Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Dentists unable to extract class certification from court in dispute with Delta Dental insurers, (Sep 23, 2025)

By Justin Marcus Smith, J.D.

The dentists did not satisfy predominance because they failed to account for local market conditions.

A putative class of dentists failed to establish the necessary Fed. R. Civ. P. 23(b) predominance for class certification in their antitrust suit against the Delta Dental insurance association and its members, held the federal district court in Chicago. First, the court found the record suggested that the alleged market restraints served plausible procompetitive purposes enabling Delta Dental to compete with national insurers. Accordingly, the rule of reason applied. Turning to class certification, the court reasoned the dentists’ evidence was too reliant on nationwide Delta Dental enrollment averages that did not account for local variations in charge and reimbursement rates. The court did not exclude the dentists’ expert evidence, it simply found it unpersuasive for class certification purposes (In re Delta Dental Antitrust litigation, No. 1:19-cv-06734 (N.D. Ill. Sept. 22, 2025)).

Background. In 2019, ten dentist and dental practices representing a putative class complained that 39 Delta Dental “member companies” (insurers licensed to use the Delta Dental name, collectively, the DDMCs) and the Delta Dental Plan Association (DDPA, collectively Delta Dental), formed a buyers’ cartel to exercise monopsony power and restrain competition in the dental insurance business.

Three quintessentially anticompetitive facets of the alleged conspiracy were: (1) a market allocation agreement dividing the dental insurance market into 39 states or territories, allocating exclusive control of each to a specific insurer, and providing none would sell or attempt to sell dental insurance outside of its own allocated territory (exclusive service areas or ESAs); (2) a price-fixing agreement fixing artificially low reimbursement rates to providers of dental goods and services, enforced through Delta Dental market domination; and (3) a revenue agreement restricting the amount of revenue that any Delta Dental insurer could derive from selling non-Delta Dental -branded dental insurance.

In 2020, the district court denied the Delta Dental motion to dismiss. The court determined that the dentists’ allegations describing the Delta Dental insurers’ use of a market allocation mechanism articulated a viable per se violation of the Sherman Act. The court also determined that allegations describing use of a price fixing agreement and revenue restriction mechanism, if proven, may entitle the dentists to relief.

The defendant DDMCs did not dispute they agreed to operate only in their respective ESAs. However, they argued the arrangement was procompetitive. The Delta Dental also acknowledged DDMCs share information in a centralized database about reimbursement rates they pay to dental providers in their respective ESAs. Again, Delta Dental claimed this made for more efficient payment, because DDMCs are often responsible for paying out-of-network claims, as well as better ability to compete with insurers who offer multistate dental plans. However, Delta Dental denied it was involved in price fixing. Last, Delta Dental argued second brands do in fact compete with them.

At length, and with a number of Daubert motions pending, the plaintiffs moved for class certification. Delta Dental argued determinations of antitrust impact and damages would require individualized proof. The district court denied class certification. The district court also denied two Daubert motions, granted one other, and denied two others as moot.

Rule of reason. The court held this was not a case subject to per se analysis. The DDMCs raised plausible arguments that they believed the challenged practices were procompetitive when they adopted them.

The dentists argued for per se antitrust analysis because the alleged conspiracy incorporated three kinds of restraints the Supreme Court has identified as unlawful per se: market allocations; horizontal price-fixing; and output restrictions. Delta Dental also combined them. The court said the labels the dentists applied to the DDMCs conduct masked the history and nuances of the Delta Dental association.

Originally, employer groups, trade unions, and others sought such insurance associations because they could not provide effective multistate coverage on their own. The need for efficient nationwide coordination crystallized after Delta Dental of California won a contract with the United States Department of Defense, the largest dental plan ever written at the time. To facilitate coordination, what is now the DDPA created a National Provider File (NPF) to let DDMCs share information about the providers in their networks. ESA restrictions set the limits on intra-association competition and protect “in-network” rates. A multi-state employer must generally contract with the DDMC whose ESA covers the location of the employer’s headquarters. For example, the NPF database facilitates the processing of claims for McDonald’s Wisconsin employees, who are not in McDonald’s headquarters state of Illinois, at the reimbursement rate set forth for the provider’s contract with Delta Dental of Wisconsin. The court concluded the outline of the information exchanges at issue here were a natural result of a state insurance regulatory structure, with built-in geographic limitations, that has long authorized the sharing of information for the benefit of enrollees. In short, the Delta Dental association might be a legitimate and efficient collaboration allowing DDMCs to compete effectively with national insurers.

The court said the dentists did not offer evidence to suggest the DDMCs were actual or potential competitors when they joined together in the DDPA at the behest of the American Dental Association to offer multistate group dental plans, as national insurers could inherently do. Delta Dental, meanwhile, offered several putative procompetitive justifications. Moreover, whether the DDPA made a “new product” was not dispositive of per se or rule of reason treatment.

Evidence about the multi-state claims processing policies, and the manner applied, similarly counseled against the dentists’ interpretation of them as per se unlawful price-fixing.

As for the “effective discounts,” the dentists pointed to evidence that this standard placed downward pressure on provider reimbursements, but Delta Dental said these were not “reimbursement discounts.” In short, evidence that one DDMC lowered some provider reimbursement rates to comply with the effective discount standard did not suggest that all DDMCs were required, agreed, or did adopt this strategy for contracted providers. Accordingly, the court said the evidence presented called for rule of reason scrutiny.

Last on this point, the dentists did not contend that anything in the DDPA membership standards imposed second brand restrictions. If anything, the record contained evidence that the DDPA formally authorized DDMCs to operate second brands that compete with Delta Dental branded insurance. The court said the dentists, meanwhile, appeared to draw a “long bow” with their expert evidence to the contrary. The dentists’ evidence was not enough to show the DDMCs imposed unlawful per se output restrictions.

R. 23(a). The court said it did not need to decide R. 23(a) satisfaction because the dentists did not satisfy the more demanding criteria of R. 23(b)(3). With respect to R. 23(a), all agreed that the dentists’ proposed class of about 240,000 dental providers satisfied numerosity. Delta Dental did not dispute the existence of common issues of law and fact, but it did dispute that the dentists, who were from only 8 states, were not typical of the proposed nationwide class due to geographically disparate charge and reimbursement rates. Delta Dental also questioned the adequacy of the dentists’ class representatives. Again, the court reserved about R. 23(a) because it denied class certification for lack of predominance under R. 23(b)(3).

R. 23(b). There was no dispute the DDMCs had an agreement, but the court did not find the dentists’ expert evidence persuasive on the question of R. 23(b)(3) predominance. The court applied the AmEx burden-shifting framework. See Ohio v. Am. Express Co., 585 U.S. 529, 541 (2018). The parties’ views on the relevant geographic market were in sharp contrast. The dentists said it was the entire United States, but Delta Dental insisted any impact must be assessed locally in each of the thousands of geographic dentistry markets.

The court concluded the dentists’ proposed geographic market did not correspond to the commercial realities of the industry. The evidence overwhelmingly showed dental patients choose providers close to where they live or work. The availability of substitute buyers depends on insurance coverage in local communities and sometimes payment out-of-pocket. In areas with few Delta Dental patients, the DDMCs have little market power over the provider.

The dentists urged the court to look at Delta Dental’s national average market-share. However, the dentists’ expert on this point, Dr. Bamberger, did not show why a provider in a region with modest Delta Dental presence would feel forced to join the local DDMC network. Providers pick networks based in part on the number of available patients. The court also noted evidence of bi-directional network effects that “can and do influence provider reimbursement rates.” Whether or not this qualified as an AmEx “two-sided transaction platform,” it was clear the dentists did not account for local market conditions influencing DDMC reimbursement rates to providers.

The court also rejected the dentists’ suggestion that other common issues, like the DDMCs conduct and motivations, were enough to satisfy predominance. The dentists’ contentions here were not relevant to the essential inquiry of whether or not the challenged restraints might have enhanced competition.

Daubert motions. The court said its rejection of the dentists’ proposed nationwide market definition vitiated most of Dr. Bamberger’s expert opinion. His opinion depended on Delta Dental national enrollment shares in 2019 and 2020. Even assuming the figures were correct, the court found Dr. Bamberger relied too much on enrollment averages that ignored the importance providers placed on local Delta Dental market share. As a result of Dr. Bamberger’s view that Delta Dental market share in the DDMC respective operating areas has no bearing on reimbursement rates offered, he failed to engage meaningfully with evidence of a positive correlation between enrollment shares and reimbursement percentages.

Even so, the court held the Bamberger analysis was not something to exclude. The court said Dr. Bamberger drew a rational connection between the evidence he cited and the conclusions he drew. Rather than exclude this evidence of Delta Dental monopsony power, the court simply found it unpersuasive.

For roughly the same reasons, the court also declined to exclude the expert testimony of a Delta Dental expert, Dr. Murphy, who offered an opinion about two-sided network effects. The court decided to exclude the expert testimony of a dentist’s expert, Dr. Lewin, because the court said the dentists did not explain how spending of allegedly ill-gotten gains was relevant or made it any more or less likely that the challenged restraints suppressed competition. Last, the court denied as moot the dentists’ motions to exclude two other experts because Delta Dental only offered them in response to the excluded Lewin opinions.

The Case is No. 1:19-cv-06734.

Judge: Bucklo, E.

Attorneys: Jay S. Handlin (Wollmuth Maher & Deutsch LLP) for Rittenhouse Smiles, P.C. Elisa Greer Beneze (Dechert, LLP) for Delta Dental Insurance Co.

Companies: Rittenhouse Smiles, P.C.; Delta Dental Insurance Co.

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