State ex rel. W.Va. Univ. Hosps. v. Gaujot, 21-0737

CourtSupreme Court of West Virginia
PartiesState of West Virginia ex rel. West Virginia University Hospitals, Inc.; and West Virginia United Health System, Inc., d/b/a WVU Healthcare v. The Honorable Phillip D. Gaujot, Judge of the Circuit Court of Monongalia County; Christopher Thomack; and Joseph Michael Jenkins
Decision Date10 June 2022
Docket Number21-0737

State of West Virginia ex rel. West Virginia University Hospitals, Inc.; and West Virginia United Health System, Inc., d/b/a WVU Healthcare
v.

The Honorable Phillip D. Gaujot, Judge of the Circuit Court of Monongalia County; Christopher Thomack; and Joseph Michael Jenkins

No. 21-0737

Supreme Court of Appeals of West Virginia

June 10, 2022


Armstead, Justice, concurring in part and dissenting in part

The petitioners in this matter, West Virginia University Hospitals, Inc., and West Virginia United Health System, Inc., d/b/a WVU Healthcare (collectively "WVU Hospitals"), allege that the circuit court failed to comply with our mandate in State ex rel. W.Va. Univ. Hosps., Inc. v. Gaujot, 242 W.Va. 54, 829 S.E.2d 54 (2019) ("Gaujot II").[1]In particular, they object to the circuit court's findings, after remand, of commonality and ascertainability and to the circuit court's refusal to revisit the subject of predominance under our more recent decision in State ex rel. Surnaik Holdings of WV, LLC v. Bedell, 244 W.Va. 248, 852 S.E.2d 748 (2020). They object, further, to the circuit court's alleged failure to address the ethical concerns, raised in Gaujot II, about attorneys' participation in the class. Id. at 64 n.16, 829 S.E.2d at 64 n.16.

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Because I am satisfied with the circuit court's removal of certain attorneys from the class in order to address the ethical issues raised in Gaujot II, I agree with the majority opinion's refusal to grant relief on that issue. As the majority opinion observes "[a] writ of prohibition is an extraordinary remedy" and one that "we do not grant . . . lightly." Nevertheless, we have also held that "[a] circuit court's failure to conduct a thorough analysis of the requirements for class certification pursuant to West Virginia Rules of Civil Procedure 23(a) and/or 23(b) amounts to clear error." Surnaik at __, 852 S.E.2d at 750, syl. pt. 8. Because I believe that the circuit court has yet to conduct a sufficiently thorough analysis of commonality or ascertainability for purposes of Rule 23(a) or of predominance for purposes of Rule 23(b), I respectfully dissent from those portions of the majority opinion that find no error on these issues, and I would grant the writ of prohibition.

Commonality.

Rule 23 authorizes "[o]ne or more members of a class [to] sue . . . as representative parties" but "only if . . . there are questions of law or fact common to the class . . . ." W.Va. R. Civ. P. 23(a)(2) (emphasis added). When these parties were before us in Gaujot II, we found that the circuit court had "exceeded its legitimate powers by certifying the class" without "conduct[ing] a sufficiently thorough analysis of the case to determine whether the commonality required . . . under Rule 23 of the West Virginia Rules of Civil Procedure is present." Id. at 64, 829 S.E.2d at 64. We granted relief on that basis.

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On remand, Christopher Thomack and Joseph Jenkins ("Class Representatives") conducted additional discovery, and the circuit court subsequently found commonality by determining that WVU Hospitals' "average cost" to produce medical records during the period set forth in the class definition, i.e., from January 18, 2008, to June 5, 2014 (the "Class Period"), was $2.08. The court reasoned that, "[b]ased upon that average cost of $2.08 per request fulfilled, it appears that each and every requestor suffered damages based on the $10.00 search fee alone, without even considering the additional damages related to the $.40 per page/image fee that was charged for every class member's request." (Emphasis added.)

This so-called "average cost" of $2.08 was the linchpin of the circuit court's analysis. The court noted that the medical records reimbursement statute, W.Va. Code § 16-29-2, had changed on June 6, 2014. After quoting both versions of the statute, the circuit court announced, without any analysis, that both versions contained "the same restrictions regarding the charges . . . on producing a patient's medical record (that is, the fees must be reasonable and based upon the expenses actually incurred)." The circuit court also noted that WVU Hospitals had conducted a "time study" designed to "accurately capture [WVU Hospitals'] actual costs incurred in producing medical records" under the new statutory regime. Resulting invoices for the period of June 6, 2014, through July 31, 2014, showed that WVU Hospitals' "average cost" to respond to a records request was $2.08. Based on deposition testimony, the circuit court found that the results of the time study were "transferrable" to the Class Period. The circuit court also found, based on

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deposition testimony, that WVU Hospitals could not replicate the process of producing individual class members' medical records during the Class Period, and the court concluded that any uncertainty regarding damages should be resolved against WVU Hospitals.

I believe that the circuit court's use of an "average cost" to find commonality was improper. "A representative or statistical sample, like all evidence, is a means to establish or defend against liability." Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 454-55 (2016). Sometimes, "a representative sample is the only practicable means to collect and present relevant data establishing a defendant's liability." Id. at 455 (internal quotation marks omitted). However, such evidence must be reliable. "Its permissibility turns not on the form a proceeding takes-be it a class or individual action-but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action." Ibid.

In this case, the "average cost" relied upon by the circuit court was unreliable because it rested on a flawed assumption that West Virginia Code § 16-29-2 did not meaningfully change on June 6, 2014. During the Class Period, the relevant portion of West Virginia Code § 16-29-2 provided as follows:

The provider shall be reimbursed by the person requesting in writing a copy of the records at the time of delivery for all reasonable expenses incurred in complying with this article: Provided, That the cost may not exceed seventy-five cents per page for the copying of any record or records which have already been reduced to written form and a search fee may not exceed ten dollars.
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W.Va. Code § 16-29-2(a) (eff. 1999) (emphasis added). By contrast, during the time study, the relevant portion of the statute contained these provisions:

A person requesting records from a provider shall . . . pay a reasonable, cost-based fee, at the time of delivery. Notwithstanding any other section of the code or rule, the fee shall be based on the provider's cost of: (1) Labor for copying the requested records if in paper, or for placing the records in electronic media; (2) supplies for creating the paper copy or electronic media; and (3) postage if the person requested that the records be mailed.
. . . .
The labor for copying under this section shall not exceed twenty-five dollars per hour . . . .

W.Va. Code § 16-29-2(a) & (b) (eff. 2014) (emphasis added).

These versions of the statute are substantially different. The 2014 statute authorized WVU Hospitals to collect a "reasonable, cost-based fee" based on three things only-labor, supplies, and postage. Ibid. Even the category of labor was restricted to "[l]abor for copying" and "[l]abor . . . for placing the records in electronic media[.]" Under the 1999 statute, however, WVU Hospitals had the right to seek reimbursement for each of these costs plus every other expense that was both "reasonable" and "incurred in complying with this article[.]" W.Va. Code § 16-29-2(a) (eff. 1999). Such reasonable expenses, unlike those authorized by the 2014 statute, were not limited to the costs involved in "copying" records or "placing the records in electronic media" but instead included costs such as those incurred in searching for relevant records. W.Va. Code § 16-29-2(a) (eff. 2014) and W.Va. Code § 16-29-2(a) (eff. 1999). Indeed, the 1999 statute expressly

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included reference to a search fee. Such costs of searching for and locating records were not included under the 2014 version of the statute.

Because of these differences, no relevant inference can be drawn from the amounts that WVU Hospitals charged for records between June 6, 2014, and July 31, 2014. It may be that these invoices, which were based on the time study, provide some insight regarding WVU Hospitals' actual time investment in responding to records requests during the Class Period. However, even this insight is of doubtful relevance because the labor costs that WVU Hospitals could lawfully recoup were narrower under the 2014 statute than they were under the 1999 statute.[2]

Furthermore, I am unsure that the "average cost" relied on by the circuit court is useful in any manner with regard to certification of a class action in this matter. The record shows, as WVU Hospitals has maintained all along, that the time it takes to respond to a given records request can vary widely. According to the spreadsheet prepared by Kathryn Crous, which served as the basis for the circuit court's "average cost," two...

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