Claims Relating to Hospital Charges Must Proceed Individually, Business Court Says

The North Carolina Business Court today rebuffed an attempt by “self-pay” patients receiving emergency treatment to challenge the hospital’s charges on a class-wide basis. In Hefner et al. v. Mission Hospital, Inc., et al., No. 12-CVS-3088 (N.C. Business Court Dec. 8, 2014), Judge Gale found that there “is a panoply of potential issues factoring into the ultimate questions of reasonableness [of patient charges] because every patient treated at Mission received different services and was billed for different amounts.” A key consideration in deciding whether to certify a class, particularly in North Carolina state courts, is whether the forecasted individual issues relate exclusively to “damages” or whether they also relate to the core issue of liability, something we have discussed in another post. In the language of North Carolina appellate precedent, this determination depends upon whether the case fits within the Scylla of Beroth or the Charybdis of Faulkenbury. The key to Judge Gale’s decision was his finding that “this case is much more comparable to Beroth than Faulkenbury,” i.e., the reasonableness of hospital charges was found to be a liability issue.

In Wal-Mart Stores, Inc. v. Dukes, Justice Scalia rejected plaintiffs’ attempt to found a common question on statistical proof based on an aggregate disparity. Judge Gale did much the same thing, expressly rejecting “the notion that it would be appropriate or fair … to reduce the question of the reasonableness of individualized charges to some form of averaging.” And Judge Gale delivered an important exegesis of the recent Beroth decision: “Beroth makes it clear that a Plaintiff seeking class certification must produce evidence that each putative class member was affected the same way and at least to approximately the same extent by a defendant’s actions. If liability as to the proposed class can only be established after an individualized investigation into the circumstances of each class member, the class does not satisfy the commonality prerequisite.”

(Robert Fuller and Heyward Bouknight of our firm represented Defendants in this case).