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In re Evanston Northwestern Corporation Antitrust Litigation

United States District Court, Seventh Circuit

December 10, 2013

IN RE: EVANSTON NORTHWESTERN CORPORATION ANTITRUST LITIGATION

MEMORANDUM OPINION AND ORDER

EDMOND E. CHANG, District Judge.

Plaintiffs Amit Berkowitz, Steven J. Messner, Henry W. Lahmeyer, and Painters District Council No. 30 Health & Welfare Fund brought this proposed class-action suit against Defendant NorthShore University HealthSystem (which used to be known as Evanston Northwestern Healthcare), alleging violations of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2, and Section 7 of the Clayton Antitrust Act, 15 U.S.C. § 18.[1] R. 224, Am. Consolidated Class Action Compl. After an interlocutory appeal, Plaintiffs have renewed their motion for class certification. R. 478. For the reasons that follow, the motion is granted.

I. Background

The Court assumes familiarity with the facts of this litigation, which are set out in greater detail in Messner v. Northshore University HealthSystem, 669 F.3d 802 (7th Cir. 2012), and in In re Evanston Northwestern Healthcare Corp. Antitrust Litigation, 268 F.R.D. 56 (N.D. Ill. 2010). Suffice it to say that Plaintiffs brought this class action on behalf of all end-payors who purchased inpatient and outpatient healthcare services directly from NorthShore, alleging that NorthShore illegally monopolized the market and caused Plaintiffs and the putative class to pay artificially inflated prices for healthcare services. Am. Consolidated Class Action Compl. ¶¶ 1-3. Plaintiffs sought to certify the following class under Rule 23(b)(3):

All persons or entities in the United States of America and Puerto Rico, except those who solely paid fixed amount co-pays, uninsureds who did not pay their bill, Medicaid and Traditional Medicare patients, governmental entities, defendant, other providers of healthcare services, and the present and former parents, predecessors, subsidiaries and affiliates of defendant and other providers of healthcare services who purchased or paid for inpatient hospital services or hospital-based outpatient services directly from NorthShore University Health[System] (formerly known as Evanston Northwestern Healthcare), its wholly-owned hospitals, predecessors, subsidiaries, or affiliates other than those acquired as a result of the merger with Rush North Shore Medical Center... from at least as early as January 1, 2000 to the present....

R. 240 at 1. After Plaintiffs moved for class certification, the previously assigned judge denied their motion, holding that they had not satisfied Rule 23(b)(3)'s predominance prerequisite. In re Evanston Northwestern Healthcare Corp., 268 F.R.D. at 87. Plaintiffs took an interlocutory appeal to the Seventh Circuit, which held that Plaintiffs did satisfy the predominance requirement. Messner, 669 F.3d at 826. The Seventh Circuit then vacated the district court's order and remanded for further proceedings consistent with its opinion. Id. Following that remand, Plaintiffs now renew their motion for class certification, R. 478, and after unsuccessful settlement negotiations, the motion is ready for decision.

II. Standard of Review

Courts usually should decide the question of class certification before turning to the merits of a given action. See Weismueller v. Kosobucki, 513 F.3d 784, 786-87 (7th Cir. 2008). To be entitled to class certification, a plaintiff must satisfy each requirement of Rule 23(a)-numerosity, commonality, typicality, and adequacy of representation-as well as one subsection of Rule 23(b). See Harper v. Sheriff of Cook Cnty., 581 F.3d 511, 513 (7th Cir. 2009); Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). "Failure to meet any of the Rule's requirements precludes class certification." Harper, 581 F.3d at 513 (internal quotation marks omitted).

"A class may be certified only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. " Creative Montessori Learning Ctrs. v. Ashford Gear LLC, 662 F.3d 913, 916 (7th Cir. 2011) (emphasis omitted) (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011)). The named plaintiff bears the burden of showing that each requirement is satisfied. See Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993). The Court "must make whatever factual and legal inquiries are necessary to ensure that requirements for class certification are satisfied before deciding whether a class should be certified, even if those considerations overlap the merits of the case." Am. Honda Motor Co. v. Allen, 600 F.3d 813, 815 (7th Cir. 2010) (citing Szabo v. Bridgeport Machs., 249 F.3d 672, 676 (7th Cir. 2001)); see also Dukes, 131 S.Ct. at 2551 (explaining that class certification analysis "[f]requently... will entail some overlap with the merits of the plaintiff's underlying claim"). The Court has "broad discretion to determine whether certification of a class-action lawsuit is appropriate." Chavez v. Ill. State Police, 251 F.3d 612, 629 (7th Cir. 2001).

III. Analysis

A. Rule 23(a) Prerequisites

At the outset, the parties quarrel over which of Rule 23's class-certification prerequisites are still in play. In her opinion, Judge Lefkow analyzed the Rule 23(a) prerequisites of typicality and adequacy and held that they were satisfied.[2] See In re Evanston Northwestern Healthcare Corp. Antitrust Litig., 268 F.R.D. at 61-65. In Plaintiffs' view, this means that only Rule 23(b)(3) superiority is left after the appellate opinion in Messner. See R. 479, Pls.' Br. at 4-5. NorthShore responds that this Court must revisit all of Rule 23(a)'s certification prerequisites, including typicality and adequacy. R. 491, Def.'s Resp. Br. at 27-28. Specifically, NorthShore argues that Judge Lefkow's discussion of typicality and adequacy was dicta and not binding as law of the case. Id. at 28. But dicta "are the parts of an opinion that are not binding on a subsequent court" because they are not "integral elements of the analysis underlying the decision." Wilder v. Apfel, 153 F.3d 799, 803 (7th Cir. 1998). And here, Judge Lefkow's discussion of the Rule 23(a) typicality and adequacy prerequisites was an integral element of the overall decision to certify the class at all, even if she ultimately decided not to certify. In other words, she fully considered and analyzed typicality and adequacy because, under Rule 23, the outcome of Plaintiffs' motion depended on whether each and every single class-certification prerequisite was satisfied. Cf. United States v. Crawley, 837 F.2d 291, 292 (7th Cir. 1988) (explaining that future courts may disregard dicta because it is "unnecessary to the outcome of the earlier case and therefore perhaps not as fully considered as it would have been if it were essential to the outcome"). The prior order's analysis of typicality and adequacy was fully reasoned and necessary to the outcome of the case, so it was not dicta that should be so lightly disregarded.

NorthShore also argues that Judge Lefkow's entire order was vacated and is no longer binding on this Court. Def.'s Resp. Br. at 28. Although the Seventh Circuit vacated the previous order and remanded for further proceedings, it vacated the order after holding only that Plaintiffs had satisfied predominance. See Messner, 669 F.3d at 814-26. Because the Seventh Circuit did not address any of the other Rule 23 prerequisites, its vacatur had nothing to do with the merits of the prior order's analysis of typicality and adequacy. So even though the prior order was technically vacated, and thus cannot be the law of the case, the Seventh Circuit did not disturb the previous findings of typicality and adequacy. Indeed, the Seventh Circuit implicitly recognized that superiority was the only class-certification prerequisite remaining when it noted, without mentioning the need to rehash typicality and adequacy, that "[t]here are so many common issues of law and fact relating to the issue of Northshore's liability, however, that the superiority requirement likely poses no serious obstacle to class certification here. " Id. at 814 n.5 (emphasis added). And NorthShore has not offered any new evidence or arguments that Judge Lefkow did not consider.[3] Accordingly, this Court adopts the reasoning and findings in Judge Lefkow's prior opinion. For the reasons discussed there, see In re ...


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