DEFENDANTS’
I. INTRODUCTION AND RELIEF REQUESTED
Defendants, MultiPlan, Inc. and Regence BlueShield (collectively, “Defendants”), file this Opposition to the Motion for Class Certification (“Motion”) of Plaintiffs, Lydia Zou and Blair Fleming (collectively, “Plaintiffs”). Plaintiffs’ Motion seeks to have the Court decide, in one fell swoop, whether Defendants violated Washington’s Consumer Protection Act (“CPA”) in its handling of more than 150 individual subrogation claims. They do this despite Washington law making absolutely clear that “but for” causation is required for each putative class member to establish his or her CPA claim.
Moreover, communications central to this case—a letter mistakenly identifying an individual’s health plan as an ERISA plan—were in most cases never sent to the actual member (meaning most of the putative class never received the communication forming the basis of the CPA claim), and injuries resulting therefrom are therefore likely non-existent. Plaintiffs try to avoid these obstacles by framing their proposed class as an “issue class” seeking injunctive and declaratory relief, but variations among putative class members and their interactions (or lack thereof) with Defendants, as well as lack of typicality and adequacy, foreclose class-wide relief of any kind. Plaintiffs’ Motion should be denied.
II. FACTS
a. Background on Subrogation Recovery
An employer providing health benefits to its employees can do so in one of two ways. They can contract with an insurance company to provide benefits, in which case the insurance company administers benefits and pays claims with insurance company funds. This type of plan is often called a “fully-insured” plan. Alternatively, the employer can “self-fund” the plan, meaning that claims are paid out of the employer’s own pocket and the employer therefore bears the risk of loss.
See Declaration of Errol J. King, Jr. (“King Declaration”), Exhibit H, Expert Report of Nancy A. Case (“Case Report”), p. 3. These types of plans are called “self-insured” or “self-funded” plans.
Employers offering self-insured plans regularly contract with third party administrators to administer plan benefits on behalf of the employer.
The health plans of the named Plaintiffs, as well as the health plans of all putative class members based on the class definition set forth in Plaintiffs’ First Amended Complaint (the “Complaint”or“FAC”) areself-funded plans with government employers, suchas cities, counties, and public hospitals. Those local governments sponsored their self-funded health plans, and retained Regence to act as their third-party administrator, and Regence retained MultiPlan to perform subrogation recovery services on behalf of Regence and the governmental self-funded plans.
Subrogation arises when a member is injured by the fault of another, and the member’s health plan pays for treatment in connection with that injury. For self-funded plans, subrogation serves as a vital revenue stream for the governmental plans to recoup amounts paid for claims that are attributable to at-fault third parties. Case Report, pp. 3–4. Governmental self-funded health plans rely on subrogation to control costs because they often “operate with limited financial resources allocated for claims payments,” and “[s]ubrogation ensures that funds remain available for legitimate plan expenses.” Id., p. 4. The cost savings achieved through subrogation in selffunded plans are directly passed on to employers and employees in the form of lower employee contributions, generally makinghealthcare coveragemoresustainable and affordable. Id.; see also id. (“For health plan members, subrogation ensures that plan resources are not used to pay for claims that should be paid for by someone else, promotes affordability, and allows employers to offer high-quality benefits and prevent significant cost increases over time.”). In sum, health plans—and specifically self-funded health plans like those of Plaintiffs and the putative class members—rely on subrogation recovery “to contain costs, maintain financial stability, offset future claims costs, [and] reduce direct claim expenses,” while recovery also “encourage[s] accountability and fairness, aligned with the principle that those responsible for causing the harm
should bear the costs, rather than the broader insurance pool.” Id.
b. The Putative Class
Plaintiffs in this case are Lydia Zou and Blair Fleming. Both were, at the relevant times, employed by Valley Medical Center and enrolled in the Valley Medical Center Health Plan (the “VMCPlan”), aself-fundedlocalgovernmentplan.Dr.Zouwas injuredin an accident,afterwhich she received medical treatment paid for by the VMC Plan. Her auto insurer agreed to tender the policylimits ofherunderinsuredmotorist (“UIM”) coveragein theamount of$250,000,but before she accepted, she contacted MultiPlan to request a waiver of the VMC Plan subrogation lien. FAC, ¶¶ 3.30-3.31. MultiPlan agreed to negotiate the lien but did not offer a full waiver. Dr. Zou argued that she was not “made whole” under Thiringer v. American Motors Ins. Co., 91 Wn. 2d 215 (1978), and the MultiPlan representative explained that the VMC Plan has a first-priority subrogation provision that does not require application of the made-whole rule. Specifically, the VMC Plan provided:
First-Priority Claim
By accepting benefits from the Plan, You acknowledge that the Plan’s recovery rights are a first priority claim and are to be repaid to the Plan before You receive any recovery for Your damages. The Plan shall be entitled to full reimbursement on a first-dollar basis from any payments, even if such payment to the Plan will result in a recovery which is insufficient to make You whole or to compensate You in part or in whole for the damages sustained. The Plan is not required to participate in or pay Your court costs or attorney fees to any attorney You hire to pursue Your damage claim.1
The MultiPlan employee, reviewing this first-priority language in the VMC Plan, made the incorrect statement that the VMC Plan was an ERISA plan. See Case Report, pp. 7-8 (noting that first-priority reimbursement rights often signal that a plan may be governed by ERISA). Dr. Zou told the MultiPlan employee that her plan was not an ERISA plan. While MultiPlan was investigating the issue further, Dr. Zou retained counsel. MultiPlan then granted a full waiver of
1 See Exhibit E to King Declaration.
the lien. Dr. Zou claims that she was damaged by having lost access to her UIM funds for “several months,” and claims that she incurred “fees and expenses.” FAC, ¶ 3.64. She also asserts a claim for tortious interference with contractual relations and expectancy based on alleged interference with her UIM benefits. Id. at ¶ 5.1–5.4.
Plaintiff Blair Fleming was involved in an auto accident, after which MultiPlan sent her attorney, Andrew Ackley, a letter titled “Notice of ERISA Lien” that incorrectly identified her health plan as an ERISA plan. Id. at ¶¶ 3.67–3.68. Mr. Ackley later exchanged email correspondence with a MultiPlan employee who also incorrectly stated that the VMC Plan was an ERISA plan. Ms. Fleming herself did not receive any written correspondence from MultiPlan, nor did she have email or telephone communications with MultiPlan. Exhibit F to King Declaration, Fleming Deposition, pp. 26–28 (hereinafter, “Fleming Deposition”). MultiPlan ultimately waived Ms. Fleming’s subrogation lien as well.
Plaintiffs now ask this Court to certify a class for purposes of determining classwide CPA liability on the theory that MultiPlan made “fraudulent statements” regarding the nature of member’s health plans. Motion, p. 4. Their proposed class consists of:
all individuals coveredby a“government plan,” as definedby 29 U.S. Code §1002, established or maintained within Washington State, from whom MultiPlan and/or Regence collected or attempted to collect subrogation reimbursement, and stated verbally or in writing that the health plan was an ERISA plan or subject to ERISA.
MultiPlan has identified 156 individuals meeting these criteria. The 156 putative class members areindividuals enrolledin self-funded health plans sponsored bytheirlocal government employers and administered by Regence. The plans are, by definition, non-ERISA plans, and thus, the alleged “fraudulent statement” occurred when MultiPlan mistakenly stated, either verbally or in writing, that a member’s health plan was an ERISA plan. However, the “statements” were, in most cases, simply form letters—sent to either the UIM or third-party insurer, or to the members’ attorney (as
opposed to the member themselves)—that provided notice of the subrogation lien.2 And any alleged significance of a plan being an ERISA (or non-ERISA) plan was not mentioned in any of the letters. Finally, to be clear, the liens themselves were valid. The sole issue is the mistaken identification of the plans involved as ERISA plans.
III. EVIDENCE RELIED UPON
Defendants rely upon the Declarations of Stefanie Franc and Errol J. King, Jr., all exhibits attached thereto, the expert report of Nancy A. Case, and the pleadings and papers on file with the Court.
IV. ISSUES
a. Should the Court deny Plaintiffs’ Motion for Class Certification? (Yes)
b. Should the Court decline to appoint Plaintiffs as class representatives? (Yes)
c. Should the Court decline to appoint Plaintiffs’ counsel as class counsel? (Yes)
V. AUTHORITY AND ARGUMENT
a. Legal Standard for Class Actions
Civil Rule 23 “does not set forth a mere pleading standard. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). “Class actions are specialized types of suits, and as a general rule must be brought and maintained in strict conformity with the requirements of CR 23.” Oda v. State, 111 Wn. App. 79, 92, 44 P.3d 8, 14–15 (2002) (citation omitted).
Plaintiffs moving for class certification bear the burden of demonstrating that they meet the requirements of Civil Rule 23. Miller v. Farmer Bros. Co., 115 Wn. App. 815, 820, 64 P.3d 49, 53 (2003). They must show that the four prerequisites of CR 23(a) are met: numerosity,
2 Upon referral of a subrogation case to MultiPlan by Regence, MultiPlan customarily sends a notice of lien letter at the time of initial review. See Declaration of Stefanie Franc (“Franc Declaration”), ¶ 4. There are two very similar form letters: a Notice of Lien Letter (“Non-ERISA Lien Letter”) and a Notice of ERISA Lien Letter (“ERISA Lien Letter”). The only difference between the letters is one additional sentence in the Notice of ERISA Lien Letter that reads: “Regence BlueShield of Washington is a self-funded plan under the protection of the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001 et seq.” Id, at ¶¶ 4-6.
commonality, typicality, and adequate representation. In addition, Plaintiffs’ proposed class must fall into one of the categories of CR 23(b). “Unless the proposed class action fits within one of the three specific types of class actions defined by CR 23(b), class certification will be denied.” 14
Wn.Prac., Civil Procedure§ 11:73(3d ed.).This istrueforPlaintiffs’proposed“issueclass”under CR 23(c)(4) as well. See 2 Newberg and Rubenstein on Class Actions § 4:92 (6th ed.) (“[T]he proponent of an issue class—like the proponent of any other class action—must demonstrate that the proposed issue class meets all of the requirements of Rule 23(a) and fits into one of the categories of Rule 23(b)[.]”). “A class certified under Rule 23(c)(4) resolves [an] issue, not the whole case. Class members would receive the benefit of a declaratory judgment (if the class prevails) on the issue but would need to proceed in individual suits to seek damages; by contrast, if the class loses, every detainee would be bound through the doctrine of issue preclusion.” Id. (quoting Bennett v. Dart, 53 F.4th 419, 420 (7th Cir. 2022)).3
b. Argument
Plaintiffs filed this suit as a putative class action consisting of all individuals covered by a “government plan,” as defined by 29 U.S. Code § 1002, established or maintained within Washington State, from whom MultiPlan and/or Regence collected or attempted to collect subrogation reimbursement, and stated verbally or in writing that the health plan was an ERISA plan or subject to ERISA. Plaintiffs allege that Defendants violated Washington’s Consumer Protection Act in their dealings with class members and ask the Court to determine Defendants’ CPA liability on a class-wide basis. Plaintiffs, however, fail to carry their burden for three of CR 23(a)’s requirements—commonality, typicality, and adequacy—and independently fail to satisfy any of the conditions of CR 23(b).
3 “Because CR 23 is identical to its federal counterpart, cases interpreting the analogous federal provision are highly persuasive.” Schnall v. AT & T Wireless Servs., Inc., 171 Wn. 2d 260, 271, 259 P.3d 129, 134 (2011) (internal quotation marks and citation omitted); Elter v. United Servs. Auto. Ass'n, 17 Wn. App. 2d 643, 654, 487 P.3d 539, 545 (2021).
To establish a CPA violation, plaintiffs will be required to prove five elements: (1) an unfair or deceptive act or practice, (2) occurring in trade or commerce, (3) public interest impact, (4) injury to plaintiff in his or her business or property and (5) causation. Sing v. John L. Scott, Inc., 134 Wn. 2d 24, 30, 948 P.2d 816, 819 (1997). Plaintiffs need not show that Defendants intended to deceive, but that the act “had the capacity to deceive a substantial portion of the public.” Panag v. Farmers Ins. Co. of Washington, 166 Wn. 2d 27, 47, 204 P.3d 885, 894 (2009). “Deception exists if there is a representation, omission or practice that is likely to mislead a reasonable consumer.” Id. at 50 (internal quotation marks and citation omitted).4 Plaintiffs will also berequired toprovethat theallegedly deceptiveact caused injury. Id. at 57.“Personal injuries, as opposed to injuries to ‘business or property,’ are not compensable and do not satisfy the injury requirement.” Id. Proximate cause is required—that is, Plaintiffs will be required to show that “but for” the ERISA representation, the member would not have suffered an injury. Id. at 58–59. Obviously, then, if the outcome of a member’s subrogation case would have been the same, the CPA claim will fail. Id. at 64 (“If the investigative expense would have been incurred regardless of whether a violation existed, causation cannot be established.”).
d. Plaintiffs cannot establish commonality under CR 23(a).
As a prerequisite for class certification, CR 23(a)(2) requires that there be “questions of law or fact common to the class.” The Supreme Court has noted that this language is “easy to misread” since “any competently crafted class complaint literally raises common questions.” WalMart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011). Instead, the class members’ claims “must depend upon a common contention.” Id. at 350. And that “common contention . . . must be of such a nature that it is capable of classwide resolution—which means that determination of its truth or
4 At least one Washington appellate court has found that the plaintiff “likely must show” that the defendant “held knowledge of the falsity” of the misrepresentation. See Thorley v. Nowlin, 29 Wn. App. 2d 610, 653, 542 P.3d 137, 159 (2024).
falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Id. What matters “is not the raising of common questions—even in droves—but rather, the capacity of a class-wide proceeding to generate common answers apt to drive the resolution of the litigation.” Id. (internal quotation marks andcitationomitted). “Dissimilarities within theproposed class are what have the potential to impede the generation of common answers.” Id. (citation omitted).
Plaintiffs’ theory for commonality is that Defendants “made the same factual and legal misrepresentations about ERISA in every class claim,” Motion, p. 17, which, Plaintiffs allege, resulted in a CPA violation. This, of course, is a gross oversimplification of the facts. The Court cannot sweepingly decide whether the alleged “misrepresentations” were a CPA violation where variations exist regarding (a) to whom the representation was made, (b) whether the representation was corrected, (c) when the representation was corrected, (d) the sequence of receipt, and (e) the health plan at issue and whether the plan allows for, or disavows, the made whole rule.
For example, in the vast majority of the 156 putative class members’ cases, the member (i.e., “consumer”) was never sent the ERISA communication. Franc Declaration, ¶¶ 13-14. Instead, the ERISA Lien Letter was sent to an insurance company or to the member’s attorney. Id. at ¶ 14. In at least two cases, the representation was made by phone to an attorney. Id. at ¶ 16. Dr. Zou and Ms. Fleming’s cases are unique in that there were communications about the ERISA nature of the plan with MultiPlan via email.5 The ERISA Lien Letter forms the sole basis of the ERISA representation for almost everyone else in the putative class.
The sequence of the letters also varies among members. As noted above, MultiPlan has two very similar form letters, the ERISA Lien Letter and the Non-ERISA Lien Letter (neither of which attribute significance to the ERISA-status). In at least one instance, a Non-ERISA Lien
5 As noted elsewhere, Ms. Fleming’s email communication with MultiPlan was through her attorney, Andrew Ackley.
Letter was sent, then an ERISA Lien Letter, then another Non-ERISA Lien Letter. Franc Declaration, ¶ 20. In another instance, a Non-ERISA Lien Letter was sent, then an ERISA Lien Letter two days later. Id. at ¶ 21. In yet another, one ERISA Lien Letter was sent to an insurance company, followed by four Non-ERISA Lien Letters, the first of which was sent only five days after the ERISA Lien Letter. Id. at ¶ 22. In multiple instances, an ERISA Lien Letter and a NonERISA Lien Letter were sent on the same day. Id. at ¶ 23.
The health plans of the putative class members vary greatly as well. While the named Plaintiffs were both members of the VMC Plan, there are 22 different governmental plan sponsors for the 156 putative class members. See Motion, pp. 11-12; Exhibit 1 to the Declaration of Andrew Ackley (MPI_Zou_015933). Those plans are each governed by their own terms, including with respect to each plan’s right to subrogation recovery.
Defendants will have defenses to the CPA claims based on each of these issues, which are not shared uniformly by the class. And because these variations will present different questions forthe court’s consideration, Plaintiffs cannot establish therequisite commonality underCR 23(a).
e. The named Plaintiffs are not typical of the putative class, and they and their counsel are not adequate representatives.
Class certification would not be appropriate here, where the unique circumstances of Plaintiffs’ cases make them atypical of the class, and where Plaintiffs’ attorney is a material witness to the underlying facts. CR 23(a)(3) and (a)(4) provide that a class action may be maintained only if “the claims or defenses of the representative parties are typical of the claims or defensesoftheclass,”and“therepresentativepartieswillfairlyandadequatelyprotecttheinterests of the class.” The typicality requirement “helps ensure that the plaintiff's interests are aligned with those of the represented group, [so that] in pursuing his own claims, the named plaintiff will also advance the interests of the class members.” 1 Newberg and Rubenstein on Class Actions § 3:29 (6th ed.) (internal quotation marks, brackets, and citation omitted). “Like the typicality
requirement, . . . the adequacy requirement focuses on the desired attributes of those who seek to represent the class, as opposed to the characteristics of the class.” Id., § 3:50. Factors to consider include motivation for filing the action, interests in the outcome, whether the representative have any interests that conflict with interests of the class. 14 WA. Prac., Civil Procedure § 11:71 (3d ed.).
Here, unlike most putative class members, Dr. Zou communicated with MultiPlan herself. This fact alone makes her case exceedingly unusual, as MultiPlan rarely communicates directly with members. Franc Declaration, ¶ 18. Dr. Zou wrote MultiPlan to request a waiver of the subrogation lien and raised the made-whole rule.6 It was in this specific context that she was mistakenly toldthatherhealth planwas anERISA plan. By contrast,in mostclass members’cases, the ERISA Lien Letters were sent merely for notice purposes and not in the context of a made whole analysis. That is, they were sent simply to inform the receiver that the member’s plan had paid benefits because of an accident or injury, and Regence may be subrogated to the right of recovery of the member to recoup those plan assets. This was true regardless of whether the plan was an ERISA plan.7
Dr. Zou’s CPA claim is atypical for the additional reason that it is subject to the unique defense of settlement. Courts have held that “unique defenses bear on both the typicality and adequacy of a class representative.” Beck v. Maximus, Inc., 457 F.3d 291, 296 (3d Cir. 2006). “Where a class representative’s claim is subject to unique defenses that do not apply to the other class members, the claim is not typical of the class and the person is not an adequate representative.” Turk v. United Serv. Auto. Ass'n, 6 Wn. App. 2d 1033 (2018) (unpublished); see also Hisle v. Todd Pac. Shipyards Corp., 113 Wn. App. 401, 427, 54 P.3d 687, 700 (2002), aff'd, 151 Wn. 2d 853, 93 P.3d 108 (2004) (collecting cases). Here, Defendants will assert that Dr. Zou
6 Dr. Zou had consulted with an attorney prior to contacting MultiPlan and was therefore aware of the Thiringer case and the made whole doctrine. See, e.g., King Declaration, Exhibit G. 7 Dr. Zou also alleges a claim for tortious interference that is not asserted on behalf of the class.
settled her CPA claim when she agreed to accept $10,000 from MultiPlan.8 This defense is obviously unique to Dr. Zou; therefore, because the claims and defenses of the named Plaintiff, Dr. Zou, are not typical of those of the putative class, certification should be denied.
Ms. Fleming’s circumstances are unique as well. While she did not have any communications with MultiPlan herself, Andrew Ackley, her attorney, did. Mr. Ackley communicated directly with MultiPlan via email regarding whether Ms. Fleming’s plan was an ERISA plan. Franc Declaration, ¶ 19. This is atypical because for most of the putative members, the only “representation” was the ERISA Lien Letter itself. Additionally, Ms. Fleming is no longer a member of the Valley Medical Center Plan, see Fleming Deposition, pp. 11, 21, and she is therefore unlikely to experience a threat of future injury normally required for injunctive relief.
See Hockley v. Hargitt, 82 Wn. 2d 337, 351, 510 P.2d 1123, 1133 (1973) (“We hold that under RCW 19.86.090 an individual may seek and obtain an injunction that would, besides protecting his own interests,protectthepublicinterest.”)(emphasisadded); see also Grant v. Unigard Indem. Co., No. CV14-00198 BJR, 2014 WL 12028484, at *5 (W.D. Wn. July 29, 2014); but see Dix v. ICT Grp., Inc., 160 Wn. 2d 826, 837, 161 P.3d 1016, 1022 (2007).
Ms. Fleming’s motivations for filing this action are also questionable, as she appears to have virtually no understanding of the lawsuit. As detailed herein, all communications in her case were funneled through her attorney, Mr. Ackley, who strongly disagreed with MultiPlan’s statement that the VMC Plan was governed by ERISA. Additionally, she testified that any knowledge regarding ERISA came from her attorney, Fleming Deposition, p. 17; prior to the events giving rise to this case, she had never heard of ERISA, id.; she did not and does not have an understanding of why the ERISA-nature of a health plan might be significant, id., p. 19; she did not and does not have knowledge of the “made whole” rule, id., p. 25; she did not and does not
8 See Defendants’ previously filed Motion to Enforce Settlement Agreement and supporting declaration, filed on June 20, 2024.
know what MultiPlan does for Regence, id., pp. 24–25; nor does she know whether MultiPlan or Regence ultimately collected in subrogation or waived the lien in her case, id., p. 35.
Finally, Plaintiffs’ counsel, Andrew Ackley, who signed both the First Amended Complaint and the Motion for Class Certification, is a witness in this case. Ms. Fleming was representedbyMr.Ackleyduringtheeventsgivingrisetoherclaim. Mr.Ackleyreceived aNotice of ERISA Lien Letter regarding Ms. Fleming’s case, and he emailed MultiPlan to inquire about the letter.9 The email referenced in paragraph 3.70 of the FAC was not exchanged with Ms. Fleming; it was exchanged with Mr. Ackley. Franc Declaration, ¶ 19, Exhibit D. Similarly, the ERISA Lien Letter referenced in paragraph 3.73 of the FAC was not sent to a member (i.e., the anonymous “emergency department nurse”); it was in fact sent to Mr. Ackley, who was representing that member. Id. at ¶¶ 8-9. And it was Mr. Ackley who “advised” Ms. Bell, via email, of the contents of paragraph 3.74 of the FAC. Franc Declaration, ¶ 10, Exhibit C.
Mr. Ackley’s role as a necessary fact witness defeats the adequate representation requirement. See WA R RPC 3.7 (“A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless” certain criteria inapplicable here are met.). “Where there is a substantial possibility that the class counsel will be called as a witness to the transaction in which he or she represented the named plaintiffs, and might therefore be disqualified from serving as counsel, the named plaintiffs are not adequate representatives of the class.” 32B Am. Jur. 2d Federal Courts § 1562; Shroder v. Suburban Coastal Corp., 729 F.2d 1371, 1376 n.4 (11th Cir. 1984) (the possibility that class counsel would be disqualified is sufficient grounds for a court to conclude that the proposed representatives are inadequate) (also noting the court’s potential interest in “manufactured litigation”); Poynter v. Ocwen Loan Servicing, LLC, No. 3:13-CV-773DJH-CHL, 2017 WL 2779489, at *12 (W.D. Ky. June 27, 2017) (“Because it is likely that Teddy
9 Thus, while neither Plaintiff received the ERISA Lien letter that will form the basis for more than 150 of the putative class members’ claims, Mr. Ackley did. Franc Declaration, ¶ 9, 15; see also Fleming Deposition, pp. 26–28.
Gordon and his firm will be necessary material witnesses, the Poynters and their counsel could not provide fair and adequate representation of the proposed class.”). Mr. Ackley’s role in the underlying subject matter on behalf of Ms. Fleming (and the unnamed class member referenced in paragraph 3.73 of the FAC) is an independent ground for denial of certification.
f. Plaintiffs cannot satisfy either of their proposed class theories under CR 23(b). Plaintiffs argue that their proposed “issue class” can be brought under either CR 23(b)(2) or CR 23(b)(3). But the class fails under either standard.
i. Plaintiffs cannot sustain a class under CR 23(b)(2) because their damages arenotmerely “incidental”toinjunctiveordeclaratory relief.
Under CR 23(b)(2), an action may be maintained as a class only if the four prerequisites of CR 23(a) are satisfied and the “party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory reliefwith respect to the class as awhole.”Classes certifiedunder(b)(2) are “‘mandatory’ classes; that is, the results are binding on all class members, who may not choose to opt out of the class.” Sitton v. State Farm Mut. Auto. Ins. Co., 116 Wn. App. 245, 252, 63 P.3d 198, 203 (2003). Because class members may be “deprived of their rights to notice and an opportunity to control their own litigation,” “when plaintiffs are seeking monetary damages, certification under (b)(1) or (b)(2) violates due process unless the monetary damages sought are merely incidental to the primary claim for injunctive or declaratory relief.” Id. (internal quotation marks and citation omitted). “Incidental” damages are “really a group remedy, rather than an individual one” and ideally are those only “to which class members automatically would be entitled once liability to the class (or subclass) as a whole is established.” Sitton, 116 Wn. App. at 252 (citation omitted). The Washington Supreme Court similarly noted that incidental damages “flow directly from liability to the class as a whole,” and such damages “must be cognizable by objective standards and not significantly dependent on each class member’s subjective
circumstances.” Nelson v. Appleway Chevrolet, Inc., 160 Wn. 2d 173, 189, 157 P.3d 847, 855 (2007) (emphasis in original) (citation omitted); see also Dukes, 564 U.S. at 360–61 (stating that Rule 23(b)(2) “does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.”).
Here, unique determination of putative class member damages would require precisely the kind of individualized analysis that defies any notion such damages could be considered “incidental.” Each putative class member will be required to independently prove “but for” causation and damages. See Panag, 166 Wn. 2d at 58–59. For the vast majority of the putative class members, the inquiry would be something along the lines of: but for the statement in the ERISA Lien Letter that the member’s plan was an ERISA plan, the member would not have suffered damages. As a preliminary matter, each member will be required to prove that the ERISA representation was reviewed, and that the audience appreciated its significance such that actions were taken which otherwise would not have been taken because of the ERISA representation. A finding will be required, on an individualized basis, that the resolution of the subrogation case would have been different but for the ERISA representation. As noted above, the ERISA Lien Letter and Non-ERISA Lien Letter are very similar and neither speaks to the “made-whole” rule or to recovery of attorneys’ fees. It is possible—if not certain—that a person who received an ERISA Lien Letter was not aware of the ERISA/non-ERISA distinction. Similarly, and especially for those cases where both ERISA and Non-ERISA Lien Letters were sent, each member will be required to show that the behavior of MultiPlan’s negotiator was influenced by the letter—i.e., that but for the ERISA Lien Letter and the misunderstanding regarding whether the plan was governed by ERISA, the negotiator would have resolved the member’s case differently. Additionally, as there are more than 20 different plan sponsors for the 156 putative class members, each analysis will vary to some degree based on the plan involved, and whether the specific plan at issue acknowledged or disavowed the made whole rule.
The damages theory will vary for each member as well. Plaintiffs acknowledge this in their Motion, arguing:
In some cases, class members who were not made whole would be entitled to full refund among other damages. In other cases, they may only be entitled to a partial refund for proportionate fees and costs. In others, if they never paid subrogation, they may only be entitled to loss of use of funds and/or other damages.
Motion, p. 10 n.53. Plaintiffs thus suggest that some members may be entitled to a full or partial return of amounts collected by MultiPlan, whereas in the case of the named Plaintiffs (where a full waiver was granted and no amounts were collected), members may only be entitled to “loss of use” of their settlement funds while the subrogation matter was pending. The variables here are endless. Consider the following non-exclusive list of possibilities:
ForputativeclassmemberA,threeERISALienLettersaresent,followedbyaNon-ERISA Lien Letter sent three months after the first ERISA Lien Letter. MultiPlan collects subrogation reimbursement but grants a reduction for attorneys’ fees. No waiver was requested. Member’s case is closed approximately 5 months after it was opened.
For putative class member B, an ERISA Lien Letter is sent, followed less than two months later by a Non-ERISA Lien Letter. MultiPlan collects subrogation reimbursement but grants a reduction for attorneys’ fees which was requested. Member’s case is closed approximately 6 months after it was opened.
For putative class member C, an ERISA Lien Letter and Non-ERISA Lien Letter were sent on the same day. MultiPlan collects subrogation reimbursement but grants a reduction for attorneys’ fees which was requested. Member’s case is closed less than 3 months after it was opened.
For putative class member D, three ERISA Lien Letters were sent. A full waiver of the lien was requested and granted. Member’s case is closed approximately 6 months after it was opened.
For putative class member E, one ERISA Lien Letter was sent. A full waiver of the lien was requested and granted. Member’s case is closed approximately 3 months after it was opened.
For putative class member F, a Non-ERISA Lien Letter was sent. Approximately one month later, an oral ERISA Representation was made to an attorney. MultiPlan collected the lien in full and then later issued a reimbursement reduction for attorneys’ fees.
For those members claiming a refund and arguing they were not made whole, presumably the factfinder must determine that a made whole analysis was not performed where it otherwise would have been, or that it was somehow performed differently because of the ERISA representation. This will vary, of course, depending on whether the putative member’s plan language acknowledges or disavows the made whole rule. From there, the precise amount collected that otherwise would not have been collected would need to be determined. For those members seeking “loss of use” damages, it would need to be determined that the subrogation matter took longer to resolve than it otherwise would have due to the ERISA representation, and then it must be determined when it would have been resolved without the representation. This determination will be highly fact-specific and may vary depending on whether and when a waiver was requested, the extent and length of the member’s treatment, and the behavior of an unknown number of other parties. This latter variable is particularly situational since subrogation matters are regularly delayed while members and attorneys work to negotiate the underlying tort settlement and/or with other lien holders. The cause of any alleged delays would need to be investigated and proven on a case-by-case basis.
In sum, it is abundantly clear that the damages sought in this matter are not merely “incidental” to the claim for injunctive or declaratory relief. As such, a class cannot be certified under CR 23(b)(2).
ii. Plaintiffs have not satisfied the requirements of CR 23(b)(3).
Plaintiffs alternatively posit that class certification is available under CR 23(b)(3). It is not.
Under CR 23(b)(3), an action is maintainable as a class if the four requirements of 23(a) are satisfied and “[t]he court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.”
While the 23(b)(3) predominance requirement overlaps with the general commonality
requirement, it is more stringent than the general prerequisite. 14 WA. Prac., Civil Procedure § 11:76 (3d ed.). Plaintiffs only analysis of predominance is to argue, without support, that “Defendants made the exact same misrepresentations to all class members.” Motion, p. 24. That is not true. Most putative class members never communicated with MultiPlan and were not told by MultiPlan that their health plans were governed by ERISA. Franc Declaration, ¶¶ 14, 18. Instead, most “representations” (i.e., ERISA Lien Letters) were sent to attorneys and insurance companies. Plaintiffs’ oversimplification also ignores the sequence and significance of the “representations” (i.e., whether ERISA and Non-ERISA Letters were sent simultaneously, or whether the ERISA Lien Letter was sent after receipt of a Non-ERISA Lien Letter, and whether an act could be considered “deceptive” under each of those individual circumstances). Thus, Plaintiffs have not shown that common questions predominate over individual ones, even for the limited issue of whether Defendants engaged in an “unfair or deceptive act or practice” under the CPA.
The second prong of CR 23(b)(3) requires the Court to find “that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” This determination involves a comparison of the class action to other available alternatives, including individual actions. See 2 Newberg and Rubenstein on Class Actions § 4:64 (6th ed.). Plaintiffs know that they cannot possibly certify a full class action in the face of the highly individualized causation and damages analyses that would berequired foreachofthe156 putativeclass members. They therefore propose an “issue class” on only the first three elements of their CPA claim.10
Certifying such a class while leaving so many issues to individual resolution belies the notion of superiority. Simply stated, certification of a class in this case does not serve the overall goals of
10 Plaintiffs appear to ask the Court to certify a class as to only the first three elements of a CPA claim but then on multiple occasions suggest they will seek classwide liability and/or remedies. Motion, p. 19 (suggesting there would be a classwide remedy); p. 20 (same); p. 25 (suggesting “classwide determination of Defendants’ CPA liability”).
class certification, including efficiency. See CR 23(b)(3). “Even courts that have approved ‘issue certification’ have declined to certify such classes where the predominance of individual issues is such that limited class certification would do little to increase the efficiency of the litigation.” In re St. Jude Med., Inc., 522 F.3d 836, 841 (8th Cir. 2008). A class on only the first three elements of the CPA claim will not enhance efficiency where Plaintiffs ask the Court to withhold findings on class-wide causation and damages, meaning those issues would need to be tried individually for 156 members.
As discussed elsewhere herein, variation among the class members cannot be understated. Each member will be required to show “but for” causation between the alleged misrepresentation and their injury. Individualized issues bearing on causation and damages include, but are not limited to, (1) whether the recipient reviewed the ERISA Lien Letter or ERISA representation and understood its significance; (2) whether the recipient later or previously received a Non-ERISA Lien Letter and/or a corrected letter and any impact of same; (3) whether and when the member requested a waiver or reduction of the lien; (4) whether MultiPlan collected subrogation reimbursement in full, in part, or granted a complete waiver; (5) the basis of the waiver, reduction, or refusal to waive or reduce (including whether MultiPlan concluded that the member was made whole and/or whether the MultiPlan representative was acting with the understanding that the plan was an ERISA plan or subject to made-whole); (6) whether MultiPlan granted a reduction for attorney’sfees;and(7)whetherMultiPlanhasalreadyissuedafullorpartial refundofanyamounts collected.
Rule 23(c)(4), allowing for issue classes, “should not be invoked merely to postpone confronting difficult certification questions.” 7AA Fed. Prac. & Proc. Civ. § 1790 (3d ed.). Here, Plaintiffs have clearly done just that. Under the circumstances presented, a class action could hardly be considered superior to other methods of adjudication. See CR 23(b)(3)(D) (noting that “difficulties likely to be encountered in the management of a class action” is one factor to
consider). Plaintiffs’ Motion should therefore be denied.
g. The Court should decline to certify a class that includes uninjured members. Plaintiffs have crafted their class definition in such a way that it will inevitably contain uninjured members who would otherwise lack standing to bring their own CPA claims. “Standing generally refers to a particular party’s right to bring a legal claim.” Washington State Hous. Fin. Comm'n v. Nat'l Homebuyers Fund, Inc., 193 Wn. 2d 704, 711, 445 P.3d 533, 537 (2019). “The injury in fact part of the standing test precludes those whose injury is speculative or abstract, rather than actual, from bringing an action.” Id. at 716. As discussed above, Washington requires a CPA plaintiff to establish that the allegedly deceptive act caused injury, and by its own terms, the statute permits only a person “who is injured in his or her business or property by a violation” of the Act to bring acivil action. RCW19.86.090 (emphasis added). “Personal injuries, as opposedtoinjuries to business or property, are not compensable and do not satisfy the injury requirement.” Panag, 166 Wn. 2d at 57 (internal quotation marks and citation omitted). In Panag, the Washington Supreme Court discussed standing and emphasized the injury requirement, stating, “What is necessary, and does constitute the needed link between the plaintiff and the actor, is that the violation cause injury to the plaintiff’s business or property as required by RCW 19.86.090.” Panag, 166 Wn. 2d at 39.
Here, Plaintiffs’ overbroad class definition includes members in whose case MultiPlan made an ERISA representation, without regard to whether the representation was even received or reviewed, or whether a change in circumstances occurred in connection with the representation. The class would also include members for whom a MultiPlan representative granted a reduction of the lien, or the member was, in fact, made whole, and so no reduction was warranted. In those latter cases, whether the plan was or was not governed by ERISA would have no significance. In other cases, the lien might have been so small in comparison to the settlement that the member or attorney never requested a waiver and simply paid the lien to close the subrogation case. In those
cases, theERISA-nature oftheplanwould similarly beofnoimport andanyERISArepresentation could therefore never have caused injury. The Court should decline to certify a class here, where individuals who otherwise would have no standing to sue under the CPA would become plaintiffclass members.
V. CONCLUSION
Plaintiffs have failed to put forth a proposed class that can survive the rigorous analysis required by CR 23. See Weston v. Emerald City Pizza, LLC, 137 Wn. App. 164, 168, 151 P.3d 1090, 1093 (2007) (“[A] court should order class certification only after conducting a ‘rigorous analysis’ to ensure that the plaintiff seeking class certification has satisfied CR 23's prerequisites.”). And their efforts to avoid scrutiny through the use of an “issue class” fare no better. Forall the foregoingreasons, Defendants respectfully request that the Court denyPlaintiffs’ Motion for Class Certification.
DATED this 14th day of February 2025.
s/Jeffrey M. Wells
Jeffery M. Wells, WSBA #45840
Williams, Kastner & Gibbs PLLC
601 Union Street, Suite 4100
Seattle, WA 98101-2380
Phone: (206) 628-6600
Email: jwells@williamskastner.com
Errol J. King, Jr. (pro hac vice)
Katherine C. Mannino (pro hac vice)
Taylor J. Crousillac (pro hac vice)
Brittany H. Alexander (pro hac vice)
PHELPS DUNBAR LLP
II City Plaza
400 Convention Street, Suite 1100
Baton Rouge, Louisiana 70802
Telephone: (225) 376-0207
Errol.King@phelps.com
Katie.Mannino@phelps.com
Taylor.Crousillac@phelps.com
Brittany.Alexander@phelps.com
Attorneys for Defendants
CERTIFICATE OF SERVICE
I hereby certify under penalty of perjury under the laws of the State of Washington that on February 14, 2025, I caused a true and correct copy of the foregoing document to be delivered to the following counsel of record in the manner indicated:
Counsel for Plaintiffs Lydia Zou and Blair Fleming:
Andrew Ackley, WSBA #41752
Paul Stritmatter, WSBA #4532
Lisa Benedetti, WSBA #43194
Stritmatter Kessler Koehler Moore
3600 15th Avenue West, Suite 300
Seattle, WA 98119
Phone: 206-448-1777
Email: andrew@stritmatter.com pauls@stritmatter.com lisa@stritmatter.com
Debra M. Watt (debbie@stritmatter.com)
Jamie Kessler (JamieK@stritmatter.com)
DATED this 14th day of February, 2025.
Via electronic mail
Via U.S. Mail
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s/Katie Olson Katie Olson, Legal Assistant