Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39794 Filed 03/17/22 Page 1 of 16
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`EXHIBIT D
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39795 Filed 03/17/22 Page 2 of 16
`
`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
`
`
`
`
`14 F.4th 1059
`United States Court of Appeals, Ninth Circuit.
`
`Cardillo; Allison Shipp; Michelle Mackay; Colleen
`Sparke; Janet Silverness; Melanie Barclay; Tiffany
`Ringo; Hallie Lingo; Crystal Hohenthaner; Daniel
`K. Brendtro; Daniel Delier; Paul Nelson; Catherine
`Kaderavek; Karen Carlet; David Waring; Leon
`Theodore Lipka III, Plaintiffs,
`v.
`QUALCOMM INCORPORATED,
`Defendant-Appellant.
`
`No. 19-15159
`|
`Argued and Submitted December 2, 2019
`|
`Submission Withdrawn March 3, 2020
`|
`Resubmitted September 21, 2021 San Francisco,
`California
`|
`Filed September 29, 2021
`
`Synopsis
`Background: In antitrust multidistrict litigation, in which
`consumers sought injunctive and monetary relief under
`Sherman Act against licensor of modem chips, the United
`States District Court for
`the Northern District of
`California, Lucy H. Koh, J., certified nationwide class.
`Licensor appealed.
`
`
`[Holding:] The Court of Appeals, R. Nelson, Circuit
`Judge,
`held
`that
`under
`California
`law’s
`governmental-interest
`test,
`foreign states
`in which
`consumers resided had interest in applying their state laws
`to consumers’ claims, as could support finding that
`foreign states’ laws rather than solely California law
`applied
`to action,
`thus
`informing determination of
`whether predominance requirement for class certification
`was met.
`
`
`
`Vacated and remanded.
`
`
`Procedural Posture(s): Interlocutory Appeal; Motion to
`Certify Class.
`
`
`
`West Headnotes (16)
`
`
`
`
`Karen STROMBERG; Samuel Roecker; Thomas
`Lammel; Mary Galloway; Danielle Lagrave;
`Thomas McMahon; Boardsports School LLC;
`Patrick Benad; Lindsey Carr; Renee Acosta;
`Patricia Burness; Carol Harris; Robert Links;
`Nichelle Lyons; Nuala Vignoles; Rachel L. Miller;
`John William Kiefer III; Matthew Mitchell; Susan
`Gonzalez-Pender; Terese Russell; Sarah Key; Dalia
`Zatlin; Beth Crandall; Clarissa Simon; Kendall
`Martin; Rodrigo Sapla; Rebecca Davis; Thomas
`McManus; Kimberly Scavone; Melissa Ju; Chris
`Thompson; Martha Countess; Karen Hood; Jaime
`Martin; Adrian Esteban; Jeffrey Davis; Ericsson
`Broadbent; Paul Scott Ervin; Caralyn Tada;
`Nagore Miles; Bethany Rising; Jiying Spencer;
`Dayan Crutcher; Catherine Schmidlin; Allison
`Tripp; Lindsay Smith; Katie Smith; Kirsten Luenz;
`Laurel Vener; Stephen Judge; Seth Salenger; Scott
`Hansen; Joseph Kovacevich; Michelle Reynolds;
`George Marut; Janet Ackerman; Alan Schlaikjer;
`Lori Landes; Joyce Grantz; Gabrielle Kurdt; John
`Solak; Todd Espinosa; Andrew Westley; Laura
`Hallahan; Mary C. McDevitt; Padraic J. Brennan;
`Jason Schwartz; Suzanne Block; Kevin Calero;
`Carlo Endozo Caringal; Ian Carson; Andre Cruz;
`Lucas Rangel Ferreira; Masood Javaherian; David
`Koplovitz; Brian Letulle; Deirdre McElhaney;
`Carmen Minon; Erica Minon; Gabriel Minon;
`Betsy Santiago; Javier Santiago; Peter Yee; Alicia
`Hadnett; Daniel Carroll; Debra Grasl; Amanda
`Newsome; David Kreuzer; Armando Herrera;
`Eden Wagner; Neil Wagner; Allan Rotman; Shari
`Cole; Phillip James Zacharias; Mary Beth
`Cummins; Guy Snowdy; Cynthia Bambini; Grant
`Hauschild; David Floyd; Kim Coughlin; Brandon
`Fuller; Lisa Patnode; Nina Bartoshevich; Leonidas
`Miras; James Clark, Plaintiffs-Appellees,
`and
`Jordie Bornstein; Cordt Byrne; Elliot Carter; Jeff
`Ciotti; Dwight Dickerson; Matthew Christianson;
`Logan Griesemer; Ryan Hart; William Horton;
`Steve Krug; Gail Margolis; Kate Mortensen; Alyssa
`Nee; Christopher Whalen; Stephan Farid
`Wozniak; Christopher Zayas-Bazan; David
`Carney; Julie Ewald; Tom Parkin; Brian
`Depperschmidt; Brandon Steele; Kyle Weber;
`Craig Housenick; Ryan Margulis; Richard Rizzo;
`Guy Dietrich; Jeffrey M. Kurzon; Susan Nagy;
`Nicolas Yousif; Scott Frederick; Charles Poon;
`Andrea Hogan; Tina Heim; Monica Morrow; Mark
`
`WESTLAW
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`
`
`[1]
`Antitrust and Trade Regulation Indirect
` © 2022 Thomson Reuters. No claim to original U.S. Government Works.
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`1
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39796 Filed 03/17/22 Page 3 of 16
`
`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
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`purchasers
`
`Indirect purchasers are barred from seeking
`damages for alleged Sherman Act violations.
`Sherman Act § 1,
`15 U.S.C.A. § 1 et seq.
`
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`
`
`[2]
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`[3]
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`[4]
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`
`Antitrust and Trade Regulation Indirect
`purchasers
`Antitrust and Trade Regulation Treble
`damages
`
`California’s Cartwright Act, though modeled
`after
`the Sherman Act, permits
`indirect
`purchasers to bring antitrust claims and recover
`treble damages. Sherman Act § 1,
`15
`U.S.C.A. § 1 et seq.; Cal. Bus. & Prof. Code §
`16700 et seq.
`
`
`
`Federal Courts Class actions
`
`Court of Appeals reviews the district court’s
`class certification rulings for abuse of discretion
`and reviews for clear error any findings of fact
`the district court relied upon in its certification
`order.
`
`
`
`
`Federal Courts Abuse of discretion in general
`
`A district court abuses its discretion where it
`commits an error of law, relies on an improper
`factor, omits a substantial factor, or engages in a
`clear error of judgment in weighing the correct
`mix of factors.
`
`
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`District court’s choice of law determination is
`reviewed de novo, but its underlying factual
`findings are reviewed for clear error.
`
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`[6]
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`[7]
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`[8]
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`Federal Civil Procedure Evidence;
` pleadings and supplementary material
`
`Party seeking class certification has burden of
`affirmatively demonstrating that class meets
`requirements
`of
`rule
`governing
`class
`certification.
`Fed. R. Civ. P. 23.
`
`1 Cases that cite this headnote
`
`
`Federal Civil Procedure Superiority,
`manageability, and need in general
`Federal Civil Procedure Common interest in
`subject matter, questions and relief;  damages
`issues
`
`The inquiry into predominance and superiority,
`for
`class
`certification,
`focuses on
`the
`relationship between the common and individual
`issues and tests whether proposed classes are
`sufficiently cohesive to warrant adjudication by
`f
`representation.
`Fed. R. Civ. P. 23(b)(3).
`
`2 Cases that cite this headnote
`
`
`Declaratory Judgment Representative or
`class actions
`Federal Civil Procedure Common interest in
`subject matter, questions and relief;  damages
`issues
`
`Requirements of rule governing certification of
`class as
`to
`injunctive or corresponding
`declaratory relief are unquestionably satisfied
`when members of a putative class seek uniform
`injunctive or declaratory relief from policies or
`practices that are generally applicable to the
`
`[5]
`
`
`Federal Courts What law governs and choice
`of law in general
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39797 Filed 03/17/22 Page 4 of 16
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`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
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`class as a whole.
`
`Fed. R. Civ. P. 23(b)(2).
`
`1 Cases that cite this headnote
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`[9]
`
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`
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`Antitrust and Trade Regulation What law
`governs
`Federal Civil Procedure Antitrust plaintiffs
`
`Under California law’s governmental-interest
`test, foreign states in which consumers, as
`putative class members, resided had interest in
`applying their state laws to consumers’ claims,
`as could support finding that foreign states’ laws
`rather than solely California law applied to
`action against licensor of modem chips, seeking
`injunctive and monetary relief under Sherman
`Act, thus informing determination of whether
`predominance requirement for class certification
`was met; some of the states had repealed
`Illinois Brick decision precluding damages
`for indirect-purchaser claims under Sherman Act
`while others had not, and place of wrong would
`be
`the state
`in which consumer bought
`chip-containing product. Sherman Act § 1,
`15 U.S.C.A. § 1 et seq.;
`Fed. R. Civ. P.
`23(b)(3).
`
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`[10]
`
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`
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`Federal Civil Procedure Common interest in
`subject matter, questions and relief;  damages
`issues
`
`Understanding which law will apply before
`making predominance determination as to class
`certification
`is
`important when
`there are
`Fed. R.
`variations in applicable state law.
`Civ. P. 23(b)(3).
`
`
`
`
`[11]
`
`
`Federal Civil Procedure Common interest in
`subject matter, questions and relief;  damages
`issues
`
`
`
`
`In a putative class action, variations in state law
`can overwhelm common issues and preclude
`predominance
`for single nationwide class.
`Fed. R. Civ. P. 23(b)(3).
`
`
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`[12]
`
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`
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`Federal Courts Conflict of Laws;  Choice of
`Law
`
`When state claims are brought, federal courts
`apply choice-of-law rules of forum state.
`
`1 Cases that cite this headnote
`
`
`[13]
`
`
`
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`[14]
`
`
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`Federal Civil Procedure Evidence;
` pleadings and supplementary material
`
`Under California’s choice of law rules, class
`action proponent bears initial burden to show
`that
`application
`of California
`law
`is
`constitutional on basis
`that California has
`significant contact or significant aggregation of
`contacts to claims of each class member; once
`class action proponent makes this showing,
`burden shifts to other side to demonstrate that
`foreign law, rather than California law, should
`apply to class claims.
`Fed. R. Civ. P. 23.
`
`
`
`
`Action What law governs
`
`Under California law, to determine whether
`interests of other states outweigh California’s
`interest
`in class claims and
`thus whether
`California law can apply on classwide basis,
`courts use three-step governmental interest test;
`first, court determines whether relevant law of
`each of the potentially affected jurisdictions
`with regard to the particular issue in question is
`same or different, second,
`if
`there
`is a
`difference, court examines each jurisdiction’s
`interest in application of its own law under
`
`WESTLAW
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39798 Filed 03/17/22 Page 5 of 16
`
`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
`
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`circumstances of case to determine whether true
`conflict exists, and third, if court finds there is
`true conflict, it carefully evaluates and compares
`nature and strength of
`interest of each
`jurisdiction in application of its own law to
`determine which state’s interest would be more
`impaired if its policy were subordinated to the
`policy of the other state, and then ultimately
`applies the law of the state whose interest would
`be the more impaired if its law were not applied.
`
`
`
`
`[15]
`
`
`
`Action What law governs
`
`Under California law, the place of the wrong,
`while not always controlling, remains a relevant
`consideration in the governmental-interest test
`for determining whether California law or the
`law of a foreign state applies.
`
`1 Cases that cite this headnote
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`[16]
`
`
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`Federal Courts Class actions
`
`On interlocutory appeal of class certification,
`merits questions may be considered to the
`extent, but only to the extent, that they are
`relevant
`to
`determining whether
`the
`prerequisites for class certification are satisfied.
`Fed. R. Civ. P. 23.
`
`1 Cases that cite this headnote
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`*1061 Appeal from the United States District Court for
`the Northern District of California, Lucy H. Koh, District
`Judge, Presiding, D.C. No. 5:17-md-02773-LHK
`
`Attorneys and Law Firms
`
`LLP, New York, New York; Richard S. Taffet, Morgan
`Lewis & Bockius LLP, New York, New York; Willard K.
`Tom, Morgan Lewis & Bockius LLP, Washington, D.C.;
`Geoffrey T. Holtz, Morgan Lewis & Bockius LLP, San
`Francisco, California; for Defendant-Appellant.
`
`Kalpana Srinivasan (argued), Susman Godfrey LLP, Los
`Angeles, California; Joseph W. Cotchett
`(argued),
`Michael A. Montaño (argued), Adam Zapala, and
`Tamarah Prevost, Cotchett Pitre & McCarthy LLP,
`Burlingame, California; Marc M. Seltzer (argued), Steven
`G. Sklaver, Amanda Bonn, Oleg Elkhunovich, Krysta
`Kauble Pachman, and Lora Krsulich, Susman Godfrey
`LLP, Los Angeles, California; Joseph Grinstein, Susman
`Godfrey LLP, Houston, Texas; Katherine M. Peaslee,
`Susman Godfrey LLP, Seattle, Washington; Steve W.
`Berman, Hagens Berman Sobol Shapiro LLP, Seattle,
`Washington; Jeffrey D. Friedman and Rio S. Pierce,
`Hagens Berman Sobol Shapiro LLP, Oakland, California;
`for Plaintiffs-Appellees.
`
`Mary Helen Wimberly (argued) and Kristen C. Limarzi,
`Attorneys; William J. Rinner, Chief of Staff and Senior
`Counsel; Michael F. Murray, Deputy Assistant Attorney
`General; Andrew C. Finch, Principal Deputy Assistant
`Attorney General; Makan Delrahim, Assistant Attorney
`General; Antitrust Division, United States Department of
`Justice, Washington, D.C.; Jeff Landry, Attorney General;
`Elizabeth Baker Murrill, Solicitor General; Louisiana
`Department of Justice, Baton Rouge, Louisiana; Dave
`Yost, Attorney General; Benjamin M. Flowers, State
`Solicitor; Office of the Attorney General, Columbus,
`Ohio; Ken Paxton, Attorney General; Kyle Hawkins,
`Solicitor General; Office of the Attorney General, Austin,
`Texas; for Amici Curiae United States of America and
`States of Louisiana, Ohio, and Texas.
`
`Kevin G. Clarkson, Attorney General, Office of the
`Attorney General, Anchorage, Alaska; Eric Schmitt,
`Attorney General, Office of
`the Attorney General,
`Jefferson City, Missouri; for Amici Curiae States of
`Alaska and Missouri.
`
`Ashley C. Parrish and Joshua N. Mitchell, King &
`Spalding LLP, Washington, D.C.; Steven P. Lehotsky and
`Jonathan D. Urick, U.S. Chamber Litigation Center,
`Washington, D.C.; for Amicus Curiae Chamber of
`Commerce of the United States of America.
`
`Richard A. Samp and Cory L. Andrews, Washington
`Legal Foundation, Washington, D.C., for Amicus Curiae
`Washington Legal Foundation.
`
`Institute,
`Randy M. Stutz, American Antitrust
`Washington, D.C., for Amicus Curiae American Antitrust
`
`Robert A. Van Nest (argued), Eugene M. Paige, Steven A.
`Hirsch, Cody S. Harris, and Justina Sessions, Keker Van
`Nest & Peters LLP, San Francisco, California; Gary A.
`Bornstein and Yonatan Even, Cravath Swaine & Moore
`WESTLAW
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39799 Filed 03/17/22 Page 6 of 16
`
`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
`
`Institute.
`
`Steven N. Williams, Joseph Saveri Law Firm Inc., San
`Francisco, California, for Amici Curiae Choice of Law
`Professors.
`
`Scott Martin, Hausfeld LLP, New York, New York, for
`Amici Curiae Economists and Professors.
`
`Leslie A. Brueckner and Stephanie K. Glaberson, Public
`Justice P.C., Oakland, California; Jefffrey R. White and
`Amy L. Brogioli, American Association for Justice,
`Washington, D.C.; Richard A. Koffman, Emmy L.
`Levens, and Bo Uuganbayar, Cohen Milstein Sellers &
`Toll PLLC, Washington, D.C.; Sandeep Vaheesan, Open
`Markets Institute, Oakland Park, Florida; for Amici
`Curiae Public Justice P.C., American Association for
`Justice, and Open Markets Institute.
`
`Before: Eugene E. Siler*, Jay S. Bybee, and Ryan D.
`Nelson, Circuit Judges.
`
`
`
`
`
`OPINION
`
`R. NELSON, Circuit Judge:
`
`*1063 Qualcomm Incorporated seeks interlocutory review
`of the district court’s order certifying a nationwide class
`of up to 250 million class members in an antitrust
`multi-district litigation raising claims under the Sherman
`Act and California state law. Because the district court
`erred in its choice of law analysis and in light of
`FTC
`v. Qualcomm Inc., 969 F.3d 974 (9th Cir. 2020), we
`vacate the class certification order. On remand, the district
`court should reconsider the viability of Plaintiffs’ claims
`(
`FTC v. Qualcomm.
`given
`
`
`
`I
`
`A
`
`notable
`contributed
`has
`years, Qualcomm
`the
`cellular
`to modern
`technological
`innovations
`communication standards and holds thousands of cellular
`patents.
`
`
`Some of Qualcomm’s patents are standard essential
`patents (“SEPs”) covering technology that international
`standard-setting organizations (“SSOs”) incorporated into
`cellular communication standards, such as 3G CDMA or
`4G LTE. SSOs “are global collaborations of industry
`participants that establish technical specifications to
`ensure that products from different manufacturers are
`compatible with each other.”
`FTC v. Qualcomm, 969
`F.3d at 982–83 (internal quotation marks and citations
`omitted). Manufacturers and
`suppliers must use
`technology covered in Qualcomm’s SEPs if they want to
`practice 3G CDMA or 4G LTE standards. Thus, a
`manufacturer or supplier wanting to comply with 3G
`CDMA or 4G LTE standards will
`infringe on
`Qualcomm’s SEPs unless they license those SEPs.
`
`
`Before incorporating patented technology into a standard,
`SSOs require that patent holders commit to license their
`SEPs on
`fair,
`reasonable, and non-discriminatory
`(“FRAND”)
`terms. FRAND commitments safeguard
`against abuses like “patent holdup,” through which a SEP
`holder demands excessive royalties from suppliers and
`manufacturers of
`standard-compliant products and
`services. See Microsoft Corp. v. Motorola, Inc., 696
`F.3d 872, 876 (9th Cir. 2012) (citation omitted).
`
`
`Qualcomm licenses its cellular patent portfolio, including
`its SEPs, to original equipment manufacturers (“OEMs”)
`with products,
`like
`cellphones,
`that
`incorporate
`Qualcomm’s patented technologies. Though Qualcomm
`licenses its patents at the level of completed cellphone
`devices, it does not license its patents at the level of any
`given cellphone component. When Qualcomm licenses its
`patents, it receives a royalty that is typically 5% of the
`device’s wholesale net selling price.
`
`
`Besides licensing technology, Qualcomm also designs
`and sells semiconductor devices known as modem chips
`(“chips”) to OEMs. Chips enable cellphones to connect
`with cellular networks as well as provide other functions.
`Qualcomm is the leading supplier of CDMA and premium
`LTE chips worldwide.
`
`
`
`B
`
`With its principal place of business in California,
`Qualcomm is a global leader in cellular technology. Over
`
`In a separate action brought in January 2017, the Federal
`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39800 Filed 03/17/22 Page 7 of 16
`
`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
`
`Trade Commission *1064 (“FTC”) sued Qualcomm,
`alleging that Qualcomm engaged in unfair methods of
`competition in violation of the Federal Trade Commission
`Act (“FTCA”) and the Sherman Act. Afterward, many
`follow-on consumer antitrust class actions were filed
`against Qualcomm, generally alleging that Qualcomm’s
`conduct violated federal and state antitrust and consumer
`protection
`laws
`based
`on
`similar
`claims
`of
`anti-competitive conduct. The
`Judicial Panel on
`Multidistrict Litigation centralized these consumer class
`actions as a consolidated class action in the United States
`District Court for the Northern District of California
`before the same judge presiding over the separate FTC
`action.
`
`
`Plaintiffs in this multidistrict litigation are consumers who
`bought cellphones and allege that Qualcomm maintained
`a monopoly
`in chips by:
`(1) engaging
`in a
`“no-license-no-chips” policy by which Qualcomm sold
`chips only to OEMs that paid above-FRAND royalty rates
`to license Qualcomm’s SEPs; (2) refusing to license its
`SEPs to rival chip suppliers; and (3) entering into
`exclusive dealing arrangements with Apple that prevented
`rival chip suppliers from competing with Qualcomm to
`supply Apple’s chip demand. Plaintiffs contend these
`practices harmed consumers because
`the amount
`attributable
`to
`the allegedly excessive royalty—the
`amount above the FRAND royalty—was passed through
`the distribution chain to consumers in the form of higher
`prices or reduced quality in cellphones.
`
`
`Plaintiffs seek injunctive and monetary relief against
`Qualcomm, asserting violations of Sections 1 and 2 of the
`Sherman Act as well as California’s Cartwright Act and
`Unfair Competition Law (“UCL”).
`
`[1]Sections 1 and 2 of the Sherman Act are “particularly
`‘important to the preservation of economic freedom and
`our free-enterprise system.’ ”
`FTC v. Qualcomm, 969
`F.3d at 988 (quoting
`United States v. Topco Assocs.,
`Inc., 405 U.S. 596, 610, 92 S.Ct. 1126, 31 L.Ed.2d 515
`Section 1 prohibits “[e]very contract,
`(1972)).
`combination in the form of trust or otherwise, or
`conspiracy, in restraint of trade or commerce among the
`several States.”
`15 U.S.C. § 1. Section 2 also makes it
`illegal to “monopolize any part of the trade or commerce
`among
`the
`several States.”
`Id.
`§
`2. Direct
`purchasers—meaning those who buy the relevant product
`directly from the alleged antitrust violator—can bring
`antitrust suits for treble damages under the Sherman Act.
`See id. § 15. But the Supreme Court has long held that
`indirect purchasers—meaning those who purchase the
`relevant product through middlemen—are barred from
`
`seeking damages for alleged Sherman Act violations. See
`Ill. Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061,
`52 L.Ed.2d 707 (1977). Here, Plaintiffs are “indirect
`purchasers who are two or more steps removed from
`[Qualcomm] in a distribution chain” and thus cannot seek
`damages for the alleged Sherman Act violations. See
`Apple Inc. v. Pepper, ––– U.S. ––––, 139 S. Ct. 1514,
`1520, 203 L.Ed.2d 802 (2019) (emphasis omitted).
`
`[2]After the Supreme Court’s
`Illinois Brick decision,
`many states enacted
`Illinois Brick repealer laws,
`authorizing indirect purchasers to bring antitrust damages
`suits under state
`laws. For
`instance, California’s
`Cartwright Act, though modeled after the Sherman Act,
`permits indirect purchasers to bring antitrust claims and
`recover treble damages. Cal. Bus. & Prof. Code § 16700
`et seq. Currently, thirty-five states and the District of
`Columbia effectively repealed
`Illinois Brick (known
`as “repealer states”) in one form or another, but fifteen
`states have not (known as “non-repealer states”). See
`Practical Law Antitrust, State Illinois Brick Repealer
`Laws Chart, Westlaw, https://bit.ly/3foROqr.
`
`
`*1065 In addition to the Sherman Act and California’s
`Cartwright Act, Plaintiffs brought a claim under
`California’s UCL,
`Cal. Bus. & Prof. Code § 17200 et
`seq., which generally prohibits any “unlawful, unfair or
`fraudulent” conduct.
`Id. § 17200. Plaintiffs’ UCL
`claim is based on the Sherman and Cartwright Act
`violations. See
`Cel-Tech Commc’ns, Inc. v. L.A.
`Cellular Tel. Co., 20 Cal.4th 163, 83 Cal.Rptr.2d 548, 973
`P.2d 527, 539–40 (1999) (explaining that the UCL
`“borrows violations of other laws and treats them as
`unlawful practices that the unfair competition law makes
`independently actionable” (internal quotation marks and
`citation omitted)). Because neither party identified any
`material difference between the federal and state claims
`beyond the availability of damages, the district court
`generally treated Plaintiffs’ state law claims together with
`the federal claims.
`
`
`
`C
`
`Plaintiffs sought certification under
`Federal Rule of
`f
`Civil Procedure 23 (“
`Rule 23”) for an indirect
`purchaser class comprising “[a]ll natural persons and
`entities in the United States who purchased, paid for,
`and/or provided reimbursement for some or all of the
`purchase price
`for all UMTS, CDMA
`(including
`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39801 Filed 03/17/22 Page 8 of 16
`
`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
`
`CDMAone and cdma2000) and/or LTE cellular phones ...
`for their own use and not for resale from February 11,
`2001 ....” This class would number between 232.8 and
`250 million people, and the lower bound on damages to
`the consumer class was estimated as $4.84 billion.
`Opposing class certification, Qualcomm argued that (1)
`Plaintiffs provided no model that could prove antitrust
`impact using common evidence on a class-wide basis; (2)
`the proposed class’s size and heterogeneity violated due
`process, was unmanageable, and therefore not superior;
`and (3) indirect purchasers in non-repealer states lack
`standing to seek antitrust damages.
`
`
`f
`The district court certified Plaintiffs’ class under
`Rule
`23(b)(2) and (b)(3). Because the Cartwright Act mirrors
`federal antitrust law, Plaintiffs’ UCL claim is premised at
`least in part upon the Sherman and Cartwright Act
`violations, and the parties did not identify any material
`differences between the federal and state claims, the
`district court treated Plaintiffs’ federal and state law
`claims
`together when certifying
`the class. After
`concluding
`that
`the proposed class
`satisfied
`the
`requirements of
`Rule 23(a), the district court held that
`f
`the proposed class
`satisfied
`Rule 23(b)(3)’s
`predominance and superiority
`requirements. As
`to
`predominance, the district court concluded that common
`questions predominate overall and as to the elements of
`the federal antitrust claim—particularly, as to antitrust
`violation, antitrust impact, and damages.
`
`
`The district court also concluded that Plaintiffs can seek
`damages on behalf of the entire nationwide class under
`the Cartwright Act. In so concluding, the district court
`applied California’s choice of law rules and determined
`that California has sufficient contacts with the claims of
`each class member. The district court then applied
`California’s
`three-step governmental
`interest
`test
`to
`determine whether other state law, besides California law,
`should apply. Applying that test, the district court first
`concluded that non-repealer states’ antitrust laws were
`materially different from California’s Cartwright Act on
`the issue of damages recovery. The district court then
`determined that California has an interest in applying its
`law to this case because Qualcomm is a California
`business and the Cartwright Act (by allowing damages
`recovery) benefits consumers. But, according to the
`district court, non-repealer states have no interest in
`applying their laws here because non-repealer laws
`disadvantage resident consumers and are not intended to
`protect out-of-state businesses. *1066 As a result, the
`district court held that California’s Cartwright Act applied
`to the nationwide class, allowing the consumer class to
`sue for antitrust damages under
`Rule 23(b)(3).
`
`r
`
`
`
`Rule 23(b)(3), the
`Besides certifying the class under
`district court certified a
`Rule 23(b)(2) injunctive relief
`class. According to the district court, the class satisfied
`23(b)(2)’s requirements because Qualcomm’s allegedly
`anticompetitive conduct—i.e.,
`the practices
`to be
`enjoined—are generally applicable to the whole class.
`
`
`Qualcomm seeks interlocutory review under Rule 23(f) of
`the district court’s class certification order. On appeal,
`Qualcomm challenges the district court’s finding of
`Rule 23(b)(3) predominance, arguing that antitrust
`impact cannot be shown by common evidence, the class
`improperly
`includes millions of
`iPhone purchasers
`suffering no antitrust impact, and California law cannot
`apply to the nationwide class. Qualcomm also argues that
`the class is unmanageable and not a superior method of
`adjudicating the claims as required by
`Rule 23(b)(3)
`F
`and that the class failed to meet
`Rule 23(b)(2)’s
`requirements for injunctive relief.
`
`
`After this case was submitted, this court issued its opinion
`t
`in
`FTC v. Qualcomm, 969 F.3d 974. We directed the
`parties to file supplemental briefs addressing the effect of
`that decision, if any, on this case. Qualcomm urges us to
`remand to the district court with instructions to dismiss
`because
`FTC v. Qualcomm means that Plaintiffs lack
`any viable foundation for their claims. Plaintiffs argue
`that
`FTC v. Qualcomm does not affect this
`Rule
`23(f) interlocutory appeal and that the impact, if any, of
`FTC v. Qualcomm on Plaintiffs’ claims requires
`further development before this court can weigh in.
`
`
`
`II
`
`r
`
`[3] [4] [5]We review the district court’s class certification
`rulings for abuse of discretion and “review for clear error
`any findings of fact the district court relied upon in its
`certification order.”
`Senne v. Kan. City Royals
`Baseball Corp., 934 F.3d 918, 926 (9th Cir. 2019). “A
`district court abuses its discretion where it commits an
`error of law, relies on an improper factor, omits a
`substantial factor, or engages in a clear error of judgment
`Id. (citing
`in weighing the correct mix of factors.”
`Stockwell v. City & Cnty. of San Francisco, 749 F.3d
`1107, 1113 (9th Cir. 2014)). A district court’s choice of
`law determination is reviewed de novo, but its underlying
`F
`factual findings are reviewed for clear error.
`Zinser v.
`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2192-8, PageID.39802 Filed 03/17/22 Page 9 of 16
`
`Stromberg v. Qualcomm Incorporated, 14 F.4th 1059 (2021)
`2021-2 Trade Cases P 81,834, 21 Cal. Daily Op. Serv. 10,148...
`
`Accufix Rsch. Inst., Inc., 253 F.3d 1180, 1187 (9th Cir.
`2001), amended 273 F.3d 1266 (9th Cir. 2001).
`
`
`
`III
`
`[6]
`Rule 23 governs class certification. “The party
`seeking class certification has the burden of affirmatively
`demonstrating that the class meets the requirements of
`[ Rule] 23.” Mazza v. Am. Honda Motor Co., 666
`F.3d 581, 588 (9th Cir. 2012) (citing Wal-Mart Stores,
`Inc. v. Dukes, 564 U.S. 338, 350, 131 S.Ct. 2541, 180
`L.Ed.2d 374 (2011)). As a threshold matter, a class must
`first meet the four requirements of
`Rule 23(a): (1)
`numerosity, (2) commonality, (3) typicality, and (4)
`adequacy of representation.
`Senne, 934 F.3d at 927. In
`addition to
`Rule 23(a)’s requirements, the class must
`meet the requirements of at least one of the “three
`different types of classes” set forth in
`Rule 23(b).
`Id. (quoting
`Leyva v. Medline Indus., Inc., 716 F.3d
`510, 512 (9th Cir. 2013)). On appeal, Qualcomm does not
`contest that Plaintiffs met
`Rule 23(a)’s requirements;
`rather, it contests class certification under
`Rule
`23(b)(3) and (b)(2).
`
`
`*1067 [7]Under
`Rule 23(b)(3), a court must find that
`“the questions of law or fact common to class members
`predominate over any questions affecting only individual
`members, and that a class action is superior to other
`available methods for fairly and efficiently adjudicating
`the controversy.” This “inquiry
`focuses on
`‘the
`relationship between the common and individual issues’
`and ‘tests whether proposed classes are sufficiently
`cohesive to warrant adjudication by representation.’ ”
`Vinole v. Countrywide Home Loans, Inc., 571 F.3d
`935, 944 (9th Cir. 2009) (quoting
`Hanlon v. Chrysler
`Corp., 150 F.3d 1011, 1022 (9th Cir. 1998)).
`
`[8]
`Rule 23(b)(2), however, requires that “the party
`opposing the class has acted or refused to act on grounds
`that apply generally to the class, so that final injunctive
`relief or corresponding declaratory relief is appropriate
`Rule 23(b)(2)
`respecting the class as a whole.”
`“requirements
`are unquestionably
`satisfied when
`members of a putative class seek uniform injunctive or
`declaratory relief from policies or practices that are
`generally applicable to the class as a whole.”
`Parsons
`v. Ryan, 754 F.3d 657, 688 (9th Cir. 2014) (citing
`
`Rodriguez v. Hayes, 591 F.3d 1105, 1125 (9th Cir.
`2010)).
`
`
`Qualcomm asserts that the class did not meet the
`requirements of
`Rule 23(b)(2) and (b)(3). Even though
`Qualcomm
`raises various 23(b)(3) predominance
`arguments on appeal, we hold that the 23(b)(3) class was
`erroneously certified under a faulty choice of law analysis
`because differences
`in relevant state
`laws swamp
`predominance. Therefore, we vacate the 23(b)(3) class
`certification order. We