Marbaker v. Statoil USA Onshore Properties, Inc., --- Fed. Appx. ----, 2020 WL 733049 (3d Cir. Feb. 13, 2020)

Third Circuit reiterates that parties must affirmatively agree to classwide arbitration.

Plaintiffs in Marbaker alleged that defendants underpaid for oil and gas leases, filing a putative class action seeking a declaratory judgment that the oil and gas leases permitted class arbitration. The district court dismissed the declaratory judgment claim and the Third Circuit affirmed. Relying on Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 684 (2010), the panel explained that “courts will not force parties ‘to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.’” Because class arbitration “differs greatly from bilateral arbitration [as it] aggregates many more disputes, handles much higher stakes, compromises confidentiality, and binds absent parties,” “[c]ontractual silence is not enough,” and “[w]e will not infer consent.” Rather, there must be an “affirmative ‘contractual basis”’ for finding the parties consented specifically to class arbitration. The panel found these requirements were not met in the oil and gas leases because they did not mention class arbitration. Plaintiff argued the incorporation of the AAA arbitration rules in the oil and gas leases also incorporated the AAA’s Supplementary Rules for Class Arbitrations. The panel rejected that argument, reasoning that a short reference to the AAA rules is insufficient to incorporate the “panoply” of AAA supplementary rules.  Even if the supplementary rules were incorporated, that would be insufficient to “infer consent” to class arbitration because even those rules require consent to class arbitration. 

In re Lamictal Direct Purchaser Antitrust Litig., 957 F.3d 184 (3d Cir. 2020)

Third Circuit reaffirms that class certification requires rigorous analysis.

In re Lamictal is a pharmaceutical antitrust case in which plaintiffs claim that two pharmaceutical companies violated antitrust laws when settling a Hatch-Waxman lawsuit by delaying the entry of a generic product. The district court certified a class of direct purchasers. On appeal, the defendants challenged the district court’s ruling on the predominance requirement, specifically whether common issues predominated over individual issues as to antitrust injury.

The panel reversed, reiterating that the district court must conduct a “rigorous analysis” with respect to “three key aspects”: (1) the court must consider whether the factual determinations are supported by a preponderance of the evidence; (2) the court must resolve all factual and legal disputes, even if they overlap with the merits; and (3) the court must consider all factual and expert evidence, even if introduced by the party opposing class certification. Plaintiffs argued the district court acted properly because, under Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016), the predominance requirement was satisfied “unless no reasonable juror could believe the common proof at trial.” The panel rejected this argument, concluding that “a putative class must demonstrate that its claims are capable of common proof at trial by a preponderance of the evidence.” The panel then reversed the predominance finding on the issue of antitrust injury because the district court relied on averages rather than resolving the factual and expert issues presented by the parties: “[i]t was up to the District Court to scrutinize the evidence to determine what was credible and could be used in the expert analysis.”