“Today’s decision means that the plaintiffs’ bar cannot evade Rule 23 by filing suit in a friendly jurisdiction and then convincing the judge to apply the forum’s law to every claim, no matter the State in which a given claim arises.”
—Cory Andrews, WLF General Counsel & Vice President of Litigation

Earlier today, the U.S. Court of Appeals for the Ninth Circuit reversed a trial court’s nationwide class-certification order in a highly watched antitrust suit against Qualcomm, a leading computer-chip manufacturer. The decision was a victory for Washington Legal Foundation (WLF), which filed an amicus brief in the case arguing that the class’s massive size renders it unmanageable.

The plaintiffs alleged that Qualcomm behaved anticompetitively by forcing cellphone makers to pay inflated royalties to Qualcomm to license certain patents. As a result, consumers allegedly paid more for their cellphones than they would have had Qualcomm charged reasonable royalties. But as the Second Circuit emphasized in today’s decision, cellphone purchasers have no direct dealings with Qualcomm. And the antitrust laws of 22 States provide that only those who deal directly with Qualcomm have standing to sue. As a result, the California district court improperly certified the class by applying California law to the claims of all cellphone purchasers in all 50 States.

The appeals court’s reasoning largely tracks arguments found in WLF’s brief. WLF argued that each State has a strong interest in applying its own consumer protection laws to consumer sales occurring within the State. WLF urged the appeals court to respect that strong interest by eliminating from the class all consumers residing in one of the 22 States that bar antitrust claims by indirect purchasers. WLF also argued that class certification should be reversed because the district court failed to create a plan for managing so massive a lawsuit—by far the largest class action in U.S. history.