Cason-Merenda v. VHS of Michigan, Inc.

296 F.R.D. 528, 2013 WL 5106520, 2013 U.S. Dist. LEXIS 131006
CourtDistrict Court, E.D. Michigan
DecidedSeptember 13, 2013
DocketNo. 06-15601
StatusPublished
Cited by6 cases

This text of 296 F.R.D. 528 (Cason-Merenda v. VHS of Michigan, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cason-Merenda v. VHS of Michigan, Inc., 296 F.R.D. 528, 2013 WL 5106520, 2013 U.S. Dist. LEXIS 131006 (E.D. Mich. 2013).

Opinion

OPINION AND ORDER REGARDING PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

GERALD E. ROSEN, Chief Judge.

I. INTRODUCTION

In this federal antitrust suit, the Plaintiff registered nurses (“RNs”), Pat Cason-Mer-enda and Jeffrey A. Suhre, seek to recover on behalf of themselves and a class of RNs against eight Detroit-area hospitals, alleging in their two-count Third Corrected Class Action Complaint that the Defendant health care providers have violated § 1 of the Sherman Act, 15 U.S.C. § 1, by (i) conspiring among themselves and with other local hospi-tais to hold down the wages of RNs employed by these institutions (the “per se claim”), and (ii) exchanging compensation-related information among themselves in a manner that has reduced competition among Detroit-area hospitals in the wages paid to RNs (the “rule of reason claim”). In prior rulings in this case, the Court has (i) granted in part and denied in part Defendants’ motions for summary judgment, determining that Plaintiffs could go forward "with their rule of reason claim but not their per se claim, see Cason-Merenda v. Detroit Medical Center, 862 F.Supp.2d 603 (E.D.Mich.2012), and (ii) rejected Defendants’ challenge under Fed.R.Evid. 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), to the testimony of Plaintiffs’ expert, Orley Ashenfelter, Ph.D., see Cason-Merenda v. Detroit Medical Center, No. 06-15601, 2013 WL 1721651 (E.D.Mich. Apr. 22, 2013). In addition, the Court has granted final approval of settlements reached between Plaintiffs and three of the Defendant hospitals — St. John Health, Oakwood Healthcare Inc., and Bon Secours Cottage Health Services — and has preliminarily approved Plaintiffs’ settlements with four additional Defendant hospitals— Henry Ford Health System, Mount Clemens General Hospital, Inc., William Beaumont Hospital, and Trinity Health Corp. — leaving Defendant VHS of Michigan, Inc.1 as the sole remaining health care institution against which Plaintiffs are litigating their antitrust claims.

In the present opinion, the Court now turns to Plaintiffs’ pending motion for class certification. Through this motion, Plaintiffs seek certification under Fed.R.Civ.P. 23(b)(3) of a class consisting of “[a]ll registered nurses who provided direct patient care in short term acute care facilities, exclusive of supervisory, managerial and advanced practice nurses, while employed by Defendants within the Detroit, Michigan [metropolitan area] at any time from December 12, 2002 through the present.” (Plaintiffs’ Motion for Class Certification at 1.) Defendants oppose this request for class certification,2 arguing pri[532]*532marily that the core elements of Plaintiffs’ antitrust claims — including fact of injury (or “impact”), causation, and damages — cannot be established through common proof, and that individual issues instead predominate over issues common to the class with respect to these elements.

Plaintiffs’ motion has been fully and thoroughly briefed by the parties. In addition, the Court held a September 12, 2013 hearing on this motion, at which counsel advanced further arguments in support of their clients’ positions. Having reviewed the parties’ briefs and the accompanying, voluminous record, and having carefully considered the arguments of counsel at the September 12 hearing, the Court now is prepared to rule on Plaintiffs’ motion for class certification. This opinion and order sets forth the Court’s rulings on this motion.

II. FACTUAL AND PROCEDURAL BACKGROUND

The underlying facts of this case have been thoroughly set forth in the Court’s ruling on Defendants’ summary judgment motions, see Cason-Merenda, 862 F.Supp.2d at 606-23, and need not be repeated here. Briefly, the two Plaintiff registered nurses (“RNs”), Pat Cason-Merenda and Jeffrey A. Suhre, allege that the Defendant health care institutions operating in the Detroit metropolitan area have violated § 1 of the federal Sherman Act, 15 U.S.C. § 1, by agreeing to regularly exchange compensation-related information among themselves in a manner that has reduced competition among Detroit-area hospitals in the wages paid to RNs.3

A. The Record of Defendants’ Regular Exchanges of Compensation-Related Information

As observed by the Court in its summary judgment ruling, the record produced by Plaintiffs in discovery evidences “Defendants’ repeated exchanges — through both direct contacts and third-party surveys — of (i) detailed, current information as to the wages paid to their RN workforces, (ii) their planned future pay increases, and (iii) their overall philosophies and targets in setting RN wages.” Cason-Merenda, 862 F.Supp.2d at 629 (citations to record omitted). The Court further noted that a “fair number of these exchanges violated one or more of the criteria set forth in the DOJ/ FTC Guidelines,4 including the recommendations (i) that wage surveys should be managed by a third party, (ii) that survey participants provide information that is more than three months old, and (iii) that the survey data be reported in a sufficiently aggregated form such that it would not allow recipients to identify the compensation paid by any particular provider.” 862 F.Supp.2d at 629 (internal quotation marks, alteration, and citation omitted).

As Defendants have emphasized, however — and as recognized by the Court in its summary judgment opinion — the DOJ/FTC Guidelines are intended to establish “safety zones” within which health care providers may operate without attracting the attention of these two federal agencies, and are not meant to “defin[e] the limits of joint conduct that is permissible under the antitrust laws.” 862 F.Supp.2d at 630 (internal quotation [533]*533marks and citation omitted). Moreover, the exchange of wage data among the Defendant hospitals, even outside the “safety zones” of the DOJ/FTC Guidelines, is not per se unlawful and “does not invariably have anti-competitive effects” — as one of Plaintiffs’ own experts has testified, such information exchanges may be pro-competitive and may lead to either an increase or a reduction in RN wages. 862 F.Supp.2d at 642 (internal quotation marks and citations omitted). Finally, the discovery record fails to disclose the “uniform circulation, participation in, or receipt of [wage] surveys by the Defendant hospitals,” but to the contrary reveals that Defendants used these surveys “in different ways and to different degrees in their compensation setting.” 862 F.Supp.2d at 635 (internal quotation marks and citation to record omitted).

B. The Characteristics of the Proposed Plaintiff Class

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Bluebook (online)
296 F.R.D. 528, 2013 WL 5106520, 2013 U.S. Dist. LEXIS 131006, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cason-merenda-v-vhs-of-michigan-inc-mied-2013.