United States District Court, D. Oregon
EILEEN FOX-QUAMME, individually and on behalf of all others similarly situated; LISA HESS, individually and on behalf of all others similarly situated; MARY REDFIELD, individually and on behalf of all others similarly situated; O.W., a minor child, individually and on behalf of all others similarly situated; JEFF CLARK, individually and on behalf of all others similarly situated; and LEIGH ANN CHAPMAN, individually and on behalf of all others similarly situated, Plaintiffs,
HEALTH NET HEALTH PLAN OF OREGON, INC., an Oregon corporation, and AMERICAN SPECIALTY HEALTH GROUP, INC., a California corporation, Defendants.
K. DOYLE RICHARD B. MYERS Bennett, Hartman, Morris &
Kaplan, LLP Attorneys for Plaintiffs
D. PHILLIPS BRAD S. DANIELS REED W. MORGAN Stoel Rives LLP
Attorneys for Defendant Health Net Plan of Oregon, Inc.
J. SHEPHERD HARRY B. WILSON Markowitz Herbold PC ELIZABETH
MANN ANDREW Z. EDELSTEIN Mayer Brown LLP Attorneys for
Defendant American Specialty Health Group, Inc.
OPINION AND ORDER
K. DOYLE RICHARD B. MYERS, Judge
matter comes before the Court on Plaintiffs' Motion (#62)
for Class Certification and the Motions (#80, #81) to Strike
Certain Evidence in Support of Plaintiffs' Reply by
Defendants Health Net Health Plan of Oregon and American
Specialty Health Group (ASH).
reasons that follow, the Court DENIES Plaintiffs' Motion
for Class Certification and DENIES as moot Defendants'
Motions to Strike.
7, 2015, Plaintiffs filed a Class Action Allegation Complaint
(#1) in which they allege Defendants violated § 2706 of
the Patient Protection and Affordable Care Act (ACA)(codified
at 42 U.S.C. § 300gg-5).
September 9, 2015, Defendants each filed a Motion to Dismiss
Plaintiffs' Complaint on the grounds that Plaintiffs
lacked standing, failed to state a claim, and failed to join
a necessary party.
January 7, 2016, following oral argument, the Court dismissed
Plaintiffs' Complaint on the ground that Plaintiffs
failed to allege sufficient facts to state a claim and
granted Plaintiffs leave to amend their Complaint.
February 26, 2016, Plaintiffs filed their First Amended Class
Action Allegation Complaint (FAC) (#38) alleging three claims
against Defendants. In Claim One Plan Participant Plaintiffs
Eileen Fox-Quamme, Lisa Hess, Mary Redfield, and O.W. seek
recovery of benefits, enforcement of terms, and clarification
of terms pursuant to 29 U.S.C. § 1132(a) (1) (B) based
on Defendants' alleged violation of § 2706 of the
ACA for discrimination against naturopathic physicians with
respect to participation in or coverage of services under the
health-care plans issued and administered by Defendants. In
Claim Two Plan Participant Plaintiffs seek injunctive and
equitable relief pursuant to 29 U.S.C. § 1132(a) (3)
also based on Defendants' alleged violation of §
2706 of the ACA for discrimination against naturopathic
physicians with respect to participation in or coverage of
services under the health-care plans issued and administered
by Defendants. In Claim Three Practitioner Plaintiffs Jeff
Clark and Leigh Ann Chapman seek declaratory judgment
pursuant to 28 U.S.C. § 2201 on the ground that the
contracts between Defendants contain provisions that violate
§ 2706 of the ACA, and those provisions are, therefore,
March 18, 2016, Defendants filed further Motions (#41, #42)
to dismiss Practitioner Plaintiffs' Claim Three for lack
of standing. On April 29, 2016, the Court granted those
Motions by Order (#49) and dismissed both Practitioner
Plaintiffs and their Third Claim.
September 30, 2016, Plan Participant Plaintiffs (hereinafter
referred to as Plaintiffs) filed a Motion for Class
Certification. In their Motion Plaintiffs seek certification
of a class of persons "who at any time from January 1,
2014, through the present were enrolled in an employer-issued
health plan administered by Health Net Health Plan of
Oregon." On December 13, 2016, Defendants filed Motions
to Strike Certain Evidence submitted in support of
Plaintiffs' Motion for Class Certification.
Rule of Civil Procedure 23 governs class certification and
(a) Prerequisites. One or more members of a class may sue ...
as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is
(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.
(b) Types of Class Actions. A class action may be maintained
if Rule 23(a) is satisfied and if:
(3) the court finds 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. The matters pertinent to these
(A) the class members' interests in individually
controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the
controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the
litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Wal-Mart Stores, Inc. v. Dukes the United States
Supreme Court addressed class-action certification and set
out general standards under Rule 23:
The class action is "an exception to the usual rule that
litigation is conducted by and on behalf of the individual
named parties only." Califano v. Yamasaki, 442
U.S. 682, 700-701 (1979). In order to justify a departure
from that rule, "a class representative must be part of
the class and 'possess the same interest and suffer the
same injury' as the class members." East Tex.
Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395,
403 (1977)(quoting Schlesinger v. Reservists Comm. to
Stop the War, 418 U.S. 208, 216 (1974)). Rule 23(a)
ensures that the named plaintiffs are appropriate
representatives of the class whose claims they wish to
litigate. The Rule's four requirements - numerosity,
commonality, typicality, and adequate representation -
"effectively 'limit the class claims to those fairly
encompassed by the named plaintiff's claims.'"
General Telephone Co. of Southwest v. Falcon, 457
U.S. 147, 156 (1982)(quoting General Telephone Co. of
Northwest v. EEOC, 446 U.S. 318, 330 (1980)).
564 U.S. 338, 348 (2011).
decision to grant or to deny class certification is within
the discretion of the trial court. Bateman v. Am.
Multi-Cinema, Inc., 623 F.3d 708, 712 (9th Cir. 2010).
The plaintiff has the burden to comply with Federal Rule
Civil Procedure 23. Narouz v. Charter Commc'ns,
LLC, 591 F.3d 1261, 1266 (9th Cir. 2010). A
class may be certified only if the court is satisfied
"after a rigorous analysis that the prerequisites of
Rule 23(a) have been satisfied." Wal-Mart, 564
U.S. at 350-51 (citing Gen. Tel. Co. of S.W. v.
Falcon, 457 U.S. 147, 161 (1982)). A class may be
certified as to one or more claims without certifying the
entire complaint. Fed.R.Civ.P. 23(c)(4).
court must determine whether certification is based on actual
as opposed to presumed compliance with the requirements of
Rule 23. Wal-Mart, 564 U.S. at 350 (citing
Falcon, 457 U.S. at 160). Because Rule 23 "is
not a mere pleading standard, " a party seeking class
certification "must affirmatively demonstrate compliance
with the Rule." Wal-Mart, 564 U.S. at 351. This
inquiry may in some cases overlap into the "merits of
plaintiff's underlying claim" because "class
determination generally involves considerations that are
enmeshed in the factual and legal issues comprising
plaintiff's cause of action." Id. (quoting
Falcon, 457 U.S. at 160).
"bear the burden of demonstrating that they have met
each of the requirements of Federal Rule of Civil Procedure
23(a) and at least one of the requirements of Rule
23(b)." Ellis v. Costco Wholesale Corp., 657
F.3d 970, 979-80 (9th Cir. 2011) (citing Zinser v.
Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th
Cir. 2001), amended by 273 F.3d 1266 (9th Cir. 2001)).
Plaintiffs' Motion for Class Certification
oppose Plaintiffs' Motion for Class Certification on the
ground that Plaintiffs lack standing under Article III of the
United States Constitution. Even if Plaintiffs have standing,
Defendants also assert:
(1) the proposed class definition is improper;
(2) the proposed class fails to meet the requirements of Rule
23(a) for numerosity, commonality, typicality, or adequacy of
(3) Plaintiffs' claims do not meet the requirements of
Rule 23(b)(3) for predominance and superiority.
Plaintiffs do not have standing under Article
contend the Court must determine whether Plaintiffs have
standing under Article III before considering the merits of
class certification. Defendants assert Plaintiffs lack
standing because the allegations in their FAC are "sham,
" none of these Plaintiffs are obligated to pay their
providers for any services rendered, Plaintiffs have not
suffered any economic injury, and Defendants have not denied
Plaintiffs any medical care. Defendants also contend
Plaintiffs are not entitled to injunctive relief because (1)
three out of four Plaintiffs are no longer Health Net
members, (2) the remaining Plaintiff who is a member no
longer sees a naturopath, and (3) Oregon House Bill 3301 now
requires insurers to allow naturopathic physicians to apply
for credentials as primary-care providers.
addition, Defendants note the naturopathic physicians agreed
by contract with Defendants that they would not
"balance-bill" members for services not covered
without a signed agreement made in advance with the member.
Defendants contend th*e letters subsequently sent by the
naturopathic physicians to Plaintiffs demanding payment for
services that Defendants did not cover were merely a pretense
to establish Plaintiffs' standing by showing they were
injured. Defendants point out that each Plaintiff testified
during deposition that they understood they were not
obligated to pay any of these bills from those providers.
in turn, contend the Court is not required to address Article
III standing before addressing class certification.
Plaintiffs assert they were injured by Defendants'
alleged discriminatory practices when Plaintiffs received
billing statements from the naturopathic physicians requiring
Plaintiffs to pay for services not covered by their health
plans, Plaintiffs subsequently incurred out-of-pocket
expenses, and Plaintiffs reduced or discontinued medical care
by their naturopathic physicians. Regardless of their payment
obligations, Plaintiffs did not receive care after Defendants
denied Plaintiffs coverage for services provided by the
Easter v. American West Financial the Ninth Circuit
held the district court properly addressed the issue of
standing before addressing the issues of class certification.
381 F.3d 948, 962 (9th Cir. 2004). The court held the
borrowers of second mortgage loans failed to establish
investment trusts that purchased borrowers' loans were
juridically linked, and, therefore, the named borrowers
lacked standing to bring a class action against the trusts.
The borrowers, however, relied on Ortiz v. Fibreboard
Corp., 527 U.S. 815 (1999), to support their contention
that courts must consider class certification before
addressing Article III standing. Id. The
Easter court held:
Fibreboard examined class issues before the question
of Article III standing, [and] it did so in the very specific
situation of a mandatory global settlement class.
Fibreboard does not require courts to consider class
certification before standing. See Id. [527 U.S.] at
831 (noting that a "court must be sure ...