The Propriety and Inevitability of Netting in Antitrust Class Actions

Abstract

How to define “antitrust injury” is an issue that has been the source of much debate among judges, lawyers, and academics alike. Specifically, a disagreement exists as to whether participation in a single transaction, which a defendant has allegedly tainted via anticompetitive behavior, is sufficient to constitute antitrust injury. Complicating this area of jurisprudential and doctrinal uncertainty are cases in which a plaintiff who has alleged injury as a result of anticompetitive conduct later reaped offsetting gains resulting from that very same conduct. The disagreements regarding the role of these net beneficiaries, and the netting process necessary to identify them, in antitrust suits implicate matters that extend far beyond legal theory. This Note outlines the multitude of ways in which the foregoing consequences manifest. It then highlights the propriety of a contextual approach in which courts are more willing to engage in nuanced and substantive class certification analyses that balance the interests of the litigants and the goals of the antitrust laws. The Note uses financial markets, and variations among the instruments therein, as a specific instantiation of these principles and a context in which a nuanced approach is especially compelling. It concludes by demonstrating that, regardless of whether a court incorporates netting into its definition of antitrust injury, it will have to contend with netting principles during the class–certification process.