June 25, 2019

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Sixth Circuit Vacates Class Certification in Detroit Nurses Antitrust Case

On January 6, 2014, the Sixth Circuit vacated a class certification order for reconsideration in light of the Supreme Court’s 2013 decision in Comcast v. Behrend, 133 S. Ct. 1426 (2013).  In re VHS of Michigan, Inc., No. 13-0013 (6th Cir. Jan. 6, 2014).  In Comcast, the Supreme Court reversed a grant of class certification on the ground that the plaintiffs had failed to demonstrate that damages could be proven on a classwide basis because their damages model was inconsistent with their theory of liability.

Pre-Comcast, the plaintiffs in VHS filed a class action complaint alleging two theories of liability under the Sherman Act: (1) a “per se” claim that the defendant hospitals conspired to depress the wages of the plaintiff nurses, and (2) a “rule-of-reason” claim that the defendants exchanged information about nurse wages in order to reduce competition.  Subsequently, the district court granted the defendants’ motion for summary judgment on the per se claim.

Post-Comcast, the defendants moved to exclude the plaintiffs’ expert witness’s testimony, which was based on the assumption that the plaintiffs could prove both of their claims, and the district court denied the defendants’ motion without considering the potential impact of Comcast on its decision.  The district court later certified the class on the rule-of-reason claim, and the defendants appealed.  Because the district court did not take Comcast into account in its certification decision, and because the parties failed to analyze the issue before the district court, the Sixth Circuit held that it would be premature to accept an appeal.  Instead, it vacated the district court’s order and directed the court to reconsider its certification decision in light of Comcast.

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