RICHARD SEEBORG, District Judge.
In addition to their Motion for Summary Judgment, Defendants
"District court[s] retain[] the flexibility to address problems with a certified class as they arise, including the ability to decertify." United Steel Workers v. ConocoPhillips Co., 593 F.3d 802, 809 (9th Cir. 2010). "Even after a certification order is entered, the judge remains free to modify it in the light of subsequent developments in the litigation." Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 160 (1982); Rodriguez v. West Publ'g Corp., 563 F.3d 948, 966 (9th Cir. 2009). The standard for decertification is the same as it is for class certification: whether the requirements of Federal Rule of Civil Procedure 23 are met. See Marlo v. United Parcel Serv., Inc., 629 F.3d 942, 947 (9th Cir. 2011). Nonetheless, "[t]o prevail on its decertification motion, defendant[s] face[] a heavy burden because `doubts regarding the propriety of class certification should be resolved in favor of certification.'" Gonzalez v. Arrow Fin. Servs. LLC, 489 F.Supp.2d 1140, 1154 (S.D. Cal. 2007).
Federal Rule of Civil Procedure 23 governs class actions. "Before certifying a class, the trial court must conduct a rigorous analysis to determine whether the party seeking certification has met the prerequisites of Rule 23." Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012) (internal quotation marks omitted). The burden is on the party seeking certification to show, by a preponderance of the evidence, that the prerequisites have been met. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011); Conn. Ret. Plans & Trust Funds v. Amgen Inc., 660 F.3d 1170, 1175 (9th Cir. 2011).
Certification under Rule 23 is a two-step process. The party seeking certification must first satisfy the four threshold requirements of Rule 23(a): numerosity, commonality, typicality, and adequacy. Specifically, Rule 23(a) requires a showing that:
Fed. R. Civ. P. 23(a). The party seeking certification must then establish that one of the three grounds for certification applies. See Fed. R. Civ. P. 23(b). Plaintiffs invoke Rule 23(b)(3).
Rule 23(b)(3) provides that a class action may be maintained where "the court finds 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." Fed. R. Civ. P. 23(b)(2)(3). The matters pertinent to these findings include:
Id.
In considering a motion for class certification, the substantive allegations of the complaint are accepted as true, but "the court need not accept conclusory or generic allegations regarding the suitability of the litigation for resolution through a class action." Hanni v. Am. Airlines, Inc., No. 08-cv-00732-CW, 2010 WL 289297, at *8 (N.D. Cal. Jan. 15, 2010); see also Jordan v. Paul Fin., LLC, 285 F.R.D. 435, 447 (N.D. Cal.2012) ("[Courts] need not blindly rely on conclusory allegations which parrot Rule 23 requirements."). Accordingly, "the court may consider supplemental evidentiary submissions of the parties." Hanni, 2010 WL 289297, at *8; see also Blackie v. Barrack, 524 F.2d 891, 901 n.17 (9th Cir. 1975).
"A court's class-certification analysis . . . may entail some overlap with the merits of the plaintiff's underlying claim." Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 568 U.S. 455, 465-66 (2013) (internal quotation marks omitted). However, "Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage." Id. at 466. "Merits questions may be considered to the extent—but only to the extent—that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied." Id.
Defendants move for decertification on the grounds that IPPs have failed to offer class-wide evidence in support of their reduced quality theory of pass-through, arguing that their theory is built on an unsupported assumption, refuted and undermined by the record evidence. They dispute that Dr. Flamm's economic analysis can compensate for IPPs' evidentiary shortcomings. Those arguments, however, go to whether they are entitled to summary judgment on the merits of these issues, which, indeed, they are, see Order Granting Summary Judgment Against IPPs. They are not dispositive on the question of whether class certification is appropriate. While Defendants do not specify which of Rule 23's requirements they believe IPPs have not met, it appears that their argument disputes that common questions of law or fact predominate because of the variance in pricing practices and profit margins among manufacturers and retailers. This argument misunderstands the predominance inquiry, which looks to whether there are "questions of law or fact common to class members," Fed. R. Civ. P. 23(b)(2)(3) (emphasis added), not to whether all industry members followed similar pricing practices.
Indeed, as noted in the last round of class certification briefing, "[t]he crucial point is that whether the IPPs[`] theory is right or wrong, it is something that can be decided on a class-wide basis." Order Granting Renewed Mot. for Class Cert. at 19. While the merits of the theory have proven to be unsupported by the record evidence, that theory was nonetheless appropriate for disposition on a class-wide basis, which Defendants have shown through their successful Motion for Summary Judgment. For these reasons, Defendants' Motion for Decertification of the Indirect Purchaser Plaintiff Class is denied.
For the reasons stated above, Defendants' Motion for Decertification of the Indirect Purchaser Class is denied.