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Class Settlement Flaw Exposed in Case Over Smart Phone Batteries

Bloomberg Law discusses our ninth-circuit appeal in the lithium ion antitrust litigation:

A possible vehicle for federal courts to revisit the inconsistent treatment comes in an appeal to the U.S. Court of Appeals for the Ninth Circuit by a class action advocacy group. The Center for Class Action Fairness is seeking to undo an October 2017 settlement in In Re: Lithium Ion Batteries Antitrust Litigation, a multi-district lawsuit on a price-fixing cartel involving sellers of the power source in most smartphones, laptops, and cameras.

The advocacy group, part of the libertarian Competitive Enterprise Institute (CEI), alleges that the settlement unfairly sweeps in all U.S. consumers who bought a device containing an overpriced battery because it defines the settlement class as “nationwide.” But only residents from the 27 states that permit those claims have a right to damages, CEI says.

Michael Bednarz contends that letting consumers from other states into the settlement dilutes the compensation available to indirect purchasers whose states do protect their right to sue. The judge’s settlement certification unfairly distributes the $44.95 million pot among millions of people who couldn’t have brought a lawsuit for damages in the first place, the complaint says.

“Class settlements should vindicate the rights of consumers,” Ted Frank, CEI’s director of litigation, told Bloomberg Law. “To the extent that different states grant those consumers different rights, you can’t just throw them into the same pot and treat them the same.”

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Bednarz’s appeal to the Ninth Circuit doesn’t speak to the disparity between state consumers. Instead, it focuses on the rights of class members who have a viable claim. But the Supreme Court can consider related issues when it takes a case. The difficulty thus far has been in finding a case that presents the right issues all the way through the appellate process. A dispute about settlement may be the only way for the justices to take a fresh look at the law on indirect purchasers.

CEI is prepared to go the distance, Frank said. “We aren’t going to be bought out” on the appeal, he said.

Read the full article here.