members' reliance on those misrepresentations; (4) knowledge by each class member about the purported mis-enrollment differs; and (5) levels of damages for each plaintiff differ, in part due to the fact that emotional distress is an alleged component of the damages. Def. Brf. dated June 23, 1995. Based on all of these alleged individual issues, Empire claims the class action would be unmanageable.
Again, Empire's arguments are not persuasive. Although disposition of this action will require the interpretation of several plan documents, notwithstanding some differences in contractual language, the language in all the policies is expected to be substantially similar because of the statutory nature of Medicare and MSP, and the relatively small variations in the terms of the different policies. Thus the commonality prong of Rule 23(b)(3) is satisfied. See Kenavan, 1993 U.S. Dist. LEXIS 4977, 1993 WL 128012 at n. 1 ("Although there may be some confusion about the names of the policies in question, there do not appear to be more than three distinct [Medigap] contracts at issue in this case.")
The alleged difference of issues with regard to the nature of the purported misrepresentations, including oral statements, in addition to each class member's knowledge of and reliance on those statements, is insufficient to defeat the commonality requirement of Rule 23(b)(2). See In re Crazy Eddie Securities Litigation, 802 F. Supp. 804, 812 (E.D.N.Y. 1992); Kenavan, 1993 U.S. Dist. LEXIS 4977, 1993 WL 128012 at *4. New York courts have held that reliance may be assumed for the purposes of class certification "subject to such proof as is required on the trial." Weinberg v. Hertz Corp., 116 A.D.2d 1, 499 N.Y.S.2d 693, 696 (1st Dep't 1986), aff'd on other grounds, 69 N.Y.2d 979, 516 N.Y.S.2d 652, 509 N.E.2d 347 (1987). In addition, as the different plans are no doubt similar, and the communications to the employers were the same, as is indicated by Empire's own submissions, it is not unreasonable to assume that the alleged misrepresentations were very similar. See Kenavan, supra.
Further, "it is well-established that individual questions with respect to damages will not defeat class certification or render a proposed representative inadequate unless that issue creates a conflict which goes to the heart of the lawsuit." In re AM Int'l, Inc. Sec. Litigation, 108 F.R.D. 190, 196 (S.D.N.Y. 1985). Although the level of damages would be different for each plaintiff, they will not be difficult for Empire to determine. Plaintiffs seek double the amount of any improperly denied insurance claims under the MSP statute. Therefore, this case is similar to class actions seeking welfare benefits, where courts have ruled class certification is appropriate even though plaintiffs' damage amounts would vary. See Rodriguez v. Swank, 318 F. Supp. 289, 294 (N.D. Ill. 1970), aff'd, 403 U.S. 901, 29 L. Ed. 2d 677, 91 S. Ct. 2202 (1971); Calkins v. Blum, 511 F. Supp. 1073, 1088 (N.D.N.Y. 1981), aff'd on other grounds, 675 F.2d 44 (2d Cir. 1982).
In addition, the fact that plaintiffs also seek damages for emotional distress should not prevent class certification. See, e.g., Freeman v. Celebrity Cruises, Inc., 1994 U.S. Dist. LEXIS 17455 (S.D.N.Y. 1994). The critical question in the case is Empire's liability. Finally, where parties make both class claims and individual damage claims, the court has the discretion to make appropriate orders such as severance, when necessary. See Green v. Wolf Corp., 406 F.2d 291, 301 (2d Cir. 1968), cert. denied, 395 U.S. 977, 23 L. Ed. 2d 766, 89 S. Ct. 2131 (1969).
Despite Empire's claim that the individual employers, not the insurer, were responsible for compliance with the MSP statute, the Department of Health and Human Services Office of the Inspector General determined otherwise and has prevailed in litigation with insurers.
Although not legally determinative of the issue of a private right of action, this finding may be accorded significant weight. In United States v. Travelers Ins. Co., 815 F. Supp. 521, 522 (D.Conn. 1992), dealing with the government's right to hold insurers (but not third party administrators) liable for improper Medicare payments under MSP, "the court concluded that the Government has a direct right of recovery against The Travelers pursuant to 42 U.S.C. § 13957(b) that is separate and distinct from its right of subrogation . . ." The OIG Report, at 7, stated:
It has been Empire's position that compliance with MSP statutes was not its responsibility, but rather the responsibility of HCFA and Empire customers [individual employers] . . . . Notwithstanding these contentions, Federal law and regulations provide that Empire has primary responsibility for compliance with the MSP statute.
Lastly, a class action may be found superior by virtue of the fact that it may be the only way these elderly plaintiffs may obtain redress. As with securities cases, "the dictates of judicial economy and the economic disadvantages of individual suits generally outweigh any interest in individual litigation." Newberg § 4.29.
5. Class Definition
As has been discussed above, plaintiffs sought class certification under Fed. R. Civ. P. 23(b)(2). The plaintiffs' proposed class definition for this conditional certification of a class has been amended to incorporate some of Empire's objections and to clarify certain ambiguities. The following class is certified under Rule 23(b)(3):
All Medicare eligible individuals who incurred or will incur medical expenses while working, or at a time their spouses were working, in group health plans of employers of 20 or more employees covered by the working aged provisions of the Medicare Secondary Payer Program: