United States District Court, D. Montana, Billings Division
CHARLES M. BUTLER, III and CHOLE BUTLER Plaintiffs,
UNIFIED LIFE INSURANCE COMPANY; HEALTH PLANS INTERMEDIARIES HOLDINGS, LLC, doing business as Health Insurance Innovations, Inc.; ALLIED NATIONAL, INC.; NATIONAL BROKERS OF AMERICA, INC.; THE NATIONAL CONGRESS OF EMPLOYERS, INC.; and DOES 1-10 Defendants.
P. WATTERS UNITED STATES DISTRICT JUDGE
the Court are United States Magistrate Judge Timothy
Cavan's findings and recommendation filed August 8, 2019.
(Doc. 226). Judge Cavan recommends the Court deny
Plaintiffs' motion to certify a class action. (Doc. 93).
Standard of review
filed timely objections to the findings and recommendation.
(Doc. 232). Plaintiffs are entitled to de novo review of
those portions of Judge Cavan's findings and
recommendation to which they properly object. 28 U.S.C.
§ 636(b)(1); Fed.R.Civ.P. 72(b)(3).
proposed class action concerns Defendant Unified Life
Insurance Company's systematic practice of paying
healthcare bills based on what providers have previously
accepted rather than what providers charge. The Court has
already determined as a matter of law that Unified's
systematic practice breaches insurance contracts containing
the Reasonable and Customary Charge clause. The Reasonable
and Customary Charge clause states, in effect, that Unified
will pay the lesser of either the billed charges or the usual
charge for a comparable service in the geographic area.
Because Unified pays what providers previously accepted
rather than what providers either actually or usually
charged, it's a breach of the insurance contract.
class action complaint alleges Unified's practice has
subjected proposed class members to balance billing. Balance
billing occurs when a healthcare provider charges a certain
amount for a service, Unified pays an amount based on what a
healthcare provider may have previously accepted for the
service, the healthcare provider accepts Unified's
payment, but the healthcare provider does not agree
Unified's payment fully satisfies the charge. The
healthcare provider then asks the insured to pay the
remaining balance. The class seeks damages equal to the
difference between what Unified paid and what the healthcare
providers actually or usually charged for a comparable
service in the geographic area.
Cavan recommended denying certifying the class because common
class issues did not predominate over class members'
individual issues, namely the computation of damages. The
Plaintiffs argue this was error, and the Court agrees.
certification is governed by Federal Rule of Civil Procedure
23. A party seeking to maintain a class action must
demonstrate that each of the following prerequisites of Rule
23(a) are satisfied:
(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.
party must also meet at least one of the three criteria
listed in Rule 23(b). These are: (1) that there is a risk of
prejudice from separate actions; (2) that declaratory or
injunctive relief is appropriate as to the class; or (3) that
common questions of law or fact predominate, and a class
action is superior to other methods of adjudication.
Cavan found Rule 23 (a)'s prerequisites were satisfied
but that none of the criteria in Rule 23(b) were met. In
regard to Rule 23(b)(3), Judge Cavan found damages would have
to be determined on an individualized basis, considering
several factors that would vary from insured to insured.
Judge Cavan concluded common questions therefore did not
predominate and that a class action was not a superior method
of litigating the claims. The ...