Antitrust Law Daily Wrap Up, ANTITRUST NEWS: High court asked to consider objector’s standing to challenge racially-conscious antitrust class certification order, (Aug 7, 2013)

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

An objector to a class action settlement reached in putative class action antitrust litigation against Sirius XM Radio Inc. over its alleged monopolization of the satellite digital radio market have asked the U.S. Supreme Court to review a decision of the U.S. Court of Appeals in New York that found objectors to the settlement lacked standing to challenge the district court’s order allegedly requiring the class counsel to staff the case in proportion with the class’ “race and gender metrics.” The petition for certiorari was filed with the Court on August 2 (Martin v. Blessing, Dkt. 13-169).

At issue is the Second Circuit’s decision in Blessing v. Sirius XM Radio, Inc., 507 Fed. Appx. 1, 2012-2 Trade Cases ¶78,199, denying the objectors standing to challenge the diversity requirement. Before the district court, the objector had argued that consumers like himself who had paid a discounted price for Sirius’s services would not benefit from the settlement reached, and that “the requirement that consumers do new business with Sirius to obtain any benefit made the settlement a coupon settlement,” but the settlement did not comply with the Class Action Fairness Act (CAFA)’s requirements for coupon settlements. He also challenged the diversity order as “a constitutional violation that precluded settlement by class counsel who were inappropriately appointed.”

The district court rejected the objector’s arguments, and the Second Circuit upheld the district court’s decision because, “[a]lthough objectors allege that staffing a case with an eye to diversity ‘may interfere with counsel's ability to provide the best representation for the class,’ they never contend that class counsel's representation was actually inferior.” Without such allegations, the objectors could not show the injury-in-fact required for standing, according to the Second Circuit.

In his petition, the objector asks specifically: “whether an objecting class member—whose antitrust claims have been waived by a settlement negotiated by class counsel appointed by a racially conscious class certification order as described above—has standing to challenge the class certification order and, through it, the antitrust settlement?”

According to the petition, “the Diversity Order plainly discriminates based on race with no possible justification for that discrimination.” The petition asserts that the Supreme Court has directed, in Rose v. Mitchell, 443 U.S. 545 (1979), the appellate courts to “vacate all instances of race-based discrimination in judicial proceedings,” and therefore that the Court should vacate and remand the Second Circuit’s decision.

The petition also claims that the Second Circuit’s decision conflicts with a decision of the Supreme Court in Barrows v. Jackson, 346 U.S. 249 (1953), as well as decisions of the D.C. Circuit in Lutheran Church-Missouri Synod v. F.C.C., 141 F.3d 344 (1998) and the Ninth Circuit in Monterey Mech. Co. v. Wilson, 125 F.3d 702 (1987). The objector asserts that those courts concluded “that involuntary participants like [the objector] in discriminatory schemes have standing to challenge the discrimination, even though they do not themselves suffer discrimination,” and therefore that the objector should have “standing to challenge discrimination visited on anyone in the service of [his] class.”

Moreover, the petition claims that the objector should have been allowed to “rely on third-party standing to raise the equal-protection rights of counsel against whom the Diversity Order discriminates on the basis of race.” Finally, the petition asserts that the Second Circuit neglected to consider the “class’ interest in being free from the more petty but nonetheless ultra vires micromanagement of the class-counsel relationship” when it concluded that objector “need[ed] to have suffered ‘actually inferior’ legal services” to establish a cognizable case or controversy.

Attorneys: Lawrence J. Joseph for Nicolas Martin.

Companies: Sirius XM Radio Inc.

News: Antitrust