Collins v. Anthem Health Plans, Inc.

• Decision Date: 06 September 2005
• Docket Number: No. 17233.,17233.
• Citation: 275 Conn. 309,880 A.2d 106
• Court: Connecticut Supreme Court
• Parties: Edward COLLINS et al. v. ANTHEM HEALTH PLANS, INC.

880 A.2d 106

275 Conn. 309

Edward COLLINS et al. v. ANTHEM HEALTH PLANS, INC.

No. 17233.

Supreme Court of Connecticut.

Argued February 10, 2005.

Decided September 6, 2005.

Craig A. Hoover, pro hac vice, with whom were Peter R. Bisio, pro hac vice, Washington, DC, and Michael G. Durham, Guilford, for the appellant (defendant).

William F. Gallagher, Syracuse, NY, with whom were William J. Sweeney, New Britain, and, on the brief, Matthew Shafner, Groton and Hugh D. Hughes, for the appellees (named plaintiff et al.).

BORDEN, NORCOTT, KATZ, PALMER and ZARELLA, Js.

ZARELLA, J.

The defendant, Anthem Health Plans, Inc., appeals¹ from the trial court's class certification² order that was rendered following proceedings that were conducted by the trial court pursuant to our remand order in Collins v. Anthem Health Plans, Inc., 266 Conn. 12, 67-68, 836 A.2d 1124 (2003). The plaintiffs are orthopedic surgeons and groups of orthopedic surgeons who commenced this action against the defendant in 1999, alleging, inter alia, breach of contract, tortious interference with business expectancies, breach of the implied covenant of good faith and fair dealing, and violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. In Collins, we concluded that the trial court had abused its discretion in granting the plaintiffs' motion for class certification as to three subparagraphs of the plaintiffs' second amended complaint (complaint), namely, subparagraphs 20(b), (g) and (m), because it had failed to undertake the predominance inquiry that is required by Practice Book § 9-8.³ Id., at 46, 836 A.2d 1124. We further concluded that the trial court improperly had denied the plaintiffs' motion for class certification with respect to their "illegal profiling" allegation, which is set forth in subparagraph 20(j) of the complaint, on the ground that the plaintiffs' claim was not typical of those of the putative class. (Internal quotation marks omitted.) Id., at 65, 836 A.2d 1124. We remanded the case to the trial court with direction to determine whether the predominance requirement was satisfied with respect to subparagraphs 20(b), (g) and (m), and to evaluate whether the class certification requirements, other than typicality, were satisfied with respect to subparagraph 20(j). Id., at 67-68, 836 A.2d 1124. The trial court thereafter concluded that all of these requirements were satisfied and certified the class for subparagraphs 20(b), (g), (j) and (m), which apply to all counts set forth in the complaint. The defendant now appeals from the trial court's certification order, claiming that the trial court abused its discretion because: (1) the plaintiffs did not prove that the commonality and adequacy-of-representation requirements of Practice Book § 9-7⁴ were satisfied with respect to the profiling allegation contained in subparagraph 20(j);⁵ (2) it did not apply the appropriate legal standards in evaluating whether the predominance requirement of Practice Book § 9-8 was satisfied with respect to all four subparagraphs; and (3) it failed to comprehend the management difficulties that would arise if this case were tried as a class action. We disagree with the defendant's first claim but agree with its second and third claims. Accordingly, we reverse the order of the trial court certifying the class as to subparagraphs 20(b), (g), (j) and (m) of the plaintiffs' complaint.

The plaintiffs are eight orthopedic surgeons and four groups of orthopedic surgeons⁶ who entered into written agreements with the defendant to provide medical services to persons enrolled in the defendant's health insurance plans. The plaintiffs commenced this action in 1999 and thereafter filed an amended four count complaint, alleging breach of contract, tortious interference with business expectancies, breach of the implied covenant of good faith and fair dealing and a violation of CUTPA. Each of these four counts is based on the same sixteen factual allegations that are designated as subparagraphs 20(a) through (p), inclusive, in the complaint.

In March, 2001, the plaintiffs filed a motion for class certification, seeking to serve as representative parties for all physicians and physician groups who had entered into contracts with the defendant, from 1993 through 2001, to provide medical services to persons enrolled in the defendant's health insurance plans.⁷ Id. The trial court granted the motion for class certification, but only with respect to three of the sixteen subparagraphs of the amended complaint. The trial court denied the plaintiffs' motion for class certification as to the remaining thirteen subparagraphs, concluding that either: (1) the plaintiffs did not seek to establish, on their own behalf, the allegations embodied therein and, consequently, their claims were not typical of those of the putative class members; or (2) the allegations "relate[d] to discrete transactions concerning particular services in particular circumstances, with factual issues not common to other such transactions . . . ." Included in the first category was the plaintiffs' profiling allegation contained in subparagraph 20(j), which provides that the defendant made "payment for services dependent on profiling, a practice whereby treatment and/or payment for covered services for the patient is permitted/disallowed ... by the use of statistical averages for the treating physician." The court reasoned that this claim lacked the requisite typicality because none of the named plaintiffs had been terminated from the defendant's provider network or denied payment as a result of the defendant's practice of profiling.

The court, however, granted class certification with respect to subparagraphs 20(b), (g) and (m), which describe general business practices of the defendant that purportedly applied uniformly to all members of the class. Subparagraph 20(b) alleges that the defendant "[f]ail[ed] to provide the plaintiff[s] and other similarly situated physicians with a consistent medical utilization/quality management and administration of covered services by paying financial incentive and performance bonuses to providers and [the defendant's] staff members involved in making utilization management decisions." Subparagraph 20(g) avers that the defendant "[f]ail[ed] to maintain accurate books and records whereby improper payments to the plaintiffs were made based on claim codes submitted." Finally, subparagraph 20(m) alleges that the defendant "fail[ed] to provide senior personnel to work with the plaintiffs or other similarly situated physicians [to secure preauthorization for certain medical services] ...." The court determined that these allegations satisfied the threshold requirements of Practice Book § 9-7. The court also determined that these allegations satisfied the superiority requirement of Practice Book § 9-8, concluding that "a class action [was] superior to other available methods for the fair and efficient adjudication of [these claims] ...." The court made no finding in accordance with Practice Book § 9-8, however, as to whether "the questions of law or fact common to the members of the class predominate over any questions affecting only individual members ...." Despite that omission, the court granted the plaintiffs' motion to certify the class with respect to subparagraphs 20(b), (g) and (m). Because the allegations contained in the sixteen subparagraphs are asserted as factual support for each count in the plaintiffs' complaint, the court's certification ruling applied to all four counts.

The defendant appealed and the plaintiffs cross appealed from the order of the trial court granting and denying in part the plaintiffs' motion for class certification. We reversed the trial court's order certifying the class as to subparagraphs 20(b), (g) and (m) because the trial court had failed to consider the predominance requirement of Practice Book § 9-8. Collins v. Anthem Health Plans, Inc., supra, 266 Conn. at 46, 836 A.2d 1124. With regard to the plaintiffs' cross appeal, we held that the trial court improperly had denied the plaintiffs' motion for class certification with respect to subparagraph 20(j) on the ground that the plaintiffs' claim failed the typicality prerequisite of Practice Book § 9-7. Id., at 65, 836 A.2d 1124. In so holding, we concluded that the trial court had misconstrued subparagraph 20(j) to require actual termination from the defendant's provider network or denial of payment as a result of the defendant's practice of profiling. Id., at 66-67, 836 A.2d 1124. We read subparagraph 20(j) liberally and realistically to conclude that the "`harm' that the representative plaintiffs are alleged to share with the class members is the [profiling] practice itself, which looms as a threat of potential termination or underpayment for services [for all participating physicians]." Id., at 67, 836 A.2d 1124. We therefore concluded that the plaintiffs' claim with respect to subparagraph 20(j) is typical of those that would be asserted by the putative class. See id. In light of these conclusions, we remanded the case to the trial court for further proceedings. Id., at 67-68, 836 A.2d 1124. Specifically, we directed the court to determine whether the predominance requirement of Practice Book § 9-8 was satisfied with respect to subparagraphs 20(b), (g) and (m) and, if so, to reinstate the partial class certification order. Id. We further instructed the court to grant class certification as to subparagraph 20(j) if it concluded that the requirements of Practice Book §§ 9-7 and 9-8, other than typicality, were satisfied as to that subparagraph. Id., at 68, 836 A.2d 1124.

The trial court thereafter heard arguments on the certification issues that we directed it to consider on remand. During that hearing, the defendant argued, inter alia, that the predominance test required the court to evaluate how the case would be tried in order...