Duane Morris Takeaways: On February 6, 2024, in In Re Delta Dental Antitrust Litigation, No. 1:19-CV-06734, MDL No. 2931 (N.D. Ill. Feb. 6, 2024). roughly 240,000 dentists and dental practices sought class certification in the U.S. District Court for the Northern District of Illinois against Delta Dental, the largest dental insurance system in the United States, on grounds that Delta Dental and its related entities artificially lowered the reimbursement rates paid for dental goods and services to Plaintiffs in violation of the federal antitrust laws. Plaintiffs moved for class certification under Rule 23(a) and Rule 23(b)(3) on the grounds that all class members have been harmed substantially by the alleged conspiracy between Defendants and that evidence common to the class confirms the existence of the conspiracy to suppress reimbursement rates in violation of Sherman Act Section 1.
Corporate counsel should follow In Re Delta Dental Antitrust Litigation as the ruling on class certification could have a significant impact class action law, generally, and on trade and professional associations facing antitrust issues, specifically.
Plaintiffs are dentist and dental practices who participate pursuant to provider agreements in Delta Dental’s Premier or PPO networks. Defendants are the largest dental insurance system in the United States and are comprised of Delta Dental, its 39 state-level member companies and their national coordinating entities, Delta Dental plans Association and DeltaUSA. Plaintiffs claim that Defendants formed a cartel and committed per se violations of Section 1 of the Sherman Act by agreeing to reduce reimbursements to Plaintiffs through territorial restrictions, agreeing to fix the prices for specific dental goods and services, and agreeing to restrict competition from other competitors.
Rule 23 Contentions
Plaintiffs argue that class certification is appropriate under Rule 23(b)(3) because evidence common to the class can prove the existence of the conspiracy and harm to the class in the form of lower reimbursement rates. Plaintiffs claim that written agreements imposed territorial restrictions on competition and required adherence to uniform, or fixed, prices for dental goods and services. The agreements also restricted efforts to sell dental insurance under different brands. According to the model advanced by Plaintiffs’ economic expert, Plaintiffs will be able to establish both class-wide impact and class-wide damages on behalf of more than 97 percent of the proposed class. Plaintiffs also argue that Defendants’ procompetitive justifications for the restrictions are irrelevant in a per se antitrust case, but, in any event, are without merit because premiums paid by dental patients increased substantially during the class period and Delta Dental passed on the increased premiums to executives in the form of generous salaries.
Implications For Corporate Defendants
In Re Delta Dental Antitrust Litigation is another example of a federal court class certification decision that will turn whether evidence of common, injury-producing conduct exists. It will be interesting to follow whether the Court credits evidence as capable of showing the impact of the allegedly anticompetitive conduct across all class members at trial.