Case 2:19-cv-00463-RAJ-LRL Document 494 Filed 12/02/20 Page 1 of 19 PageID# 17590
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Norfolk Division
`
`D&M FARMS, MARK HASTY, DUSTIN
`LAND, ROCKY CREEK PEANUT FARMS,
`LLC, DANIEL HOWELL, and, LONME
`GILBERT, individually and on behalf
`of all others similarly situated;
`
`Plaintiffs,
`
`FILED
`
`DEC " 2 2020
`
`CLERK, U.S. DISTRICT COURT
`NORFOLK. VA
`
`V.
`
`CIVIL ACTION NO. 2:19-cv-463
`
`BIRDSONG CORPORATION, GOLDEN
`PEANUT COMPANY, LLC, and OLAM
`PEANUT SHELLING COMPANY, INC.
`
`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is a Motion for Class Certification filed by Plaintiffs D&M FARMS,
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`MARK HASTY, DUSTIN LAND, ROCKY CREEK PEANUT FARMS, LLC, DANIEL
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`HOWELL, and LONNIE GILBERT, individually and on behalf of all others similarly situated
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`(collectively "Plaintiffs"). ECF No. 235. The Court has also reviewed Defendants BIRDSONG
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`CORPORATION, GOLDEN PEANUT COMPANY, LLC, and OLAM PEANUT SHELLING
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`COMPANY, INC.'s (collectively "Defendants") Memorandum in Opposition, and Plaintiffs'
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`Reply. ECF Nos. 259, 271. Upon review of the relevant filings, the Court finds that a hearing on
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`Plaintiffs' Motion is not necessary and therefore denies Defendants BIRDSONG
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`CORPORATION and OLAM PEANUT SHELLING COMPANY, INC.'s Request for Hearing.
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`ECF No. 276. For the reasons stated herein. Plaintiffs' Motion for Class Ccrtitlcation is
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`GRANTED.
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`I. FACTUAL AND PROCEDURAL HISTORY
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`Plaintiffs filed their initial complaint on September 5, 2019. ECF No. 1. Since initiating
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`the present lawsuit, Plaintiffs filed a Second Amended Class Action Complaint (the "Complaint")
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`on May 27, 2020. ECF No. 148. Plaintiffs are a group of peanut farmers who sell raw, harvested
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`runner peanuts to the Defendants (also known as "shellers") to be processed and sold to food
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`companies or other manufacturers. Id. at 1. From approximately 2011 to 2013, "the Peanut industry
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`experienced drastic weather-related price changes that made it difficult for Defendants [...] to
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`manage risk and plan for production." Id. at 2. Since in or around January 2014, "the prices paid
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`by shellers to Peanut farmers for Runner[] [peanuts] have remained remarkably flat and
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`unchanged, despite significant supply disruptions" such as hurricanes. Id. Because of this
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`significant difference in pricing norms within the industry. Plaintiffs accuse Defendants of
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`"conspir[ing] and collud[ing] with one another to stabilize and depress Runner [peanut] prices."
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`Id.
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`According to the Complaint, Defendants have used their 80-90% market share in the
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`peanut selling industry to facilitate a price fixing conspiracy to depress the price of runner peanuts.
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`Id. at 1. Plaintiffs seek a single claim for relief, on behalf of a nationwide class, under Section 1 of
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`the Sherman Antitrust Act. Id. at 36. The purported class includes "[a]ll farmers who sold Runner
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`Peanuts to Defendants or their co-conspirators in the United States from at least as early as January
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`1, 2014 until the present." Id. at 33. Specifically excluded from the purported class are any
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`"Defendants; the officers, directors or employees of any Defendant; any entity in which any
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`Defendant has a controlling interest; and any affiliate, legal representative, heir or assign of any
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`Defendant. Id.
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`Plaintiffs filed their Motion for Class Certification on September 4, 2020. ECF No. 235.
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`Defendants filed a Memorandum in Opposition on September 25, 2020. ECF Nos. 257, 259.
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`Plaintiffs filed their Reply on October 2,2020. ECF No. 271. Accordingly, this matter is ripe for
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`judicial determination.
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`II. LEGAL STANDARD
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`In order to certify a suit as a class action, the proponent of class certification has the burden
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`of establishing that the conditions enumerated in Rule 23 of the Federal Rules of Civil Procedure
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`have been met. Windham v. American Brands, Inc., 565 F.2d 59, 64 n.6 (4th Cir. 1977) (en banc)
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`cert, denied, 435 U.S. 968, 56 L. Ed. 2d 58, 98 S. Ct. 1605 (1978). Rule 23 provides, in pertinent
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`part:'
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`(a) Prerequisites to a Class Action. One or more members of a class may sue or
`be sued as representative parties on behalf of all only if (1) the class is so numerous
`that joinder of all members is impracticable, (2) there are questions of la\v or fact
`common to the class, (3) the claims or defenses of the representative parties are
`typical of the claims or defenses of the class, and (4) the representative parties will
`fairly and adequately protect the interests of the class.
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`(b) Class Actions Maintainable. An action may be maintained if the prerequisites
`of subdivision (a) are satisfied, and in addition:
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`(3) the court finds that the questions of law or fact common to the members
`of the class predominate over any questions affecting only individual
`members, and that a class action is superior to other available methods for
`the fair and efficient adjudication of the controversy. The matters pertinent
`to the findings include: (A) the interest of members of the class in
`individually controlling the prosecution or defense of separate actions; (B)
`the extent and nature of any litigation concerning the controversy already
`commenced by or against members of the class; (C) the desirability or
`undesirability of concentrating the litigation of the claims in the particular
`forum; (D) the difficulties likely to be encountered in the management of a
`class action.
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`I A proponent of class certification must meet all of the requirements of Rule 23(a), and satisfy one of the
`subsections of Rule 23(b). Plaintiffs have moved for class certification pursuant to 23(b)(3). See ECF No. 236.
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`Fed. R. Civ. P. 23. The Court must conduct a "rigorous analysis" in determining whether the
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`requirements of Rule 23 have been met. General Telephone Co. of the Southwest v. Falcon, 457
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`U.S. 147, 161, 72 L. Ed. 2d 740, 102 S. Ct. 2364 (1982). Whether the proponent of certification
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`has met his or her burden is left to the trial court's discretion and will be reversed only for abuse
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`of such discretion. Windham, 565 F.2d at 65. In conducting its rigorous analysis of Rule 23, the
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`Court must take a "close look at the facts relevant to the certification question and, if necessary,
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`make specific findings on the propriety of certification." Thorn v. Jefferson—Pilot Life Ins. Co.,
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`445 F. 3d 311,319 (4th Cir. 2004) (internal quotations omitted). "Such findings can be necessary
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`even if the issues tend to overlap into the merits of the underlying case." Id.
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`III. DISCUSSION
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`In order to conduct a sufficient analysis of Plaintiffs' Motion, the Court must apply relevant
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`facts within Plaintiffs' Complaint to Rule 23(a) and (b). Importantly, Defendants do not contest
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`Plaintiffs' assessment of the four requirements under Rule 23(a). The Court will nonetheless
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`quickly evaluate Plaintiffs' allegations under Rule 23(a). Defendants do, however, ardently contest
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`the applicability of Rule 23(b)(3), arguing that common questions do not predominate because
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`Plaintiffs are not similarly situated and cannot rely upon common evidence. The following analysis
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`addresses the Rule 23 class action requirements in turn.
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`A. Rule 23 (a)
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`1. Numerosity
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`Rule 23(a)(1) requires that "the class is so numerous that joinder of all members is
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`impracticable." This Court, among others, has previously held that "classes consisting of forty or
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`more members are considered sufficiently large to satisfy the impracticability requirement."
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`American Sales Company, LLC v. Pfizer, Inc. 2017 WL 3669604, at *6 (E.D. Va. July 28, 2017);
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`see, e.g., Meijer, Inc. v. Warner Chilcott Holdings Co. Ill, Ltd., 246 F.R.D. 293, 301 (D.D.C.
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`2007) (quoting Thomas v. Christopher, 169 F.R.D. 224, 237 (D.D.C. 1996)) (finding the
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`numerosity requirement satisfied by a class of thirty members).
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`Here, Plaintiffs purport to represent "almost 12,000 farmers that are geographically
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`dispersed across the Southern and Southeastern U.S." ECF No. 241 at 12. Defendants do not
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`challenge Plaintiffs purported class size. Accordingly, the Court finds that the numerosity
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`requirement is satisfied.
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`2. Commonality & Typicality
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`The commonality and typicality requirements tend to merge. While Rule 23(a)(2) requires
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`that questions of law or fact be common to the class, Rule 23(a)(3) similarly requires that "the
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`claims or defenses of the representative parties are typical of the claims or defenses of the class."
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`"Commonality requires the plaintiff to demonstrate that the class members 'have suffered the same
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`injury.'" Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350-51 (2011) (quoting Gen. Tel. Co. of
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`the Sw. V. Falcon, 457 U.S. 147, 157 (1982)). "A common question is one that can be resolved for
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`each class member in a single hearing, such as the question of whether an employer engaged in a
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`pattern and practice of unlawful discrimination against a class of its employees." Thorn, 445 F.3d
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`at 318. In the antitrust context, courts have generally held that an alleged conspiracy or monopoly
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`is a common issue that will satisfy Rule 23(a)(2) as the singular question of whether defendants
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`conspired to harm plaintiffs will likely prevail. See, e.g., Meijer, 246 F.R.D. at 300; In re
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`Wellbutrin XL Antitrust Litig, No. 08-2431, 2011 WL 3563385, at *4 (E.D. Pa. Aug. 11, 201 1).
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`Meanwhile, typicality ensures that "only those plaintiffs who can advance the same factual
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`and legal arguments may be grouped together as a class." Brousard v. Meineke Discount Muffler
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`Shops, Inc., 155 F.3d 331, 340 (4th Cir. 1998). Additionally, "typicality 'will be established by
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`plaintiffs and all class members alleging the same antitrust violations by defendants.'" Pftzer, Inc.,
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`2017 WL 3669604, at *11 (quoting In re Vitamins Antitrust Litig., 209 F.R.D. 251, 260 (D.D.C.
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`2002)). Here, Plaintiffs allege that Defendants took part in a conspiracy to depress the price of
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`runner peanuts from January 2014 to present. See Compl. Because this alleged conspiracy is part
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`and parcel to a single antitrust violation. Plaintiffs' claims are also typical among the class. See In
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`re Vitamins Antitrust Litig., 209 F.R.D. at 260 ("The typicality requirement is satisfied if each
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`class member's claim arises from the same course of events that led to the claims of the
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`representatives parties and each class member makes similar legal arguments to prove the
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`defendant's liability." (internal quotations omitted)). Accordingly, the purported class meets the
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`commonality and typicality requirements of Rule 23(a).
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`3. Adequate Representation
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`The final requirement of a Rule 23(a) analysis necessitates that the named plaintiffs, and
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`their counsel, fairly and adequately protect the interests of the purported class. Plaintiffs must
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`demonstrate that the named plaintiffs and putative class will "share common objectives and the
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`same factual and legal positions," ensuring that there are no "fundamental" conflicts that go to the
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`"heart of the litigation." Gunnells v. Healthplan Sers., Inc., 348 F.3d 417,430-31 (4th Cir. 2003).
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`Here, Plaintiffs are a group of peanut farmers who sell raw, harvested runner peanuts to
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`the Defendants. Plaintiffs seek to represent a class of peanut farmers who have also sold runner
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`peanuts to Defendants. Plaintiffs, and the purported class, seek to recover damages pursuant to
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`conduct allegedly in violation of the Sherman Act. Notably, Defendants do not challenge the
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`adequacy of Plaintiffs or Plaintiffs' counsel. Upon review, the Court finds no evidence to suggest
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`that the interests of the named Plaintiffs in any way contradict that of the purported class. The
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`same goes for Plaintiffs' counsel. Accordingly, requirement four of Rule 23(a) is met and Rule
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`23(a) is satisfied in its entirety.
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`B. Rule 23(b)(3) Certification
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`An assessment of Rule 23(b)(3) is where the parties disagree. Under Rule 23(b)(3),
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`common questions of law or fact "must predominate over any questions affecting only individual
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`members." Fed. R. Civ. P. 23(b)(3). Further, a plaintiff must establish "that a class action is
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`superior to other available methods for the fair and efficient adjudication of the controversy." Id.
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`These requirements are commonly referred to as the predominance and superiority requirements
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`of a Rule 23(b)(3) analysis.
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`The predominance requirement establishes a separate and "more stringent" analysis than
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`Rule 23(a)'s commonality requirement. Thorn, 445 F.3d at 319 (quoting Lienhart v. Dryvil Sys.,
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`Inc., 255 F.3d 138, 146 n.4 (4th Cir. 2001)); cf. Fed. R. Civ. P. 23(a)(2) (requiring only the
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`presence of common questions of law or fact). Predominance of common questions over individual
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`issues ensures that the "proposed class[] [is] sufficiently cohesive to warrant adjudication by
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`representation." v4/Mc/ie/M Prods., Inc., v. Windsor, 521 U.S. 591,623 (1997). "If the 'qualitatively
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`overarching issue' in the litigation is common, a class may be certified notwithstanding the need
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`to resolve individualized issues." Soutter v. Equifax Info. Servs., LLC, 307 F.R.D 183, 214 (E.D.
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`Va. 2015) (citing Ealyv. Pinkerton Gov't Servs., 514 F. App'x 299,305 (4th Cir. 2013)); see also
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`Namenda, 331 F. Supp. 3d at 204 ("'[IJndividual questions need not be absent' in order to certify
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`a class under Rule 23(b)(3); the text of Rule 23(b)(3) itself contemplates that such questions will
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`be present." (quoting
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`v. Mel S. Harris & Assocs. LLC, 780 F.3d 70, 81 (2d Cir. 2015))).
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`In order to satisfy the predominance requirement, a plaintiff must demonstrate that each
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`element of the legal claim "is capable of proof at trial through evidence that is common to the class
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`rather than individual." In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 311. "Because the
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`nature of the evidence that will suffice to resolve a question determines whether the question is
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`common or individual, a district court must formulate some prediction as to how specific issues
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`will play out in order to determine whether common or individual issues predominate in a given
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`case." Id. (internal quotations and citations omitted). Accordingly, the Court must conduct a
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`"rigorous analysis" of the Rule 23(b)(3) requirements, establishing various facts in support of such
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`analysis. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 323-24. In so doing, the Court is
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`required to evaluate "Plaintiffs' methodology for proving [predominance and superiority] and must
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`act as finder of fact in the face of conflicting expert testimony." In re Titanium Dioxide Antitrust
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`Litig, 284 F.R.D. at 340.
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`/. Factual Findings Relevant to Plaintiffs* Motion
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`a. Facts Relevant to Alleged Violations of the Sherman Act § I
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`As previously articulated. Plaintiffs seek to represent a class of "almost 12,000 farmers that
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`are geographically dispersed across the Southern and Southeastem U.S." ECF No. 241 at 12; ECF
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`No. 259 at 8. Plaintiffs individually sold runner peanuts to one or more of the Defendants during
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`the proposed class period—^January 1,2014 through the present. Compl. ^ 19-25. Plaintiffs accuse
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`Defendants of artificially depressing the price of runner peanuts, causing peanut farmers to receive
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`below market payments in exchange for their product. See Compl.
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`In support of Plaintiffs' theory of liability. Plaintiffs rely upon experts, documents,
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`depositions, and various conversations exchanged between Defendants' employees. As one such
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`offer of proof, Plaintiffs rely upon the expert report of Dr. Michael A. Williams, Ph. D. ECF No.
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`237-1. In his report. Dr. Williams sets forth market research demonstrating a likelihood that
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`Defendants conspired to commit antitrust violations. Id. As a part of his report. Dr. Williams
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`conducts a market structure analysis in which he concludes that throughout the relevant class
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`period, there existed (1) high buyer concentration in the peanut market, (2) antitrust barriers to
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`entry in the peanut shelling market, (3) a commodity-like nature for runner peanuts, (4) a large
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`number of repeat sales to the same shelters, (5) relatively low elasticity of supply, and (6) various
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`industry trade associations. Id. Dr. Williams argues that taken together, these six factors support a
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`likelihood of collusion and, thus, unlawful price-fixing. Id.
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`Upon review, Defendants' only challenge to Dr. Williams' market structure analysis is that
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`he lacks "any empirical analysis whatsoever," without describing what information is lacking and
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`without pointing to a counter argument or rebuttal testimony to that effect. ECF No. 259 at 14. The
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`Court, however, finds Dr. Williams' market structure analysis to contain plausible evidence in
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`support of an alleged conspiracy. Arguments (1), (2), and (4) are supported by the mere fact that
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`Defendants occupy 80-90% of the market share for peanut shellers. Accordingly, it is very likely
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`that high buyer concentration, barriers to market entry, and a large number of repeat sales exist
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`since there are so few market competitors. Further, argument (3) is plausible since the Agricultural
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`Act of 2014 (the "2014 Farm Bill") (a bill that was repeatedly referenced in Defendants'
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`Memorandum in Opposition) identifies peanuts as a "covered commodity" under various
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`provisions of the Bill. See ECF No. 237-1. Dr. Williams also relies upon seemingly trustworthy
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`sources in support of arguments (5) and (6). Id. at 24-28.
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`Plaintiffs further allege that additional evidence of collusion will flow from emails, phone
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`records, and deposition testimony establishing "internal emails in which senior Defendant
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`executives passed competitive pricing information to top management shortly after... texts and/or
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`phone calls with competitors." ECF No. 236 at 10. So far, Plaintiffs have taken five depositions in
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`addition to having "roughly 25 [more depositions] scheduled or being scheduled." Id. Plaintiffs
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`have also obtained various communications in which Defendants discuss pricing for the upcoming
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`buying season. Id. at 11. For example, one such email from an employee at Defendant 01am to an
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`employee at Defendant Birdsong reads "[i]t is always a pleasure to break bread together and talk
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`about the industry and where we are and where we are going." Id.] Id. at Ex. 4. In another email,
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`an employee from Defendant Golden Peanut contacted an employee from Defendant Birdsong
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`asking "[w]hat are you paying for Seg 2 & 3?" to which the Birdsong employee responded "175."
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`ECF No. 236 at 12; Id. at Ex. 8. In another internal email between Defendant Golden Peanut's
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`employees, one such employee acknowledges that Defendant 01am has set a purchase price for
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`one of its products at "$400 for 2016 in all areas according to a usually reliable source." Id. at 12;
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`Id. at Ex. 9. Plaintiffs refer to a litany of similar emails, deposition testimony, and other documents
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`in support of potential collusion. See ECF No. 236 at 10-18. Additionally, after he reviewed these
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`emails, among other documents, Dr. Williams further determined that the peanut industry is ripe
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`for collusion since the communications reflect actions against Defendants' individual self-
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`interests, but in favor of the alleged conspiracy. ECF No. 237-1.
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`Defendants do not challenge the validity of the emails, and other documents; however,
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`Defendants do argue that the information exchanged therein "do[es] not violate the Sherman Act."
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`ECF No. 257 at 13; see also id. at 33-35. Instead, the communications were byproducts of
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`"legitimate business relationships[,]... all of which are lawful." Id. at 34. While this conclusion
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`remains to be seen, the underlying facts (i.e. the emails and other documents) are not in dispute
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`and will be accepted as true for the limited purposes associated with this Memorandum Opinion
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`and Order.
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`b. Facts Relevant to Antitrust Impact
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`Assuming the alleged conspiracy occurred. Plaintiffs argue that the impact of this
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`conspiracy permeates throughout the purported class. The parties almost entirely rely upon their
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`expert opinion reports to evaluate the impact of the alleged conspiracy on the class. In support of
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`Plaintiffs' Motion, Dr. Williams conducts a two-part analysis. First, he assesses "whether common
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`evidence and analyses can be used to determine whether the alleged conspiracy deflated prices to
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`the Class below competitive levels in general." ECF No. 237-1 at 44-45. This assessment was
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`previously addressed in Section IIl.B.l.a. Second, Dr. Williams assessed "whether common
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`evidence and analysis can be used to determine whether any such general price deflation would
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`have a widespread effect on Class members, causing all or virtually all of them to receive a lower
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`payment for at least one sale of Runner peanuts than they would have received but for the alleged
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`conspiracy." Id. This assessment will be analyzed as follows.
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`Dr. Williams' two-part inquiry makes use of a multiple variable regression model. ECF
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`No. 237-1 at 45. The multiple variable regression model compares "prices during the period
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`effected by the alleged unlawful conduct... to competitive prices during a 'benchmark' period,
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`i.e., prices in a market or during a time period likely unaffected by the alleged unlawful conduct."
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`Id. In making this comparison, the model can demonstrate what the price for runner peanuts would
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`have been absent the conspiracy. Id. This establishes a "but-for" price for the runner peanuts which
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`is a widely used plaintiffs' tactic in antitrust, horizontal price fixing cases. In re Titanium Dioxide
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`Antitrust Litig., 284 F.R.D at 345; see also In re EPDM Antitrust Litig., 256 F.R.D. 82, 88 (D.
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`Conn. 2009); In re Rail Freight, 287 F.R.D. at 44. Additionally, Dr. Williams' regression model
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`was used to compare the actual prices of Defendants' runner peanuts with the "but-for" price,
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`determining that 99.8% of the purported class had been affected by the alleged conspiracy. ECF
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`No. 237-1 at 58.
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`Dr. Williams' regression model "employs econometric methods to account for factors that
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`affect prices but that are unrelated to collusion (e.g., cost and demand factors) to isolate the price
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`effects, if any, of the alleged conspiracy." Id. Dr. Williams also accounts for fixed price effects
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`such as the calendar month, each Defendant, transaction type, region, peanut segregation, high-
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`oleic indicator, seed indicator, pool contract indicator, and farmer. Id. at 57. By using this method.
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`Dr. Williams determined that Defendants' "alleged conspiracy depressed farmer stock runner
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`peanut prices below competitive levels by 18.1%." Id. at 58.
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`Defendants, and Defendants' expert Dr. Michelle Burtis, disagree with Dr. Williams'
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`findings. According to Defendants, Dr. Williams does not account for the specific instances during
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`the class period in which Defendants allegedly colluded. ECF No. 259 at 20-23. In other words.
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`Defendants intend to discredit Dr. Williams' assessment based upon alleged overinclusion of
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`altemative factors that would impact price - those other than a conspiracy. Id. Defendants argue
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`that in so doing, "he attributes any and all prices differences [sic] between his benchmark period
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`and the proposed Class period to 'the alleged conspiracy.'" Id. at 22 (internal citations omitted).
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`Defendants further accuse Plaintiffs of relying upon averages attributable to the entire class
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`instead of those applicable to each proposed class member equally. Defendants argue that "[rjather
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`than designing a model that is capable of proving whether each of these different proposed class
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`members was impacted by the alleged conduct, Dr. Williams created a model that manufactures
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`common impact by applying the same average underpayment rate to all growers." Id. at 23.
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`(emphasis omitted). Additionally, Defendants allege that Dr. Williams' method produces false
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`positives and includes a number of uninjured Plaintiffs. Id. at 28-29 and 31-33. According to Dr.
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`Burtis, Dr. Williams' conclusion that 99.8% of the class was impacted yields an error that could
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`range from at least 50% to as high as 97%. Id. at 29; ECF No. 259-2.
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`The Court will consider these facts in its Predominance analysis below.
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`2. Predominance
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`To succeed on their antitrust claim at trial, Plaintiffs must establish the following elements:
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`(1) a violation of the applicable antitrust laws, (2) individual injury, or antitrust impact, and (3)
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`measurable damages. See 15 U.S.C. § 15; Am. Sales Co., 2017 WL 3669604, at *13. While
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`Defendants do not concede to any violation of the applicable antitrust law- i.e. Section One of the
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`Sherman Act- Defendants primarily contest Plaintiffs' ability to prove elements two and three of
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`their antitrust claim. ECF No. 259 at 20. The Court, however, will examine each element herein.
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`a. A Violation of Section One of the Sherman Act
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`In alleging that Defendants committed antitrust violations. Plaintiffs have proven that
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`common issues of law and fact clearly predominate over individual issues. Plaintiffs set forth a
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`myriad of common evidence such as emails, conversations, and deposition testimony in which
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`Defendants discuss competitors' prices in a manner that can be perceived as a means to collude.
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`Fatally, Dr. Williams conducts a market structure analysis in which he concludes that throughout
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`the relevant class period, there existed (1) high buyer concentration in the peanut market, (2)
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`antitrust barriers to entry in the peanut shelling market, (3) a commodity-like nature for runner
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`peanuts, (4) a large number of repeat sales to the same shelters, (5) relatively low elasticity of
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`supply, and (6) various industry trade associations. Id. While the court will not assess the weight
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`of these factors to establish any sort of liability, the factors certainly predominate the class.
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`Importantly, if true, each factor impacts the price of runner peanuts which of course effects the
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`vast majority, if not all, of the purported class. Defendants have not provided enough evidence to
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`undermine or negate the Courts reliance on Plaintiffs' cited emails and Dr. Williams' market
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`structure analysis. Accordingly, common issues of law and fact predominate with respect to
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`proving violations of the Sherman Act.
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`b. Individual Injury and/or Antitrust Impact
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`"It is a basic tenet of antitrust law that a cause of action will not lie if the plaintiff has not
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`been harmed." Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77,92 (3d Cir. 2011). Therefore, only
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`those who have suffered injury "by reason of anything forbidden in the antitrust laws" may bring
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`a suit for treble damages. 15 U.S.C. § 15(a). "[Antitrust] impact often is critically important for
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`the purpose of evaluating Rule 23(b)(3)'s predominance requirement because it is an element of
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`the claim that may call for individual, as opposed to common, proof." Hydrogen Peroxide, 552
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`F.3d at 311. Importantly, at the class certification stage. Plaintiffs need only demonstrate, by a
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`preponderance of the evidence, "that the element of antitrust impact is capable of proof at trial
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`through evidence that is common to the class rather than individual to its members." Hydrogen
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`Peroxide, 552 F.3d at 311-12. Accordingly, to meet their burden. Plaintiffs must demonstrate that
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`through evidence common to the class, the proposed class received a lower price for runner peanuts
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`than they would have received absent the alleged conspiracy. See Hanover Shoe v. United Shoe
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`Machinery Corp., 392 U.S. 481,489 (1968).
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`As discussed in detail above, Plaintiffs rely upon Dr. Williams' expert report to prove class-
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`wide impact. Therein, Dr. Williams concludes that "approximately 99.8% of [the proposed class]
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`had at least one underpayment observation during the Class Period." ECF No. 237-1 at 62. In
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`getting to this conclusion, Dr. Williams uses a multiple variable regression model to conclude that
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`approximately 12,000 farmers were potentially underpaid as a result of the alleged conspiracy. Id.
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`A variation of that regression model further established a "but-for" price, indicating what farmers
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`would have been paid for their runner peanuts but for the alleged conspiracy. Dr. Williams then
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`took the actual prices paid to each of the farmers, compared those prices to the "but-for" prices,
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`and found that 99.8% of the proposed class had at least one underpayment observation during the
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`class period.
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`Courts have held that determining class-wide impact via an economic regression model is
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`sufficient to withstand a predominance analysis. In re EPDM Antitrust Litig., 256 F.R.D. at 88
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`("[0]ne way of demonstrating predominance is to show that there is a common method for proving
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`that the class plaintiffs paid higher actual prices than in the but-for world, such as using an
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`econometric regression model."); In re Titanium Dioxide Antitrust Litig., 284 F.R.D. at 345; In re
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`High-Tech Employee Antitrust Litig., 2014 WL 1351040 (N.D. Cal. Apr. 4, 2014). On the other
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`hand, some courts have rejected regression models where the variables undergirding the regression
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`analysis were not sufficiently tailored to the liability at issue. See Comcast Corp v. Behrend, 569
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`U.S. 27 (2013); In re Wholesale Grocery Prods. Antitrust Litig., 946 F.3d 995, (8th Cir. 2019).
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`Here, Dr. Williams' regression model spans the relevant Class period (January 1, 2014 to
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`December 31,2019), separates and accounts for variables unrelated to Plaintiffs' theory of liability
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`(such as the farmers' costs associated with production and prices for peanut butter sales), and
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`utilizes fixed effect variables to ensure consistency. See supra lIl.B.l.a. Defendants argue,
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`however, that the regression model: (1) is over inclusive as it does not consider alternative
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`variables that may have impacted the price of Runner peanuts, (2) does not properly account for
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`the different contracts each Defendant may have had with members of the proposed class, (3) does
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`not account for the impact of the 2014 Farm Bill, (4) does not account for each individual
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`occurrence attributable to the conspiracy (i.e., each email or other communication), and (5)
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`produces false positives. ECF No. 259 at 9-12,20-31.
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`In taking all of Dr. Williams alleged missteps into consideration, Defendants argue that Dr.
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`Williams improperly establishes a general, average rate of underpayment and applies this rate to
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`the entire class to prove impact. Specifically, Defendants argue that Dr. Williams improperly uses
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`a single average percentage rate for underpayment and imputes this percentage across the class
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`without applying an individual assessment for impact to each individual member of the Class. This
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`Court, however, has previously found that "[i]t is a common practice to use averages to determine
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`whether class members suffered a common antitrust injury in cases such as this one, even if the
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`damages calculation, which occurs later in the proceedings, will require a more individualized
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`inquiry." In re Zetia (Ezetimibe) Antitrust Litig., No. 2:18cd2836 (E.D. Va. Aug. 21,2020).
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`Importantly, "[t]he real question before the court is whether the plaintiffs have established
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`a workable multiple regression equation, not whether plaintiffs' model actually works." In re
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`EPDM Antitrust Litig., 256 F.R.D. at 100. "[T]he issue at class certification is not which expert is
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`the most credible, or the most ac