Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Preliminary approval of settlement sought in fertility clinics price fixing case, (Feb 2, 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—concerning guidelines that restricted donor compensation—the two defendant societies have agreed to settle the action by amending their compensation guidelines to remove dollar limits, according to a motion for preliminary approval of the settlement filed in the federal district court of San Francisco (Kamakahi v. American Society for Reproductive Medicine, January 29, 2016).

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, however, 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. In April 2015, Kristin Wells and Chelsey Kimmel were allowed to intervene as plaintiffs in order to seek injunctive relief on behalf of a subclass of donors who intend to donate again.

The plaintiffs are seeking preliminary approval of a proposed settlement under which 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.

The plaintiffs propose amending the class definition and preliminarily certifying the following class for settlement purposes: 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.

According to the plaintiffs’ motion, the proposed settlement satisfies both the procedural and substantive components for preliminary approval. The proposed class is sufficiently numerous and the question of whether the guidelines violate antitrust laws was a question common to all class members and susceptible to resolution by common proof. The proposed class representatives will fairly and adequately protect the interests of the class and have retained qualified and experienced counsel.

Additionally, the settlement was the product of hard fought, non-collusive negotiations spanning over a year and after extensive discovery. There were experienced counsel on both sides that had comprehensive understanding of the strengths and weaknesses of each party’s respective claims and defenses. Finally, the case presents complex and hotly contested issues and the settlement provides significant, meaningful, and immediate relief to the class.

Attorneys: Rosemary M. Rivas and Michael G. McLellan (Finkelstein Thompson LLP) and Bryan L. Clobes (Cafferty Clobes Meriwether & Sprengel LLP) for Lindsay Kamakahi and Justine Levy.

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

News: Antitrust CaliforniaNews