Hefczyz v. Rady Children's Hosp.
D071264
| Cal. Ct. App. | Nov 17, 2017Background
- Plaintiff Artur Hefczyc (guarantor for a self-pay ER patient) was billed $9,831.34 by Rady Children’s Hospital based on its Chargemaster; he sued for declaratory relief on behalf of a class of guarantors who were billed full Chargemaster rates.
- Complaint sought declarations that Rady’s COTA (Conditions of Treatment/Admission) contains an open-price term and limits Rady to charging only the reasonable value of services, and that Rady’s billing practices are unconscionable/unreasonable.
- Proposed class definition limited membership to guarantors of ER visits billed at full Chargemaster rates without write-offs, discounts, third-party payments, or charity adjustments.
- Trial court denied class certification under California law (Code Civ. Proc. §382), finding the class not ascertainable, common issues did not predominate, and class treatment was not superior; it rejected plaintiff’s argument that federal Rule 23(b)(1)/(b)(2) equivalents should apply.
- On appeal, the court affirmed: California requires ascertainability, predominance, and superiority for class certification even where relief is declaratory; applying those requirements, plaintiff failed to meet his burden.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether California courts should apply the federal Rule 23(b)(1)/(b)(2) standards (thus relaxing ascertainability/predominance/superiority) for a class seeking only declaratory relief | Hefczyc: Federal equivalents apply because he seeks class-wide declaratory relief about a single contract term, so the stricter California requirements need not apply | Rady: California precedent governs; plaintiff must satisfy ascertainability, predominance, and superiority under §382 | Court: California precedent controls; plaintiff must prove ascertainability, predominance, and superiority (federal rule guidance is advisory only) |
| Ascertainability of the proposed class | Hefczyc: Class members can be identified from hospital billing records or self-identify; administrative feasibility not required | Rady: Identification requires burdensome, individualized manual review of accounts; system lacks aggregated data; impracticable | Court: Class not ascertainable — substantial evidence that identifying members would impose unreasonable time and expense |
| Predominance — whether common issues (contract interpretation/reasonableness of Chargemaster) predominate over individual issues | Hefczyc: Core question is contract interpretation of COTA (common to all); he is not asking the court to determine individual reasonable-value amounts | Rady: Resolution requires individualized, fact‑intensive inquiries into the reasonable value of thousands of distinct Chargemaster line items and varied patient services | Court: Common issues do not predominate; determining whether Chargemaster reflects reasonable value is inherently individualized and unsuitable for class-wide adjudication |
| Superiority — whether class adjudication is superior to individual suits | Hefczyc: Class declaration would streamline challenges to Rady’s billing scheme and aid negotiation/dispute resolution for class members | Rady: Class adjudication would require thousands of individualized determinations, burdening court and parties; individual suits are more manageable | Court: Class treatment is not superior given individualized proof required; trial court did not abuse discretion |
Key Cases Cited
- Howell v. Hamilton Meats & Provisions, Inc., 52 Cal.4th 541 (Cal. 2011) (defines chargemaster and discusses hospital pricing disclosure duties)
- Linder v. Thrifty Oil Co., 23 Cal.4th 429 (Cal. 2000) (standards and appellate review for class certification)
- Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (Cal. 2012) (class certification is procedural; courts may consider merits where relevant to certification)
- Sav-on Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319 (Cal. 2004) (trial courts have broad discretion on certification)
- Kendall v. Scripps Health, 16 Cal.App.5th 553 (Cal. Ct. App. 2017) (California standards for ascertainability/predominance/superiority apply even when declaratory relief is sought)
- Hale v. Sharp Healthcare, 232 Cal.App.4th 50 (Cal. Ct. App. 2014) (reasonableness of hospital chargemaster charges requires individualized inquiries; predominance lacking)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (U.S. 2011) (predominance and (b)(3) analysis explained; (b)(2) limited to class‑wide injunctive/declaratory relief)