Chambers v. The Moses H. Cone Mem'l Hosp.

1

2022 NCBC 61

CHRISTOPHER CHAMBERS, on behalf of himself and all others similarly situated, Plaintiff, v. THE MOSES H. CONE MEMORIAL HOSPITAL; THE MOSES H. CONE MEMORIAL HOSPITAL OPERATING CORPORATION d/b/a MOSES CONE HEALTH SYSTEM and d/b/a CONE HEALTH; and DOES 1 through 25, inclusive, Defendants.

No. 12 CVS 6126

Superior Court of North Carolina, Guilford

October 19, 2022

Higgins Benjamin PLLC, by John F. Bloss, and Law Offices of Barry L. Kramer, by Barry L. Kramer (pro hac vice), for Plaintiff Christopher Chambers.

Womble Bond Dickinson (US) LLP, by Philip Mohr and Brent F. Powell for Defendants The Moses H. Cone Memorial Hospital and The Moses H. Cone Memorial Hospital Operating Corporation.

ORDER AND OPINION ON MOTION FOR FINAL APPROVAL OF CLASS-ACTION SETTLEMENT AND PETITION FOR ATTORNEYS' FEES

ADAM M. CONRAD SPECIAL SUPERIOR COURT JUDGE FOR COMPLEX BUSINESS CASES

I. BACKGROUND

1. Pending are Plaintiff Christopher Chambers's motion for final approval of a settlement of this class action and his related petition for attorneys' fees and expenses. (ECF Nos. 148, 150.) Both are unopposed. For the reasons given below, the Court enters this Order and Final Judgment and thereby APPROVES the proposed settlement, DISMISSES all class claims, and GRANTS the fee petition.

2. In August 2011, Chambers had an emergency appendectomy at the Moses H. Cone Memorial Hospital ("Moses Cone"). He was uninsured at the time. Before receiving treatment, he signed a standard form contract, which required him to pay all charges in accordance with Moses Cone's "regular rates and terms." Moses Cone later sent Chambers a bill for more than $14,000. According to Chambers, this amount was excessive. He believes that the phrase "regular rates" in Moses Cone's form contract is meaningless and that his bill was based on "artificially and grossly excessive Chargemaster rates." In May 2012, Chambers sued Moses Cone and its parent company on the ground that it overcharged him and a class consisting of other self-pay patients who received emergency care. (See Am. Compl. ¶¶ 12, 25, 27, 42, ECF No. 49.)

3. There is no need to recite the entire procedural history of this case, which now spans over ten years. Readers may find detailed discussions of the original claims, later amendments, judicial rulings, and appeals in earlier decisions of this Court and the North Carolina Supreme Court. See generally Chambers v. Moses H. Cone Mem'l Hosp., 374 N.C. 436 (2020); Chambers v. Moses H. Cone Mem'l Hosp., 2021 NCBC LEXIS 106 (N.C. Super. Ct. Dec. 3, 2021); Chambers v. Moses H. Cone Mem'l Hosp., 2021 NCBC LEXIS 63 (N.C. Super Ct. July 19, 2021); Chambers v. Moses H. Cone Mem'l Hosp., 2017 NCBC LEXIS 22 (N.C. Super. Ct. Mar. 13, 2017).

4. In short, all that remains is a class claim for declaratory judgment. Chambers seeks declarations, on behalf of the putative class, that Moses Cone's form contract includes an open price term, that it may not bill self-pay patients at Chargemaster rates, and that it is entitled only to the reasonable value of its services. He asserts the claim on behalf of a class of similarly situated self-pay patients. (See Am. Compl. ¶¶ 28, 31, 40, 41.)

5. In April 2022, the parties agreed to a proposed settlement. Chambers then filed an unopposed motion for preliminary approval of the settlement agreement and conditional class certification. (See ECF Nos. 141, 141.1.) On 6 June 2022, the Court entered an order that (1) preliminarily approved the settlement agreement; (2) conditionally certified the settlement class, (3) directed that notice be given to putative class members, (4) set a schedule for submission of a motion for final settlement approval and of any objections, and (5) scheduled a hearing to determine the fairness, reasonableness, and adequacy of the terms of the settlement. (See generally Order Preliminarily Approving Class Action Settlement and Scheduling Order, ECF No. 146.)

6. On 23 August 2022, Chambers timely filed an unopposed motion for final approval of the settlement. That same day, he also filed an unopposed petition for attorneys' fees and expenses. (ECF Nos. 148, 150.)

7. On 22 September 2022, the Court held the fairness hearing, at which counsel for Chambers and Moses Cone appeared. Neither the Court nor the parties received any objection to the settlement before, during, or after the hearing. No member of the proposed class attended the hearing.

8. Based on the parties' submissions and the representations of counsel at the hearing, it appears that notice was sent to 473 class members, some of which have been returned as undeliverable. It further appears that counsel for Moses Cone inadvertently informed counsel for Chambers of the undeliverable notices after the deadline for doing so had passed. Even so, counsel consulted a publicly available database to locate current addresses for these class members. Only four new addresses were discovered. Counsel for both sides represented that it was impracticable to send supplemental notices to these newly discovered addresses in keeping with the schedule set by the Court. They further agree that the efforts to give notice to class members were adequate and that due process has been satisfied.

II. CLASS CERTIFICATION AND SETTLEMENT APPROVAL

9. A class-action settlement raises "unique due process concerns" because it binds individuals who have not appeared in the litigation; thus, "parties cannot settle a class action without court approval." Ehrenhaus v. Baker, 216 N.C.App. 59, 72 (2011) ("Ehrenhaus I"). The parties have asked the Court to certify a settlement class and to approve their settlement as fair, reasonable, and adequate.

10. Class Certification. Rule 23 of the North Carolina Rules of Civil Procedure governs class certification. Under that rule, a court may certify a class action if the following requirements are met:

(1) the existence of a class, (2) the named representatives will fairly and adequately represent the interests of all class members, (3) there is no conflict of interest between the representative and class members, (4) class members outside the jurisdiction will be adequately represented, (5) the named party has a genuine personal interest in the outcome of the litigation, (6) class members are so numerous that it is impractical to bring them all before the court, and (7) adequate notice of the class action is given to class members.

Moss v. Towell, 2018 NCBC LEXIS 20, at *6 (N.C. Super. Ct. Mar. 6, 2018) (quoting In re PokerTek Merger Litig., 2015 NCBC LEXIS 10, at *9 (N.C. Super. Ct. Jan. 22, 2015)) (cleaned up); see also N.C. R. Civ. P. 23.

11. Having considered all matters of record, the Court concludes that these requirements have been met here and that certification of the settlement class is appropriate.

12. Because "the named and unnamed members each have an interest in either the same issue of law or of fact" and "the issue predominates over issues affecting only individual class members," a class exists. Crow v. Citicorp Acceptance Co., 319 N.C. 274, 280 (1987). The Court finds that Chambers, as class representative, and his counsel fairly and adequately represented the interests of all class members; that there is no conflict of interest between Chambers and the class members; that it would be impractical to bring the nearly 500 class members before the Court; and that a class action is superior to other available methods for the fair and efficient adjudication of this controversy.

13. The Court further finds that the class members received fair and adequate notice. The parties gave notice in the manner directed by the order preliminarily approving the settlement. This notice fairly, accurately, and reasonably informed members of the settlement class of their rights and of the consideration they were to receive. Considering the number of class members involved and the age of the claims, the Court determines that the form and manner of the notice is the best notice practicable under the circumstances and therefore satisfies due process. Likewise, the Court determines that it does not violate due process to include those class members who did not receive actual notice because of mailings returned as undeliverable. See Hamilton v. Memorex Telex Corp., 118 N.C.App. 1, 14 (1995) (holding that the trial court did not err in including class members whose notices were returned undeliverable).

14. The only remaining claim is for declaratory judgment. "When the class representative seeks injunctive or declaratory relief, a non-opt-out class is necessary 'to avoid unnecessary inconsistencies and compromises in future litigation.'" Ehrenhaus I, 216 N.C.App. at 79 (quoting DeBoer v. Mellon Mortg. Co., 64 F.3d 1171, 1175 (8th Cir. 1995)). Given that only declaratory relief is at issue, the parties have asked the Court to certify a non-opt-out class, and the Court concludes that it would be appropriate to do so.

15. Accordingly, the Court certifies the following non-opt-out class for settlement purposes only (all defined terms are found in the settlement agreement, ECF No. 141.1):

All ED Patients who: (1) obtained treatment from one of Defendants' emergency departments during the Applicable Time Period; and (2) had an Account Balance as of 25 April 2022. For clarity, the Settlement Class shall not include any ED Patient seen prior to or after the Applicable Time Period. Moreover, the Settlement Class shall not include any ED Patient seen during the Applicable Time Period whose Original Bill: a) has previously been written off in full; b) was paid in full; c) was paid in whole or in part by a third-party insurance provider, Medicare, or Medicaid; or d) is the subject of a prior judgment or a Prior Resolution.

16. Finally...