Troutman Pepper Litigators Secure Complete Victory for State Hospitals in Georgia Supreme Court
ATLANTA – Troutman Pepper recently notched a hard-fought class action victory in the Georgia Supreme Court, with a unanimous decision reversing both the trial court and the Court of Appeals on class certification and summary judgment. The decision addresses the practice of filing hospital liens in the State of Georgia, and it could not come at a better time for Georgia hospitals. The first of many copycat cases, it represents a complete victory for hospitals around the state and will provide precedent under Georgia’s Rule 23 that will be used for years to come.
Troutman Pepper’s litigators were led by Bill Withrow and Lindsey Mann, with significant input and support from Kathleen Campbell and Chris Kelleher. In addition, the case was defended by a team from Hall Booth Smith, including Paul Ivey, Cal Martin, Lauren Dimitri, and Tyler Pritchard, who were instrumental in the victory.
The case was brought by a group of plaintiffs who were involved in car accidents and were treated at The Medical Center in Columbus, Georgia. None of the plaintiffs had health insurance, but because they were victims in the car accidents, they each had a potential tort recovery that could be used to cover the costs of their medical care.
In accordance with Georgia’s Hospital Lien Statue, the hospital perfected hospital liens against the tort recovery alone in the amount of the hospital bills. This is standard practice for hospitals, and in a typical case, the lien is negotiated for an amount far lower than the liened amount once the tort recovery is received and other liens, charges, and patient needs are accounted for. In this case, plaintiffs alleged that the act of filing the lien in the amount of the bill constituted fraud and asserted claims for fraud, negligent misrepresentation, and RICO. They also sought to represent a class of similarly situated individuals.
In August 2016, the trial court denied the hospital’s motion for summary judgment. The parties commenced class certification proceedings and in September 2017, following a series of lengthy briefs, input from two experts, and an evidentiary hearing, the trial court granted class certification and entered plaintiffs’ proposed order verbatim. The Court of Appeals affirmed the trial court’s ruling, with one small exception — the Court of Appeals concluded that the trial court erred in denying the hospital’s motion for summary judgment on the RICO claim.
The Georgia Supreme Court reversed the trial court’s orders on summary judgment and class certification, finding that the hospital is entitled to summary judgment on all claims and the plaintiffs did not satisfy the requirements for class certification — a complete victory for the hospital. With respect to summary judgment, the Court found that filing the liens in the amount of the hospital charges is done in accordance with the Hospital Lien Statute and cannot constitute fraud or serve as a predicate offense under Georgia’s RICO act. With respect to class certification, the Court entered a landmark decision in Georgia, finding that the plaintiffs failed to satisfy the commonality requirement, which is typically an extremely low bar for class certification. Though the Court did not reach the other elements of Rule 23, the Court called into question the plaintiffs’ ability to satisfy both typicality and adequacy and, by implication, predominance. The ruling is expected to end a related series of lawsuits and permit hospitals to continue their status quo, ending the significant uncertainty that has occurred over the last four years.
Troutman Pepper has a nationally recognized Class Action Practice. Its experienced and strategic approach helps clients efficiently resolve disputes while also managing the unique risk of class actions. The firm has successfully defended clients in class actions in 38 states plus the District of Columbia, including “plaintiff-friendly” jurisdictions such as California, Florida, Illinois, and West Virginia.
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