Kendall v. Scripps Health
D070390A
| Cal. Ct. App. | Oct 23, 2017Background
- Plaintiff Paul Kendall received emergency treatment at a Scripps Health hospital, signed an admission "Agreement for Services" that referenced payment of the facility's "billed charges" in its Charge Description Master, and was billed at Charge Master rates as a self-pay patient.
- Kendall sued asserting class claims under the Consumers Legal Remedies Act (CLRA) and the Unfair Competition Law (UCL), and sought declaratory relief constraining Scripps to bill only the reasonable value of services (or declaring Charge Master rates unconscionable).
- Proposed class: self-pay emergency patients (Nov 1, 2009 to certification) billed at full Charge Master rates, excluding accounts written off or fully unpaid with no collection activity.
- Kendall offered expert declarations purporting to show Charge Master rates greatly exceed costs and proposing methods to identify class members from Scripps' records; Scripps countered with declarations showing record fragmentation, billing complexity, and need for individualized inquiries.
- The trial court denied class certification, finding lack of predominant common issues and that the class was not reasonably ascertainable; it also declined to certify a declaratory-judgment issue class as unnecessary or cumulative to statutory claims.
- On appeal the Court of Appeal affirmed, concluding the trial court did not abuse discretion: substantial evidence supported findings on predominance and ascertainability, and declaratory relief was inappropriate for class-wide resolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether class certification should be granted for CLRA/UCL claims (predominance/community of interest) | Kendall: common questions predominate because all self-pay patients were billed Charge Master rates and classwide relief (e.g., percentage reduction) is feasible | Scripps: individualized issues (coverage later obtained, adjustments, varying services/costs, billing procedures) predominate; class treatment would require hundreds of thousands of individualized inquiries | Denied — court found substantial individualized factual issues and substantial evidence supporting lack of predominance; no abuse of discretion |
| Whether proposed class is reasonably ascertainable | Kendall: experts show feasible methods to extract and identify class members from Scripps' systems | Scripps: data are fragmented across systems (Eclipsys and imaging/File CD); queries require exact fields and manual review; identification would be impracticable and costly | Denied — substantial evidence that class membership cannot be identified without individualized review; not reasonably ascertainable |
| Whether declaratory relief on contract interpretation may be certified as issue class (or under federal Rule 23) | Kendall: the Agreement's price term is a common contract question; federal Rule 23 standards (systemic-policy cases) should guide certification and permit an issue class or broad certification | Scripps: declaratory relief would be advisory or cumulative, and substantive statutes/regulations permit Charge Master disclosures and post-service adjustments; federal Rule 23 is not controlling and does not avoid ascertainability/notice concerns | Denied — court declined to certify declaratory/issue class, holding no actual controversy suitable for classwide declaratory relief and California law governs evaluation; court properly exercised discretion |
| Whether the trial court improperly resolved merits at certification | Kendall: court improperly relied on merits-like considerations (e.g., whether receipt of a bill is injury) | Scripps: threshold factual/legal inquiries relevant to certification are permissible; evidence showed individualized defenses and adjustments | Held — trial court acted within its authority to examine plaintiff's theory of recovery and relevant preliminary issues for certification; no overreach |
Key Cases Cited
- Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (discretionary certification review; trial court evaluates plaintiff's theory of recovery for class treatment)
- Hale v. Sharp HealthCare, 232 Cal.App.4th 50 (hospital Charge Master class claims; ascertainability and individual inquiries defeat certification)
- Nicodemus v. St. Francis Memorial Hospital, 3 Cal.App.5th 1200 (ascertainability and certification standards under California law)
- Hall v. Rite Aid Corporation, 226 Cal.App.4th 278 (certification inquiry centers on whether plaintiff's theory is amenable to class treatment)
- Linder v. Thrifty Oil Co., 23 Cal.4th 429 (courts must weigh benefits and burdens before allowing class actions)
- Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319 (trial courts given broad discretion on certification decisions)
- Moran v. Prime Healthcare Management, Inc., 3 Cal.App.5th 1131 (Hospital Fair Pricing Policies Act context; Act does not preclude UCL claims challenging allegedly exorbitant charges)
- Children's Hospital Central California v. Blue Cross of California, 226 Cal.App.4th 1260 (reasonable value of medical services is a factual determination; billed charges not necessarily market value)