Cement and Concrete Antitrust Litigation, In re
| Decision Date | 27 May 1987 |
| Docket Number | 85-1670 and 85-1722,Nos. 84-2865,s. 84-2865 |
| Citation | 817 F.2d 1435 |
| Parties | , 1987-1 Trade Cases 67,575 In re CEMENT AND CONCRETE ANTITRUST LITIGATION. STATE OF ARIZONA, Plaintiff-Appellant. v. CITY OF AUSTIN, et al., Plaintiffs-Appellees, and PORTLAND CEMENT ASSOCIATION, et al., Defendants, v. ARC CORPORATION, et al., Class Members-Appellees. STATE OF CALIFORNIA, Plaintiff-Appellant, v. PORTLAND CEMENT ASSOCIATION, et al., Defendants-Appellees. STATE OF MINNESOTA, Plaintiff-Appellant, v. PORTLAND CEMENT ASSOCIATION, et al., Defendants-Appellees. ARIZONA SLUMP BLOCK, INC., Plaintiff-Appellant, v. PORTLAND CEMENT ASSOCIATION, City of Austin, et al., Defendants-Appellees. SMITH & GREEN CORP., Plaintiff-Appellant, v. PORTLAND CEMENT ASSOCIATION, City of Austin, et al., Defendants-Appellees. STATE OF ALABAMA, Plaintiff-Appellant, v. PORTLAND CEMENT ASSOCIATION, et al., Defendants-Appellees. to 85-1724. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Thomas Greene, Deputy Atty. Gen., Sacremento, Cal., Patricia A. Cutler, Deputy Atty. Gen., San Francisco, Cal., Thomas F. Catania, Jr., Sp. Asst. Atty. Gen., St. Paul, Minn., James Prude, Asst. Atty. Gen., Montgomery, Ala., for plaintiffs-appellants States of California, Minnesota, and Alabama.
Kenneth R. Reed and Dee Ann Mowry Rogers, Phoenix, Ariz., for plaintiff-appellant State of Arizona.
Carl W. Divelbiss, Phoenix, Ariz., for plaintiffs-appellants Arizona Slump Block, Inc. and Smith & Green Corp.
David J. Leonard and David H. Nix, Tucson, Ariz., for class members-appellees Allied Concrete, Inc., et al.
Kurt W. Melchior, San Francisco, Cal., for class members-appellees Arc Corp. and its subsidiaries.
Ralph E. Hunsaker, Phoenix, Ariz., for plaintiff-appellant Arizona Slump Block, Inc.
Appeal from the United States District Court for the District of Arizona.
Before WALLACE, HUG and BRUNETTI, Circuit Judges.
In this consolidated action, the parties appeal from the district court's judgment and orders certified for appeal which encompass a plan for distributing a fund created by the settlement of a multidistrict class action alleging a nationwide conspiracy to fix the price of cement. The appellants contend that the "offset" provision in the plan is inequitable, that certain parties should have been excluded from participation, and that other potential claimants should have been allowed to share in the fund. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291, and we affirm.
Beginning in 1976, 35 actions were filed in 12 district courts against a number of cement manufacturers and their trade association alleging, among other things, a nationwide conspiracy to fix prices in violation of section 1 of the Sherman Act, 15 U.S.C. Sec. 1. Six of these actions also alleged another conspiracy among certain sellers of ready-mix concrete in Arizona (the Ready-mix Companies). Several of the lawsuits alleged other antitrust violations, including violations of state laws. On September 12, 1977, the Judicial Panel on Multidistrict Litigation transferred all pending actions to the District of Arizona for coordinated pretrial proceedings. In re Cement and Concrete Antitrust Litigation, 437 F.Supp. 750 (J.P.M.D.L. 1977).
On March 9, 1979, the district court granted a motion to certify the actions as class actions and establish four classes. The first and broadest class was the National Cement Class, made up of all those who purchased cement during the relevant time period other than the defendants and the members of the governmental classes. The next two classes, the California Governmental Class and the Oregon Governmental Class, consist of the respective states and their political subdivisions that purchased cement. The fourth class, the Arizona Ready-mix Class, consists of those entities that purchased ready-mix concrete for delivery within the State of Arizona. In the fall of 1979, the defendants in this fourth class action (the Ready-mix Companies) settled with this class and a partial judgment was entered on July 8, 1980, pursuant to Fed.R.Civ.P. 54(b).
Between July 1979 and October 1981, the first three classes entered into a series of settlement agreements with seven of the major defendants. The settlements totaled approximately $32,000,000 in cash plus 135,000 shares of stock in one of the defendant companies. The settlement agreements left distribution of the settlement fund for later resolution, subject to the approval of the court. On January 6, 1984, the district court decertified the National Cement Class. The decertification order provided, however, that absent class members retained their eligibility to participate in the settlement fund. After decertification, the remaining defendants reached separate settlements with the California and Oregon Governmental Classes and with most of the remaining individual plaintiffs.
On January 21, 1985, the district court approved a plan for distributing the settlement fund. Under this plan, the fund would be distributed to the class members in proportion to the amount of their cement purchases both from manufacturers who settled with the class (settling defendants) and from manufacturers who did not settle with the class (nonsettling defendants). Any claimant, however, whose claim was based on purchases from nonsettling defendants would have to offset against his share of the fund any amount he had already received in an individual settlement with a nonsettling defendant. Furthermore, if a claimant chose to continue litigating claims against the nonsettling defendants, the claimant's share of the settlement fund would be placed in escrow pending the outcome of that litigation. Any amount received by that claimant from continued litigation with the nonsettling defendant would then be offset against the claimant's share when released from escrow. Alternatively, a claimant could choose to waive any claims against nonsettling defendants and immediately receive a full share of the fund.
On appeal, the parties raise five objections to the district court's allocation of the settlement fund. First, they argue that the court should have adopted a proposal for assigning "weights" to claims as a substitute for the plan's offset provision. Second, Arizona contends that the court should have excluded the Ready-mix Companies from sharing in the fund. Finally, some argue that the district court erred in its refusal to allow payments out of the fund for claims based on: (1) an alleged concerted refusal to deal, (2) state civil penalty statutes, and (3) state indirect purchaser statutes. We consider each of these five objections in turn.
Several of the parties in this appeal object to the offset provision in the district court's plan and to the procedures followed by the district court in its adoption. Rule 23(e) declares that a "class action shall not be ... compromised without the approval of the court." Fed.R.Civ.P. 23(e). When evaluating a proposed class action settlement, a district court must determine whether it is "fundamentally fair, adequate and reasonable." Officers for Justice v. Civil Service Commission, 688 F.2d 615, 625 (9th Cir.1982) (Officers for Justice ), cert. denied, 459 U.S. 1217, 103 S.Ct. 1219, 75 L.Ed.2d 456 (1983). We review the district court's determination for an abuse of discretion. In re Equity Funding Corporation of America Securities Litigation, 603 F.2d 1353, 1362 (9th Cir.1979) (Equity Funding ).
The district court required class members who purchased cement from nonsettling defendants to offset their share of the settlement fund with any moneys they have received or will receive in litigation against the nonsettling defendants. Without this requirement, the plan was perceived as being inequitable to class members who purchased cement only from the settling defendants. Some time before the parties agreed to settle, the defendants had entered into a judgment-sharing agreement. Because of this agreement, the settling defendants could terminate their liability in the case only by having the plaintiffs agree not to sue the nonsettling defendants based upon their joint liability for the acts of the settling defendants. A successful settlement was possible therefore only because the plaintiffs covenanted not to sue the nonsettling defendants based upon their joint liability for the plaintiffs' purchases of price-fixed cement from the settling defendants.
Nevertheless, even with this covenant, the plaintiffs retained the right to continue litigation against nonsettling defendants if the lawsuits were based on purchases from those defendants. Therefore, a portion of the class--those who purchased only from the settling defendants--had to release all claims against the nonsettling defendants, while the remainder of the class did not. This left open the possibility that class members with claims against nonsettling defendants could secure double recovery: collect from the settlement fund for purchases made from settling defendants, and also collect against the nonsettling defendants under another settlement or a judgment. The district court adopted the offset provision to put plaintiffs who purchased cement from nonsettling defendants in the same position as plaintiffs who had to waive their joint-liability claims against those nonsettling defendants. On appeal, some parties argue that the court instead should have adopted one of two other proposed solutions.
One proposal would have allowed only class members who purchased cement from settling defendants to share in the fund. The district court properly rejected this solution. Antitrust defendants are jointly and severally liable for the acts of their coconspirators. See, e.g., In re Uranium Antitrust Litigation, 617 F.2d 1248, 1257 (7th Cir.1980). Therefore, the settling defendants were liable to all class members, not to just those members who...
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