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/blue Shield of Louisiana

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 21-174

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

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APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, NO. 16-C-3647-C
HONORABLE LEDRICKA THIERRY, DISTRICT JUDGE

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SHARON DARVILLE WILSON
JUDGE

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Court composed of D. Kent Savoie, Sharon Darville Wilson, and Charles G.
Fitzgerald, Judges.

AFFIRMED.

Michael William Magner
Jones, Walker
201 St. Charles Ave., 51st Fl.
New Orleans, LA 70170
(504) 582-8266
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Richard Allen Sherburne, Jr.
Attorney At Law
P.O. Box 98029
Baton Rouge, LA 70898
(225) 295-2116
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Joseph C. Giglio, Jr.
Liskow & Lewis
P. O. Box 52008
Lafayette, LA 70505-2008
(337) 232-7424
COUNSEL FOR INTERVENOR APPELLEE:
Blue Cross Blue Shield Association

Patrick Craig Morrow, Sr.
Morrow, Morrow, Ryan & Bassett
324 W Landry Street
Opelousas, LA 70570
(337) 948-4483
COUNSEL FOR PLAINTIFF APPELLEE:
Opelousas General Hospital Authority, A Public Trust

Stephen Barnett Murray
Murray Law Firm
701 Poydras St., Ste. 4250
New Orleans, LA 70139
(504) 525-8100
COUNSEL FOR PLAINTIFF APPELLEE:
Opelousas General Hospital Authority, A Public Trust

James Alcee Brown
Liskow & Lewis
701 Poydras, Ste 5000
New Orleans, LA 70139-5099
(504) 581-7979
COUNSEL FOR INTERVENOR APPELLEE:
Blue Cross Blue Shield Association

Thomas Allen Filo
Cox, Cox, & Filo
723 Broad Street
Lake Charles, LA 70601
(337) 436-6611
COUNSEL FOR PLAINTIFF APPELLEE:
Opelousas General Hospital Authority, A Public Trust

Mark Aaron Cunningham
Jones, Walker, Waechter, Poite
201 St. Charles Ave, 51st Flr
New Orleans, LA 70170-5100
(504) 582-8266
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Pride Justin Doran
Doran & Cawthorne, PLLC
P. O. Box 2119
Opelousas, LA 70571
(337) 948-8008
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Douglas Michael Chapoton
Attorney At Law
P. O. Box 98029
Baton Rouge, LA 70898
(225) 295-2116
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Arthur M. Murray
Murray Law Firm
701 Poydras St., Ste. 4250
New Orleans, LA 70139
(504) 525-8100
COUNSEL FOR PLAINTIFF APPELLEE:
Opelousas General Hospital Authority, A Public Trust

Michael C. Drew
Jones, Walker
201 St. Charles Ave., 51st Fl
New Orleans, LA 70170
(504) 582-8318
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Graham H. Ryan
Jones, Walker, LLP
201 St. Charles Ave., 51st Fl.
New Orleans, LA 70170
(504) 582-8266
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Jessica W. Chapman
Attorney At Law
P. O. Box 98029
Baton Rouge, LA 70898
(225) 295-2116
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

Raven C. Boxie
Doran & Cawthorne, P.L.L.C.
P. O. Box 2119
Opelousas, LA 70571
(337) 948-8008
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

William E. Kellner
Liskow & Lewis
P. O. Box 52008
Lafayette, LA 70505-2008
(337) 232-7424
COUNSEL FOR INTERVENOR APPELLEE:
Blue Cross Blue Shield Association

Ryan M. Kantor
Morgan, Lewis & Bockius
1111 Pennsylvania Ave., NW
Washington, DC 20004-2541
(202) 739-5343
COUNSEL FOR DEFENDANT APPELLANT:
Louisiana Health Service & Indemnity Company

WILSON, Judge.

In this anti-trust class action, Defendant, Louisiana Health Service &

Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana (BCBSLA),

along with the Louisiana Commissioner of Insurance, Louisiana Department of

Insurance, and the Blue Cross Blue Shield Association (the Association) appeal the

trial court’s denial of BCBSLA’s motion to strike the motion for partial summary

judgment filed by Plaintiff Class. For the following reasons, we affirm the trial

court’s denial of the motion to strike.

I.

ISSUES

Although BCBSLA asserted several assignments of error in brief, as

several of these assignments address the motion for summary judgment rather than

the motion to strike, the only issues we must decide in this appeal are:

(1) whether the trial court erred in considering a
partial summary judgment with respect to less than
all claims and claimants in the class action without
certifying a sub class; and

(2) whether the trial court erred by not requiring
Plaintiffs to amend their petition to add a new
unpleaded theory as to BCBSLA’s liability under
La.R.S. 51:122.

II.

FACTS AND PROCEDURAL HISTORY

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

Opelousas General Health System (Plaintiffs or Plaintiff Class) filed a class action

on August 24, 2016, against BCBSLA, alleging BCBSLA engaged in

anticompetitive conduct in violation of La.R.S. 51:122 through artificially low

reimbursement rates resulting from contracts between BCBSLA and Louisiana

medical providers. At this time, several anti-trust class actions were brought

against various Blue Cross Blue Shield entities which were consolidated in a

federal Multi-District Litigation in the United States District Court for the Northern

District of Alabama. Prior to certification of the class, attempts were made by

BCBSLA to remove this case to federal court, but it was ultimately remanded back

to Louisiana from the United States Eleventh Circuit Court of Appeal which cited a

lack of diversity.

BCBSLA participates in the Blue Card program. Under that program,

BCBSLA and Blue Plans from other states sign licensing agreements with the

Association for the exclusive use of the Blue Cross and Blue Shield trademarks

when contracting insurance in their respective states. Each insurer participates in

the Blue Card program whereby patients from out of state Blue Plans can receive

the same discounted in-network rates from providers that were negotiated with that

state’s Blue insurer. Each Blue insurer may only use the Blue trademarks within

their respective states.

The plaintiff class here represents Louisiana health providers who

entered into contracts, known as provider agreements, with BCBSLA. Those

agreements defined the term “member” to include insureds from out of state

affiliate Blue Plans, and required the contractual discounts negotiated by BCBSLA

for its insureds to also apply to any patient with an out of state Blue Plan receiving

care from the Louisiana contractual providers. This suit only involves provider

agreements with BCBSLA and asserts only monetary claims under Louisiana Law.

The Association filed a petition for intervention which was denied by the trial court

and affirmed by this court. Opelousas Gen. Hosp. Auth. v. La. Health Serv. &

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Indem. Co., 19-265 (La.App. 3 Cir. 11/12/19), 284 So.3d 643, writ denied, 19-

01912 (La. 1/28/20), 291 So.3d 1060. Class certification was granted by the trial

court and affirmed by this court. Opelousas Gen. Hosp. Auth. v. La. Health Serv.

& Indem. Co., 19-736 (La.App. 3 Cir. 11/12/19), 283 So.3d 619, writ denied, 19-

01848 (La. 1/28/20), 291 So.3d 1054.

On October 7, 2020, Plaintiffs moved for partial summary judgment

seeking the return of contractual discounts for patients insured by out of state Blue

insurers for a portion of the class and excluding those members who were part of a

federal settlement. In response, BCBSLA filed a motion to strike on November 2,

2020, requesting that the court strike the motion for partial summary judgment or

continue the hearing on the motion to allow for depositions to be taken of Robert

Ehlers, the witness Plaintiffs used to exclude disputed claims from billing records.

In the motion to strike, BCBSLA argued that Plaintiffs had never pled the theory

that formed the basis for the motion for partial summary judgment, and that

granting the partial summary judgment to less than all class members on less than

all claims violated La.Code Civ.P. arts. 591-592 because Plaintiffs had not moved

to certify a subclass. On November 5, 2020, then presiding Judge Alonzo Harris

held a phone conference with respect to the motion to strike or continue and stated

that he would grant the continuance to allow BCBSLA to conduct discovery with

respect to Mr. Ehlers. The motion to strike was set for hearing on December 16,

2020, before the motion for partial summary judgment. At the hearing, the trial

court denied the motion to strike and proceeded with the motion for summary

judgment. On January 12, 2021, an order denying the motion to strike was signed.

On January 13, 2021, BCBSLA filed a motion for suspensive appeal of the order

denying the motion.

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III.

STANDARD OF REVIEW

Louisiana Code of Civil Procedure Article 964 provides, “[t]he court

on motion of a party or on its own motion may at any time and after a hearing

order stricken from any pleading any insufficient demand or defense or any

redundant, immaterial, impertinent, or scandalous matter.” “The granting of a

motion to strike ... rests in the sound discretion of the trial court and is reviewed

under the abuse of discretion standard.” Comeaux v. Butcher Air Conditioning

Co., Inc., 19-154, p. 5 (La.App. 3 Cir. 6/12/19), 274 So.3d 653, 656–57 (quoting

Cole v. Cole, 18-523, pp. 7-8 (La.App. 1 Cir. 9/21/18), 264 So.3d 537, 544).

“Motions to strike are viewed with disfavor and are infrequently granted.”

Hazelwood Farm, Inc. v. Liberty Oil & Gas Corp., 01-0345, p. 6 (La.App. 3 Cir.

6/20/01), 790 So.2d 93, 98 writ denied, 01-2115 (La. 7/26/01), 794 So.2d 834. “It

is disfavored because striking a portion of a pleading is a drastic remedy, and

because it is often sought by the movant simply as a dilatory tactic.” Id. “A

motion to strike is only proper if it can be shown that the allegations being

challenged are so unrelated to a plaintiff’s claims as to be unworthy of any

consideration and that their presence in the pleading would be prejudicial to the

moving party.” Id.

IV.

LAW AND DISCUSSION

Need for Subclass

In their first assignment of error, BCBSLA alleges that the trial court

erred by concluding Plaintiffs did not violate La.Code Civ.P. arts. 591-592 by

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creating an uncertified subclass. After reviewing the record, we disagree. The

code provisions on summary judgment specifically allow that summary judgment

may be granted for all or part of the relief prayed for by the moving party.

La.Code Civ.P. art 966(A)(1). While La.Code Civ.P. arts. 591-592 spell out the

process and requirements for certifying a subclass, BCBSLA points to no law that

requires creating a subclass to move forward a motion for partial summary

judgment. By its nature, a motion for partial summary judgment requires that not

all claims as to all parties are adjudicated. Here, Plaintiffs have sought to dispose

of claims on behalf of claimants where there exists no genuine issue of material

fact as to their ability to recover. Contrary to BCBSLA’s contention, Plaintiffs

have not abandoned their claims as to the rest of the class in seeking to make use of

the partial summary judgment tool and they specifically reserve their right to later

pursue claims on behalf of claimants where there exists a genuine issue of material

fact.

In certifying the class, the court has already determined that no

divergent interest exists within the class that would necessitate the certification of

subclasses. The motion for partial summary judgment does not alter this

determination. Accordingly, we find that the trial court did not abuse its discretion

in allowing the motion to proceed on behalf of less than all claims and less than all

claimants without certifying a subclass.

New Theory of Liability

In the next assignment of error that we address, BCBSLA contends

that the trial court erred by failing to require Plaintiffs to amend their petition to

address a new theory of liability not alleged in the petition. We disagree.

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The record reveals that Paragraph 11 of the original petition

specifically plead the facts and theory that form the basis of the partial summary

judgment. Plaintiffs specifically alleged:

This scheme included not only unlawful agreements to
not compete in other Blue Cross/Blue Shield geographic
markets (in exchange for exclusive monopolistic reign
over the Louisiana market), but also granted other Blue
Cross/Blue Shield companies access to its Louisiana
contracted rates essentially turning would-be competitors
into Louisiana Blue Cross customers or clients instead.

Furthermore, in affirming the class certification, this court noted that

Plaintiffs had alleged that BCBSLA’s contracting practices “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.” Opelousas Gen. Hosp.

Auth., 283 So.3d at 622. BCBSLA’s assignment lacks merit. Accordingly, we

find that the trial court did not abuse its discretion in failing to require Plaintiffs to

amend their petition.

The remaining assignments of error by BCBSLA all pertain to the

decision on the motion of partial summary judgment and not the motion to strike.

Therefore, we forego any consideration of those assignments in this opinion.

V.

CONCLUSION

For the foregoing reasons, we find that the trial court did not abuse its

discretion in failing to require Plaintiffs to certify a subclass or amend their

original petition before proceeding with the motion for partial summary judgment.

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Therefore, we find that the trial court’s denial of the motion to strike was not an

abuse of discretion and we affirm the trial court’s ruling.

AFFIRMED.

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