Case 1:05-md-01720-MKB-JAM Document 8453 Filed 05/04/21 Page 1 of 24 PageID #:
`142066
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
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`BARRY’S CUT RATE STORES INC., et al.,
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` Plaintiffs,
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`MDL No. 1720
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`Case No. 05-md-01720-MKB-VMS
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` v.
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`VISA, INC., et al.,
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`Defendants.
`
`THE GRUBHUB PLAINTIFFS’ MEMORANDUM OF LAW
`IN OPPOSITION TO EQUITABLE RELIEF PLAINTIFFS’
`MOTION FOR CLASS CERTIFICATION
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES .......................................................................................................... ii
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`I.
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`II.
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`PRELIMINARY STATEMENT ........................................................................................ 1
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`STATEMENT OF FACTS ................................................................................................. 2
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`A.
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`B.
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`C.
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`D.
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`The Grubhub Plaintiffs ............................................................................................2
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`The Rule 23(b)(2) Class Representatives ................................................................3
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`The Rule 23(b)(3) Settlement and Release ..............................................................4
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`Key Distinctions between the Grubhub Plaintiffs and Other Class
`Members ..................................................................................................................5
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`III.
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`ARGUMENT ...................................................................................................................... 9
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`A.
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`B.
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`C.
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`D.
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`The Proposed Rule 23(b)(2) Class, Absent Opt-Out Rights, Is Not
`Cohesive ...................................................................................................................9
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`The Putative Class Would Not Adequately Represent the Grubhub
`Plaintiffs .................................................................................................................11
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`Certification of the Class as Defined Would Violate Due Process Rights ............13
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`The Grubhub Plaintiffs Should Be Excluded from the Class Definition or
`Given Opt-out Rights .............................................................................................16
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`IV.
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`CONCLUSION ................................................................................................................. 18
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`TABLE OF AUTHORITIES
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`Page
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`Cases
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`Allen v. Dairy Farmers of Am., Inc., 279 F.R.D. 257 (D. Vt. 2011) ............................................ 12
`
`Amchem Prods. v. Windsor, 521 U.S. 591 (1997) ........................................................ 9, 12, 16, 17
`
`Blackman v. District of Columbia, 633 F.3d 1088 (D.C. Cir. 2011) ............................................ 11
`
`Brown v. Porter McGuire Kiakona & Chow, Ltd. Liab. P’ship, No. CIVIL 17-00554
`LEK-KSC, 2019 U.S. Dist. LEXIS 8229 (D. Haw. Jan. 17, 2019) .......................................... 13
`
`Cent. States SE & SW Areas Health & Welfare Fund v. Merck-Medco Managed Care,
`L.L.C., 504 F.3d 229 (2d Cir. 2007) ......................................................................................... 17
`
`Cholakyan v. Mercedes-Benz, USA, LLC, 281 F.R.D. 534 (C.D. Cal. 2012) ......................... 13, 15
`
`Cnty. of Suffolk v. Long Island Lighting Co., 907 F.2d 1295 (2d Cir. 1990).......................... 17, 18
`
`Fata v. Pizza Hut of Am., Inc., No. 6:14-cv-376-Orl-37DAB, 2016 U.S. Dist. LEXIS
`153545 (M.D. Fla. Aug. 5, 2016) ............................................................................................. 13
`
`Grubhub Holdings Inc. et al. v. Visa Inc., et al., Case No. 19-cv-07273 (N.D. Ill. Nov. 4,
`2019) ........................................................................................................................................... 5
`
`Grubhub Holdings, Inc. v. Visa Inc., Case No. 19-cv-06555 (E.D.N.Y.) (MKB) (VMS),
`First Am. Compl., ECF No. 7906 ........................................................................................... 2, 3
`
`In re Foreign Exch. Benchmark Rates Antitrust Litig., 407 F. Supp. 3d 422 (S.D.N.Y.
`2019) ......................................................................................................................................... 13
`
`In re LIBOR-Based Fin. Instruments Antitrust Litig., 299 F. Supp. 3d 430 (S.D.N.Y.
`2018) ......................................................................................................................................... 13
`
`In re Literary Works in Elec. Databases, 654 F.3d 242 (2d Cir. 2011) ....................................... 17
`
`In re Monumental Life Ins. Co., 365 F.3d 408 (5th Cir. 2004) ..................................................... 17
`
`In re Payment Card Interchange Fee & Merch. Discount Antitrust Litig., 827 F.3d 223
`(2d Cir. 2016) ................................................................................................................ 12, 13, 16
`
`In re Skelaxin (Metaxalone) Antitrust Litig., 299 F.R.D. 555 (E.D. Tenn. 2014) ........................ 15
`
`In re St. Jude Med., 425 F.3d 1116 (8th Cir. 2005) ........................................................................ 9
`
`In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124 (2d Cir. 2001) ............................. 16
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`Jamie S. v. Milwaukee Pub. Sch., 668 F.3d 481 (7th Cir. 2012) .................................................. 10
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`Kartman v. State Farm Mut. Auto. Ins. Co., 634 F.3d 883 (7th Cir. 2011) .................................. 11
`
`Keepseagle v. Johanns, 236 F.R.D. 1 (D.D.C. 2006) ................................................................... 18
`
`Lemon v. Int’l Union of Operating Eng’rs, 216 F.3d 577 (7th Cir. 2000) ................................... 16
`
`Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) ................................................................ 13
`
`M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832 (5th Cir. 2012) .................................................. 11
`
`McReynolds v. Richards-Cantave, 588 F.3d 790 (2d Cir. 2009) .................................................. 17
`
`Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) .......................................................................... 17
`
`Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) ................................................................ 13
`
`Rouse v. Caruso, No. 2:06-CV-10961, 2013 U.S. Dist. LEXIS 19946 (E.D. Mich. Jan. 7,
`2013), report and recommendation adopted by, No. 06-CV-10961, 2013 U.S. Dist.
`LEXIS 19209 (E.D. Mich. Feb. 13, 2013) ................................................................................ 15
`
`Scholtisek v. Eldre Corp., 229 F.R.D. 381 (W.D.N.Y. 2005) ...................................................... 17
`
`Slamon v. Carrizo (Marcellus) LLC, No. 3:16-CV-2187, 2020 U.S. Dist. LEXIS 87149
`(M.D. Pa. May 18, 2020) .......................................................................................................... 14
`
`Tech. Training Assocs. v. Buccaneers Ltd., No. 8:16-cv-1622-T-AEP, 2019 U.S. Dist.
`LEXIS 169334 (M.D. Fla. Sept. 30, 2019) ............................................................................... 13
`
`Vidal v. Wolf, 16-CV-4756 (NGG) (VMS), 2020 U.S. Dist. LEXIS 213068 (E.D.N.Y.
`Nov. 14, 2020) .......................................................................................................................... 17
`
`Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) ........................................................... passim
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`Other Authorities
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`David Betson & Jay Tidmarsh, Optimal Class Size, Opt-Out Rights, and “Indivisible”
`Remedies, 79 Geo. Wash. L. Rev. 542 (2011) ............................................................................ 8
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`Newberg on Class Actions, Absent Class Members, § 9:51 ......................................................... 18
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`Rules
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`Rule 23 ...................................................................................................................................... 1, 17
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`Rule 23(a)(4) ....................................................................................................................... 2, 11, 14
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`Rule 23(b)(1) ................................................................................................................................. 17
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`Rule 23(b)(2) .......................................................................................................................... passim
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`Rule 23(b)(3) .......................................................................................................................... passim
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`Rule 23(d)(2) ................................................................................................................................. 16
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`Rule 23(d)(5) ................................................................................................................................. 16
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`I.
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`PRELIMINARY STATEMENT
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`The Grubhub Plaintiffs1 are seven large companies whose distinct business models reflect
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`the diversity of the American economy. One runs mobile and internet platforms that connect
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`customers with takeout restaurants. Another operates hundreds of brick-and-mortar “wholesale
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`clubs.” Yet another manages more than 400 restaurants in multiple states. Collectively, they pay
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`more than $180 million per year in interchange fees. They opted out of the Rule 23(b)(3) class
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`settlement and filed their own case to seek the damages and injunctive remedies that best address
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`the impact of Visa’s and Mastercard’s anticompetitive conduct on their specific business models.
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`The Rule 23(b)(2) class representatives are small, single-location businesses that pay only
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`a fraction of the interchange fees paid by the Grubhub Plaintiffs. The class representatives—and
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`the vast majority of their putative class—elected not to opt out of the Rule 23(b)(3) settlement.
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`As a result, they have voluntarily given up their individual claims for money damages and
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`injunctive relief in exchange for a payment from the Rule 23(b)(3) settlement fund, and can seek
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`equitable relief only on a class-wide basis, through this Rule 23(b)(2) case.
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`Counsel for the putative Rule 23(b)(2) class seek certification of a mandatory class that
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`would include the Grubhub Plaintiffs and preclude them from pursuing their injunctive relief
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`claims—thereby holding the Grubhub Plaintiffs, who opted out of the Rule 23(b)(3) class, to the
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`same restrictions imposed on the entities that voluntarily accepted the Rule 23(b)(3) monetary
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`settlement and its limitations on their right to seek injunctive relief.
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`Neither Rule 23 nor the Constitution permits that result. The differences between the
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`Grubhub Plaintiffs and other class members give rise to different interests, especially as it relates
`
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`1 The Grubhub Plaintiffs are identified in the Declaration of James A. Wilson in support of The
`Grubhub Plaintiff’s Memorandum of Law in Opposition to the Motion for Class Certification.
`References to “Ex. __” in this brief identify exhibits to the Wilson Declaration.
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`1
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`to which of the many different Visa and Mastercard rules and practices should be the targets of
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`injunctive relief or a potential settlement. There is no “one size fits all” remedy. And, the
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`injunctive relief proposed by an expert hired by the putative class would affirmatively harm the
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`Grubhub Plaintiffs. In addition, the fact that the Grubhub Plaintiffs opted out of the Rule
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`23(b)(3) settlement exposes them to issue and claim preclusion risks that do not exist for other
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`putative class members and creates conflicts of interests with the class and class counsel.
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`These distinct and divergent interests, recognized by class representatives and experts for
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`the class, mean that the cohesion needed to certify a mandatory class is lacking. The obvious
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`conflicts of interest also show that the Rule 23(a)(4) adequacy of representation requirement is
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`not met. And standing behind those disabling flaws is the violation of the Grubhub Plaintiffs’
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`fundamental due process rights that would result if the Grubhub Plaintiffs are forced into a
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`mandatory class and required to yield control over their injunctive relief claims to the putative
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`class and class counsel, who may make different decisions about resolution of those claims in
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`view of their different interests. This Court therefore should either deny the motion for class
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`certification, redefine the class to exclude the Grubhub Plaintiffs, or give them opt-out rights, so
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`they may protect their due process rights and pursue their claims as they see fit.
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`II.
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`STATEMENT OF FACTS
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`A.
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`The Grubhub Plaintiffs
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`Grubhub Holdings, Inc. owns mobile and internet platforms that link customers with
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`takeout restaurants in thousands of cities and manages a portfolio of brands used in that business.
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`Grubhub Holdings, Inc. v. Visa Inc., Case No. 19-cv-06555 (E.D.N.Y.) (MKB) (VMS), First
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`Am. Compl. ¶ 28, ECF No. 7906. BJ’s Wholesale Club Holdings, Inc. operates 218 membership
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`warehouse clubs in the eastern part of the United States. Id. ¶ 29. Leslie’s Poolmart, Inc. sells
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`2
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`swimming pool supplies and related products through hundreds of stores in 36 states. Id. ¶ 30.
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`Uline, Inc. is the leading distributor of shipping, packaging, and industrial supplies and operates
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`eight distribution facilities in locations across the country. Id. ¶ 31. Bob Evans Restaurants, Inc.
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`runs 480 restaurants in 18 states. Id. ¶ 32. Pandora operates 402 stores and also engages in
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`wholesale sales (to its franchisees) and internet sales of jewelry items. Id. ¶ 32a. Belk, Inc.
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`operates hundreds of retail department stores in the United States, and also sells items via the
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`internet. Id. ¶ 32b. These seven companies—the Grubhub Plaintiffs—all accept Visa and
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`Mastercard credit and debit cards and collectively paid approximately $180 million in
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`interchange fees on billions of dollars of sales in 2018. Id. ¶¶ 14, 28-32b.
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`
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`B.
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`The Rule 23(b)(2) Class Representatives
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`The proposed Rule 23(b)(2) class representatives are a dentist’s office, a consulting firm
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`and internet service provider owned by the same person, two bars with the same ownership, a
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`pharmacy, and a hair salon.2 All have only one location.3 These businesses pay interchange fees
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`that are smaller, by orders of magnitude, than those paid by the Grubhub Plaintiffs. RunCentral,
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`for example,
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` in interchange during its most successful year. Ex. 3,
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`RunCentral Dep. at 152. Generic Depot 3,
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` Ex. 5, Generic Depot 3 Dep. at 55. And CMP Consulting
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`2 See Ex. 1, Boss Dental Dep. at 18; Ex. 2, CMP Consulting Dep. at 16; Ex. 3, RunCentral Dep.
`at 11; Ex. 4, DDMB, Inc. and DDMB2 LLC Dep. at 17; Ex. 5, Generic Depot 3 Dep. at 30; Ex.
`6, PureOne LLC Dep. at 29.
`3 See Ex. 1, Boss Dental Dep. at 21; Ex. 2, CMP Consulting Dep. at 17; Ex. 3, RunCentral Dep.
`at 16; Ex. 4, DDMB, Inc. and DDMB2 LLC Dep. at 17; Ex. 5, Generic Depot 3 Dep. at 31; Ex.
`6, PureOne LLC Dep. at 29.
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`3
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` being made by Visa or Mastercard cards. Ex. 2,
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`CMP Consulting Dep. at 33-35.
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`C.
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`The Rule 23(b)(3) Settlement and Release
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`In September 2018, a Rule 23(b)(3) class of merchants settled its claims against Visa and
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`Mastercard. See Superseding & Am. Def. Class Settlement Ag. Rule 23(b)(3) Class Pls. & Defs.
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`(Sept. 17, 2018), ECF No. 7754. Pursuant to the settlement, notice was sent to the members of
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`the putative class, who were given the opportunity to opt out. See Final Approval Order (Dec.
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`13, 2019), ECF No. 2267, at 2 ¶¶ B & C. The Rule 23(b)(2) class representatives, and the vast
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`majority of putative class members, did not opt out of the Rule 23(b)(3) class settlement. See id.
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`at 3 ¶ 2 & Ex. 1. In contrast, the Grubhub Plaintiffs did opt out of the Rule 23(b)(3) settlement.
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`See id. at Ex. 1; First Am. Compl. ¶ 33.
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`Rule 23(b)(3) class members that did not opt out released “any and all manner of claims,”
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`including claims for “payment of money, or for injunctive, declaratory, or other equitable relief,”
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`Final Approval Order at 9-10 at ¶ 16(C)(a), in exchange for a monetary payment. Pursuant to the
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`release, the only remedy those Rule 23(b)(3) class members may now receive is injunctive relief
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`in this case. See id. at ¶ 16(F)(a). Entities that did opt out, like the Grubhub Plaintiffs, are not
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`subject to the release’s limitation on damages or injunctive relief. See id. at ¶ 2 & Ex. 1.4 After
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`opting out, the Grubhub Plaintiffs filed their own case against Visa and Mastercard in November
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`2019, which seeks both monetary damages and equitable remedies on the individual claims of
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`4 According to the 2019 report of the claims administrator for the Rule 23(b)(3) settlement, more
`than 16 million notices of the settlement were sent to class members, and only 675 entities opted
`out of the Rule 23(b)(3) class and settlement. See 2019 Suppl. Report Claims Administrator ¶ 6,
`Ex. A. More than 99.99 % of the Rule 23(b)(3) class members therefore accepted the settlement,
`are subject to the release, and have voluntarily limited their available remedies.
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`4
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`the Grubhub Plaintiffs. See Compl., Grubhub Holdings Inc. et al. v. Visa Inc., et al., Case No.
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`19-cv-07273 (N.D. Ill. Nov. 4, 2019), ECF No. 1.
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`
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`D.
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`Key Distinctions between the Grubhub Plaintiffs and Other Class Members
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`The class representatives recognize that they are differently situated than large merchants
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`that have different business models—and that the Visa and Mastercard rules and practices affect
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`them differently as a result. For example, Carlos Perez, the owner of CMP Consulting and
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`RunCentral, agrees that Visa and Mastercard rules impact different merchants differently,
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`depending on the strategy a merchant uses to lower its cost of acceptance, and that merchants
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`that operate brick-and-mortar stores and can see the payment cards that customers present—and
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`can try to steer the customer to a different card—
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` Ex. 2, CMP Consulting Dep. at 91,
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`151. He noted that Visa’s all-outlets practice, which requires an entity that accepts Visa at one
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`location to accept the cards at all locations in order to qualify for a better interchange tier, is not
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`important to RunCentral—which has no other brands or locations. Ex. 3, RunCentral Dep. at
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`127-28.
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`Douglas Marks, who owns two bars operated by DDMB Inc. and DDMB2 LLC with his
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`siblings, testified that those
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`, which in contrast are a significant focus of the Grubhub Plaintiffs’ Complaint.
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`Compare Ex. 4, DDMB Inc. and DDMB2 LLC Dep. at 113 with First Am. Compl. ¶¶ 7, 10, 103-
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`04, 162-63, 175-76, 190-91, 203-04. Hal Goldman, an owner of Generic Depot 3, stated that
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`large merchants use card acceptance cost-reduction practices and techniques, like requests for
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`proposals to processors and acquiring banks, that are not realistically available for small
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`merchants. Ex. 5, Generic Depot 3 Dep. at 221-22. Heather Boyd Smith, an owner of PureOne,
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`LLC, agrees that the Visa and Mastercard rules affect different merchants differently, depending
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`on circumstances like the number of locations they operate and their strategies for lowering their
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`costs of acceptance. Ex. 6, PureOne, LLC Dep. at 270, 277, 280.
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`
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`The class representatives also recognize that merchants that are pursuing their own,
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`unreleased claims for damages and injunctive relief—like the Grubhub Plaintiffs—have different
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`interests than the class representatives. Ex. 1, Boss Dental Dep. at 232-33. Indeed, the owner of
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`PureOne, LLC thinks that class members should be allowed to opt out of this case if they believe
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`that doing so is in their best interests. Ex. 6, PureOne LLC Dep. at 278.
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`The Rule 23(b)(2) class certification motion, and the reports and testimony of its experts,
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`also recognize that large merchants are differently situated than small merchants like the Rule
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`23(b)(2) class representatives and many class members. Default interchange rules, for example,
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`affect large and small merchants in different ways. See Rule 23(b)(2) Br. at 8 (“While both
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`networks permit bilateral agreements in theory, in practice such agreements affect a small
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`minority of large Merchants.”). In his report, Professor Keith Leffler, one of the experts for the
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`Rule 23(b)(2) class, acknowledged that large merchants are differently situated than small
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`merchants with respect to the Visa and Mastercard rules and
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` See Ex. 7, Leffler Rpt. ¶¶ 48, 49, 53; see
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`also Ex. 8, Leffler Dep. at 73-74 (agreeing that the injunctive relief sought by class would
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`constrain the deals Visa and Mastercard could make with larger merchants).
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`The same volume-related bargaining power also would help large merchants to negotiate
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`special routing deals if the Visa and Mastercard no-bypass rules were changed, and would allow
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`large merchants to employ selective acceptance strategies if the Honor All Cards rules were
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`eliminated. Professor Carlton, one of the Rule 23(b)(2) experts, recognizes that reality in his
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`report. See Ex. 9, Carlton Rpt. ¶¶ 9, 12-14, 28-29, 41-47, 59. Other Visa and Mastercard rules
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`focus on merchant-specific issues, like Visa’s Fixed Acquirer Network Fee (“FANF”), which
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`escalates as the number of a merchant’s locations increases, or its “all-outlets” requirement,
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`which applies only to merchants with multiple outlets and does not affect single-store or single-
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`brand class members at all.
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`In fact, Professor Stiglitz, another of the Rule 23(b)(2) experts, specifically distinguishes
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`between large and small merchants in the equitable relief that he urges this Court to adopt.
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`Professor Stiglitz envisions relief in which the Court would set a “maximum merchant price
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`during a reasonable transition period,” “monitor” the market, and prevent “special deals”
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`between Defendants and “premium merchants” because “Defendants’ limiting of deals to
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`merchant category leaders [could be] designed to deter the outbreak of wider competition within
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`the category.” Ex. 10, Stiglitz Rpt. ¶¶ 141, 166, 177. He urges the Court to “establish
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`procedures . . . to hear and adjudicate any complaints by merchants that Visa or Mastercard is
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`engaged in any conduct designed to undermine or circumvent the specific remedies ordered by
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`the Court” and “continue to monitor such merchant-specific arrangements to ensure that no
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`contractual provisions are included that raise the cost to the merchant’s rivals or that might
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`provide any incentive for other merchants not to impose charges.” Id. ¶¶ 169, 177. Professor
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`Stiglitz’s contemplated “relief” thus would not only restrain the contracting activities of
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`“premium” merchants, it would allow other putative class members to actually assert claims
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`against “premium” merchants for actions deemed contrary to the regulatory regime.
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`The class certification motion also highlights the distinction between putative class
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`members that did not opt out of the Rule 23(b)(3) settlement, and therefore cannot bring any
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`7
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`claims outside of this class action case, and putative class members like the Grubhub Plaintiffs,
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`that did opt out and can pursue their own injunctive relief claims in their own case. Putative
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`class counsel contend that what the Grubhub Plaintiffs believe to be their individual injunctive
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`claims—claims that they specifically acted to preserve by opting out of the Rule 23(b)(3)
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`settlement—are not individual claims at all, and instead are a “collective asset” that belongs to
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`the class and should be under the exclusive control of class counsel. Rule 23(b)(2) Br. at 49.
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`Putative class counsel then argue that “disallowing opt-outs prevents free-riding by
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`individual Merchants, thereby ensuring fairness and increasing the value of the injunctive-relief
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`claims to all Merchants.” Id. at 48 (emphasis in original). The class brief adds:
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`In short, allowing opt-outs would permit individual Merchants to monetize for
`themselves an asset—the claim for injunctive relief—that is valuable precisely
`because it would benefit all Merchants. Allowing opt-outs would permit an
`individual Merchant to gain financially based on the benefit that a legal claim
`would provide to other Merchants. Moreover, that individual monetization of a
`collective asset significantly diminishes its overall value. The Court should not
`permit free-riding that would undermine the ability of the Equitable Relief
`Plaintiffs’ duty to maximize the claim’s value on behalf of all Merchants who
`have the claim.
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`Id. at 49 (emphasis in original). Rule 23(b)(2) counsel thus want to take the individual injunctive
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`claims of the Grubhub Plaintiffs and resolve those claims to benefit other class members. Id.5
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`5 Professor Leffler acknowledges that the principal article he cites for his conclusions regarding
`free-riding specifically supports the fact that the Grubhub Plaintiffs are not “free riders,” but
`rather plaintiffs making an appropriate choice to protect their rights. Ex. 8, Leffler Dep. at 110-
`11 (agreeing that the article he cites at footnote 120 of his Report for his free riding argument,
`David Betson & Jay Tidmarsh, Optimal Class Size, Opt-Out Rights, and “Indivisible” Remedies,
`79 Geo. Wash. L. Rev. 542 (2011), Leffler Dep. Ex. 6, supports allowing opt out rights for
`plaintiffs who would benefit less from remaining in a class than from pursuing their own claims).
`Indeed, that article directly supports the Grubhub Plaintiffs’ position:
`[I]t is possible for a class to contain members who benefit less from class
`treatment than the class action benefits from them. In most circumstances, these
`individuals should be excluded from class membership. Because writing a class
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`III. ARGUMENT
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`
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`A.
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`The Proposed Rule 23(b)(2) Class, Absent Opt-Out Rights, Is Not Cohesive
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`Rule 23(b)(2) “applies only when a single injunction . . . would provide relief to each
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`member of the class” and “does not authorize class certification when each individual class
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`member would be entitled to a different injunction or declaratory judgment against the
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`defendant.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360 (2011) (emphasis added). A
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`proper class must have “sufficient unity so that absent members can fairly be bound by decisions
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`of class representatives,” Amchem Prods. v. Windsor, 521 U.S. 591, 621 (1997), and “even
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`greater cohesiveness” is required to certify a Rule 23(b)(2) class. See In re St. Jude Med., 425
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`F.3d 1116, 1121 (8th Cir. 2005). Because the proposed Rule 23(b)(2) class in this case, which
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`does not permit merchants that seek different injunctive relief to opt out, lacks this essential
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`quality of cohesion, it cannot be certified.
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`The Grubhub Plaintiffs are distinct from the vast majority of putative class members for
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`two reasons. First, the Grubhub Plaintiffs opted out of the Rule 23(b)(3) class and are pursuing
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`their own claims. They are seeking relief shaped to their own, individual interests and business
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`models. Other class members are not, because they gave up their individual claims through the
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`Rule 23(b)(3) settlement and may receive only equitable relief though this case.
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`Second, the Grubhub Plaintiffs are larger merchants that have different interests, and
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`different capabilities, than small merchants, and they are seeking rules relief tailored to their
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`definition that excludes these members might be difficult, an alternative solution
`to achieve exclusion is to give class members the ability to opt out, on the theory
`that each member is in the best position to realize the benefits and losses from
`class treatment.
`Leffler Dep. Ex. 6, at 569 (emphasis added).
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`specific business operations. The putative class representatives, and the experts for the putative
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`class, all recognize that the Visa and Mastercard rules affect large merchants differently than
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`small merchants—a reality that destroys any claim that the class is cohesive.
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`Both of these important differences lead the Grubhub Plaintiffs to seek individually
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`customized injunctive relief, not solely the elimination of certain rules—and certainly not a
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`court-imposed restriction that would prevent large merchants from leveraging competition to
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`negotiate the individual terms of their relationships with Visa and Mastercard and issuing banks.
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`It is no answer to say, as the putative class does, that Visa and Mastercard rules apply to
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`all merchants, and rules relief thus must “remain substantially identical” for all class members.
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`Rule 23(b)(2) Br. at 1; id at 5-6, 33-42. As the Supreme Court has explained, cohesion looks to
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`whether “a single injunction would provide relief to each member of the class,” or whether “each
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`individual class member would be entitled to a different injunction or declaratory judgment
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`against the defendant.” Dukes, 564 U.S. at 360 (emphasis added).
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`Here, the Grubhub Plaintiffs would be entitled to different injunctive relief because they
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`may seek individualized, affirmative injunctive relief to remedy the anticompetitive effect of the
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`Visa and Mastercard rules and practices on their businesses, whereas the other Rule 23(b)(2)
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`class members cannot. The size, business activities, and multiple locations operated by the
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`Grubhub Plaintiffs also give them different interests in shaping appropriate equitable relief—and
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`in making choices about which of the many complex Visa and Mastercard rules and practices
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`should be the focus of such relief. Single-location merchants have little interest, for example, in
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`Visa’s FANF, which escalates for merchants with more than one location.
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`Rule 23(b)(2) certification is impermissible when the class would not derive an
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`indivisible, common benefit from the injunctive relief being pursued. See Jamie S. v. Milwaukee
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`Pub. Sch., 668 F.3d 481, 499 (7th Cir. 2012).6 Here, the relief proposed by Professor Stiglitz on
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`behalf of the class not only would not benefit the Grubhub Plaintiffs, it would harm them.
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`Professor Stiglitz urges the Court to set judicially established interchange rates, prohibit large
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`merchant agreements that may set different rates, and create a policing mechanism that would
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`allow small merchants to bring claims against large merchants who are claimed to have violated
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`the judicially made rules. Ex. 10, Stiglitz Rpt. ¶¶ 141, 166, 177. Such relief would affect class
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`members differently—it would affirmatively restrain the actions of large merchants—and is
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`clearly relief that the Grubhub Plaintiffs would never seek and do not want. Indeed, the Grubhub
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`Plaintiffs plead that they want to be