Air Evac EMS., Inc. v. Dodrill

• Decision Date: 08 July 2021
• Docket Number: CIVIL ACTION NO. 2:21-cv-00310
• Citation: 548 F.Supp.3d 580
• Parties: AIR EVAC EMS., INC., Plaintiff, v. James A. DODRILL, Defendant.
• Court: U.S. District Court — Southern District of West Virginia

548 F.Supp.3d 580

AIR EVAC EMS., INC., Plaintiff,

v.James A. DODRILL, Defendant.

CIVIL ACTION NO. 2:21-cv-00310

United States District Court, S.D. West Virginia, Charleston Division.

Signed July 8, 2021

Alex J. Zurbuch, Carte P. Goodwin, Frost Brown Todd, Charleston, WV, Charlotte Taylor, Pro Hac Vice, Jones Day, Washington, DC, Joshua L. Fuchs, Pro Hac Vice, Nicole Marie Perry, Pro Hac Vice, Jones Day, Houston, TX, for Plaintiff.

Katherine A. Schultz, Cassandra Lynn Means, Office of the Attorney General, Charleston, WV, for Defendant.

MEMORANDUM OPINION AND ORDER

THOMAS E. JOHNSTON, CHIEF JUDGE

"It's deja vu all over again. " - Yogi Berra

Pending before the Court is Plaintiff Air Evac EMS, Inc.’s ("Plaintiff" or "Air Evac") Motion for Preliminary Injunction ("Plaintiff's Motion"). (ECF No. 4.) For the reasons discussed more fully below, the Court GRANTS Plaintiff's Motion.

I. Background

Air Evac is an emergency air ambulance provider that operates throughout the United States, including in West Virginia. It is a federally regulated air carrier and provides transport for injured or sick individuals when dispatched by first responders, hospitals, or physicians. Air Evac performs this service without regard to a patient's ability to pay or insurance status. As part of its business model, Air Evac "offers a prepaid, discounted Membership Program to both individual West Virginia residents and to West Virginia businesses and municipalities." (ECF No. 1 at ¶ 4.) This prepaid Membership Program costs less than $100 a year for an individual and their household. Id. Additionally, businesses and municipalities can also purchase memberships on behalf of their employees or citizens. Id. The benefit of this program is that those with a membership who are transported by Air Evac (or its sister companies) are not responsible for any portions of their bill that is not covered by insurance.¹ This Membership Program ensures that a member does not face any out-of-pocket costs if transported by Air Evac or one of its affiliated providers. (ECF No. 5 at p. 7.) Air Evac describes its Membership Program as a

debt cancellation agreement: in exchange for the prepaid membership fee, if a member is transported by Air Evac (or an Air Evac company), then Air Evac (or the Air Evac sister company that is the transporting provider) will cancel the portion of the bill that would otherwise be the patient's out-of-pocket responsibility, including co-pay, deductible, or balance that is not covered by the patient's insurance.

(ECF No. 1 at ¶ 4.)

Air Evac now comes before this Court seeking a preliminary injunction to enjoin HB 2776 from taking effect as scheduled on July 9, 2021. This is not Air Evac's first appearance before the court. Prior to this current action, Air Evac has been involved in at least two lawsuits in the Southern District of West Virginia, in which it sought to either limit or enjoin the enforcement of certain legislation or regulations. To set the scene for this current action, the Court will first describe these prior actions and will then provide the background of the current matter.

A. Air Evac EMS, Inc. v. Cheatham et all, Civil Action No. 2:16-cv-05224²

On June 9, 2016—Plaintiff Air Evac EMS, Inc. ("Plaintiff" or "Air Evac") filed a Complaint for Declaratory and Injunctive Relief in the Southern District of West Virginia. (ECF No. 1.) The named defendants in this case were: Ted Cheatham, in his capacity as Director of the Public Employees Insurance Agency; Mary Jane Pickens, Joshua Sword, James W. Dailey, II, Troy Giatras, Elaine A. Harris, William Ihlenfeld, Brian Donat, William Milam, and Michael Smith, in their capacities as members of the Public Employees Insurance Agency's Finance Board; and Michael D. Riley, in his capacity as the West Virginia Insurance Commissioner (collectively, "Defendants").

Air Evac's Complaint primarily sought to limit the reach of House Bill 4315 ("HB 4315"), which was passed during West Virginia's 2016 Legislative Session. HB 4315 capped "the amount that PEIA pays Air Evac when it transports patients that are covered by PEIA insurance." (ECF Nos. 1 at p. 2; 27 at p. 2.) HB 4315 also eliminated Air Evac's ability to recover any payment from PEIA when it transports PEIA patients that participate in Air Evac's membership program. (ECF Nos. 1 at p. 2; 27 at p. 2.) The case also sought to address the limits placed on Air Evac's reimbursement when it transports patients covered by workers’ compensation and the fee schedule established by the Office of the Insurance Commissioner for these patients. (ECF Nos. 1 at p. 2; 27 at p. 2.) Apart from HB 4315, Air Evac further alleged that "the PEIA Finance Board, pursuant to the fee schedule it adopts, cap[ped] the amount PEIA reimbursed Air Evac for providing life-saving transportation to its participants"—which was impermissible due to the Airline Deregulation Act of 1978's ("ADA") preemption of this type of regulation.

In sum, Air Evac sought "a declaration that the [ADA] expressly preempts these laws and regulations" and "a declaration that HB 4315 violates the Contract Clause of the U.S. Constitution because it substantially impairs Air Evac's contractual rights, and is thus void and unenforceable." (ECF Nos. 1 at p. 2; 27 at p. 2.) Air Evac also requested that the Court permanently enjoin Defendants from enforcing the West Virginia Code sections and accompanying regulations that establish and limit the price or rate of Air Evac's services. (ECF Nos. 1 at pp. 26-27; 27 at pp. 26-27.)

On August 12, 2016, Defendants filed a Motion to Dismiss Complaint, in which they argued that Air Evac's Complaint should be dismissed for failure to state a claim. (ECF No. 25.)³ Then, on August 25, 2016, Air Evac filed an Amended Complaint, (ECF No. 27). This Amended Complaint contained six claims for relief. (ECF No. 27.) Counts I and II sought declarations that the two subsections of W. Va. Code § 5-16-8a were each preempted by the ADA because they established and limited the price of Air Evac's services. (ECF No. 27.) Count III alleged that the regulation of Air Evac's subscription agreement violated the Contracts Clause of the United States Constitution and sought declaratory and injunctive relief. (ECF No. 27.) Counts IV and V sought a declaration that the PIEA and OIC fees schedules were preempted by the ADA.⁴ (ECF No. 27.) Air Evac's sixth claim was pled in the alternative: if the Court chose not to invalidate W. Va. Code § 5-16-8a and the fee schedules, then Air Evac asked that the Court invalidate the prohibition on balance billing as preempted by the ADA. (ECF No. 27.)

On September 15, 2016, Defendants filed an Amended Motion to Dismiss Complaint, (ECF No. 36). The Court denied Defendants’ Amended Motion to Dismiss in May 2017. (ECF No. 87.) Later that month, on May 22, 2017, Defendants filed their Motion for Summary Judgment. (ECF No. 88.) Air Evac also filed its own Motion for Summary Judgment. (ECF No. 90.)

Ultimately, this Court granted Plaintiff's Motion for Summary Judgment in part and denied it in part and denied Defendants’ Motion for Summary Judgment in its entirety. (ECF No. 111.) In partially granting Plaintiff's Motion for Summary Judgment, this Court found that "Air Evac's practice of providing emergency air ambulance services indiscriminately when called upon by third party professionals, together with its certification as an air carrier by the DOT and court cases affirming this status, qualify Air Evac as an air carrier under the ADA." (ECF No. 111 at 11.) Next, this Court determined that the statute and regulations at issue in the Amended Complaint sufficiently "relate to" the price of an air carrier. (ECF No. 111 at 13.) Finally, the Court found that "the challenged laws—including the mandatory fee schedule and the prohibition of balance-billing—have the ‘force and effect of the law[,]" which resulted in the laws being preempted by the ADA. (ECF No. 111 at 17.) As the ADA preemption served as an adequate basis to invalidate the laws at issue, the Court declined to examine Count III: Air Evac's Contracts Clause challenge. (ECF No. 111 at 19.) Based on the above reasoning, this Court granted Plaintiff's Motion for Summary Judgment as to Counts I, II, IV, and V and denied the Motion as to Count III. Defendants appealed this ruling to the Fourth Circuit Court of Appeals, and that Court affirmed this Court's findings and rulings. See Air Evac EMS, Inc. v. Cheatham , 910 F.3d 751 (4th Cir. 2018).

B. Air Evac EMS, Inc. v. Dodrill, Civil Action No. 2:21-cv-00105⁵ ("Dodrill I")

In this recent case, Plaintiff Air Evac alleged that in 2019 Defendant Dodrill and the Office of the Insurance Commissioner ("OIC") "began exploring how to regulate Air Evac's Membership Program out of existence through a novel application of the West Virginia Insurance Code"—despite the ADA and the Court's prior rulings in Cheatham . (ECF No. 4 at p. 7.) Air Evac stated that, for more than a year, it cooperated in good faith with OIC's information-gathering efforts while repeatedly warning OIC that the ADA preempts any effort by West Virginia to regulate the Membership Program." Id.

In an effort to push back on OIC and Dodrill's regulatory strategy, on February 10, 2021, Air Evac filed a lawsuit against Defendant James Dodrill ("Defendant Dodrill" or "West Virginia Insurance Commissioner"), in his official capacity as West Virginia Insurance Commissioner. (ECF No. 1.) The Complaint listed four specific prayers for relief and asked the Court to:

1. Issue a temporary restraining order and—after a hearing—a preliminary injunction barring Defendant Dodrill from enforcing W. Va. Code §§ 33-1-1 ; 33-3-1, and 33-44-1 et seq. against Air Evac;

2. Issue a judgment declaring that the ADA preempts W. Va. Code §§ 33-1-1 ; 33-3-1, and 33-44-1 et seq. , as applied to other ambulance providers;

3. Permanently enjoin Defendant Dodrill from enforcing W. Va. Code §§ 33-1-1 ; 33-3-1, and 33-44-1 et seq. ,

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