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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

ERIN ANGELO, NICHOLAS 

ANGELO, AND CYNTHIA 

WILSON, on behalf of themselves 

and all others similarly situated,

Plaintiffs

v.

CENTENE MANAGEMENT 

COMPANY, LLC, CELTIC 

INSURANCE COMPANY, 

SUPERIOR HEALTH PLAN, INC., 

and CENTENE COMPANY OF 

TEXAS, L.P.,

Defendants

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No. 1:20-cv-00484-RP

REPORT AND RECOMMENDATION AND ORDER

OF THE UNITED STATES MAGISTRATE JUDGE

TO: THE HONORABLE ROBERT PITMAN

UNITED STATES DISTRICT JUDGE

Before the Court is Plaintiffs’ Motion for Class Certification, Dkt. 62; 

Defendants’ Motion to Exclude Expert Testimony, Dkt. 70; and all related briefing. 

After reviewing these filings, and the relevant case law, the undersigned denies 

Defendants’ Motion to Exclude Expert Testimony and recommends that the District 

Court deny Plaintiffs’ Motion for Class Certification.

I. BACKGROUND

This is a class action on behalf of all individuals in the State of Texas who from 

January 1, 2014, through December 31, 2021 (the “Class Period”) were insured for 

health care under the Ambetter insurance policy sold and managed by Defendants. 

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Dkts. 62 at 1; 1, at 14. Plaintiffs allege that the lists of providers represented to be 

available to insureds were materially inaccurate in that they contained thousands of 

names of providers who were not available to provide medical care. Dkts. 62, at 1; 1, 

at 13. As a result, the premiums paid by class members were artificially inflated

because policyholders were charged for access to providers who were not in fact 

available to them. Dkts. 62, at 1; 1, at 5, 14. This class action seeks to recover the 

alleged overcharges. Dkts. 62, at 1; 1, at 5, 14, 26.

The health insurance policies at issue are offered under the Affordable Care 

Act and sold through the government’s Affordable Care Act marketplace at 

healthcare.gov. Dkt. 63, at 7. The healthcare.gov listings for available policies list

price, co-pay amounts, deductibles, and offer the ability to search the provider 

database—but the listings do not include the number of providers in the network. Id. 

However, Defendants are required to maintain “a network that is sufficient in 

number and types of providers [to] ensure that all services will be accessible without 

unreasonable delay.” 45 C.F.R. §§ 156.230(a)(2), 156.230(a)(1)(ii).

Plaintiffs filed the pending motion for class certification seeking to certify a 

class of “all persons in the State of Texas who were insured by Defendants’ Ambetter 

insurance product which was purchased through the [Affordable Care Act] HIE from 

the date on which the Ambetter policies were first sold in Texas to December 31, 

2021,” a class of more than 400,000 people. Dkts. 62, at 7; 1, at 26. Plaintiffs seek 

compensation for alleged overpayment of insurance premiums due to inflated 

insurance premium prices. Dkt. 62, at 1. The gravamen of Plaintiffs’ complaint is the 

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theory that the defendant insurance companies misrepresented the accuracy, size,

and availability of providers of their network since it was “not as robust as 

Defendants represent it to be” and therefore caused Plaintiffs to pay inflated 

insurance premiums. Dkt. 74, at 2. Plaintiffs ask the Court to conditionally certify 

this suit as a collective action. Dkt. 62, at 1.

Defendants responded and separately moved to strike the declarations 

included in the Plaintiffs’ motion for class certification on the grounds that the 

Plaintiffs do not have Article III standing, and do not fulfill the Rule 23(b)(3) 

requirements of predominance and superiority. Dkt. 63, at 1. Further, Defendants 

also moved to exclude one of Plaintiffs’ Class Certification Motion Experts on the 

grounds that the expert's methodology for measuring damages is unreliable, and thus 

that it does not pass the Daubert standard. Dkt. 70, at 1. 

II. DEFENDANTS’ MOTION TO STRIKE

Before turning to the class certification motion, the undersigned addresses 

Defendants’ motion to strike Plaintiffs’ expert testimony in support of class 

certification. Defendants object to the testimony of Plaintiffs’ expert, Dr. Simon. F. 

Haeder, arguing that his testimony is unreliable and irrelevant, and therefore does 

not pass the standard set in Daubert. Dkt. 70, at 9. Defendants posit five reasons why 

Dr. Haeder’s testimony should be excluded: (1) Dr. Haeder’s damages model 

improperly assumes that Superior made a promise that is not contained in the 

relevant contract; (2) Dr. Haeder’s model does not measure the harm that flows from 

an inaccurate directory; (3) Dr. Haeder’s model is inconsistent with the governing 

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law; (4) Dr. Haeder relies on improper assumptions about Superior’s network 

breadth; and (5) Dr. Haeder’s model fails to account for supply-side factors. Dkt. 76, 

at 2-9. 

A. Legal Standard

Federal Rule of Evidence 702 sets the standard for the admissibility of expert 

testimony. The gatekeeping function identified in Daubert v. Merrell Dow 

Pharmaceuticals, Inc., 509 U.S. 579 (1993), “imposes a special obligation upon a trial 

judge to ‘ensure that any and all scientific testimony ... is not only relevant, but 

reliable.’” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147 (1999) (quoting 

Daubert, 509 U.S. at 589). Rule 702 provides that: 

A witness who is qualified as an expert ... may testify ... in the form of 

an opinion ... if 

(a) the expert’s scientific, technical, or other specialized knowledge will 

help the trier of fact to understand the evidence or to determine a fact 

in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the 

facts of the case. 

Fed. R. Evid. 702.

Under Daubert, expert testimony is admissible if the proponent demonstrates 

that (1) the expert is qualified; (2) the evidence is relevant; and (3) the evidence is 

reliable. See Moore v. Ashland Chem. Inc., 151 F.3d 269, 276 (5th Cir. 1998); Watkins 

v. Telsmith, Inc., 121 F.3d 984, 989 (5th Cir. 1997). “The inquiry envisioned by Rule 

702 is, we emphasize, a flexible one. Its overarching subject is the scientific validity 

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and thus the evidentiary relevance and reliability—of the principles that underlie a 

proposed submission. The focus, of course, must be solely on principles and 

methodology, not on the conclusions that they generate.” Watkins, 121 F.3d at 989. 

“As a general rule, questions relating to the bases and sources of an expert’s opinion 

affect the weight to be assigned that opinion rather than its admissibility and should 

be left for the jury’s consideration.” Viterbo v. Dow Chem. Co., 826 F.2d 420, 422 (5th 

Cir. 1987). “To trigger a Daubert inquiry, an expert’s testimony, or its ‘factual basis, 

data, principles, methods, or their application,’ must be ‘called sufficiently into 

question.’” Rodriguez v. Riddell Sports, Inc., 242 F.3d 567, 581 (5th Cir. 2001) 

(quoting Kumho, 526 U.S. at 149).

District courts are to make a “preliminary assessment of whether the 

reasoning or methodology underlying the testimony is scientifically valid and of 

whether that reasoning or methodology properly can be applied to the facts in issue.” 

Carlson v. Bioremedi Therapeutic Sys., Inc., 822 F.3d 194, 199 (5th Cir. 2016) 

(internal quotations and citations omitted). “A party seeking to introduce expert 

testimony must show ‘(1) the testimony is based upon sufficient facts or data, (2) the 

testimony is the product of reliable principles and methods, and (3) the witness has 

applied the principles and methods reliably to the facts of the case.” Id. (internal 

quotations omitted).

At class certification, Daubert review is “limited to [an expert] opinion’s 

reliability and relevance to the requirements of class certification.” Cone v. Vortens, 

Inc., No. 4:17-CV-00001, 2019 WL 4451146, at *2 (E.D. Tex. Sept. 17, 2019). The 

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standard for measuring reliability is relatively low. McManaway v. KBR, Inc., No. H10-1044, 2012 WL 13059744, at *3 (S.D. Tex. Aug. 22, 2012) (“Although a trial judge’s 

discretion should be supported by adequately supported findings, the trial judge must 

not apply the reliability factors too stringently and transform a Daubert hearing into 

a trial on the merits.”). “Vigorous cross-examination, presentation of contrary 

evidence, and careful instruction on the burden of proof are the traditional and 

appropriate means of attacking shaky but admissible evidence.” Daubert, 509 U.S. at 

596.

B. Analysis

Plaintiffs have designated Dr. Haeder as an expert to testify on the purported 

damage to Plaintiffs caused by Defendants’ allegedly inflated premium rate. Dkt. 75, 

at 1. Defendants challenge the damages model Dr. Haeder utilizes to arrive at his 

suggested damages number. Id.

Defendants first claim Dr. Haeder’s report should be excluded because his

damages model is unreliable. Dkt. 70, at 3. They argue that it does not fit the facts of 

the case because it assumes facts that are not true; namely, it assumes that Superior 

promised its customers a certain network breadth, i.e., a certain number of network 

providers in proportion to the number of providers in the area. Id. at 9. However, 

Defendants contend, Superior never made promises about its about its network 

breadth. Id. Defendants thus contest the basis or source that the Plaintiffs’ expert’s 

model rests on. 

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Defendants also propose that Dr. Haeder’s model does not fit Plaintiffs’ theory 

of recovery, a breach of the contractual promise to provide a current provider 

directory. Dkt. 70, at 10. Defendants posit that a current directory and a network of 

a certain size are not synonymous, and thus the damages that would flow from claims 

arising from each would be different. Id. at 1. Since Dr. Haeder did not measure 

damages from an inaccurate directory, according to Defendants, his model fails the 

“fit” test under Comcast v. Behrend, 569 U.S. 27 (2013). Id. Defendants next argue 

that courts reject expert opinions, like Dr. Haeder’s, where the “evidence of actual 

injury impermissibly consists of estimates based on assumptions that are based on 

estimates and assumptions.” Eleven Line, Inc. v. N. Tex. State Soccer Ass’n, 213 F.3d 

198, 207 (5th Cir. 2000). 

Here, Defendants are contesting the basis of the Dr. Haeder’s opinion in that 

they contest the assumptions underlying his findings, (as well as, in some cases, the 

sources of his opinions). These issues go to the weight of and not admissibility of Dr. 

Haeder’s testimony.Viterbo, 826 F.2d at 422. The undersigned finds that given that 

the standard for measuring reliability at this stage is relatively low and grounds for 

exclusion is limited to an inquiry as to relevance to class certification requirements, 

Dr. Haeder’s testimony should not be excluded. Therefore, Defendants’ motion to 

exclude Dr. Haeder’s testimony in support of class certification is denied. 

III. MOTION FOR CLASS CERTIFICATION 

Plaintiffs seek to certify their class under Rule 23(b)(3). Dkt. 62, at 13.

Defendants object, arguing to Plaintiffs cannot fulfill Rule 23(b)(3)’s predominance 

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and superiority requirements of Rule 23(b)(3). Id at 8. Defendants, however, contend 

that the Court need not address the merits of Plaintiffs’ class-certification arguments 

because Plaintiffs lack the requisite standing to sue in the first place. As standing is 

a constitutional threshold that Plaintiffs themselves must first meet before obtaining 

certification on behalf of the proposed class, the undersigned addresses that issue 

first.

A. Legal Standard

Standing is a fundamental requirement imposed by Article III. TransUnion 

LLC v. Ramirez, 141 S. Ct. 2190, 2200 (2021). A plaintiff “must demonstrate standing 

with the ‘manner and degree of evidence required at the successive stages of 

litigation.’” Id. at 2208 (quoting Lujan v. Defenders of Wildlife, 540 US. 555, 561 

(1992)). The “irreducible constitutional minimum of standing contains three 

elements”: injury in fact, causation, and redressability. Lujan, 504 U.S. at 560-61.

Injury in fact is the “invasion of a legally protected interest which is (a) concrete and 

particularized ... and (b) actual or imminent, not conjectural or hypothetical.” Id. at 

560. The causal connection between the injury and the conduct complained of’ must 

be fairly traceable to the challenged action of the defendant, and not the result of the 

independent action of some third party not before the court. Id. at 561. Finally, it 

must be “likely, as opposed to merely speculative, that the injury will be redressed by 

a favorable decision.” Id.

A named plaintiff must have standing to represent a class of other allegedly 

injured persons. See Warth v. Seldin, 422 U.S. 490, 501-02 (1975). If the class 

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representative presents a standing problem, that issue must be addressed prior to 

deciding class certification. Flecha v. Medicredit, Inc., 946 F.3d 762, 769 (5th Cir. 

2020). “After all, if the class representative lacks standing, then there is no Article 

III suit to begin with—class certification or otherwise.” Id. In addition, even if the 

named plaintiffs have standing, the presence of an overwhelming number of 

uninjured persons within the putative class also raises Article III concerns and 

counsels against certification. See TransUnion, 141 S. Ct. at 2200 (“No concrete harm, 

no standing.”). 

B. Discussion 

Defendants focus their standing challenge on the first element, arguing that 

Plaintiffs cannot demonstrate an injury in fact. Defendants cite three reasons in 

support of this contention: (1) Plaintiffs’ class-wide theory of injury from an alleged 

promise regarding the number of providers cannot confer standing; (2) Plaintiffs’ 

expert’s class-wide damages model hinges on a promise that was not made and that 

does not fit the facts of the case; and (3) the presence of uninjured persons in the 

putative class defeats class standing. Dkt. 63, at 8-13.

Plaintiffs respond that they have suffered an injury in fact in that each

policyholder was overcharged when they paid for a policy they believed would grant 

access to “a robust network of providers, when in fact the network of providers 

available to treat them was materially smaller than represented.” Dkt. 66, at 7.

Plaintiffs plead what the Fifth Circuit has called an “overcharge-by-fraud” theory of 

injury, a theory under which plaintiffs “seek[] to recover for a purported economic 

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injury rather than any risk of physical injury” and allege that an inflated price was 

set for a service than otherwise could have been obtained, absent misrepresentation. 

See Earl v. Boeing Co., 53 F.4th 897, 902 (5th Cir. 2022).1

While purely economic injuries can give rise to standing, typically Plaintiffs 

asserting overcharge injuries plead facts sufficient to demonstrate plausible 

expectations or affirmative misrepresentations as the basis of their injury. See 

Martone v. Robb, 902 F.3d 519, 522 (5th Cir. 2018) (observing in class action involving 

employee stock purchases the plaintiff pleaded that throughout the period he was 

purchasing stock, Whole Foods was “report[ing] enormous growth of its sales 

revenues, net income, new stores and stock price” and made representations “about 

its integrity and reputation”); Cole v. Gen. Motors Corp., 484 F.3d 717, 722 (5th Cir. 

2007) (plaintiffs alleged that they contracted to purchase DeVilles with side impact 

1

In Earl, plaintiffs alleged that airline ticket prices they paid were inflated because the 

actual value of those tickets for most passengers was zero where Defendants concealed 

defects in the MAX 8 plane that posed serious risks of injury or death. 53 F.4th at 902. 

Plaintiffs claimed that had they known about the defects, “demand for tickets on routes flying 

the MAX 8 would have dropped, so the airlines would have been forced to lower ticket fares 

and plaintiffs would have paid less for their tickets.” Id. The Fifth Circuit found this theory 

of injury untenable because it relied on the unlikely inference that MAX 8 planes would have 

been allowed to fly even with public knowledge of the defect. Id. In reality, if there “was 

widespread public knowledge” of the MAX 8 defect, airlines “would have offered zero MAX 8 

flights” and “ticket fares would have likely gone up because the airlines’ useable fleets would 

have been smaller in the meantime.” Id. Ultimately, the Fifth Circuit found that plaintiffs 

did not plausibly allege “that they were any worse off financially” since, had the “defect been 

widely exposed earlier, the MAX 8 flights plaintiffs chose would have been unavailable and 

they’d have had to take a different, more expensive (or otherwise less desirable) flights 

instead. Id. at 903.

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air bags that would deploy only under certain circumstances involving a side impact 

but claimed that they received DeVilles with air bags that could “deploy 

unexpectedly, without a crash”); Coghlan v. Wellcraft Marine Corp., 240 F.3d 449, 

451 (5th Cir. 2001) (putative class action plaintiffs claimed they contracted to buy allfiberglass boats and relied on sellers’ representations to that effect, but instead 

received a less valuable, wood-fiberglass hybrid). The undersigned agrees with 

Defendants that Plaintiffs have not pleaded facts sufficient to show that they had 

reasonable expectations with respect to the size of the provider network such that the 

prices paid for access to the network were inflated.

Plaintiffs’ theory of their overcharge injury rests on the counterfactual 

assumptions that insureds were promised (or that Defendants represented) that a 

provider network of a certain size would be available and that provider network size, 

in any event, is static. Plaintiffs claim that the “lists of providers represented to be 

available to Centene’s insureds were materially inaccurate in that they contained 

thousands of names of providers who were in fact not available to provide medical 

care” and “the provider directories were at least fifty percent smaller than 

represented.” Dkt. 62, at 7-8. 

However, Plaintiffs have not pleaded any facts supporting the claim that they 

had reasonable expectations of network size. Defendants state that its insurance 

policy does “not specify the number of providers in [its] network.” Dkt. 63, at 12. 

Further, neither the Health Insurance Marketplace, nor Defendants’ Plan 

Documents and contracts state a set number of providers. Dkt. 63-2, at 13. As 

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Defendants explain, they couldn’t have stated a set number of providers or advertised 

a set network size, “because the size changes frequently.” Dkts. 63, at 12; 63-2, at 13 

(stating “provider networks change frequently as providers retire and new providers 

join”). Indeed, Defendants affirmatively advise consumers, “[t]hroughout the year, 

the providers available in-network may change.” See Dkt. 63-5 (Provider Guide 

Notice). Plaintiffs’ expert, Dr. Haeder, even alludes to factors affecting variable 

network size including medical providers discontinuing practice. Dkt. 62-2, at 13 

(stating “a large number of providers listed in Centene’s provider directory are not 

actively providing medical care to consumers”). 

Plaintiffs have also not adequately pleaded that they were overcharged or that 

they overpaid for the policies they purchased. The assumption underlying Plaintiffs’ 

overcharge theory is that network size meaningfully accounts for higher premiums. 

Dkt. 62, at 12. Plaintiffs’ expert Dr. Haeder reports that the network provider list 

(provided to him by Defendants) contains, on average, 49% more practitioners than 

are actually available to policyholders. Dkt. 62-2, at 13. Dr. Haeder also modeled the 

relationship between network size and policy premiums and concluded that every 1% 

change in network size corresponds to a .29% change in policy premium cost resulting 

in a calculable measure of overpayment. Id. at 8, 13.

Defendants respond that this relationship demonstrates correlation, not 

causation. Dkt. 63, at 15. The undersigned agrees. In attempting to rebut Defendants’ 

assertion, Plaintiffs merely reiterate Dr. Haeder’s conclusion that “the health services 

literature has established that health plans with narrower networks are provided at 

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lower premiums than those with broader networks” without substantively addressing 

what other factors account for the cost of premiums. Dkt. 66, at 7; 66-4, at 45. Dr. 

Haeder’s report, however, suggests other factors that bear on the cost of premiums, 

including “hospital network breadth[] and hospital network quality” as well as factors 

such as wait times, travel times, and personal doctor coverage for the doctors in a 

patient’s given geographical area. Dkt. 66-4, at 45, 49. Plaintiffs have not adequately 

established that the value of the service for which they paid is measured primarily 

by network size, and that the premiums they paid were inflated as a result of the 

alleged discrepancy between promised network size and actual network size.

The undersigned finds that Plaintiffs’ have not plausibly pleaded an injury in 

fact in pleading that they paid inflated prices for coverage under Defendants’ 

insurance policies. Plaintiffs, therefore, lack standing to bring their claim. Because 

this suit does not present a justiciable case or controversy under Article III, the 

undersigned does not reach the class-certification question.

IV. RECOMMENDATION AND ORDER

The undersigned DENIES Defendants’ Motion to Exclude Expert Testimony, 

Dkt. 70. Further, based on the foregoing discussion the undersigned 

RECOMMENDS that the District Court DENY Plaintiffs’ Motion for Class 

Certification, Dkt. 62, for lack of standing. 

V. WARNINGS

The parties may file objections to this Report and Recommendation. A party 

filing objections must specifically identify those findings or recommendations to 

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which objections are being made. The district court need not consider frivolous, 

conclusive, or general objections. See Battle v. United States Parole Comm’n, 834 F.2d 

419, 421 (5th Cir. 1987). A party’s failure to file written objections to the proposed 

findings and recommendations contained in this Report within fourteen days after 

the party is served with a copy of the Report shall bar that party from de novo review 

by the district court of the proposed findings and recommendations in the Report and, 

except upon grounds of plain error, shall bar the party from appellate review of 

unobjected-to proposed factual findings and legal conclusions accepted by the district 

court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); 

Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).

SIGNED August 4, 2023.

DUSTIN M. HOWELL

UNITED STATES MAGISTRATE JUDGE

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