Not Just Alive, But Thriving: Recent Developmentsin Class Action Law

Not Just Alive, But Thriving: Recent Developments
in Class Action Law

October 1998

During the past year, the class action device has undergone increasing criticism and suffered potentially devastating attacks on three fronts -- judicial case law, judicial rule making and legislation. By now, it is clear that the class action is not just surviving, it is flourishing. The new case law guides but does not substantially narrow the availability of class actions. The proposed amendments to Rule 23 have largely ended up on the cutting room floor. And even modest legislation is languishing in Congress. The bottom line is more class actions overall and more class actions in substantive areas that were unimaginable just a few years ago.

II. Class Certification and Decertification

Kopies, Inc. v. Eastman Kodak Company, No. C-94-0524 (N.D. Cal. 1998). (Copies available.)

In August 1994, within a few months of the filing of the complaint and upon limited discovery, Judge Caulfield conditionally certified a class of 15,000 end users of Kodak high volume copiers and Kodak copier service. Plaintiffs' principal claim was that Kodak had monopolized the market for Kodak copier service and that end users had been charged a supracompetitive price for service. After considerable discovery, plaintiffs' expert produced a damage report that set a "competitive benchmark price" for service. Kodak moved for decertification of the class under Rule 23(c)(1).

In April 1998, Judge Quackenbush, sitting by designation, denied Kodak's motion in a 35-page opinion. The decision is notable for at least four reasons: (1) prior antitrust class actions had been largely limited to price fixing cases where the "competitive" price was easily determined by the elimination of the fix; in this monopolization case, the Court validated plaintiffs' expert's selection of a single price for service in the context of highly complex variations in customers, discounts, products and equipment prices; (2) the 15,000 member class included most Fortune 500 companies and damages for many individual class members exceeded $1,000,000; (3) plaintiffs' competitive benchmark price was higher than the price charged about 2000 class members; the Court suggested that supplemental notice be given those members and an opt-out opportunity; and (4) the Court rejected Kodak's due process argument that, even though plaintiff had developed formulaic damages, Kodak could not be prevented from putting before the jury non-cumulative individual facts relevant to each member's purchases and lack of damage.

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