Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal: Settlement in fertility clinics price fixing case gets preliminary approval, (Mar 24, 2016)

By Linda O’Brien, J.D., LL.M.

In a class action by women who sold human egg donor services to fertility clinics that were members of reproductive medicine societies, alleging price fixing of donor compensation, the federal district court in San Francisco has preliminarily approved a settlement requiring the two defendant societies to amend their compensation guidelines to remove dollar limits (Kamakahi v. American Society for Reproductive Medicine, March 23, 2016, Spero, J.).

The American Society for Reproductive Medicine (ASRM) is an organization that is “devoted to advancing knowledge and expertise in reproductive medicine.” Its affiliate, 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 January 2016, the plaintiffs moved for preliminary approval of their settlement with SART and ASRM.

Under the terms of the settlement, the defendants have agreed to amend their compensation guidelines to remove provisions that set forth specific dollar limits of recommended or required levels of compensation to donors. The settlement also provides that the defendants will pay (1) a total of $1.5 million to compensate class counsel for attorney fees and costs; (2) costs of notice to the class of up to $150,000; and (3) awards of $5,000 to each of the four named plaintiffs to compensate them for release of their damages claims.

Approval of settlement agreement. The court found that the proposed settlement was sufficiently fair, reasonable, and adequate to authorize the dissemination of notice to potential class members. The agreement was negotiated at arm’s-length by experienced counsel acting in good faith and there has been adequate opportunity for discovery for experienced counsel to evaluate the claims and risks at the current stage of the litigation.

Additionally, the court determined that the preliminary approval of the proposed settlement was warranted under the prerequisites of Federal Rule of Civil Procedure 23(a) because the members of the settlement class are so numerous that joinder is impracticable; there are issues of law and fact common to the settlement class; the claims of the named representatives are typical of the claims of the settlement class members; and the named representatives will fairly and adequately represent the interests of the settlement class.

Certification of settlement class. For purposes of the settlement, the following class was certified: all women who sold human egg donor services for the purpose of supplying human eggs to be used for assisted fertility and reproductive purposes within the United States from April 12, 2007, to the present, and who intend to sell donor services in the future to any clinic that was a member of SART or any fertility clinic that followed the SART and ASRM compensation guidelines.

A fairness hearing has been scheduled for August 26, 2016 to determine the fairness, reasonableness, and adequacy of the proposed settlement, and to consider class counsel’s petition for attorneys’ fees and expenses.

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

Attorneys: Bryan L. Clobes (Cafferty Clobes Meriwether & Sprengel LLP) and Mark Punzalan (Punzalan Law, P.C.) for Lindsay Kamakahi. Megan Dixon (Hogan Lovells US 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