The opinion of the court was delivered by: Chesler, District Judge
This matter comes before the Court on Plaintiffs' renewed motion for class certification pursuant to Federal Rule of Civil Procedure 23. The Court denied Plaintiffs' initial motion for class certification by Order of February 11, 2009, which was accompanied by an Opinion indicating deficiencies that prevented certification of the previously proposed class under Rule 23(b)(2) and four proposed subclasses.*fn1 The instant motion, which attempts to cure those deficiencies, differs in several material respects from the initial motion.*fn2 Plaintiffs have redefined four proposed classes: the Post-EOB Billing Class, the Medicare Part B Class, the Anthem BCBS FEHB Class and the Debt Collection Victims Class. Plaintiffs, moreover, no longer seek to certify a class for injunctive relief and/or equitable relief but rather seek certification of those four classes under Rule 23(b)(3) for money damages. None of the classes assert an ERISA claim or a common law fraud claim. Defendant Quest Diagnostics, Inc. ("Defendant" or "Quest"), which is targeted by three of the four classes, has opposed the motion. The Debt Collector Defendants ("DCDs") *fn3 have filed their own joint opposition to the motion for class certification, which incorporates the arguments raised by Quest in its opposing papers.
Also before the Court is a motion filed by Plaintiffs for an order permitting the intervention of Katrina Camaj as a named Plaintiff in this action pursuant to Federal Rule of Civil Procedure 24 or to join her as a Plaintiff pursuant to Federal Rule of Civil Procedure 20 or 21. Alternatively, they move to amend the Complaint pursuant to Federal Rule of Civil Procedure 15 to add her as a Plaintiff. Plaintiffs propose to add Camaj so that she may serve as the representative for the Medicare Part B Class. Quest has opposed this motion.
The Court heard oral argument on the motions on September 7, 2010. The Court requested supplemental briefing following argument. It has considered the arguments made by counsel at the proceedings of September 7 as well as the papers submitted by the parties. For the reasons discussed below, the Court denies the class certification motion in its entirety.
On this renewed motion, Plaintiffs seek certification under Rule 23(b)(3) of four classes of alleged victims of the billing practices employed by Quest, and as to one of the classes, of the debt collectors Quest employed to pursue unpaid bills. The Court begins its analysis by setting forth the definition of each proposed class and the claims for which each class seeks to be certified, followed by the standard that each class must satisfy as to each claim it wishes to pursue as a Rule 23(b)(3) class.
A. Post-EOB Billing Class
Plaintiffs define this class as:
All natural persons in the United States of America and its territories who are or were members, participants, subscribers or beneficiaries of a health insurance plan provided by an insurance provider or administered by a third party administrator ("TPA") with whom Quest Diagnostics, Inc ("Quest") had a participating provider contract, were billed by Quest or its agent and paid an amount in excess of the stated patient responsibility on an Explanation of Benefits ("EOB") or Electronic Remittance Advice ("ERA") provided to Quest prior to the date of the Quest bill.
This class asserts claims under the consumer fraud statutes of all fifty states and the District of Columbia, under the federal RICO statute and under a common law theory of unjust enrichment. The claims are directed only against Defendant Quest. The proposed class representative is Richard Grandalski, with alternative proposals of Elizabeth Cruthers and Aria McKenna.
Plaintiffs define this class as:
All natural persons in the United States of America and its territories who are or were participants or beneficiaries of Medicare Part B, and who paid any portion of bills from Quest Diagnostics, Inc. ("Quest"), when Quest did not have an Advanced Beneficiary Notice ("ABN") completed on the form approved by the Centers for Medicare and Medicaid Services ("CMS") and a determination of patient responsibility from Medicare Part B or its administrators.
This class asserts claims under the consumer fraud statutes of all fifty states and the District of Columbia, under the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq. , and under a common law theory of unjust enrichment. The claims are directed only against Defendant Quest. The proposed class representative is Katrina Camaj.
C. Anthem BCBS FEHB Program Class
Plaintiffs define this class as:
All natural persons in the United States of America and its territories who are or were members, participants, subscribers or beneficiaries of Anthem Blue Cross and Blue Shield and the Federal Employees Health Benefits ("FEHB") Program and who were billed by and paid to Quest Diagnostics, Inc. ("Quest") or its agent(s) an amount in excess of the stated patient responsibility on an Explanation of Benefits ("EOB") or Electronic Remittance Advice ("ERA") provided to Quest prior to the date of the Quest bill.
This class asserts claims for breach of contract, for violation of the consumer fraud statutes of all fifty states and the District of Columbia, and for unjust enrichment. The claims are directed only against Defendant Quest. The proposed class representative is Richard Grandalski.
D. Debt Collection Victim Class
Plaintiffs define this class as:
All natural persons in the United States of America and its territories who received written demands from debt collectors retained by Quest Diagnostics, Inc. ("Quest"), which demands: i) stated that the debt collector may engage in "additional" or "further" collection efforts or may report a delinquency to credit bureaus; or ii) added interest, charges or penalties in excess of the original amount billed by Quest.
This class asserts claims under the federal Fair Debt Collection Practices Act ("FDCPA"), the consumer fraud statutes of all fifty states and the District of Columbia, the federal RICO statute and the common law theory of unjust enrichment. The claims are directed at the DCDs, but not at Quest. The proposed class representatives are Richard Grandalski, Aria McKenna, Richard Ranieri, and Christine Ranieri.
II. STANDARD FOR CERTIFICATION UNDER RULE 23(B)(3)
To obtain certification, Plaintiffs must demonstrate that each of the putative classes meets the threshold requirements of Rule 23(a) as well as one of the three Rule 23(b) categories under which they wish to proceed as a class. In re Prudential Ins. Co. of Am. Sales Practices Litig. Agent Actions, 148 F.3d 283, 308-09 (3d Cir. 1998). In moving for class certification, a movant has the burden of proving that all requirements of Rule 23 are met. General Telephone Co. of the Sw. v. Falcon, 457 U.S. 147, 161 (1982). In this case, Plaintiffs have sought certification of four different classes under Rule 23(b)(3), which permits certification when "questions of law or fact common to class members predominate over any questions affecting only individual members" and when "a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed.R.Civ.P. 23(b)(3). The Third Circuit recently reiterated the well-established standard for certification, holding as follows:
Every putative class must satisfy the four requirements of Rule 23(a): (1) the class must be "so numerous that joinder of all members is impracticable" (numerosity); (2) there must be "questions of law or fact common to the class" (commonality); (3) "the claims or defenses of the representative parties" must be "typical of the claims or defenses of the class" (typicality); and (4) the named plaintiffs must "fairly and adequately protect the interests of the class" (adequacy of representation, or simply adequacy). Fed.R.Civ.P. 23(a)(1)-(4). If those requirements are met, a district court must then find that the class fits within one of the three categories of class actions in Rule 23(b).
In re Community Bank of N.Va. , - F.3d -, 2010 WL 3666673 at *12 (3d Cir. Sept. 22, 2010) ("Community Bank II").
In Community Bank II, the Third Circuit proceeded to specify that when certification under Rule 23(b)(3) was sought, the district court could not certify a class unless two additional requirements had been met: "(i) common questions of law or fact predominate (predominance), and (ii) the class action is the superior method for adjudication (superiority)." Id. Predominance is similar to Rule 23(a)(2)'s requirement of commonality in that both are concerned with ensuring that the putative class presents common questions of law of fact. Indeed, where Rule 23(b)(3) certification is sought, the commonality inquiry is subsumed into the predominance analysis. Danvers Motor Co. v. Ford Motor Co., 543 F.3d 141, 148 (3d Cir.2008). Predominance, however, imposes a "far more demanding standard," as it "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." In re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 266 (3d Cir. 2009) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623-24 (1997)). The Third Circuit has emphasized the stringent nature of the predominance requirement, explaining that it may be satisfied only when "common issues predominate over issues affecting only individual class members." Id. (quoting In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 527-28 (3d Cir. 2004)). Rule 23(b)(3)'s superiority requirement focuses the Court on manageability concerns. It must consider whether a trial of the claims by representation would pose difficulties such that some other method of adjudication would be superior to class certification. In re Cmty. Bank of N. Va., 418 F.3d 277, 309 (3d Cir. 2005). The rule lists four factors relevant to a court's evaluation of predominance and superiority. They are:
(A) the class members' interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action. Fed.R.Civ.P. 23(b)(3). This list is not exhaustive, and courts may consider other pertinent factors in deciding whether a case is suited to class certification. Amchem, 521 U.S. at 615-16.
A court cannot satisfy itself that a class meets Rule 23's standard in some abstract, theoretical way; instead, it must conduct a rigorous analysis based on the elements of the claim or claims a named plaintiff seeks to pursue in a representative capacity on behalf of the putative class. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 311 (3d Cir. 2009). "A class certification decision requires a thorough examination of the factual and legal allegations." Id. (quoting Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 166 (3d Cir. 2001)). The Rule 23 analysis indeed "may include a preliminary inquiry into the merits" insofar as the merits of the claim may be relevant to the class certification analysis. Hohider v. United Parcel Svc., Inc., 574 F.3d 169, 176 (3d Cir. 2009); Hydrogen Peroxide, 552 F.3d at 307. If the Court finds that the action, or any portion thereof, warrants class certification, its order must "define the class and the class claims, issues, or defenses . . ." Fed.R.Civ.P. 23(c)(1)(B); see also Wachtel v. Guardian Life Ins. Co. of Am., 453 F.3d 179, 184 (3d Cir. 2006) (holding that rule "requires district courts to include in class certification orders a clear and complete summary of those claims, issues, or defenses subject to class treatment.").
A. Consumer Fraud Act Claim
The Court begins its class certification analysis with Plaintiffs' claim that Quest has violated the consumer fraud statutes of New Jersey as well as those of the 49 other states and the District of Columbia. Plaintiffs continue to argue that New Jersey's Consumer Fraud Act may apply to the claims of each nationwide member of the class, despite the conclusion reached by the Court on Plaintiffs' first motion for class certification that the consumer fraud statute of each class member's home state would apply to his or her claim. The Court notes that each of the four putative classes seeks to pursue this claim as a certified Rule 23(b)(3) class. The Court's choice of law analysis is central to the Court's evaluation of whether any of the classes can meet the rule's predominance and superiority requirements as to the statutory consumer fraud claim, and its determination of which state's law applies to this claim will apply across all four classes.
Plaintiffs urge the Court to re-visit the exhaustive choice of law analysis it conducted in Agostino I. They take the position that, as illustrated by Third Circuit and district court decisions issued after Agostino I, the appropriate framework for the choice of law analysis in this case is supplied by section 148(2) of the Second Restatement on Conflict of Laws ("Restatement") rather than section 148(1), which the Court had previously applied. See Restatement (Second) of Conflict of Laws § 148 (1971). They argue that had the correct standard been applied in the initial motion for class certification, the Court would have reached a different conclusion. It would have found, they contend, that New Jersey's Consumer Fraud Act applies to the entire putative class, regardless of the particular class member's state of origin.
Essentially, the choice of law argument presented in this second motion for class certification constitutes a motion for reconsideration, governed by Local Civil Rule 7.1(i). Local Civil Rule 7.1(i) creates a procedure by which a court may reconsider its decision upon a showing that dispositive factual matters or controlling decisions of law were overlooked by the court in reaching its prior decision. See Bryan v. Shah, 351 F.Supp.2d 295, 297 (D.N.J. 2005); Bowers v. Nat'l Collegiate Athletic Assoc., 130 F.Supp.2d 610, 612 (D.N.J. 2001). The Court preliminarily notes that motions for reconsideration must be brought within 14 days of the date of the order challenged. L.Civ.R. 7.1(i). This motion was filed over one year after the Court's opinion and order in Agostino I. Apart from its unusually delayed and ...