New Seventh Circuit Decision Endorses Heightened Scrutiny of Experts at Class Certification Stage While Potentially Lowering the Bar to the Predominance Element at Class Certification

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In the health care antitrust world, the Federal Trade Commission (FTC) Evanston case, involving a retrospective attack on the consummated merger between Evanston Northwestern and Highland Park hospitals, is an important government enforcement benchmark. Now in a private antitrust class action, the Evanston merger continues to make important law, both with respect to class certification issues and the analysis of antitrust harm in the private class context when differential pricing is present.

Some commentators have been quick to hail the Supreme Court’s landmark decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), as a broad win for all class action defendants. In particular, the court’s endorsement of the evaluation of merits issues at the class certification stage – including dicta favoring the exclusion of unreliable expert testimony submitted at the class certification stage pursuant to Fed. R. Evid. 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) – has been portrayed as imposing additional obstacles to certification of plaintiff classes. The Seventh Circuit’s recent opinion in Messner v. Northshore University HealthSystem, No. 10-2514 (7th Cir. Jan. 13, 2012), suggests that these developments may not inevitably spell doom for class certification. Following Dukes, the decision in Messner approves intensive examination of merits issues at the class certification stage, and highlights the critical role that reliable expert testimony plays in class certification by mandating Daubert review at the class certification stage when expert opinions are material to the decision. In doing so, however, the Seventh Circuit demonstrated that the Dukes decision does not change the critical role of the predominance inquiry in the certification of Fed. R. Civ. P. 23(b)(3) classes.

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