Henley v. Biloxi H.M.A., LLC, Civil No. 1:19-cv-544-HSO-JCG

• Decision Date: 25 September 2020
• Docket Number: Civil No. 1:19-cv-544-HSO-JCG
• Citation: 489 F.Supp.3d 580
• Parties: Kimberly HENLEY, on behalf of herself and all other similarly situated, Plaintiff v. BILOXI H.M.A., LLC d/b/a Merit Health Biloxi; Community Health Systems, Inc.; and John and Jane Does 1 through 25 Inclusive, Defendants
• Court: U.S. District Court — Southern District of Mississippi

489 F.Supp.3d 580

Kimberly HENLEY, on behalf of herself and all other similarly situated, Plaintiff

v.BILOXI H.M.A., LLC d/b/a Merit Health Biloxi; Community Health Systems, Inc.; and John and Jane Does 1 through 25 Inclusive, Defendants

Civil No. 1:19-cv-544-HSO-JCG

United States District Court, S.D. Mississippi, Southern Division.

Signed September 25, 2020

Christopher C. Van Cleave, Van Cleave Law, PA, Biloxi, MS, Barry Kramer, Pro Hac Vice, Law Office of Barry Kramer, Las Vegas, NV, for Plaintiff.

Jeffrey R. Blackwood, Alicia N. Netterville, Christina M. Seanor, Bradley Arant Boult Cummings, LLP, Jackson, MS, for Defendants.

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT BILOXI H.M.A., LLC d/b/a MERIT HEALTH'S MOTION TO DISMISS [12] PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6)

HALIL SULEYMAN OZERDEN, UNITED STATES DISTRICT JUDGE

THIS MATTER IS BEFORE THE COURT on Defendant Biloxi H.M.A., LLC d/b/a Merit Health Biloxi's ("Merit Health" or "Defendant") Motion to Dismiss [12] for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), or in the alternative for failure to state a claim upon which relief can be granted under Rule 12(b)(6). After review of the Motion, the parties' briefs, the record, and relevant legal authority, the Court finds that while it does possess subject-matter jurisdiction over Plaintiff's claims against Merit Health, Plaintiff's claims against Defendant Merit Health should be dismissed for failure to state a claim.

I. BACKGROUND

A. Facts and procedural history

Plaintiff Kimberly Henley ("Plaintiff") filed the Complaint in this case on August 27, 2019, asserting a single claim for declaratory relief. Compl. [1]. Plaintiff's claims arise out of emergency medical treatment and services she received on or about May 19, 2018, at a hospital emergency room operated by Merit Health in Biloxi, Mississippi. Id. at 7. Plaintiff asserts that she was billed a gross amount of $17,752.47 for the visit, which included what she characterizes as a hidden "surcharge" in the amount of $2,201.75. Id. The surcharge was designated on Plaintiff's bill as "ER DEPT EXTENSIV," and Plaintiff asserts the charge was "a result of merely being seen in [Merit Health's] emergency room." Id. at 8. Merit Health allowed Plaintiff a "self-pay discount" which reduced the bill to a total of $6,213.36, including a reduced surcharge of $770.61. Id. at 7. At the time of filing her Complaint, Plaintiff had paid over $1,500.00 towards her bill. Compl. [1] at 8.

The Complaint seeks a declaration that Defendants Merit Health, Community Health Systems, Inc. ("CHS"), and John and Jane Does 1 Through 25 owed a duty to disclose the surcharge, which is billed to emergency care patients in advance of them receiving any treatment or services that would trigger such a charge. Compl. [1] at 11. The Complaint also seeks costs and attorney's fees, but does not seek money damages, reimbursement, or any other form of relief. Id. at 12. On August 28, 2019, Henley filed a Placeholder Motion [2] for Class Certification requesting that the Court certify a class on behalf of herself and all other persons similarly situated. Placeholder Mot. For Class Certification [2] at 1. The Court denied that Motion with leave to refile at a later time specified in the case management order. Order [28] at 9. The Court has previously dismissed Defendant Community Health Systems, Inc. for lack of personal jurisdiction. Order [30].

Defendant Merit Health has filed the present Motion [12] to Dismiss Pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6) and a corresponding Memorandum in Support [14]. Merit Health contends that Plaintiff lacks standing to seek declaratory relief and that her claim is moot, depriving this Court of subject-matter jurisdiction. In the alternative, Merit Health asserts that the Complaint fails to state a claim on which relief can be granted because Mississippi law does not impose upon Merit Health a duty to disclose the surcharge. See Def.'s Mem. [14]; Def.'s Reply [26].

1. Merit Health's Rule 12(b)(1) Motion to Dismiss

Merit Health contends that Plaintiff's declaratory judgment claim should be dismissed under Rule 12(b)(1), on grounds that

this Court lacks subject matter jurisdiction of this matter under Article III because Plaintiff seeks an advisory opinion from this Court, which it has no authority to issue, and because—without an injury in fact—Plaintiff lacks standing to bring this suit.

Mem. [13] at 8 (citing Flast v. Cohen , 392 U.S. 83, 96, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) ("[T]he oldest and most consistent thread in the federal law of justiciability is that the federal courts will not give advisory opinions.")). According to Defendant, no controversy exists because a declaration in Plaintiff's favor "could not change her responsibility for her hospital bills," and a declaration that Merit Health owed a duty to disclose the surcharge to Plaintiff would not change the fact that she is obligated to pay for the emergency services rendered. Id. at 13. Merit Health maintains that "Plaintiff [is] seek[ing] a ruling that would have a preclusive effect in future proceedings," id. , which would constitute an improper advisory opinion, and that her claim is also moot because federal law currently requires hospitals operating in the United States to publish online standard charges for items and services provided, id. at 15. "Any relief Plaintiff could arguably seek by way of injunctive or declaratory relief requiring disclosure is already provided for by federal laws and regulations, and [Merit Health] is in compliance." Id. at 16 (citing 42 U.S.C. § 300gg-18(e) ).

Plaintiff counters in her Response that the Declaratory Judgment Act, 28 U.S.C. § 2201, confers subject-matter jurisdiction on this Court because she is seeking a declaration of "rights and other legal relations" between the parties involved; namely, that she and members of the putative Class of similarly situated individuals "(1) have a right to be informed [about the surcharge] in advance of treatment ..., and (2) Defendants owed Plaintiff and class members a duty to disclose" the surcharge. Pl.'s Resp. [23] at 6. Plaintiff maintains that an actual controversy exists between her and Merit Health because the parties disagree whether Defendants owed a duty to disclose the existence and amount of the surcharge. For this reason, a declaration, if issued, "would affect the rights of litigants in this case." Id. at 8.

Merit Health replies that, in addition to not asserting an actual case or controversy, Plaintiff's claim is incapable of being redressed by a declaratory judgment in her favor, pointing out that "[b]ecause Plaintiff is not seeking monetary damages, there is nothing to be redresse[d] by a favorable decision from this Court." Def.'s Reply [26] at 10. Defendant reiterates its position that Plaintiff's claim is moot because "[e]ven though the crux of Plaintiff's claim is failure to disclose, she concedes that [Merit Health] discloses the emergency room fees" on its website, and thus her claim "attack[s] the adequacy and method of disclosure," rather than its occurrence. Id. at 11.

2. Alternative Rule 12(b)(6) Motion to Dismiss

In support of its Rule 12(b)(6) Motion [12] to Dismiss, Merit Health argues that Plaintiff has not "state[d] any cognizable tort claim," nor has she "otherwise claim[ed] that Merit Health violated any state or federal law." Def.'s Mem. [13] at 17. Defendant asserts that the Declaratory Judgment Act does not create a separate, substantive cause of action upon which Plaintiff can proceed, and "to the extent that Plaintiff attempts to plead a tort claim" by seeking the declaration of a duty to disclose, she has not stated a claim as matter of law. Id. at 18. This is because while a duty to disclose is an element of a negligent misrepresentation claim under Mississippi law, Plaintiff has no right to relief because she has not shown that she was physically or financially injured by the nondisclosure of the surcharge. Id. at 18-19, 22.

Merit Health also argues that Mississippi law does not impose upon it a duty to disclose because "Plaintiff does not and cannot allege the existence of a fiduciary or confidential relationship between Plaintiff and Merit Health[.]" Def.'s Reply [26] at 4. It maintains that "Plaintiff's ability to accept or reject emergency treatment from Merit Health is far from the dependence, dominion, and control necessary to create a fiduciary relationship." Id. at 6. Defendant points out that Plaintiff has not alleged that she placed any special trust or confidence in Merit Health and cannot demonstrate the existence of a fiduciary or confidential relationship. Id. at 7.

Plaintiff responds that a duty to disclose exists "in the circumstances such as those presented by Plaintiff's claims" because the Mississippi Supreme Court has adopted the Restatement (Second) of Torts' approach that

a party to a business transaction is under a duty to exercise reasonable care to disclose to the other before the transaction is consummated ... matters known to him that he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading.

Pl.'s Resp. [23] at 9-10 (quoting Restatement (Second) of Torts, § 551(2)(b) ). Although Plaintiff maintains that Merit Health was under a duty to disclose and that it failed to do so, she argues that even if Merit Health did disclose the surcharge on its website, the disclosures consisted of "lengthy price lists ... [which] do not provide useable information to patients." Id. at 11-12.

II. DISCUSSION

A. Merit Health's Rule 12(b)(1) Motion

1. Relevant legal standard

A motion to dismiss pursuant to Rule 12(b)(1) challenges a federal court's subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). "[T]he jurisdictional issue of standing is a legal question," and "[t]he party invoking federal jurisdiction bears the burden of establishing standing."...