Messner v. Northshore University HealthSystem
2012 U.S. App. LEXIS 731
| 7th Cir. | 2012Background
- Northshore merged with Highland Park Hospital in 2000; FTC found the merger violated Clayton Act §7 and ordered divestiture or equivalent remedy; plaintiffs seek treble damages and injunctive relief under Clayton Act §4 and class certification for patients and payors; district court denied class certification citing lack of predominance and uniform price increases; Seventh Circuit granted interlocutory appeal due to importance of the issue; court vacated and remanded, holding uniformity not required for predominance and addressing Daubert issues; Dranove proposed difference-in-differences (DID) to show class-wide antitrust impact using common evidence from contracts; pricing in healthcare is complex due to bundles, contracts, escalator clauses, and potential restructuring; the record shows non-uniform price changes but could still support DID analyses with multiple contract-level analyses; court ultimately finds error in district court’s predominance ruling and Daubert handling and remands for further proceedings
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Daubert admissibility at certification | Noether’s testimony is critical; district court failed to rule conclusively | Daubert analysis not required since certification denied | Daubert ruling required; district court erred in not ruling conclusively |
| Predominance standard applied | District court applied too strict a uniformity requirement; common evidence may prove impact | Uniformity needed for DID reliability | District court abused discretion; predominance can be shown with common evidence using DID |
| Antitrust impact method (DID) validity with non-uniform pricing | DID can show class-wide impact via contract-level analyses; non-uniformity manageable | Non-uniform pricing undermines common impact analysis | Non-uniformity does not defeat class-wide impact methodology; remand for proper application of DID |
| Class overbreadth and injury | Class contains members who may have suffered injury or could have injury; not overbroad | Potential non-injured or uninjured members risk overbreadth | Not overbroad; remand to refine class if discovery shows broader issues |
Key Cases Cited
- Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2008) (predominance and common evidence standards under Rule 23(b)(3))
- Behrend v. Comcast Corp., 655 F.3d 182 (3d Cir. 2011) (common evidence and methodological issues for class certification)
- Amchem Prod., Inc. v. Windsor, 521 U.S. 591 (S. Ct. 1997) (predominance and cohesiveness in class actions; antitrust context noted)
- American Honda Motor Co. v. Allen, 600 F.3d 813 (7th Cir. 2010) (Daubert analysis required when expert testimony is critical to certification decision)
- Kohen v. Pacific Inv. Mgmt. Co., 571 F.3d 672 (7th Cir. 2009) (class certification considerations; avoid overbreadth and fail-safe classes)