A federal judge has declined to certify a class of registered nurses who allege San Antonio’s three largest hospital groups conspired to depress their wages over a five-year period.
The ruling, issued Tuesday by Chief U.S. District Judge Orlando Garcia of the Western District of Texas, examined whether a group of approximately 11,000 registered nurses who worked in San Antonio from 2002 through 2007 should be certified as a class. The nurses allege the hospitals, which include CHRISTUS Santa Rosa Health System, Baptist Health Systems and Methodist Healthcare System, engaged in the conspiracy through explicit agreements and/or exchanges of wage information.
Judge Garcia’s ruling marks a major win for a group of Texas lawyers at Norton Rose Fulbright and Gibson, Dunn & Crutcher, who are representing the defendant hospitals.
The arguments for or against class certification, according to the ruling, mainly boiled down to whether the plaintiffs met the requirements under Rule 23(b) in the Federal Rules for Civil Procedure, which requires the plaintiffs to demonstrate that the issues common to the class predominate over individual issues and that a class action is the superior remedy to the controversy.
To prove this, the plaintiffs heavily relied on their expert, economics Professor Henry S. Farber of Princeton University, whose opinion the defendants sought to exclude.
Although Judge Garcia found that the plaintiffs met many of the fundamental requirements for certifying a class he determined that they did not meet the Rule 23(b) requirement under the federal rules of civil procedure.
Whether the plaintiffs adequately met Rule 23(b) relied heavily on whether their expert met the burden to show that the “question of antitrust injury/impact is subject to common proof.”
In a 24-page opinion, Judge Garcia ruled that the expert (Professor Henry S. Farber) did not.
“After reviewing the record, the court finds that Professor Farber’s opinions do not address a causal link and thus do not assist the court in determining whether antitrust injury/impact can be shown with evidence common to the class,” Judge Garcia wrote.
“Because plaintiffs have not demonstrated that antitrust impact/injury, which hinges on a causal link to the violation, can be shown with common evidence on a classwide basis, the court cannot conclude that common issues would predominate over individual issues,” Judge Garcia wrote later. “There is no need to reach the remaining arguments for excluding Professor Farber’s opinions. Likewise, there is no need to reach a determination on superiority because predominance has not been met.”
Norton Rose Fulbright, which represents CHRISTUS, took the lead on preparing the opposition to the plaintiffs’ class action certification motion. The litigation team included Houston partners Layne Kruse, Darryl Wade Anderson and Seth Isgur and San Antonio partner Mario Barrera.
Dallas partners Veronica Lewis and Josh Lipton of Gibson Dunn are the lead lawyers for Baptist.
A pair of Washington, D.C.-based partners at Simpson, Thacher & Bartlett are the lead lawyers for Methodist HCA.
Lawyers for the plaintiffs did not immediately respond to a request for comment. A group of out-of-state law firms led by Keller Rohrback in Seattle are representing the plaintiffs. Their local counsel is San Antonio lawyer Luke Kellogg.
Tuesday’s ruling marks the latest defense win in this longstanding legal dispute, which has been going on since 2006. The plaintiffs’ law firms also filed similar actions simultaneously in Detroit, Albany, Chicago and Memphis. Class certification was denied in Chicago and Memphis. In Albany, it was granted but only on certain issues, and in Detroit, certification was granted and summary judgment was denied.
The case is Maderazo v. Hospital Corporation of America, Inc. et al in the San Antonio division of the Western District of Texas, 5:06-cv-00535-OLG.