Class Cert Denied in Quest Overbilling Case

     PHILADELPHIA (CN) – Quest Diagnostics should not face a class action on overbilling claims, the 3rd Circuit ruled, finding the proposed classes too broad, too plentiful and stretching across too many state lines.
     Richard Grandalski leads the complaint against the diagnostic-testing giant, claiming that the company overbills patients for various testing services. The action sought certification for “a proposed class of all persons who were billed by Quest and who paid an amount in excess of that stated on an EOB or ERA provided to Quest prior to the date of the bill.”
     The patients also sought a second class certification for “a class who were members, participants, subscribers or beneficiaries of Anthem Blue Cross and Blue Shield and the Federal Employee Health Benefits Program.”
     Citing the law of the class members’ home states, however, a federal judge in Newark, N.J., concluded that “applying so many different fraud statutes would be unwieldy and inappropriate for class treatment at trial.”
     The District Court additionally found that “there were numerous explanations for overbilling that would not be wrongful or unjust,” according to the 3rd Circuit’s summary published on Sept. 11.
     The highly individualized evidence each class member would present on unjust enrichment also meant that common issues of fact did not predominate between the class members, the court found.
     A three-judge panel with the 3rd Circuit affirmed, noting that “the nationwide classes proposed by appellants were for purposes of trial, not settlement.”
     “under such facts, it was reasonable for the District Court to inquire at the certification stage as to whether the classes posed ‘intractable management problems’ for trial,” Judge Marjorie Rendell wrote for the court.
     For the panel, it is the homes states of the plaintiffs, not of Quest Diagnostics, that presents a major concern.
     Citing circuit precedent from last year’s case, Maniscalco v. Brother Int’l, Rendell said that “nothing else about the relationship between the parties, other than the fortuitous location of [the defendant’s] headquarters, took place in the state of New Jersey.”
     “[Plaintiff’s] home state, in which he received and relied on [the defendant’s] alleged fraud, has the ‘most significant relationship’ to his consumer fraud claim,” the ruling continues (brackets in original).
     Rendell Said that “the same conclusion applies here” and “controls our analysis here and confirms that the laws of class members’ home states apply to their state law claims for the Post-EOB Billing Class and Anthem BCBS FEHB Program Class.”
     The plaintiffs failed to show the court that, “even if each class member’s home state law controlled their claims, the District Court erred in finding such claims impractical for class treatment.”
     “In this case, appellants did not provide enough information or analysis to justify the certification of the classes they proposed,” Rendell wrote.
     Ultimately the plaintiffs “have failed to provide a sufficient, or virtually any, analysis describing how the grouped state laws might apply to the facts of this case,” Rendell added. “They assert only that the differences between the state laws within each group are ‘insignificant or non-existent.'”
     Rendell also agreed that “the District Court properly found that individual inquiries would be required to determine whether an alleged overbilling constituted unjust enrichment for each class member,” nothing that “such specific evidence is incompatible with representative litigation.”

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