Court Opinion

ID: 2775943
Source: CourtListenerOpinion
Date Created: 2015-02-03 17:00:47.187005+00
Date Added: 2024-06-11T10:51:09.786064
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 15a0102n.06

                                           No. 14-0107
                                                                                        FILED
                          UNITED STATES COURT OF APPEALS                          Feb 03, 2015
                               FOR THE SIXTH CIRCUIT                          DEBORAH S. HUNT, Clerk

In re: VHS OF MICHIGAN, INC., dba )
Detroit Medical Center,           )
                                  )                                    OPINION
        Petitioner.               )
                                  )

       BEFORE: STRANCH and DONALD, Circuit Judges; ECONOMUS, District Judge.

       STRANCH, Circuit Judge. Defendant VHS of Michigan, Inc., d/b/a Detroit Medical

Center (DMC), petitions for permission to appeal an order of the district court certifying a class

action in an antitrust suit. DMC also moves for leave to file a reply. The plaintiffs oppose the

petition and the motion. We deny DMC’s petition for permission to appeal. We also deny

DMC’s motion for leave to file a reply because the pertinent rule does not permit the filing of a

reply. Fed. R. App. P. 5(b).

       We may, in our discretion, permit an appeal from an order certifying a class action. Fed.

R. Civ. P. 23(f). In such appeals, we give the district court’s decision to certify substantial

deference and will only reverse on “a strong showing that the district court’s decision was a clear

abuse of discretion.” Beattie v. CenturyTel, Inc., 511 F.3d 554, 559−60 (6th Cir. 2007) (internal

quotation marks omitted); In re Delta Air Lines, 310 F.3d 953, 960 (6th Cir. 2002). Among

other factors, we consider: (1) whether the petitioner is likely to succeed on appeal under the

deferential abuse-of-discretion standard; (2) whether the cost of continuing the litigation for

either party will hamper subsequent review; (3) whether the case presents a novel or unsettled

       
        The Honorable Peter C. Economus, United States District Judge for the Northern District
of Ohio, sitting by designation.
No. 14-0107, In re: VHS of Michigan, Inc., dba Detroit Medical Center,

question of law; and (4) the procedural posture of the case. In re Delta Air Lines, 310 F.3d at

960. Our caselaw counsels against routinely taking such interlocutory appeals. Id. at 959. Here,

DMC has not demonstrated a strong likelihood of success on appeal and no other factor strongly

favors permitting the appeal.

       In this case, Detroit-area nurses sued eight local hospitals in antitrust for conspiring to

suppress wages; seven hospitals settled and DMC is the only remaining defendant. Plaintiffs

alleged two theories of liability:    (1) a per se theory that the hospitals had a wage-fixing

agreement and (2) a rule of reason theory that “softened competition” resulted from the hospitals

sharing compensation information. An expert for the plaintiffs provided a damages estimation

but did not provide separate calculations for each theory of liability. He provided a conservative

“but for” baseline calculation applicable if either of the alleged theories were proven.

       The district court granted summary judgment on the per se argument but not the rule of

reason argument, then certified the class on the latter theory. This court later ordered the district

court to reconsider the certification order in light of Comcast Corp. v. Behrend, 133 S. Ct. 1426

(2013). Upon reconsideration, the district court analyzed and applied Comcast, determined that

it did not call into question the court’s prior decision, and then recertified the class and reinstated

the prior certification opinion.

       Reviewing the relationship between the damages calculation and the rule of reason

theory, the district court stated that Comcast would apply if the plaintiffs’ two initial theories of

liability “would bring about a separate and distinct harm to the members of the Plaintiff class”

and the damages calculation “reflects the aggregation of these distinct harms.” It concluded that

the plaintiffs’ damages calculation did not reflect an aggregation of distinct harms because the

plaintiff’s evidence showed that the two theories were mutually exclusive and the damages

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No. 14-0107, In re: VHS of Michigan, Inc., dba Detroit Medical Center,

calculation could therefore equally represent either theory of recovery. The district court also

determined that a generic damages model is permissible after Comcast as long as the plaintiffs

prove with other evidence that the modeled damages stem from the theory of liability being

pursued. The district court noted there was sufficient evidence of causation linking the rule of

reason antitrust theory to plaintiffs’ injury and damages, restating its conclusion from its earlier

summary judgment decision. See Cason-Merenda v. Detroit Med. Ctr., 862 F. Supp. 2d 603,

642 (E.D. Mich. 2012).

       In its petition for permission to appeal, DMC argues that the district court’s application of

Comcast was an abuse of discretion. Relying primarily on its interpretation of Comcast, DMC

contends that the plaintiffs have not established the link between the damages model and the rule

of reason theory and that the damages from the two theories can be aggregated.

       The district court correctly concluded that this case does not implicate the concerns of

Comcast––that a defendant should not be held liable for damages not attributable to the theory of

liability accepted for class-action treatment. 133 S. Ct. at 1433–34. Comcast applies where

multiple theories of liability exist, those theories create separable anticompetitive effects, and the

combined effects can result in aggregated damages. Id. In such cases, the plaintiff’s model must

measure damages attributable only to the liability theory (and resulting anticompetitive effects)

accepted for class-action treatment. Id. Where there is no chance of aggregated damages

attributable to rejected liability theories, the Supreme Court’s concerns do not apply.

       Here, as the district court concluded, the two theories of anticompetitive conduct—the

per se wage-fixing claim and the rule of reason “softened competition” claim—were mutually

exclusive. Because the expert’s damages calculation applied to either theory of anticompetitive

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No. 14-0107, In re: VHS of Michigan, Inc., dba Detroit Medical Center,

conduct, damages were not improperly aggregated.             Thus, this case does not raise the

aggregated-damages concern present in Comcast.

       Additionally, “after Comcast [a] class must be able to show that their damages stemmed

from the defendant’s actions that created the legal liability.” In re Whirlpool Corp. Front-

Loading Washer Prods. Liab. Litig., 722 F.3d 838, 860 (6th Cir. 2013) (internal quotation marks

omitted); Butler v. Sears, Roebuck & Co., 727 F.3d 796, 799 (7th Cir. 2013) (“Comcast holds

that a damages suit cannot be certified to proceed as a class action unless the damages sought are

the result of the class-wide injury that the suit alleges.” (emphasis omitted)).

       The plaintiffs’ damages baseline establishes that, if plaintiffs succeed on their rule of

reason theory, the harm from “softened competition” was at least equal to the expert’s damages

estimation. Those damages would be attributable to the “softened competition” theory, even

though this general anticompetitive measure may understate the total damages from “softened

competition.” As noted by the district court, “it does not matter that a more ‘true’ measure of

these damages might be different.” The plaintiffs have produced sufficient evidence that the

baseline “damages stem[] from the [hospitals’ information sharing] that created the [softened

competition],” In re Whirlpool Corp., 722 F.3d at 860 (internal quotation marks omitted), and

that the “softened competition” resulted in at least the value of the estimated damages.

       DMC has not shown it is likely to succeed in making the requisite strong showing that the

district court abused its discretion in determining that plaintiffs produced sufficient evidence of

causation to prove that softened competition caused the modeled damages or that the damages

from the separate theories are mutually exclusive. None of the other factors we consider weigh

in favor of permitting the appeal. In re Delta Air Lines, 310 F.3d at 960. DMC has not shown

that the cost of continuing litigation will hamper subsequent review. Id. The case does not

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No. 14-0107, In re: VHS of Michigan, Inc., dba Detroit Medical Center,

present novel or unsettled issues, and there is nothing unusual about the procedural posture of the

case to warrant interlocutory review. Id.

       Because we conclude that the factors do not favor interlocutory review, we DENY the

petition for permission to appeal.

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