Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Prospective egg donors’ motion to intervene granted in price fixing case against fertility clinics, (Apr 28, 2015)

By Linda O’Brien, J.D., LL.M.

A magistrate judge in the federal district court in San Francisco has granted a motion to intervene by two prospective egg donors in a class action by women who sold human egg donor services to reproductive services companies that allegedly engaged in horizontal price fixing by limiting donor compensation (Kamakahi v. American Society for Reproductive Medicine, April 27, 2015, Spero, J.).

Background. The American Society for Reproductive Medicine (ASRM) is an organization that is “devoted to advancing knowledge and expertise in reproductive medicine.” Its affiliated society, Society for Assisted Reproductive Technology (SART) is a primary organization of professionals that are dedicated to the practice of assisted reproductive technologies in the United States. Plaintiffs Lindsay Kamakahi and Justine Levy donated eggs at SART member clinics and received compensation. They filed a putative class action against SART and ASRM, alleging that the defendants’ ethical guidelines—which limited “appropriate” compensation—constituted an unlawful horizontal price fixing agreement, in violation of the Sherman Act.

In February 2015, the court certified a plaintiffs’ class for the purpose of determining whether the defendants’ compensation guidelines violate the Sherman Act. However, the court declined to certify a subclass of past donors who intended to donate again, since neither plaintiff demonstrated any such intent. Kristin Wells and Chelsey Kimmel moved to intervene as plaintiffs in order to seek injunctive relief on behalf of a subclass of donors who intend to donate again.

Both Wells and Kimmel submitted declarations that they have donated eggs in the past and intend to do so again. They have taken concrete steps to donate within the next year, including notifying two agencies of their intent to donate and signing consent forms relating to their next donation.

The court determined that the proposed intervenors, Wells and Kimmel, timely presented their motion to permit intervention. Of the three requirements of Federal Rule of Civil Procedure 24(b) — commonality, timeliness, and jurisdiction — the defendants disputed only the timeliness of the proposed intervenors’ motion.

Timeliness. Although the litigation was not in the early stages, a mere lapse of time did not necessarily bar intervention, according to the court. The proposed intervention did not meaningfully implicate any stage of the case before the class certification. Moreover, there was no prejudice to the defendants, since intervention would not lead to the relitigation of issues, such as the denial of the defendants’ motion to dismiss or denial of certification of a damages class. Although the defendants may be required to appear at two class certification hearings instead of one, due to the timing of the intervention motion, a denial of said motion would not extinguish the proposed intervenors’ claims.

The defendants’ argument that the class counsel failed to select appropriate class representatives and should not be allowed multiple attempts at class certification was rejected. The court noted that “as a practical matter, it makes little sense to foreclose a more efficient resolution of the overall case because class counsel made a legal error that they have now corrected, without significant prejudice to defendants.” Therefore, the court concluded that the motion was sufficiently timely to warrant permissive intervention.

The case is No. 3:11-cv-01781-JCS.

Attorneys: Bryan L. Clobes (Cafferty Clobes Meriwether & Sprengel LLP) for Lindsay Kamakahi. Megan Dixon (Hogan Lovells U.S. LLP) for American Society for Reproductive Medicine, and Society for Assisted Reproductive Technology.

Companies: American Society for Reproductive Medicine; Society for Assisted Reproductive Technology

Cases: Antitrust CaliforniaNews