Antitrust Law Daily Wrap Up, ANTITRUST—6th Cir.: Some indirect purchasers may not immediately appeal dismissal of their antitrust claims against refrigerant compressor manufacturers, (Sep 26, 2013)

By Tobias J. Gillett, J.D., LL.M.

In multidistrict litigation against manufacturers of refrigerant compressors for allegedly engaging in price fixing and market division, the filing of a legally operative combined complaint by indirect purchasers of the compressors united their claims into a single complaint, and the district court’s dismissal of the claims of only some of the plaintiffs did not permit immediate appeal by those plaintiffs, the U.S. Court of Appeals in Cincinnati has ruled (In re: Refrigerant Compressors Antitrust Litigation, September 25, 2013, Sutton, J.).

Indirect purchasers of refrigerant compressors alleged that manufacturers of the compressors violated the federal antitrust laws by fixing prices and dividing markets. The Judicial Panel on Multidistrict Litigation centralized actions filed in judicial districts across the country in the Eastern District of Michigan for pretrial proceedings, and the indirect purchasers filed a “consolidated amended complaint” combining all of their allegations. The Eastern District of Michigan dismissed the claims of six of the indirect purchasers, but did not dismiss all claims in the complaint. Those six indirect purchasers appealed, and simultaneously asked the court to enter a final judgment under Federal Rule of Civil Procedure 54(b) or to certify an interlocutory appeal under 28 U.S.C. § 1292. The court denied those requests, and the compressor manufacturers moved to dismiss the appeal for lack of jurisdiction.

The appellate court explained that a party can generally only appeal a district court’s final decisions, and that a ruling that disposes of only some claims or parties is ordinarily not final. Where plaintiffs bring different claims in the same complaint, “they have brought just one action, and a ruling that fails to dispose of the whole complaint is not final.”

However, the court observed that the federal appellate courts have differed in their approach to separate actions filed by separate plaintiffs in the same district court that are then consolidated, with some holding that the actions retain their separate identities, others holding that they merge, and still others holding that they sometimes merge and sometimes remain distinct. The Sixth Circuit generally treated cases consolidated by the court as separate actions, but treated a plaintiff’s filing of a complaint unifying claims initially brought separately as merging the claims into a single action, with immediate appeal from a dismissal of fewer than all claims normally available only in the first scenario. The court noted that this test followed the general rule that an amended complaint supersedes an earlier complaint for all purposes, and established a rule that was “easy to administer.”

The court concluded that it saw “no reason” to treat a situation in which plaintiffs filed separate actions in separate district courts, the actions were consolidated, and the plaintiffs filed a new consolidated complaint differently from the situation presented by a new consolidated complaint filed by plaintiffs in separate actions in the same district court.

The court rejected the indirect purchasers’ contention that they did not file a consolidated complaint, and instead only filed an “administrative document with no legal force.” The court explained that in many cases involving multidistrict litigation, the plaintiffs will file a “master complaint” reflecting all of their allegations, with the intent that it would merely serve as an administrative summary of the claims, and that the individual complaints would retain their separate legal existence. However, in other cases the court and the plaintiffs would treat the combined complaint as an operative pleading superseding the individual complaints.

Here, the “master complaint” was an operative pleading superseding the indirect purchasers’ prior individual complaints. The purchasers had served the defendants with the master complaint, rather than the individual complaints; the court had set the deadline for the defendants to answer with reference to the date the master complaint was filed; the purchasers had asked leave to amend the master complaint as if it were a real complaint; and the parties and the court had looked only to the master complaint when arguing about or adjudicating the defendants’ motions to dismiss.

The court declined to adopt a special final order rule for multidistrict cases. 28 U.S.C. §1291 set forth one final-order rule warranting uniform treatment, and developing a special jurisdictional rule for multidistrict cases would “create administrative problems.” The court found that adoption of more complex finality rules would only increase the number of unauthorized exercises of appellate jurisdiction. Moreover, the new complaint had superseded the individual complaints, and the court found it made “little sense to ascertain appellate jurisdiction by looking at the ghosts of departed pleadings.” It would also be “odd,” in the court’s view, to have to refer to one complaint in the jurisdiction section of an opinion and another complaint in the merits section. Finally, the court asked, “what would we do if the post-transfer consolidated complaint added new claims, or worse still new parties, never mentioned in the pre-transfer individual complaints?”

The court concluded that the purchasers’ hardship from having to wait until the end of pre-trial proceedings to appeal was insufficient reason to alter its decision. Hardship was not a reason to ignore a statutory jurisdictional rule. Moreover, rulemaking was the “preferred means for determining whether and when prejudgment orders should be immediately appealable,” and direction of final judgment under Rule 54(b) or certification of an interlocutory appeal under 28 U.S.C. §1292(b) would ordinarily reduce any hardship.

The appellate court noted that its decision only addressed a scenario in which the plaintiffs had decided to file a legally operative combined complaint and did not decide that a multidistrict transfer alone, or the filing of an administrative summary of complaints following such a transfer, unified the plaintiffs’ cases into a single action. Even in the present scenario, the filing of a consolidated complaint only merged the plaintiffs’ cases for the duration of pretrial proceedings, not permanently.

The cases are Nos. 13-1608, 13-1615, 13-1617, 13-1624, 13-1625, 13-1628, and 13-1631.

Attorneys: David E. Plunkett (Williams, Williams, Rattner & Plunkett) for Air Cooling Energy Corp. Edward A. Geltman and Jeremy William Dutra (Squire Sanders) for Tecumseh Products Co.

Companies: Gateway KGMP Development, Inc.; Air Cooling Energy Corp.; F.G. Farah and Partners, LLC; Strong Electric; Saad Wholesale, Inc.; Tecumseh Products Co.

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