The Chamber of Commerce’s “Chicken Little” Games
by Leah M. Nicholls
The U.S. Chamber of Commerce has a long and troubling history of trying to keep cases out of court, and they’re particularly vicious when it comes to fighting certification of class action suits. Much like Chicken Little, the Chamber proclaims that the sky is falling each time a group of consumers try to get their day in court.
This time, the Chamber is rallying to the defense of a pharmaceutical company trying to squash competition and keep drug prices high.
On Monday, Public Justice filed an amicus brief in In re Prograf Antitrust Litigation, a case involving allegations that Astellas, the manufacturer of the brand name drug Prograf – an immunosuppressant taken by transplant patients – filed a fraudulent petition with the federal Food and Drug Administration (FDA) to delay the availability of a generic version of the drug.
What motivation could big pharma have for wanting to facilitate such a delay? Because the longer the generic gets delayed, the longer Astellas has a monopoly, and the longer patients and health plans have to pay the higher price for brand-name Prograf.
The district court certified a class action only on the question whether Astellas’ behavior violated antitrust laws, in which case the plaintiffs would each have to individually prove any damages resulting from Astellas’ anticompetitive behavior. That certification is key to the case: Antitrust claims are expensive and difficult to prove, and it’s unlikely an individual plaintiff would have the resources to pursue them on his or her own.
That all seems pretty straightforward. But on appeal, Astellas – supported by the Chamber of Commerce, argues that Rule 23(c)(4) – which made the certification possible – doesn’t actually mean what it says.
Here’s what the rule says:
“When appropriate, an action may be brought or maintained as a class action with respect to particular issues.”
But Astellas and the Chamber contend that only cases, not issues, can be certified for class treatment. Unsurprisingly, the Chamber also makes a host apocalyptic arguments as to why the sky will fall if issue classes are permitted. In particular, they argue that certification of issue classes will be “automatic” and that defendants will be forced to settle frivolous classes.
That’s pure nonsense.
For starters, as we explained to the First Circuit in our brief, issue certification has been around for decades – and every circuit to have considered the question has now held that Rule 23(c)(4) permits it. Yet, the “deluge” of “vexatious litigation” the Chamber predicts has failed to materialize.
And second, the data clearly shows that District courts are just as likely to deny certification as grant it. That might be why the Chamber failed to cite a single example of the kind of automatic certification it predicted in its brief. We couldn’t find one, either.
Finally, the Chamber’s well-worn argument that certifying class actions is bad because it “forces” defendants to settle meritless claims just doesn’t jibe with the facts. In light of the kinds of anecdotes the Chamber raises here, the Federal Judicial Center was tasked with finding the data to support their claims.
Guess what? It found no evidence to support it. None.
Unsurprisingly, defendants are pretty good at filing motions to dismiss and district courts are pretty good at weeding out meritless claims. Those vexatious class cases just aren’t making it to the certification stage, and you’d be hard-pressed to find a district court judge interested in overseeing a frivolous class action. And class actions settle at the same rate as individual civil litigation.
This last argument – about the hydraulic pressure allegedly created by class actions – has its origins in a time when the rules were different and classes were easier to certify. Under today’s rules, it’s far from easy and never automatic. And, frankly, the Chamber’s position disrespects the important gatekeeping role that district courts play.
It’s past time for the Chamber to stop its Chicken Little games in an attempt to protect huge corporations that want to block the courtroom doors.
Our brief in this case was co-written by Leah Nicholls, Public Justice staff attorney, and Blythe Chandler, associate at Terrell Marshall Daudt & Willie, PLLC.