Thursday, April 1, 2010

Class action decision

In Sacred Heart Health Systems v. Humana Military Healthcare Services, the Court reversed the district court's determination under Fed. R. Civ. P. 23 to certify a class in a case brought by 260 hospitals against Humana. Why? The Court agreed with Humana that "many important uncommon questions raised by this litigation overwhelm the one common issue and render the case unsuitable for class treatment." For instance, breach of contract claims are "peculiarly driven by the terms of the parties' agreement, and common questions rarely will predominate if the relevant terms vary in substance among the contracts." (The Court noted that a form contract would better suit class certification.) The Court also noted the differences in the applicable state laws governing those contracts. The Court acknowledged the disparity in power between Humana and "even the largest of the class members here." Nonetheless, it remanded the case to the district court to determine whether any subset of the claims or class members might be suspectible of fair and efficient class treatment.

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