Alabama v. Blue Bird Body Co.

Rule of Law:

In a private antitrust action, class certification under Federal Rule of Civil Procedure 23(b)(3) is improper if individual questions of fact regarding both the antitrust violation and the resulting injury (impact) predominate over common questions. This is particularly true where the products are non-homogeneous and are sold in highly varied and localized markets, necessitating individualized proof for each class member.

Facts:

• Six national manufacturers produced school bus bodies, which consist of the passenger coach separate from the chassis.
• These manufacturers sold the bus bodies through approximately 400 independent local distributors to over 16,000 different governmental entities across the United States.
• School bus bodies are not a standardized product; they are highly customized to meet varying state and local specifications concerning size, materials, climate control, and equipment for special needs.
• The purchasing methods used by governmental entities varied significantly across states and localities, with some requiring competitive bidding under complex rules and others permitting negotiated prices or other discretionary purchasing procedures.
• The State of Alabama alleged that the six manufacturers conspired with local distributors to fix prices, rotate bids, and allocate customers and sub-markets.
• Plaintiffs claimed that this conspiracy was not confined to Alabama but was implemented through various illegal patterns of conduct in each state across the country, resulting in artificially high prices for purchasers.

Procedural Posture:

• The State of Alabama, its Superintendent of Education, and the Perry County Board of Education filed a private antitrust class action in the U.S. District Court for the Middle District of Alabama.
• The complaint named six school bus body manufacturers and seven Alabama-based distributors as defendants.
• Plaintiffs sought to represent two classes: a 'state class' of all governmental entities in Alabama that purchase school bus bodies, and a 'national class' of all such entities in the United States (except Georgia).
• The district court entered an order certifying both the state class and the national class under Federal Rule of Civil Procedure 23(b)(3).
• To address manageability concerns with the national class, the district court proposed a plan to bifurcate the trial into liability and damages phases and, following a liability verdict, to sever and transfer the individual damage claims to district courts across the country.
• The district court certified its class certification order for an immediate interlocutory appeal to the U.S. Court of Appeals for the Fifth Circuit.
• The defendants (appellants) petitioned for review, which the Fifth Circuit granted.