Herrera v. JFK Med. Ctr. Ltd.

MARISELA HERRERA, LUZ SANCHEZ, NICHOLAS ACOSTA,PENNY WOLLMEN, individually and on behalf of others similarly situated, Plaintiffs-Appellants, v. JFK MEDICAL CENTER LIMITED PARTNERSHIP, d.b.a. JFK Medical Center,HCA HOLDINGS, INC., MEMORIAL HEALTHCARE GROUP, INC.,d.b.a. Memorial Hospital Jacksonville,NORTH FLORIDA REGIONAL MEDICAL CENTER, INC., Defendants-Appellees.

No. 15-13253

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

April 26, 2016

[DO NOT PUBLISH]

Non-Argument Calendar

D.C. Docket No. 8:14-cv-02327-JSM-TBM

Appeal from the United States District Court for the Middle District of Florida Before MARTIN, JULIE CARNES, and ANDERSON, Circuit Judges.

PER CURIAM:

Plaintiffs brought this putative class action alleging that Defendant HCA Holdings, Inc. and three of its Florida hospitals, Defendants JFK Medical Center, Memorial Hospital Jacksonville, and North Florida Regional Medical Center, Inc. (collectively, "Defendants"), charged unreasonable fees for emergency radiological services, including CT scans, MRIs, ultrasounds, and x-rays. On Defendants' motion, the district court struck Plaintiffs' class action allegations, effectively denying class certification. We granted Plaintiffs' interlocutory appeal. See Fed. R. Civ. P. 23(f). After careful review, we reverse.

I. Background

Under the Florida Motor Vehicle No-Fault Law, Fla Stat. § 627.730 et seq., owners of motor vehicles registered in the State of Florida are required to purchase personal injury protection ("PIP") insurance coverage of $10,000. § 627.736(1). PIP insurance policies cover 80% of all reasonable and necessary medical expenses related to a motor vehicle accident, including charges for x-ray services. § 627.736(1)(a). But once PIP insurance pays the $10,000 policy limit, the insured is responsible for any remaining expenses if he does not have other applicable insurance coverage. § 627.736(5)(a)(4). Medical providers are allowed to charge"only a reasonable amount . . . for the services and supplies rendered. . . . However, such a charge may not exceed the amount the person or institution customarily charges for like services or supplies." § 627.736(5)(a). A "reasonable amount" is determined with the aid of "evidence of usual and customary charges and payments accepted by the provider involved in the dispute, reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages." Id.

Plaintiffs allege that Defendants charge PIP-covered patients who receive treatment after motor vehicle accidents unreasonable fees for radiological services. In fact, these fees are up to 65 times higher than the usual and customary fees charged to non-PIP patients for similar radiological services. Because PIP insurance covers only 80% of patients' bills (up to $10,000), the patients' 20% share is more expensive than it would be under the usual and customary rate. And Plaintiffs allege that "the exorbitant and unreasonable charges prematurely exhaust the PIP coverage available to Plaintiffs, resulting in Plaintiffs having to pay out of pocket for additional medical services that would otherwise have been covered under PIP."

Specifically, the amended complaint alleges that each plaintiff received a CT scan of his or her brain. Herrera and Sanchez were charged $6,404 at JFK MedicalCenter in Atlantis, Florida, while Acosta was charged $6,277 at Memorial Hospital Jacksonville and Wollmen was charged $6,140 at North Florida Regional Medical Center in Gainesville. Plaintiffs also received CT scans of their spines. Herrera and Sanchez were charged $5,900 each, Acosta was charged $6,965, and Wollmen was charged $6,853. The Florida Medicare rate for a brain CT scan ranges from $164 to $169, and for a CT scan of the cervical spine it ranges from $213 to $220. Defendants charge uninsured patients anywhere from $1,596 to $3,464 for a CT scan. Plaintiffs thus allege that Defendants charged them fees far in excess of what it usually and customarily charges the uninsured or private, non-PIP insurers, including insurers who do not have a contract with Defendants.

As to x-rays, Herrera received a lumbar spine x-ray at a cost of $3,359. Herrera and Sanchez each received a thoracic spine x-ray at a cost of $2,222, and Wollmen received one for $1,454. The Florida Medicare rate for a lumbar spine x-ray is $50, and for a thoracic spine x-ray it is $40. Plaintiffs further allege that the rates they were charged greatly exceeded the amounts typically billed and paid by private, non-PIP insurers or uninsured patients. Plaintiffs contend that all of these rates were unreasonable as a matter of law.

As a result of these fees, Plaintiffs exhausted their $10,000 PIP insurance policies and were left with medical bills that would have been covered in full or inpart had Defendants not charged these unreasonable rates. Accordingly, Plaintiffs seek to represent a class of similarly-situated persons who received PIP-covered emergency radiological services at one of Defendants' hospitals in Florida and who "(a) were billed by the facility for any portion of the charges for such services; and/or (b) had their $10,000 of PIP coverage prematurely exhausted by the facility's charges and, as a result, were billed for additional medical services rendered by the facility and/or third-party providers that would otherwise have been covered under PIP."

Plaintiffs assert violations of Florida's Deceptive and Unfair Trade Practices Act, breach of contract, and breach of the implied covenants of good faith and fair dealing. Defendants moved to dismiss the amended complaint and to strike Plaintiffs' class allegations. The court dismissed the claim for breach of the implied covenants of good faith and fair dealing, but let the other claims proceed. The court struck the class allegations, however, explaining that "the most important issue to settle, the reasonableness of the charge for the specific radiological service and the damages incurred by each putative plaintiff, would be highly individualized in nature." Herrera v. JFK Med. Ctr. Ltd. P'ship, 87 F. Supp. 3d 1299, 1308 (M.D. Fla. 2015). The court said it would also have to examine whether the expenses Plaintiffs claimed would have been covered by PIPinsurance were reasonable, necessary, and related to the motor vehicle accident. Id. at 1309. Thus, the court found that individual factual inquiries would predominate in this action, making class litigation highly impractical. Id. The court struck the class allegations and dismissed three of the four named plaintiffs so they could file separate actions. Id. at 1310. We granted Plaintiffs' interlocutory appeal of the district court's decision to strike the class allegations. See Fed. R. Civ. P. 23(f).¹

II. Discussion

We review a district court's decisions regarding class certification for abuse of discretion. Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1264 (11th Cir. 2009). "A district court abuses its discretion if it applies an incorrect legal standard, follows improper procedures in making the determination, or makes findings of fact that are clearly erroneous." Id. (citation omitted).

Federal Rule of Civil Procedure 23 governs class actions. "A class action may be maintained only when it satisfies all the requirements of [Rule] 23(a) andat least one of the alternative requirements of Rule 23(b)." Allapattah Servs., Inc. v. Exxon Corp., 333 F.3d 1248, 1260 (11th Cir. 2003) (quotation marks omitted). Under Rule 23(a), the four prerequisites to bringing a class action are:

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and

(4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a).

In this case, the relevant alternative requirement is Rule 23(b)(3), under which a court must "find[] 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). "In other words, the issues in the class action that are subject to generalized proof, and thus applicable to the class as a whole, must predominate over those issues that are subject only to individualized proof." Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1005 (11th Cir. 1997) (internal quotation marks omitted). The district court found that, on its face, Plaintiffs' complaint failed to satisfy Rule 23(b)(3), and becausePlaintiffs do not argue that they meet either of the other alternative requirements under Rule 23(b), this prong is the only issue before us on appeal.

Plaintiffs argue that the district court erred in two ways: (1) the district court should have allowed discovery before making a decision about predominance, and (2) the district court made its decision primarily on the basis that there would be individualized damages issues, which fact should not necessarily preclude class treatment. We agree that the court erred in finding that, as a matter of law, class treatment was inappropriate based on the face of Plaintiffs' complaint. And although the district court did not deny class treatment solely due to individualized damages issues, we also agree that at this stage the complaint does not compel a conclusion that individualized inquiries into damages would overwhelm any common issues.

Rule 23(c) directs a district court, "[a]t an early practicable time after a person sues or is sued as a class representative, . . . [to] determine by order whether to certify the action as a class action." Fed. R. Civ. P. 23(c)(1)(A). While it is sometimes possible to decide the propriety of class certification from the face of the...