Leet ex rel. Situated v. Hosp. Serv. Dist. No. 1 of E. Baton Rouge Parish

• Decision Date: 23 June 2016
• Docket Number: Case No. 3:15-cv-00811-JWD-EWD
• Parties: VICTORIA LEET, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED v. HOSPITAL SERVICE DISTRICT NO. 1 OF EAST BATON ROUGE PARISH, LOUISIANA, D/B/A LANE REGIONAL MEDICAL CENTER ET AL.
• Court: U.S. District Court — Middle District of Louisiana

VICTORIA LEET, INDIVIDUALLY AND ON BEHALF

OF ALL OTHERS SIMILARLY SITUATED v. HOSPITAL SERVICE DISTRICT NO. 1 OF EAST BATON ROUGE PARISH,

LOUISIANA, D/B/A LANE REGIONAL MEDICAL CENTER ET AL.

Case No. 3:15-cv-00811-JWD-EWD

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

June 23, 2016

RULING AND ORDER

I. INTRODUCTION

Before the Court is the Rule 12(c) Motion for Judgment on the Pleadings ("Rule 12 Motion"), (Doc. 11), filed by Alegis Revenue Group LLC¹ ("Alegis" or Defendant"), one of three defendants in this proceeding. In this purported class action,² Ms. Victoria Leet ("Leet" or "Plaintiff") has responded with the Plaintiffs' Opposition to Motion for Judgment on the Pleadings Filed by Alegis ("Opposition"), (Doc. 15), to which Alegis has countered with the Memorandum in Reply to Plaintiff's Opposition to Alegis Revenue Solutions, LLC's Motion forJudgment on the Pleadings Filed by Alegis ("Reply"), (Doc. 26). The instant dispute between Alegis and Leet (collectively, "Parties") centers on the applicability of the Fair Debt Collection Practices Act ("FDCPA"), as approved on September 20, 1977, and as subsequently amended,³ to Alegis' interactions with Leet in the summer of 2014.

Focusing upon the statutory language, Alegis maintains that the medical lien against Leet is not a "debt" and that it is not a "debt collector" as those two terms are defined in § 1692a; moving beyond the FDCPA's plain text, Alegis urges this Court to follow an apparent judicial majority and hold that the FDCPA does not apply to communications solely directed towards a debtor's attorney. As the pleadings compel any one of these determinations, Defendant asserts that Plaintiff's existing claims against Alegis must be dismissed pursuant to Federal Rule of Civil Procedure 12(c).⁴ According Plaintiff, none of Alegis' points withstand scrutiny, and the FDCPA's applicability is clear. Having considered the Parties' arguments and submissions, the Court concludes that the FDCPA's unique definition of "debt collector," exempts Alegis from its coverage. For this reason,⁵ as more fully explained below, this Court GRANTS Alegis' Rule 12 Motion.

II. BACKGROUND

A. Relevant Facts

On or about May 29, 2014, Leet was involved in a motor vehicle crash that resulted in serious injuries for which medical attention was required. (Doc. 1-1 at 2, 17, 35; Doc. 8 at 1; Doc. 11-1 at 3.) At the time of this accident, Leet was covered by a health insurance policy with Blue Cross Blue Shield of Louisiana ("BCBSLA"), which classified her as "an enrollee" or "insured" under Louisiana law.⁶ (Doc. 1-1 at 2, 17, 35; Doc. 8 at 1; Doc. 11-1 at 3.) For her injuries, Plaintiff was treated at the Lane Regional Medical Center ("Lane Regional") in Zachary, East Baton Rouge Parish, Louisiana, "a full service medical care center and emergency room" operated by the Hospital Service District of Number 1 of East Baton Rouge Parish ("Service District") and which is one of BCBSLA's contracted health care providers. (Doc. 1-1 at 2-3, 17-18, 35; Doc. 8 at 1; Doc. 11-1 at 3-4.) The bill totaled charged $8,789.35. (Doc. 1-1 at 2, 17-18; Doc. 8 at 2; Doc. 11-1 at 3.)

Afterward, in accordance with state law, La. R.S. § 22:1874 et seq., Lane Regional filed a claim for this amount with BCBSLA in its capacity as Plaintiff's insurer and received payment of $1,477.74 with no patient deductible, co-pay, or co-insurance required. (Doc. 1-1 at 2-3, 18, 36; Doc. 8 at 2; Doc. 11-1 at 4.) As Plaintiff construes the relevant contract and state law, though Lane Regional charged $8,789.35 and obtained only $1,477.74, it had been "paid in full" per the pertinent contract and applicable law. (Doc. 1-1 at 3, 18-19, 36; see also Doc. 11-1 at 4.)

In June of 2014,⁷ Lane Regional retained Alegis "to act as its agent to collect" this sum. (Doc. 1-1 at 3-4, 18-19, 36; Doc. 8 at 5-6; Doc. 11-1 at 4.) On June 24, 2014, Alegis, in turn,served a medical lien ("Lien") on Leet's attorney, Mr. Andrew D'Aquilla ("D'Aquilla"). (Doc. 1-1 at 3-4, 18-19, 36; Doc. 8 at 5-6; Doc. 11-1 at 4.) On August 21, 2014, US Agencies Casualty Insurance Company, "the liability insurance company for the third party who caused" Leet's accident, paid to Lane Regional the full sum owed—$8,789.35—pursuant to the medical lien obtained by Alegis. (Doc. 1-1 at 4, 19, 37; Doc. 11-1 at 4.)

On November 5, 2014, BCBSLA notified Lane Regional of its obligation under the provider agreement to accept the sum of $1,477.74 and refund any amounts over that number to Leet within thirty days. (Doc. 1-1 at 4, 19, 37; Doc. 8 at 2.) Despite this demand, Lane Regional allegedly issued a refund of $1,477.74 to Leet and "refused to refund" the full sum paid by BCBSLA. (Doc. 1-1 at 4, 19, 37; Doc. 11-1 at 4.)

As Alegis stresses and the pleadings establish, its "only involvement in the conduct complained of is that it filed . . . [the L]ien . . . on behalf of Lane Regional with Plaintiff's attorney." (Doc. 8 at 6; see also Doc. 1-1 at 44-46; cf. Doc. 15 at 5, 14-15.)

B. Procedural History

This action began with the filing of a class action petition in the Twentieth Judicial District Court, Parish of West Feliciana, of the State of Louisiana, on December 10, 2014. (Doc. 1-1 at 1, 16.) In this first filing, Leet named three persons as defendants: BCBSLA; the Service District in its role as the operator of Lane Regional; and Alegis. (Id.) However, while Alegis had always been a named defendant, Leet's FDCPA claim against Alegis first appeared in the Second Amending and Supplemental Class Action Petition, dated October 13, 2015 ("Relevant Complaint"). (Doc. 1-1 at 44-46; Doc. 8 at 5-6.) Eventually, the action was transferred from the Twentieth Judicial District Court to the Nineteenth Judicial District Court. (Doc. 24.)

On December 1, 2015, BCBSLA removed Plaintiff's action to this Court. (Doc. 1.) An amended notice of removal followed on December 2, 2015. (Doc. 3.) The Service District and BCBSLA answered on December 22, 2015, and January 28, 2016, respectively. (Docs. 6, 9.) Alegis filed the Rule 12 Motion on February 15, 2016. (Doc. 11.) On March 9, 2016, Plaintiff submitted the Opposition. (Docs. 15, 18.) The Reply came on March 24, 2016. (Doc. 31.) On May 3, 2016, this Court scheduled a hearing on the Rule 12 Motion for June 15, 2016. (Doc. 32.)

C. Parties' Arguments

The Parties' contentions can be easily summarized.

For three reasons, Alegis urges dismissal of the FDCPA claims plead against it by Leet. (Doc. 11-1 at 2 -3; Doc. 31 at 1-2.) First, by serving the Lien, Alegis was not "acting as a 'debt collector' as defined by the FDCPA." (Doc. 11-1 at 7; Doc. 31 at 3-4 True, the FDCPA does define a "debt collector" as "any person who uses an instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due to another." (Doc. 11-1 at 7-8 (citing 15 U.S.C. § 1692a(6)); see also Doc. 31 at 3.) However, an exception appears in paragraph F for those entities "collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was not in default at the time it was obtained by such person." (Doc. 11-1 at 8 (citing 15 U.S.C. § 1692a(6)(F)(iii); see also Doc. 31 at 3.) Factually and incontestably, Alegis served the Lien on June 24, 2014, and thus before August 21, 2014, the date on which Leet first "received any third party payments to which it might apply." (Doc. 11-1 at 8, 11 (relying on, among others, Hamilton v. Trover Solutions, Inc., Civ. No. 01-650 Section "J"(4),2003 U.S. Dist. LEXIS 8296, 2003 WL 21105100 (E.D. La. May 13, 2003), and Dantin v. Rawlings Co., LLC, No. 03-116-A, 2005 U.S. Dist. LEXIS 46182, 2005 WL 6075786 (M.D. La. Apr. 13, 2005)); see also Doc. 31 at 3-5.) As such, the Lien concerned an obligation that "was not in default at the time it was obtained by Alegis, and Alegis was thus not acting as a 'debt collector' within the scope of [the] FDCPA." (Doc. 11-1 at 11; see also Doc. 31 at 3-5.)

Second, Alegis never actually attempted to collect a "debt," as that term is defined by the FDCPA, as the Lien does not represent an "amount[] payable only to third parties." (Doc. 11-1 at 11 (citing to Gacy v. Gammage & Burnham, 2006 U.S. Dist. LEXIS 8525, 2006 WL 467937 (D. Ariz. Feb. 23, 2006)); Doc. 31 at 5-6.) Lastly, as a number of different courts have ruled, "communications addressed solely to a debtor's attorney," as transpired here, "do not fall within the ambit of the FDCPA." (Doc. 11-1 at 13-14 (citing, among others, Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 (9th Cir. 2007), and Kropelnicki v. Siegel, 290 F.3d 118 (2d Cir. 2002)); see also Doc. 31 at 6.) Whether independently or cumulatively weighed, Alegis contends that these three reasons mandate dismissal.

Ignoring the fact that her claim under Louisiana's Anti-Balance Billing Statute ("Billing Statute") has already been dismissed, (Doc. 26 at 2-3; Doc. 31 at 2 -3),⁸ Plaintiff begins with a summary of the purposes of both the Billing Statute and the FDCPA, (Doc. 15 at 5-9). Afterward, she articulates three rejoinders to Alegis' arguments. First, Leet argues that Alegis is, in fact, a "debt collector" because the Lien is no more than "a security device used to collect from the patient an amount owed by the patient" and attempts to distinguish Alegis' case law.(Doc. 15 at 9-12.) Thus, according to Plaintiff, Alegis must be deemed a "debt collector" under the FDCPA as it "attempted to wrongfully use a security interest, the medical lien, to collect sums not owed and exempt from collection." (Id. at 14.) In this analysis, it is irrelevant "whether Alegis meets the general definition of 'debt collector,'" as is the exception upon which Alegis relies. (Id. at 14-15.) Second, Leet counters Alegis' "debt" argument by...