It's Just Too Big a Mess

Kendall v. Scripps Health, No. D070390A (D4d1 Oct. 23, 2017)

A Patient got a $17,500 bill for services that the Hospital admitted would have been reimbursed at about $2k to Medicare or Medi-Cal. So he brought a class action to challenge the Hospital’s opaque billing practices. But the trial court denied class cert because common questions weren’t predominant and the class was not ascertainable. The Court of Appeal affirms on both grounds.

On the common questions, the issue is that the billing practices are a product of a dense web of regulations that make it very hard say whether an individual uninsured patient is or isn’t getting ripped off. Patient’s proposed heuristic for determining that a charge is unfair—a ratio of actual cost to the top-line charge on something called a Charge Master—doesn’t really conform to reality, as the actual costs aren’t uniform even across procedures and the Charge Master charges are often revised or discounted.

The ascertainability discussion is interesting, although somewhat inconclusive. As a condition for class cert, California requires the plaintiff to identify a reasonable means by which the members of the class can be identified. Interestingly the Ninth Circuit, recently declined to impose a requirement that class plaintiffs demonstrate that there is an “administratively feasible way to determine who is in the class.” Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1124 (9th Cir. 2017). 

In any event, Patient did not identify a feasible method, although it seems like that is partially the result of Hospital’s less than helpful billing database. It  seems a little off to let a defendant out of a class action due to its own poor records management. But particularly since the problems with commonality that go to the class definition made it “difficult to make any realistic evaluation of the ascertainability criterion,” the court finds that the trial court didn’t abuse its discretion in finding a lack of ascertainability. 

Finally, Patient argues that even if his damages claims can’t be addressed class-wide, his declaratory relief claims about the legality of the hospital practices should be. He takes issue, in particular, with the trial court’s imposition of an ascertainability requirement on this prong, suggesting that the court should apply a standard more akin to Federal Rule of Civil Procedure 23(b)(2). Rule 23(b)(2) sets a lower threshold for certification of claims where the plaintiff seeks only equitable or declaratory relief that potentially affects the class as a whole. But the court rejects the argument, holding that California law is sufficiently comprehensive, so resort to federal class action practice is unnecessary. 

Affirmed.