiffs here, as in Nexium, do

propose to submit affidavits concerning class members'

hypothetical purchasing preferences prior to completion of the

liability phase, there is still another ground for distinguishing

this case from that one. In Nexium, unlike here, the defendants

presented a categorical challenge. They contended that the

presence, at the certification stage, of any uninjured class

members itself defeated predominance because the plaintiffs had no

possible means to prove injury at all. The defendants based that

contention on the hypothetical nature of the inquiry into injury

presented in that case, given that the inquiry turned on what was

necessarily speculation about a plaintiff's hypothetical

purchasing preference. See id. at 20 (noting the defendants'

argument that "the [brand-loyalist issue] presents problems that

plaintiffs cannot overcome, for plaintiffs have no methodology to

identify [at a later stage of litigation] those consumers who would

have switched to a generic version" (emphasis added)).

Nexium rejected that categorical challenge. It did so

by explaining that, in an individual action, a plaintiff could

- 41 -
prove the injury claimed through "testimony by the consumer that,

given the choice, he or she would have purchased the generic."

Id. at 20. And Nexium then went on to explain that because "[t]here

cannot be a more stringent burden of proof in class actions than

in individual actions," it followed that "similar testimony in the

form of an affidavit or declaration would be sufficient in a class

action." Id. For that reason, Nexium concluded that the

defendants had failed to show that the plaintiffs could not meet

their burden at the certification stage to demonstrate a viable

means of identifying injured class members.

To be sure, Nexium did not stop there. Nexium also

acknowledged that proof of injury in the form of personal testimony

may "require[] determination of the individual circumstances of

class members" and thus may cause individual rather than common

issues to predominate. Id. at 21. But, having identified that

additional potential obstacle to establishing predominance, Nexium

dispensed with that concern by explaining that the predominance

requirement does not categorically preclude a class from relying

on individualized proof of injury, at least where the number of

uninjured class members is de minimis. See id. (refusing to find

that "the need for individual determinations or inquiry for a de

minimis number of uninjured members at later stages of the

litigation defeats class certification").

- 42 -
 Unfortunately, Nexium's holding that the predominance

requirement does not impose a categorical bar against plaintiffs

relying on individualized means of proving injury only gets us so

far here. And that is because I do not read Nexium to have

addressed the distinct issue of when, even where the number of

uninjured class members is de minimis, plaintiffs' reliance on

individualized means of proving injury is so great that it can no

longer comport with the predominance requirement. Yet, that is

the question that we must confront here, because the defendants

make precisely that contention in this case.

In considering that question, I would not rule out the

possibility that plaintiffs who seek to prove injury in such a

case by relying on affidavits might be able to satisfy the

predominance requirement just as the plaintiffs were found to have

satisfied it in Halliburton Co. v. Erica P. John Fund, Inc., 134

S. Ct. 2398, 2412 (2014) (upholding certification on the basis of

a presumption of reliance even where "the defendant might attempt

to pick off the occasional class member here or there through

individualized rebuttal"). I note, in that regard, that one reason

that the Halliburton Court assumed that the defendants would only

be able to engage in "individualized rebuttal" against the

"occasional class member" may have been that proof of reliance in

that case involved resolution of a "'speculative state of facts,

i.e., how [the plaintiff] would have acted . . . if the

- 43 -
misrepresentation had not been made.'" Id. at 2407 (quoting Basic

Inc. v. Levinson, 485 U.S. 224, 245 (1988)). I suspect that

defendants might have a similarly hard time making more than a

speculative case that they would be able effectively to contest an

affiant's representation that, if presented with a cheaper generic

alternative, she would have spent less rather than more to get the

same drug. See Nexium, 777 F.3d at 31 ("The defendants'

speculation cannot defeat the plaintiffs' showing."). Moreover,

I could imagine that plaintiffs in a case not unlike this one might

be able to establish -- perhaps through undisputed evidence from,

say, health plan purchasing records -- that only a small

identifiable subset of the class's members would actually need to

rely on individualized testimony concerning their hypothetical

purchasing preferences to show injury.

In the event that plaintiffs made those showings, I could

see how, in light of Nexium, a court might be able to conclude

that the plaintiffs, at the certification stage, could succeed in

showing that resolution of the injury issue would not require an

impermissibly large number of individualized determinations. See

id. at 21 (noting that Rule 23(b)(3) "does not require a plaintiff

seeking class certification to prove that each element of her claim

is susceptible to classwide proof" but only to show that there is

no "reason to think that [individualized] questions will overwhelm

common ones and render class certification inappropriate"). But,

- 44 -
even if that is the case, the plaintiffs before us make no showing

that would permit us to so find.

As our opinion explains, the plaintiffs do not argue

that the defendants would be incapable of mounting effective

challenges to any, let alone to most, of the plaintiffs' affidavits

at summary judgment. Nor may we conclude that the plaintiffs would

only need to rely on individualized proof of injury for a small

identifiable subset of the class, such that their reliance on

individual adjudications could be deemed both efficient and fair.

The plaintiffs have not shown that the number of

potentially uninjured class members could be winnowed down through

common means of proof, even when that evidence is considered in

combination with evidence gleaned from health plan purchasing

records. And we may not assume that only the plaintiffs within

the small subset of the class conceded to be uninjured will need

to offer an affidavit to prove what hypothetical choice they would

have made if given the option to purchase a generic. Class members

do not come pre-identified as brand loyal or price sensitive, after

all, and one does not ordinarily set out to find a needle in a

haystack by examining only ten percent of the straw.

I thus see no basis for affirming the certification order

on this record, because the plaintiffs have not yet shown that

common rather than individual issues would predominate if this

class were certified. Accordingly, I join our opinion in full.

- 45 -