Opelousas General Hospital Authority, a Public Trust, D/B/A Opelousas General Health System v. Louisiana Health Service & Indemnity Company D/B/A Blue Cross and Blue Shield of Louisiana

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

19-736

OPELOUSAS GENERAL HOSPITAL AUTHORITY, A PUBLIC
TRUST, D/B/A OPELOUSAS GENERAL HEALTH SYSTEM

VERSUS

LOUISIANA HEALTH SERVICE & INDEMNITY COMPANY D/B/A
BLUE CROSS/BLUE SHIELD OF LOUISIANA

************
APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, DOCKET NO. 16-C-3647-C
HONORABLE ALONZO HARRIS, PRESIDING

************
SYLVIA R. COOKS
JUDGE
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Court composed of Sylvia R. Cooks, John E. Conery, and Candyce G. Perret, Judges.

AFFIRMED.

Thomas A. Filo
Cox, Cox, Filo, Camel & Wilson, L.L.C.
723 Broad Street
Lake Charles, LA 70601
(337) 436-6611
COUNSEL FOR PLAINTIFF/APPELLEE:
Opelousas General Hospital Authority, et al.

Patrick C. Morrow
James P. Ryan
Morrow, Morrow, Ryan, Bassett & Haik
324 West Landry Street
Opelousas, LA 70570
(337) 948-4483
COUNSEL FOR PLAINTIFF/APPELLEE:
Opelousas General Hospital Authority, et al.

Stephen B. Murray
Stephen B. Murray, Jr.
Arthur M. Murray
Murray Law Firm
Poydras Center, Suite 2150
650 Poydras Street
New Orleans, LA 70130
(504) 525-8100
COUNSEL FOR PLAINTIFF/APPELLEE:
Opelousas General Hospital Authority, et al.

Mark A. Cunningham
Michael C. Drew
Jones Walker LLP
201 St. Charles Avenue, 49th Floor
New Orleans, LA 70170
(504) 582-8266
COUNSEL FOR DEFENDANT/APPELLANT:
Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield
of Louisiana

Pride J. Doran
Doran & Cawthorne, L.L.C.
521 E. Landry Street
P.O. Box 2119
Opelousas, LA 70571
(337) 948-8008
COUNSEL FOR DEFENDANT/APPELLANT:
Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield
of Louisiana

COOKS, Judge.

Defendant, Louisiana Health Service & Indemnity Company d/b/a Blue Cross

Blue Shield of Louisiana (hereafter BCBS-LA), appeals the judgment of the trial

court certifying a class of Louisiana healthcare providers sought by Plaintiff,

Opelousas General Hospital Authority, a Public Trust d/b/a Opelousas General

Health System (hereafter OGHA). Finding no abuse of the trial court’s discretion in

certifying the class, we affirm the lower court judgment.

OGHA alleged that BCBS-LA’s uniform contracting practices amounted to

anticompetitive conduct that was in violation of the Louisiana Anti-Trust Statute.

La.R.S. 51:122 et seq. Specifically, OGHA alleged these unfair contracting

practices prohibited Louisiana Blue Cross providers from contracting for

reimbursement rates with any other out-of-state Blue Cross insurer, required that

Louisiana Blue Cross providers accept Louisiana Blue Cross contracted rates from

any other Blue Cross insurer, and excluded any other Blue Cross insurer from

entering the Louisiana health insurance marker or contracting for its own

reimbursement rates with Louisiana Blue Cross providers. OGHA maintains this

results in a monopolistic market share for BCBS-LA and violates anti-trust law

under La.R.S. 51:122 and/or 51:123.

Since the filing of this suit on August 24, 2016, there have been several

motions in both state and federal court that significantly delayed the proceedings.

Although originally set for hearing on June 29, 2017, due to the numerous motions

filed by BCBS-LA and the Blue Cross Blue Shield Association, the class

certification was not heard until nearly two years later on May 30, 2019. After the

hearing on the class certification and filing of post-hearing memoranda by both

parties, the trial court rendered judgment certifying the statewide class sought by

OGHA on July 29, 2019.

On appeal, BCBS-LA contends the trial court erred in certifying the class

because OGHA did not offer any common evidence to satisfy the elements of a

violation of Louisiana’s antitrust law on a class-wide basis. BCBS-LA also

maintains one of OGHA’s lead lawyers has an irreconcilable conflict of interest due

to his service on the Board of Trustees of OGHA.

ANALYSIS

In Baker v. PHC-Minden, L.P., 14-2243, p. 1 (La. 5/15/15), 167 So.3d 528,

538, the supreme court set forth the analysis for appellate review of the class

certification procedure in Louisiana:

A class action is “a nontraditional litigation procedure that
permits a representative with typical claims to sue or defend on behalf
of, and stand in judgment for, a class of similarly situated persons when
the question is one of common interest to persons so numerous as to
make it impracticable to bring them all before the court.” Ford v.
Murphy Oil U.S.A., Inc., 96-2913 (La.9/9/97), 703 So.2d 542, 544. Its
purpose and intent is to adjudicate and obtain res judicata effect on all
common issues applicable to persons who bring the action, as well as
to all others similarly situated. Brooks v. Union Pacific R. Co., 08-
2035, p. 10 (La.05/22/09), 13 So.3d 546, 554.

The only issue to be considered by the trial court when ruling on
certification, and by this Court on review, is whether the case at bar is
one in which the procedural device is appropriate. In determining the
propriety of such action, the court is not concerned with whether the
plaintiffs have stated a cause of action or the likelihood they ultimately
will prevail on the merits, but whether the statutory requirements have
been met. Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 178, 94 S.Ct.
2140, 2153, 40 L.Ed.2d 732 (1974).

This determination of whether a class action meets the
requirements imposed by law involves a rigorous analysis in which the
trial court “must evaluate, quantify, and weigh [the relevant factors] to
determine to what extent the class action would in each instance
promote or detract from the goals of effectuating substantive law,
judicial efficiency, and individual fairness.” McCastle v. Rollins
Environmental Services of Louisiana, Inc., 456 So.2d 612, 618
(La.1984). Doing so, the trial court must actively inquire into every
aspect of the case and not hesitate to require showings beyond the
pleadings. Brooks, 08-2035 at p. 10, 13 So.3d at 554. “Going beyond
the pleadings is necessary, as a court must understand the claims,
defenses, relevant facts, and applicable substantive law in order to make
a meaningful determination of the certification issues.” Dupree v.
Lafayette Ins. Co., 09-2602, p. 7 (La. 11/30/10), 51 So.3d 673, 680.

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Any errors to be made in deciding class action issues should be
in favor of and not against the maintenance of the class action, because
a class certification order is always subject to modification or
decertification, “if later developments during the course of the trial so
require.” McCastle, 456 So.2d at 620. To that end, La.Code. Civ. Proc.
art. 592(A)(3)(d) provides the trial court “may alter, amend, or recall
its initial ruling on certification and may enlarge, restrict, or otherwise
redefine the constituency of the class or the issues to be maintained in
the class action.” La.Code. Civ. Proc. art. 592(A)(3)(d). Nonetheless,
the trial court should evaluate the case closely before certifying the
class in light of the consequent burdens of giving notice and additional
discovery. See Dupree, 09-2602 at p. 7, 51 So.3d at 680.

A trial court has wide discretion in deciding whether to certify a
class. Brooks, 08-2035 at p. 10, 13 So.3d at 554. Subject to the
manifest error standard, its factual findings can only be reversed upon
finding, based on the entire record, no reasonable factual basis for the
factual finding and the factfinder is clearly wrong. Stobart v. State,
through Department of Transp. and Development, 617 So.2d 880, 882
(La.1993). However, we review its ultimate decision of whether or not
to certify the class under the abuse of discretion standard. Dupree, 09-
2602 at p. 7, 51 So.3d at 680. Implicit therein “is recognition of the
essentially factual basis of the certification inquiry and of the district
court’s inherent power to manage and control pending litigation.”
Brooks, 08-2035 at p. 11, 13 So.3d at 554.

In Louisiana, the requirements for class certification are set forth in La.Code

Civ.P. art. 591. Article 591(A) provides five threshold requirements for certification

of a class:

A. 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.

(4) The representative parties will fairly and adequately protect
the interests of the class.

(5) The class is or may be defined objectively in terms of
ascertainable criteria, such that the court may determine the
constituency of the class for purposes of the conclusiveness of any
judgment that may be rendered in the case. This prerequisite shall not
be satisfied if it is necessary for the court to inquire into the merits of
each potential class member’s cause of action to determine whether an
individual falls within the defined class.

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These prerequisites are commonly referred to as numerosity, commonality,

typicality, adequacy of representation, and objective definability of the class.

The burden of establishing the statutory criteria have been satisfied falls on

the party seeking to maintain the class action. Dupree v. Lafayette Ins. Co., 09-2602,

(La.11/30/10), 51 So.3d 673. Thus, OGHA was required to prove the five

prerequisites of La.Code Civ.P. art. 591(A), namely numerosity, commonality,

typicality, adequacy of the representative parties, and objectively definable class.

“Once these five prerequisites have been met, La.Code Civ.P. art. 591(B) lists

three additional criteria, one of which must also be satisfied for certification

depending on the type of class action sought.” Baker, 167 So.3d at 358. Here, the

additional requirement needed for class certification is set forth in La.Code Civ.P.

art. 591(B)(3), which provides:

(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 these findings include:

(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 concerning the
controversy already commenced by or against members of the
class;

(c) The desirability or undesirability of concentrating the
litigation in the particular forum;

(d) The difficulties likely to be encountered in the
management of a class action;

(e) The practical ability of individual class members to
pursue their claims without class certification;

(f) The extent to which the relief plausibly demanded on
behalf of or against the class, including the vindication of such
public policies or legal rights as may be implicated, justifies the
costs and burdens of class litigation.

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As this court noted in Emigh v. West Calcasieu Cameron Hosp., 13-2985

(La.App. 3 Cir. 11/2/17), 231 So.3d 140, 148, we must first “review the trial court’s

factual findings . . . as to whether [OGHA] met their burden of proving the

requirement[s] set forth in La.Code Civ.P. art. 591(A).”

1. Numerosity.

The numerosity prerequisite is not based on the number of class members

alone. The core conditions of the numerosity requirement is that “joinder is

impracticable and there is a definable group of aggrieved persons.” Doe v. Southern

Gyms, LLC, 12-1566, p. 12 (La. 3/19/13), 112 So.3d 822, 831.

OGHA presented testimony that the number of potential class members would

be approximately 11,000 health care providers throughout Louisiana. Mica Toups,

a Network Development Representative for BCBS-LA, testified in the Acadiana

area alone, there would be “thousands” of potential class members. In Emigh, this

court held a class of 254 potential class members made joinder of the claims

impractical and satisfied the numerosity requirement. We find no error in the trial

court’s finding that numerosity was met.

2. Commonality.

Commonality refers to “a common nucleus of operative facts such as would

justify allowing the class action to proceed.” McCastle v. Rollins Envtl. Servs. of

Louisiana, Inc., 456 So.2d 612, 620 (La. 1984). The commonality requirement is

met if plaintiffs can demonstrate that there is “one issue, the resolution of which will

affect all or a significant number of plaintiffs.” Clark v. Trus Joist MacMillian, 02-

676, 02-512, p. 8 (La.App. 3 Cir. 12/27/02), 836 So.2d 454, 461 (citing Duhe v.

Texaco, Inc., 99-2002, pp. 12 (La.App. 3 Cir. 2/7/01), 779 So.2d 1070, 1078). The

court in Duhe noted the “test of commonality is not a demanding one, and requires

only that there be at least one issue, the resolution of which will affect all or a

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significant number of the putative class members. Mullen v. Treasure Chest Casino,

LLC, 186 F.3d 620 (5 Cir.1999), cert. denied, 528 U.S. 1159, 120 S.Ct. 1169, 145

L.Ed.2d 1078 (2000).” Id. at 1078. The Duhe court further explained “[t]he mere

fact that varying degrees of damages may result from the same factual transaction

and same legal relationship or that class members must individually prove their right

to recover, does not preclude class certification.” Id. at 1085.

In the present class action, OGHA is alleging a common practice (BCBS-LA’s

business model) violated La.R.S. 51:122 and La.R.S. 51:123. In her testimony Mica

Toups acknowledged that all the contracted providers were subject to this course of

conduct. Dr. Lawrence Wu, a Health Care Economist and Expert in Anti-Trust Law

who testified for BCBS-LA, stated there was a common course of conduct. We

agree with OGHA and the trial court that the commonality requirement was met as

it was demonstrated the course of conduct by BCBS-LA gave rise to a common

nucleus of operative facts, the resolution of which will affect all or a significant

number of the putative class members. As noted, simply because different rates may

apply to providers in different areas of Louisiana will not defeat class certification.

3. Typicality.

The typicality requirement necessitates that the claims of class representatives

are typical of all members. “It satisfies typicality if the representative plaintiffs’

claims arise out of the same event or course of conduct as the class members’ claims

and are based on the same legal theory.” Duhe, 779 So.2d at 1079.

BCBS-LA argues typicality is not met here because OGHA, as a rural hospital,

“is differently situated from, for example, a chiropractor group in Baton Rouge, a

physical therapist partnership in New Orleans, or a solo practitioner neurologist in

Lafayette.” The trial court entertained this argument below, and in its written

reasons, stated that “the claims all arise out of the same legal theory, a violation of

the statute, advance[d] by plaintiff on behalf of the entire class.” We find no error

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in this conclusion. BCBS-LA acknowledged the complained of conduct is

applicable to all prospective class members, who are contracted providers of BCBS-

LA, and the same legal theory, a violation of La.R.S. 51:122 and/or La.R.S. 51:123,

has been advanced by OGHA. As OGHA notes, although different areas may have

different average rates for services, the calculation of loss will be the same, i.e., the

difference between the allegedly unlawful contracted rate and the providers billed

charges for the services. Therefore, we find no abuse of the trial court’s vast

discretion in finding typicality was met in the present case.

4. Adequacy of Representation.

In Duhe, 779 So.2d at 1079, this court discussed the adequacy of

representation requirement:

The purpose of the adequacy requirement is to protect the legal
rights of the unnamed class members. Kirkpatrick v. J.C. Bradford &
Co., 827 F.2d 718 (11 Cir.1987), cert. denied, 485 U.S. 959, 108 S.Ct.
1221, 99 L.Ed.2d 421 (1988). . . . The test often used for adequate
representation consists of three elements: (1) the chosen class
representatives cannot have antagonistic or conflicting claims with
other members of the class; (2) the named representatives must have a
sufficient interest in the outcome to insure vigorous advocacy; and (3)
counsel for the named plaintiffs must be competent, experienced,
qualified, and generally able to conduct the proposed litigation
vigorously. Davis v. Cash For Payday, Inc., 193 F.R.D. 518
(N.D.Ill.2000).

The trial court noted the following concerning Thomas Filo, who is an attorney for

the proposed class and argued this case before this court on appeal:

Tom Filo, one of the attorneys for [OGHA], testified that he has been
involved in class action cases since 2004; has had twenty plus new law
suits involving reimbursement issues; that all of their cases have been
certified, that he filed the first class action lawsuit in Louisiana
involving healthcare providers. . .

The trial court then concluded the adequacy of representation requirement was met,

finding “the class counsel and class representatives have extensive experience in

serving as representatives for litigation and settlement of cases involving health care

provider classes where contracted reimbursement rates were challenged as

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unlawful.”1 The trial court noted OGHA has served as “both a class representative

and has been involved as a class member in a number of cases that were litigated or

settled.”

To date in these proceedings, counsel for OGHA has vigorously and

successfully defended numerous motions filed by BCBS-LA and the Blue Cross

Blue Shield Association in both state and federal court. We find no abuse of

discretion in the trial court’s finding that adequacy of representation was met herein.

BCBS-LA also asserts there is a clear and irreconcilable conflict of interest

between OGHA, the proposed class and one of its lead attorneys. Specifically,

BCBS-LA argues:

In this case, clear and undisputed conflicts of interest exist
between OGH and putative class counsel and the remainder of the class.
The team of lawyers seeking to be named as class counsel is headed by
Mr. [Patrick] Morrow, a member of the Board of Trustees of OGH who
executed the engagement letter with OGH on behalf of all of the
attorneys. Mr. Morrow’s fiduciary relationship with OGH creates a
conflict between OGH and the class, and between the putative attorneys
and the class. With Mr. Morrow owing a fiduciary duty to OGH, he
and his co-counsel are unable as a matter of law to act in the best interest
of the class as a whole.

The trial court was presented with that argument below, and dismissed BCBS-LA’s

argument as regards Mr. Morrow’s ability to serve as class counsel. The trial court

relied on a Louisiana Board of Ethics opinion which concluded as follows:

. . . the Code of Governmental Ethics would not prohibit Patrick
Morrow from serving as a member of the St. Landry Parish Hospital
Service District No. 2 or the Opelousas General Hospital Trust
Authority d/b/a Opelousas General Hospital while his law firm . . . has
an ongoing representation of many hospitals, including Opelousas
General Hospital . . . Since the St. Landry Parish Hospital District No.
2 or the Opelousas General Hospital Trust Authority d/b/a Opelousas
General Hospital does not have the authority to direct the litigation or

1
OGHA notes its counsel’s successful participation in other class actions, including Williams v.
SIF Consultants of Louisiana, Inc., 12-419 (La.App. 3 Cir. 11/7/12), 103 So.3d 1172, writ denied,
12-2637 (La.3/15/13), 109 So.3d 381; Thibodeaux v. American Lifecare, Inc., 14-931 (La.App. 3
Cir. 2/11/15), 157 So.3d 1193, writ denied, 15-531 (La. 5/15/15), 170 So.3d 970; and Opelousas
General Hospital Authority v. Fairpay Solutions, Inc., 13-17 (La.App. 3 Cir. 7/3/13), 118 So.3d
1269, writ denied, 17-1319 (La. 9/15/17), 225 So.3d 480.

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affect the representation by Mr. Morrow or his law firm in these class
actions, there is no transaction which Mr. Morrow is in any way
interested under the supervision or jurisdiction of his board.

Further, the Board concluded . . . Mr.Morrow would not be prohibited
from providing compensated services to [his law firm] while it
represents hospitals including the St. Landry Parish Hospital District
No. 2 or the Opelousas General Hospital Trust Authority d/b/a
Opelousas General Hospital.

We find nothing presented by BCBS-LA which would persuade this court to rule

contrary to the Board of Ethics’ opinion. Moreover, we find nothing in this assertion

against Mr. Morrow that would be a factor in denying class certification in the

present case. We find no error in the trial court’s ruling that Mr. Morrow could

participate as counsel in this matter.

5. Definability.

Under the final requirement, OGHA must show the class is or may be defined

objectively in terms of ascertainable criteria, such that the court may determine the

constituency of the class for purposes of the conclusiveness of any judgment

rendered in the case. La.Code Civ. Proc. art. 591(A)(5); Baker, 167 So.3d 528.

OGHA set forth the proposed class as follows:

All Louisiana healthcare providers who, as of the date of the filing of
the instant petition, 1) are citizens of the state of Louisiana, and 2) are
contracted with Defendant [BCBS-LA], and 3) have had one or more
medical bills reimbursed pursuant to such contract for any services
rendered to a patient in the state of Louisiana.

We find the OGHA’s definition clearly meets this requirement. BCBS-LA’s own

billing system [the FACET system], will serve in defining the class as these

documents can be utilized to ascertain the harm caused to each class member as each

provider’s reimbursement rate and billed charges are available for all services

rendered through the contract with BCBS-LA.

6. Common Questions of Law and Fact Predominate.

Having concluded that OGHA satisfied the five requirements of La.Code

Civ.P. art. 591(A), we must lastly find OGHA also met the additional criteria set

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forth in La.Code Civ.P. art. 591(B)(3), that “common questions of law or fact

common to the members of the class predominate over any questions affecting only

individual members, and that a class is superior to other methods for the fair and

efficient adjudication of the controversy.”

BCBS-LA argues the “antitrust impact” in this case cannot be measured

through common evidence across the proposed class. BCBS-LAS again focuses on

the fact that reimbursement rates differ across geographic regions of the state,

provider types and specialties, patient volume and mix, etc. They contend courts

would be forced to make individualized inquiries for various providers to determine

the individual antitrust injury to each. However, as OGHA argued and the trial court

recognized, the proposed class members in this case are healthcare providers that

allege the contracting practices of BCBS-LA violate Louisiana antitrust law and are

invalid regardless of the varying reimbursement amounts. As set forth above, the

necessary information is ascertainable through BCBS-LA’s billing system.

Damages, thus, would be a calculation between the billed charges and the alleged

invalid contracted rate for each provider.

Accordingly, we find the common claim advanced by the proposed class is

that BCBS-LA’s contracted rate results from the business model that BCBS-LA

applies to all contracted healthcare providers. Therefore, we find a common

question of law and fact predominates over the individual issues such that a class

procedure is the most efficient way to resolve the issues presented.

DECREE

For the foregoing reasons, the judgment of the trial court certifying this

matter as a class action is affirmed. All costs of this appeal are assessed against

appellant, Louisiana Health Service & Indemnity Company d/b/a Blue Cross Blue

Shield of Louisiana.

AFFIRMED.

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