2:09-md-02042-SFC Doc # 246 Filed 06/13/11 Pg 1 of 4 Pg ID 6044
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`In re: Refrigerant Compressors
`Antitrust Litigation
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`Case No. 2:09-md-02042
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`Honorable Sean F. Cox
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`___________________________/
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`ORDER DENYING WITHOUT PREJUDICE
`MOTION FOR PRELIMINARY APPROVAL OF PROPOSED
`CLASS ACTION SETTLEMENT BETWEEN DIRECT PURCHASER CLASS
`PLAINTIFFS AND THE TECUMSEH DEFENDANTS
`(DOCKET ENTRY NO. 157)
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`Beginning in February 2009, Direct Purchaser Plaintiffs and Indirect Purchaser Plaintiffs
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`filed complaints in various jurisdictions asserting claims against Defendants. The United States
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`Judicial Panel on Multidistrict Litigation consolidated those actions in this Court for pretrial
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`proceedings.
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`The Indirect Purchaser Plaintiffs’ complaints have since been combined in a Second
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`Consolidated Amended Complaint, which seeks certification of a nationwide class, and asserts
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`state-law antitrust claims, consumer protection / unfair competition claims, and unjust
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`enrichment claims.
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`The Direct Purchaser Plaintiffs’ (“DP Plaintiffs”) complaints have been combined in a
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`Master Amended Complaint (“MAC”) which seeks class action certification and asserts federal
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`antitrust claims. DP Plaintiffs filed their Master Amend Complaint (“MAC”) on June 30, 2010.
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`(Docket Entry No. 155).
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`Approximately a month after DP Plaintiffs filed their MAC, on August 5, 2010, they filed
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`2:09-md-02042-SFC Doc # 246 Filed 06/13/11 Pg 2 of 4 Pg ID 6045
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`a Motion for Preliminary Approval Of Proposed Class Action Settlement Between Direct
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`Purchaser Class Plaintiffs and Defendants Tecumseh Products Company, Tecumseh Compressor
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`Company, Tecumseh do Brasil, Ltda. and Tecumseh do Brasil USA, LLC (“the Tecumseh
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`Defendants”) was filed. (Docket Entry No. 157). In this motion, the DP Plaintiffs seek
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`settlement-only class certification and ask the Court for preliminary approval of a settlement
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`class consisting of all persons or entities “who purchased Refrigerant Compressor Products” in
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`the United States “directly from any Defendant named in the Action, or from any of their
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`parents, predecessors, successors, subsidiaries, or affiliates, at any time during the period from
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`and including January 1, 2004 up to and including December 31, 2008. Refrigerant Compressor
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`Products shall mean compressors of less than one horsepower used for refrigeration, freezing or
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`cooling purposes, and/or refrigeration products, including condensers, manufactured by a
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`Defendant containing compressors of less than one horsepower also manufactured by a
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`Defendant. Refrigerant Compressor Products specifically excludes compressors used in air
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`conditioning products.” (See Docket Entry No. 157-4 at 3).
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`On August 30, 2010, all Defendants, with the exception of the Tecumseh Defendants,
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`filed a Joint Motion to Dismiss Claims by Direct Purchaser Plaintiffs. This Court issued its
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`Opinion & Order on that motion on June 13, 2011. (Docket Entry No. 245). Notably, this Court
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`ruled that the only persons or entities who have standing to assert federal antitrust claims in this
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`action are those persons or entities who directly purchased compressors from a Defendant and
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`that any named DP Plaintiff who did not purchase compressors from a Defendant lacks standing
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`and must be dismissed from this action. (Id. at 16). The Opinion & Order further explained that,
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`although the parties agree in principle that any named DP Plaintiff who directly purchased
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`compressors from a Defendant would have standing, the MAC does not identify which, if any,
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`named DP Plaintiffs purchased compressors from a Defendant:
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`It is undisputed that if any named DP Plaintiff purchased compressors
`directly from a Defendant who manufactures compressors, that person or entity
`would have standing to assert a federal antitrust claim in this action. The problem
`is, the way the MAC is drafted, it is impossible to determine which, if any, of the
`named DP Plaintiffs allege that they purchased compressors directly from a
`Defendant. This is because the MAC does not identify any named DP Plaintiff
`who purchased compressors – as opposed to products containing compressors –
`directly from a Defendant. Rather, the MAC defines the term “Refrigerant
`Compressor Products” as including both: 1) compressors of less than one
`horsepower; and 2) products that contain such compressors. Thus, when the
`MAC alleges that each of the named DP Plaintiffs has “purchased Refrigerant
`Compressor Products directly from one or more defendants,” the MAC does not
`specify whether that entity is alleged to have purchased compressors, products
`containing compressors, or both. Accordingly, based on the allegations in the
`MAC, this Court cannot determine whether any of the named DP Plaintiffs has
`standing by virtue of having directly purchased compressors from a Defendant.
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`Although DP Plaintiffs have not filed a motion seeking leave to file an
`amended complaint, at the May 26, 2011 hearing they requested leave to file an
`amended complaint. Given that it is undisputed that any named DP Plaintiff who
`purchased compressors directly from a Defendant who manufactures compressors
`would have standing to assert a federal antitrust claim in this action, the Court
`shall grant DP Plaintiffs’ request to file an amended complaint in order to specify
`which, if any, of the DP Plaintiffs have federal antitrust standing by virtue of
`having directly purchased compressors from a Defendant.
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`(Id. at 17-18). DP Plaintiffs must file their amended complaint no later than July 13, 2011.
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`Given this Court’s rulings regarding standing, this Court must deny DP Plaintiffs’ request
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`for settlement-only class certification.
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`FED. R. CIV. P. 23(a) sets forth four prerequisites for class certification: 1) numerosity; 2)
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`commonality; 3) typicality; and 4) adequacy of representation. The requirements of FED. R. CIV.
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`P. 23(a) “must be satisfied before a court certifies a class for trial or for settlement-only
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`purposes.” Thacker v. Chesapeake Appalachia, L.L.C., 259 F.R.D. 262, 266 (E.D. Ky. 2009)
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`(citing Amchem Prods., Inc. v Windsor, 521 U.S. 591, 620 (1997)).
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`As the settlement class is currently defined, those prerequisites are not met because the
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`proposed settlement class includes persons or entities who do not have standing to assert a
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`federal antitrust claim in this action.1
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`Accordingly, IT IS ORDERED that DP Plaintiffs’ Motion for Preliminary Approval of
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`Proposed Class Action Settlement Between DP Plaintiffs and the Tecumseh Defendants (Docket
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`Entry No. 157) is DENIED WITHOUT PREJUDICE.
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`IT IS SO ORDERED.
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`S/Sean F. Cox
`Sean F. Cox
`United States District Judge
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`Dated: June 13, 2011
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`I hereby certify that a copy of the foregoing document was served upon counsel of record on
`June 13, 2011, by electronic and/or ordinary mail.
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`S/Jennifer Hernandez
`Case Manager
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`1For example, the proposed settlement class definition creates an insurmountable problem
`as to typicality. Romberio v. Unumprovident Corp., 385 Fed.Appx. 423, 431 (6th Cir. 2009).
`“‘The premise of the typicality requirement is simply stated: as goes the claim of the named
`plaintiff, so go the claims of the class.” Id. (Citing Sprague v. General Motors Corp., 133 F.3d
`388, 399 (1998)). “Where a class definition encompasses many individuals who have no claim
`at all to the relief requested,” the “typicality premise is lacking, for – under those circumstances
`– it cannot be said that a class member who proves his own claim would necessarily prove the
`claim of other class members.” Romberio, 385 Fed.Appx. at 423.
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