## Facts

- Direct purchasers sued major producers of hydrogen peroxide and persalts, alleging a horizontal price-fixing conspiracy in violation of Sherman Act § 1 and seeking treble damages under Clayton Act § 4.
- Plaintiffs sought certification of a Rule 23(b)(3) damages class, contending the alleged conspiracy caused classwide antitrust impact and classwide damages.
- Plaintiffs offered an expert economic model to show common impact and damages through common proof.
- Defendants offered expert testimony and record evidence indicating significant variation in prices, contract terms, and individualized negotiations among purchasers, disputing that impact could be shown on a classwide basis.
- The district court certified the class, treating plaintiffs’ burden as a “threshold showing” and declining to resolve the parties’ conflicting expert views at the certification stage.

## Issues

1. What standard of proof governs factual determinations supporting Rule 23 findings, including predominance under Rule 23(b)(3)?
2. Must a court resolve factual and expert disputes relevant to class certification even if those disputes overlap with merits issues?
3. In an antitrust price-fixing case, how should a court evaluate expert evidence offered to establish classwide antitrust impact for predominance purposes?

## Decision

- The Third Circuit vacated the class certification order and remanded.
- The court held that class certification requires the district court to make findings that each Rule 23 requirement is met, supported by a preponderance of the evidence; a “threshold showing” is insufficient.
- The court held that the district court must resolve all factual and legal disputes material to Rule 23, even if they overlap with the merits, including disputes bearing on elements of the cause of action.
- The court held that expert opinions offered for class certification must be assessed for reliability under Federal Rule of Evidence 702 and Daubert when they bear on Rule 23 requirements.
- The district court erred by declining to weigh competing expert evidence and by failing to conduct a rigorous predominance analysis focused on whether antitrust impact was capable of classwide proof.

## Legal Principles

- Rule 23 certification requires a rigorous analysis and judicial findings that each requirement is satisfied; supporting factual determinations must be made by a preponderance of the evidence.
- A court may not refuse to decide genuine factual or legal disputes relevant to certification on the ground that the disputes overlap with the merits.
- Predominance under Rule 23(b)(3) is more demanding than Rule 23(a) commonality and requires determining whether common questions are more important than individualized ones.
- In antitrust damages classes, plaintiffs must show that antitrust impact is capable of proof through evidence common to the class rather than individualized evidence.
- Expert testimony used to establish Rule 23 requirements must be tested for reliability under Rule 702 and Daubert to the extent it is material to certification.

## Conclusion

The Third Circuit required district courts to decide class certification based on rigorous findings supported by a preponderance of the evidence, including resolving material expert disputes under Daubert, and it vacated certification where the court accepted a minimal showing and did not determine whether antitrust impact could be proven with common evidence despite significant purchaser-level variation.


In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2008)