Diaz v. State
2013 MT 219
| Mont. | 2013Background
- Plaintiffs Diaz and Hoffmann‑Bernhardt (State employees and dependents) sued Montana and its TPAs (BCBS, New West) alleging the plan exercised subrogation without conducting "made‑whole" analyses, reducing or denying benefits.
- Earlier remand (Diaz I) held Montana made‑whole statutes do not apply to TPAs but directed certification under Rule 23(b)(2); this appeal challenges the District Court’s later class definition on remand.
- Plaintiffs sought a class of all State plan members not made whole by the State/TPAs’ programmatic practices, including those who never filed claims with the plan ("non‑filers").
- The State moved to narrow the class to (a) claims within an eight‑year lookback and (b) only insureds who timely submitted claims under the plan (one‑year filing rule). The District Court adopted the eight‑year period but limited the class to those who timely filed claims.
- Plaintiffs appealed under Rule 23(f), arguing the filing limitation (excluding non‑filers) was arbitrary, inequitable, contrary to Diaz I, and improperly decided defenses; the Supreme Court reviews for abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether excluding non‑filers from the class abused discretion | Excluding non‑filers defeats the class purpose because many failed to file only due to the challenged exclusion and thus should be represented | Inclusion of non‑filers is unworkable and would include people without claims; identifying non‑filers is impracticable and would create numerous individualized defenses | No abuse of discretion; court may limit class to those who timely filed because plaintiffs failed to show non‑filers are a significant, identifiable group or that inclusion is manageable |
| Whether the class‑definition appeal is ripe / plaintiffs have standing to challenge modification | Plaintiffs argued interlocutory review is proper under Rule 23(f) because the certification order (including definition) directly harms them | State argued plaintiffs hadn’t sought amendment under Rule 23(c)(1)(C) and thus lack ripe issue for appeal | Plaintiffs have standing; class definition is part of the appealable certification order so interlocutory review is appropriate |
| Whether the District Court violated the law‑of‑the‑case from Diaz I by narrowing the class | Plaintiffs: Diaz I approved a broader class and the court is bound by that decision | State: Diaz I did not decide inclusion of non‑filers; lower court retains discretion to refine the class as the case develops | Law‑of‑the‑case does not prohibit limiting the class; Diaz I did not decide the non‑filer issue and Rule 23(c)(1)(C) permits modification |
Key Cases Cited
- Diaz v. Blue Cross & Blue Shield of Mont., Inc., 267 P.3d 756 (Mont. 2011) (remanded; held made‑whole statutes do not apply to TPAs but directed class certification under Rule 23(b)(2))
- Chipman v. N.W. Healthcare Corp., 288 P.3d 193 (Mont. 2012) (standard of review for class certification: abuse of discretion)
- Rolan v. New W. Health Servs., 307 P.3d 291 (Mont. 2013) (affirmed broader class definition in companion case; courts may reach different reasonable outcomes)
- Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct. 1184 (U.S. 2013) (district courts may alter or amend class‑certification orders as the case develops)