In the United States Court of Federal Claims

No. 17-877C

(Filed: April 17, 2018)

*************************************

COMMON GROUND HEALTHCARE *

COOPERATIVE, *

*

Plaintiff, * Affordable Care Act; Cost-Sharing

* Reduction Payments; Motion for Class 

 v. * Certification; RCFC 23

*

THE UNITED STATES, *

*

Defendant. *

*************************************

Stephen Swedlow, Chicago, IL, for plaintiff.

Marc S. Sacks, United States Department of Justice, Washington, DC, for defendant.

OPINION AND ORDER

SWEENEY, Judge

Plaintiff Common Ground Healthcare Cooperative contends, for itself and on behalf of

those similarly situated, that the federal government has ceased making the cost-sharing

reduction payments to which it and other insurers are entitled under the Patient Protection and

Affordable Care Act (“Affordable Care Act”), Pub. L. No. 111-148, 124 Stat. 119 (2010), and its

implementing regulations. Currently before the court are plaintiff’s motions, pursuant to Rule 23

of the Rules of the United States Court of Federal Claims (“RCFC”), to certify a class and for the

appointment of class counsel. For the reasons set forth below, the court grants plaintiff’s

motions.1

 

1

 At the conclusion of its response in opposition to plaintiff’s motion to certify a costsharing reduction class, defendant requests that the court defer ruling on the motion “until there

is further clarity regarding the legal and factual issues raised by” plaintiff’s cost-sharing

reduction claim. The court denies defendant’s request.
I. BACKGROUND

A. The Affordable Care Act

Congress enacted the Affordable Care Act in March 2010. 124 Stat. at 119. The Act

includes “a series of interlocking reforms designed to expand coverage in the individual health

insurance market.” King v. Burwell, 135 S. Ct. 2480, 2485 (2015). In conjunction with these

reforms, the Act provided for the establishment of an American Health Benefit Exchange

(“exchange”) in each state by January 1, 2014, to facilitate the purchase of “qualified health

plans” by individuals and small businesses. 42 U.S.C. §§ 18031, 18041 (2012); accord King,

135 S. Ct. at 2485 (describing an exchange as “a marketplace that allows people to compare and

purchase insurance plans”). Qualified health plans can be offered at four levels (bronze, silver,

gold, and platinum) that differ based on how much of a plan’s benefits an insurer is required to

cover under the plan.2 42 U.S.C. § 18022(d)(1). An insurer that wants to offer qualified health

plans on an exchange is required to offer at least one silver plan and one gold plan. Id. 

§ 18021(a)(1)(C)(ii). 

The reforms enacted in the Affordable Care Act provided benefits and risks for insurers. 

On the one hand, insurers would have access to a market of previously uninsured individuals,

which could result in the insurers attracting more customers. See King, 135 S. Ct. at 2485;

accord 42 U.S.C. § 18091(2)(C). On the other hand, because insurers lacked data “to predict the

needs of the newly-insured” individuals, they would be hampered in their ability to “price

[qualified health] plans to reflect the medical costs associated with this new and untested

marketplace.” Compl. ¶ 2. To mitigate the risk faced by insurers, the Affordable Care Act

included three premium stabilization programs, 42 U.S.C. §§ 18061-18063, one of which was the

temporary risk corridors program, id. § 18062. Under this three-year program, the Secretary of

the Department of Health and Human Services (“Secretary of HHS”) was required to make

payments to insurers whose costs to provide benefits exceeded the premiums they received

(minus administrative costs), and collect payments from insurers whose costs to provide benefits

were less than the premiums they received (minus administrative costs). Id. § 18062(a)-(b). 

While the risk corridors program was meant to mitigate the risks faced by insurers, two

other reforms were aimed at ensuring that individuals had access to affordable insurance

coverage and healthcare: the premium tax credit program enacted in section 1401 of the

Affordable Care Act, 26 U.S.C. § 36B (2012), and the cost-sharing reduction program enacted in

section 1402 of the Affordable Care Act, 42 U.S.C. § 18071. 

The premium tax credit is designed to reduce the insurance premiums paid by individuals

whose household income is between 100% and 400% of the poverty line. See id. 

§ 18082(c)(2)(B)(i); 26 U.S.C. § 36B(c)(1)(A); accord 26 C.F.R. § 1.36B-2(a) to (b) (2017); 45

2

 For example, for a silver-level plan, insurers are required to provide coverage for 70%

of the benefits offered under the plan. 42 U.S.C. § 18022(d)(1)(B). 

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C.F.R. § 156.460(a)(1) (2017). As set forth in the statute, the Secretary of HHS is required to

determine whether individuals enrolling in qualified health plans on an exchange are eligible for

the premium tax credit and, if so, to notify the Secretary of the United States Department of the

Treasury (“Treasury Secretary”) of that fact. 42 U.S.C. § 18082(c)(1). The Treasury Secretary,

in turn, is required to make periodic advance payments of the premium tax credit to the insurers

offering the qualified health plans in which the eligible individuals enrolled. Id. 

§ 18082(c)(2)(A). The insurers are required to use these advance payments to reduce the

premiums of the eligible individuals. Id. § 18082(c)(2)(B)(i); see also 26 U.S.C. § 36B(f)

(describing the process for annually reconciling an individual’s actual premium tax credit with

the advanced payments of the credit). 

Cost-sharing reductions are designed to reduce the out-of-pocket expenses, such as

deductibles, copayments, and coinsurance,3 paid by individuals whose household income is

between 100% and 250% of the poverty line. See 42 U.S.C. §§ 18022(c)(3), 18071(c)(2); accord

45 C.F.R. §§ 155.305(g), 156.410(a). As set forth in the statute, insurers offering qualified

health plans are required to reduce eligible individuals’ cost-sharing obligations by specified

amounts,4 42 U.S.C. § 18071(a), and the Secretary of HHS and/or the Treasury Secretary is

required to reimburse the insurers for the cost-sharing reductions they made, id. §§ 18071(c)(3),

18082(c)(3). The amount of the cost-sharing reduction payments owed to insurers is based on

information provided to HHS by the insurers. See 45 C.F.R. § 156.430(c) (requiring insurers to

report to HHS, “for each policy, the total allowed costs for essential health benefits charged for

the policy for the benefit year, broken down by . . . (i) [t]he amount the [insurer] paid[,] (ii) [t]he

amount the enrollee(s) paid[, and] (iii) [t]he amount the enrollee(s) would have paid under the

standard plan without cost-sharing reductions”).

In short,“[t]he premium tax credits and the cost-sharing reductions work together: the tax

credits help people obtain insurance, and the cost-sharing reductions help people get treatment

once they have insurance.” California v. Trump, 267 F. Supp. 3d 1119, 1123 (N.D. Cal. 2017).

3

 “The term ‘cost-sharing’ includes . . . deductibles, coinsurance, copayments, or similar

charges,” but not “premiums, balance billing amounts for non-network providers, or spending for

non-covered services.” 42 U.S.C. § 18022(c)(3).

4

 To be eligible for cost-sharing reductions, an individual must enroll in a silver-level

plan. 42 U.S.C. § 18071(b)(1). As noted above, under a standard silver-level plan, insurers are

required to provide coverage for 70% of the benefits offered under the plan. Id. §

18022(d)(1)(B). However, for eligible individuals, that percentage increases to 73% (when

household income is between 200% and 250% of the poverty line), 87% (when household

income is between 150% and 200% of the poverty line), or 94% (when household income is

between 100% and 150% of the poverty line). Id. § 18071(c)(2). 

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B. Termination of Cost-Sharing Reduction Payments

Beginning in 2014, the government began making cost-sharing reduction payments to

insurers. However, on October 12, 2017, the government terminated the payments based on the

Attorney General’s conclusion that Congress had not appropriated any funds for that purpose. 

Because insurers were still required to reduce eligible individuals’ cost-sharing obligations, the

lack of reimbursement had the potential to cause serious financial strain on the insurers, who

might then increase premiums to make up for their lost cost-sharing reduction payments or

withdraw from the exchanges to obviate their cost-sharing reduction obligations. Indeed, some

insurers did, in fact, increase premiums for the qualified health plans they offered on the

exchanges.

C. Procedural History

On February 24, 2016, Health Republic Insurance Company (“Health Republic”) filed a

putative class action in this court in which it alleged that the government had not fully paid the

risk corridors payments to which it and other insurers were entitled for 2014 and 2015 (“the

Health Republic case”). Subsequently, a number of other insurers filed similar lawsuits, and

Health Republic moved to certify its case as a class action. After defendant indicated that it did

not dispute that Health Republic had satisfied the requirements of RCFC 23, the court granted

Health Republic’s motion, certified a class of insurers who were owed risk corridors payments

for 2014 and 2015, and appointed the law firm representing Health Republic–Quinn Emanuel

Urquhart & Sullivan, LLP (“Quinn Emanuel”)–as class counsel. 

Plaintiff, who is represented by the same attorney who represents Health Republic, opted

into the certified class in the Health Republic case. Then, on June 27, 2017, plaintiff filed its

own putative class action in this court to recover, for itself and other insurers, unpaid risk

corridors payments for 2016. Several months later, on November 12, 2017, plaintiff filed an

amended complaint to add a claim to recover, for itself and other insurers, the cost-sharing

reduction payments that the government has not made since October 2017. Thereafter, several

other insurers sought to recover unpaid cost-sharing reduction payments in this court by filing

suit or, like plaintiff, adding claims to their existing complaints.5

5

 See Local Initiative Health Auth. for L.A. Cty. v. United States, No. 17-1542C

(amended complaint filed Feb. 8, 2018); Me. Cmty. Health Options v. United States, No. 17-

2057C (filed Dec. 28, 2017); Cmty. Choice Health Options v. United States, No. 18-5C

(amended complaint filed Feb. 27, 2018); Sanford Health Plan v. United States, No. 18-136C

(filed Jan. 26, 2018); Mont. Health Co-op v. United States, No. 18-143C (filed Jan. 30, 2018);

Molina Healthcare of Cal. v. United States, No. 18-333C (filed Mar. 5, 2018); Health Alliance

Med. Plans, Inc. v. United States, No. 18-334C (filed Mar. 5, 2018); Blue Cross & Blue Shield of

Vt. v. United States, No. 18-373C (filed Mar. 9, 2018).

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On December 14, 2017, plaintiff moved to certify two classes–a risk corridors class and a

cost-sharing reduction class–and for the appointment of Quinn Emanuel as class counsel. 

Defendant responded shortly thereafter, indicating that it did not dispute that plaintiff had

satisfied the requirements of RCFC 23 with respect to the risk corridors class and that it did not

oppose plaintiff’s motion for the appointment of class counsel with respect to either class. After

receiving defendant’s response, the court granted plaintiff’s motion to certify a risk corridors

class, certified a class of insurers who were owed risk corridors payments for 2016, and

appointed Quinn Emanuel as class counsel. 

Defendant subsequently filed a response in opposition to plaintiff’s motion to certify a

cost-sharing reduction class, and plaintiff filed a reply in support of its motion. The court deems

oral argument unnecessary.

II. DISCUSSION

In its class certification motion, plaintiff seeks the certification of a cost-sharing reduction

class, which it describes as follows: 

All persons or entities offering Qualified Health Plans under the Patient Protection

and Affordable Care Act in the 2017 or 2018 benefit year, and who made

cost-sharing reductions for eligible insureds pursuant to Section 1402 of the

Patient Protection and Affordable Care Act, but did not receive a “timely and

periodic” payment from the Government of an amount “equal to the value of the

reductions” provided to its insureds. Excluded from the Class is the Defendant

and its members, agencies, divisions, departments, and employees.

Mot. 2. 

A. Legal Standard

RCFC 23 governs the certification and conduct of class actions in the United States Court

of Federal Claims (“Court of Federal Claims”). Among other provisions, it includes several

requirements for maintaining a class action:

(a) Prerequisites. One or more members of a class may sue as representative

parties on behalf of all members only if:

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the

claims or defenses of the class; and

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(4) the representative parties will fairly and adequately protect the interests of 

the class.

(b) Class Actions Maintainable. A class action may be maintained if RCFC 23(a)

is satisfied and if:

(1) [not used];

(2) the United States has acted or refused to act on grounds generally

applicable to the class; and

(3) the court finds that the questions of law or fact common to class members

predominate over any questions affecting only individual members, and that a

class action is superior to other available methods for fairly and efficiently

adjudicating the controversy. The matters pertinent to these findings include: 

(A) the class members’ interests in individually controlling the

prosecution of separate actions;

(B) the extent and nature of any litigation concerning the controversy

already begun by class members;

(C) [not used]; and

(D) the likely difficulties in managing a class action.

RCFC 23(a)-(b) (alterations in original). In other words, a putative class representative must

demonstrate: (i) numerosity–that the proposed class is so large that joinder is impracticable; (ii)

commonality–that there are common questions of law or fact that predominate over questions

affecting individual prospective class members and that the government has treated the

prospective class members similarly; (iii) typicality–that its claims are typical of the proposed

class; (iv) adequacy–that it will fairly represent the proposed class; and (v) superiority–that a

class action is the fairest and most efficient method of resolving the suit. Toscano v. United

States, 98 Fed. Cl. 152, 155 (2011); Barnes v. United States, 68 Fed. Cl. 492, 494 (2005). The

class action’s proponent must satisfy each of the requirements by a preponderance of the

evidence. Messner v. Northshore Univ. HealthSys., 669 F.3d 802, 811 (7th Cir. 2012) (citing

Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 202 (2d Cir.

2008)); see also Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011) (“Rule 23 does not set

forth a mere pleading standard. A party seeking class certification must affirmatively

demonstrate his compliance with the Rule–that is, he must be prepared to prove that there are in

fact sufficiently numerous parties, common questions of law or fact, etc.”). Moreover, “[t]hese

requirements are in the conjunctive; hence, a failure to satisfy any one of them is fatal to class

certification.” Barnes, 68 Fed. Cl. at 494. The court may certify a class only if, “after a rigorous

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analysis,” it finds that the requirements of RCFC 23 have been met. Gen. Tel. Co. of the Sw. v.

Falcon, 457 U.S. 147, 161 (1982). 

Although defendant’s sole argument in opposition to plaintiff’s motion to certify a costsharing reduction class is that plaintiff has not met its burden of establishing that a class action is

superior to other methods of resolving insurers’ claims for unpaid cost-sharing reduction

payments, the court addresses all of the factors that plaintiff must satisfy.

B. Numerosity

To prevail on its motion to certify a cost-sharing reduction class, plaintiff must first

satisfy the numerosity requirement. RCFC 23(a)(1) specifies that a class action is appropriate

only if “the class is so numerous that joinder of all members is impracticable[.]” “‘Impracticable

does not mean impossible.’” Jaynes v. United States, 69 Fed. Cl. 450, 454 (2006) (quoting

Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993)); see also Fauvergue v. United States, 86

Fed. Cl. 82, 96 (2009) (“The ability to use joinder does not preclude certification.”), rev’d on

other grounds sub nom. Bright v. United States, 603 F.3d 1273 (Fed. Cir. 2010). Rather, a

putative class representative need only establish that “‘it is extremely difficult or inconvenient to

join all the members of the class.’” Jaynes, 69 Fed. Cl. at 454 (quoting 7A Charles Alan Wright

et al., Federal Practice and Procedure § 1762 (3d ed. 2005) (“Wright 2005”)). A court must

examine the facts of the case to determine whether the numerosity requirement has been

satisfied. Gen. Tel. Co. of the Nw., Inc. v. EEOC, 446 U.S. 318, 330 (1980). In particular, a

court should consider the number of potential class members, the geographic dispersal of the

potential class members, and the size of each potential class member’s claim. King v. United

States, 84 Fed. Cl. 120, 123-24 (2008); accord Jaynes, 69 Fed. Cl. at 454; 5 James Wm. Moore et

al., Moore’s Federal Practice ¶ 23.22[1][b] (3d ed. 2012); 7A Charles Alan Wright et al., Federal

Practice and Procedure § 1762 (3d ed. 2016). 

The number of potential class members is considered to be the most important factor of

the numerosity requirement. King, 84 Fed. Cl. at 124; Fauvergue, 86 Fed. Cl. at 96. Plaintiff

represents, based on the number of insurers offering qualified health plans on the exchanges, that

hundreds of such insurers are owed cost-sharing reduction payments. This fact, standing alone,

is sufficient to satisfy the numerosity requirement. See, e.g., Brown v. United States, 126 Fed.

Cl. 571, 578 n.3 (2016) (indicating that the Court of Federal Claims has found potential class

sizes of 23, 25, 135, 150, and 152 members sufficient to satisfy the numerosity requirement). 

Indeed, in the risk corridors context, the court certified a class in the Health Republic case that

ultimately included 149 members, and certified a class in this case with the knowledge that there

were approximately 280 potential class members. Moreover, plaintiff observes that potential

class members are dispersed throughout the country–a fact that supports the conclusion that

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plaintiff has satisfied the numerosity requirement.6

 See, e.g., King, 84 Fed. Cl. at 124-25 (“If

plaintiffs are dispersed geographically, then a court is more likely to certify a class action.”). 

C. Commonality

The next requirement, commonality, comprises three separate inquiries. First, are there

factual or legal issues common to the proposed class? RCFC 23(a)(2). Second, do these

common issues predominate over issues that are not common to the proposed class? RCFC

23(b)(3). And third, has the government acted or refused to act on grounds applicable to the

entire proposed class? RCFC 23(b)(2). In analyzing whether the commonality requirement has

been satisfied, “the court must, where necessary, look beyond the pleadings, and seek to develop

an understanding of the relevant claims, defenses, facts and substantive law.” Barnes, 68 Fed.

Cl. at 494; accord Wal-Mart Stores, Inc., 564 U.S. at 350-52. As discussed below, plaintiff has

established all three elements of the commonality requirement. 

1. Common Issues

First, to establish the existence of a common factual or legal issue, plaintiff must

demonstrate that the claims of the potential class members “depend upon a common contention”

that “is capable of classwide resolution[.]” Wal-Mart Stores, Inc., 564 U.S. at 350; see also

King, 84 Fed. Cl. at 126 (agreeing that “‘commonality is satisfied where the lawsuit challenges a

system-wide practice or policy that affects all of the putative class members’” (quoting

Armstrong v. Davis, 275 F.3d 849, 868 (9th Cir. 2001))); Barnes, 68 Fed. Cl. at 496 (“[T]he

questions underlying the claims of the class merely must share essential characteristics, so that

their resolution will advance the overall case.”). A common contention can be resolved for the

entire class if the “determination of its truth or falsity will resolve an issue that is central to the

validity of each one of the claims in one stroke.” Wal-Mart Stores, Inc., 564 U.S. at 350; accord

id. (“‘What matters to class certification . . . is not the raising of common “questions”–even in

droves–but, rather the capacity of a classwide proceeding to generate common answers apt to

drive the resolution of the litigation. Dissimilarities within the proposed class are what have the

potential to impede the generation of common answers.’” (quoting Richard A. Nagareda, Class

Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 131-32 (2009))); Tyson

Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (“[A] common question is one where

‘the same evidence will suffice for each member to make a prima facie showing [or] the issue is

susceptible to generalized, class-wide proof.’” (quoting 2 William B. Rubenstein, Newberg on

Class Actions § 4:50, at 196-97 (5th ed. 2012)). Only one significant common contention

capable of classwide resolution is necessary to satisfy the common-issue requirement. See

Barnes, 68 Fed. Cl. at 496 n.6.

6

 Plaintiff also contends that some of the potential cost-sharing reduction claims are

small enough that insurers might not pursue them in the absence of a class action, but does not

supply any evidence supporting this contention.

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Plaintiff identifies five issues that are common to all potential members of the proposed

cost-sharing reduction class, including whether the pertinent statute and regulation mandate the

payment of money, whether the government’s failure to make periodic cost-sharing reduction 

payments violates the pertinent statute and regulation, and whether the government is liable to

the potential class members for its failure to make the payments.7 These issues are, in fact,

common to all potential class members. Thus, plaintiff has satisfied the common-issue

requirement. 

2. Predominance

In addition to determining whether plaintiff has established the existence of common

factual or legal issues, the court must determine whether those issues predominate over issues

that are not common to the proposed class. This predominance inquiry “tests whether proposed

classes are sufficiently cohesive to warrant adjudication by representation” and “is far more

demanding” than the initial common-issue inquiry. Amchem Prods., Inc. v. Windsor, 521 U.S.

591, 623-24 (1997); accord Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013). Common

issues–those in which the same evidence could be used by each member of the class to make a

prima facie showing–predominate over individual issues–those in which each member of the

class must present individualized evidence to make a prima facie showing–if they “‘are more

substantial than the issues subject only to individualized proof.’” Jaynes, 69 Fed. Cl. at 457

(quoting Moore v. PayneWebber, Inc., 306 F.3d 1247, 1252 (2d Cir. 2002)); accord Tyson

Foods, Inc., 136 S. Ct. at 1045; Geneva Rock Prods., Inc. v. United States, 100 Fed. Cl. 778, 789

(2011).

As plaintiff observes, all potential members of the proposed cost-sharing reduction class 

are subject to the same statutory and regulatory regime under the [cost-sharing

reduction] provision of the [Affordable Care Act]–the same requirements to be

[qualified health plan] issuers, the same obligations to provide [Affordable Care

Act]-compliant plans, the same reporting requirements, and the same

requirements to provide cost-sharing reduction to insureds while being denied

[cost-sharing reduction] reimbursements by the Government.

Mot. 23. The only issue that is not common to the proposed class is the precise amount of money

allegedly due to each potential class member under the pertinent statutes and regulations. 

7

 Another common issue not mentioned by plaintiff, but implicated in defendant’s

response in opposition to plaintiff’s motion, is whether the government’s liability for its failure to

make cost-sharing reduction payments is mitigated by the increased premium tax credits it paid

to insurers after it ceased making cost-sharing reduction payments. This issue is discussed in

more detail below. See infra Sections II.C.2, II.F. 

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In its response in opposition to plaintiff’s motion, defendant suggests–as part of its

argument concerning the superiority factor–that the need to calculate damages for each potential

class member overwhelms the common issues, rendering class certification inappropriate. 

Specifically, it argues:

[Plaintiff’s cost-sharing reduction claims] may present individualized questions 

. . . , because many insurers will not have been injured because their [cost-sharing

reduction] liabilities will have been offset by premiums that were raised in

connection with the cessation of [cost-sharing reduction] payments, resulting in

increased premium tax credit payments from the government. The class action

mechanism would make adjudicating these individualized questions

impracticable.

Resp. 12 (citation omitted). However, as plaintiff remarks, defendant does not identify any

statutory provision permitting the government to use premium tax credit payments to offset its

cost-sharing reduction payment obligations (even if insurers intentionally increased premiums to

obtain larger premium tax credit payments to make up for lost cost-sharing reduction payments).8

In the absence of such an offset, the calculation of each potential class member’s unpaid costsharing reduction payments appears to be a rather straightforward process based on data provided

to the government by the insurers–the identity of each qualified health plan in which individuals

eligible for cost-sharing reductions are enrolled, and the amount of each individual’s cost-sharing

reduction. Such a calculation lacks the complexity that would overwhelm the issues common to

the proposed class. Furthermore, it is well settled that the need for individualized damages

calculations does not preclude the certification of a class. See, e.g., Geneva Rock Prods., Inc.,

100 Fed. Cl. at 789 (“The central legal questions of this case . . . can all be resolved through

generalized proof. Even though the question of just compensation will require ‘individualized

proof’ if the government is found liable, this court has repeatedly held that the overall question of

liability is ‘more substantial’ than the individualized calculation of damages.”); Haggart v.

United States, 89 Fed. Cl. 523, 533-34 (2009) (“The primary factual difference among potential

class members concerns the damages each individual class member would be entitled to receive

if the court found the government’s actions constituted a taking of plaintiffs’ property. . . . 

However, . . . differences in the amount of potential damages among putative class members will

not alone prevent class certification.”); Fauvergue, 86 Fed. Cl. at 100 (“The predominate

question applicable to all putative plaintiffs is whether the Government committed a taking . . . . 

8

 Rather, defendant suggests that the October 2017 decision of the United States District

Court for the Northern District of California (“district court”) in California v. Trump supports the

availability of such an offset. See Resp. 10 (“As [the district court] noted, many insurers have

been able to recoup [cost-sharing reduction] payments for 2018 by raising premiums to account

for the non-payment of [cost-sharing reductions] and those higher premium costs are then paid

for by the Government through increased premium tax credits.”); accord id. at 12. As the court

explains below in its discussion of the superiority factor, defendant’s reliance on this decision is

misplaced. See infra Section II.F. 

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That plaintiffs may receive different awards of damages based on the nature of the takings claim 

does not displace the principal legal question or the core facts of this case.”); Curry v. United

States, 81 Fed. Cl. 328, 334 (2008) (“The ‘[m]ere fact that damage awards will ultimately require

individualized fact determinations is insufficient, by itself’ to defeat a class action.” (quoting

McCarthy v. Kleindienst, 741 F.2d 1406, 1415 (D.C. Cir. 1984))). In sum, plaintiff has

established that the common issues presented in this case predominate over the sole

individualized issue.

3. Similar Treatment

The final aspect of the commonality requirement is determining whether the government

has “acted or refused to act on grounds generally applicable to the class.” RCFC 23(b)(2). 

Plaintiff contends that the government’s failure to make cost-sharing reduction payments to

insurers satisfies this requirement. There can be no dispute that this failure to act is generally

applicable to the class. Thus, plaintiff has established this aspect of the commonality

requirement. 

D. Typicality

The third general requirement for maintaining a class action is that the claims of the

proposed class representative(s) be typical of the claims of the other prospective class members. 

See RCFC 23(a)(3). In many ways, the typicality requirement is similar to the commonality

requirement: “Both serve as guideposts for determining whether under the particular

circumstances maintenance of a class action is economical and whether the named plaintiff’s

claim and the class claims are so interrelated that the interests of the class members will be fairly

and adequately protected in their absence.” Gen. Tel. Co. of the Sw., 457 U.S. at 157 n.13. 

Nevertheless, typicality and commonality are distinct requirements. Typicality is demonstrated

“when ‘each class member’s claim arises from the same course of events, and each class member

makes similar legal arguments to prove the defendant’s liability.’” Barnes, 68 Fed. Cl. at 498

(quoting In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 291 (2d Cir. 1992)). It “may

be satisfied even if some factual differences exist between the claims of the named

representatives and the claims of the class, provided that the named representatives’ claims share

the same essential characteristics as the claims of the class at large.” Fisher v. United States, 69

Fed. Cl. 193, 200 (2006) (citing Piazza v. EBSCO Indus., Inc., 273 F.3d 1341, 1351 (11th Cir.

2001)). Accordingly, “[t]he threshold requirement for typicality is . . . not high.” Id. 

Plaintiff argues that it satisfies the typicality requirement because, in its role as the

representative party, it is alleging the same government conduct, stating the same claim, and

seeking the same relief as all potential members of the proposed cost-sharing reduction class. 

The court agrees.

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E. Adequacy

In addition to establishing numerosity, commonality, and typicality, a putative class

representative must establish that it will “fairly and adequately protect the interests of the class.” 

RCFC 23(a)(4). There are two aspects to the adequacy requirement: the existence of conflicts

between the putative class representative and the members of the proposed class, and the

qualifications and capabilities of proposed class counsel. Amchem Prods., Inc., 521 U.S. at 625-

26 & n.20; Gen. Tel. Co. of the Sw., 457 U.S. at 157 n.13. 

1. Conflicts of Interest

The first component of the adequacy requirement concerns whether there are any conflicts

of interest precluding a plaintiff from serving as a class representative. See Gen. Tel. Co. of the

Nw., Inc., 446 U.S. at 331. Plaintiff contends that “[t]here are no ‘conflicting, competing, or

antagonistic interests as between [it] and the proposed class’ that would warrant a finding that [it]

would not adequately protect the class’s interest.” Mot. 26-27 (quoting Singleton v. United

States, 92 Fed. Cl. 78, 86 (2010)). Indeed, the court cannot discern any conflicts of interest,

especially given the almost universal commonality of the issues requiring the court’s resolution. 

Thus, plaintiff has established this component of the adequacy requirement.

2. Proposed Class Counsel

The second component of the adequacy requirement concerns the experience and

competence of proposed class counsel. Before the court can appoint class counsel, it “must

consider”:

(i) the work counsel has done in identifying or investigating potential claims in

the action;

(ii) counsel’s experience in handling class actions, other complex litigation, and

the types of claims asserted in the action;

(iii) counsel’s knowledge of the applicable law; and

(iv) the resources that counsel will commit to representing the class[.]

RCFC 23(g)(1)(A). In addition, it “may consider any other matter pertinent to counsel’s ability

to fairly and adequately represent the interests of the class[.]” RCFC 23(g)(1)(B). Ultimately,

the court must satisfy itself that the proposed class counsel would best serve the interests of the

proposed class. RCFC 23(g)(2).

Plaintiff seeks the appointment of Quinn Emanuel as counsel for the cost-sharing

reduction class. The court finds that Quinn Emanuel has the experience and resources necessary

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to handle class actions, as reflected by its prior decision to appoint Quinn Emanuel as class

counsel for the two risk corridors classes. Further, as reflected by plaintiff’s amended complaint

and motion for class certification, Quinn Emanuel has performed the work necessary to identify

and investigate the potential cost-sharing reduction claims, and is well versed in the law

regarding such claims. Accordingly, the court finds that plaintiff has satisfied the second

component of the adequacy requirement. 

F. Superiority

The final requirement that plaintiff must satisfy to maintain a class action is superiority;

in other words, a class action must be “superior to other available methods for fairly and

efficiently adjudicating the controversy.”9 RCFC 23(b)(3). This requirement is met if the

prospective class representative establishes that “a class action would achieve economies of time,

effort, and expense, and promote uniformity of decision as to persons similarly situated, without

sacrificing procedural fairness or bringing about other undesirable results.” Fed. R. Civ. P. 23

advisory committee’s note to 1966 amendment, quoted in Amchem Prods., Inc., 521 U.S. at 615. 

Among the factors to consider in determining superiority are (1) the potential “class members’

interests in individually controlling the prosecution of separate actions,” (2) “the extent and

nature of any litigation concerning the controversy already begun by class members,” and (3)

“the likely difficulties in managing a class action.” RCFC 23(b)(3). “Essentially, under this

prong of the analysis, the court is obliged to conduct a cost/benefit analysis, weighing any

potential problems with the manageability or fairness of a class action against the benefits to the

system and the individual members likely to be derived from maintaining such an action.” 

Barnes, 68 Fed. Cl. at 499; see also Jaynes, 69 Fed. Cl. at 459 (“In making [the superiority]

assessment, the court must consider what alternative procedures are available for disposing of the

dispute and compare the possible alternatives to determine whether Rule 23 will be sufficiently

effective to justify the class action approach. The superiority requirement is most clearly

satisfied ‘if a comparative evaluation of other procedures reveals no other realistic possibilities.’”

(citation omitted) (quoting 7AA Wright 2005, supra, § 1779)).

Plaintiff asserts that a class action is “superior to joinder or individual adjudication of”

cost-sharing reduction claims, explaining that “[a] single Government action affected” each

potential member of the proposed cost-sharing reduction class “in exactly the same way,” and

that the government can identify each potential class member and possesses, or will soon

possess, “the data showing how much it owes each” potential class member. Mot. 27-28. 

Consequently, plaintiff argues, resolution of the legal issues presented in this case on a classwide

basis would achieve economies of time, effort, and expense. Plaintiff further contends that it has

9

 There are several other methods of adjudicating the claims of multiple individuals

arising from the same course of conduct: the permissive joinder of parties under RCFC 20, the

filing of a related case under RCFC 40.2, and consolidation under RCFC 42(a). Procedurally,

RCFC 20 requires a motion to amend the complaint to join new plaintiffs, while RCFC 40.2 and

RCFC 42(a) require the filing of separate complaints.

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satisfied the factors described in RCFC 23(b)(3) because (1) “[t]here is nothing to indicate that a

Class member would benefit from individually controlling an action, and because the Court of

Federal Claims permits only opt-in classes, there is no concern that a class member might be

swallowed into a class that it would prefer not to participate in,” and (2) “there are no ‘likely

difficulties,’ in managing the class.” Id. at 28 (citations omitted). 

In response, defendant argues that plaintiff has not met its burden of establishing that a

class action would be the superior method of resolving insurers’ cost-sharing reduction claims. 

In particular, defendant contends that plaintiff has not demonstrated that the consolidation of

separate suits pursuant to RCFC 42 “is a less effective mechanism for considering” the claims.10

Resp. 10. Defendant avers that “Rule 42’s consolidation procedures are superior to a class action

because those procedures will allow the Court to consider the common issues shared by the

plaintiffs, while also allowing the Court to assess whether the cessation of [cost-sharing

reduction] payments operated to an individual plaintiff’s detriment in a particular case.” Id. 

According to defendant, there will be significant individualized determinations in resolving

insurers’ cost-sharing reduction claims “because many insurers will not have been injured

because their [cost-sharing reduction] liabilities will have been offset by premiums that were

raised in connection with the cessation of [cost-sharing reduction] payments, resulting in

increased premium tax credit payments from the government.” Id. at 12. 

10

 RCFC 42 provides:

(a) Consolidation. If actions before the court involve a common question of law

or fact, the court may:

(1) join for hearing or trial any or all matters at issue in the actions;

(2) consolidate the actions; or

(3) issue any other orders to avoid unnecessary cost or delay.

(b) Separate Trials. For convenience, to avoid prejudice, or to expedite and

economize, the court may order a separate trial of one or more separate issues,

claims, counterclaims, or third-party claims.

(c) Separate Determinations of Liability and Damages.

(1) In General. On stipulation of the parties or on its own, the court may

at any time order that issues of liability and issues of damages be

addressed in separate proceedings.

(2) Motion for Reconsideration. The parties may file a motion for

reconsideration within 14 days after a separate determination of liability.

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As noted above, defendant does not identify any statutory provision permitting the

government to use premium tax credit payments to offset its cost-sharing reduction payment

obligations (even if insurers intentionally increased premiums to obtain larger premium tax credit

payments to make up for lost cost-sharing reduction payments). Rather, defendant suggests that

the district court’s decision in California v. Trump supports the availability of such an offset. 

Defendant’s reliance on that decision for this proposition is misplaced. Although the district

court described how insurers are coping with the lost cost-sharing reduction payments by raising

premiums to obtain larger premium tax credit payments, nowhere in its decision does the district

court hold that the government’s liability for cost-sharing reduction payments is lessened or

eliminated by the government making larger premium tax credit payments to insurers. Indeed,

the district court very clearly emphasized that the premium tax credit program and cost-sharing

reduction program were separate and distinct:

Repeatedly referring to the two programs by their separate names suggests

Congress considered them distinct, if undoubtedly related. And the statute often

recites not just the names of these two programs, but the different statutory

provisions that created them. For instance, in the advance payment provision, . . .

the statute refers to “the premium tax credit allowable under section 36B of Title

26 and the cost-sharing reductions under section 18071 of this title.” 42 U.S.C. 

§ 18082(a)(1); see also, e.g., id. § 300gg-4(l)(3)(A)(ii) (“credits under section 36B

of Title 26 or cost-sharing assistance under section 18071 of this title”); id. 

§ 18031(i)(3)(B) (“premium tax credits under section 36B of Title 26 and

cost-sharing reductions under section 18071 of this title”). That Congress so often

identified each reform by its location in one title of the U.S. Code or the other

suggests that Congress was cognizant of the different way in which each reform

fit into the statutory scheme. 

California, 267 F. Supp. 3d at 1131. Moreover, the portion of the decision upon which defendant

relies–pages 1133 to 1139–contains the district court’s analysis of “whether the absence of a

preliminary injunction would harm the public and impede the objectives of health care reform.” 

Id. at 1133. In other words, the district court’s focus was on how the increase in premiums

would affect the public, and not on the government’s obligation to make payments to insurers. 

The court recognizes that the parties have not had the opportunity to fully brief the issue

of whether the government’s obligation to make cost-sharing reduction payments is mitigated by

its increased premium tax credit payments–an issue that is common to all potential class

members. However, given the lack of cited authority supporting the availability of such an

offset, the determination of the amount due to each potential class member appears to consist of a

straightforward calculation based on data that the government has obtained, or will be obtaining,

from the affected insurers. Thus, for the purposes of resolving the present motion, the court must

assume that the individual damages determinations will be uncomplicated. 

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As plaintiff observes in its reply in support of its motion, defendant does not argue that

insurers “have strong interests in litigating their own separate actions” or that “numerous

individual class members have filed their own lawsuits regarding [cost-sharing reduction]

payments.” Reply 5. Instead, defendant addresses the manageability of the proposed class

action, arguing that the need for individualized damages determinations makes consolidation

more appropriate than a class action. Plaintiff convincingly rebuts this argument. 

First, plaintiff reiterates the position it advanced in its motion that resolution of the legal

issues presented in this case on a classwide basis would achieve economies of time, effort, and

expense because each insurer was affected by the same government action in the same way. The

court agrees. A class action would allow insurers to pursue their cost-sharing reduction claims

without the need to file separate complaints–an efficient and cost-effective approach. Further, a

class action would relieve both defendant and the court of the burdens associated with managing

potentially hundreds of new cases with virtually identical allegations. 

Second, plaintiff rightly observes that consolidation would not be more efficient than a

class action, explaining:

In essence, the Government argues that [qualified health plan] issuers should be

forced to hire separate lawyers, spend time and money drafting their own

complaints, pay filing and other related fees, generate a new index number with

each case, and then either file a motion to consolidate their individual action with

this case or force the Government to file its own motion requesting that relief. All

of this, according to the Government, will be more efficient, fair, and thus

“superior” to a class action in which putative class members simply fill in a form

to opt into a class with counsel who has been at the forefront of this litigation for

over two years.

Id. at 6-7. There can be no question that the consolidation of cost-sharing reduction claims

would be more cumbersome than allowing insurers to pursue their claims in a class action. 

In sum, the court finds that plaintiff has satisfied its burden of establishing that a class

action is superior to other methods of resolving insurers’ cost-sharing reduction claims. 

III. CONCLUSION

Because plaintiff has satisfied all of the requirements set forth in RCFC 23 for

maintaining a class action, the court GRANTS plaintiff’s motion to certify a cost-sharing

reduction class. Specifically:

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1. The court certifies the following cost-sharing reduction class:

All persons or entities offering Qualified Health Plans under the Patient Protection

and Affordable Care Act in the 2017 or 2018 benefit year, and who made 

cost-sharing reductions for eligible insureds pursuant to Section 1402 of the

Patient Protection and Affordable Care Act, but did not receive a “timely and

periodic” payment from the Government of an amount “equal to the value of the

reductions” provided to its insureds. Excluded from the Class is the Defendant

and its members, agencies, divisions, departments, and employees.

2. The cost-sharing reduction class claim is for amounts allegedly owed to the class by

the United States pursuant to section 1402 of the Affordable Care Act (42 U.S.C. § 18071) and

45 C.F.R. § 156.430 for the 2017 and 2018 benefit years.

3. The parties may later move for decertification or move for the class to be divided into

subclasses if, as this case develops, the circumstances warrant such a motion.

4. Plaintiff is designated as the class representative.

5. The court GRANTS the unresolved portion of plaintiff’s motion for the appointment

of class counsel and appoints Quinn Emanuel as counsel for the cost-sharing reduction class.11 

6. Defendant, by no later than Friday, May 18, 2018, shall provide to plaintiff a list of

potential class members, which shall include all entities that offered qualified health plans under

the Affordable Care Act in the 2017 and 2018 benefit years, and who made cost-sharing

reductions for eligible insureds pursuant to section 1402 of the Affordable Care Act, but did not

receive a “timely and periodic” payment from the government of an amount “equal to the value

of the reductions” provided to its insureds. The list shall include the name of the individual or

entity that is a potential class member, the current or last known electronic-mail address of the

individual or entity (providing the name and electronic-mail address of the person responsible for

cost-sharing reduction receivables, if known), and the current or last known mailing address of

the individual or entity.

7. If, after May 18, 2018, plaintiff discovers the identity of additional potential class

members to whom plaintiff believes that notice should be provided, plaintiff shall promptly

inform defendant. Defendant shall have an opportunity to object to any additional potential class

members within seven calendar days from the date that plaintiff identifies the newly discovered

potential class members by forwarding its objections to plaintiff via electronic mail. If the parties

11

 Notwithstanding the appointment of Quinn Emanuel as class counsel, all filings made

on behalf of the class shall continue to be signed by the attorney of record for the class

representative. See RCFC 83.1(c)(1)-(2) (“A party may have only one attorney of record in a

case at any one time . . . . All filings must be signed in the attorney of record’s name.”).

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are unable to resolve any of defendant’s objections to the newly discovered potential class

members, they shall file a joint motion setting out in separate sections their respective positions

for resolution by the court.

8. Class counsel shall submit to the court a proposed notice plan and opt-in schedule that

complies with the requirements of RCFC 23(c)(2)(B) by no later than Wednesday, May 30,

2018.

IT IS SO ORDERED.

s/ Margaret M. Sweeney 

MARGARET M. SWEENEY

Judge

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