ROYAL MILE COMPANY, INC. et al v. UPMC et al

Filing 630

OPINION setting forth the reasons the motion to certify class 525 will be DENIED AS PREMATURE. Appropriate orders will be entered. Signed by Judge Joy Flowers Conti on 3/1/2019. (kjm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
COLE’S WEXFORD HOTEL, INC.,
on its own behalf and on behalf of all
others similarly situated,
v.

Plaintiffs,

HIGHMARK INC.,
Defendant.

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Civil Action No. 10-1609

MEMORANDUM OPINION
CONTI, Senior District Judge
I.

Introduction

In the third amended complaint, plaintiff Cole’s Wexford Hotel, Inc. (“Cole’s
Wexford”) asserts four claims against defendant Highmark Inc. (“Highmark”) under §§ 1
and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and § 4 of the Clayton Act, 15 U.S.C. § 15.
(ECF No. 286.) Cole’s Wexford alleges that Highmark, the largest health insurance provider
in Western Pennsylvania, and former defendant, UPMC, 1 the largest healthcare provider in
Western Pennsylvania, conspired to monopolize the healthcare and health insurance markets
in Western Pennsylvania. Cole’s Wexford alleges that as a result of the UPMC-Highmark
1

UPMC was named as a defendant and co-conspirator of Highmark in the third
amended complaint. On July 28, 2016, the court: granted the motion to certify the settlement
class with respect to the claims against UPMC (ECF No. 413) filed by Cole’s Wexford;
granted the motion for final approval of that settlement (ECF No. 414); and issued a final
judgment order with respect to UPMC on all claims against it for purposes of Federal Rule of
Civil Procedure 58(a) (ECF No. 415). UPMC is, therefore, no longer a named defendant in
this case.

conspiracy, Cole’s Wexford from July 1, 2010, until March 21, 2012, was forced to pay
Highmark Health Insurance Company, a for-profit subsidiary of Highmark, supracompetitive
rates for health insurance.
Cole’s Wexford filed a motion to certify class, pursuant to Federal Rule of Civil
Procedure 23(a) and (b)(3). (ECF Nos. 525, 526.) The motion to certify class was briefed by
the parties. Highmark in its response in opposition to the motion to certify class argued that
Cole’s Wexford did not: (1) “demonstrate that the class is ascertainable[;]” (2) “demonstrate
that it has a reliable method to establish class-wide impact[, i.e., satisfy the predominance
requirement of Rule 23(b)(3);]” or (3) set forth a theory of damages that satisfies Rule 23.
(ECF No. 547 at 2-3.)
On September 19, 2018, the court held a hearing on the motion to certify class.
Counsel made argument and Cole’s Wexford’s proffered economic expert, Robin Cantor,
Ph.D. (“Dr. Cantor”), and Highmark’s proffered economic expert, John Johnson, IV, Ph.D.
(“Dr. Johnson”), participated in the presentation of concurrent expert evidence. 2 Dr. Cantor’s
expert report and testimony concerned, among other things, the methodology 3 that the
proposed class would use to show antitrust impact and damages on a class-wide basis. Dr.

2

This method of presenting expert evidence is also known as placing the experts in a
“hot tub.” In re Domestic Drywall Antitrust Litig., Civ. Action No. 15-1712, 2018 WL
2184391, at *2 (E.D. Pa. May 10, 2018) (“The Court had extensive hearings, including the
testimony of the competing experts, and a so-called ‘hot tub’ where both experts sat in the
jury box and were examined by counsel and the Court.”); see Rovakat, LLC v. C.I.R., 102
T.C.M. (CCH) 264 (T.C. 2011), aff'd, 529 F. App'x 124 (3d Cir. 2013).
3

It is the court’s understanding that Dr. Cantor’s methodology for proving antitrust
impact and methodology for proving damages are essentially the same methodology. (Dr.
Cantor’s Expert Report at 10 ¶ D.) Thus, the court in this opinion refers to a “methodology”
proposed by Dr. Cantor as opposed to “methodologies.”
2

Johnson’s expert report and testimony did not identify a particular alternative methodology;
rather, his report and testimony challenged the reliability of the methodology proposed by
Dr. Cantor. At the request of Highmark, the court continued the hearing until November 9,
2018, in order for Highmark to present the testimony of William Cashion (“Cashion”),
Highmark’s chief actuary. The court permitted Cole’s Wexford to conduct a limited
deposition of Cashion prior to the hearing held on November 9, 2018, and permitted Dr.
Cantor and Dr. Johnson to submit supplemental expert reports based upon Cashion’s
testimony.
The hearing on class certification concluded on November 20, 2018. During that
portion of the hearing, Dr. Cantor and Dr. Johnson each addressed the court and counsel
made summations. The parties and their experts used the majority of the three-day class
certification hearing to address whether Cole’s Wexford satisfied the predominance standard
of Rule 23(b)(3), i.e., whether Dr. Cantor’s expert report set forth a reliable methodology for
proving class-wide antitrust impact and damages. In light of the diametrically opposing
views of the parties and the difficult economic issues raised by their arguments, the court
determined a technical advisor was necessary to assist the court’s understanding about the
reliability of Dr. Cantor’s proposed methodology. See In re Domestic Drywall Antitrust
Litig., 322 F.R.D. 188, 194 (E.D. Pa. 2017).
The parties each filed supplemental briefs with respect to the applicable standards
under Rule 23 and the questions to be posed to the technical advisor. (ECF Nos. 601, 602.)
The parties did not agree on an individual to serve as the technical advisor. The court,
therefore, appointed Christopher Garmon, Ph.D. (“Dr. Garmon”) to serve as technical
advisor to the court. (ECF No. 619.) A report by the technical advisor is forthcoming and
3

will address whether the “‘methodology’ for proving class-wide antitrust impact that was
proposed by Cole’s Wexford Hotel, Inc. and its expert, Robin Cantor, Ph.D., is a reliable
methodology in the field of economics….” (ECF No. 619 at 1 (emphasis added).)
For the reasons set forth in this memorandum opinion, the motion to certify class
(ECF No. 525) will be denied as premature. During the class certification hearing, the court
inquired whether Highmark was challenging Dr. Cantor’s report and testimony under
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) (“Daubert”).
Highmark’s counsel vigorously asserted that it was not doing so and argued that a Daubert
analysis was not required. The court requested briefing on that issue. In the briefing, (ECF
Nos. 601, 602), neither party identified the proper process a court is to utilize when a
challenge to the reliability of an expert’s methodology is raised during class certification
procedures. As more fully discussed below, the court as part of its “rigorous analysis” of the
evidence must determine whether the expert evidence presented by Cole’s Wexford would be
admissible at trial under the standards set forth in Federal Rules of Evidence 701 and 702 and
Daubert. In re Blood Reagents Antitrust Litig., 783 F.3d 183, 187 (3d Cir. 2015); In re
Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 323 (3d Cir. 2008).
II.

Discussion
A. Applicable Law
1. In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305 (3d Cir.
2008)

In Hydrogen Peroxide, the plaintiffs, who were “[p]urchasers of hydrogen peroxide
and related chemical products” sued the defendants, who were chemical manufacturers, for
engaging in a horizontal price-fixing conspiracy in violation of § 1 of the Sherman Act and §
4

4 of the Clayton Act. Hydrogen Peroxide, 552 F.3d at 307-08. The plaintiffs filed a motion to
certify class relying in part on the opinions of an economist. Id. at 308. The defendants in
opposition to the motion to certify class offered the opinions of a different economist. Id. The
defendants also filed a motion to exclude the opinions of the plaintiffs’ expert under Daubert,
which the court denied. Id. The defendants did not appeal the district court’s decision with
respect to Daubert. Id. at 315 n.13.
The district court found the plaintiffs satisfied the requirements of Rule 23(a), and the
defendants did not appeal that portion of the district court’s decision. Hydrogen Peroxide,
552 F.3d at 310. Like Cole’s Wexford, the plaintiffs in Hydrogen Peroxide sought class
certification under Rule 23(b)(3), the “twin requirements” of which are predominance and
superiority. Id. at 310. The defendants appealed to the court of appeals the district court’s
finding that the predominance requirement was met. Id. The defendants argued the district
court committed three errors: (1) it applied too lenient a standard of proof to class
certification; (2) it did not “meaningfully” consider the defendants’ expert’s opinion; and (3)
it applied the presumption of antitrust impact set forth in Bogosian v. Gulf Oil Corp., 561
F.2d 434, 454 (3d Cir. 1977). Hydrogen Peroxide, 552 F.3d at 312.
The court of appeals first rejected the district court’s statement of the applicable
standards under Rule 23 and held the case would be remanded on that basis. Id. at 322.
According to the district court, the plaintiffs were required to make only a “threshold
showing” with respect to predominance. Id. at 321. The court of appeals disagreed:
A “threshold showing” could signify, incorrectly, that the burden on the party
seeking certification is a lenient one (such as a prima facie showing or a burden
of production) or that the party seeking certification receives deference or a
presumption in its favor. So defined, “threshold showing” is an inadequate and
improper standard. “[T]he requirements of Rule 23 must be met, not just
5

supported by some evidence.” IPO, 471 F.3d at 33; see e.g., id. at 40, 42
(rejecting the view that a party seeking certification need only make “some
showing” with respect to the Rule 23 requirements).
Id. The court of appeals also rejected the district court’s statement that in a case alleging a
horizontal price-fixing conspiracy the district court when in doubt should err in favor of
certifying a class. Id. at 321-22. The court of appeals explained: “These statements invite error.
Although the trial court has discretion to grant or deny class certification, the court should not
suppress ‘doubt’ as to whether a Rule 23 requirement is met-no matter the area of substantive
law.” Hydrogen Peroxide, 552 F.3d at 321.
Second, the court addressed the defendants’ argument that the district court erred by
failing to consider the testimony of the defendants’ expert economist. Id. at 322. The district
court—after denying the Daubert motion—found it improper to weigh the opinions of the
defendants’ expert against the opinions of the plaintiffs’ expert, i.e., the district court
“apparently believed it was barred from resolving disputes between the plaintiffs’ and
defendants’ experts.” Id. at 322, 325. The court of appeals disagreed:
Resolving expert disputes in order to determine whether a class certification
requirement has been met is always a task for the court-no matter whether a
dispute might appear to implicate the “credibility” of one or more experts, a
matter resembling those usually reserved for a trier of fact. Rigorous analysis
need not be hampered by a concern for avoiding credibility issues; as noted,
findings with respect to class certification do not bind the ultimate fact-finder
on the merits. A court's determination that an expert's opinion is persuasive or
unpersuasive on a Rule 23 requirement does not preclude a different view at the
merits stage of the case.
…
Rule 23 calls for consideration of all relevant evidence and arguments, including
relevant expert testimony of the parties.
Id. at 324-25. The court of appeals on that basis vacated the order certifying the class and
remanded the case to the district court. Id. at 325.
6

With respect to the defendants’ third argument that the district court erred by
concluding the predominance requirement of Rule 23 was met based upon the Bogosian
presumption of antitrust impact, the court of appeals explained that there was conflicting
evidence presented to the district court about whether the presumption applied to the facts of
the case. Hydrogen Peroxide, 552 F.3d at 326. It was not apparent to the court of appeals that
the district court considered all the relevant evidence with respect to the issue. Id. The court of
appeals held: “The District Court, upon review of all the evidence consistent with this opinion,
may again consider whether the reasoning in Bogosian is compatible with the record of this
case.” Id. at 326-27. The court of appeals vacated the class certification order and remanded
the case to the district court for further proceedings consistent with the court’s opinion. Id. at
327.
2. In re Blood Reagents Antitrust Litigation, 783 F.3d 183 (3d Cir. 2015)
In In re Blood, the plaintiffs, who were “direct purchasers of…products used to test
blood compatibility between donors and recipients[,]” sued the defendants, who were the
sellers of those products, for entering into a horizontal price-fixing conspiracy in violation of
§ 1 of the Sherman Act and § 4 of the Clayton Act. In re Blood, 783 F.3d at 185. The
plaintiffs filed a motion to certify class and the court held a hearing on the motion. Id. The
plaintiffs with respect to their motion to certify class relied mostly on expert testimony to
prove antitrust impact was provable on a class-wide basis. Id. at 188 (“[P]laintiffs relied on
expert testimony to produce most of their antitrust impact analyses and damages
models….”). The defendant opposing the class certification 4 challenged the reliability of the
4

The court preliminarily approved the plaintiffs’ settlement with one of the two
defendant-sellers prior to deciding the class certification issues. In re Blood, 783 F.3d at 185.
7

expert opinions proffered by the plaintiffs and the sufficiency of the evidence under Rule 23.
Id. at 188. The district court rejected the defendant’s arguments and granted the motion to
certify class. Id. at 185. The district court, which relied upon Behrend v. Comcast Corp., 655
F.3d 182 (3d Cir. 2011) (“Behrend”), explained that the plaintiffs’ expert’s testimony “‘could
evolve to become admissible evidence’ at trial.” In re Blood, 783 F.3d at 185 (quoting In re
Blood Reagents Antitrust Litig., 283 F.R.D. 222, 240 (E.D. Pa. 2012)). The district court also
rejected the defendant’s arguments about “‘the reliability of plaintiffs’ damages models.’” Id.
at 186.
On appeal, the defendant raised two issues. First, the defendant argued that the district
court erred by “declining to address at class certification whether plaintiffs’ damages models
were capable of producing just and reasonable damage estimates at trial.” Id. at 186.
Specifically, the defendant, citing to Comcast Corp. v. Behrend, 569 U.S. 27 (2013)
(“Comcast”), argued that the “plaintiffs’ expert's methodologies…[could not] prove antitrust
impact as a matter of law because they…[were] incapable of distinguishing lawful price
increases resulting from the creation of a duopoly from price increases resulting from the
alleged price-fixing conspiracy.” In re Blood, 783 F.3d at 186 n.4. Second, the defendant
argued that the district court erred because it did not determine whether the plaintiffs’
expert’s opinions were admissible under Daubert. Id. at 186. With respect to the first issue,
the court of appeals remanded the case because the “‘could evolve’ formulation of the Rule
23 standard” relied upon by the district court was no longer good law in light of the Court’s
decision in Comcast. Id. at 186-87.
With respect to the second issue, the court held:

8

We join certain of our sister courts to hold that a plaintiff cannot rely on
challenged expert testimony, when critical to class certification, to demonstrate
conformity with Rule 23 unless the plaintiff also demonstrates, and the trial
court finds, that the expert testimony satisfies the standard set out in Daubert.
Id. at 187. The court of appeals explained the plaintiff’s burden at the class certification stage
is to prove “through evidentiary proof” that “there are in fact sufficiently numerous parties,
common questions of law or fact, typicality of claims or defenses, and adequacy of
representation, as required by Rule 23(a).” Id. Thus, the “rigorous analysis” of the evidence
required at the class certification stage includes a determination about whether the expert
testimony relied upon to prove the elements of Rule 23 is admissible evidence under Daubert.
In re Blood, 783 F.3d at 187-88. The court explained:
Expert testimony that is insufficiently reliable to satisfy the Daubert standard
cannot “prove” that the Rule 23(a) prerequisites have been met “in fact,” nor
can it establish “through evidentiary proof” that Rule 23(b) is satisfied.
Id. at 187 (citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011)). The Daubert
inquiry is “‘especially important…when a party opposing class certification offers expert
opinion…[because the district court] may be persuaded by the testimony of either (or neither)
party’s expert with respect to whether a certification requirement is met.’” Id. at 188 n.10
(quoting Hydrogen Peroxide, 552 F.3d at 312).
The court of appeals remanded the case with the following instructions:
Because…[the defendant] consistently challenged the reliability of plaintiffs’
expert's methodologies and the sufficiency of his testimony to satisfy Rule
23(b)(3), we leave it to the District Court on remand to decide in the first
instance which of…[the defendant’s] reliability attacks, if any, challenge those
aspects of plaintiffs' expert testimony offered to satisfy Rule 23 and then, if
necessary, to conduct a Daubert inquiry before assessing whether the
requirements of Rule 23 have been met.

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Id. at 188 (emphasis added). The court of appeals explained that the Daubert inquiry should be
limited to “expert testimony offered to prove satisfaction of Rule 23’s requirements.” Id. at
188 n.8. The court of appeals rejected the plaintiffs’ argument that the defendant waived the
opportunity to raise a Daubert challenge because the defendant in the district court
“consistently challenged the reliability of [the] plaintiffs’ expert’s models and the sufficiency
of his testimony to satisfy Rule 23(b)(3).” In re Blood, 783 F.3d at 188 n.9 (emphasis added).
B. Analysis
Cole’s Wexford relies solely upon the expert opinions of Dr. Cantor to prove that the
predominance requirement of Rule 23(b)(3) is satisfied, i.e., antitrust impact and damages are
capable of proof on a class-wide basis. Highmark in support of its opposition to class
certification presented the opinions of Dr. Johnson to prove, among other things, that the
proposed methodology set forth by Dr. Cantor is not reliable. Highmark, however, did not file
a Daubert motion challenging the qualifications of Dr. Cantor or the fit or reliability of her
opinions.
The court—after reviewing the parties’ submissions (including the expert reports
authored by Dr. Cantor and Dr. Johnson) and presiding over the presentation of concurrent
expert evidence—recognizes that: (1) Highmark’s arguments in opposition to class
certification, which were based upon Dr. Johnson’s opinion, raised issues about the reliability
of Dr. Cantor’s methodology; and (2) the court must determine whether Dr. Cantor’s
methodology is reliable under Daubert before considering that methodology in its assessment
of the sufficiency of the evidence under Rule 23(b)(3). (H.T. 11/20/2018 (ECF No. 621) at

10

158-59.) 5 In other words, if the court finds the expert opinions of Dr. Cantor are unreliable
under Daubert, and, thus, inadmissible at trial, Cole’s Wexford cannot rely upon that evidence
in support of its motion to certify class under Rule 23. (Id.)
Counsel for Highmark argued to the court that under Hydrogen Peroxide the court at
the class certification stage is required to make a determination about the sufficiency of the

5

At the class certification hearing, the following exchange occurred between the court
and counsel for Highmark:
THE COURT: So, that's sort of a Daubert, kind of a Daubert issue. But if there
is a proper methodology here and there's some evidence out there that you can
use to support that, then that's where I could weigh in. But if you don't have a
reliable method, I just throw out the expert reports to begin with and, therefore,
there isn't any issue and the ability to find common evidence. I think it's more
fundamental than you are thinking, at least from what I'm understanding your
attack is here. If it's just there is no evidence, you are actually attacking there is
no methodology.
[HIGHMARK’S COUNSEL]: Correct.
THE COURT: Am I wrong about that?
[HIGHMARK’S COUNSEL]: No. You’re not. There is no methodology and
the law requires there to be one. That’s the easiest [way] to get rid of the case.
THE COURT: That’s sort of like the Daubert issue. You’re attacking…[if] there
a methodology. You don’t even go down the road looking for capable of proof
because…the expert’s report is worthless.
…
THE COURT: Will you have to…meet a threshold Daubert standard for me to
even consider the plaintiff's report[?] Because if there is no methodology, then
you don't even bother with capable of proof [issue] because they haven't shown
a methodology to show anything could be capable.
[HIGHMARK’S COUNSEL]: They have shown a theoretical way that they
could establish impact at a trial. That's not a methodology that can support class
certification. We will brief that.

(H.T. 11/20/2018 (ECF No. 621) at 158-60.)
11

evidence presented to satisfy the requirements of Rule 23(b)(3). (H.T. 11/20/2018 (ECF No.
621) at 157; ECF No. 601 at 5-7.) The court agrees with Highmark that Cole’s Wexford must
demonstrate through evidentiary proof that antitrust impact is “capable of proof at trial through
evidence that is common to the class rather than individual to its members.” Hydrogen
Peroxide, 552 F.3d at 311-12. Resolution of a motion to certify class demands a “rigorous
assessment of the available evidence[,]” which in this case includes a “rigorous assessment
of… the method or methods by which…[Cole’s Wexford] propose[s] to use the evidence to
prove impact at trial.” Id. at 321.
Counsel for Highmark, however, erroneously argued to the court that a Daubert
reliability inquiry is not a part of the court’s analysis about the sufficiency of the evidence
under Hydrogen Peroxide. (H.T. 11/20/2018 (ECF No. 621) at 155-5.) 6 Highmark on at least
two occasions represented to the court that was not challenging Dr. Cantor’s opinions as
unreliable and thus inadmissible under Daubert. (ECF No. 601 at 7-8; H.T. 11/20/2018 (ECF
6

Counsel for Highmark at the conclusion of the class certification hearing explained:
It's not a Daubert issue, as Third Circuit cases have said. We didn't file a Daubert
motion. You don't have to decide that in this case. Hydrogen Peroxide says they
have evidence, we have evidence. You have to decide this by a preponderance
of the evidence. And you can't just say the jury might decide that this is, it's not
a reliability question. It's a preponderance of the evidence. That is the entire
point of Hydrogen Peroxide.
…
It's not about reliability. That's a Daubert inquiry. You can say, okay, well, this
is reliable, but it doesn't establish. It doesn't constitute. But you don't have any
actual evidence here of what they plan to do. You do not have a methodology.
…
Well, we're not, we're not saying that what she's saying is junk science. I don't
see a Daubert, I don't see reliability, as the issue that Hydrogen Peroxide brought
clarity to.

(H.T. 11/20/2018 (ECF No. 621) at 155-57.)
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No. 621) at 156-57.) According to Highmark, whether it “move[d] to exclude Dr. Cantor’s
opinion[s] as unreliable…is irrelevant to a consideration of whether it suffices to show that
antitrust impact is capable of proof using common evidence.” (ECF No. 601 at 8 (emphasis
added)). Highmark, however, titled the second major heading of its brief in opposition to
certify class as follows:
COLE’S DID NOT DEMONSTRATE THAT IT HAS A RELIABLE
METHOD TO ESTABLISH CLASS-WIDE IMPACT.
(ECF No. 547 at 2 (emphasis added).) At the hearing on class certification, counsel for
Highmark and Dr. Johnson argued to the court that Dr. Cantor’s proposed methodology is
not reliable. (H.T. 9/19/2018 (ECF No. 587) at 69) (counsel for Highmark arguing that “Dr.
Cantor has not identified a reliable method capable of common proof to show that that
alleged increase in healthcare costs automatically increased base rates and an increase in base
rates automatically increased premiums. She has no method that shows that.”); (H.T.
9/19/2018 (ECF No. 587) at 170-71 (Dr. Johnson arguing “There's no method here. This is a
series of connected dots that are really not connected at all. It's not reliable. It's not enough. It
doesn't actually tell you what you need to know, which is whether or not impact can be
demonstrated to common proof.”).
As this court explained at the conclusion of the class certification hearing and as set
forth in In re Blood, Daubert issues are relevant at class certification. (H.T. 11/20/2018 (ECF
No. 621) at 159.) The court will not assume Dr. Cantor’s opinions are admissible in order to
decide the motion to certify class. The court must undertake a rigorous analysis of the
evidence, which includes a threshold determination under Daubert about whether the
evidence is admissible at trial. If so, then the court will determine whether Cole’s Wexford
13

satisfied its burden to show, among other things, that antitrust impact is capable of proof at
trial via evidence common to the class. In re Blood, 783 F.3d at 187.
Counsel for Highmark is correct that Daubert was not an issue in Hydrogen Peroxide.
In that case, the defendants filed a Daubert motion, which the district court denied, and the
defendants did not appeal that decision to the court of appeals. Hydrogen Peroxide, 552 F.3d
at 315 n.13. The expert evidence analyzed by the court of appeals, therefore, was already
held to be admissible by the district court. Id. In this case, however, Highmark requests the
court to determine that Dr. Cantor’s opinions are unreliable under Rule 23 standards without
first subjecting it to a Daubert analysis. Under In re Blood, to which neither party cites,
however, the court must find that expert testimony that is “critical to class certification”
satisfies the standard set forth in Daubert in order to “demonstrate conformity with Rule 23.”
In re Blood, 783 F.3d at 187. The Daubert inquiry is “especially important” here because
Highmark offered Dr. Johnson’s opinions, which challenged the reliability of Dr. Cantor’s
opinions. Id. at 188 n.10 (quoting Hydrogen Peroxide, 552 F.3d at 323).
The court of appeals in In re Blood instructed the district court on remand to: (1)
determine which of the defendant’s “reliability attacks” challenged the aspects of the
plaintiffs’ expert’s opinions with respect to the requirements of Rule 23; and (2) then, if
necessary, “conduct a Daubert inquiry before assessing whether the requirements of Rule 23
have been met.” In re Blood, 783 F.3d at 188 (emphasis added); see Ctr. City Periodontists,
P.C. v. Dentsply Int'l, Inc., 321 F.R.D. 193, 201 (E.D. Pa. 2017) (citing to In re Blood and
explaining: “this Court first resolves the Daubert Motions before proceeding to the Class
Motion”); Abraham v. Ocwen Loan Servicing, LLC, 321 F.R.D. 125, 150 (E.D. Pa. 2017)
(citing to In re Blood and deciding the defendant’s Daubert motion prior to deciding the
14

motion to certify class); In re Pharmacy Benefit Managers Antitrust Litig., No. CV 03-4730,
2017 WL 275398, at *16 (E.D. Pa. Jan. 18, 2017) (citing In re Blood and deciding whether
expert testimony offered in support of a motion to certify class was admissible under Daubert
before considering the merits of the motion to certify class); In re Processed Egg Prod.
Antitrust Litig., 312 F.R.D. 124, 151 (E.D. Pa. 2015) (citing In re Blood and recognizing that
“[t]o certify a class based on Dr. Stiegert's testimony, the Court would have to first consider
whether Dr. Stiegert's testimony meets the standards set forth in Daubert”).
Here, with respect to the first step, from the hearing already conducted it is clear that
Highmark is challenging the reliability of Dr. Cantor’s proposed methodology that Cole’s
Wexford intends to use at trial to show via evidence common to the proposed class that the
proposed class suffered antitrust impact and damages. Under those circumstances, the court
must proceed to step two and conduct a Daubert inquiry to determine whether Dr. Cantor’s
proposed methodology to prove class-wide antitrust impact and damages is admissible under
Rules 701 and 702.
Based upon the foregoing, the motion to certify class (ECF No. 525) will be denied as
premature because the parties did not address Daubert in their briefing with respect to class
certification or cite to evidence of record in support of the Daubert requirements. The court
must first determine whether Dr. Cantor’s opinions are admissible under Daubert. An order
setting forth the schedule for filing Daubert motions 7 will accompany this memorandum
opinion. As soon as is practicable, the technical advisor’s report, which may address issues
concerning the reliability of Dr. Cantor’s proposed methodology, will be filed on the docket.

7

Cole’s Wexford may challenge the opinions offered by Dr. Johnson under Daubert.
15

The technical advisor’s report may inform the parties’ Daubert briefing. The court will hold a
Daubert hearing in this case at which the technical advisor will be present. The parties may
cite to the transcripts from the class certification hearing in support of their Daubert motions.
The parties shall meet and confer with respect to whether Dr. Cantor and Dr. Johnson should
be present at the Daubert hearing.
This court is concerned with the age of this case and achieving an expeditious
resolution of the case. The court is also mindful of the expense to the parties, but cannot
resolve the motion to certify class without first conducting a Daubert inquiry. Highmark
repeatedly represented that it was not attacking Dr. Cantor’s opinions under Daubert, but Dr.
Johnson’s report and testimony, as well as Highmark’s arguments, belie that assertion.
Cole’s Wexford, therefore, will be provided a fair opportunity to prove that Dr. Cantor and
her opinions satisfy the Daubert standard. If successful, the court will then entertain a
renewed motion to certify class.
Appropriate orders denying as premature the motion to certify class and setting forth
the schedule for filing motions to challenge the qualifications of any proposed expert witness
will be entered.
BY THE COURT,
Dated: March 1, 2019

/s/ JOY FLOWERS CONTI
Joy Flowers Conti
Senior United States District Judge

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