266 Conn. 12 | Conn. | 2003
Opinion
The defendant, Anthem Health Plans, Inc., appeals
On the cross appeal, the plaintiffs claim that the trial court improperly: (1) refused to rule on the merits of the motion for class certification with respect to their claim that the defendant unlawfully altered the payment terms
The following facts and procedural history are undisputed. The plaintiffs ar e several orthopedic surgeons and groups of orthopedic surgeons, who brought this class action in 1999, alleging breach of contract, tortious interference with business expectations, and violation of CUTPA. See footnote 2 of this opinion. In support of those counts, the plaintiffs alleged that they had each entered a written agreement with the defendant for the provision of certain medical services to persons insured by the defendant, and that the defendant had breached the terms of those agreements in several ways. Specifi
In March, 2001, the plaintiffs moved for class certification to serve as representative parties for the following class of unnamed persons: “ ‘[A]ll those providers, doctors and physicians who have signed with the defendant [one of several written agreements to provide medical services to persons insured by the defendant].’ ” At a hearing on the motion, the plaintiffs further limited the proposed class to “include only physicians, not social workers or other providers who are not medical doctors,” “who signed such agreements from 1993 to the present.”
In July, 2001, the trial court granted the motion for class certification, but only with respect to three of the sixteen subparagraphs of the plaintiffs’ complaint asserting factual allegations in support of the counts of the complaint. Because the same factual allegations served as the basis for each count of the plaintiffs’ complaint, the court’s ruling applied to each count. The court denied the plaintiffs’ motion for class certification, however, with respect to the remaining thirteen
Before turning to the claims raised in this appeal and cross appeal, we set forth our standard of review for orders granting and denying class certification. “Although a trial court must undertake a rigorous analysis to determine whether the plaintiffjs] [have] borne [the] burden successfully ... it has broad discretion in determining whether a suit should proceed as a class action. . . . Our review is confined to determining whether the trial court abused its discretion.” (Internal quotation marks omitted.) Marr v. WMX Technologies, Inc., 244 Conn. 676, 680, 711 A.2d 700 (1998); see also Moore v. PaineWebber, Inc., 306 F.3d 1247, 1252 (2d Cir. 2002). In reviewing a decision of the trial court for abuse of discretion, “every reasonable presumption should be given in favor of the trial court’s ruling.” (Internal quotation marks omitted.) State v. O’Neil, 261 Conn. 49, 81, 801 A.2d 730 (2002). “Judicial discretion [however] ... is always legal discretion, exercised according to the recognized principles of equity. . . . While its exercise will not ordinarily be interfered with on appeal to this court, reversal is required where the abuse is manifest or where injustice appears to have been done.” (Internal quotation marks omitted.) Rivera v. Veterans Memorial Medical Center, 262 Conn. 730, 742-43, 818 A.2d 731 (2003). Furthermore, our deference to the discretion of the trial court “presupposes that the trial court did in fact exercise its discretion. . . . [S]ee State v. Lee, 229 Conn. 60, 73-74, 640 A.2d 553 (1994) ([i]n the discretionary realm, it is improper for the trial court to fail to exercise its discretion).” (Citation omitted; internal quotation marks omitted.) Danbury v. Dana Investment Corp., 249 Conn. 1, 35-36, 730 A.2d 1128 (1999). The United States Court of Appeals for the Second Circuit has exercised “even
“[I]n determining whether to certify the class, a [trial] court is bound to take the substantive allegations of the complaint as true.” (Internal quotation marks omitted.) Rivera v. Veterans Memorial Medical Center, supra, 262 Conn. 743. “[T]he interpretation of pleadings is always a question of law for the court .... Cahill v. Board of Education, 198 Conn. 229, 236, 502 A.2d 410 (1985). The modem trend, which is followed in Connecticut, is to construe pleadings broadly and realistically, rather than narrowly and technically. . . . Beaudoin v. Town Oil Co., 207 Conn. 575, 587-88, 542 A.2d 1124 (1988), and cases cited therein. Although essential allegations may not be supplied by conjecture or remote implication; Cahill v. Board of Education, supra, 236; the complaint must be read in its entirety in such a way as to give effect to the pleading with reference to the general theory upon which it proceeded, and do substantial justice between the parties. Price v. Bouteiller, 79 Conn. 255, 257, 64 A. 227 (1906).” (Internal quotation marks omitted.) Travelers Ins. Co. v. Namerow, 261 Conn. 784, 795, 807 A.2d 467 (2002); see also Doe v. Yale University, 252 Conn. 641, 667, 748 A.2d 834 (2000) (“pleadings must be constmed broadly and realistically, rather than narrowly and technically” [internal quotation marks omitted]). “[T]he class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiffs cause of action. . . . [S]ometimes, it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question. . . . General Telephone Co. of the Southwest v. Falcon, [457 U.S. 147, 160, 102 S. Ct. 2364, 72 L. Ed. 2d 740 (1982)]. In determin
I
PARTIAL CLASS ACTION
As a threshold matter, we note that, by restricting class certification to particular issues raised in three subparagraphs of the plaintiffs’ complaint, the trial court created a “partial class action.” 7B C. Wright, A. Miller & M. Kane, supra, § 1790, p. 268. Rule 23 (c) (4) of the Federal Rules of Civil Procedure expressly authorizes a partial class action, whereby an action is only “brought or maintained as a class action with respect to particular issues . . . .” Neither party has raised or briefed the issue of whether we should recognize the partial class action mechanism in Connecticut. Although our rules of practice neither expressly prohibit nor permit such a mechanism, we interpret them to permit the partial class action mechanism.
The same principles of judicial economy advanced by class actions generally are further advanced by partial class actions. “[C]lass actions serve a unique function in vindicating plaintiffs’ rights. [C]lass action procedures . . . increase efficiencies in civil litigation by encouraging multiple plaintiffs to join in one lawsuit. Many jurisdictions have recognized that in certain situations, class action suits are superior to individual law
Accordingly, we permit the partial class action device. A class action may be brought or maintained with respect to particular issues, provided that the requirements for class certification are satisfied. Cf. State Farm Mutual Automobile Ins. Co. v. Mabry, 274 Ga. 498, 499, 556 S.E.2d 114 (2001) (enabling partial class action to proceed, with respect to certain counts of complaint, and not others, in absence of express
We also adopt the proviso, set forth in rule 23 (c) (4) of the Federal Rules of Civil Procedure, that, in considering the propriety of certifying a partial class action, the remaining rules governing class certification must be “construed and applied accordingly.” For example, the requirement of Practice Book § 9-7 (3) that “the claims ... of representative parties [be] typical of the claims ... of the class” must be read to refer only to the claims for which the court has granted class certification, rather than all of the claims brought by the representative plaintiffs. The typicality requirement, as with most of the requirements for class certification, concerns whether “the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.” General Telephone Co. of the Southwest v. Falcon, supra, 457 U.S. 157 n.13; id. (requirements of commonality, typicality and adequacy of representation “serve as guideposts” for that basic assessment). Generally, the class action requirements are designed to balance the economic benefits of proceeding with a class action, discussed previously, against any procedural unfairness, which might result from class certification. Amchem Products, Inc. v. Windsor, 521 U.S. 591, 615, 117 S. Ct. 2231, 138 L. Ed. 2d 689 (1997). In a partial class action, the binding effect of the judgment on absent class members is limited to the particular claims for which class certification was granted. See generally 7B C. Wright, A. Miller & M. Kane, supra, §§ 1789 through 1790. As a result, the concern for adequate representation is limited to those certified claims for which there is such representative litigation, and the applicability of the rules should be similarly limited.
II
THE MOTION TO DISMISS THE APPEAL IN PART
Next, we address the plaintiffs’ motion to dismiss the defendant’s appeal “insofar as [it] puiports to raise nonCUTPA issues.” The plaintiffs filed that motion while the case was pending before the Appellate Court. The Appellate Court denied the motion without prejudice, pending argument on the merits, and instructed the parties to address the issue in their briefs. We then transferred the appeal to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1. In its brief, the defendant claims that we should review the trial court’s class certification order with respect to each of the counts of the plaintiffs’ complaint, rather than restrict our review to the counts brought under CUTPA. Specifically, the defendant argues that, although § 42-1 lOh only provides for the interlocutory appeal of class certification orders as they affect counts brought under CUTPA; see footnote 8 of this opinion for the text of § 42-1 lOh; because the CUTPA and non-CUTPA counts are “inextricably intertwined”; Taff v. Bettcher, 243 Conn. 380, 384 n.2, 703 A.2d 759 (1997); the certification order as to the nonCUTPA counts also constitutes a final judgment for purposes of appeal. Conversely, the plaintiffs argue that we should restrict the scope of our review of the trial court’s class certification order to the counts brought under CUTPA. For the reasons that follow, we dismiss as moot the plaintiffs’ motion to dismiss the appeal as to the non-CUTPA counts.
“It is settled law that the right to appeal is purely statutory and is allowed only if the conditions fixed by statute are met.” (Internal quotation marks omitted.)
As the defendant correctly contends, and the facts of the present case indicate, the nonCUTPA counts are “inextricably intertwined” with the CUTPA claims. Taff v. Bettcher, supra, 243 Conn. 384 n.2. As discussed previously, the trial court granted class certification with respect to three subparagraphs of the plaintiffs’ complaint that contained factual allegations supporting each count of the complaint; and the certification order did not differentiate among, or even address, the individual counts of the complaint. Therefore, in a realistic, if not a formal, sense, our analysis of the court’s class certification order would apply to all counts of the complaint, because each count depends upon the same factual issues certified for class representation in the court’s order. Any restriction of our review of this class certification order with respect to the CUTPA count would, therefore, be purely hypothetical. Consequently, we conclude that where, as here, the factual and legal bases of the class certification issues do not' differ among the CUTPA and nonCUTPA claims, and where they are, therefore, inextricably intertwined with each other, our conclusions regarding the class certification of the CUTPA counts will, as a matter of law, govern the class certification of the nonCUTPA counts as well.
Ill
THE DEFENDANT’S APPEAL
Next, we address the defendant’s claim that the trial court abused its discretion by determining that the plaintiffs had established the elements of commonality and typicality, as required to bring a class action under Practice Book § 9-7 (2) and (3), with respect to each of the three subparagraphs of the plaintiffs complaint for which the trial court granted class certification. In
The following additional undisputed facts and procedural history are relevant to our resolution of this claim. The trial court granted class certification with respect to three subparagraphs of factual allegations in the plaintiffs’ complaint, namely, paragraph 20 (b), (g) and (m) . In those subparagraphs, the plaintiff alleged the following: “20. . . . [The defendant has] unilaterally breached the terms of the [a]greements in one or more of the following respects . . . (b) Failing to provide the [p]laintiff and other similarly situated physicians with a consistent medical utilization/quality management and administration of covered services by paying financial incentive and performance bonuses to providers and [the defendant’s] staff members involved in making utilization management decisions. . . . (g) Failing to maintain accurate books and records whereby improper payments to the [p]laintiffs were made based on claim codes submitted. . . . (m) By failing to provide senior personnel to work with the [p]laintiffs or other similarly situated physicians . . . .”
The trial court determined that, in those three sub-paragraphs of the complaint, the plaintiffs had alleged
Next, we set forth the specific rules of class certification at issue in this claim. At the outset, we note that our jurisprudence governing class certification is relatively undeveloped, because “most class actions are brought in federal court. Our class action requirements, however, are similar to those applied in the federal courts. Compare Practice Book §§ 9-7 and 9-8 [see footnotes 5 and 6 of this opinion] with Fed. R. Civ. P. 23 (a) and (b).
As the United States Court of Appeals for the Second Circuit
Finally, we emphasize that, in the context of a partial class action, such as the present case, the typicality requirement does not require that all of the claims brought by representative plaintiffs be typical of the
The trial court did not abuse its discretion in determining that the elements of commonality and typicality were satisfied with respect to each of the three subparagraphs of factual allegations at issue. When viewed liberally and realistically; see Doe v. Yale University, supra, 252 Conn. 667; each of the three subpara-graphs of the complaint implicates issues of law and fact common to the class certified by the trial court. Additionally, the plaintiffs’ claims under those subpara-graphs are typical of claims advanced on behalf of the class.
A
Paragraph 20 (b) of the Plaintiffs’ Complaint
In paragraph 20 (b) of the complaint, the plaintiffs allege that “by paying financial incentive and performance bonuses to [personnel] involved in making utilization management decisions” the defendant has breached its contractual obligation under certain agreements to provide “consistent medical utilization/ quality management and administration of covered services . . . .” Read liberally and realistically, this paragraph alleges that the defendant had a contractual obligation to all physicians who had entered one of the relevant agreements—each member of the class—to ensure a consistent standard for authorizing or denying coverage for medical services, and that an incentive bonus program implemented by the defendant had breached that obligation. Thus, the trial court did not abuse its discretion by determining that common lac-
As mentioned previously in this opinion, the defendant makes four specific counterarguments. Each of these arguments is unpersuasive. First, the defendant contends that commonality and typicality were absent because the allegations in paragraph 20 (b) of the complaint involve individualized inquiries that are not susceptible to class-wide proof. Specifically, the defendant contends that paragraph 20 (b) requires a case-by-case inquiry into whether each particular course of treatment was “ ‘medically necessary,’ ” which would vary from plaintiff to plaintiff. No such inquiry into whether particular courses of treatment were “medically necessary” is required, however, to establish liability for breach of contract according to the allegations contained in paragraph 20 (b). That subparagraph alleges only that an incentive program developed by the defendant created inconsistent standards of coverage, which breached a common term of the agreements with each class member. An inquiry into the amount of coverage that would have been medically necessary for any given course of treatment would be required, if at all, only to assess the appropriate level of damages for a given plaintiff. “That there may be individual consideration of the issue of damages has never been held to bar certification of a class.” Marr v. WMX Technologies, Inc., 244 Conn. 676, 682, 711 A.2d 700 (1998).
Third, the defendant maintains that the court improperly “shifted . . . the burden” to the defendant to establish commonality and typicality with respect to
B
Paragraph 20 (g) of the Plaintiffs’ Complaint
In paragraph 20 (g) of the complaint, the plaintiffs alleged that the defendant breached its agreements with
The defendant again claims that the plaintiffs’ allegations involve individualized inquiries, which are not susceptible to class-wide proof, and that the trial court improperly shifted the burden to establish the requirements of commonality and typicality away from the plaintiffs. The defendant maintains that the “vague nature” of paragraph 20 (g) of the complaint makes it unclear whether the plaintiffs are alleging a general failure to maintain accurate books and records, or, rather, a series of failures to maintain accurate books and records, unrelated to any general business practice.
Finally, the defendant again claims that there was insufficient evidence to establish that any of the plaintiffs had suffered the breach alleged. More specifically, the defendant maintains that no direct evidence of a general business policy to maintain inaccurate books, or improper payments resulting therefrom, has yet been introduced. As explained previously in this opinion, the introduction of evidence to support the merits of the
C
Paragraph 20 (m) of the Plaintiffs’ Complaint
In paragraph 20 (m) of the complaint, the plaintiffs alleged that the defendant breached its agreements with each class member by “failing to provide senior person
The defendant again claims that the allegation at issue would be highly individualized across the class, requiring an inquiry into whether each member was deprived of access to senior support personnel. Again, if the plaintiffs established that the defendant promulgated a general policy of not providing senior personnel to the members of the class, an inquiry into each individual instance where a given member sought, and failed to gain, access to such personnel would be relevant only to the question of damages. The general practice of failing to provide the senior personnel, alone, is suffi
The defendant again maintains that the elements of commonality and typicality were not established with respect to paragraph 20 (m) of the complaint because none of the plaintiffs had suffered the “harm” alleged. Specifically, the defendant contends that “none of the evidence in the record identifies a single, specific instance in which a claim was denied because a [plaintiff was unable to speak with senior personnel.” Again, the defendant’s argument depends upon the proposition that an inquiry into specific instances of unpaid fees is relevant to the breach alleged. The practice of failing to provide access to senior personnel, itself, is the alleged breach of contract contained in paragraph 20 (m). A specific inquiry into evidence of improperly denied claims on the basis of the breach alleged is relevant only to the question of damages.
The defendant also renews its contention that the trial court “shifted the burden of proof to” the defendant to establish commonality and typicality by failing to require further evidence of the general practice alleged in paragraph 20 (m) of the complaint. Again, evidentiary support of the plaintiffs’ claim is pertinent only to the merits. “[I]n determining the propriety of a class action . . . the question is not whether the plaintiff or plaintiffs . . . will prevail on the merits, but rather whether the requirements of [the class action rules] are met.” (Internal quotation marks omitted.) Rivera v. Veterans Memorial Medical Center, supra, 262 Conn. 743. “[I]n determining whether to certify the class, [however] a [trial] court is bound to take the substantive allegations of the complaint as true.” (Internal quotation marks omitted.) Id.
In summary, the trial court did not abuse its discretion in determining that the elements of commonality
D
Predominance Requirement of Practice Book § 9-8
Next, the defendant claims that the trial court abused its discretion in granting the plaintiffs’ motion for class certification because they had failed to establish that “questions of law or fact common to the members of the class predominate over any questions affecting only individual members,” as required to maintain a class action under Practice Book § 9-8. Specifically, the defendant contends that the trial court was required, under Practice Book § 9-8, to determine whether the predominance requirement was satisfied as to paragraphs 20 (b), (g) and (m) of the complaint, and that the court failed to do so. We agree with the defendant.
In its memorandum of decision granting, in part, the plaintiffs’ motion for class certification, the trial court recited the predominance requirement as part of its standard of review for assessing the propriety of class certification. The court noted that, under Practice Book § 9-8, “an action ‘may be maintained as a class action if the prerequisites of [Practice Book] § 9-7 are satisfied and the judicial authority finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members . . . .’” In its application of the class action requirements to the present case, however, the court did not revisit the question of predominance.
In the present case, the trial court was required to apply the proper legal standards for assessing whether the predominance prerequisite for class certification was satisfied, as required for class certification under Practice Book § 9-8. The requirements for maintaining a class action under Practice Book § 9-8 are substantially identical to the requirements for maintaining a class action under rule 23 (b) (3) of the Federal Rules of Civil Procedure. Under both rules, the party seeking class certification must demonstrate, in addition to the
“[T]he predominance criterion is far more demanding” than the requirement of commonality, which, as discussed previously in part III of this opinion, the trial court did address. Amchem Products, Inc. v. Windsor, supra, 521 U.S. 624. The “predominance inquiry tests whether [the] proposed classes are sufficiently cohesive to warrant adjudication by representation. . . . Class-wide issues predominate if resolution of some of the legal or factual questions that qualify each class member’s case as a genuine controversy can be achieved through generalized proof, and if these particular issues are more substantial than the issues subject only to individualized proof.” (Citations omitted; internal quotation marks omitted.) Moore v. Paine-Webber, Inc., supra, 306 F.3d 1252. In making this assessment, rule 23 (b) (3) of the Federal Rules of Civil Procedure suggests consideration of the following four factors: “(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the
Although, in the section of its memorandum of decision discussing the standard of review, the trial court recited the fact that the predominance requirement must be established to certify the class, it did not proceed to apply the proper standards, discussed previously, for assessing whether the predominance requirement was satisfied. Where a trial court’s “certification order merely reiterates [the] predominance requirement and is otherwise silent as to any reason why common issues predominate over individual issues . . . [the trial court has] abused its discretion by not adequately considering the predominance requirement before certifying the class.” (Citation omitted.) Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996). Therefore, the trial court’s class certification order must be reversed, based on the failure of the court to exercise its discretion regarding the predominance requirement.
Because the issue will arise again on remand, we take this opportunity to clarify our approach for assessing whether the predominance requirement is satisfied in a partial class action. As explained previously in part I of this opinion, the proper construction of the class action requirements differs in the context of a partial class action. We conclude that, in the context of a partial class action, where class certification is limited to particular issues, the requirement of Practice Book § 9-8, namely, that “the questions of law or fact common to the members of the class predominate over any questions affecting only individual members” calls for a weighing of the common and individual questions involved within those certified issues, rather than the common and individual issues involved in the entire action. As explained in part I of this opinion, the class action requirements are designed to balance the economic
We note that there is currently a split in the Federal Circuit Courts of Appeals on this particular issue. The United States Court of Appeals for the Fifth Circuit disagrees, at least in part, with the approach set forth in this opinion. In Castano v. American Tobacco Co., 84 F.3d 734, 745 n.21 (5th Cir. 1996), the Court of Appeals stated that “a [District [CJourt cannot manufacture predominance through the nimble use of subdivision (c) (4) [of rule 23 of the Federal Rules of Civil Procedure permitting partial class actions]. The proper inteipretation of the interaction between [the predominance requirement] and [subdivision] (c) (4) is that a cause of action, as a whole, must satisfy the predominance requirement . . . and that [subdivision] (c) (4) is a housekeeping rule that allows courts to sever the common issues for a class trial.” The Fifth Circuit then cited a case decided by the United States Court of Appeals for the Ninth Circuit as supporting its proposition. Subsequently, however, the Ninth Circuit stated
The United States Court of Appeals for the Second Circuit
E
Adequacy of Representation Requirement of Practice Book § 9-7 (4)
Next, the defendant claims that the plaintiffs cannot fairly and adequately represent the certified class, as required to bring a class action under Practice Book § 9-7 (4). The defendant offers three specific arguments in support of this claim, each of which alleges conflicts of interest between the named plaintiffs, who are all orthopedic surgeons or groups of orthopedic surgeons, and the represented class, which includes all physicians who have entered the relevant contractual agreements with the defendant. We are not persuaded.
Both Practice Book § 9-7 (4) and rule 23 (a) (4) of the Federal Rules of Civil Procedure state that a class
First, the defendant contends that “orthopedists ‘have [their] own unique issues and problems as opposed to other specialties.’ ” Although this vague observation is, undoubtedly, true, the defendant does not proceed to analyze how such a general divergence of interests bears on the plaintiffs’ representation of the class with respect to the issues certified in this class action. “Analysis, rather than mere abstract assertion, is required in order to avoid abandoning an issue by failure to brief the issue properly. . . . We will not review claims absent law and analysis.” (Internal quotation marks omitted.) State v. Van Eck, 69 Conn. App. 482, 493, 795 A.2d 582, cert. denied, 260 Conn. 937, 802 A.2d 92, cert. denied, 261 Conn. 915, 806 A.2d 1057 (2002).
Finally, the defendant notes that several of the named plaintiffs have withdrawn from prosecuting the litigation. From this, the defendant argues that a conflict of interest exists in the litigation, even among the named plaintiffs, who are fellow orthopedic surgeons and members of the larger class. The defendant claims that the plaintiffs who withdrew opposed the litigation either because they “did not find this suit to have merit” or did not wish to incur the costs of litigation. These differing interests do not implicate the adequacy of representation requirement. The withdrawn plaintiffs will not incur the expenses complained of as the representative plaintiffs proceed with this class action. Although the withdrawn plaintiffs may have voiced a differing cost analysis with respect to the benefits of the litigation, they still share an interest in those benefits. Therefore, the representative plaintiffs’ interests in proceeding with this class action are not antagonistic to the withdrawn plaintiffs’ interests. In re Visa Check/Mastermoney Antitrust Litigation, supra, 280 F.3d 142.
Superiority Requirement of Practice Book § 9-8
Finally, the defendant claims that a class action is not “ ‘superior to other available methods for the fair and efficient adjudication of the controversy,’ ” as required by Practice Book § 9-8, and that, therefore, the trial court abused its discretion in granting, in part, the plaintiffs’ motion for class certification. We disagree.
As discussed previously in this opinion, under both rule 23 (b) (3) of the Federal Rules of Civil Procedure and Practice Book § 9-8, “a class must meet two requirements beyond the [r]ule 23 (a) [and Practice Book § 9-7] prerequisites: Common questions must ‘predominate over any questions affecting only individual members’; and class resolution must be ‘superior to other available methods for the fair and efficient adjudication of the controversy.’ In adding ‘predominance’ and ‘superiority’ to the qualification-for-certification list, the Advisory Committee sought to cover cases ‘in which a class action would achieve economies of time, effort, and expense, and promote . . . uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results.’ . . . Sensitive to the competing tugs of individual autonomy for those who might prefer to go it alone or in a smaller unit, on the one hand, and systemic efficiency on the other, the Reporter for the 1966 amendments cautioned: ‘The new provision invites a close look at the case before it is accepted as a class action . . . .’” (Citation omitted.) Amchem Products, Inc. v. Windsor, supra, 521 U.S. 615.
Several “[fjactors [are] relevant to the superiority of a class action under [r]ule 23 (b) (3) includ[ing]: (A) the interest of the members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation con-
The trial court expressly considered whether the superiority requirement was satisfied before granting class certification. The court began by noting that “[t]he class is not so large as to present manageability issues, and the named plaintiffs appear to have sufficient resources to afford notice to the class and organize and present the claims of [the] class members.”
These findings by the trial court do not appear to us, in light of the defendant’s arguments, to be an abuse of discretion. There appears to be a certain economy in settling each class member’s claim against the defendant for the unlawful, general business practices alleged in paragraphs 20 (b), (g) and (m) of the complaint, which is the main benefit in permitting a partial class action. See 7B C. Wright, A. Miller & M. Kane, supra, § 1790, p. 271; see also Robinson v. Metro-North Commuter R. Co., supra, 267 F.3d 167 (courts should “take full advantage of [the partial certification] provision to certify separate issues in order ... to reduce the range of disputed issues in complex litigation and achieve judicial efficiencies” [internal quotation marks omitted]).
The defendant maintains that the action will be unmanageable because of the “myriad individual issues that must be proven if [the plaintiffs] are to prevail on behalf of the class members they seek to represent.” For the reasons discussed in parts I and II of this opinion, the plaintiffs will not have to establish the “myriad individual issues” suggested by the defendant. Rather, the plaintiffs need only establish the allegations as to general business practices alleged in paragraphs 20 (b), (g) and (m) of the complaint to secure a judgment on behalf of the class members in this partial class action. The trial court did not abuse its discretion by finding that the increased expense of forcing each individual class member to litigate the same claims in separate actions was not justified.
The defendant also takes issue with the trial court’s second finding, namely, that the incentive for each of the individual class members to bring and control individual actions was inadequate in light of the relatively
Finally, the defendant argues that the trial court’s finding that a class action “ ‘will avoid duplicative law
IV
THE PLAINTIFFS’ CROSS APPEAL
The plaintiffs’ first two claims on the cross appeal relate to allegations before the trial court that the defendant unlawfully had altered payment terms of the agreements through the adoption of the resource based relative value scale (relative value scale)
The plaintiffs’ original complaint did not specifically allege that the defendant’s adoption of the relative value scale breached the payment terms of the agreements. In their memorandum of law in support of their motion for class certification, however, the “plaintiffs claimjed] that the use and implementation of the [relative value scale] violate[d] the contract provisions of [the agreements].” The trial court noticed the incongruence, and ruled against the plaintiffs’ motion for class certification with respect to that claim. The court’s reasoning was as follows: “[T]he plaintiffs claim that the use and implementation of the [relative value scale] violates the contract provisions of [the agreements] .... The plaintiffs have not, however, alleged in any part of their amended complaint a claim based on changes in the method of calculating the amount to be paid for each service pursuant to the [relative value scale] system. The amended complaint is devoid of any reference to this change in fee structure or to [the relative value scale], either by name or by any general description. A class cannot be certified as to a claim not made in the complaint.” (Internal quotation marks omitted.) The court proceeded, however, to grant the plaintiffs’ motion for class certification with respect to three other subparagraphs of allegations raised in the complaint. See part III of this opinion.
Following the trial court’s order granting, in part, the plaintiffs’ motion for class certification, the plaintiffs moved to amend their complaint and the class certification to add a subparagraph alleging that the defendant did not provide adequate notice of the change to the relative value scale compensation system. Specifically, the plaintiffs moved to amend the complaint to add the following allegation: “[The defendant has] unilaterally breached the terms of [its] [agreements [with the plain
A
First, the plaintiffs claim that the trial court abused its discretion by refusing to rule on the merits of their original motion for class certification with respect to their claim that the defendant unlawfully failed “to notify [the plaintiffs] of the purpose and effect” of the implementation of the relative value scale. Specifically, the plaintiffs argue that the trial court “read [their] complaint too restrictively,” when it refused to consider class certification of this claim on the basis that it was not “articulated in the complaint . . . .” The plaintiffs argue that paragraph 20 (n) of the complaint, which states that the defendant violated its agreements with the plaintiffs by “failing to adequately communicate with the [p]laintiffs changes to the underlying [agreements,” encompasses their claim. We disagree.
Contrary to the plaintiffs’ central premise in this claim, the trial court did not rule, in its original order granting class certification, that a claim by the plaintiffs as to improper notice of the relative value scale was not “articulated in the complaint . . . .” The trial court found, rather, that “the plaintiffs’ claim that the use and implementation of the [relative value scale] violates [the agreements was not] . . . alleged in any part of their . . . complaint.” (Emphasis added; internal quotation marks omitted.) As a result, the plaintiffs’ contention that that finding was improper, because the court should have read paragraph 20 (n) of the complaint—an allegation as to improper notice of changes to the terms of the agreements—more broadly, to
B
Next, the plaintiffs claim that the trial court improperly denied their motion to amend the class certification to include the plaintiffs’ new claim that the defendant unlawfully had failed “to notify [the plaintiffs] of the purpose and effect” of the change to the relative value scale fee structure. We disagree.
As discussed previously in part IV of the opinion, the court denied the plaintiffs’ motion to amend the class certification on two alternate bases: (1) because the plaintiffs had not established, through legal analysis and argument, that the prerequisites to class certification were satisfied with respect to the subject allegation; and (2) because the motion did not comply with the timeliness requirements of the court’s case management orders. Because we agree with the trial court’s first, independently sufficient basis for denying the plaintiffs’ motion, we need not consider the propriety of the second basis for its decision.
The plaintiffs concede that, in their memorandum of law in support of the motion, they did not present any argument analyzing whether the prerequisites to class certification were satisfied with respect to the allegation that the defendant had failed to notify the plaintiffs properly of the relative value scale compensation system. Instead, the plaintiffs contend, incorrectly, that they had already fully briefed and argued that the class certification prerequisites were satisfied in proceedings related to their earlier, original motion for class certification. Again, the plaintiffs’ claim is based on the incorrect premise that their claim as to improper notice of the change to the relative value scale was briefed on
C
Finally, the plaintiffs claim that the trial court abused its discretion by denying class certification with respect to their allegation, in paragraph 20 (j) of their complaint, that the defendant had engaged in “illegal profiling” of their utilization of medical resources, leading to their potential termination from participation in the agreements. The plaintiffs argue that the trial court improperly found that the element of typicality was not satisfied, primarily on the basis that the representative plaintiffs had not suffered the specific harm of termination from participation in the agreements. More specifically, the plaintiffs argue that actual termination from participation in the agreements was not an element of each representative plaintiffs, and class member’s, claim under par agraph 20 (j) of the complaint. We agree.
In paragraph 20 (j) of their complaint, the plaintiffs alleged that the defendant had “unilaterally breached
We incorporate by reference the standards for evaluating the elements of commonality and typicality, under Practice Book § 9-7 (2) and (3), discussed previously in part III of this opinion. In addition, we note the United States Supreme Court’s general observation that “a class representative must be part of the class and . . . suffer the same injury as the class members.” (Interna! quotation marks omitted.) General Telephone Co. of the Southwest v. Falcon, supra, 457 U.S. 156. As stated previously in this opinion, our review of the trial court’s judgment in denying a motion for class certification “is confined to determining whether the trial court abused its discretion.” (Interna! quotation marks omitted.) Marr v. WMX Technologies, Inc., supra, 244 Conn. 680; see also Moore v. PaineWebber, Inc., supra, 306 F.3d
Paragraph 20 (j) of the plaintiffs’ complaint does not allege that each representative plaintiffs claim depends upon either (1) nonpayment, or (2) termination from participation in the agreements. Thus, we agree with the plaintiffs that the court did not properly interpret that paragraph of their complaint. Paragraph 20 (j) alleges that the defendant breached its agreement with each of the plaintiffs “[b]y making payment for services dependent on profiling . . . .” Although the allegation explains that profiling involves the threat of termination and nonpayment for services, the breach is established, according to the claim, through the practice of profiling alone. Therefore, the “harm” that the representative plaintiffs are alleged to share with the class members is the practice itself, which looms as a threat of potential termination or underpayment for services. The fact that the plaintiffs seek injunctive relief to prevent this allegedly unlawful practice reinforces this interpretation of the pleadings. Any instance where the defendant actually terminated a plaintiff from participation in the agreement, or underpaid a fee owed to that plaintiff, would be relevant to the question of damages, but “individual consideration of the issue of damages has never been held to bar certification of a class.” Marr v. WMX Technologies, Inc., supra, 244 Conn. 682.
Accordingly, we reverse the order of the trial court granting partial class certification and remand the case for further proceedings as follows. On remand, the trial court is directed to determine whether the plaintiffs have established that the predominance requirement of
The order of the trial court granting partial class certification is reversed and the case is remanded to that court for further proceedings consistent with the preceding paragraph.
In this opinion the other justices concurred.
The defendant appealed and the plaintiffs cross appealed from the judgment of the trial court to the Appellate Court, and we transferred the case to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1.
The plaintiffs named in the second amended complaint were: Edward Collins; Michael Connair; Scott Gray; Konald Ripps; John O’Brien; Joseph Zeppieri; Kristaps J. Keggi; John M. Keggi; Connecticut Family Orthopedics, P.C.; Hartford Orthopedic Surgeons, P.C.; Connecticut Sports Medicine & Orthopaedic Center, P.C.; and Orthopaedic Surgery, P.C.
Class certification is a procedural mechanism enabling representative parties to litigate on behalf of a class of unnamed persons, who are not joined in the action. “Although representative suits have been recognized in various forms since the earliest days of English law, see generally S. Yeazell, From Medieval Group Litigation to the Modern Class Action (1987); see also Marcin, Searching for the Origin of the Class Action, 23 Cath. U. L. Rev. 515, 517-524 (1973), class actions as we recognize them today developed as an exception to the formal rigidity of the necessary parties rule in equity, see Hazard, Gedid, & Sowle, An Historical Analysis of the Binding Effect of Class Suits, 146 U. Pa. L. Rev. 1849, 1859-1860 (1998) ... as well as from the bill of peace, an equitable device for combining multiple suits, see Z. Chafee, Some Problems of Equity 161-167, 200-203 (1950).
The rules permitting the institution and maintenance of a class action in Connecticut are General Statutes § 52-105 and Practice Book §§ 9-7 and 9-8. General Statutes § 52-105 provides: “When the persons who might be made parties are very numerous, so that it would be impracticable or unreasonably expensive 1o make them all parties, one or more may sue or be sued or may be authorized by the court to defend for the benefit of all.” See footnotes 5 and 6 of this opinion for the text of Practice Book §§ 9-7 and 9-8, respectively.
The plaintiffs’ original complaint also contained counts sounding in conversion and violation of the Connecticut Unfair Insurance Practices Act, General Statutes § 38a-815 et seq. The trial court granted the defendant’s motion to strike those counts. Those counts are not a subject of this appeal.
Practice Book § 9-7 provides: “One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.”
Practice Book § 9-8 provides: “An action may be maintained as a class action if the prerequisites of Section 9-7 are satisfied and the judicial authority finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members and that a class action is superior to other available methods for the fair and efficient abdication of the controversy.”
Class actions are also expressly authorized by General Statutes § 52-105. See footnote 3 of this opinion for the text of § 52-105.
General Statutes § 42-110h provides: “As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this section may be conditional, and it may be amended before decision on the merits. An order issued under this section shall be immediately appealable by either party.” (Emphasis added.)
The right of appeal is purely statutory and our statutes generally limit the right of appeal “to appeals by aggrieved parties from final judgments." (Emphasis added.) State v. Curcio, 191 Conn. 27, 30, 463 A.2d 566 (1983).
Specifically, the plaintiffs had argued, in a hearing before the trial court, that the defendant unilaterally modified the payment terms by adopting the resource based relative value scale as promulgated by the United States government to limit permissible fees for medicare recipients.
The plaintiffs further limited the proposed class with other specific exceptions in their brief in support of their motion for class certification. Those specific limitations are not relevant to this appeal.
A partial class action is a class action brought or maintained only “with respect to particular issues . . . .” 7B C. Wright, A. Miller & M. Kane, Federal Practice and Procedure (2d Ed. 1986) § 1790, p. 268, citing Fed. R. Civ. P. 23 (c) (4). Although rule 23 (c) (4) of the Federal Rules of Civil Procedure expressly authorizes this class action device, our current rules of practice do not contain a comparable, express provision. We set forth a rule recognizing the partial class action in part I of this opinion.
We note that in at least one other case brought, in part, under CUTPA; Walsh v. National Safety Associates, Inc., 241 Conn. 278, 694 A.2d 795 (1997); we assumed jurisdiction over nonCUTPA claims on an interlocutory appeal from a class certification order, albeit without noting the jurisdictional question raised in the present appeal by the plaintiffs. In that case, however, the jurisdictional claim was not presented to us, and we did not consider it.
Rule 23 of the Federal Rules of Civil Procedure provides in relevant part: “(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
“(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:
“(1) the prosecution of separate actions by or against individual members of the class would create a risk of
“(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
“(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
“(2) the party opposing the class has acted or refused to act on grounds
“(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action. . . .”
Practice Book § 9-8 imposes further requirements to maintain a class action that are also at issue in this appeal. See part III D and F of this opinion.
As explained in part I of this opinion, the present case is a partial class action. Accordingly, we construe the requirement that the representative plaintiffs’ “claims” be typical and present common issues to refer strictly to the claims for which the court has granted class certification. See part I of this opinion.
“Decisions of the Second Circuit Court of Appeals, although not binding on us, are particularly persuasive.” Turner v. Frowein, 253 Conn. 312, 341, 752 A.2d 955 (2000).
The defendant alludes to the same United States Supreme Court case, General Telephone Co. of the Southwest v. Falcon, supra, 457 U.S. 147, in an effort to support its argument that evidence is required to establish the propriety of class certification based on an allegation of general business practices. Falcon does not support the defendant’s argument. Allegations of general business practices made by the plaintiff in Falcon were insufficient to establish the propriety of class certification, but not for lack of evidentiary support. Id., 159. In Falcon, the plaintiff had alleged an instance of racial
We note that the United States Supreme Court has implied, in dicta, that conflicts of interest between class members implicate the adequacy of representation requirement, rather than the requirements of commonality and typicality. See General Telephone Co. of the Southwest v. Falcon, supra, 457 U.S. 157 n.13; id., 157-58 n.13 (commonality and typicality requirements “tend to merge with the adequacy-of-representation requirement, although the latter requirement also raises concerns about . . . conflicts of interest”). We need not resolve the question of whether the defendant’s claim regarding a conflict of interest also implicates the elements of commonality and typicality, however, because the defendant has also challenged the trial court’s class certification order based on the adequacy of representation criterion; see part III E of this opinion; and has incorporated by reference this claim regarding a conflict of interest. We address the claim here for convenience.
Currently, the defendant only cites to evidence that is ambiguous on the matter. The defendant quotes one deponent’s testimony as stating that “whether a primary care physician’s bonus is improper ‘depends on what [it is] for.’ ” (Emphasis added.)
In Peoples v. Wendover Funding, Inc., supra, 179 F.R.D. 492, the federal District Court of Maryland took the Fifth Circuit’s approach a step further. Rather than require that the “cause of action, as a whole, ” satisfy the predominance requirement; Castano v. American Tobacco Co., supra, 84 F.3d 745 n.21; the District Court interpreted Castaño as requiring that the court determine whether “common questions predominate in the case as a whole . . . .” (Emphasis added.) Peoples v. Wendover Funding, Inc., supra, 501 n.4.
Again, we note that “[decisions of the Second Circuit Court of Appeals, although not binding on us, are particularly persuasive.” Turner v. Frowein, 253 Conn. 312, 341, 752 A.2d 955 (2000).
The fact that “[t]he commonality and typicality requirements . . . tend to merge with the adequacy-of-representation requirement,” explains the overlap in the defendant’s arguments. General Telephone Co. of the Southwest v. Falcon, supra, 457 U.S. 157 n.13.
Those findings are not at issue in this appeal.
In the very deposition testimony cited by the defendant, this plaintiff immediately equivocated as to whether he actually sought that sum. That testimony was as follows:
“Q: As part of this suit, will you be seeking the sixty-seven thousand [dollars] that you weren’t paid?
“A: I’m seeking some correction on that. ... I think that the issue is that [the defendant] for its own financial interest has reduced my reimbursement . . . without any discussion with me, but just has imposed [that reduction] on me in a dictatorial fashion which I think is morally wrong.”
As mentioned previously in footnote 10 of this opinion, the relative value scale is a compensation scheme promulgated by the United States government to limit permissible fees for medicare recipients.