Home Depot U.S.A. Inc. v. Lafarge N. Am. Inc. (In re Domestic Drywall Antitrust Litig.)
| Decision Date | 08 November 2021 |
| Docket Number | 18-cv-5305,Civil Action MDL 13-2437 |
| Parties | IN RE DOMESTIC DRYWALL ANTITRUST LITIGATION v. LAFARGE NORTH AMERICA INC. HOME DEPOT U.S.A., INC. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
MEMORANDUM RE: MOTION FOR CERTIFICATION FOR INTERLOCUTORY APPEAL
Plaintiff Home Depot U.S.A., Inc. (“Home Depot”), filed a Motion for Certification under 28 U.S.C. § 1292(b). (ECF. No. 142). Home Depot requests this Court certify for appeal its August 20, 2021 Order-which granted Defendant Lafarge North America, Inc.'s (“Lafarge”) Daubert motion to exclude an economic expert retained by Home Depot-so Home Depot may petition the Third Circuit Court of Appeals for permission to appeal.
This Court's Memorandum & Order (ECF No. 136) fully sets forth the factual background and the reasons upon which this Court relied to justify its exclusion of Dr. Kneuper as Home Depot's expert economist. The rulings this Court made in its Order will not be repeated because they are well stated in the Memorandum Opinion (ECF No. 136), and the present Motion filed by Home Depot (ECF No. 142), Lafarge's Response (ECF No. 143), and Home Depot's Reply Brief (ECF No. 144) accurately describe the unique procedural history.
Briefly though, this Court excluded Home Depot's for several reasons, two of which were: (i) because Dr. Robert Kneuper improperly based his expert opinions on conclusions that were contrary to findings and rulings this Court had made earlier in this multidistrict litigation; and (ii) because he relied on facts that were not established in the prior proceedings, and in some instances on facts that were contrary to other established facts. Although Dr. Kneuper's ultimate conclusions superficially appeared to be the usual and normal opinions of an economist appearing for a plaintiff in an antitrust case, the reasons he gave for these conclusions took him out of the realm of economics, and as this Court noted in its Memorandum Opinion, Dr. Kneuper turned himself into a “attorney-juror-judge.”
The litigation history of this case is relevant. Home Depot had been a class member participating in a large settlement which was finalized before Home Depot filed its complaint in the Northern District of Georgia on June 11, 2018. Home Depot opted out of this class, but only did so as to Lafarge only; it remained apart of the class as to all the remaining defendants. Then, Home Depot filed the present action against Lafarge, and it was transferred to the undersigned by the Judicial Panel of Multidistrict Litigation (“JPML”) on December 10, 2018. Once this case was transferred to this Court, Home Depot did very little, and nothing of significance, to initiate any discovery of its own although there was no bar to it doing so.[1]
As stated in its Memorandum Opinion, there is little if any precedent for the Court's decision to rely on its prior rulings in this MDL to strike Dr. Kneuper's expert opinions. Although this Court disagrees with Home Depot's argument that its Order was incorrect[2], Home Depot does correctly recognize the novelty of this Court's Order, particularly within the context of multidistrict antitrust litigation (“MDL”). Home Depot is also correct that the issues decided by this Court were controlling issues of law, that substantial ground for difference of opinion on those issues exists, and that an appellate decision will likely advance the termination of this litigation. For the foregoing reasons, Home Depot's Motion will be GRANTED.
28 U.S.C. § 1292(b) sets out a three-part test for certification for interlocutory appeal:
28 U.S.C. § 1292(b).
This Court decided an issue that is a controlling issue of law in this litigation: that Home Depot is bound by the rulings this Court made before Home Depot's present action was transferred to this Court.
First, the Court relied on principles of “issue-preclusion” and “law of the case” to justify its conclusion that Home Depot, and its expert economist Dr. Kneuper, were bound by rulings entered in this MDL before Home Depot's case was transferred to this Court in 2018. Whether Home Depot is indeed bound by rulings issued in this MDL before Home Depot joined it in 2018, as this Court held it was, is one issue that will absolutely control future proceedings in this case.
Home Depot argues this Court's rulings that were issued before Home Depot transferred into this MDL should not apply, and accordingly, that this Court had no right to rely on principles of “issue preclusion” and “law of the case” when ruling on the Dr. Kneuper Daubert motion.
Home Depot is correct that this Court relied extensively on these two legal principles when it excluded Dr. Kneuper. Both “issue preclusion” and “law of the case” principles can play an important role in traditional pretrial proceedings in complex commercial litigation, and this is especially true when courts decide important issues during those proceedings.
Although this Court believes it had the right to rely on principles of “issue preclusion” and “law of the case”, for the reasons set forth in its Memorandum Opinion, this Court's Order decided this controlling issue of law and which will directly affect the trajectory of this case. This Court's Order will affect both the upcoming decision on Lafarge's pending Motion for Summary Judgment (ECF No. 82) and the proceedings after this case is transferred back to the Northern District of Georgia for trial.[3] Once this case is returned to the Northern District of Georgia after the conclusion of pretrial proceedings, the trial judge may be bound by this Court's rulings.[4] The judge to whom this case will be assigned for trial will be totally unfamiliar with the extensive procedural history, but will undoubtedly be affected, if not affirmatively bound, by this Court's various rulings. As a practical matter, it is unlikely that the judge to whom the case is assigned in the Northern District of Georgia will undertake a completely de novo examination of the procedural history and this Court's rulings. So, this Court's Order will continue to direct impact the case after it leaves this Court.
Therefore, the principal controlling question of law is whether a tag-along party's expert may ignore prior rulings that were issued by the MDL transferee judge before the tag-along party joined said MDL? This question is not raised by normal cases where all parties are present from the very start of the case, and this question warrants Third Circuit review.
Home Depot relies extensively on In re TMI Litig., 193 F.3d 613 (3d Cir. 1999), amended, 199 F.3d 158 (3d Cir. 2000). In TMI, the Third Circuit decided the case based on its interpretation of Fed.R.Civ.P. 42(a), which allows for consolidation, but different consolidation from that which is allowed under 28 U.S.C. § 1407. Although, the TMI Court did discuss “issue preclusion” in the context of collateral estoppel, it ultimately ruled that a summary judgment issued against one group of plaintiffs could not be applied to a different group of plaintiffs because the different group never had the opportunity to litigate their claims and never had the “opportunity to object to the defendants' motion for summary judgment or otherwise protect their substantive claims.” In re TMI Litig., 193 F.3d 613, 724 (3d Cir. 1999), amended, 199 F.3d 158 (3d Cir. 2000). Because that different group of plaintiffs never had the opportunity to be heard on summary judgment, “issue preclusion” and “law of the case” could not be used to apply summary judgment to them. Id.
This Court acknowledges that although some language in TMI supports Home Depot's position, its procedural history is considerably different from the present action. TMI was not a class action, and its decision was heavily predicated on the fact that the different group of plaintiffs never had the opportunity to be heard on the earlier summary judgment. Home Depot did have this opportunity to be heard as part of a class but chose instead to opt-out as to Lafarge and file its own action.
Home Depot's delayed filing triggers this unique procedural situation that the undersigned believes the Third Circuit should review: whether Home Depot's decisions to opt-out of the class settlement as to Lafarge and to delay filing its own lawsuit until 2018 shield it from “issue preclusion” and “law of the case” applicability. Regardless of the differences between TMI and the present action, this Court believes the TMI decision demonstrates a difference of opinion regarding “issue preclusion” and “law of the case” applicability in an MDL.
In its Memorandum Opinion, this Court relied on Phila. Housing Auth. v. Am. Radiator & Standard Sanitary Corp., 323 F.Supp. 381 (E.D. Pa. 1970). Once again, this decision is not factually analogous, but it provides a ruling contradictory to that of TMI. The Philadelphia Housing Court determined it was appropriate to apply one summary judgment decision in the MDL to another case in the same MDL containing a different a group of plaintiffs. The Court held “an earlier decision by this Court in this very same multidistrict litigation, Mangano, establishes the law of this case.” Philadelphia House Auth. v. Am. Radiator & Standard Sanitary Corp., 323 F.Supp. 381, 385 (E.D. Pa....
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