United States District Court, E.D. Arkansas, Jonesboro Division
SUE GARRISON, Individually and on Behalf of All Others Similarly Situated PLAINTIFFS
REVCLAIMS, LLC; ST. BERNARD'S HOSPITAL, INC.; ST. BERNARD'S COMMUNITY HOSPITAL CORP.; BAPTIST HEALTH; BAPTIST HEALTH HOSPITALS; LAWRENCE MEMORIAL HOSPITAL; WHITE RIVER HEALTH SYSTEM, INC.; and JOHN DOES 1-100 DEFENDANTS
OPINION AND ORDER
LEON HOLMES UNITED STATES DISTRICT JUDGE
Garrison, individually and on behalf of all others similarly
situated, commenced this putative class action against the
defendants alleging that the defendants' billing and
collection practices violate the Arkansas Deceptive Trade
Practices Act, Ark. Code Ann. § 4-88-101, et
seq., and the Arkansas Fair Debt Collection Practices
Act, Ark. Code Ann. § 17-24-501, et seq.
Garrison also asserts common law claims of breach of
contract, unjust enrichment, conversion, breach of fiduciary
duty, abuse of process, and civil conspiracy. Defendants St.
Bernard's Hospital, Inc., RevClaims, LLC, Baptist Health,
Baptist Health Hospitals, St. Bernard's Community
Hospital Corp., Lawrence Memorial Hospital, and White River
Health System, Inc., all move for judgment on the pleadings
under Federal Rule of Civil Procedure 12(c) or,
alternatively, to dismiss under Rule 12(b)(6). For the
following reasons, the defendants' motions to dismiss are
survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), a complaint must contain “a short
and plain statement of the claim showing that the pleader is
entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although
detailed factual allegations are not required, the complaint
must set forth “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167
L.Ed.2d 929 (2007). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173
L.Ed.2d 868 (2009). The Court accepts as true all of the
factual allegations contained in the complaint and draws all
reasonable inferences in favor of the nonmoving party.
Gorog v. Best Buy Co., Inc., 760 F.3d 787, 792 (8th
Cir. 2014). The complaint must contain more than labels,
conclusions, or a formulaic recitation of the elements of a
cause of action, which means that the court is “not
bound to accept as true a legal conclusion couched as a
factual allegation.” Twombly, 550 U.S. at 555,
127 S.Ct. at 1965.
August 2013, Garrison was injured in a car accident, and
another driver was deemed to be at-fault. Document #2 at
¶ 17. Garrison was taken to NEA Baptist Memorial
Hospital and received emergency inpatient treatment there.
Id. at ¶¶ 18-19. Over the next year,
Garrison underwent several surgeries and received ongoing
treatment at St. Vincent's Infirmary. Id. at
¶ 19. After her final surgery, Garrison was referred to
St. Bernard's Hospital, Inc., (not St. Bernard's
Community Hospital) for physical therapy. Id. St.
Bernard's required Garrison to assign to St.
Bernard's the right to directly bill her qualified health
plan. Id. at ¶ 21. Instead of billing
Garrison's qualified health plan for the treatment she
received, St. Bernard's contracted with RevClaims, LLC,
to collect on her account. Id. at ¶ 23.
RevClaims did not seek recovery from Garrison's qualified
health plan either but instead sought recovery by placing a
lien on Garrison's third-party claim against the at-fault
driver. Id. at ¶¶ 24-27. A RevClaims
representative first recorded a Notice of Arkansas Hospital
Lien on behalf of St. Bernard's on September 23, 2014.
Document #58-3 at 3. The lien was renewed by notice within
180 days on March 24, 2015. Id. at 1. No further
notices were filed, and St. Bernard's released the lien
on March 17, 2017. Document #70-1. In addition to releasing
the lien, the release notice also includes a paragraph
stating that St. Bernard's has written off all
outstanding amounts claimed by the lien and will not report
any unpaid amounts on Garrison's credit history.
defendants argue that Garrison does not have standing to sue
them, but for two separate reasons. Defendants Baptist
Health, Baptist Health Hospitals, St. Bernard's Community
Hospital, Lawrence Memorial Hospital, and White River Health
System argue that Garrison was not injured by any conduct
traceable to them. Defendants St. Bernard's Hospital and
RevClaims argue that Garrison has not suffered an injury in
traceability argument, Garrison responds that although she
was not treated by those defendants, their conduct is fairly
traceable to her injury because the defendants engaged in a
civil conspiracy in which they agreed “to illegally and
improperly enforce statutory liens in order to recover
amounts in excess of the negotiated contract rates directly
from QHP insured individuals in lieu of submitting the bills
to the QHP insurers for payment.” Id. at
¶ 149. To the injury-in-fact argument, Garrison contends
that she was injured by the “simple fact” that
St. Bernard's and RevClaims filed liens against
Garrison's third-party recovery instead of billing her
health plan. Document #63 at 9-10.
Court has power to adjudicate cases and controversies. U.S.
Const. art. III, § 2, cl. 1. A case or controversy does
not exist where a plaintiff lacks standing. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct.
2130, 2136, 119 L.Ed.2d 351 (1992). The “irreducible
constitutional minimum of standing” requires a
plaintiff to have (1) suffered an injury in fact that is (2)
fairly traceable to the conduct of the defendant and is (3)
likely to be redressed by a favorable judgment. Id.
at 561, 112 S.Ct. at 2136. These elements are not pleading
requirements and must be supported with sufficient evidence
just as any other element on which the plaintiff bears the
burden of proof. Id. The sufficiency of the evidence
corresponds to the stage of litigation, and “[a]t the
pleading stage, general factual allegations of injury
resulting from the defendant's conduct may
suffice.” Id. at 561, 112 S.Ct. at 2137
(citation omitted). A plaintiff must maintain standing
throughout all stages of review. Arizonans for Official
English v. Arizona, 520 U.S. 43, 67, 117 S.Ct. 1055,
1068, 137 L.Ed.2d 170 (1997).
first question is whether Garrison has suffered an injury
that is traceable to the conduct of the remote defendants.
Garrison agrees that these defendants have not directly
caused her injury. She contends, nevertheless, that she has
been harmed by all of the defendants through a conspiracy to
bill patients like her illegally. Garrison's complaint,
however, does not allege sufficient facts to support her
conspiracy claim. Conspiracy allegations must be supported
with sufficient specificity and facts for a court to find a
meeting of the minds. Murray v. Lene, 595 F.3d 868,
870 (8th Cir. 2010); see also Nelson v. City of
McGehee, 876 F.2d 56, 59 (8th Cir. 1989). Though
addressing a conspiracy claim in a different context, in
Twombly the Supreme Court explained that a plaintiff
must plead “enough factual matter (taken as true) to
suggest that an agreement was made.” 550 U.S. at 556,
127 S.Ct. at 1965. Conclusory allegations of an agreement are
not sufficient to plausibly state a claim. Id. at
556-57, 127 S.Ct. at 1965-66. Garrison's complaint falls
short in this regard. Other than conclusory allegations that
the defendants conspired with one another, the only
allegation to which Garrison points to show a conspiracy is
that all of the defendants engaged RevClaims to perform
patient billing, but that hardly shows that all of these
hospitals were in a conspiracy with one another. Cf.
Impro Prods., Inc. v. Harrick, 715 F.2d 1267, 1279 (8th
Cir. 1983) (explaining the elements of a hub-and-spoke
conspiracy in the antitrust context); United States v.
Buckley, 525 F.3d 629, 633 (8th Cir. 2008) (where the
spokes of a conspiracy have no knowledge or connection with
one another but deal independently with the hub, there is not
a single conspiracy but rather as many conspiracies as there
are spokes); In Re: Iowa Ready-Mix Concrete Antitrust
Litig., 768 F.Supp.2d 961, 975-76 (N.D. Iowa 2011) (to
plead a hub-and-spoke conspiracy, the complaint must allege
an overall plan or that each defendant had knowledge that
others were involved in the conspiracy). Garrison's
complaint alleges that each hospital contracted with
RevClaims, which might suffice to plead that each hospital
separately conspired with RevClaims, but it does not suffice
to plead a single conspiracy that included all of the
hospitals. The complaint does not contain sufficient factual
allegations to support Garrison's claim that all of the
hospitals engaged in a single conspiracy and, therefore, does
not show that Garrison's injury is traceable to any
conduct of the moving defendants. Accordingly, Garrison
cannot show that she has standing to sue these defendants.
second question is whether St. Bernard's or RevClaims has
injured Garrison. Garrison's prayer for relief seeks a
declaratory judgment, “damages in an amount equal to
all amounts improperly billed . . . and recovered through
filing liens, ” pre-judgment and post-judgment
interest, attorneys' fees and costs, and injunctive
relief. Document #2 at 40-41. It is undisputed that St.
Bernard's and RevClaims have recovered nothing from its
lien on Garrison's claim against the at-fault driver. The
most recent notice of lien was filed on March 24, 2015. That
lien became void 180 days later because no suit was filed to
enforce it. See Ark. Code Ann. § 18-46-106(a).
Furthermore, St. Bernard's has now released its lien.
Thus, no controversy presently exists for declaratory or
injunctive relief. As to the damages claims, St.
Bernard's and RevClaims argue that Garrison has suffered
no injury because they have recovered nothing of hers and
have no potential to do so. Garrison offers no argument that
she has been injured under Arkansas Fair Debt Collection
Practices Act, but she maintains that St. Bernard's and
RevClaims have injured her under each of the remaining claims
in her complaint.
claim under the Arkansas Deceptive Trade Practices Act and
common law claims of breach of contract, unjust enrichment,
conversion, and breach of fiduciary duty all depend on
whether St. Bernard's or RevClaims have recovered money
owed to her or whether St. Bernard's lien encumbers her
claim against the at-fault driver. They have recovered
nothing and the lien does not encumber her claim against the
contract claim rests on the provider agreement between St.
Bernard's and her health insurer. She claims that she is
a third-party beneficiary legally “entitled to have an
in-network medical care provider submit her bills to her
health insurance carrier for payment.” Document #63 at
10. Even if such a right exists, the purpose would be to
prevent the medical care provider from billing and holding
Garrison liable for any treatment rendered. Thus, the injury
to her of such a breach would be financial liability. Since
St. Bernard's and RevClaims have recovered nothing on her
debt to the hospital, the lien has expired, and the debt has
been released, Garrison has no injury under her contract
claim. She admits as much when she says that her damages on
this claim are her expectancy interest, and her expectancy
interest is the now-released amount St. Bernard's and
RevClaims should have billed to her insurer. Garrison also
states that she could be injured by St. Bernard's turning
the bill over to collections or reporting it on her credit
history. The lien release, though, contains a paragraph that
estops St. Bernard's from doing so.
links her injuries under the Arkansas Deceptive Trade
Practices Act to whatever injuries she has suffered under her
contract claim. The Act entitles her to “actual
damages, ” and she concludes that she is therefore able
to recover damages to the extent she is entitled to recover
compensatory damages under her contract claim. She has no
actual damages under either claim and so no standing to
pursue this claim.
next argues that St. Bernard's and RevClaims have been
unjustly enriched by encumbering her third-party insurance
claim. Id. at 11. She says that the liens gave St.
Bernard's and RevClaims superior right to possession of
the third-party insurer's $100, 000 settlement tender.
Id. For this same reason Garrison also argues that
St. Bernard's and RevClaims are liable for conversion.
But she says that her counsel could not execute a release of
that tender because she was pursuing a claim against the
insurer for additional amounts-not because the insurer
received the notice of lien. Id. at 3. As it now
stands, the lien is not encumbering the proceeds and neither
St. Bernard's or RevClaims received any of Garrison's
settlement proceeds. Garrison has shown no injury.
breach-of-fiduciary-duty claim is based on an alleged
responsibility of St. Bernard's to bill her health
insurer rather than her. Her injury, then, is any amount she
was improperly billed. But again, St. Bernard's has
released the lien and essentially forgiven the treatment
expenses incurred by Garrison. It ...