Class Action Bills H.R. 1875/S. 353: More Unwarranted Advantages for HMOs
The Class Action "Fairness" Act (S. 353) and The Interstate Class Action Jurisdiction Act (H.R. 1875) rewrite class action rules so that, if passed, defendants would be able to remove most state class actions to federal court.
Removals to federal court are detrimental to consumers because:
- Defendants that injure the public should not have the power to choose the legal forum they believe will benefit them most.
- Justice will be considerably delayed for injured consumers. The current high vacancy rate in the federal judiciary has already created a backlog of civil cases. Adding complex and resource-intensive class action cases that traditionally have been handled by the states will create further delays.
- State judges are more familiar with interpreting the intricate interrelationships of state tort and consumer protection laws. Losing their experience by moving complex state class action cases to federal courts is inherently inefficient.
- State judges commonly are called upon to apply state law to new factual situations. Federal judges will be more reluctant to judicially extend state law; their reticence would have a negative impact on evolving areas of law such as tobacco, HMO, and pharmaceutical litigation.
In the following class action cases involving HMOs, a substantial number, if not all, of the plaintiffs are in-state residents but one or more of the primary defendants are out-of-state defendants. Under S. 353 and H.R. 1875, the defendant(s) would be permitted to remove these cases to federal court even though the plaintiffs are all, or nearly all from the state where the cases were filed, the cases would be tried in-state, and they would be based on unique state law. Cases with fundamentally no federal interest would be tried in federal court.
Ada Solorzano et. al. v. Family Health Plan, Inc.
Plaintiffs: The class is made up of subscribers (mostly California residents) to Family Health Plan, Inc.'s "Senior Plan," who also receive Medicare and Medi-Cal benefits.
Defendant: Family Health Plan, Inc. is a Wisconsin-based corporation.
Jurisdiction: The case was filed in the Superior Court of Los Angeles, California.
Basic Facts: All of the plaintiffs, each of whom receives Medicare and Medi-Cal benefits, were visited at their homes by FHP's agents who urged them to enroll in FHP's "Senior Plan," a coordinated health plan for Medicare beneficiaries, and assured them that they could use non-FHP doctors for a "nominal" fee. All three named plaintiffs enrolled and assigned their Medicare and Medi-Cal benefits over to FHP. The plaintiffs only learned that treatment by outside doctors was not generally covered under the Senior Plan when their own doctors turned them away or billed them in full for noncovered services. The class disenrolled and brought claims based on three California statutes and alleged that Family Health Plan, Inc. engaged in unfair competition, deceptive trade practices, and deceptive advertising.
Remedy Sought: Plaintiffs seek a cessation of the defendant's behavior, as well as general recompense for their injuries and punitive damages as a deterrent and punishment for the Plan's wrongdoing.
Impact of the Bills: Defendant would be permitted to remove this case to federal court because, while most of the plaintiffs are California residents and the claim is based on California law, the defendant is an out-of-state corporation.Robert S. Napoletano et. al. v. CIGNA Healthcare of Connecticut, Inc; F. Barrett Hollis et. al. v. CIGNA Healthcare of Connecticut, Inc.
Plaintiffs: These are two related class actions. The class in Hollis is made up of patients who reside in Connecticut and had begun treatment with the physicians who brought an action against CIGNA in Napolitano. The class in Napolitano is made up of nine Connecticut physicians who had treated the plaintiffs in Hollis and were terminated from their contract for allegedly not following review procedures.
Defendants: CIGNA is a Delaware corporation with headquarters in Pennsylvania.
Jurisdiction: The cases were filed in Superior Court of Connecticut, appealed to the Connecticut Supreme Court, and remanded back to the Superior Court.
Basic Facts: Each plaintiff in Hollis was a participant in a CIGNA health plan who received treatment from a doctor that participated in CIGNA's health care network. CIGNA purportedly removed the doctors treating the Hollis plaintiffs from their healthcare network. Each plaintiff in Napolitano was a doctor listed in the CIGNA health care network. The doctors claim that they were all terminated without just cause. The Hollis plaintiffs claim that they were each receiving treatment from a participating doctor who was later unjustifiedly removed from the list of participating doctors. The Hollis plaintiffs allege that CIGNA's arbitrary and deceptive decisions regarding participating doctors unfairly denied them continuity of care.
Remedy Sought: The Hollis class brought claims alleging unfair and deceptive acts of misrepresentation and false advertising that violated the Connecticut Unfair Trade Practices Act and the Connecticut Unfair Insurance Practices Act. Plaintiffs seek monetary compensation for the harm suffered, a cessation of the offensive conduct, and punitive damages. The Napolitano plaintiffs claim that CIGNA breached it contracts with the plaintiffs, breached its obligation to deal in a good faith manner, tortiously interfered with their business expectancies, and violated the Connecticut Unfair Trade Practices Act. The Napolitano plaintiffs seek monetary compensation for the harm suffered, punitive damages, a cessation of the harmful conduct, and a statement by the court that the defendant's conduct was wrongful.
Impact of the Bills: Defendant would be permitted to remove this case to federal court because while most, if not all, of the plaintiffs are Connecticut residents and their claim is based on Connecticut law, CIGNA is an out-of-state corporation.For more information, contact Jackson Williams, Legislative Representative,
at (202) 454-5135 or by email: Jwilliams@citizen.org
Back to Class Action Fact Sheets