77 Cal.App.5th 500
Cal. Ct. App.2022Background
- In January 2018 Torres received emergency care at Hanford Community Hospital and was later billed a $3,206.34 “ED LEVEL 5 89” charge characterized in pleadings as an emergency room Evaluation and Management Services (EMS) Fee added on top of itemized treatment charges.
- Hospital maintained a chargemaster and its annual “25 common outpatient procedures” list filed with OSHPD and publicly available online; the chargemaster listed EMS fee codes and prices but used abbreviated, industry coding descriptions.
- Torres sued on behalf of a class seeking declaratory relief and alleging CLRA violations for failing to disclose the existence, triggering events, and amounts of the EMS Fee prior to treatment.
- The trial court granted defendant Hospital’s motion for judgment on the pleadings; Torres appealed from the judgment and from the denial of leave to amend.
- The Court of Appeal held Torres adequately alleged Hospital had exclusive knowledge and that pricing information was not reasonably accessible, but concluded Torres failed to plead reliance with the particularity required under the CLRA and failed to plead active concealment with required specificity; leave to amend was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to disclose EMS Fee under CLRA / declaratory relief | Hospital had a duty to disclose EMS Fees before treatment because patients have a right to know and Hospital had exclusive knowledge | Legislature regulated chargemaster disclosure and Hospital complied; CLRA does not require more extensive pre-treatment price disclosures | Court: Torres pleaded facts showing Hospital’s exclusive knowledge and that chargemaster disclosures were not reasonably accessible, but that alone did not establish a CLRA violation without adequate reliance allegations; active concealment also not pleaded with particularity |
| Adequacy of reliance / causation under CLRA | Torres alleged she “relied on not being billed” and that knowledge of the EMS Fee would affect a patient’s decision to stay for treatment | Hospital argued statutory postings and OSHPD filings put prices in the public domain and that the nature/severity of treatment makes it unreasonable to infer she would have sought care elsewhere | Court: Mere conclusory statement of reliance is insufficient; plaintiff must allege she would have acted differently (e.g., declined/stopped treatment); given likely high severity of her condition, reasonable inference she would have gone elsewhere was not supported |
| Active concealment and specificity of omissions | Plaintiff alleged Hospital intentionally concealed its intent to bill EMS Fees | Hospital argued there were no affirmative acts of concealment and chargemaster disclosures existed | Court: Conclusory allegation of active concealment insufficient—plaintiff must allege specific acts that concealed information |
| Leave to amend | Torres argued she should be allowed to amend to cure defects | Hospital argued defects could not be cured and plaintiff failed to show how amendment would succeed | Court: Torres failed to demonstrate on appeal how she could cure the pleading defects (particularly reliance); denial of leave to amend affirmed |
Key Cases Cited
- Gutierrez v. Carmax Auto Superstores California, 19 Cal.App.5th 1234 (Cal. Ct. App. 2018) (articulates situations where omission can give rise to CLRA liability and that CLRA claims must be pleaded with reasonable particularity)
- Durell v. Sharp Healthcare, 183 Cal.App.4th 1350 (Cal. Ct. App. 2010) (CLRA requires a causal link and reliance for omission-based claims)
- Mirkin v. Wasserman, 5 Cal.4th 1082 (Cal. 1993) (reliance on an omission may be proven by showing one would have acted differently if the omitted information were disclosed)
- Nolte v. Cedars-Sinai Medical Center, 236 Cal.App.4th 1401 (Cal. Ct. App. 2015) (upheld nondisclosure of a facility-type fee in different context)
- Gray v. Dignity Health, 70 Cal.App.5th 225 (Cal. Ct. App. 2021) (related hospital pricing transparency decision; did not address exclusive-knowledge duty considered here)