IN RE: LITHIUM ION BATTERIES ANTITRUST LITIGATION (2019)

United States Court of Appeals, Ninth Circuit.

IN RE: LITHIUM ION BATTERIES ANTITRUST LITIGATION, Indirect Purchaser Plaintiffs, Plaintiff-Appellee, v.
Michael Frank Bednarz, Objector-Appellant, v. Panasonic Corporation; Panasonic Corporation of North America; Sanyo Electric Co, Ltd; Sanyo North America Corporation; Hitachi, Ltd.; Hitachi Maxwell, Ltd.; Maxwell Corporation of America; Toshiba Corporation; Toshiba America Electronic Components, Inc.; NEC Corporation; Samsung SDI Co. Ltd.; Samsung SDI America, Inc.; Sony Corporation; Sony Energy Devices Corporation; Sony Electronics, Inc.; NEC Tokin Corporation; LG Chem, Ltd.; LG Chem America, Inc., Defendants-Appellees.

No. 17-17367

Decided: September 16, 2019

Before: HAWKINS, McKEOWN, and BYBEE, Circuit Judges.

Steve Berman, Attorney, Hagens Berman, Seattle, WA, Elizabeth J. Cabraser, Eric B. Fastiff, Attorney, Brendan P. Glackin, Attorney, Richard M. Heimann, Attorney, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA, Joseph W. Cotchett, Attorney, Adam J. Zapala, Cotchett, Pitre & McCarthy, LLP, Burlingame, CA, Jeff D. Friedman, Shana E. Scarlett, Attorneys, Hagens Berman Sobol Shapiro LLP, Berkeley, CA, for Plaintiff-Appellee Theodore H. Frank, Adam Ezra Schulman, Anna W. St. John, Hamilton Lincoln Law Institute, Washington, DC, for Objector-Appellant Jeffrey J. Amato, Eva W. Cole, Jeffrey L. Kessler, James F. Lerner, Winston & Strawn LLP, New York, NY, for Defendants-Appellees Panasonic Corporation, Panasonic Corporation of North America, Sanyo Electric Co, Ltd, Sanyo North America Corporation Jason Alan Levine, Craig Philip Seebald, Partner, Lindsey R. Vaala, Attorney, Vinson & Elkins LLP Washington, DC, for Defendant-Appellee Hitachi, Ltd. Jason Alan Levine, Craig Philip Seebald, Partner, Lindsey R. Vaala, Attorney, Vinson & Elkins LLP, Washington, DC, Meghan Natenson, Attorney, Vinson & Elkins LLP, San Francisco, CA, for Defendants-Appellees Hitachi Maxwell, Ltd., Maxwell Corporation of America Christopher M. Curran, Attorney, Jerry Frank Hogue, White & Case LLP, Washington, DC, for Defendants-Appellees Toshiba Corporation, Toshiba America Electronic Components, Inc. Dana Lynn Cook-Milligan, Sean D. Meenan, Jeanifer E. Parsigian, Robert Bernard Pringle, Esquire, Attorney, Winston and Strawn LLP, San Francisco, CA, for Defendant-Appellee NEC Corporation Dylan I. Ballard, Gary Halling, Esquire, James McGinnis, Nadezhda Nikonova, Attorney, Michael W. Scarborough, Attorney, Sheppard Mullin Richter & Hampton LLP, San Francisco, CA, for Defendants-Appellees Samsung SDI Co. Ltd., Samsung SDI America, Inc. Matthew Michael Brown, Esquire, Attorney, Beatriz Mejia, Attorney, Cooley LLP, San Francisco, CA, for Defendants-Appellees Sony Corporation, Sony Energy Devices Corporation, Sony Electronics, Inc. George Arnold Nicoud, III, George Charles Nierlich, III, Gibson, Dunn & Crutcher LLP, San Francisco, CA, for Defendant-Appellee NEC Tokin Corporation Nathan P. Eimer, Eimer Stahl, LLP, Chicago, IL, for Defendants-Appellees LG Chem, Ltd., LG Chem America, Inc.

MEMORANDUM *

The district court certified a nationwide settlement class and approved settlement agreements between Indirect Purchaser Plaintiffs (“IPP”) and defendants LG Chem, Limited; LG Chem America, Incorporated; Hitachi Maxell, Limited; Maxell Corporation of America; and NEC Corporation. The district court approved IPP's plan to distribute the settlement fund pro rata to settlement class members, regardless of whether their claim(s) arose in Illinois Brick repealer or non-repealer states. Michael Bednarz, an objecting class member, appeals.

In the context of a class-action settlement, a district court must give “undiluted, even heightened, attention” to Rule 23's requirements because the court “will lack the opportunity ․ to adjust the class, informed by the proceedings as they unfold.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). When a class-action settlement agreement is negotiated prior to class certification, we rigorously enforce Rule 23's procedural requirements. Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015). “To survive appellate review, the district court must show it has explored comprehensively all factors, and must give a reasoned response to all non-frivolous objections.” Id. at 1223–24 (quoting Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir. 2012)) (internal quotation marks omitted).

Here, the district court did not explain why a nationwide class should be certified and a pro rata distribution plan approved despite substantial differences in state law between repealer and non-repealer states. The final approval order merely paraphrases Rule 23 and concludes that the Rule's requirements are met. Similarly, the district court summarily overruled Bednarz's objections, finding “the settlement, and the pro rata allocation among settlement class members, fair and adequate despite these differences [in state law].”

The district court's analysis of Rule 23's requirements was cursory, as was its overruling of Bednarz's Illinois Brick objections. A more fulsome analysis is required. This is especially true given the district court's suggestion in a previous order denying certification of a nationwide class that California's Illinois Brick repealer law likely would not apply to class members from non-repealer states. Our concerns are also magnified by the district court's recent approval of another set of settlement agreements whose distribution plans specifically account for the difference between repealer and non-repealer states.

We express no opinion on whether the representation, settlement class, and settlement agreements satisfy Rule 23. Instead, we “vacate and remand to allow the district court to properly exercise its discretion” consistent with Rule 23's rigorous procedural requirements. In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 950 (9th Cir. 2011).

We VACATE the district court's final approval order and REMAND for further proceedings. Each party shall bear its own costs on appeal.

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