672 F.3d 402 (6th Cir. 2012), 10-5003, Gooch v. Life Investors Ins. Co. of America

Docket Nº:10-5003, 10-5723.
Citation:672 F.3d 402
Opinion Judge:KAREN NELSON MOORE, Circuit Judge.
Party Name:Anthony GOOCH, Plaintiff-Appellee, v. LIFE INVESTORS INSURANCE COMPANY OF AMERICA and Aegon USA, Inc., Defendants-Appellants.
Attorney:Markham R. Leventhal, Jorden Burt LLP, Miami, Florida, for Appellants. Thomas O. Sinclair, SinclairWilliams, LLC, Birmingham, Alabama, for Appellee. Markham R. Leventhal, Richard J. Ovelmen, Julianna Thomas McCabe, Jorden Burt LLP, Miami, Florida, for Appellants. Thomas O. Sinclair, M. Clayborn W...
Judge Panel:Before: MOORE and KETHLEDGE, Circuit Judges; MARBLEY, District Judge [*]. MOORE, J., delivered the opinion of the court, in which MARBLEY, D.J., joined. KETHLEDGE, J. (p. ----), delivered a separate writing concurring in part and concurring in the judgment. RAYMOND M. KETHLEDGE, Circuit Judge, co...
Case Date:February 10, 2012
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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672 F.3d 402 (6th Cir. 2012)

Anthony GOOCH, Plaintiff-Appellee,

v.

LIFE INVESTORS INSURANCE COMPANY OF AMERICA and Aegon USA, Inc., Defendants-Appellants.

Nos. 10-5003, 10-5723.

United States Court of Appeals, Sixth Circuit.

February 10, 2012

         Argued: July 22, 2011.

         Rehearing and Rehearing En Banc Denied March 16, 2012.

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         ARGUED:

         Markham R. Leventhal, Jorden Burt LLP, Miami, Florida, for Appellants.

         Thomas O. Sinclair, SinclairWilliams, LLC, Birmingham, Alabama, for Appellee.

          ON BRIEF:

         Markham R. Leventhal, Richard J. Ovelmen, Julianna Thomas McCabe, Jorden Burt LLP, Miami, Florida, for Appellants.

         Thomas O. Sinclair, M. Clayborn Williams, SinclairWilliams, LLC, Birmingham, Alabama, Eric L. Buchanan, Eric Buchanan & Associates, Chattanooga, Tennessee, for Appellee.

          Before: MOORE and KETHLEDGE, Circuit Judges; MARBLEY, District Judge [*].

          MOORE, J., delivered the opinion of the court, in which MARBLEY, D.J., joined. KETHLEDGE, J. (p. ----), delivered a separate writing concurring in part and concurring in the judgment.

         OPINION

          KAREN NELSON MOORE, Circuit Judge.

          Anthony Gooch (" Gooch" ) filed a class-action lawsuit against Life Investors Insurance Company and its parent company, Aegon (collectively referred to as " Life Investors" ). Gooch alleges breach of contract because Life Investors has begun interpreting the " actual charges" provision of his cancer-insurance policy to mean the charges that the medical provider accepts as full payment from the primary insurer and the insured. Gooch claims that the policy entitles him to be paid the higher " list prices" that appear on his hospital bills before the primary insurer negotiates a lower rate. The District Court for the Middle District of Tennessee granted Gooch's motion for class certification. The district court also issued a preliminary injunction that requires Life Investors to pay Gooch according to his interpretation of the " actual charges" provision. Meanwhile, an Arkansas state court certified a nearly identical class, and the Arkansas

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Supreme Court has affirmed that class's settlement.

         Based on the intervening Arkansas class action, we conclude that this class action is precluded in large part and that class certification, in its current terms, is improper. We hold that we lack jurisdiction to consider the motion to dissolve the preliminary injunction because it is premised on faults in the original injunction, not on new evidence that is different in any relevant way. We therefore VACATE the order of class certification but DISMISS the appeal of the order that denied the motion to dissolve the preliminary injunction for lack of jurisdiction. We REMAND the case for further proceedings consistent with this opinion.

         I. BACKGROUND

         A. Substantive History

         Gooch has a cancer-only insurance policy with Life Investors. When a policyholder makes a claim for cancer-related medical expenses, Life Investors pays the policyholder directly. R. 1-1 (Policy, Section C). After a patient submits many claims, the policy pays defined sums of money without reference to the patient's costs, charges, or expenses. See, e.g., id. Section E, Part 2, ¶ ¶ 1-5. Other provisions are less clear. Life Investors pays " the actual charges" for radiation, chemotherapy, blood, ambulances, medical expenses for bone marrow donors, and some patient transportation. Id. ¶ ¶ 11(a), 12(a), 14, 17(b), 18(b), 23. The company pays " actual expenses" for hairpieces for radiation-caused alopecia, some patient transportation, and lodging, meals, and transportation for bone marrow donors. Id. ¶ ¶ 11(c), 17(c), 18(c). The policy covers " Usual and Customary charges" for prosthetic devices and experimental treatment. Id. ¶ ¶ 8, 13. The policy defines " usual and customary" as " [t]he normal and reasonable charge for a service, an apparatus, or medicine in the geographic area where provided." Id. Section A. The other relevant phrases are not defined.

         Gooch purchased his policy in 1997. Id. at 1-2. In 1999, he was diagnosed with non-Hodgkins lymphoma. R. 90-1 (Gooch Dep. at 25:22-23). Pursuant to a " Premium Waiver" provision in his policy, Gooch applied for and was granted an exemption from making premium payments, which has been in effect since January 10, 2000. R. 298-4 (Gwin Decl. ¶ 12). This exemption will remain in effect so long as Gooch remains " Totally Disabled" as defined in the policy. R. 1-1 (Policy, Section F). From 1999 to 2006, Gooch submitted medical bills relating to his treatments, and Life Investors paid Gooch the full amounts that the medical providers sought for their services— the " list prices."

          In May 2006, Life Investors notified Gooch and other policyholders that the company was adjusting its implementation of the policy with regard to the phrase " actual charges." R. 36-2 (Ex. D, Letter). Life Investors informed policyholders that, going forward, policyholders must submit documents " showing the actual charges being paid to and accepted as payment by the healthcare provider." Id. Life Investors refers to this information as " proof of loss," which is distinct from the " ‘ list’ prices or ‘ standard’ rates" that often appear in the " informational statements" sent to patients by healthcare providers. Id. Life Investors explained in the letter that these informational statements " are not true ‘ bills' and do not reflect the actual amounts being paid to and accepted by the healthcare provider as payment in full" and, therefore, " do not reflect the ‘ actual charges' being incurred and paid." Id. Between October 2006 and the issuance of the preliminary injunction, Life Investors paid Gooch only according to the " proof of loss" — that is, the amount that Gooch

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and/or his primary insurer paid to the medical provider and that the provider accepted as full payment. Gooch disputes this change and argues that he should continue receiving payment for list prices.

         B. Procedural History

         The progress of this case has been slow and serpentine. Two years ago we explained that " the case has languished for more than two years, with numerous partial or complete stays punctuated by random bursts of rulings, orders, and discovery." Gooch v. Life Investors Ins. Co. of Am. (In re Life Investors), 589 F.3d 319, 322 (6th Cir.2009). That approach began shortly after Gooch filed his complaint on March 30, 2007. R. 1 (Compl.). He alleged breach of contract for claims submitted in or after October 2006, along with breach of an implied duty of good faith and fair dealing, bad faith, and violation of the Tennessee Consumer Protection Act. Id. at 18-25. Gooch also sought a preliminary injunction to prevent Life Investors from paying him only the money that he and his insurers paid to satisfy his medical bills. R. 35 (5/23/07 Prelim. Inj. Mot.); see also R. 68 (7/12/07 Amended Prelim. Inj. Mot.). Both parties moved for summary judgment. R. 45 (6/8/07 Summary Judgment Mot.); R. 64 (7/12/07 Summary Judgment Mot.). Gooch moved to certify a class under Rule 23(b)(2). R. 66 (7/12/07 Class Cert. Mot.).

         Initially, the district court set a briefing schedule that, among other things, gave Life Investors until August 3, 2007 to respond to Gooch's motion for a preliminary injunction and gave Life Investors 150 days after the district court ruled on Life Investors's motion to dismiss in which to file a response to Gooch's cross-motion for summary judgment. R. 80 (8/3/07 Dist. Ct. Order at 2). On March 6, 2008, however, the district court granted Gooch's motion for a preliminary injunction, denied Life Investors's motion to dismiss, granted Gooch's cross-motion for summary judgment, and certified the class. R. 112 (3/6/08 Dist. Ct. Op.); R. 113 (3/6/08 Dist. Ct. Order). As we observed in 2009, " the court partially relied upon matters outside of the pleadings and the four corners of the policy— the evidence submitted by Gooch— in coming to its conclusions, without having permitted the Company an opportunity to take discovery or offer any contradictory evidence." In re Life Investors, 589 F.3d at 324. The preliminary injunction stated that, " within twenty four (24) hours from the entry of this Order, the Defendant Life Investors Insurance Company of America shall restore the amount of the Plaintiff's benefits under their Supplemental Cancer Policy in accordance with the medical billings index as calculated by this Defendant from 1999 to 2006." R. 113 (3/6/08 Dist. Ct. Order).

         Less than two weeks later, the district court set aside class certification in a terse handwritten note. R. 122 (3/19/08 Dist. Ct. Order). The district court gave Life Investors forty-five days to respond to the motion for class certification. At a status conference on April 11, 2008, the district court stayed all discovery indefinitely. See In re Life Investors, 589 F.3d at 325; see also R. 173 (5/2/08 Dist. Ct. Order) (clarifying that, based on the April 11, 2008 status conference, all discovery was stayed indefinitely). In August 2008, at Gooch's request, the district court partially lifted the stay on discovery only for Gooch so that he could conduct several depositions of the defendants. R. 180 (8/21/08 Dist. Ct. Order). On February 27, 2009, the district court denied Life Investors's motion to dissolve the stay on its discovery. R. 236 (2/27/09 Dist. Ct. Order)....

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