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If at first your class certification motion doesn’t succeed, narrow the class and try again. That seems to be the rationale behind a motion filed Monday by a team of plaintiffs’ lawyers whose first class certification motion in an antitrust suit against office supply giant 3M was rejected by U.S. District Judge John R. Padova. Earlier this month, Padova handed down a 28-page decision in Bradburn Parent/Teacher Store Inc. v. 3M that denied class certification in a suit that accuses 3M of monopolizing the market for transparent tape after finding that the named plaintiff cannot represent the entire class since its theory of damages is “antagonistic” to the damages theory that larger retailers would likely pursue. The Bradburn case stems from a previous antitrust suit against 3M in which a jury awarded $68 million to LePage’s Inc., a competing supplier of tape, that accused 3M of using illegal tactics to drive it out of business. The verdict in the LePage’s case was initially overturned by the 3rd U.S. Circuit Court of Appeals, but the appellate court later reheard the case en banc and voted 7-3 to reinstate the verdict. Right now the LePage’s case is pending on the U.S. Supreme Court’s docket, and the justices have asked the Solicitor General’s Office to file a brief to recommend whether the high court should take the case up. The Bradburn case was filed on behalf of a class of direct purchasers of tape who claim that 3M used illegal tactics to maintain its monopoly in the transparent tape market. Plaintiffs’ attorneys Robert S. Berry, J. Daniel Leftwich and Gregory Baruch of Berry & Leftwich in Washington, D.C., along with Charles M. Jones of Jones Osteen Jones & Arnold in Huntsville, Ga., sought certification of a broad class that would include anyone who directly purchased invisible and transparent tape from 3M from October 1998 to the present. But 3M’s lawyers opposed certification, arguing that the class suffered from serious conflicts and that the lead plaintiff would have significantly different interests that would directly conflict with the interests of large-volume retailers. The 3M defense team — attorneys John G. Harkins Jr., Eleanor Illoway and David Engstrom of Harkins Cunningham in Philadelphia, along with Brent N. Rushforth, Kit A. Pierson, Martina M. Stewart and Paul Alexander of Heller Ehrman White & McAuliffe in Washington, D.C. — argued that Bradburn’s litigation strategy would significantly differ from the strategy that the large-volume retailers would prefer. The defense argued that since the large-volume retailers purchased significant quantities of “private label” tape from competitors of 3M, such as LePage’s, they would have an interest in pursuing a “lost profits” damages theory. LePage’s had argued at its trial that it landed significant contracts to provide retailers such as Staples and Kmart with private label tape, but lost the accounts when 3M abused its monopoly power by offering the large retailers “bundled rebates” that they could earn only if they purchased targeted amounts of several 3M products. The effect of the bundled rebate program, LePage’s said, was to force the retailers to drop LePage’s as a supplier. Unlike the large retailers, 3M’s lawyers said, smaller class members such as Bradburn never purchased private label tape and therefore would be pursuing an “overcharge” theory of damages — seeking to recover the difference between the price of the 3M branded tape it purchased during the damages period and the price that such tape would have commanded absent 3M’s anticompetitive conduct. The differing damages theories amount to a conflict that would exist as soon as the class was certified, the defense team argued. As a result, the defense team argued that Bradburn cannot adequately represent the proposed class because its interests are not aligned with those of the large-volume retailers that it seeks to represent. The plaintiffs’ lawyers argued that 3M’s conflict argument was based on speculation and was a “red herring” because there was no evidence that a lost profits theory of damages would produce a greater recovery for any of the potential class members than an overcharge theory of damages. Padova disagreed, finding that “the conflict between large-volume retailers and plaintiff is neither speculative nor hypothetical, but is rather apparent, imminent and on an issue at the heart of this litigation.” Many of the largest class members, Padova said, “may not benefit from plaintiff’s strategy of pursing an overcharge theory of damages, but rather may be harmed by plaintiff’s attempts to pursue this theory.” As a result, Padova concluded that “plaintiff’s theory of damages is antagonistic to an alternative theory that many class members will likely wish to pursue, and because plaintiff is not in a position to pursue this alternative theory itself, plaintiff’s interests are antagonistic to those of other members of the proposed class.” Narrower Class Proposed Now the plaintiffs’ lawyers have proposed a new, narrower class that, they say, “eliminates the conflict concerns that led the court to deny certification of the original proposed class.” In a brief filed Monday, the plaintiffs proposed that the case be certified on behalf of a class consisting of “all persons who directly purchased invisible or transparent tape from 3M Company between October 2, 1998 and the present, and who have not purchased, for resale under the class member’s own label, any ‘private label’ invisible or transparent tape from 3M Company or any of 3M Company’s competitors at any time from October 2, 1988 to the present.” The plaintiffs’ lawyers argue that the proposed new class definition eliminates the conflict because “it excludes not only those who ‘purchase significant quantities of private label tape, but any customer who has ever purchased even a single roll of private label tape from any source over the past 15 years.” The redefined class, they said, would consist only of class members who bought only branded tape. “The proposed new class definition separates out those customers who might . . . have viable lost profit theories, leaving only those whose lost profit claims would face substantial hurdles even to being heard. While it is conceivable that there might be a class member who might want to make such a claim (and hire the lawyers and experts necessary to do it), such a possibility is entirely speculative and hypothetical, and therefore cannot create a conflict that is ‘apparent’ or ‘imminent’ or present ‘a real probability of a potential conflict,’” they wrote. As a result, they said, the newly defined class would be cohesive and share “a common interest in establishing a 3M monopoly overcharge on its branded tape product.”

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