BOUFFARD v. LABORATORY CORPORATION OF AMERICA HOLDINGS

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

SHERYL ANDERSON, MARY CARTER, )

ROBERT HUFFSTUTLER, RAMZI )

KHAZEN, CHAIM MARCUS, LILY )

MARTYN, JONAH MCCAY, HOLDEN )

SHERIFF, MICHELLE SULLIVAN, )

SHONTELLE THOMAS, and JOSEPH )

WATSON, individually and on )

behalf of all, )

)

Plaintiff, )

) 1:17cv193

v. )

)

LABORATORY CORPORATION OF )

AMERICA HOLDINGS, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.

This putative class action challenging the billing practices

of Defendant Laboratory Corporation of America Holdings

(“LabCorp,” although sometimes intermittently referred to by the

parties as “Labcorp”) returns to the court on Plaintiffs’ motion

for class certification pursuant to Federal Rule of Civil Procedure

23(b)(2) and 23(b)(3). (Doc. 99.) The motion is fully briefed,

and the record is voluminous. (Docs. 111, 126, 190, 191, 192,

194, 213, 214.) Plaintiffs and LabCorp also filed a joint motion

to seal materials relating to class certification. (Docs. 196,

197.) Plaintiffs filed an objection to the joint motion (Doc.

198), and LabCorp filed a reply (Doc. 199). On November 8, 2022,

the court heard oral argument on the pending motions. (Doc. 210.)

For the reasons set forth below, the joint motion to seal will be

granted and the motion for class certification will be denied.

I. BACKGROUND

A. Facts

The 138-page amended complaint, complete with a table of

contents, contains extensive factual allegations about LabCorp,

its “business model,” and Plaintiffs’ various claims. The key

allegations are as follows, while more detailed allegations

relevant to the analysis are set out later in this opinion.

LabCorp provides laboratory testing services to healthcare

recipients internationally. (Doc. 42 ¶ 1.) It has more than 115

million patient encounters annually and has “generated more

revenue from clinical lab testing services than any other company

in the world.” (Id.) Its “LabCorp Diagnostics” segment is an

independent clinical laboratory business that provides the

services that are the subject of Plaintiffs’ amended complaint.

(Id. ¶¶ 44–45.) LabCorp’s customers are managed care

organizations, biopharmaceutical companies, governmental

agencies, physicians and other healthcare providers, hospitals,

employers, patients, and consumers. (Id. ¶ 47.)

LabCorp routinely charges different customers different rates

for the same services. These rates include an undiscounted retail

rate, which Plaintiffs variously term the “fee schedule rate,”

“list price” (or “PLP”), and “chargemaster rate” (hereinafter,

“list price”); the discounted rates LabCorp has negotiated with

certain third-party payors, such as insurers; a standardized rate

for Medicare clients; and rates that LabCorp negotiates with

certain uninsured or underinsured individuals. (Id. ¶¶ 41, 48–

49, 70–71, 87, 211.) These rates vary greatly, but the list prices

tend to be much higher than the other rates. (Id. ¶¶ 5, 469.)

There are eleven Plaintiffs seeking class certification.1

(Id. ¶¶ 23–36.) Their common complaint is that they were provided

services by LabCorp for which they were charged LabCorp’s list

price, which they allege is grossly too high and without any prior

agreement. Some Plaintiffs — Michelle Sullivan, Mary Carter, and

Chaim Marcus — arranged for their diagnostic testing at a LabCorp

facility, presumably in their states of residence, California,

Maryland, and New Jersey, respectively.2 (Id. ¶¶ 24, 28, 33, 149,

227, 323.) Others, including Shontelle Thomas (resides in

Tennessee), and Lily Martyn (resides in New York but had services

performed in North Carolina), authorized their physicians to order

laboratory testing without knowing what lab would do the work.

1 There were initially fourteen Plaintiffs. (Doc. 111.) At the hearing

on the class certification motion held on November 8, 2022, however,

Plaintiffs’ counsel confirmed that former Plaintiff Victoria Smith is

no longer in the case, and Plaintiffs Tena Davidson and Michael Wilson

are only pursuing individual claims. (Doc. 210 at 21-22.)

2 Unlike the other Plaintiffs, Marcus procured testing services for his

two sons, not himself. (Doc. 42 ¶¶ 225–31.)

(Id. ¶¶ 29, 34, 240–42, 345–47.) Still others, including

Sheryl Anderson (resides in Alabama) and Ramzi Khazen (resides in

Texas), had blood drawn by their health care providers who sent

the specimens to LabCorp without advising either Plaintiff that

the sample was being sent to any laboratory testing company. (Id.

¶¶ 23, 27, 121–25, 203-05.) At the time the services were

rendered, none of these Plaintiffs had an express agreement with

LabCorp to pay the list prices LabCorp subsequently charged.

(E.g., id. ¶ 111, 156-58, 229, 325.) Most Plaintiffs had health

insurance, but the relevant testing performed by LabCorp was not

covered by their policies; Martyn and Thomas were uninsured. (Id.

¶¶ 122, 148, 167, 176, 203, 225–26, 239, 253, 278, 297, 322, 344,

360, 379.) As a result, Plaintiffs were charged LabCorp’s list

prices. Some Plaintiffs paid the charges under protest, while

others have refused to pay.

B. Procedural History

Plaintiffs filed an eight-count complaint on March 8, 2017.

(Doc. 1.) On March 28, 2018, the court granted LabCorp’s motion

to dismiss the original complaint in a memorandum opinion and order

finding that the allegations failed to state a claim upon which

relief could be granted. See Sullivan v. Laboratory Corp. of

America Holdings, No. 1:17cv193, 2018 WL 1586471 (M.D.N.C.

Mar. 28, 2018). On August 10, 2018, after the court granted leave,

Plaintiffs filed an amended complaint. (Doc. 42.) The amended

complaint contains eleven claims, each on behalf of a putative

class. In Count I, Plaintiffs seek a declaratory judgment that

they never contractually assented to LabCorp’s list prices, and

therefore that LabCorp’s right of recovery against them for the

relevant laboratory testing services is limited to an implied-

contract recovery of the “reasonable value” of the services

rendered. (Id. ¶¶ 466–68.) Further, Plaintiffs seek a declaration

that LabCorp’s list prices exceed the “reasonable value” of its

services. (Id. ¶ 470.) In Count II, as to all Plaintiffs who

paid LabCorp’s list prices, Plaintiffs seek to recoup the amounts

they paid above the “reasonable value” of the services rendered.

(Id. ¶¶ 480–82.) In Counts III–XI, Plaintiffs allege that

LabCorp’s billing practices violate various consumer protection

statutes prohibiting unfair or deceptive trade practices in North

Carolina, Alabama, California, Florida, Maryland, New Jersey,

Tennessee, and Texas. (Id. ¶¶ 483–555.)

On August 16, 2019, this court granted LabCorp’s subsequent

motion to dismiss the amended complaint in part, dismissing Count

II and any claim in Counts III-XI based on nondisclosure of CPT

codes, and denied in part as to all other claims. (Doc. 55.)

Following discovery, Plaintiffs filed the present class

certification motion (Doc. 99), which is fully briefed (Docs. 111,

126, 190, 191, 192, 194, 213, 214, 218, 219, 220, 223) and ready

for decision.3 The court also held extensive oral argument on the

claims on November 8, 2022.

II. ANALYSIS

A. Motion for Class Certification

1. Legal Standard

Plaintiffs move to certify one class and three subclasses

under Federal Rule of Civil Procedure 23: the nationwide “Common

Law Class” under Count I, composed of “Labcorp patients in the

United States who, without any express contract with Labcorp that

establishes the amount of fees to be paid to Labcorp, were charged

based on [the list price] in excess of the reasonable market rate

for the clinical lab testing services Labcorp performed” (Doc. 111

at 25);4 the “Misleading Estimate Subclass” under Counts III, IV,

VII, VIII, IX, X, and XI, composed of “Labcorp patients who were

provided a written statement describing potential charges not

based on [the list price], but were charged based on [the list

price] in excess of the reasonable market rate for the clinical

lab testing services Labcorp performed” (id. at 25-26); the “Urine

Testing Subclass,” composed of LabCorp patients in the United

3 The parties filed evidence and briefs under seal which “contain

sensitive personal health information, Labcorp’s nonpublic business

information, and analysis describing confidential information of a non-

party competitor to LabCorp.” (See Doc. 197 at 2.)

4 All citations to the record are to the paragraph number or ECF docket

page except for testimony.

States “who were overbilled for urine testing” done “in violation

of industry practice” (id. at 26, 36); and the “Select Silver

Subclass,” composed of LabCorp patients “who were out-of-network

with certain [BlueCross Blue Shield of Alabama] insurance plans”

and charged the list price (id.).5 Plaintiffs also move for

appointment of class counsel under Rule 23(g). (Id. at 37; Doc.

99-1 at 2.) LabCorp opposes certification, challenging whether

several of the prerequisites to certification have been met. (Doc.

190.)

“The class action is an exception to the usual rule that

litigation is conducted by and on behalf of the individual named

parties only.” Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013)

(citation and internal quotation marks omitted). To be certified,

a party seeking class certification must “establish by a

preponderance of the evidence that the action complies with each

part of Rule 23.” Brown v. Nucor Corp., 785 F.3d 895, 931 (4th

Cir. 2015) (Agee, J., dissenting) (citing cases). First, a

plaintiff must satisfy the four requirements set out in Rule 23(a):

“(1) numerosity of parties; (2) commonality of factual and legal

issues; (3) typicality of claims and defenses of class

representatives; and (4) adequacy of representation.” Gunnells v.

5 The court assumes for the purposes of class certification that the

potential Urine Testing and Select Silver subclass members were also

allegedly charged the list price “in excess of the reasonable market

rate.” See infra note 10.

Healthplan Services, Inc., 348 F.3d 417, 423 (4th Cir. 2003); see

Thorn v. Jefferson-Pilot Life Insurance Co., 445 F.3d 311, 317

(4th Cir. 2006) (citation and alterations omitted) (“Plaintiffs

bear the burden of demonstrating satisfaction of the Rule 23

requirements and the district court is required to make findings

on whether the plaintiffs carried their burden.”)

Next, the proposed class must show that it is one of the three

types of classes described in Rule 23(b). See Thorn, 445 F.3d at

318. Here, Plaintiffs seek to certify their Common Law Class

pursuant to Rule 23(b)(2), which provides that a class action is

appropriate if “the party opposing the class has acted or refused

to act on grounds that apply generally to the class, so that final

injunctive relief or corresponding declaratory relief is

appropriate respecting the class as a whole.” Fed. R. Civ. P.

23(b)(2). (See Doc. 99-1 at 1.) Plaintiffs seek to certify the

proposed subclasses pursuant to Rule 23(b)(3), which provides that

a class action may be maintained if the court finds that “questions

of law or fact common to class members predominate over any

questions affecting only individual members.” Fed. R. Civ. P.

23(b)(3). (See Doc. 99-1 at 2.) Although it is Plaintiffs’ burden

to demonstrate compliance with Rule 23, the court “has an

independent obligation to perform a ‘rigorous analysis’ to ensure

that all of the prerequisites have been satisfied.” EQT Prod. Co.

v. Adair, 764 F.3d 347, 358 (4th Cir. 2014) (quoting Wal-Mart

Stores, Inc. v. Dukes, 564 U.S. 338, 350-51 (2011)).

At the class certification stage, “[m]erits questions may be

considered to the extent – but only to the extent – that they are

relevant to determining whether the Rule 23 prerequisites for class

certification are satisfied.” Amgen Inc. v. Connecticut

Retirement Plans & Trust Funds, 568 U.S. 455, 466 (2013).

Otherwise, “[a]n evaluation of the probable outcome on the merits

is not properly part of the certification decision.” Id. (quoting

Fed. R. Civ. P. 23 advisory committee’s note to 2003 amendment);

Brown, 785 F.3d at 903 (“Rule 23 grants courts no license to engage

in free-ranging merits inquiries at the certification stage.”

(quoting Amgen, 568 U.S. at 466)).6 Persuasiveness of the class-

wide evidence is, in general, a matter for a jury. See Tyson

Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 459 (2016); Olean

Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th

651, 678 (9th Cir. 2022).7 “[A]t the certification stage, the

Plaintiff or the Court can refine the classes as necessary to bring

6 The findings in this order apply only to the motion for class

certification. See Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366

(4th Cir. 2004) (noting that if the jury or factfinder’s “finding on any

fact differs from a finding made in connection with class action

certification, the ultimate factfinder’s finding on the merits will

govern the judgment”).

7 Of course, if no reasonable juror could believe the class-wide evidence,

Plaintiffs would lack common proof. Tyson Foods, 577 U.S. at 459

(comparing class certification standards to standards for summary

judgment and directed verdict).

them within the requirements of Rule 23, if appropriate.” See

Abdur-Rahman v. Wells Fargo Bank N.A., No. 3:21-CV-00207-RJC, 2022

WL 481788, at *6 (W.D.N.C. Feb. 16, 2022) (citing Manuel v. Wells

Fargo Bank, National Ass’n, No. 3:14CV238, 2015 WL 4994549 (E.D.

Va. Aug. 19, 2015)).

2. Subclass Certification

As noted, Plaintiffs seek certification of one nationwide

class (the “Common Law Class”) and three subclasses: (1) the

“Misleading Estimate Subclass,” that includes “Labcorp patients

who were provided a written statement describing potential charges

not based on [the list price], but were charged based on [the list

price] in excess of the reasonable market rate for the clinical

lab testing services Labcorp performed” (Doc. 111 at 25); (2) the

“Urine Testing Subclass,” composed of LabCorp patients in the

United States “who were overbilled for urine testing” conducted

“in violation of industry practice” (id. at 26, 36); and (3) the

“Select Silver Subclass,” composed of LabCorp patients “who were

out-of-network with certain BlueCross Blue Shield of Alabama

insurance plans” and charged the list price. (Id.)

“When appropriate, a class may be divided into subclasses

that are each treated as a class under this rule,” Fed. R. Civ. P.

23(c)(5), so long as each subclass “independently meet[s]” the

requirements for certifying a class under Rule 23. See Gunnells,

348 F.3d at 441 (citing In re A.H. Robins, 880 F.2d 709, 728 (4th

Cir. 1989)); Johnson v. Meriter Health Servs. Emp. Ret. Plan, 702

F.3d 364, 368 (7th Cir. 2012). In addition, under the Federal

Rules of Civil Procedure's requirement of notice pleading,

defendants in all lawsuits must be given notice of the specific

claims against them. See Fed. R. Civ. P. 8(a)(2) (“A pleading that

states a claim for relief must contain . . . a short and plain

statement of the claim showing that the pleader is entitled to

relief”). Although the notice pleading requirement does not

require detailed factual allegations in each instance, the

complaint must “give the defendant fair notice of what the . . .

claim is and the grounds upon which it rests.” Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 555 (2007) (citation omitted). Here,

LabCorp argues that certification of the Plaintiffs’ three

proposed subclasses is inappropriate because the “three proposed

subclasses are untethered from the Amended Complaint” and were

therefore not properly pleaded. (Doc. 190 at 35-36.) Plaintiffs,

in turn, argue that LabCorp “had notice of the subclass claims,”

ostensibly because the factual allegations animating the

underlying theories of liability were apparent on the face of

complaint, even if the precise theories of liability themselves

were not. (Doc. 192 at 18-21.)

LabCorp is correct. As a general matter, it is improper for

a plaintiff to seek certification of a class or subclass based on

new claims and facts not asserted in the complaint. See Anderson

v. U.S. Dep't of Hous. & Urban Dev., 554 F.3d 525, 528–29 (5th

Cir. 2008) (trial court abused discretion certifying class where

plaintiffs’ claims were “based on a totally different course of

conduct” than those pleaded in the complaint); In re Canon Cameras,

237 F.R.D. 357, 358 n.1 (S.D.N.Y. 2006)(“[T]he plaintiffs' instant

motion [for class certification] attempts to rely, in part, on

factual allegations that were not pled in the Second Amended

Complaint. . . . [and therefore] in considering the plaintiffs’

instant motion, the Court has considered only those factual

allegations pled in the Second Amended Complaint”); Brown v. Am.

Airlines, Inc., 285 F.R.D. 546, 560 (C.D. Cal. 2011)(“Class

certification is not a time for asserting new legal theories that

were not pleaded in the complaint”); Trinidad v. Victaulic Co. of

Am., No. 85–1962, 1986 WL 276 *3 (E.D. Penn. Aug. 15, 1986)

(denying certification of subclass based on claims not alleged in

complaint). Yet here, Plaintiffs do just this. For the reasons

set out below, the court declines to find that the subclasses are

properly before the court.

a. “Misleading Estimate Subclass”

Plaintiffs first offer the “Misleading Estimate Subclass.”

As LabCorp rightly points out, the “Patient Acknowledgment of

Estimated Financial Responsibility” (“Patient Estimate”) and

“credit card authorization form” are separate documents “at the

heart” of this subclass. (Doc. 190 at 36.) Plaintiffs acknowledge

in their motion for class certification that the Misleading

Estimate Subclass seeks relief, pursuant to Counts III through XI

(except Counts V and VI), for “any person who signed a Patient

Estimate or credit card authorization and was subsequently billed

a price that was not disclosed on that form.” (Doc. 111 at 24

(emphasis added); see also id. at 35 (asserting that “the members

of the Misleading Estimate Subclass are ascertainable” because

“Labcorp knows when it issues a credit card authorization form or

Patient Estimate.”).)

The amended complaint, however, does not once mention a

“Patient Estimate” or otherwise plead that any named plaintiff

ever received one. Nor could it have. As Plaintiffs candidly

acknowledge, “the Patient Estimate only came into regular use after

this lawsuit was filed.” (Doc. 111 at 26, n.15). This much is

confirmed by a separate, but related, putative class action filed

against LabCorp in this district. See Nolan v. Laboratory Corp.

of Am. Holdings, No. 1:21-cv-979 (M.D.N.C.). In that case, the

complaint (also filed by Plaintiffs’ counsel in this case) notes

that “the Patient [Estimate] came into use by Labcorp on or about

the date of filing of the Amended Complaint in Anderson . . . and

accordingly is not referenced in that Amended Complaint.”8 (Case

8 The court may take judicial notice of pleadings filed in other actions.

See Anderson v. FDIC, 918 F.2d 1139, 1141 n.1 (4th Cir. 1990) (explaining

that “a district court should properly take judicial notice of its own

records”); In re Deepwater Horizon, 934 F.3d 434, 440 (5th Cir. 2019)

No. 1:21-cv-979, Doc. 1 ¶ 1.) The point of the parallel Nolan

litigation, the complaint continues, was to properly “bring” the

Patient Estimate “before the Court.” (Id.) The first mention of

the Patient Estimate in this case appears in Plaintiffs’ briefing

on the present motion for class certification. (Doc. 111 at 10.)

It indicates that the Patient Estimate is a two-page form that

provides LabCorp’s estimate of the “Health Plan Allowed Rate” for

each test a patient orders based on the insurance information the

patient disclosed to LabCorp, along with information about the

deductible and co-insurance, as well as certain disclaimers. (See

id. at 10-12; Doc. 114-2.) Because the amended complaint contained

no allegation that the Patient Estimate was in any way misleading,

it did not put LabCorp on notice that its use of the Patient

Estimate ostensibly violated the law. Therefore, the Patient

Estimate cannot form the basis of LabCorp’s liability in this

action.

In like fashion, no claim in the amended complaint is based

on LabCorp’s allegedly misleading credit card authorization form.

To be sure, the amended complaint refers to the credit card

authorization only as to Plaintiff Mary Carter. (Doc. 42 ¶¶ 156-

58.) But as LabCorp points out, Plaintiffs only mention Carter’s

(taking judicial notice of the “docket and complaint” in a related but

separate action because courts “may take judicial notice of prior court

proceedings as matters of public record”).

credit-card authorization form to establish that she signed no

express contract with LabCorp. (See Doc. 42. ¶¶ 156-58 (alleging

that Carter signed a credit card authorization that authorized

LabCorp to charge her credit card up to $484, which turned out to

be less than the list price, the balance of which she was later

billed); Doc. 190 at 36, n.11.) This assertion, while necessary

to show that Carter is a member of the putative “Common Law Class”

- one who “without any express contract with LabCorp . . . [was]

charged fees for clinical lab testing services performed by LabCorp

that were in excess of the reasonable market rates for the same

services” (Doc. 42, ¶ 449; see also Doc. 111 at 25) – is not

relevant to establishing that the document itself was “misleading”

or “deceptive” under state consumer protection laws.9 While

Plaintiffs now also argue that Plaintiff Marcus signed a credit

9 On January 25, 2023, Plaintiffs moved to supplement the record with an

affidavit from Jeffrey Frist, a non-party, which the court allowed.

(Docs. 218, 219, 224.) In the affidavit, Frist states that on November

28, 2022, he went to a LabCorp patient service center and was presented

with a credit card authorization form to sign before LabCorp would

perform his lab tests. (Id. ¶¶ 4-5.) Plaintiffs contend that this

evidence establishes that LabCorp still uses the credit card

authorization form and, therefore, that Plaintiffs “Marcus and Carter’s

claims are not moot.” (Doc. 219 at 3.) LabCorp contends that it only

uses the credit card authorization form infrequently when a patient’s

insurance information cannot be accessed electronically and that

Plaintiffs’ filing is tardy because they knew this during the discovery

period for class certification. (Doc. 220.) LabCorp also points out

that Frist’s form accurately disclosed LabCorp’s list prices and that

all of his charges were paid by his insurer. (Id.) Plaintiffs respond

that is only because LabCorp’s policy is to disclose the list prices up

to an aggregate of $150, as evidenced by Plaintiffs Marcus’s and Carter’s

forms. Even accepting Plaintiffs’ contentions as true, they are

insufficient to revive the Misleading Estimate Subclass claim, which

fails for not having been pleaded.

card authorization form, the amended complaint similarly makes no

reference to such a document, alleging rather that Marcus did not

execute any agreement with LabCorp as to the scope of his services

or the “potential costs or charges.” (Doc. 42 ¶ 229.) Nowhere

does the amended complaint allege that the credit card

authorization was misleading.

These deficiencies are fatal to Plaintiffs’ proposed

Misleading Estimate Subclass. See Anderson, 554 F.3d at 529 (“[B]y

defining the class based on” factual allegations not mentioned in

the complaint, “the district court changed the nature of the

lawsuit and rendered the complaint inadequate”); Guadiana v. State

Farm Fire & Cas. Co., 2009 WL 6325542, at *8 (D. Ariz. Dec. 18,

2009) (holding that a “theory of the case ... not raised in [the

plaintiff’s] amended complaint . . . cannot form the basis for

class certification”). It is a fundamental proposition that “a

complaint must do more than name laws that may have been violated

by the defendant; it must also allege facts regarding what conduct

violated those laws.” Anderson, 554 F.3d at 528. Because the

Plaintiffs have failed to do that here, the Misleading Estimate

Subclass is not considered at this time for certification.

b. “Urine Testing” Subclass

For similar reasons, the “Urine Testing Subclass” also fails.

According to Plaintiffs’ motion for class certification, the Urine

Testing Subclass consists of those who were “overbilled for urine

testing” conducted “in violation of industry practice” - an

amorphously-phrased standard. (Doc. 111 at 26, 36.) The amended

complaint, however, is silent about what allegedly constitutes the

relevant “industry practice” much less how such individuals would

be identified or even identifiable. More to the point, it omits

any discussion about how LabCorp’s conduct with respect to its

urine testing services violates the law.10 Put another way,

Plaintiffs entirely fail to explain how the putative claims of the

Urine Testing Subclass relate to any pleaded claim in the amended

complaint.11 In their reply brief, Plaintiffs attempt to remedy

this pleading deficiency by arguing that “the Court could find”

that LabCorp’s “billing practice violates industry standards” and

therefore “constitutes an unfair and deceptive trade practice.”

(Doc. 194 at 20.) However, it is axiomatic under the Federal Rules

10 Plaintiffs’ motion for class certification, moreover, does not define

what “industry practice” LabCorp unlawfully violates merely by billing

the list price for urine tests. (See Doc. 111 at 36 (vaguely asserting

that “[n]o patient would knowingly consent to a methodology for billing

for urine tests that was inconsistent with industry standards” (emphasis

added).) Plaintiffs do argue that “industry practice is to pay one price

for generating multiple test results from a single urine sample . . . ,

[but] Labcorp charges [list prices] separately for each compound tested.”

(Id. at 20-21.) Plaintiffs do not explain, however, why charging

underinsured patients the list price is inherently unlawful.

Nevertheless, for the reasons discussed herein, these fatal defects

cannot be cured in Plaintiffs’ reply brief.

11 To be sure, Plaintiffs claim in their motion for class certification

that “[t]his subclass applies to Counts III through XI (except Counts V

and VI).” (Doc. 99-1 at 2.) Plaintiffs’ proposed subclass is not

cognizable, however, because there are no allegations in the complaint

that LabCorp’s practices with respect to urine testing are somehow

unlawful.

of Civil Procedure that the complaint itself contain “a short and

plain statement of the claim showing that the pleader is entitled

to relief.” Fed. R. Civ. P. 8 (a)(2). The court cannot, as

Plaintiffs wish, “infer a claim for relief and, in addition,

certify a class on the basis of that inference without violating

. . . the rules of civil procedure.” Trinidad v. Victaulic Co. of

Am., No. CIV. A. 85-1962, 1986 WL 276, at *3 n.3 (E.D. Pa. Aug.

15, 1986).12

c. “Select Silver Subclass”

Plaintiffs’ “Select Silver” subclass suffers from the same

defects. That subclass seeks damages for all patients “who were

Select Silver patients, or had other [Blue Cross Blue Shield]

insurance that was out-of-network with Labcorp and were charged

[the patient list price].” (Doc. 111 at 25-26.) In their reply

brief, Plaintiffs argue that “the Court could . . . find” that

LabCorp’s “fail[ure] to take reasonable measures to inform BCBS

subscribers that Labcorp was out of network” violates “the Alabama

12 It is true, of course, that the Federal Rules of Civil Procedure do

not require a plaintiff to plead legal theories in the complaint. See

Johnson v. City of Shelby, Miss., 574 U.S. 10, 11 (2014) (per curiam).

The problem here, however, is that Plaintiffs’ invocation of “industry

practice” as the relevant comparator to LabCorp’s list price comes - at

the class certification stage - too late in the day. Allowing such a

constructive amendment at the class certification stage “would unfairly

prejudice the defendant, by depriving it of the notice it needs to

conduct effective discovery.” Faulconer v. Centra Health, Inc., 808 F.

App'x 148, 154 (4th Cir. 2020)(unpublished)(explaining that constructive

amendment of the complaint at the summary judgment undermines the

complaint’s purpose and thus can unfairly prejudice the defendant).

consumer protection statute.” (Doc. 192 at 20.) Plaintiffs,

however, fail to connect this subclass with allegations pleaded in

the amended complaint. Although the amended complaint contains

vague allegations that LabCorp “knew or was reckless in failing to

know” that patients in this putative subclass might not get

insurance coverage for LabCorp’s testing services, see Doc. 42

¶ 126, 185, it does not contain any allegations that LabCorp acted

deceptively by failing to disclose to patients or providers that

those with a BlueCross BlueShield “Select Silver” plan were out-

of-network with LabCorp. As such, the court cannot certify the

“Select Silver” subclass. See Guadiana, 2009 WL 6325542, at *8.

The Urine Testing Subclass and the Select Silver Subclass,

moreover, fail for a second reason. Local Rule 7.3(h) provides

that “[a] reply brief is limited to discussion of matters newly

raised in the response.” LR 7.3(h); see Henry v. N.C. Acupuncture

Licensing Board, No. 1:15CV831, 2017 WL 401234, at *4 (M.D.N.C.

Jan. 30, 2017). Courts in this district “have consistently held

that ‘[r]eply briefs . . . may not inject new grounds . . . [and

that an] argument [that] was not contained in the main brief . . .

is not before the Court.’” Tyndall v. Maynor, 288 F.R.D. 103, 108

(M.D.N.C. 2013) (quoting Triad International Maintenance Corp. v.

Aim Aviation, Inc., 473 F. Supp. 2d 666, 670 n.1 (M.D.N.C. 2006)).

It is improper, under Local Rule 7.3(h), to wait until a reply

brief to provide support for an unsupported argument made in a

party’s first motion. See Jarvis v. Stewart, No. 1:04CV00642,

2005 WL 3088589, at *1 (M.D.N.C. Nov. 17, 2005). In sum, Rule

7.3(h) “exists to give the replying party a chance to rebut newly

raised arguments, not to give the replying party an unfair

advantage in having a chance to make new arguments that should

have been raised initially.” Pouncey v. Guilford County, No.

1:18CV1022, 2020 WL 1274264, at *5 (M.D.N.C. Mar. 17, 2020).

Here, Plaintiffs submitted the Urine Testing and Select

Silver Subclasses in their original motion for class certification

but failed to provide support that these subclasses satisfied Rule

23(a).13 (See Doc. 111 at 27-33.) As LabCorp points out, as to

the Urine Testing and Select Silver Subclasses, Plaintiffs “say[]

nothing about numerosity or ascertainability,” and “no common

question is identified.” (Doc. 190 at 37.) In their reply,

Plaintiffs put forward new arguments to support their contention

that the Urine Testing and Select Silver Subclasses meet the

requirements of Rule 23(a). (Doc. 192 at 20-21.) However, “[t]his

is precisely the kind of briefing tactic that Local Rule 7.3(h)

seeks to prevent.” Pouncey, 2020 WL 1274264, at *5–6.

Accordingly, LabCorp is correct that Plaintiffs have failed to

meet their burden to satisfy the Rule 23(a) requirements for the

13 Other Rule 23 factors were addressed by Plaintiffs in their brief

(Doc. 111 at 36-37), and LabCorp addressed these arguments in its

response (Doc. 190 at 39-40).

Urine Testing and Select Silver Subclasses.

For all these reasons, Plaintiffs’ motion to certify the

proposed subclasses is denied.14

3. Rule 23(a) Requirements

The decision whether to certify a class is governed by Federal

Rule of Civil Procedure 23, under which certification requires two

showings: first, that the four “prerequisites” of Rule 23(a) are

met; and second, that the case fits within at least one of the

three “types of actions” described in Rule 23(b). A failure on

either front dooms the class. See EQT Prod. Co., 764 F.3d at 357.

The court begins with Rule 23(a), under which LabCorp argues that

the plaintiffs cannot satisfy two prerequisites: commonality and

typicality. LabCorp also contends that each proposed class fails

to meet Rule 23’s “implicit threshold requirement that the members

of a proposed class be ‘readily identifiable.’” Id. at 358

(quoting Hammond v. Powell, 462 F.2d 1053, 1055 (4th Cir. 1972)).

14 As discussed below, however, the court also finds that, even assuming

these subclasses were properly pleaded, they nevertheless fail to meet

the requirements of Rule 23 and therefore cannot be certified. See

United States v. Ford, 703 F.3d 708, 711 n.2 (4th Cir. 2013) (“Where a

court makes alternative holdings to support its decision, each holding

is binding precedent.”); Jean Alexander Cosms., Inc. v. L'Oreal USA,

Inc., 458 F.3d 244, 253 (3d Cir. 2006) (“Courts routinely decide cases

on multiple grounds, each of which has been fully litigated and given

careful consideration due to their potentially dispositive role in the

case.”)

Each requirement will be addressed in turn.15

a. Commonality

Commonality means that “there are questions of law or fact

common to the class.” Fed. R. Civ. P. 23(a)(2). This “requires

the plaintiff[s] to demonstrate that the class members have

suffered the same injury” in the sense that “[t]heir claims . . .

depend upon a common contention,” the determination of which “will

resolve an issue that is central to the validity of each one of

the claims in one stroke.” Dukes, 564 U.S. at 350 (internal

quotation marks omitted); Brown, 785 F.3d at 909 (“Wal–Mart

instructs that plaintiffs must present a common contention capable

of being proven or disproven in ‘one stroke’ to satisfy Rule

23(a)(2)’s commonality requirement.”). “‘This provision does not

require that all the questions of law and fact raised by the

dispute be common,’ just that any ‘dissimilarities between the

claims do not impede a common resolution.’” Johnson v. Jessup,

381 F. Supp. 3d 619, 634 (M.D.N.C. 2019) (quoting 7A Charles Alan

Wright et al., Federal Practice and Procedure § 1762 (3d ed.

2018)). “A question is not common . . . if its resolution turns

on a consideration of the individual circumstances of each class

member.” Thorn, 445 F.3d at 319 (citation omitted).

15 LabCorp does not contest the adequacy of representation or the

numerosity of the Common Law Class. (See Doc. 190 at 27-33).) Because

the Common Law Class fails on other grounds, the court assumes, without

deciding, that those requirements of Rule 23(a) are met.

Plaintiffs proffer the following common questions of law for

the Common Law Class: (1) “[W]hen a patient and Labcorp do not

agree in writing on a specific price for a test before the test is

performed, as a matter of law is Labcorp entitled to be paid only

the reasonable value of its services in performing the test?”;

and (2) “Did patients, solely by virtue of having lab tests

performed by Labcorp, consent to [the list price]?” (Doc. 111 at

29-30.) Plaintiffs also argue the common questions of fact are

(1) whether LabCorp can justify its list prices, and (2)

determining the common method of determining the reasonable value

of tests. (Id. at 30-31.)

In response, LabCorp argues that Plaintiffs’ motion has an

“overarching flaw” because Plaintiffs’ theory of liability is

premised on “LabCorp charg[ing] [the list price] in excess of the

reasonable value for each test and panel” yet Plaintiffs fail to

provide a “common methodology for determining the ‘reasonable

value’ of LabCorp’s tests.” (Doc. 190 at 23.) LabCorp contends

that “to establish class-wide liability, Plaintiffs’ theory

requires a uniform method to calculate reasonable value for each

test and panel” and that “Plaintiffs cannot meet their burden under

Rule 23 with promises of future proof.” (Id. at 23-24.) LabCorp

also argues that, rather than Plaintiffs’ proposed questions, “the

real question is: what is the nature of the relationship between

each class member and Labcorp?” (Id. at 30.) It contends “a court

must first rule out the existence of an express contract and an

implied-in-fact contract” by “examin[ing] the parties’ conduct”

before the court may “determine whether an implied-in-law contract

exists.” (Id.) Accordingly, LabCorp concludes, Plaintiffs’

Common Law Class does not satisfy Rule 23(a)’s commonality

requirement. (Id.)

In reply, Plaintiffs argue that determining the “reasonable

value” does not “require[] an individualized inquiry into the

various factors considered in pricing each test.” (Doc. 192 at

6.) Rather, they argue, regardless of whether an implied-in-fact

or implied-in-law contract exists,16 “the party seeking

compensation [LabCorp] has the burden of showing its price is

reasonable.” (Id. at 7 (emphasis added).) They further contend

that “[t]o justify certification, Plaintiffs need not develop a

methodology for determining a ‘reasonable’ price,” and that the

court should select from “one of the Plaintiffs’ suggested

benchmarks” to determine the extent of LabCorp’s liability. (Id.

at 9.) Finally, Plaintiffs argue LabCorp’s individualized factual

questions are “irrelevant” as “the central fact is that class

members did not agree to [the list price].” (Id. at 12.)

Each of Plaintiffs’ proposed questions will be addressed in

16 This court has previously discussed the doctrinal distinction in North

Carolina law between implied-in-fact and implied-in-law contracts.

Anderson v. Lab'y Corp. of Am. Holdings, No. 1:17CV193, 2019 WL 3858320,

at *3 (M.D.N.C. Aug. 16, 2019).

turn.

i. Burden

As a preliminary matter, each party argues that the other has

failed to meet the burden regarding the “reasonableness” of the

list price.17 (See Doc. 190 at 23-24; Doc. 192 at 7-8.) Plaintiffs

are correct that, under a contract implied-in-law theory, at the

merits stage “[t]he burden is always upon the complaining party to

establish by evidence such facts as will furnish a basis for [the]

assessment [of reasonable value], according to some definite and

legal rule.” Cline v. Cline, 128 S.E.2d 401, 404 (N.C. 1962)

(citation omitted). However, the Fourth Circuit has “stressed in

case after case that it is not the defendant who bears the burden

of showing that the proposed class does not comply with Rule 23,

but that it is the plaintiff who bears the burden of showing that

the class does comply with Rule 23.”18 Thorn, 445 F.3d at 321

(rejecting plaintiff’s argument that the defendant had the “burden

of proving that its statute of limitations defense presents issues

that must be decided on an individual basis”); see In re Hydrogen

17 Plaintiffs also appear to attempt shift the burden to the court. (See

Doc. 192 at 9 (“To justify [class] certification, Plaintiffs need not

develop a methodology for determining a ‘reasonable’ price.

Rather, . . . the Court could establish reasonable amounts Labcorp is

entitled to collect without prior patient agreement by using one of the

Plaintiffs’ suggested benchmarks.”).)

18 Plaintiffs erroneously rely on cases outside of the class certification

context. (See Doc. 192 at 7-8.)

Peroxide Antitrust Litigation, 552 F.3d 305, 318 (3d Cir. 2008),

as amended (Jan. 16, 2009) (“A party’s assurance to the court that

it intends or plans to meet the [Rule 23] requirements is

insufficient.”).

Further, the court’s prior order denying LabCorp’s motion to

strike Plaintiffs’ class allegations made clear that it was the

Plaintiffs who would bear the burden of establishing a method to

determine “reasonable value” at class certification. See Anderson

v. Laboratory Corp. of America Holdings, No. 1:17CV193,

2019 WL 3858320, at *9-*10 (M.D.N.C. Aug. 16, 2019) (stating that

“Plaintiffs have not yet moved to certify a class and therefore

need not yet meet these standards,” and “although LabCorp

identifies serious hurdles Plaintiffs will have to overcome to

achieve class certification — Plaintiffs’ chances of attaining

certification are not so wholly nonexistent as to justify the

drastic remedy of striking their class allegations” (emphasis

added)).19 Thus, the court rejects Plaintiffs’ contention that

LabCorp bears the burden of proving Plaintiffs’ contract implied-

in-law claim class does not satisfy Rule 23 by failing to

“demonstrate that it has a rational basis for charging [the list

19 Contrary to this court’s previous order, Plaintiffs assert, without

providing support, that “[t]o justify certification, Plaintiffs need not

develop a methodology for determining a ‘reasonable’ price.” (Doc. 192

at 4; see Doc. 120-2 ¶ 8 (plaintiffs’ expert was asked whether “there

[is] a methodology for determining a fair and reasonable price that could

be applied to all of Labcorp’s tests”).)

price].” (Doc. 192 at 9.) Instead, the court will determine

whether Plaintiffs have satisfied their burden, as promised, to

“develop a formula to calculate the [reasonable] market rate for

any given clinical lab test.” Anderson, 2019 WL 3858320, at *10

(quoting Doc. 42 ¶ 110).

ii. Application

Here, Plaintiffs have failed to make the necessary showing

for commonality. For example, Plaintiffs’ first proposed common

question of law is overbroad. Even if all class members “d[id]

not agree in writing on a specific price for a test before the

test is performed,” it is still possible that LabCorp could be

entitled to recover the list price “as a matter of law,” under an

implied-in-fact contract theory, rather than “reasonable value”

under an implied-in-law contract. See Ellis Jones, Inc. v. Western

Waterproofing Co., 312 S.E.2d 215, 218 (N.C. Ct. App. 1984)

(“Because plaintiff’s pleadings and evidence were broad enough to

support the alternative theories of an implied in fact contract

and an implied in law contract, the trial judge should have

instructed on both theories.”); Whitfield v. Gilchrist, 497 S.E.2d

412, 415 (N.C. 1998) (“[Q]uantum meruit is not an appropriate

remedy when there is an actual agreement between the parties.”).

In North Carolina, “[a]n implied contract refers to an actual

contract inferred from the circumstances, conduct, acts or

relations of the parties, showing a tacit understanding.” Archer

v. Rockingham County, 548 S.E.2d 788, 793 (N.C. Ct. App. 2001);

Southeast Caissons, LLC v. Choate Construction Co., 784 S.E.2d

650, 656–57 (N.C. Ct. App. 2016)(citation omitted) (“A valid

contract may be implied in light of the conduct of the parties and

under circumstances that make it reasonable to presume the parties

intended to contract with each other.”); but see Forsyth County

Hospital Authority, Inc. v. Sales, 346 S.E.2d 212, 214 (N.C. Ct.

App. 1986) (“Failure to agree on the amount of compensation

entitles the physician to the reasonable value of his services.”).

Whether an implied-in-fact contract may be inferred depends

on “the circumstances, conduct, acts or relations” between LabCorp

and each individual class member. Archer, 548 S.E.2d 793. For

instance, this question could turn on whether and, if so, how much

information was known about LabCorp’s pricing by a class member or

his agent before receiving a test. See Anderson, 2019 WL 3858320,

at *10 n.21 (citing Manecke v. Kurtz, 731 S.E.2d 217 (N.C. Ct.

App. 2012) (discussing liability of principals for contracts

entered into by their agents)); see also Convergent Acquisitions

& Development, Inc. v. Credent Real Estate, Inc., No. 3:06CV324,

2007 WL 2137829, at *3 (W.D.N.C. July 23, 2007) (“A principal may

be liable for the actions of his agent if it is determined that

the agent acted within either his actual or apparent authority to

take said actions.”) (citing McGarity v. Craighill, Rendleman,

Ingle & Blythe, P.A., 349 S.E.2d 311, 313 (N.C. Ct. App. 1986))).

An individual class member may be liable for the list price if an

agency relationship was created with his physician and the

physician ordered a test from LabCorp on that patient’s behalf.20

Some individual class members may be liable for the list price if

their physician informed them about it beforehand. Others may

have learned about the list price from resources such as the

Laboratory Contact Center, which provides patients with

information about LabCorp’s list prices upon request.21 (Doc. 190-

3 at 72, 83-85.) And still others may have learned the list price

from LabCorp’s Patient Portal, a digital application through which

patients can, among other things, “review billing statements, pay

bills, and contact LabCorp with billing and pricing questions,

among other things.” (Doc. 190-2 at 74, Doc. 190-3 at 103-104.)

Thus, as LabCorp contends, a common “question is: what is the

nature of the relationship between each class member and Labcorp?”

(Doc. 190 at 30.) Rather than presenting a question which would

“resolve an issue that is central to the validity of each one of

20 LabCorp representatives “continually have conversations with providers

surrounding new tests, new pricing, existing pricing[,]” insurance

coverage, and “customizable patient fee schedules.” (Doc. 190-3 at 130,

143-44, 160-61.) Plaintiffs also submit the common question of “Did

patients, solely by virtue of having lab tests performed by Labcorp,

consent to PLPs?” Answering this question in any meaningful way for the

parties would require the court to explore a possible agency relationship

for each individual class member, along with circumstances that might

otherwise create a valid contract with LabCorp.

21 LabCorp may instead seek to recover the list price pursuant to a

possible financial agreement between an individual class member’s

physician and LabCorp. (See Doc. 63 at 42-45.)

the claims,” Dukes, 564 U.S. at 350, the question of whether

LabCorp would be limited to recover the “reasonable” value of its

services “turns on a consideration of the individual circumstances

of each class member.” Thorn, 445 F.3d at 319 (citation omitted);

see also Scarlett v. Air Methods Corp., No. 16-CV-02723-RBJ, 2020

WL 2306853, at *11 (D. Colo. May 8, 2020) (finding that class

action certification was not appropriate because whether an

implied-in-fact contract had been formed would require findings of

fact applicable to each patient's individual case); Agostino v.

Quest Diagnostics Inc., 256 F.R.D. 437, 467 (D.N.J. 2009) (“With

the contracts at issue potentially numbering in the thousands and

containing materially different provisions, proof of a right to

recovery under one contract does not necessarily establish a

classwide right to recovery.”).22

Setting aside the particularized nature of Plaintiffs’

claims, Plaintiffs have also failed to satisfy their burden of

establishing a method to determine “reasonable value” to achieve

class certification. Plaintiffs, citing the report of Zirui Song,

M.D., Ph.D. (Docs. 120-2), “intend to present expert testimony

22 To the extent Plaintiffs seek to avoid these particularized questions

through their class definition, they attempt to create an improper fail-

safe class. See EQT Prod. Co., 764 F.3d at 360 n.9 (citing Messner v.

Northshore Univ. HealthSys., 669 F.3d 802, 825 (7th Cir. 2012)

(explaining that a fail-safe class “is defined so that whether a person

qualifies as a member depends on whether the person has a valid claim”)).

“Such a class definition is improper because a class member either wins

or, by virtue of losing, is defined out of the class and is therefore

not bound by the judgment.” Messner, 669 F.3d at 825.

showing that a common methodology can be used to determine the

reasonable value of tests on a Class-wide basis.” (Doc. 111 at

31.) In his report, Dr. Song determines “the [LabAccess Program

(‘LAP’)] price is an ideal option for a fair, reasonable, and

conservative benchmark.” (Doc. 120-2 ¶ 40.) In response, LabCorp

argues that LAP pricing is only available for 565 tests, or 0.53

percent of the total test codes, and “allows self-pay patients to

prepay . . . a discounted price prior to testing.” (Doc. 190 at

12.) The discount varies depending on the particular test and

“take[s] into account, among other factors, that up-front payment

eliminates the risk of non-payment and the expense of post-test

billing and collections.” (Id.)

Dr. Song also lists various other benchmark prices,

previously identified to the court, that in his opinion “would be

fairer and more reasonable compared to the [list] prices.” (Doc.

120-2 ¶ 46.) Dr. Song proposes that these benchmarks, “[r]elative

to the [list] price, . . . would be a step towards fair and

reasonable.” (Id. ¶ 47 (emphasis added); see id. ¶ 50 (opining

that each existing price option is “reasonable” besides the list

price).) As such, Plaintiffs argue, the court would only need to

determine which benchmark establishes the “reasonable” price and

then apply that finding across the possible tests. (Doc. 111 at

21-22.) These benchmarks include the “client price” paid by

healthcare provider clients following negotiation, the “pixel

price,” paid for 10 advertised tests capable of “home-based sample

collection,” and the LAP price. (Doc. 120-2 ¶¶ 12, 14, 48.) Dr.

Song’s report contends that “Labcorp’s process for setting its

[list prices] is [a] completely arbitrary” 20% markup from the

Client Price. (Id. ¶ 45.) Dr. Song’s report concludes that, while

“each of the [pricing] options described above is reasonable” in

his opinion, “the LAP price is the best available benchmark because

it is the price LabCorp charges when it cannot take advantage of

patients’ lack of information.” (Id. ¶ 50.) Ultimately, Dr. Song

believes that LabCorp patients should only be responsible for an

indefinite “fair and reasonable price.” (Id. ¶ 51.)

However, as LabCorp properly contends, Dr. Song’s report

falls far short of Plaintiffs’ promise to “develop a formula to

calculate the market rate for any given clinical lab test” subject

to common proof. (See Doc. 42 ¶ 110.) First, LAP pricing – Dr.

Song’s preferred benchmark - is only available for 565 tests, or

0.53 percent of the total test codes, so it fails to provide a

uniform formula “for any given clinical lab test.” (Id.; see Doc.

190 at 26.) Put another way, because LAP pricing is not available

for over 99 percent of all LabCorp tests, it is by definition an

inappropriate “benchmark” for all but one percent of LabCorp’s

tests. Tellingly, Dr. Song could only produce the LAP for 26 of

the 74 unique LabCorp tests administered to the class

representatives in this case – meaning that, even for his preferred

benchmark, he could only determine the “reasonable” price for 35

percent of the tests administered to the class representatives.

(Doc. 120-2 ¶ 23.)

The LAP pricing benchmark that Dr. Song proposes is also

flawed because, under his theory, the reasonable value of any

particular lab-testing service is determined by the average amount

of all 565 tests for which is a LAP price. (Id. ¶ 23.) It is

well-established, however, that averages can mask significant

variation across individual cases. See David H. Kaye & David A.

Freedman, Reference Guide on Statistics, in Reference Manual on

Scientific Evidence 213, 266 & n.130 (Fed. Jud. Ctr., 3d ed. 2011);

Louis Kaplow & Steven Shavell, Fairness Versus Welfare, 114 Harv.

L. Rev. 961, 1193 (2001). Accordingly, Dr. Song’s LAP model – by

using averages – fails to accurately measure the “reasonable value”

of any single lab test and therefore “flouts the requirement that

an expert’s model reliably prove that each putative class member

suffered individual injury.” In re Aluminum Warehousing Antitrust

Litig., 336 F.R.D. 5, 57 (S.D.N.Y. 2020) (emphasis added). Put

differently, Dr. Song’s model necessarily fails because it does

not capture the “reasonable value” of any particular test and

therefore “do[es] not reflect the individual characteristics of

class members.” Gates v. Rohm & Haas Co., 655 F.3d 255, 266 (3d

Cir. 2011) (stating that averages evidence “is not ‘common’ because

it is not shared by all (possibly even most) individuals in the

class”) (internal quotations marks omitted); Sheet Metal Workers

Local 441 Health & Welfare Plan v. GlaxoSmithKline, PLC, Civ. A.

No. 04-5898, 2010 WL 3855552, at *30 (E.D. Pa. Sept. 30, 2010)

(internal quotation marks omitted)(noting that methodology using

average prices was insufficient as a common method capable of

showing class-wide injury because “averaging by definition glides

over what may be important differences”); Reed v. Advocate Health

Care, 268 F.R.D. 573, 591 (N.D. Ill. 2009) (“Measuring average

base wage suppression does not indicate whether each putative class

member suffered harm from the alleged conspiracy. In other words,

it is not a methodology common to the class that can determine

impact with respect to each class member.”); Freeland v. AT & T

Corp., 238 F.R.D. 130, 151 (S.D.N.Y. 2006) (internal quotation

marks omitted) (rejecting a methodology that used an average

overcharge for cellular phones to show class-wide impact and noting

that “averages that include prices for different products can lead

to serious analytical problems”).

For similar reasons, Plaintiffs’ suggestion that the client

list price23 could serve as an appropriate benchmark also fails.

Even if the court determined that any class member was

“unreasonably” overcharged with a list price approximately 20

23 The client list price, in contrast to the LAP Price discussed above,

“is the retail price charged to healthcare providers (rather than to a

patient or insurer).” (Doc. 190 at 10.)

percent above the “reasonable” client price, this would not justify

a finding that any other class plaintiff was likewise injured.

See, e.g., Harrison v. Blount EMS, Inc., No. 7:08-CV-1039-LSC,

2010 WL 11615000, at *4-5 (N.D. Ala. Jan. 12, 2010) (“The

accumulation of this [individualized] evidence may determine the

reasonableness of the charges made to a particular class member,

but it will establish nothing regarding any other class member.”);

Colomar v. Mercy Hospital, Inc., 242 F.R.D. 671, 677 (S.D. Fla.

April 11, 2007) (“Put differently, the legality — or ultimate

reasonableness — of [defendants’] charges can only be determined

by looking at the specific bills in question and analyzing them”

individually); Day v. Sarasota Drs. Hosp., Inc., No. 8:19-CV-1522-

T-33TGW, 2020 WL 4539145, at *6 (M.D. Fla. July 23, 2020)(“As

numerous courts have recognized, determining the reasonableness of

charges for medical services entails an individualized, fact-

dependent analysis.”) As discussed above, the evidence the court

would be required to examine would require an individualized

inquiry and vary from test to test.24 Analyzing this evidence for

a particular class member may determine the reasonableness of the

charges made in that plaintiff’s instance, but it is insufficient

to establish the reasonableness of charges for any other potential

24 For instance, the client list price can sometimes be identical to, or

higher than, the patient list price. (See Doc. 190 at 3; Doc. 190-8 at

92 n.147.)

class member.

Additionally, Plaintiffs have not demonstrated why LabCorp

should accept government-imposed rates (essentially nationalizing

LabCorp’s business) or negotiated rates with commercial payors

(essentially eliminating LabCorp’s ability to decide what price to

charge in a free-market economy), for every test and every patient.

(Cf. Doc. 32 at 19-20 (“Plaintiffs’ theory is fundamentally flawed

because it . . . presumes that a negotiated rate is as a matter of

law the only reasonable rate.”); see Doc. 120-2 ¶ 50 (opining that

“it would be overly conservative to use the Client List price as

a benchmark because it is rarely (if ever) paid in practice.”).)

Thus, as Plaintiffs’ expert “admittedly has no [common] answer to

that question,” the court “can safely disregard what he has to

say.” See Dukes, 564 U.S. at 354–55. Without a common methodology

to determine the reasonable value of LabCorp’s 100,000 or more

tests, there is “nothing to unite all of Plaintiffs’ claims” that

“touch and concern all members of the class.” See id. at 359 n.10.

At bottom, Plaintiffs’ mere “inten[t]” to provide “expert

testimony showing that a common methodology can be used to

determine the reasonable value of tests on a Class-wide basis”

(see Doc. 111 at 31) fails to satisfy their burden at class

certification. “Rule 23 does not set forth a mere pleading

standard.” Dukes, 564 U.S. at 350. Rather, “[a] party seeking

class certification must affirmatively demonstrate his compliance

with the Rule — that is, he must be prepared to prove that there

are in fact sufficiently numerous parties, common questions of law

or fact, etc.” Id. (emphasis in original); see EQT Prod. Co., 764

F.3d at 361-62 (stating that a district court must definitively

determine that the requirements of Rule 23 have been satisfied and

that “[c]ertifying a class in the face of . . . uncertainty runs

afoul of the rule that ‘actual, not presumed, conformance with

Rule 23(a) [is] . . . indispensable’”) (citing General Telephone

Co. of Southwest v. Falcon, 457 U.S. 147, 160 (1982)).

Simply put, how to calculate the “reasonable value” of a

particular test is “the essential question on which [Plaintiffs’]

theory of commonality depends” for each proposed class. Dukes,

564 U.S. at 354. For the reasons stated above, Defendants

correctly state that an evaluation of the “reasonableness” of the

list price for each test “requires an individualized inquiry into

the various factors considered in pricing each test.” (Doc. 190

at 18 (citing Doc. 190-3 at 45-48).) Proposing to proceed on an

average value across several different tests simply does not

suffice. Thus, Plaintiffs have failed to carry their burden to

establish commonality for any of their proposed classes. Class

certification is therefore inappropriate.

b. Typicality

Rule 23(a)(3) requires that “the claims or defenses of the

representative parties are typical of the claims or defenses of

the class.” Fed. R. Civ. P. 23(a)(3). “The essence of the

typicality requirement is captured by the notion that ‘as goes the

claim of the named plaintiff, so go the claims of the class.’”

Deiter v. Microsoft Corp., 436 F.3d 461, 466 (4th Cir. 2006)

(quoting Broussard v. Meineke Discount Muffler Shops, Inc., 155

F.3d 331, 340 (4th Cir. 1998)). Typicality is satisfied so long

as plaintiffs’ claims are not “so different from the claims of

absent class members that their claims will not be advanced by

plaintiff’s proof of his own individual claim.” Id. at 466-67;

see Lienhart v. Dryvit Systems Inc., 255 F.3d 138, 146 (4th Cir.

2001) (explaining that “‘a class representative must be part of

the class and possess the same interest and suffer the same injury

as the class members’”) (quoting Falcon, 457 U.S. at 156)). To

determine whether a named plaintiff’s “claims or defenses” are

typical of those of the proposed class, the court will frequently

have to undertake some investigation of “the merits of the

plaintiff’s underlying claim.” Dukes, 564 U.S. at 351; see id. at

349 n.5 (noting that “the commonality and typicality

requirements . . . tend to merge”).

Plaintiffs argue that the named Plaintiffs “have suffered the

same injuries as Common Law Class members: they were billed PLP

instead of a price set at the reasonable value of the testing

service.” (Doc. 111 at 32.) They also contend that “Plaintiffs’

claims all boil down to the same legal issue: what is Labcorp

entitled to bill to perform a test when it has not agreed with the

plaintiff on a price.” (Id.)

The court finds that Plaintiffs have also failed to

demonstrate that their claims and defenses are typical of the

claims or defenses of the class. As discussed above, the question

of whether LabCorp would be limited to recover the “reasonable

value” of its services “turns on a consideration of the individual

circumstances of each class member.” Thorn, 445 F.3d at 319

(citation omitted); see also Agostino, 256 F.R.D. at 467. Even if

Plaintiffs can show that the list price charged to a Plaintiff by

LabCorp for a particular test is unreasonable as to that

Plaintiff’s unique and fact-specific circumstances, Plaintiffs can

show nothing about the other tests. Further, the record reflects

that none of the Plaintiffs agreed to arbitration or class-waiver

clauses that might bar other potential class members’ claims.25

See Jensen v. Cablevision Sys. Corp., 372 F. Supp. 3d 95, 122-24

(E.D.N.Y. 2019)(finding that named plaintiffs, who were not

subject to arbitration agreement, failed to satisfy typicality

requirement where putative class members had arbitration

provisions); Tan v. Grubhub, Inc., No. 15-CV-05128-JSC, 2016 WL

4721439, at *3 (N.D. Cal. Jul. 19, 2016), aff'd sub nom. Lawson v.

25 All patients who use LabCorp’s Patient Portal “agree to arbitrate

their disputes with LabCorp and to a class-action waiver.” (Doc. 190

at 14; see Doc. 190-3 at 12.) Those who use the Patient Portal number

in the millions. (Doc. 190-2 at 74.)

Grubhub, Inc., 13 F.4th 908 (9th Cir. 2021) (“[T]ypicality . . .

[is] lacking where the lead plaintiff was not subject to the same

arbitration provisions as unnamed plaintiffs.”); King v. Capital

One Bank (USA), N.A., No. 3:11-CV-00068, 2012 WL 5570624, at *14

(W.D. Va. Nov. 15, 2012) (finding that the plaintiff not subject

to the arbitration provision “could not fairly and adequately

represent in this Court the interests of individuals who are bound

to pursue their claims in arbitration”). Thus, the question of

what LabCorp is entitled to recover requires a transaction-by-

transaction inquiry into each class members’ individual

circumstances, and therefore Plaintiffs’ claims are not typical of

proposed class members.

Furthermore, Plaintiffs’ claims of injury are dependent on

the price charged for only a small fraction of LabCorp’s more than

100,000 clinical lab tests and panels. (Doc. 190 at 8.) To be

sure, Plaintiffs need not allege an injury for every test LabCorp

offers to satisfy typicality. Here, however, the record

demonstrates that LabCorp maintains that it sets its list price

for each test based on numerous factors analyzed by its pricing

department, and Plaintiffs merely claim that sometimes that price

for a particular test is unreasonable.26 It is difficult to imagine

26 At least one named Plaintiff has conceded that, in his particular

circumstances, the list prices charged for several tests were

“reasonable.” (Doc. 191 at 32.)

how Plaintiffs, even if they could show that the list price for a

particular test was unreasonable, can demonstrate that LabCorp’s

list prices for thousands of other tests are unreasonable without

having to address myriad factual issues for each test.

In sum, Plaintiffs have failed to provide this court with a

common nexus sufficient to tie these varying claims together.

Therefore, the court finds that, even if commonality were met, the

proposed classes do not satisfy the typicality requirement.

c. Ascertainability

In addition to Rule 23(a)’s enumerated requirements of

numerosity, commonality, typicality, and adequacy, Plaintiffs must

also satisfy “an implicit threshold requirement that the members

of a proposed class be readily identifiable,” a requirement

“sometimes called ‘ascertainability.’” Krakauer v. Dish Network,

L.L.C., 925 F.3d 643, 654-55 (4th Cir. 2019) (citation omitted).

“[A] class cannot be certified unless a court can readily identify

the class members in reference to objective criteria.” Id. at 655

(quoting EQT Prod. Co., 764 F.3d at 358). “The goal is not to

identify every class member at the time of certification, but to

define a class in such a way as to ensure that there will be some

administratively feasible way for the court to determine whether

a particular individual is a member at some point.” Id. at 658.

In other words, the ascertainability requirement dictates that

“class litigation should not move forward when a court cannot

identify class members without extensive and individualized fact-

finding or ‘mini-trials.’” Id.

Plaintiffs do not argue that the Common Law Class is

ascertainable but instead contend that “[t]he Fourth Circuit has

not applied an ‘ascertainability’ requirement to a Rule 23(b)(2)

class.” (Doc. 111 at 33 n.19.) In response, LabCorp contends

that the Fourth Circuit does apply an ascertainability requirement

to Rule 23(b)(2) classes. (Doc. 190 at 29.) Furthermore, it

argues that the Common Law Class is not ascertainable because

Plaintiffs have failed to demonstrate a method of identifying

patients (1) “to whom [the list price] were disclosed before

testing;” (2) “to whom [the list price] were disclosed by an

intermediary” such as their physician; or (3) “who were charged

(or paid) a [list price] that was ‘in excess’ of the reasonable

value for the specific test performed.” (Id. at 27.) LabCorp

also argues that Plaintiffs’ proposed classes “are . . .

impermissible fail-safe classes” which “violate the

ascertainability requirement and raise due process concerns.”

(Id. at 28-29.) In reply, Plaintiffs “urge this court to follow

the cases holding an ascertainability requirement does not apply

to Rule 23(b)(2).” (Doc. 192 at 15.) Alternatively, they argue

the 23(b)(2) classes are ascertainable as “Labcorp keeps track of

the collectability rate of non-covered services . . . , which

means that it is able to identify patients whose insurance did not

pay for a test” and were charged the list price. (Id.)

i. Fourth Circuit Standard for Rule 23(b)(2)

Classes

As a threshold matter, the Fourth Circuit has not explicitly

held that the implied requirement of ascertainability - that

plaintiffs identify an administratively feasible way to identify

class members - should apply to Rule 23(b)(2) cases. However, the

court finds the reasoning in J.O.P. v. U.S. Department of Homeland

Security persuasive. 338 F.R.D. 33 (D. Md. 2020). There, the

court found that the Fourth Circuit’s opinion in EQT Production

Company v. Adair “at least suggests” that the ascertainability

requirement applies to Rule 23(b)(2) actions. 338 F.R.D. at 51.

In that case, “the Fourth Circuit discussed ascertainability with

respect to the plaintiffs’ ‘ownership classes’ for which

plaintiffs sought class certification under both Rules 23(b)(2)

and (3).” Id. at 51 (citing EQT Prod. Co., 764 F.3d at 357)

(emphasis in original).27 “Specifically, the classes that the

Fourth Circuit ultimately ordered the district court to reconsider

on ascertainability grounds sought ‘a declaration that the class

members [were] true owners of CBM, as well as payment of the

royalties they believe [defendants] have improperly escrowed or

27 Thus, Plaintiffs are plainly incorrect when they assert “the discussion

of ascertainability [in EQT] was [only] in the context of a Rule 23(b)(3)

class.” (Doc. 192 at 15 n.6.) The only discussion in EQT specific to

a Rule 23(b)(3) class concerned “underpayment of royalties” class claims.

See EQT Prod. Co., 764 F.3d at 364-71.

withheld.’” Id. (quoting EQT Prod. Co., 764 F.3d at 358) (emphasis

in original). The Fourth Circuit neither “suggest[ed] a different

analysis for each rule” nor “distinguish[ed] between rulings that

involve declaratory relief, covered by Rule 23(b)(2), and rulings

rewarding royalties or other individualized relief.” Id. Thus,

the J.O.P. court held that “threshold requirement of

ascertainability that is implicit in Rule 23 applies to Plaintiffs’

propose class.” Id. So it is here. Accordingly, the court finds

that the ascertainability requirement applies to Plaintiffs’

proposed Common Class.

ii. Application

Here, LabCorp is correct that even were Plaintiffs’ proposed

Common Law Class able to overcome the other hurdles for

certification, it fails to satisfy the ascertainability

requirement. As discussed above, each class depends on a class

member being charged a list price “in excess of the reasonable

market rate” despite no agreement or awareness of the potential

charges. (See, e.g., Doc. 111 at 25.) However, even assuming

LabCorp possesses the internal records to identify each potential

class member who was charged the list price (see Doc. 111 at, 33

n.19, 35), Plaintiffs have failed to identify an objective and

administratively feasible way to determine whether a potential

class member (or their “agent”)28 nevertheless was aware of or

agreed to pay the list price.29 Such determinations and extensive

fact finding would require the sort of “mini trials” that the

ascertainability requirement is designed to avoid. See Peters v.

Aetna Inc., 2 F.4th 199, 242 (4th Cir. 2021). LabCorp is correct

that Plaintiffs’ attempt to curtail these administrative problems

through their class definitions creates impermissible fail-safe

classes; whether a potential plaintiff qualifies as a member cannot

depend on whether LabCorp is unable to raise various individual

fact-driven defenses. See supra note 22. Thus, the court finds

that Plaintiffs’ Common Law Class fails to satisfy the

ascertainability requirement.

4. Rule 23(b) Requirements

In addition to meeting the Rule 23(a) requirements, “the

[proposed] class action must fall within one of the three

categories enumerated in Rule 23(b).” Gunnells, 348 F.3d at 423.

Plaintiffs seek to certify their Common Law Class under Rule

23(b)(2). (Doc. 111 at 33-34, 36-37.) Plaintiffs also seek to

certify the Misleading Estimates, Select Silver, and Urine Testing

28 See supra notes 20-21 and accompanying text.

29 Additionally, there is already evidence in the record that the list

price is not “unreasonable” or “in excess of the reasonable market rate”

in at least some instances. See supra note 26. Plaintiffs have not

submitted an administratively feasible way of distinguishing where the

list price charged was “reasonable” and where it was not.

subclasses pursuant to Rule 23(b)(3), and alternatively, under

Rule 23(b)(2). (Doc. 111 at 34-36.)30

a. Rule 23(b)(2)

Certification under Rule 23(b)(2) is appropriate if “the

party opposing the class has acted or refused to act on grounds

that apply generally to the class, so that final injunctive relief

or corresponding declaratory relief is appropriate respecting the

class as a whole.”31 Fed. R. Civ. P. 23(b)(2). By its terms, Rule

23(b)(2) therefore sets forth two requirements: (1) that the

defendant acted or refused to act on grounds generally applicable

to all class members, and that (2) final relief of an injunctive

nature or a corresponding declaratory nature, settling the

legality of the behavior with respect to the class, is appropriate.

30 As explained above, the Plaintiffs’ proposed subclasses cannot be

certified because the underlying claims were not adequately pleaded.

See supra, Part II-A-2 (“Subclass Certification”). However, the court

also finds that, in the alternative, these subclasses fail to satisfy

the requirements of Rule 23. See Ford, 703 F.3d at 711 n.2. For purposes

of the following analysis, moreover, the court considers Plaintiffs’

claims as to the credit card authorization in the Misleading Estimate

Subclass in the context of Plaintiffs’ overarching claim that LabCorp

is limited to seek a “reasonable value” for its services and not some

other disclosed value. (Doc. 111 at 25 (defining the Misleading Estimate

Subclass as those “Labcorp patients who were provided a written statement

describing potential charges not based on PLP, but were charged based

on PLP in excess of the reasonable market rate for the clinical lab

testing services Labcorp performed”) (emphasis added).)

31 “Because of the group nature of the harm alleged and the broad

character of the relief sought, the (b)(2) class is, by its very nature,

assumed to be a homogenous and cohesive group with few conflicting

interests among its members. Accordingly, Rule 23(b)(2) classes are

‘mandatory,’ in that ‘opt-out rights’ for class members are deemed

unnecessary and are not provided under the Rule.” Berry v. Schulman,

807 F.3d 600, 608-09 (4th Cir. 2015) (quotations omitted).

See Thorn, 445 F.3d at 330; Shook v. Board of County Commissioners

of County of El Paso, 543 F.3d 597, 604 (10th Cir. 2008) (noting

that the Tenth Circuit has “interpreted the rule to require that

a class must be amenable to uniform group remedies” (citation

omitted)).

“Rule 23(b)(2) applies only when a single injunction or

declaratory judgment would provide relief to each member of the

class.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360 (2011);

Shook, 543 F.3d 597, 604 (“[T]he class must be sufficiently

cohesive that any class-wide injunctive relief can satisfy the

limitations of Federal Rule Civil Procedure 65(d) — namely, the

requirement that it ‘state its terms specifically; and describe in

reasonable detail . . . the act or acts restrained or

required.’”). “The requirement that declaratory or injunctive

relief predominate, of course, echoes the predominance requirement

of Rule 23(b)(3), and, albeit indirectly, serves essentially the

same function.” Thorn, 445 F.3d at 330. This rule does not

authorize class certification, however, when “each class member

would be entitled to an individualized award of monetary damages.”

Dukes, 564 U.S. at 360-61. “Rule 23(b)(2)’s categorical exclusion

of class actions seeking primarily monetary relief, like Rule

23(b)(3)’s predominance requirement, therefore ensures that the

class is sufficiently cohesive that the class-action device is

properly employed.” See Thorn, 445 F.3d at 330. Moreover, “[i]f

redressing the class members’ injuries requires time-consuming

inquiry into individual circumstances or characteristics of class

members or groups of class members, ‘the suit could become

unmanageable and little value would be gained in proceeding as a

class action.’” Shook, 543 F.3d at 604 (quoting Barnes v. American

Tobacco Co., 161 F.3d 127, 143 (3d Cir. 1998)). “In short, under

Rule 23(b)(2) the class members’ injuries must be sufficiently

similar such that they can be addressed in a single injunction

that need not differentiate between class members.” Id.; Thorn,

445 F.3d at 330 (“[T]he goal of the remedy phase is either to make

a declaration about or enjoin the defendant’s actions affecting

the class as a whole, and individual hearings will not be

necessary.”)

Plaintiffs argue that the Common Law Class satisfies Rule

23(b)(2) because an injunction would prevent LabCorp from

recovering a list price amount “that exceeded a reasonable value”

and require “advanced disclosure” of the list price. (Doc. 111 at

33.) Additionally, Plaintiffs argue that the Misleading Estimate,

Urine Testing, and Select Silver subclasses may be certified under

Rule 23(b)(2) because “Labcorp has acted in a uniform manner” in

“providing uniform documents with inadequate and misleading

estimates,” not acting “in conformance with industry standards”

when billing Urine Testing class members, and not “charging Select

Silver patients” the list price. (Id. at 37.)

In response, LabCorp argues that the Common Law class “fails

to satisfy Rule 23(b)(2)” because “disparate factual

circumstances” surround each potential class member. (Doc. 190 at

33.) For example, LabCorp argues that “an unidentified segment of

the proposed class . . . actually knew the PLP before service or

had their services ordered by a provider on their behalf who knew

the PLP” – render the proposed class “not cohesive.” (Id.) They

also argue that “Plaintiffs have not offered a workable injunction

plan with sufficient specificity.” (Id. (noting Plaintiffs’

proposed injunction is “unlimited as to time” and “would enjoin

conduct unrelated to liability”).) Further, LabCorp contends that

the Misleading Estimate, Urine Testing, and Select Silver

subclasses should not be certified under Rule 23(b)(2) in the

alternative, as “such a class may be certified only when monetary

damages are ‘incidental’ to the injunction sought.” (Id. at 40

(citing Berry v. Schulman, 807 F.3d 600, 609 (4th Cir. 2015)). In

reply, Plaintiffs suggest various types of injunctive relief the

court “could” provide to generally “protect class members.” (Doc.

192 at 8, 8 n.5.)

The problems that inhere in the determination of a “reasonable

price” for the thousands of tests for the class members infect the

injunctive relief request. (See Doc. 120-2 at 17 (Dr. Song

acknowledging the existence of 281,341 unique tests); Doc. 190-3

at 260 (deposition of LabCorp Senior Vice President Tammy Karnes,

explaining that LabCorp has “thousands of tests”).) As discussed

above, determining the list price for each test will depend on a

factfinder analyzing numerous factors, including those offered by

LabCorp’s pricing department.32 (See Doc. 190 at 9-10.) Thus,

even if a list price for one test for one class member was deemed

unreasonable and LabCorp was enjoined from collecting it, that

would not necessarily mean that a different list price for any of

the thousands of different tests is unreasonable for different

class members. Any appropriate injunctive relief would require

individualized assessments of whether a particular class member is

entitled to an order barring the collection of the list price as

to each test in his or her bill, and thus there is no “cohesiveness

among class members with respect to their injuries.” Shook, 543

F.3d at 604; see Dukes, 564 U.S. at 360. In other words, Plaintiffs

do not satisfy Rule 23(b)(2) because “as a substantive matter the

relief sought would merely initiate a process through which highly

individualized determinations of liability and remedy are made.”

Jamie S. v. Milwaukee Pub. Sch., 668 F.3d 481, 499 (7th Cir. 2012)

(finding district court erred by certifying an injunction class

under Rule 23(b)(2)). This cuts against the very definition of a

cohesive class. See Gates, 655 F.3d at 264 (“The key to the [Rule

23](b)(2) class is ‘the indivisible nature of the injunctive or

32 See supra note 26 and accompanying text.

declaratory remedy warranted — the notion that the conduct is such

that it can be enjoined or declared unlawful only as to all of the

class members or as to none of them.’”) (quoting Dukes, 564 U.S.

at 360)); see Shook, 543 F.3d at 604 (“The latter half of Rule

23(b)(2) requires that final injunctive relief be appropriate for

the class as a whole . . . and we have interpreted the rule to

require that a class must be amenable to uniform group remedies.”

(internal quotation marks omitted)(emphasis in original)); see

also Thorn, 445 F.3d at 330 (“[T]he goal of the remedy phase is

either to make a declaration about or enjoin the defendant’s

actions affecting the class as a whole, and individual hearings

will not be necessary.”).

Furthermore, Plaintiffs do not attempt to justify their

proposed injunctive remedy, which asks the court to “enjoin[]

collection of PLPs on past or future lab tests when there is no

patient written acknowledgment of that price.” (Doc. 111 at 24.)

This proposal is problematic because it appears to reach what even

Plaintiffs concede is lawful conduct. Plaintiffs’ theory of

liability in this case is that it is unlawful for LabCorp to

collect the list price without disclosing that price before the

test is performed. (Doc. 111 at 9.) Yet under their proposed

injunction, LabCorp would be subject to contempt proceedings even

when a patient was orally advised of the list price – whether by

LabCorp, a treating physician, or otherwise - but did not provide

that patient with a written acknowledgment of that price. As such,

the proposed injunction goes far beyond enjoining the conduct

complained of and violates “traditional concepts of judicial

restraint in equity matters.” Bhd. of R.R. Carmen of Am., Local

No. 429 v. Chi. & N.W. Ry. Co., 354 F.2d 786, 800 (8th Cir. 1965);

see N.L.R.B. v. Express Publ'g Co., 312 U.S. 426, 435-36 (1941)

(“This Court will strike from an injunction decree restraints upon

the commission of unlawful acts which are thus [disassociated]

from those [acts] which a defendant has committed.”); Mallet & Co.

Inc. v. Lacayo, 16 F.4th 364, 390 (3d Cir. 2021) (“Injunction

orders should not restrain competitors from engaging in lawful

business activities.”).

Plaintiffs’ other vague suggestions for injunctive relief

fare no better. (See Doc. 192 at 8, 8 n.5 (“The Court could also

enjoin Labcorp from collecting PLPs from class members, to make

its PLPs publicly available (such as on its website), and/or

requiring a patient’s signature to acknowledge PLPs before being

billed them.”).) While Plaintiffs need not “come forward with an

injunction that satisfies Rule 65(d) with exacting precision at

the class certification stage,” Shook, 543 F.3d at 605 n.4, they

must at least be able to describe it in “reasonably particular

detail” to permit the court to “at least ‘conceive of an injunction

that would satisfy Rule 65(d)'s requirements,’ as well as the

requirements of Rule 23(b)(2).” Id. at 605 (alteration omitted)

(quoting Monreal v. Potter, 367 F.3d 1224, 1236 (10th Cir. 2004)).

“Rule 65(d) reflects Congress’[s] concern with the dangers

inherent in the threat of a contempt citation for violation of an

order so vague that an enjoined party may unwittingly and

unintentionally transcend its bounds.” Sanders v. Air Line Pilots

Ass'n, Int'l, 473 F.2d 244, 247 (2d Cir. 1972) (citing Int'l

Longshoremen's Ass'n, Local 1291 v. Phila. Marine Trade Ass'n, 389

U.S. 64 (1967)). Here, Plaintiffs’ indefinite intentions for their

injunction are not sufficient to trigger the remedial power of the

court to dictate how a private company conducts its business. See

Gunn v. University Committee to End the War in Vietnam, 399 U.S.

383, 389 (1970) (“An injunctive order is an extraordinary writ,

enforceable by the power of contempt.”); CPC Int'l, Inc. v. Skippy

Inc., 214 F.3d 456, 459 (4th Cir. 2000) (“The terms of Rule 65(d)

are mandatory and must be observed in every instance.”) (internal

quotation marks omitted).

Finally, LabCorp is correct that, although Plaintiffs’ class

certification of the Misleading Estimates, Urine Testing, and

Select Silver subclasses nominally seeks an injunction, “[w]here

monetary relief predominates, Rule 23(b)(2) certification is

inappropriate.” Berry, 807 F.3d at 609. The clear purpose of

each of Plaintiffs’ proposed subclasses is monetary relief – it is

not enough that LabCorp ceases to perform the conduct at issue to

each class member. In order to be granted relief, each class

member primarily seeks compensation for LabCorp’s alleged

wrongdoing. Thus, Rule 23(b)(2) certification is improper as “the

presumption of cohesiveness” is broken down and “the procedural

safeguard of opt-out rights” is necessary. Id.

Accordingly, Plaintiffs’ proposed classes fail to satisfy the

requirements of Rule 23(b)(2).

b. Rule 23(b)(3)

Rule 23(b)(3) class actions are proper where “the court finds

that the questions of law or fact common to class members

predominate over any questions affecting only individual members,

and that a class action is superior to other available methods for

fairly and efficiently adjudicating the controversy.” Fed. R.

Civ. P. 23(b)(3). These two requirements relate to the action’s

“manageability,” which is “a practical problem, and primarily a

factual one with which a district court generally has a greater

familiarity and expertise.” See Windham v. American Brands, Inc.,

565 F.2d 59, 65 (4th Cir. 1977) (en banc) (citation omitted).

Accordingly, trial courts enjoy “a wide range of discretion” in

evaluating whether the requirements of Rule 23(b)(3) have been

met. Id. (citation omitted); see Reiter v. Sonotone Corp., 442

U.S. 330, 345 (1979) (noting that district courts “have broad power

and discretion vested in them” as to the “certification and

management of potentially cumbersome” class actions).

The predominance requirement - that questions common to the

class “predominate” over other individual questions - is more

stringent than the “commonality” requirement under Rule 23(a).

See Lienhart v. Dryvit Systems, Inc., 255 F.3d 138, 146 n.4 (4th

Cir. 2001). An individual question is one where proposed class

members will need to present “evidence that varies from member to

member,” while a common question can be proved by the same evidence

for each member in order to make a prima facie showing “or the

issue is susceptible to generalized, class-wide proof.” Tyson

Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 453 (2016) (citation

omitted). The predominance inquiry begins “with the elements of

the underlying cause of action.” Erica P. John Fund, Inc. v.

Haliburton Co., 563 U.S. 804, 809 (2011). At bottom, the inquiry

determines whether a trial meant to resolve class-wide issues is

manageable or whether it is likely to devolve into a series of

individual mini-trials examining questions specific to individual

class members. See Thorn, 445 F.3d at 327–29.

Plaintiffs argue that, as to the Misleading Estimate, Urine

Testing, and Select Silver subclasses, their class definitions

satisfy the predominance requirement. (Doc. 111 at 34-36.) In

response, LabCorp argues that “individualized [fact] questions”

will predominate over Plaintiffs’ proposed common questions, and

that “Plaintiffs also failed to show that individualized issues

regarding state law will not predominate.” (Doc. 190 at 39.)

LabCorp further contends that “Plaintiffs previously represented

to this Court that ‘each state’s [consumer protection law] statute

is distinct and requires separate analysis as to whether the claim

may proceed.’” (Id. at 39-40 (citing Doc. 36 at 14).) Plaintiffs

did not respond to these arguments in their reply. (See Doc. 192.)

That silence is ordinarily deemed a concession of the

argument. See Mahdi v. Stirling, 20 F.4th 846, 905 (4th Cir. 2021)

(citations omitted) (explaining that a failure to respond to an

argument in reply brief results in waiver of that issue). But

even so, it is apparent that common questions for these proposed

classes do not predominate. First, as discussed above with respect

to Rule 23(a)’s requirement of commonality, the question of whether

a class member was charged a list price that exceeds a reasonable

value “turns on a consideration of the individual circumstances of

each class member.” Thorn, 445 F.3d at 319 (citation omitted).

Whether the factors LabCorp considers when determining the list

price for a particular test at a particular time in a particular

region was “reasonable” for that particular class member is

necessarily a specific inquiry for individual class members. Cf.

Maldonado v. Ochsner Clinic Foundation, 493 F.3d 521, 525 (5th

Cir. 2007) (“[T]he reasonableness of medical fees depends on

multiple factors, including the services rendered, patient’s

financial status, and customary fee for similar services, [so] it

is unlikely Appellants could ever demonstrate that the

chargemaster rates are unreasonable.”). Such individualized

questions, applied to the diverse situations of the potential class

members, illustrates that the predominance requirement cannot been

met.

In addition to the nature of each test, there is an

individualized component as to the damages suffered. See Deiter,

436 F.3d at 467 (discussing, in class action antitrust claim

context, the requirement that the plaintiffs establish proof of

damages). While individual questions as to damages do not

necessarily defeat class certification alone, see Gunnells, 348

F.3d at 429, Plaintiffs’ theory assumes that proof that one test

exceeds the “reasonable value” is sufficient to show injury across

the class. Not only is that not true for any specific test, it is

not true across the hundreds (perhaps thousands) of tests at issue

in this litigation. Merely demonstrating that a list price exceeds

the reasonable value as to one test for one class member in one

locale does not necessarily demonstrate that a separate list price

exceeds a separate reasonable value for a different class member.

Further, as to the Misleading Estimates subclass, LabCorp is

correct that “Plaintiffs have not tried to show that the consumer

protection laws of all states are sufficiently similar to warrant

certification of nationwide subclasses.” (Doc. 190 at 39.) Where

attempting to certify a class across the law of several states,

“plaintiffs have the burden of showing that common questions of

law predominate, and they cannot meet this burden when the various

laws have not been identified and compared.” Gariety v. Grant

Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2004) (emphasis added).33

Here, Plaintiffs have failed to identify and compare the possible

consumer protection statutes applicable to their class claims.

Additionally, Plaintiffs’ prior representations to this court

suggests that any effort to do so would be fruitless. (See Doc.

36 at 14 (noting that “each state’s [consumer protection law]

statute is distinct and requires separate analysis as to whether

the claim may proceed”); see also Doc. 190 at 40 (discussing

“relevant differences” between the consumer protection laws at

issue here).) See BMW of North America, Inc. v. Gore, 517 U.S.

559, 568–70 (1996) (describing the states’ deceptive trade

practice laws as “a patchwork of rules representing the diverse

policy judgments of lawmakers in 50 States”).

Accordingly, Plaintiffs’ motion for class certification (Doc.

99) will be denied, and Plaintiffs’ motion for appointment of class

counsel under Rule 23(g) contained therein will be denied as moot.

B. Motion to Seal

The parties have moved jointly to seal certain portions of

the record. (Docs. 196, 197.) Plaintiffs later filed an objection

to certain designations addressed in the joint motion (Doc. 198),

33 This is borne out by the related case, Nolan, supra, whose claims are

predicated on the unfair and deceptive trade practice laws of Florida

and Nevada, which differ not only in their statutory text but also in

their judicial interpretations.

and LabCorp filed a reply (Doc. 199). For the reasons stated

below, the motion to seal will be granted.

“[T]he courts of this country recognize a general right to

inspect and copy . . . judicial records and documents.” Nixon v.

Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978). “The operations

of the courts and the judicial conduct of judges are matters of

utmost public concern,” Landmark Commc'ns, Inc. v. Virginia, 435

U.S. 829, 839 (1978), “and the public's business is best done in

public.” Cochran v. Volvo Grp. N. Am., LLC, 931 F. Supp. 2d 725,

727 (M.D.N.C. 2013). The right of public access derives from both

the common law and the First Amendment. See Va. Dep’t of State

Police v. Washington Post, 386 F.3d 567, 576 (4th Cir. 2004).

“While the common law presumption in favor of access attaches to

all ‘judicial records and documents,’ the First Amendment

guarantee of access has been extended only to particular judicial

records and documents.” Stone v. Univ. of Md. Med. Sys. Corp.,

855 F.2d 178, 180 (4th Cir. 1988) (citation omitted). Accordingly,

in any given case, some documents will “fall within the common law

presumption of access,” others will be “subject to the greater

right of access provided by the First Amendment,” and some “may

not qualify as ‘judicial records’ at all.” United States v.

Moussaoui, 65 F. App'x 881, 889 (4th Cir. 2003) (unpublished)

(citing United States v. Amodeo, 44 F.3d 141, 145–46 (2d

Cir.1995)).34

When a party makes a request to seal judicial records, a

district court “must comply with certain substantive and

procedural requirements.” Washington Post, 386 F.3d at 576.

Procedurally, the court must (1) give the public notice and a

reasonable opportunity to challenge the request to seal; (2)

“consider less drastic alternatives to sealing”; and (3) if it

decides to seal, make specific findings and state the reasons for

its decision to seal over the alternatives. Id. “As to the

substance, the district court first must determine the source of

the right of access with respect to each document, because only

then can it accurately weigh the competing interests at stake.”

Id. (internal quotation marks and alteration omitted).

As to the source of the right at issue, this court has

previously explained that “[t]here does not appear to be a First

Amendment right of access” to briefs and exhibits filed in

connection with a motion for class certification. Cochran, 931 F.

Supp. 2d at 728; see Garey v. James S. Farrin, P.C., No. 1:16CV542,

2020 WL 1676947, at *1 (M.D.N.C. Apr. 6, 2020). Nevertheless, as

“documents filed with the court that play a role in the

adjudicative process,” briefs and exhibits filed in connection

34 Unpublished opinions of the Fourth Circuit are not precedential but

can be cited for their persuasive, but not controlling, authority. See

Collins v. Pond Creek Mining Co., 468 F.3d 213, 219 (4th Cir. 2006).

with a motion for class certification are considered “judicial

records” to which the common law presumption of access attaches.

See Cochran, 931 F. Supp. 2d at 727–29 (citing In re Application

of U.S. for an Order Pursuant to 18 U.S.C. Section 2703(d), 707

F.3d 283, 290 (4th Cir. 2013)).

The common law presumption of access may be overcome when

“there is a ‘significant countervailing interest’ in support of

sealing that outweighs the public's interest in openness.” In re

Application, 707 F.3d at 293 (quoting Under Seal v. Under Seal,

326 F.3d 479, 486 (4th Cir. 2003)). The burden of establishing

such a countervailing interest is on the party seeking to keep the

information sealed. See Rushford v. New Yorker Magazine, Inc.,

846 F.2d 249, 253 (4th Cir. 1988).

In evaluating whether a party has met its burden to overcome

the public's right of access, the court should consider “the

interests advanced by the parties in light of the public interest

and the duty of the courts.” Nixon, 435 U.S. at 602. As the Nixon

Court noted, “access has been denied where court files might have

become a vehicle for improper purposes,” such as using court

records to gratify private spite, to promote public scandal, or as

“sources of business information that might harm a litigant's

competitive standing.” Id. at 598.

In their joint motion to seal, the parties contend that there

are three categories of documents and information appropriate for

sealing: (1) “Medical, insurance, and records containing

Plaintiffs’ individually identifiable health information,”

including “information protected by” the Health Insurance

Portability and Accountability Act (“HIPPA”); (2) “LabCorp’s

sensitive and confidential competitive business information”; and

(3) “[A]nalysis discussing information produced by a non-party,

Quest Diagnostics, Inc.,” which was “designated by Quest’s counsel

as” highly confidential. (Doc. 197 at 4-5.) Two weeks after

filing the joint motion to seal, however, Plaintiffs apparently

changed tack and objected to certain of LabCorp’s “sealing

designation of data derived from LabCorp’s publicly available

pricing.” (Doc. 198 at 3.) They also sought to “withdraw their

sealing designations for any Protected Health Information” for all

named plaintiffs and affiants, except for Lily Martyn and Ramzi

Khazen. (Id.) In reply, LabCorp maintains that its confidential

business information should be sealed and stresses that

Plaintiffs’ objection mischaracterizes its request as an effort to

seal its patient list prices. (Doc. 199 at 3.) As to Plaintiffs’

reversal of their own request to seal portions of their documents

containing HIPPAA-protected information, LabCorp “takes no

position” but “respectfully seeks further direction from the Court

to ensure compliance with federal law” as it relates to the

protected health information contained in its own filings. (Id.

at 3-5.)

First, as to the joint motion’s second and third categories

– concerning LabCorp’s sensitive and confidential business

information and certain confidential analysis provided by Quest

Diagnostics, a non-party – the court finds that that the

presumption of access has been overcome and therefore that sealing

is appropriate. It is well-established that “[o]ne exception to

the public's right of access is where such access to judicial

records could provide a ‘source[] of business information that

might harm a litigant's competitive standing.’” Woven Electronics

Corp. v. Advance Group, Inc., 930 F.2d 913 (4th Cir. 1991)

(unpublished) (quoting Nixon, 435 U.S. at 598); see Bayer

Cropscience, Inc. v. Syngenta Crop Prot., LLC, 979 F. Supp. 2d

653, 656–57 (M.D.N.C. 2013) (explaining that sealing is

appropriate when the information contains “certain marketing,

sales, and licensing information which is not ordinarily public”

whose disclosure would harm “[t]he competitive and financial

interest of the part[y]”); Longman v. Food Lion, Inc., 186 F.R.D.

331, 335 (M.D.N.C. 1999) (noting documents could “be sealed even

given the public access requirements because they contain

Defendants’ trade secrets, confidential business information, or

information protected by attorney-client privilege”).

While statements by counsel in briefs are not evidence, INS

v. Phinpathya, 464 U.S. 183, 188 n. 6 (1984), superseded by statute

on other grounds, 8 U.S.C. § 1254(b)(3), LabCorp’s representation

to the court “that documents contain confidential business

information can be considered as some evidence.” Cochran, 931 F.

Supp. 2d 730 (citing Pittston Co. v. United States, 368 F.3d 385,

406 (4th Cir. 2004)). Moreover, the court’s own review of the

materials reveals that LabCorp, far from attempting to conceal the

patient list prices, seeks only to keep secret certain non-public

business information whose disclosure would harm its competitive

standing. Furthermore, LabCorp has narrowly tailored its proposed

redactions to allow for public access to the majority of the

filings, a less drastic alternative to sealing the documents in

their entirety. See Garey, 2020 WL 1676947, at *2. Here, too,

the public notice of the request to seal was filed on January 12,

2022, over a year ago, and since then no member of the public has

objected despite a reasonable opportunity to do so. See Silicon

Knights, Inc. v. Epic Games, Inc., No. 5:07-CV-275-D, 2008 WL

3914463, at *3 (E.D.N.C. Aug. 22, 2008). Accordingly, the motion

to seal, as it relates to LabCorp’s confidential and sensitive

business information, is granted.

Next, as to the joint motion’s second category of information

– the “[m]edical, insurance, and records containing Plaintiffs’

individually identifiable health information and other health

information, including information protected by [HIPPA]” – the

court also finds that the presumption of access has been overcome.

Courts regularly recognize that an individual’s interest in the

privacy of his or her health information is a legitimate basis for

sealing. See Ansara v. Maldonado, No. 219CV01394GMNVCF, 2022 WL

17253803, at *3 (D. Nev. Nov. 1, 2022); K.K. v. Premera Blue Cross,

No. 21-cv-1611, 2022 WL 1719134, at *4 (W.D. Wash. May 27, 2022);

Frohn v. Globe Life & Accident Ins. Co., No. 1:19-CV-713, 2022 WL

214553, at *1 (S.D. Ohio Jan. 25, 2022); U.S. ex rel. Lockyer v.

Hawaii Pac. Health, No. CIV. 04-00596 ACK-LE, 2007 WL 128853, at

*1 (D. Haw. Jan. 10, 2007). Congress, too, has recognized the

importance of that privacy interest when it enacted HIPAA, 42

U.S.C. § 1320d et seq., a federal statute which obliges LabCorp,

as a covered entity, to carefully guard the use and disclosure of

its patients protected health information. (Doc. 199 at 4). This,

too, weighs in favor of sealing. See Shane Grp., Inc. v. Blue

Cross Blue Shield of Michigan, 825 F.3d 299, 308 (6th Cir. 2016)

(explaining that sealing is appropriate when the information is

protected by statute or regulation). Finally, the public’s

interest in access to this information is at best minimal,

especially considering the court’s limited reliance on the

information sought to be kept secret.35 See Lesnik v. Eisenmann

SE, No. 16-CV-01120-LHK, 2021 WL 2093062, at *2 (N.D. Cal. Feb.

12, 2021) (explaining that because the court “did not rely on any

of the information that the parties seek to seal” the “public

35 The court’s only citation to this redacted information can be found

at footnote 26, supra.

interest in access to this information is minimal.”) Accordingly,

the compelling reasons for sealing here outweigh the public’s need

for direct access to the information sought to be redacted.

Plaintiffs indicate, however, that they no longer “object to

the public disclosure” of their medical information and thus seek

to “withdraw” their requests to seal made in connection with their

filings. (Doc. 198 at 6.) LabCorp does not oppose this request.

(Doc. 199 at 4-5.) Of course, should they so choose, Plaintiffs

may voluntarily file documents on the public docket which contain

references to their own confidential health information.

Accordingly, the court grants the motion to seal; provided,

however, that the grant is stayed for seven days and is without

prejudice to Plaintiffs’ withdrawal of the sealed documents filed

with the court and refiling same for public view with redactions

of only personal identifiers (such as birthdate, social security

number, etc.). See United States v. Dunlap, 458 F. Supp. 3d 368,

372 (M.D.N.C. 2020).

III. CONCLUSION

This case, which has been through various iterations over

almost six years, seeks to address an issue endemic to the present

health care economy: the often-indeterminate cost of healthcare.

The present context involves laboratory testing. Many, perhaps

most, patients who seek laboratory testing do so at the behest of

a treating physician. With the patchwork of insurance coverage

options – including Medicare, Medicaid, and scores of insurers -

physicians themselves are ill-suited to know the range of prices

applicable to any particular patient for any particular test by

any particular testing laboratory. While patients could inquire

of their physician’s business staff or of the laboratory services

company itself about their full potential financial liability,

this case demonstrates that some, perhaps many, fail to do so.

The same is true when patients order tests directly from LabCorp

at one of its service centers. By contrast, it would be a rare

thing for a customer to conduct any other business transaction in

a similar fashion.

Plaintiffs here seek to prohibit LabCorp from charging its

list prices to patients who order laboratory testing through their

physicians or at LabCorp service centers on the grounds that such

prices, which often exceed negotiated prices with insurers or the

government, are excessive and undisclosed. Plaintiffs’ proposed

remedy is a court-imposed nationwide average “reasonable rate”

across hundreds, if not thousands, of tests. This “reasonable

rate” would be imposed as well on all LabCorp customers who

presented to a LabCorp service center and received an estimate of

their costs based on the customer’s proffered insurance

information but for whom the insurer later denied coverage, in

whole or in part. Finally, Plaintiffs seek injunctive relief,

including a requirement that LabCorp post its list prices on the

internet and disclose its list prices in its interactions with

patients at its service centers, even though the patients claim to

have insurance which, if applicable, would likely entitle them to

a lower rate.

Some jurisdictions have addressed so-called “surprise”

medical billing legislatively, mandating certain disclosures.36

While legislatures are not bound by the Federal Rules of Civil

Procedure, this court is. In seeking to impose such a remedy

judicially in this proposed class action, Plaintiffs’ claims

cannot overcome the important hurdles that distinguish a court

from a legislature. For the reasons stated, the problems alleged

in this case are not amenable to judicial relief. Therefore,

IT IS ORDERED that the Plaintiffs’ motion for class

certification (Doc. 99) is DENIED, their motion for appointment of

class counsel under Rule 23(g) (Doc. 99) is DENIED as moot, and

the parties’ joint motion to seal (Doc. 196) is GRANTED, provided,

however, that the grant is STAYED for seven days and is without

prejudice to Plaintiffs’ withdrawing those identified sealed

documents filed with the court and re-filing them for public view

with redactions of only personal identifiers (such as birthdate,

social security number, etc.).

36 See, e.g., No Surprises Act, Pub. L. 116-260, 134 Stat. 2758 (2021);

Conn. Gen. Stat. § 38a-477aa (2015) (the “Surprise Billing Law”); Wash.

Rev. Code § 48.49, et seq. (2019) (“Balance Billing Protection Act”);

N.M. Stat. Ann § 59a, et seq. (2019) (the “Surprise Billing Protection

Act”).

/s/ Thomas D. Schroeder

United States District Judge

February 13, 2023