State ex rel. West Virginia University Hospitals, Inc. v. Gaujot

• Decision Date: 05 June 2019
• Docket Number: No. 18-0841,18-0841
• Citation: 829 S.E.2d 54
• Parties: STATE of West Virginia EX REL. WEST VIRGINIA UNIVERSITY HOSPITALS, INC., and West Virginia United Health System, Inc., Petitioners v. The Honorable Phillip D. GAUJOT, Judge of the Circuit Court of Monongalia County, Christopher Thomack, and Joseph Michael Jenkins, Respondents
• Court: West Virginia Supreme Court

829 S.E.2d 54

STATE of West Virginia EX REL. WEST VIRGINIA UNIVERSITY HOSPITALS, INC., and West Virginia United Health System, Inc., Petitioners

v.The Honorable Phillip D. GAUJOT, Judge of the Circuit Court of Monongalia County, Christopher Thomack, and Joseph Michael Jenkins, Respondents

No. 18-0841

Supreme Court of Appeals of West Virginia.

Submitted: February 5, 2019

Filed: June 5, 2019

Marc E. Williams, Esq., Alexander L. Turner, Esq., Christopher D. Smith, Esq., Nelson Mullins Riley & Scarborough LLP, Huntington, West Virginia, Christine S. Vaglienti, Esq., West Virginia University Hospitals, Inc., Morgantown, West Virginia, Counsel for the Petitioners

David E. Goddard, Esq., Edmund L. Wagoner, Esq., Goddard & Wagoner, Clarksburg, West Virginia, Christopher J. Regan, Esq., Laura P. Pollard, Esq., Bordas & Bordas PLLC, Wheeling, West Virginia, David J. Romano, Esq., Jennifer L. Finch, Esq., Romano Law Offices, Clarksburg, West Virginia, Counsel for Christopher Thomack and Joseph Michael Jenkins, on their own behalf and on behalf of all similarly situated persons consisting of a class of aggrieved persons

Armstead, Justice:

This case is before the Court on a petition for writ of prohibition. Respondent Phillip D. Gaujot, Judge of the Circuit Court of Monongalia County, certified a class action against Petitioners, West Virginia University Hospitals, Inc. ("WVUH "), and West Virginia United Health System, Inc. ("WVUHS " and, together with WVUH, the "Hospitals "). Judge Gaujot named Respondents Christopher Thomack and Joseph Michael Jenkins as lead plaintiffs. The Hospitals later moved to decertify the class, and Judge Gaujot denied their motion. The Hospitals believe that Judge Gaujot erred, and they ask this Court to prohibit him from conducting any further proceedings until he has vacated his order denying their motion to decertify the class.

Based on the record before us, the arguments of the parties, and the applicable law, we find that the circuit court exceeded its jurisdiction by failing to conduct a sufficiently thorough analysis of whether the commonality required for class certification under Rule 23 of the West Virginia Rules of Civil Procedure is present. Accordingly, we grant the writ of prohibition as moulded, vacate the circuit court’s order denying the Hospitals’ motion to decertify the class, and remand this case for further actions consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2012, Mr. Thomack and Mr. Jenkins were injured in separate accidents. They were treated at Ruby Memorial Hospital. Each hired an attorney to seek damages for his injuries, and each attorney requested copies of his client’s medical records. Mr. Thomack alleges that WVUHS charged his attorney $514.40 for his medical records. Mr. Jenkins says that WVUHS charged his attorney $656.80. WVUHS arrived at these fees by charging "40 cents per page" plus an additional $10.00 fee for "[p]rocessing."

WVUHS charged by the page, though it provided the records as images on a computer disc.

Mr. Thomack and Mr. Jenkins believe that these fees were illegal. On January 18, 2013, Mr. Thomack sued WVUH in the Circuit Court of Monongalia County.¹ Later, on June 27, 2013, Mr. Jenkins sued WVUHS² in the Circuit Court of Harrison County. Each plaintiff sued individually and as the (would be) representative of a class of similarly situated persons. Their cases were subsequently consolidated in the Circuit Court of Monongalia County.

On or about January 9, 2014, after consolidation, Mr. Thomack and Mr. Jenkins filed a consolidated and amended class action complaint against the Hospitals in the Circuit Court of Monongalia County. The consolidated complaint’s central allegation is that the Hospitals violated W. Va. Code § 16-29-2(a) [1999] by "charg[ing] Plaintiffs $0.40 ‘per page’ for copies of their already existing medical records[.]"

In October 2013—before consolidation—Mr. Thomack moved for class certification under Rule 23. The Hospitals opposed the motion in a memorandum filed in March 2014, after consolidation. They argued that a "fact intensive, case-by-case analysis ... will be required to determine whether the fees imposed by WVUH and paid by each class member were, in fact, reasonable or unreasonable." They supported this argument with an affidavit from Melissa Martin, WVUH’s director of health information management and chief privacy officer. In her affidavit, Ms. Martin described a variety of "electronic and/or physical storage systems" that must be searched when WVUH responds to a records request.

Ms. Martin also described what happens after the records have been located. She reported that medical records "are extracted and copied into a production system[.]"³ Then "a WVUH technician manually inspects the document bundle to ensure that the production complies with the scope of the request and that no images are duplicates or illegible." She explained that this inspection process "can be very time consuming" because mental health information enjoys special protection and may be embedded in other records. Because of this concern, employees must actually "read the medical records" (emphasis added). Once this inspection is complete, WVUH counts the number of images and invoices the person who requested them. When WVUH receives payment, it saves the assembled records to a computer disc and conducts a further inspection to ensure that the records have been properly saved to the disc.

The parties argued the certification motion on March 31, 2014. Mr. Thomack and Mr. Jenkins emphasized the Hospitals’ uniform charging practices and claimed the Hospitals were trying to "offset" their "search cost by charging 40 cents a page[.]" They proposed that an expert could determine the Hospitals’ "actual cost" of producing medical records. In arguing this, Mr. Thomack and Mr. Jenkins seemed to assume that the Hospitals’ actual cost could be determined on some basis—seemingly a "rate" per page—that would allow liability to be shown by a simple comparison with the Hospitals’ fee per page. On their theory of the case, "whether or not [the Hospitals] are actually overcharging, that’s a merits issue."

The Hospitals argued that commonality was "the crux of this case" and urged the circuit court to "look at ... the kind of proof that’s going to be necessary for [the class plaintiffs] to prevail." They conceded that "all" had been "charged 40 cents a page and a $10 search fee[,]" yet they believed that commonality remained absent. According to them, deciding the case would require "look[ing] at each individual request [for medical records] and determin[ing] under the circumstances for the records that have been produced and the charges that were made, is that reasonable[?]" These arguments suggested to the circuit court that the Hospitals had strayed "into the subject matter of the lawsuit[,]" and the court agreed with Mr. Thomack and Mr. Jenkins that, at the certification stage, there was no need for them to show that they could "prevail on the merits[.]"

On April 16, 2014, the circuit court entered an order certifying a class of:

All individuals who have requested copies of their medical records from [the Hospitals] ..., and their related entities, at any time during the five (5) years preceding the filing of this lawsuit, and who paid the fees charged by the [Hospitals] ..., and their related entities, to obtain their medical records.

The court certified the class as to the claims raised in the consolidated complaint and noted that "the reasonableness of the forty (40) cents per page charged to patients" is "[t]he most significant issue" and one that "is common to every member of the class and dominates the litigation as a whole." The court also found "a common issue of fact" in "the uniform nature of Defendants’ [pricing] policy[.]"

The order expressly dismissed the Hospitals’ objections and factual claims, interpreting them as an argument about damages. According to the court, the Hospitals "argue that the Plaintiffs’ claims will be subject to individualized inquiries, as a result of the varying amounts charged to each individual to produce medical records" (emphasis added). The Hospitals’ assertion was wrong, according to the court, "because the claims are based on a readily identifiable, standard calculation of forty (40) cents per page." These individual showings, the court held, "address the damages , and do not affect the underlying common issues regarding whether the charges are permissible under the applicable statute" (emphasis added).⁴

The circuit court revised the class definition in a subsequent order entered on November 12, 2015. The court clarified that the term "individuals" included both "individual patients" and a "representative requesting records on behalf of the patient, if the patient could ultimately be held responsible to pay the cost[.]"⁵

In 2017, we issued two decisions⁶ that, according to the Hospitals, undercut the circuit court’s class certification decisions. The Hospitals moved to decertify the class, advancing a new argument that Mr. Jenkins⁷ lacked standing because he had yet to reimburse his attorney for the cost of obtaining his medical records.⁸ They also renewed their attack on commonality, arguing that establishing "liability under W. Va. Code § 16-29-2 [would] require[ ] an individualized analysis of the amount WVUH charged each class member versus the amount [WVUH] actually expended to compile the class member’s records."

Mr. Thomack and Mr. Jenkins responded that Mr. Jenkins had, indeed, "reimbursed his attorney" and that, for purposes of certification, standing on the part of a class representative is sufficient. Regarding commonality, they contended that each member of the class had experienced "the same harm ...—paying more for copies of their medical records than [the Hospitals] were permitted to charge" and that this harm "ar[ose] out of the same wrongful conduct—[the Hospitals’] systematic charging...