Antitrust Law Daily Wrap Up, ANTITRUST—7th Cir.: Wisconsin natural gas class certification vacated and remanded, (Aug 6, 2025)

By Justin Marcus Smith, J.D.

After nearly twenty years of NYMEX natural gas trading litigation, the courts are still grappling with the threshold issue of class certification.

After several defendants settled for $12 million in a Wisconsin law natural gas price-fixing case in 2023, the remaining defendants awaiting trial, including Xcel Energy, Inc., successfully appealed class certification. The United States Court of Appeals for the Seventh Circuit distinguished between admissibility of expert evidence and the rigor required for class certification. To certify a class, the district court could not avoid direct engagement with expert evidence for and against the idea that a proven national market conspiracy affected prices paid for natural gas in Wisconsin. Despite the fungibility of natural gas, the defendants argued the market was just too complex to assume causation of local impact at the class certification stage. The court agreed that the district court needed to take a closer look at the voluminous expert evidence before certifying a class. The Seventh Circuit accordingly vacated class certification and remanded with suggested “guardrails” for the court and parties to follow on remand (Arandell Corp. v. Xcel Energy Inc., No. 22-3279 (7th Cir. Aug. 5, 2025)).

Background. In the early 2000s, a group of natural gas traders, including the defendants in these two consolidated actions, manipulated the price of gas futures contracts on the New York Mercantile Exchange (NYMEX). Class action lawsuits followed. Certain NYMEX defendants and class representatives entered settlements in 2006.

At the defendants’ request, these two cases were transferred to the MDL action in the District of Nevada on June 14, 2007, and May 22, 2009, as tag-along actions. After various appeals, the cases were remanded to the instant district court in Wisconsin for trial and final resolution of various issues on claims limited to Wisconsin antitrust law, not federal antitrust law. The court restored Arandell Corp. and the other plaintiffs’ Wisconsin law claims after vacating the Nevada MDL court’s grant of summary judgment based on Ninth Circuit reversal of summary judgment in related lawsuits. The instant court also certified a class of Wisconsin industrial and commercial buyer-users of natural gas.

In early 2023, the instant court granted preliminary approval of an $12 million gross settlement with the Williams defendants for apportionment among Wisconsin business natural gas buyers. A few months later, the court finally approved that settlement awarding $4 million of the $12 million as attorney fees for the Wisconsin plaintiffs’ counsel.

However, in the meantime, non-settling defendants had filed an interlocutory appeal on class certification with the United States Court of Appeals for the Seventh Circuit. The focus on appeal was the expert evidence given in 2022 on antitrust impact. The Wisconsin plaintiffs relied on the same expert evidence providing economic models to calculate antitrust impact and actual damages for the treble damage remedy.

The Seventh Circuit acknowledged that other proceedings proved the existence of a conspiracy. The existence and scope of were certainly subject to common proof. It was also well established that individual damage questions should not defeat class certification. The pivotal question on appeal was whether the instant Wisconsin plaintiffs could use common proof to show antitrust impact from the conspiracy in a national market affecting prices paid for natural gas in Wisconsin. The court noted natural gas is fungible, but on appeal, the defendants argued they offered evidence showing natural gas price markets were so complex and unusual to preclude the use of the common proof. The plaintiffs’ experts responded with detailed rebuttals.

Rigor required. The Seventh Circuit began with the observation that district courts are not required to resolve every expert dispute at class certification. There is a difference between admissibility of evidence under Fed. R. Evid. 702 and the “rigorous analysis” requirement for class certification. Evidence may be admissible, yet fall short of supporting analytical rigor.

The plaintiffs defended the district court’s certification decision by arguing they would have to prove a nationwide market as part of the merits at trial. Relevant evidence would be common, but the class might not win a trial. However, the Seventh Circuit pointed out that national market causation was also critical to class certification. The overlap on the merits did not allow the district court to defer resolving the factual issue.

National market. The plaintiffs and their experts relied on fungibility to extend national antitrust impact to the Wisconsin market, but the defendants argued it was not that simple. Defense experts raised a host of issues with the plaintiff experts methods and conclusions. There are spot prices, prices fixed for time periods, indexed prices, as well as putative “anomalies in the data” such that prices did not actually move as the plaintiff experts predicted. The defendants contended these flaws called for individualized inquiries defeating class certification. The plaintiff experts said the defense experts distorted their work and cherry-picked data to find a few anomalies the larger economic model could easily explain.

Remand. The Seventh Circuit said it reviewed these many detailed reports, but the arguments raised were not suited for disposition on appeal. The district court would need to engage with the debates and make findings of fact about the existence of a national market affecting Wisconsin prices. See Comcast Corp. v. Behrend, 569 U.S. 27, 34–35 (2013) (reversing class certification where lower courts refused to entertain challenges to plaintiffs’ damages model as undermining predominance of common issues; overlap with merits did not justify refusal to engage with defense evidence and arguments).

The court offered certain suggestions or “guardrails” on remand. First, the district court would have to consider whether evidence of divergent trader conduct, based on trader transactional positions, undermined the existence of a national market. There would be no credit for occasionally manipulating prices downward if the defendants were in fact causing prices to rise most of the relevant time. A Federal Energy Regulatory Commission (FERC) report noted that even if a certain market participant were a net buyer of natural gas, unlawful trading could increase the appearance of volatility and make it easier to offload unneeded gas at higher prices. The Seventh Circuit noted how the MDL court in Nevada correctly observed that a conspiracy could exist even if participant conduct varied. Some members could even be at cross purposes at various times based on their individual interests. Volatility itself might have increased the value of fixed-price contracts.

Second, perfect proof was not required. To the extent the defendants were arguing that the variety of trading arrangements would defeat the existence of a national market, the plaintiffs were not required to prove uniform simultaneous effect on all class members. The key in a reversed decision denying class certification was that the plaintiff economic expert offered a common method for showing price impact despite different results for different individual class members in calculating damages. Real world markets are never as simple as a model. A common method might support an inference of impact and reasonable estimation of actual damages.

Third, the defendants were not correct if they suggested the plaintiffs must show all class members suffered the same injury. The plaintiffs also do not need to prove the conspiracy affected every gas purchase by a class member during the class period. A class member need only have any affected purchase. For example, some named plaintiffs entered into fixed-price contracts before the class period began.

Fourth, the actions of non-defendant co-conspirators would be fair game at trial. Not all co-conspirators need to be named defendants.

Fifth, the district court might find it helpful to explore the simpler “full consideration” remedy in Wisconsin antitrust law separately from the more complicated federal antitrust treble-damages remedy.

Last, the Seventh Circuit rejected the defendants’ proposal that the record simply could not support class certification. The court declined to deny it. The defendants invoked Comcast here, but the court distinguished Comcast was about monopolization, not price fixing. The horizontal price-fixing in the instant matter was a basic, core antitrust violation. The defendants pointed out that the plaintiffs alleged the conspirators used different price fixing methods including “churning,” wash sales, and fraudulent reports. The defendants tried to equate these varying price fixing methods with the Comcast plaintiffs’ different theories of antitrust impact, but the court called that an apples-to-oranges comparison. Comcast called for the district court to engage with the merits of the expert debate over causation and antitrust impact, but it did not show certification would be inappropriate here.

The court acknowledged it was “demanding a great deal from the district court on remand.” Expert testimony encompassed about a dozen reports. The key reports were all filed in class certification debates in Nevada that began in 2009 which were refiled years later in Wisconsin. The Seventh Circuit suggested counsel for both parties to chart the evidence for the district court.

The Case is No. 22-3279.

Judge: Hamilton, D.

Attorneys: Melinda A. Bialzik (Kohner, Mann & Kailas, S.C.) for Arandell Corp. Kathryn Reilly (Wheeler Trigg O'Donnell LLP) for Xcel Energy Inc.

Companies: Arandell Corp.; Xcel Energy Inc.

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