Fleischman v. Albany Med. Ctr.
| Citation | 728 F.Supp.2d 130 |
| Decision Date | 22 July 2010 |
| Docket Number | No. 06-CV-0765,06-CV-0765 |
| Parties | Wendy FLEISCHMAN and Cindy Cullen, on behalf of themselves and all others similarly situated, Plaintiffs, v. ALBANY MEDICAL CENTER; Ellis Hospital; Northeast Health; Seton Health System; St. Peter's Health Care Service, Defendants. |
| Court | U.S. District Court — Northern District of New York |
Mark A. Griffin, Raymond J. Farrow, Keller Rohrback LLP, Seattle, WA, David P. Dean, Mary Joyce Carlson, James & Hoffman, Washington, DC, Michael D. Hausfeld, Daniel A. Small, Joseph M. Sellers, Charles E. Tompkins, Shelly L. Friedland, Kalpana Kotagal, Cohen Milstein Hausfeld & Toll, PLLC, Washington, DC, Michael P. Lehmann, Thomas P. Dove, Furth Lehmann & Grant LLP, San Francisco, CA, Daniel E. Gustafson, Jason S. Kilene, Gustafson Gluek PLLC, Minneapolis, MN, for Plaintiffs.
Steven E. Bizar, Christopher M. Hapka, Buchanan Ingersoll & Rooney, PC, Philadelphia, PA, Wendelynne J. Newton, Pittsburgh, PA, for Defendant Catholic Health East.
Richard L. Weisz, Hodgson Russ LLP, Albany, NY, David Marx, Amy Carletti, McDermott Will & Emery, LLP, Chicago, IL, April Tabor, McDermott Will & Emery, LLP, New York, NY, for Defendant Albany Medical Center.
Daniel J. Hurteau, Nixon Peabody, LLP, Albany, NY, for Defendant Northeast Healthcare, Inc.
Nicholas J. D'Ambrosio, Bond Schoeneck & King LLP, Albany, NY, for Defendant Ellis Hospital.
Brian M. Culnan, John F. Queenan, Iseman Cunningham Riester & Hyde, LLP, Albany, NY, for Defendant St. Peter's Health Care Service.
Mark W. Thomas, Wilson, Elser, Moskowitz, Edelman & Kicker, LLP, Albany, NY, Philip A. Proger, Toby G. Singer, Michael R. Shumaker, Jones Day, Washington, DC, for Defendants Ascension Health, Inc. and Seton Health System.
DECISION and ORDER
Plaintiffs commenced the instant action against Defendants claiming that they conspired amongst themselves to keep down the wages of registered nurses in the Albany area. Presently before the Court are: (1) Defendants' Joint Motion to Exclude Expert Testimony of Orley Ashenfelter [Docket No. 355/358]; (2) Defendants' Joint Motion to Exclude Expert Testimony of Gregory Vistnes [Docket No. 344/356]; (3) Defendants' Joint Motion for Summary Judgment [Docket No. 345]; and (4) Plaintiffs' Motion to Exclude Portions of Expert Testimony of Robert Willig [Docket No. 342/343].
Plaintiffs allege that during the class period, June 20, 2002 to June 20, 2006, Defendants entered into at least two restraints of trade in violation of the Sherman Act. Count I alleges that Defendants engaged in a continuing conspiracy in restraint of trade to depress the compensation of RNs employed at hospitals in the Albany area. See Docket No. 1. Count II alleges that Defendants have engaged in a continuing agreement to regularly exchange detailed and non-public information about compensation being paid or to be paid to their RN employees, which not only facilitated the enforcement of the wage suppression conspiracy but unreasonably restrained competition on RN compensation in its own right. Id.
In a Decision and Order dated July 28, 2008, the Court certified a class of registered nurses with respect to two issues: "whether there has been a violation of antitrust law and whether there has been injury to the class that the Sherman Act was designed to prevent." Fleischman v. Albany Medical Center, 2008 WL 2945993, at *7 (N.D.N.Y. July 28, 2008). Following merits discovery, Plaintiffs moved the Court to amend the prior certification orderto additionally certify the issues of impact and damages as to a narrower class of registered nurses. The Court denied Plaintiffs' motion. All Defendants have settled with Plaintiffs except Albany Medical Center and Ellis Hospital.
Presently before the Court are: (1) Defendants' Joint Motion to Exclude Expert Testimony of Orley Ashenfelter; (2) Defendants' Joint Motion to Exclude Expert Testimony of Gregory Vistnes; (3) Defendants' Joint Motion for Summary Judgment; and (4) Plaintiffs' Motion to Exclude Portions of Expert Testimony of Robert Willig. The facts as pertinent to each motion are set forth as follows.
Defendants move to exclude Orley Ashenfelter, who will testify concerning anticompetitive effect, injury-in-fact, and damages. Ashenfelter "currently serves as the Joseph Douglas Green Professor of Economics at Princeton, where he specializes in labor economics, and was recently elected to serve as President of the American Economic Association." See Plaintiffs' Opposition Memo. at 3. He has previously served "as the director of the Office of Evaluation of the U.S. Department of Labor and had testified for the Federal Trade Commission in a variety of antitrust matters." Id. at 4.
Ashenfelter opines "the fees that Defendants paid for agency nurses, when appropriately adjusted, are equal to or less than competitive staff nurse wages because in a competitive market employees are paid what they are worth." Plaintiffs' Opposition Memo. at 5. Ashenfelter selects agency nurses as a benchmark because they are used as a substitute for staff nurses in the workplace and their wages are not set by the Defendant hospitals.
Ashenfelter first determined the rates paid to agency nurses by Defendants during the class period. He then estimated separate competitive wages by hospital and year and for specialty and non-specialty jobs, shift differentials and on-call status because agency nurse wage rates were separately set for each of these variables. Next, these rates were adjusted so as to account for the flexibility offered by agency nurses and the additional costs incurred to employ staff nurses such as payroll taxes, workers compensation, human resources costs, and recruitment costs. Ashenfelter then compared this agency nurse wage benchmark to actual earnings of staff nurses, as reflected in payroll records. The analysis purports to take into account straight-time, overtime, shift differentials, on-call status, bonuses, and tuition. Ashenfelter concluded that Plaintiffs and most other staff nurses should have, on average, earned 21% more than they were actually paid.
Ashenfelter also opines that in a competitive market more RNs would have been employed. Ashenfelter's report explains that underutilization is an anticompetitive effect of the conspiracy to depress RN wages.
Defendants challenge the reliability of Ashenfelter's methodology arguing that it is inadmissible under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and should be excluded from consideration both on summary judgment and at trial. Specifically, Defendants argue that Ashenfelter's methodology should be excluded because: (1) it is based on an assumption that contradicts his claims of anticompetitive effect, impact, and damages; (2) the "but for wages" do not vary by the experience of the nurse; (3) it is premised on theidea that Defendants made extensive long term use of agency nurses; (4) the "but for wages" are not credible; (5) the rate of employment of nurses in the Albany area is no different from the rate in New York state as a whole; (6) Ashenfelter did not assess whether there was a conspiracy or whether the anticompetitive effects resulted from a conspiracy or some other cause; (7) it applies only to the smaller subclass that the Court rejected; and (8) it is not reliable to prove impact and damages for the two named plaintiffs.1
Plaintiffs maintain that Defendants' criticisms are unfounded or go to the weight of the evidence, rather than its admissibility. Specifically, Plaintiffs respond that Ashenfelter's methodology is reliable and admissible because: (1) he employed widely acceptable and reliable methods; (2) he properly relied on widely accepted economic principles and peer reviewed materials; (3) his benchmark comparisons reliably show impact and measure damages; (4) Defendants challenge results and not methodology; (5) agency bill rates allow reasonable estimation of competitive staff nurse wages; and (6) the validity of Ashenfelter's benchmark does not depend on whether the use of agency nurses was excessive.
Defendants also move to exclude Gregory Vistnes, who will testify that Defendants conspired to suppress nurse compensation or agreed to exchange confidential information for the purpose, or with the effect, of doing so. "Dr. Vistnes is a Vice President at Charles River Associates, an international economics and business consulting firm." See Plaintiffs' Opposition Memo. at 1. He has also "served as Deputy Director for Antitrust in the Federal Trade Commission's Bureau of Economics" and "held several positions in the Economic Analysis Group of the U.S. Department of Justice's Antitrust Division, including Assistant Chief of the Economic Regulatory Section." Id. at 1-2.
Although Defendants seek to exclude all of the expert testimony of Vistnes, Defendants specifically dispute the reliability of two opinions; his facilitation opinion and his softened competition opinion.
Vistnes' "facilitation opinion" asserts that "Defendants' information sharing made it easier [for Defendants] to form and maintain a wage-fixing agreement." See Plaintiffs' Opposition Memo. at 6. Specifically, it concludes "that direct, regular exchanges of detailed compensation information made it easier for Defendants to coordinate on nurse compensation." Id. Plaintiffs contend that this opinion is based "on a thorough understanding of the economics literature on information exchange, ... and a full examination of the discovery record regarding Defendants' 60+ information exchanges." Id. at 9.
Vistnes' "softened competition opinion" asserts that "the information exchanges in this case ... reduced Defendants' incentive to compete." See ...
To continue reading
Request your trial
-
In re Dealer Mgmt. Sys. Antitrust Litig.
...E. Harrington, and W. Kip Viscusi, as well as the Handbook of Antitrust Economics"); see also, e.g., Fleischman v. Albany Medical Center , 728 F. Supp. 2d 130, 159–60 (N.D.N.Y. 2010) (identifying a number of "plus factors" as "relevant to the determination of whether circumstantial evidence......
-
AngioDynamics, Inc. v. C.R. Bard, Inc.
...that if certain conduct did occur, economists would expect the market to react in a particular way"); Fleischman v. Albany Med. Ctr. , 728 F. Supp. 2d 130, 151-52 (N.D.N.Y. 2010) ("[Plaintiffs’ expert] seeks to testify that the information exchanges, engaged in by the Defendant hospitals, m......
-
Shanus v. R.L. Americana, LLC
...are the traditional and appropriate means of attacking shaky but admissible evidence."); see also Fleischman v. Albany Med. Ctr., 728 F. Supp. 2d 130, 147 (N.D.N.Y. 2010) (explaining, in another case in which Ashenfelter's testimony was challenged, that "[t]he fact that Defendants dispute A......
-
Krause v. CSX Transp.
...permitted to testify as to the ‘knowledge, motivations, intent, state of mind, or purposes' of others.” Fleischman v. Albany Medical Center, 728 F.Supp.2d 130, 167–168 (N.D.N.Y.2010) (citing In re Fosamax Products Liability Litigation, 645 F.Supp.2d 164, 192 (S.D.N.Y.2009); In re Rezulin Pr......
-
Clearance: Proskauer's Quarterly Antitrust Update - Fall 2012
...this issue at the present, advanced stage of this protracted litigation." Id. at *4, 22Seealso Fleischman v. Albany Medical Center, 728 F. Supp.2d 130, 158 (N.D.N.Y. 2010, the facts of which are similar to Cason-Merenda, and resulted in a settlement. In Fleischman, plaintiff RNs alleged tha......
-
Noncompete News - February 2014
...Center, 862 F. Supp. 603 (E.D. Mich. 2012) (hospital sharing of wage information for nurses); Fleischman v. Albany Medical Center, 728 F. Supp. 2d 130 (S.D. N.Y. 2010) (direct coordination by HR personnel of current and future Employers often use wage surveys to remain competitive in the of......
-
Experts
...the actual computation of damages may suffer from minor imperfections.”) (citation omitted); Fleischman v. Albany Medical Center, 728 F. Supp. 2d 130, 148 (N.D.N.Y. 2010) (antitrust damages rarely can be determined with certainty and must be based on a “just and reasonable estimate”). As a ......
-
Tacit Agreement Under Section 1 of the Sherman Act
...F.3d 651, 654 (7th Cir. 2002). Courts continue to quote Posner’s statement after Twombly . See, e.g. , Fleischman v. Albany Med. Ctr., 728 F. Supp. 2d 130, 157 (N.D.N.Y. 2010); In re Ethylene Propylene Diene Monomer (EPDM) Antitrust Litig., 681 F. Supp. 2d 141, 166 (D. Conn. 2009). 59 635 F......
-
Legal Analysis of Joint Venture Formation and Conduct
...(affirming finding of harm to competition based on reduction in supply of toys to wholesale clubs); Fleischman v. Albany Med. Ctr., 728 F. Supp. 2d 130, 163 (N.D.N.Y. 2010) (concluding that evidence of depressed nurse wages was sufficient evidence of harm to competition resulting from compe......
-
Table of Cases
...2d 1133 (N.D. Cal. 2009), 53 In re Flat Glass Antitrust Litig., 385 F.3d 350 (3d Cir. 2004), 52 Fleischman v. Albany Medical Center, 728 F. Supp. 2d 130 (N.D.N.Y. 2010), 189, 195 In re Flonase Antitrust Litig., 723 F. Supp. 2d 761 (E.D. Pa. 2010), 79 In re Flonase Antitrust Litig., 907 F. S......