Sabeta v. Baptist Hosp. of Miami, Inc.

• Decision Date: 23 February 2005
• Docket Number: No. 04-21437CIV-JORDAN.,04-21437CIV-JORDAN.
• Citation: 410 F.Supp.2d 1224
• Parties: Miriam SABETA, et al., Plaintiffs v. BAPTIST HOSPITAL OF MIAMI, INC., et al., Defendants
• Court: U.S. District Court — Southern District of Florida

410 F.Supp.2d 1224

Miriam SABETA, et al., Plaintiffs v. BAPTIST HOSPITAL OF MIAMI, INC., et al., Defendants

No. 04-21437CIV-JORDAN.

United States District Court, S.D. Florida. Miami Division.

February 23, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Miguel Manuel de la O, Miami, Richard F. Scruggs, Richard F. Scruggs Law Firm, Oxford, MS, Bryan Anthony Vroon, John W Crongeyer, Vroon & Crongeyer, Atlanta, GA, for Miriam Sabeta, Barbara Colomar, On behalf of themselves and all others similarly situated, plaintiffs.

Teresa Ragatz, Eric David Isicoff, Evan Roberts, Isicoff Ragatz & Koenigsberg, Miami, Edward C. Crooke, Christopher R. Zaetta, Mitchell E. Zamoff, Catherine E. Stetson, Hogan & Hartson, Washington, DC, Ty Cobb, Hogan & Hartson, Denver, CO, for Baptist Hospital of Miami, Inc., Baptist Health South Florida, Inc., John Does, 1 through 10, American Hospital Association, defendants.

ORDER ON MOTIONS TO DISMISS AND FOR SUMMARY JUDGMENT

JORDAN, District J.

I. INTRODUCTION

On June 16, 2004, Miriam Sabeta and Barbara Colomar filed this civil action against Baptist Hospital of Miami, Inc., Baptist Health South Florida, Inc. (collectively referred to as "Baptist"), and John Does 1 through 10. On July 26, 2004, the plaintiffs filed their first amended complaint [D.E. 18], adding as a defendant the American Hospital Association ("AHA"). At the heart of the plaintiffs' amended complaint is their allegation that, as uninsured and indigent patients, they were charged a higher rate for medical care and services than is charged to patients with private insurance or those covered by Medicare or Medicaid. They challenge the defendants' policies for billing and collections from uninsured and indigent patients, and the excessively aggressive tactics used to collect on unpaid bills. The plaintiffs assert the following claims in the amended complaint, listed by count number: (1) a third-party beneficiary claim against Baptist for breach of Baptist's contract with the United States government, the State of Florida, and local governments, under 26 U.S.C. § 501(c)(3); (2) a claim against Baptist for breach of the contract between Baptist and the plaintiffs; (3) a claim against Baptist for breach of duty of good faith and fair dealing; (4) a claim against Baptist for breach of a charitable trust created by the acceptance of federal, state, and local tax exemptions under 26 U.S.C. § 501(c)(3); (5) a claim against Baptist for violation of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. §§ 501.201-213; (6) a claim against Baptist for violations of the Florida Not For Profit Act;¹ (7) a claim against Baptist for violations of the Emergency Medical Treatment and Active Labor Act ("EMTALA"), 42 U.S.C. § 1395 dd; (8) a claim against Baptist for unjust enrichment/constructive trust; (9) a claim against both AHA and Baptist for civil conspiracy/concert of action; (10) a claim against the AHA for aiding and abetting Baptist, among other things, in its breach of contract, unjust enrichment, and violations of the FDUTPA, the FDCPA, 42 U.S.C. § 1983, and the Fourteenth and Fifteenth Amendments of the United States Constitution; (11) a claim against Baptist for violations of the Federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692a(5); (12) a claim against Baptist for violations of 42 U.S.C. § 1983 and the Fourteenth and Fifteenth Amendments of the United States Constitution; and (13)² a claim against Baptist for injunctive and declaratory relief under Fed.R.Civ.P. 23(b)(2).

Currently pending are: (1) Baptist's motion for partial summary judgment [D.E. 25] as to Count 7; (2) Baptist's motion to dismiss the first amended complaint [D.E. 26]; and (3) the AHA's motion to dismiss the first amended complaint [D.E. 53].³ For the reasons stated below, these motions are all GRANTED as to Counts 1, 3, 4, 7, 8, and 12, the claims over which the court has purported original federal jurisdiction pursuant to 26 U.S.C. § 501(c)(3) and/or 28 U.S.C. § 1331. Additionally, Count 11 is DISMISSED WITHOUT PREJUDICE, and the plaintiffs' request for leave to amend Count 11 is GRANTED. Counts 10 and 13, the derivative claims, are likewise DISMISSED. The remaining state law claims — Counts 2, 5, 6, and 9 — are DISMISSED WITHOUT PREJUDICE pursuant to 28 U.S.C. § 1367(c)(3), as I decline to exercise supplemental jurisdiction.

II. RELATED LITIGATION

This lawsuit is one of dozens of almost identical lawsuits filed in district courts across the country on behalf of uninsured and indigent patients. In October of 2004, the Judicial Panel on Multidistrict Litigation rejected a motion to transfer and consolidate the pending actions into one combined action. In re Not-For-Profit Hospitals/Uninsured Patients Litigation, 341 F.Supp.2d 1354 (J.P.M.L. 2004). Several of the cases have been withdrawn prior to a ruling on defense motions.⁴ In most of the other cases, the district courts have granted the defendants' motions to dismiss.⁵ Although I have analyzed this specific case on its own merits, I have adopted the persuasive reasoning from some of the other dismissals.

III. FACTS⁶

Baptist Health South Florida, Inc. is a not for profit corporation and the parent of the largest system of hospitals serving South Florida. See First Amended Complaint at ¶ 43. Baptist Hospital of Miami, Inc., also a not for profit corporation, is one of five hospitals under the Baptist umbrella.⁷ As not for profit institutions, the Baptist health care facilities qualify for federal tax-exempt status under § 501(c)(3) of the Internal Revenue Code. See id. at ¶ 40, 46. The American Hospital Association ("AHA") is the national trade association for the nonprofit hospital industry based in Chicago, Illinois. See id. at ¶ 38. The plaintiffs, Mss. Sabeta and Colomar, are Florida residents who were treated in Baptist's emergency care department. See id. at ¶¶ 35, 36.

Both Ms. Sabeta and Ms. Colomar received medical treatment in Baptist's emergency care department. See id. at ¶¶ 62, 70. Neither plaintiff alleges any deficiency in the care she received. See id. Both plaintiffs allege that they lacked health insurance at the time of their treatment. See id. at ¶¶ 61, 69. When Ms. Sabeta did not pay her bills, Baptist obtained a judgment against her for $7, 104.00 on or about November 4, 2002. See id. at ¶ 66. Ms. Colomar, on the other hand, reached an agreement with Baptist to pay her obligations of over $10,000 with payments of $50 per month. See id. at ¶ 71; Baptist Mot. to Dismiss at 4. Ms. Colomar made payments pursuant to this agreement as recently as the month before she brought this suit. See Baptist Mot. to Dismiss at 4.

Ms. Colomar arrived at Baptist's emergency department on March 7, 2003 at 3:10 a.m., complaining of shortness of breath. Montesino Decl. at ¶ 4a. At 3:20 a.m., she was triaged. Id. at ¶ 4c. At that time, Ms. Colomar's respiration was unlabored, her pulse regular, her blood pressure within an acceptable range, and she was not in pain. Id. Ms. Colomar told the nurse that she had been discharged from Mercy Hospital earlier that day for the same problem. Id. at ¶ 4b. At 3:30 a.m., ten minutes later, Ms. Colomar received medical screening and treatment and was initiated to stabilize her condition. Id. at ¶ 4d. The medical screening and treatment rendered to Ms. Colomar in the emergency department was consistent with Baptist's normal practices. Id. at 6. During the screening, she received intravenous antibiotics. Id. At 3:40 a.m., Ms. Colomar received additional medication and her blood was drawn for testing. Id.

According to Baptist's records, Ms. Colomar was registered as a patient at 3:50 a.m., 20 minutes after her medical screening and treatment began. Id. at ¶ 4e. Ms. Colomar, however, states that she was "registered" and filled out paperwork before she was medically screened and treated. See Colomar Aff. at ¶¶ 5-7. The screening process includes asking patients to complete several forms, which can include a guarantee of payment for services not covered by insurance. See Montesino Decl. at ¶ 4e. After diligent search, however, Baptist could not locate any payment guarantee signed by Ms. Colomar. See Colomar Aff. at ¶ 5. Nevertheless, Ms. Colomar states that she recalls signing a payment guarantee form. See id. at ¶ 6.

According to Baptist's records, Baptist last provided treatment to Ms. Sabeta in its emergency department on October 4, 2000. See Montesino Decl. at ¶ 6. Ms. Sabeta brought her EMTALA claim against Baptist on June 16, 2004, more than three years later.

The plaintiffs allege that, in a letter from the AHA to the United States Department of Health and Human Services Secretary Tommy Thompson dated December 16, 2003, the AHA admitted that Baptist and other hospital members of the AHA charge their uninsured patients the full price for medical care, and represented that member hospitals were required by federal and state laws to charge and aggressively collect inflated medical expenses. See First Am. Compl. at ¶ 126; Ex. A to AHA Mot. to Dismiss.

In an internal memorandum dated December 17, 2003, entitled "Federal Regulations Hamper Hospital Efforts to Assist Patients of Limited Means," the AHA advised Baptist and its other member nonprofit hospitals of the following, as pointed out by the plaintiffs in ¶ 163 of their amended complaint:

The difficulties created by the Medicare billing rules are related to the practical requirement that each hospital maintain a uniform charge structure that applies to all patients. In other words, each patient must be charged the same amount for identical services. Such uniformity remains crucial to determining payments for some hospitals, such as critical access hospitals, and also to the submission of accurate cost reports for all hospitals.

See Ex. B to AHA Mot. to Dismiss at 2.

[F]ederal and state antikickback laws also contribute to the regulatory confusion. Those laws...