On July 19, 2007, the Fifth Circuit Court of Appeals affirmed the ruling of the U.S. District Court for the Eastern District of Louisiana denying class certification to three plaintiffs seeking to represent a class of uninsured patients who had received treatment from Ochsner Clinic Foundation. Maldonado v. Ochsner Clinic Found., No. 06-30573 (5^th Cir. July 19, 2007).  The plaintiffs filed a lawsuit against Ochsner Clinic Foundation, a non-profit corporation, on behalf of themselves and all others similarly situated uninsured patients. The plaintiffs claimed that Ochsner billed uninsured patients higher rates for their care according to Ochsner’s internal “chargemaster” rates, while offering lower discounted rates to patients with private insurance, Medicare or Medicaid.

The lawsuit was removed to federal court where the plaintiffs then sought class certification under Federal Rules of Civil Procedure 23(b)(2) or (3). The Fifth Circuit agreed with the district court that the plaintiffs did not meet their burden of proving that Rule 23(b) was appropriate. Federal Rule 23(b)(2) provides injunctive relief or declaratory relief for the class when the opposing party has acted or refused to act on grounds generally applicable to the class. For Rule 23(b)(2) to apply, the class members must demonstrate that they were harmed in essentially the same way and that injunctive relief predominates over monetary damage claims.

The Fifth Circuit found that Rule 23(b)(2) did not apply to the plaintiffs because the plaintiffs failed to identify a way to determine what a reasonable or “mutually affordable” charge was. The reason it was difficult for the plaintiffs to identify a reasonable charge, the Court explained, was because individualized issues outweighed class cohesiveness issues. In addition, since Ochsner instituted a thirty-five percent discount to uninsured patients before suit was even filed, the Court held that class certification under Rule 23(b)(2) was inappropriate because the majority of the class did not face future harm. Seeking an injunction under such circumstances would be pointless.

The plaintiffs also sought class certification under Rule 23(b)(3), which required them to prove that common questions predominate over questions affecting only individual members. The Fifth Circuit held that Rule 23(b)(3) did not apply to the lawsuit because the plaintiffs offered no sensible method to resolve the claims on a class-wide basis.

The Court stated that the plaintiffs would be unable to prove that the chargemaster rates were unreasonable since the amount of medical fees differed for each patient, depending on the particular services rendered and other factors.  Therefore, Rule 23(b)(3) did not apply, because the individual questions predominated over the common questions.  The Fifth Circuit held that since the plaintiffs did not satisfy the requirements of either Rule 23(b)(2) or (b)(3), the district court properly denied class certification.