Ren v. Philip Morris Inc

Ren v. Philip Morris Inc., No. 00-004035-CZ, 2002 WL 1839983, slip op. at 2 (Mich. Cir. Ct. June 11, 2002) was a price-fixing antitrust case brought by indirect consumer purchasers of cigarettes. The plaintiffs attempted to use common proof, specifically including economic theory and correlation analysis, to show injury. Id. at 6. The court determined that the correlation analysis which showed that the overcharge was passed on to the consumer ninety-six percent of the time was sufficient to show injury. Id. at 11-12. The court noted that at the class certification stage, the plaintiffs were not required to show that every single member of the class was injured where the plaintiffs could show widespread injury to the class. Id. In regard to antitrust injury, Ren determined that the indirect purchasers could not establish injury "through the use of the presumptions or inferences that might otherwise prevail in direct purchaser federal antitrust cases." The court in Ren nevertheless concluded that Dr. McCormick's correlation analysis was "a method based on common proofs from which it could be concluded that there was class wide injury or impact" and that the plaintiffs thereby met their predominance burden as to injury. Ren, 2002 WL 1839983, at 11-12. On the other hand, in regard to damages, the court in Ren determined that Dr. McCormick's mere aggregation of damages showing classwide damages, with no indication of "the quantum of damages to any one individual," id. at 14, was insufficient to meet the plaintiffs' predominance burden as to damages. Id. at 16. The court expressly rejected Dr. McCormick's proposed aggregate class damages approach, finding it inadequate as a matter of law. Id. at 17. More particularly, the court in Ren held that Dr. McCormick's proposal to simply divide estimated aggregate classwide damages among class members "amounted to 'no method' at all since it necessarily permits an award of something other than actual damages." Id. Without a method for proving each individual class member's actual damages through a formula or other common proof, the plaintiffs failed to show that common issues would predominate. Id. at 16-17. The court found it unlikely that "any sort of ascertainment of individual damages can be made under some systematic or formulaic basis that avoids the necessity of individualized proofs regarding the brands of cigarettes purchased, and the particular retail prices paid," id. at 16, and determined that, upon resolution of any common issues, the court would still "be faced with potentially an indefinite number of mini-trials to ascertain a class member's actual damages," and further determined that these considerations made a class action unmanageable. Id. at 17-18.