North Carolina Superior Court Denies Class Certification In Hospital Monopoly Case

Duane Morris Takeaways: On September 8, 2026, Judge Mark A. Davis of the North Carolina Superior Court denied Plaintiffs’ motion for class certification and excluded key portions of Plaintiffs’ expert report in Davis v. HCA Healthcare, Inc., Case No. 21-CVS-003276-100 (N.C. Super. Ct. Sept. 8, 2026). The Court found that Plaintiffs, a putative class of indirect purchasers alleging that a hospital network’s anticompetitive conduct caused them to pay inflated health insurance premiums, failed to satisfy the predominance requirement under Rule 23 of the North Carolina Rules of Civil Procedure because they could not demonstrate class-wide antitrust impact through common proof. The decision is required reading for defense counsel in antitrust class actions, particularly those involving indirect purchaser claims and pass-through theories of harm.

Case Background

Plaintiffs are individual North Carolina residents and a small business who purchased commercial health insurance in the Western North Carolina region through various channels, including ACA Exchange plans, employer-sponsored fully-insured plans, and employer-sponsored self-funded plans. They brought suit against the HCA entities that acquired Mission Health, a hospital system in Western North Carolina, from ANC Healthcare, Inc. and Mission Hospital, Inc. (the “ANC Defendants”) in January 2019, as well as the ANC Defendants themselves (the former nonprofit owners of Mission Health). The Plaintiffs asserted claims for monopolization, attempted monopolization, and restraint of trade under N.C.G.S. § 75-1 and the North Carolina Constitution.

Mission Health had previously operated under a Certificate of Public Advantage (“COPA”) that shielded it from antitrust liability in exchange for regulatory oversight. The COPA was repealed in 2016. Plaintiffs allege that Defendants coerced Blue Cross Blue Shield (“BCBS”) and United Healthcare (“United”) into including anticompetitive provisions in managed care contracts, resulting in supra-competitive prices for healthcare services that were ultimately passed through to the putative class in the form of higher health insurance premiums. A separate direct purchaser class action against the same Defendants, City of Brevard v. HCA Healthcare, Inc., No. 1:22-CV-00114 (W.D.N.C.), was previously filed in federal court and settled. The present action was designated a mandatory complex business case and assigned to the North Carolina Business Court.

The Court’s Decision

The Court focused its denial on the predominance requirement, specifically whether Plaintiffs demonstrated class-wide antitrust impact through common proof. As a threshold matter, the Court rejected Plaintiffs’ argument that because they sought only equitable relief — injunctive relief and equitable disgorgement rather than monetary damages — a relaxed predominance standard should apply. The Court emphasized a critical structural distinction between North Carolina Rule 23 and Federal Rule 23: unlike the Federal Rules, which exempt injunctive-relief classes from the predominance requirement under Rule 23(b)(2), North Carolina’s Rule 23 requires predominance for all class actions regardless of the type of relief sought. See Dewalt v. Hooks, 382 N.C. 340, 350–51 (2022). This distinction eliminated Plaintiffs’ primary pathway to a lower certification bar.

Turning to the merits, the Court found that Plaintiffs’ indirect purchaser theory — that supra-competitive healthcare prices were passed through by BCBS and United to class members via higher premiums — was not supported by sufficient common evidence. The Court excluded paragraphs 232–237 of Plaintiffs’ expert, Dr. Robert J. Town’s, report under Rule 702 and the Daubert framework. Dr. Town’s opinions on pass-through consisted of only six paragraphs out of 237 total, relied solely on general economic literature and selected deposition testimony, and did not employ any econometric or statistical model. Critically, Dr. Town admitted in deposition that he was never asked to quantify damages, determine the number of class members who suffered harm, calculate a pass-through rate, or analyze any lag between alleged overcharges and premium increases.

The Court relied heavily on Sidibe v. Sutter Health (Sutter I), 333 F.R.D. 463 (N.D. Cal. 2019), where a similar indirect purchaser class was denied certification because the expert’s pass-through analysis was based on assumptions rather than rigorous econometric modeling, and noted that even the expert in Sutter I had at least attempted to construct a statistical model, which Dr. Town had not done. The Court catalogued a series of unaddressed questions that Dr. Town’s analysis failed to consider, including how many distinct insurance plans were affected, the role of regulatory oversight by the NC Department of Insurance, competition within the insurance market, other factors contributing to premium increases, whether refunds or rebates offset any pass-through, the differences between ACA, fully-insured, and self-funded plans, and whether employers absorbed costs rather than passing them to employees. The Court also rejected Plaintiffs’ alternative theory that class members were harmed by a decrease in the quality of services at Mission Health, finding this theory inherently individualized and subjective.

Implications For Employers

Davis v. HCA Healthcare is a significant defense victory in indirect purchaser antitrust class actions and underscores the rigorous burden plaintiffs face in demonstrating pass-through impact on a class-wide basis. The decision reinforces that generic economic literature and corporate representative testimony about general pricing trends are insufficient to satisfy predominance — plaintiffs must present actual econometric or statistical modeling showing that alleged overcharges were passed through to all or virtually all class members.

The ruling also highlights a potentially significant structural advantage for class action defendants in North Carolina state court: because North Carolina’s Rule 23 does not contain a counterpart to Federal Rule 23(b)(2), plaintiffs cannot avoid the predominance requirement simply by recasting damages claims as requests for injunctive or equitable relief. Defense counsel should further note the Court’s thorough catalogue of individualized issues that an indirect purchaser expert must address — including plan-specific pricing dynamics, regulatory influences, competitive market conditions, and employer-level absorption of costs — which provides a useful roadmap for challenging pass-through expert opinions in future cases. The decision is consistent with a growing body of case law requiring rigorous empirical analysis in indirect purchaser class actions and sends a clear signal that courts will closely scrutinize the methodology behind pass-through theories at the certification stage.