Duane Morris Antitrust Class Action Review – 2024

Antitrust Class Actions I. Executive Summary

Class action litigation involving antitrust claims had several key developments in 2023, despite a relative lack of actual verdicts. Because antitrust remedies often allow recovery of treble damages, the incentive to settle these cases is often paramount. Additionally, plaintiffs are entitled to reasonable attorneys ’ fees that may be substantial because of the complexity of this kind of litigation. As a result, most antitrust class actions are settled before trial, and one of the most crucial phase in these cases is class certification. Thus, the order granting or denying a motion to certify a class in these cases is critical. Challenges to alleged restraints in the labor markets continued to be the most popular form of class action antitrust litigation in 2023. Growing recognition of the intersection between antitrust violations and the labor markets has led governmental antitrust authorities to increase their scrutiny of labor markets and the plaintiffs’ bar to push the limits of class actions to recover for compensation-related antitrust violations. Because courts have less familiarity with anticompetitive conduct within labor markets, the plaintiffs’ class action bar and the antitrust enforcement authorities in the Biden Administration have continued to push for labor market restraints to be treated differently from product or services markets for antitrust purposes. Traditionally, courts dealing with competitors agreeing to fix prices or allocate markets in product or services markets have treated such conduct as per se violations, or presumptively illegal, under the Sherman Act. Other anticompetitive conduct that does not deserve per se treatment has been reviewed under the rule of reason. The rule of reason test analyzes relevant antitrust markets, market power, anticompetitive effects, and procompetitive benefits related to the conduct at issue. Plaintiffs in no-poach, no-hire, or wage-fixing cases argue that such conduct is akin to price fixing and should be afforded per se treatment. In the alternative, plaintiffs argue that the alleged conduct should receive a “quick-look” analysis, which largely assumes the illegality of the alleged anticompetitive conduct, while defendants maintain that these types of restraints are ancillary to broader employment agreements and deserve full rule of reason review. Per se , quick-look, and rule of reason cases involve drastically different evidentiary burdens and presumptions, even at the pleading stage. As a result, litigants have contested this issue in vigorous fashion. In 2023, the question of whether per se treatment, quick-look analysis, or rule of reason review applies continued to be the primary battleground in antitrust class actions. Indeed, in the class action context, whether the court analyzes the no-poach agreements under the per se , quick-look, or rule of reason test is often the critical issue driving the outcome of whether the plaintiffs can satisfy the class certification requirements of Rule 23. This is because rule of reason analysis requires plaintiffs to define the market or markets where the alleged anticompetitive conduct occurred, which in and of itself requires allegations of cross-elasticity of demand and interchangeability of the labor services performed – a heavy burden for antitrust plaintiffs. Furthermore, such a requirement could implicate hundreds of thousands of local labor markets, each requiring an individualized inquiry that overwhelms the commonality necessary for class certification. Because per se and quick-look analysis presumes or largely presumes harm and does not consider procompetitive justifications, the plaintiffs in such cases are relieved of having to define any relevant market where harm occurred. Thus, the plaintiffs are able to avoid the threat that a court will foresee highly individualized market inquiries in the court ’ s class certification analysis. We are likely to see continued battles over per se , quick-look, and rule of reason treatment in labor market antitrust class actions in the future. Plaintiffs in antirust actions often seek class certification under Rule 23(b)(3), which, after all of the requirements of Rule 23(a) have been met, allows for class certification were common questions of law or fact predominate, and a class action is a superior method of adjudication. The predominance requirements

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