Brown v. Knoxville Hma Holdings, LLC
| Citation | 447 F.Supp.3d 639 |
| Decision Date | 20 March 2020 |
| Docket Number | NO. 3:18-cv-00861,3:18-cv-00861 |
| Court | U.S. District Court — Middle District of Tennessee |
| Parties | Garry BROWN and John Hawkingberry, Plaintiffs, v. KNOXVILLE HMA HOLDINGS, LLC d/b/a Tennova Healthcare, Clarksville Health System, G.P., and Professional Account Services, Inc., Defendants. |
Benjamin A. Gastel, James Gerard Stranch, IV, Branstetter, Stranch & Jennings, PLLC, Nashville, TN, for Plaintiffs.
John R. Jacobson, Stuart A. Burkhalter, William M. Outhier, Riley, Warnock & Jacobson, Nashville, TN, for Defendants.
Pending before the Court is Defendants' Motion to Dismiss (Doc. No. 18, the "Motion"). Plaintiffs filed a response (Doc. No. 24), and Defendants replied (Doc. No. 25). For the reasons stated below, the Motion will be granted.
Plaintiffs Garry Brown and John Hawkingberry (collectively "Plaintiffs"), brought this putative class action lawsuit against Defendants Knoxville HMA Holdings, LLC d/b/a Tennova Healthcare ("Tennova Healthcare"), Clarksville Health System, G.P. (together with Tennova Healthcare, "Tennova"), and Professional Account Services, Inc. ("PASI") (collectively "Defendants"), alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") and the Fair Debt Collection Practices Act ("FDCPA"). Plaintiffs also assert several state law claims against Defendants including tortious interference with business relationships, declaratory judgment under Tenn. Code Ann. § 29-14-101, et seq. , violation of the Tennessee Consumer Protection Act under Tenn. Code Ann. § 47-18-101, et seq. , fraud, breach of contract, and unjust enrichment.1
Tennova is the owner and/or operator of the Tennova Healthcare–Clarksville Hospital ("Hospital"). PASI is a collection service agency hired by Tennova to provide accounts receivable collection services. When the Hospital provides treatment to a patient, it makes an initial determination regarding the reason for the treatment, including whether a third party may be liable for the patient's injuries. If the Hospital determines that a third party may be liable, Tennova enlists PASI to collect the full, unadjusted costs of the medical services provided to the patient by filing and collecting, or attempting to file and collect, one or more hospital liens that attach to any settlement or recovery the injured patient may receive from the third-party tortfeasor. In such cases, Tennova does not bill the injured patient. Likewise, it does not bill the injured patient's health insurance provider at the discounted rate(s) generally applicable to the billed services for patients covered by that insurance provider; Tennova chooses not to do so even if it is aware that the patient has valid health insurance at the time treatment is rendered.
On or about September 11, 2016, Plaintiff Brown was treated at the Hospital for injuries he sustained from an automobile accident. Brown was insured by TriCare, a health program for military veterans and their families. Tennova did not submit Brown's medical bills to TriCare for payment. Rather, Tennova instructed PASI to file a hospital lien against Brown for $2,013.07, the full, non-discounted rate for the treatment Brown received at the Hospital.
Plaintiff Hawkingberry's circumstances unfolded likewise approximately 14 months later. On or about November 21, 2017, Hawkingberry was treated at the Hospital for injuries he sustained as a result of an automobile accident that took place on November 20, 2017. Like Brown, Hawkingberry was insured by TriCare. The Hospital did not submit Hawkingberry's medical bills to TriCare for payment. Rather, the Hospital instructed PASI to file a hospital lien against Hawkingberry for $11,602.75, the full, non-discounted rate for the treatment Hawkingberry received at the Hospital.
The notice sent to each Plaintiff states that "[t]he Hospital ... creates a lien up to the maximum allowable amount of any obtained or recovered damages which the patient or his/her legal representative may receive or be entitled to receive, whether by judgment, settlement or compromise, from any and all causes of action, suits, claims, counterclaims or demands accruing to the patient, all in accord with the provisions of the laws of the State of TN." (Doc. No. 19-1).2
Tennova and Plaintiffs' health insurance provider, TriCare, had entered into a provider agreement for the administration of benefits to TriCare enrollees who receive care at the Hospital. The agreement was in effect at all relevant times. Pursuant to the agreement, Tennova has an obligation to bill TriCare for services rendered to enrollees consistent with the provider agreement.
Both Plaintiffs have resolved their claims with the third parties who were liable for their injuries. However, Plaintiffs cannot receive the full payments from these settlements because of the outstanding hospital liens.
For purposes of a motion to dismiss, the Court must take the factual allegations in the complaint as true, as the Court has done above. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. at 679, 129 S.Ct. 1937. A legal conclusion, including one couched as a factual allegation, need not be accepted as true on a motion to dismiss, nor are mere recitations of the elements of a cause of action sufficient. Id. at 678, 129 S.Ct. 1937 ; Fritz v. Charter Township of Comstock , 592 F.3d 718, 722 (6th Cir. 2010). Moreover, factual allegations that are merely consistent with the defendant's liability do not satisfy the claimant's burden, as mere consistency does not establish plausibility of entitlement to relief even if it supports the possibility of relief. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.
In determining whether a complaint is sufficient under the standards of Iqbal and its predecessor and complementary case, Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), it may be appropriate to "begin [the] analysis by identifying the allegations in the complaint that are not entitled to the assumption of truth." Iqbal , 556 U.S. at 680, 129 S.Ct. 1937. Identifying and setting aside such allegations is crucial because they simply do not count toward the plaintiff's goal of showing plausibility of entitlement to relief. As suggested above, such allegations include "bare assertions," formulaic recitation of the elements, and "conclusory" or "bald" allegations. Id. at 681, 129 S.Ct. 1937. The question is whether the remaining factual allegations plausibly suggest an entitlement to relief. Id. If not, the pleading fails to meet the standard of Rule 8 and thus must be dismissed pursuant to Rule 12(b)(6). Id. at 683, 129 S.Ct. 1937.
In Count Seven of the First Amended Class Action Complaint (Doc. No. 15, "Amended Complaint"), Plaintiffs bring a so-called civil RICO claim under 18 U.S.C. § 1964(c). Hemi Group, LLC v. City of New York , 559 U.S. 1, 6, 130 S.Ct. 983, 175 L.Ed.2d 943 (2010) (citation omitted).3 One of those criminal provisions is Section 1962(c), which provides:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
18 U.S.C. § 1962(c). In pertinent part, therefore, Section 1962(c) prohibits employees or associates of an "enterprise" from conducting the enterprise's affairs "through a pattern of racketeering activity."
Plaintiffs claim that Defendants are (legal rather than natural) persons liable to them under 18 U.S.C. § 1964(c) because they have been injured by reason of Defendants' conducting of the affairs of an "enterprise" through a pattern of racketeering activity (namely, a pattern of mail fraud and wire fraud), in violation of 18 U.S.C. § 1962(c).4
Specifically, Plaintiffs allege that Defendants, in conducting the affairs of what Plaintiffs dub the "Tennova Unlawful Hospital Lien Enterprise," engaged in a scheme to defraud Plaintiffs and putative class members by routinely and repeatedly filing and collecting payment of unlawful hospital liens. (Doc. No. 15 ¶¶ 91-105). Plaintiffs allege that this scheme was facilitated by the use of the United States mail and wire communications, such that Defendants have committed mail fraud and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343, respectively. (Id. ¶ 98). It is these alleged acts of mail and wire fraud that, according to Plaintiffs, constitutes the "pattern of racketeering activity" through which Defendants conducted the affairs of the "Tennova Unlawful Hospital Lien Enterprise."
To state a claim under § 1962(c), a plaintiff must show (1) conduct (2) of an enterprise (3) engaged in or affecting interstate commerce (4) through a pattern (5) of racketeering activity. See Sedima, S.P.R.L. v....
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Greenbaum v. Clarksville Health Sys., G.P.
...Plaintiffs argue that Defendants had no objectively reasonable basis for filing a notice of removal after Brown v. Knoxville HMA Holdings, LLC, 447 F. Supp. 3d 639 (M.D. Tenn. 2020), which involved the same defendants and law firms here. In Brown, Judge Eli J. Richardson dismissed plaintiff......