Antitrust Law Daily Wrap Up, ANTITRUST NEWS: $42M settlement reached in hospital wage suppression conspiracy suit, (Sep 14, 2015)

By Greg Hammond, J.D.

Two Detroit-area nurses have reached a $42 million settlement of class claims that VHS of Michigan, Inc., doing business as Detroit Medical Center (DMC), conspired with other area hospitals to suppress wages. Acting as representatives of a class of hospital nurses, they filed a motion for preliminary approval of the proposed settlement on September 11, 2015 (Cason-Merenda v. Suhre, Dkt. 06-15601).

Pat Cason-Merenda and Jeffrey A. Suhre filed suit against eight local hospitals, alleging a conspiracy to suppress wages in violation of the Sherman Act. Specifically, they claimed that the hospitals: (1) conspired among themselves and with other local hospitals to hold down the wages of registered nurses employed at these hospitals; and (2) exchanged compensation-related information among themselves that reduced competition among Detroit-area hospitals in the wages paid to registered nurses. DMC is the only hospital that had not settled the nurses’ claims. The previous settlements with the other hospitals collectively amounted to a recovery of over $48 million.

The plaintiffs claim that settlement is in the range of possible approval and is fair, reasonable, and adequate because the parties engaged in arms-length negotiations over many years, including numerous sessions with a court-appointed settlement master; DMC and the class were represented by experienced counsel; and the settlement was executed just weeks before trial was set to begin.

In addition, Cason-Merenda and Suhre assert that the agreement provides certainty and a substantial settlement amount to be paid to members of the class that avoids the risk of ongoing litigation. Such substantial relief, according to the plaintiffs, is far preferable to the possibility of a smaller recovery or none at all, and will be available much sooner than if litigation against DMC continued through trial and appeal.

Attorneys: Raymond J. Farrow (Keller Rohrback L.L.P.), Daniel A. Small (Cohen Milstein Sellers & Toll PLLC), David P. Dean (James & Hoffman, PC), E. Powell Miller (The Miller Law Firm, PC), Daniel E. Gustafson (Gustafson Gluek PLLC), and Joseph Goldberg (Freeman, Boyd, Hollander, Goldberg, Urias, & Ward, P.A.) for plaintiffs.

Companies: VHS of Michigan, Inc.

News: Antitrust