Gomez v. St. Vincent Health, Inc.
649 F.3d 583
7th Cir.2011Background
- Gomez and Barnett allege St. Vincent Health, Inc. failed to timely provide COBRA notices after qualifying events.
- TPAs and external audits assisted COBRA administration; audits and a call center showed no prior COBRA issues.
- Between May 2004 and January 2006, about 1,570 events occurred; an estimated 266 COBRA notices were not timely sent.
- District court refused to certify the class, citing inadequacy of proposed class counsel; it denied Gomez damages, denied statutory penalties, but awarded Barnett some damages.
- Seventh Circuit affirms district court’s rulings on class certification, penalties, and damages, in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class certification adequacy | Gomez and Barnett contend counsel was adequate. | Company argues counsel was inadequate and certification proper to deny. | District court did not abuse discretion; class certification denied. |
| Statutory penalties for delayed notices | Penalty should be imposed for COBRA-notice delay. | Penalty not warranted given lack of prejudice and good-faith corrective actions. | District court’s denial of statutory penalties affirmed. |
| Barnett's damages for belated notice | Barnett seeks additional vision or other out-of-pocket damages. | Only established damages (and limited additional amount) should be awarded. | Damages for prescription costs upheld; no additional compensation for vision expenses. |
Key Cases Cited
- Mondry v. American Family Mutual Insurance Co., 557 F.3d 781 (7th Cir. 2009) (purpose of penalties is to deter noncompliance, not compensate injuries)
- Lopez ex rel. Gutierrez v. Premium Auto Acceptance Corp., 389 F.3d 504 (5th Cir. 2004) (ERISA §1132(a)(1)(A) and (c) distinction on relief)
- Scott v. Suncoast Beverage Sales, Ltd., 295 F.3d 1223 (11th Cir. 2002) (oversight by TPA does not shield administrator from COBRA liability without adequate system)
- Starr v. Metro Systems, Inc., 461 F.3d 1036 (8th Cir. 2006) (consider prejudice and administrator conduct in determining penalties)
- Kenseth v. Dean Health Plan, Inc., 610 F.3d 452 (7th Cir. 2010) (distinguishes types of relief under ERISA and COBRA enforcement)