In a recent Law360 article, Sean Durkin examines whether courts should take a more economic approach to evaluating class certification in antitrust cases. He argues that broad class definitions can create inefficiencies, increase opt-outs, and undermine the goals of class actions, even when most class members have suffered some harm.
On July 16, a federal court certified the “Cattle Plaintiffs Producer Class” in In Re Cattle and Beef Antitrust Litigation, a case alleging that Cargill, JBS, National Beef, and Tyson, the four largest beef packers, conspired to reduce competition for the purchase of fed cattle over a five-year class period.[1] The U.S. District Court for the District of Minnesota reasoned that class certification was warranted, in part, because of the presumption that the predominance requirement of Rule 23(b)(3) is “readily met” in conspiracy cases[2] and because the producer class had satisfied that requirement.[3]
The court certified the class despite recognizing that the effect of the conspiracy on producers may have varied because the conspiratorial conduct was episodic.[4] The court also recognized that the plaintiffs’ experts’ damages model estimating an average overcharge across purchases did not establish that all class members were harmed.[5] The court
The court’s decision reflects a familiar pattern in antitrust class actions in which courts certify broad classes even when the effect of the alleged conspiracy is likely to vary significantly across buyers. For example, four years earlier, in In re Broiler Chicken Antitrust Litigation, The U.S. District Court for the Northern District of Illinois certified a class that included all direct purchasers of broiler chickens from nearly all producers over an eleven-year period.[6] The court certified the class despite the fact the plaintiffs alleged the defendants engaged in different forms of conspiratorial conduct that varied over time and affected some class members and not others. The in broiler chicken case, and others like it, the very broad class definition induced a large number of direct purchasers to opt out of the class.
Courts’ reliance on the presumption that the predominance requirement of Rule 23(b)(3) is readily met in conspiracy cases is based on their interpretation of the predominance requirement. Courts have interpreted the predominance requirement as being satisfied when common evidence can establish that all, or nearly all, class members suffered at least some harm. They reason that a conspiracy is likely had at least some effect on all class members.
In this article, I explain why court’s interpretation of the predominance requirement can lead to inefficiently broad classes that harm high-overcharge members and lead to many opt-outs. I also propose an economic interpretation of the predominance requirement that would enhance efficiency by leading to narrower classes. Economics is well suited to evaluating the efficiency of class counsel’s class definitions, yet it has played a surprisingly limited role in how courts interpret Rule 23(b)(3). This interpretation views Rule 23(b)(3) as a constraint that restricts class counsels’ from defining inefficiently broad classes. Under this interpretation, classes are too broad to satisfy the predominance requirement when the expected overcharges across class members are sufficiently large that the differences induce many class members to opt out of the class. This can be true even if nearly all class members suffered at least some harm. This economic interpretation of Rule 23(b)(3) would enhance efficiency by leading to narrower classes.
A class counsel’s class definition options
A class counsel in a conspiracy case must decide which buyers, time periods, and products to include in its class definition. The is economically important because there is often uncertainty regarding when the alleged agreement was in effect, which products it covered, which producers were included, and the extent to which those producers deviated from the alleged agreement. As a result, there can be significant variation in the expected overcharges across buyers.
These choices are particularly evident in conspiracy cases in which there are plea agreements. A class counsel could choose to define the class to include purchases covered by the plea agreement or more broadly. In the In Re Broiler Chicken Antitrust Litigation, for example, defendant Pilgrims Pride separately pleaded guilty to bid-rigging on sales to quick service restaurants from 2012 to 2017. The direct purchaser class counsel chose to define the class to include all direct purchasers from a large number of producers from 2008 to 2019. In so doing, the class counsel added buyers and purchasers that had lower expected overcharges.
What does economics tell us about the effect of a class counsel’s decision to expand the breath of the class? Expanding the class breath means adding members who were less affected by the conspiracy. This means that incremental overcharges per member fall as class breath rises. Expanding the breadth of the class also raises a class counsel’s expected cost per member, because proving that some purchases were affected by the alleged conspiracy typically requires more evidence than proving impact for other purchases.
Why predominance matters
The predominance requirement of 23(b)(3) imposes limits on how broadly a class counsel can define the class because common evidence may not be able to establish common impact when a class is overly broad. Therefore, implicit in the existence of the predominance requirement is the recognition that a class counsel’s class definition may be inefficiently broad.
Why might a class counsel’s class definition be inefficiently broad? Economics suggest that allowing firms to set the incremental expected overcharges equal to the incremental expected costs would typically lead to efficient outcomes. Limiting a class counsel’s class definition can only be efficient, therefore, if there is some form of market failure.
At least three forms of market failure can cause a class counsel’s class definition to be inefficiently broad. First, in many antitrust class actions, class counsels and their experts argue that individual class members should be awarded the average overcharge across all class members. When this happens, expanding the class to include buyers with lower expected overcharges harms buyers with above average expected overcharges by lowering the average overcharge. This can induce those buyers to opt out. As a result, a class counsel’s class definition may not benefit all class members.
Second, a class counsel’s class definition may not be efficient because class counsels often have substantial market power. In most conspiracy cases, class counsels do not have to compete against other class counsels with different class definitions. This is particularly true in most MDLs where cases are consolidated into a single court which assigns a lead class counsel. This means that class members that are harmed by a class counsel’s decision to define a broad class may not have the option of participating in another class. However, class members that opt out of a class can be worse doing so rather than they would be participating in a more narrowly defined class. The absence of competition, therefore, can be one factor causing a class counsel’s class definition to be inefficiently broad.
Third, a class counsel’s class definition can raise legal system costs. One benefit of class actions is that they can reduce costs to the legal system. A broad class definition that induces many opt outs, raising legal system costs.
An economic interpretation of predominance
The arguments above imply that an economic interpretation of predominance should be based on using Rule 23(b)(3) to limit class counsels from defining classes that are inefficiently broad.
Classes can be inefficiently broad when expected overcharges vary significantly across class members. This harms class members with above average overcharges and can lead to many opt-outs, raising the legal system’s costs. This economic interpretation differs from courts’ standard interpretation, adopted in the In Re Cattle and Beef Antitrust Litigation decision, that common issues predominate if all, or nearly all, class members suffered some harm. Classes can be inefficiently broad even when common evidence can establish that all, or nearly all, class members suffered some harm. Evidence that a conspiracy existed is often insufficient to establish impact across a broadly defined class. In particular, demonstrating impact for purchasers with lower expected overcharges typically requires more extensive evidence than for those with higher expected overcharges.
For example, establishing that a conspiracy existed several years before the period covered by plea agreements, may require substantial additional evidence than that required to establish the existence of a conspiracy during the period covered by the plea agreements. This additional evidence is not common to all class members, so the presumption that a class in a conspiracy case necessarily satisfies the predominance requirement because the existence of a conspiracy is a common question is incorrect from an economic perspective.
Economics implies that classes can be inefficiently broad, even if all members of a class suffered at least some harm. Therefore, an economic interpretation of common impact for purposes of satisfying the predominance requirement is that the impact is not too dissimilar across class members.
The economic interpretation of predominance in practice
What type of evidence could courts use to determine whether a class counsel has satisfied the economic interpretation of predominance?
First, the regression analyses that plaintiffs’ experts used in In Re Cattle and Beef Antitrust Litigation to estimate average overcharges can often be modified to estimate differences in overcharges across class members implied by the regression. If those differences are large, an economic interpretation of predominance would suggest that the conspiracy did not have a common impact. Second, courts could evaluate whether the evidence required to demonstrate that a conspiracy affected some class members’ purchases differs substantially from the evidence required to show that other class members were impacted.
Third, courts could evaluate whether many class members likely will, or even already have, opted out of the class. This type of evidence would suggest that the class was inefficiently broad.
In practice, these questions often arise in expert analysis. The same datasets used to estimate average overcharges can also assess variation across class members and whether the evidence required to demonstrate impact differs in meaningful ways across segments of the proposed class. Where that variation is significant, it can be difficult to reconcile with the idea that common issues predominate.
The economic interpretation of predominance would lead to narrower classes
The adoption of an economic interpretation of the predominance requirement would enhance efficiency by leading to more narrowly defined classes in different ways.
This means that there could potentially be more than one class representing different buyers. For example, there could be one class representing buyers with high expected overcharges and another class representing buyers with lower expected overcharges. Having two classes, rather than one, would still lead to lower costs to the legal system than having a single class with many opt-out plaintiffs.
Even if a class counsel did define an inefficiently broad class, a court could still restrict the breadth of a class. Couts can certify classes narrower than those proposed by class counsels. Courts can also define sub-classes of buyers in which buyers within the sub-classes can have smaller differences in expected overcharges. Both these options would lead to more narrowly defined classes.
Conclusion
The cattle decision shows why the “readily met” formulation should not end the analysis: even where common evidence may support average impact, courts should still consider whether differences across class members are large enough to make the proposed class inefficiently broad. Interpreting the predominance requirement as a constraint on a class counsel’s ability to define the class suggests an interpretation of the predominance requirement that is inconsistent with the presumption that the predominance requirement is “readily met” in conspiracy cases. When classes are defined too broadly, buyers with higher expected overcharges are harmed. This can lead to increased opt-outs and higher costs for the legal system, undermining one of the core efficiencies class actions are intended to achieve. Applying an economic interpretation of predominance would promote greater efficiency by encouraging more narrowly defined classes that better align with the underlying economic evidence.
[1] In re Beef and Cattle Antitrust Litigation No. 22-3031 JTR/JFD (Dist of Minn July 16, 2026).
[2] Ibid. p. 15.
[3] Ibid. pp. 28-34.
[4] Ibid. p. 30.
[5] Ibid. p. 31.
[6] In re Broiler Chicken Antitrust Litigation, No. 16 C 8637, 2022 WL 1720468 (N.D. Ill. May 27, 2022).
