## Facts

- Residential property sellers sued the Los Angeles Realty Board and member brokerage firms, alleging a countywide agreement to fix commissions in violation of § 1 of the Sherman Act.
- The alleged mechanism was a published and distributed “recommended” commission schedule suggesting a 6% commission on the purchase price.
- The schedule contained a disclaimer stating brokers were not bound and commissions were for the transaction parties to decide.
- Plaintiffs alleged the schedule nonetheless operated to raise and stabilize commissions above competitive levels, injuring all sellers who paid those commissions.
- Plaintiffs sought treble damages and attorney’s fees under § 4 of the Clayton Act.
- The potential class was extremely large; within the limitations period, hundreds of thousands of residential sales in the county were estimated.
- The district court certified a plaintiff class of county residential sellers and a defendant class of member brokers under Federal Rule of Civil Procedure 23.
- Defendants obtained interlocutory review under 28 U.S.C. § 1292(b) limited to whether the case could proceed as a class action; the merits of the antitrust claim were not decided on appeal.

## Issues

1. Whether the district court properly certified the action as a Rule 23(b)(3) damages class given the size of the proposed classes and asserted individualized issues.
2. Whether common questions about an alleged commission-fixing conspiracy predominated over individual questions, including commission negotiations and damages.

## Decision

- The Ninth Circuit affirmed the class-certification order.
- Numerosity was satisfied because joinder of the very large number of affected sellers was impracticable.
- Commonality and predominance were satisfied because liability turned on common proof of a single alleged conspiracy and the role/effect of the recommended schedule in fixing commissions.
- Typicality and adequacy were satisfied because the named sellers asserted the same overcharge theory as absent class members and could fairly represent the class.
- Manageability concerns and individualized damages issues did not defeat certification; the court viewed class treatment as superior to repetitive individual litigation over the same alleged antitrust conduct.

## Legal Principles

- Rule 23(b)(3) certification is appropriate in an antitrust damages case when a common alleged price-fixing scheme presents predominant common liability questions, even if damages require individualized determinations.
- In assessing predominance, courts focus on whether the existence, scope, and impact of the alleged conspiracy can be proven with evidence common to the class.
- The superiority requirement supports class treatment where many potential claimants each have relatively small or impractical-to-litigate individual claims and would otherwise be unlikely to sue.
- Manageability objections based on class size and individualized damages ordinarily are addressed through case-management tools and do not, by themselves, preclude certification when common liability issues predominate.

## Conclusion

The Ninth Circuit allowed the case to proceed as a Rule 23(b)(3) class action because the alleged countywide commission-fixing scheme presented common, predominant liability questions and class treatment was a superior method for resolving claims involving a very large number of affected sellers.


Kline v. Coldwell, Banker & Co., 508 F.2d 226 (9th Cir. 1974)