Justia Contracts Opinion Summaries

Two air ambulance providers, Guardian Flight, LLC, and Med-Trans Corporation, sued Health Care Service Corporation (HCSC) for failing to timely pay dispute resolution awards under the No Surprises Act (NSA). The providers also claimed that HCSC improperly denied benefits under the Employee Retirement Income Security Act (ERISA) and was unjustly enriched under Texas law.The United States District Court for the Northern District of Texas dismissed the providers' complaint. The court found that the NSA does not provide a private right of action for enforcing dispute resolution awards. It also dismissed the ERISA claim for lack of standing, as the providers did not show that the beneficiaries suffered any injury since the NSA shields them from liability. Lastly, the court dismissed the quantum meruit claim, stating that the providers did not perform their services for HCSC's benefit. The court also denied the providers' request for leave to amend their complaint, deeming it futile.The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision. The appellate court agreed that the NSA does not contain a private right of action and that the statute's text and structure support this conclusion. The court also upheld the dismissal of the ERISA claim, reiterating that the beneficiaries did not suffer any concrete injury. Finally, the court affirmed the dismissal of the quantum meruit claim, as the providers did not render services for HCSC's benefit. The appellate court also found no abuse of discretion in the district court's denial of leave to amend the complaint. View "Guardian Flight v. Health Care Service" on Justia Law

West Virginia filed a complaint in state court against CaremarkPCS Health, LLC, a pharmacy benefit manager (PBM), alleging that Caremark unlawfully drove up the cost of insulin, causing financial harm to the state. The complaint included state law claims of civil conspiracy, unjust enrichment, fraud, and breach of contract. Caremark removed the case to federal court under the federal officer removal statute, 28 U.S.C. § 1442(a)(1), arguing that its conduct in negotiating rebates, which is central to the complaint, was performed under the direction of the federal government as part of its work for federal health plans.The United States District Court for the Northern District of West Virginia found that removal was unwarranted and remanded the case to state court. The district court concluded that Caremark failed to meet the requirements for federal officer removal and noted that West Virginia had disclaimed any federal claims in its complaint.The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court's decision. The Fourth Circuit held that Caremark was entitled to remove the case to federal court under § 1442(a)(1). The court found that Caremark acted under a federal officer because it administered health benefits for federal employees under contracts with FEHBA carriers, which are supervised by the Office of Personnel Management (OPM). The court also determined that Caremark had a colorable federal defense, specifically that federal law preempted West Virginia's claims. Finally, the court concluded that the charged conduct was related to Caremark's federal work, as the rebate negotiations for federal and non-federal clients were indivisible. Thus, the Fourth Circuit reversed the district court's remand decision and returned the case to the district court for further proceedings. View "West Virginia ex rel. Hunt v. CaremarkPCS Health, L.L.C." on Justia Law

M.G. received health care coverage through Medi-Cal and was treated by Dameron Hospital Association (Dameron) after an automobile accident. Dameron required M.G. or her representative to sign a conditions of admissions (COA) form, which included an assignment of benefits (AOB) clause. This clause assigned to Dameron the right to direct payment of uninsured and underinsured motorist (UM) benefits from M.G.'s automobile insurance policy with Progressive Casualty Insurance Company (Progressive). Dameron sought payment from Progressive for M.G.'s treatment at rates higher than Medi-Cal would pay. Progressive settled a UM claim with M.G. but did not pay Dameron, leading Dameron to sue Progressive for damages, an injunction, and declaratory relief.The Superior Court of San Joaquin County sustained a demurrer to Dameron's complaint without leave to amend, citing collateral estoppel based on a prior decision in Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (Dameron v. AAA). The court found the COA forms to be contracts of adhesion and the AOBs unenforceable, as it was not within the reasonable expectations of patients that a hospital would collect payments for emergency care directly from their UM benefits.The California Court of Appeal, Third Appellate District, affirmed the trial court's decision. The appellate court held that the COAs were contracts of adhesion and that it was not within the reasonable expectations of Medi-Cal patients that their UM benefits would be assigned to the hospital for payment of medical bills at rates higher than Medi-Cal would pay. The court concluded that the AOBs were unenforceable and did not need to address arguments regarding collateral estoppel or the Knox-Keene Health Care Service Plan Act. The court also denied Progressive's motion to strike exhibits from Dameron's reply brief. View "Dameron Hospital Assn. v. Progressive Casualty Insurance Co." on Justia Law

Dr. William Partin filed a lawsuit against Baptist Healthcare System, Inc. and Dr. Daniel Eichenberger after he resigned from his position. Partin alleged that Baptist and Eichenberger retaliated against him in violation of the Emergency Medical Treatment and Active Labor Act (EMTALA) and brought claims under Indiana law for breach of contract, tortious interference with contractual relations, and defamation. The dispute arose from Partin's treatment of a suicidal patient, J.C., in Baptist's emergency department, where Partin ordered procedures against J.C.'s will, leading to complaints from hospital staff.The United States District Court for the Southern District of Indiana granted summary judgment in favor of Baptist and Eichenberger. The court found that no reasonable jury could conclude that Partin engaged in EMTALA-protected activity or that he was retaliated against for such activity. The court also determined that Partin's breach of contract claim failed because the bylaws did not create a contractual relationship between Partin and Baptist, and his resignation was not under duress. Additionally, the court found no evidence to support Partin's claims of tortious interference with contract or defamation.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that Partin did not engage in EMTALA-protected activity and that his belief in reporting a potential EMTALA violation was not objectively reasonable. The court also agreed that the bylaws did not create a contract between Partin and Baptist and that Partin's resignation was voluntary. Furthermore, the court found that Baptist's actions were justified and not malicious, and that the statements made by Eichenberger and Marksbury were protected by qualified privilege and not made in bad faith. View "Partin v Baptist Healthcare System, Inc." on Justia Law

The buyers of a pharmaceutical business appealed the Superior Court’s dismissal of their fraudulent-inducement and indemnification claims against the sellers. The trial court determined that the buyers had waived their fraudulent-inducement claims and that the indemnification claim was time-barred. The court’s waiver determination was based on its interpretation of a letter agreement between the parties, executed after the buyers’ acquisition of the business and following governmental proceedings involving FDA and Department of Justice investigations. The sellers argued that the letter agreement precluded further litigation, including the buyers’ claims. The buyers contended that the letter agreement only limited the size and scope of claims for losses attributable to the governmental proceedings. The Superior Court agreed with the sellers and dismissed the buyers’ fraudulent-inducement claims.The Superior Court found that the buyers’ indemnification claim was untimely because it was filed more than 60 months after the acquisition closed, as required by the Purchase Agreement. The court rejected the buyers’ argument that the survival period was tolled due to the sellers’ fraudulent concealment, reasoning that the buyers were on inquiry notice of the alleged breaches well within the limitations period.The Supreme Court of Delaware reviewed the case and held that the buyers’ interpretation of the letter agreement was reasonable, as was the sellers’ and the trial court’s. The court found the relevant provision of the letter agreement to be ambiguous, making it inappropriate to dismiss the buyers’ fraudulent-inducement claim. The court also concluded that the buyers adequately pleaded that the sellers had fraudulently concealed the facts giving rise to the indemnification claim, potentially tolling the survival period. Consequently, the court reversed the Superior Court’s judgment and remanded the case for further proceedings. View "LGM Holdings, LLC v. Gideon Schurder" on Justia Law

Real Time Medical Systems, LLC provides analytics services to skilled nursing facilities by accessing health records from PointClickCare Technologies, Inc., which operates a system hosting patients’ electronic health records. Real Time uses automated bots to access these records. PointClickCare, citing security and performance concerns, blocked users suspected of using bots. Real Time sued to stop PointClickCare from restricting its access, and the district court granted a preliminary injunction in favor of Real Time.The United States District Court for the District of Maryland granted Real Time a preliminary injunction, finding that PointClickCare’s actions likely constituted information blocking under the 21st Century Cures Act. The court concluded that Real Time was likely to succeed on the merits of its claims for unfair competition and tortious interference with contracts. The court also found that Real Time would suffer irreparable harm without the injunction, that the balance of equities favored Real Time, and that the public interest supported granting the injunction.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court’s decision. The Fourth Circuit agreed that Real Time was likely to succeed on the merits of its unfair competition claim, as PointClickCare’s actions likely violated the Cures Act’s prohibition on information blocking. The court found that PointClickCare failed to demonstrate that any exceptions to the information-blocking provision applied. The court also agreed that Real Time would suffer irreparable harm without the injunction, that the balance of equities favored Real Time, and that the public interest supported the injunction. The court concluded that the district court did not abuse its discretion in granting the preliminary injunction. View "Real Time Medical Systems, Inc. v. PointClickCare Technologies, Inc." on Justia Law

A hospital in Siskiyou County, California, filed a lawsuit against the County of Siskiyou and other defendants, challenging the practice of bringing individuals with psychiatric emergencies to its emergency department under the Lanterman-Petris-Short (LPS) Act. The hospital argued that it was not equipped or licensed to provide the necessary psychiatric care and sought to prevent the county from bringing such patients to its facility unless they had a physical emergency condition. The hospital also sought reimbursement for the costs associated with holding these patients.The Siskiyou County Superior Court denied the hospital's motion for a preliminary injunction, which sought to stop the county from bringing psychiatric patients to its emergency department. The court found that the hospital had not demonstrated a likelihood of success on the merits and that the burden on the county and the potential harm to the patients outweighed the hospital's concerns.The hospital's complaint included several causes of action, including violations of Medicaid laws, disability discrimination laws, mental health parity laws, and section 17000 of the Welfare and Institutions Code. The hospital also alleged breach of an implied-in-fact contract for the costs incurred in providing post-stabilization services to psychiatric patients. The trial court sustained demurrers to the complaint without leave to amend, finding that the hospital failed to identify any clear legal mandate that the county or the Department of Health Care Services had violated.The California Court of Appeal, Third Appellate District, affirmed the trial court's judgment of dismissal. The appellate court concluded that the hospital had not identified any mandatory and ministerial duty that the county or the department had violated, which is necessary to obtain a writ of mandate. The court also found that the hospital's breach of contract claim failed because there were no allegations of mutual consent to an implied contract. Consequently, the hospital's appeal from the denial of its motion for a preliminary injunction was dismissed as moot. View "Siskiyou Hospital v. County of Siskiyou" on Justia Law

A healthcare consulting firm, Core Finance Team Affiliates, LLC (Core), provided data services to three Maine hospitals (the Hospitals) to support their claims for federal reimbursement for Medicare-eligible patients. Core's services included adjustments to the Hospitals' internal data, specifically annual hourly wage data and occupational mix survey (OMS) data. The Maine Hospital Association entered into a contract with Core, which included a contingent fee for OMS services. The Hospitals used Core's data but refused to pay the contingent fee, leading Core to file a complaint for breach of contract and unjust enrichment.The Superior Court (Cumberland County) held a jury trial on the breach of contract claim, resulting in a verdict for the Hospitals, finding they were not contractually obligated to pay the contingent fee for OMS services. Subsequently, the Business and Consumer Docket (Duddy, J.) held a bench trial on the unjust enrichment claim, awarding Core $566,582.25 based on the increased federal reimbursement the Hospitals received due to Core's services. The court ruled that the Hospitals waived the issue of quantum meruit by not pleading it as an affirmative defense.The Maine Supreme Judicial Court reviewed the case and vacated the judgment. The court held that the trial court erred in awarding restitution for unjust enrichment without first addressing the adequacy of a quantum meruit claim. The court emphasized that quantum meruit, a legal remedy, should be considered before unjust enrichment, an equitable remedy. The court also found that the award exceeded the amount Core would have received under the proposed contract and was improperly based on the Hospitals' increased federal reimbursement rather than the market value of Core's services. The case was remanded for entry of judgment in favor of the Hospitals. View "Core Finance Team Affiliates, LLC v. Maine Medical Center" on Justia Law

Dignity Health, operating as French Hospital Medical Center, filed a complaint against orthopedic surgeon Troy I. Mounts, M.D., and his corporation to recover an advance paid under their Physician Recruitment Agreement. Mounts filed a cross-complaint alleging retaliation for his complaints about patient care quality, interference with his economic opportunities, and unlawful business practices. Dignity responded with an anti-SLAPP motion to strike the cross-complaint, which the trial court initially denied. The appellate court reversed this decision and remanded the case for further consideration.Upon remand, the trial court concluded that Mounts had not demonstrated a probability of prevailing on his claims. The court found that Dignity's actions were protected by the litigation privilege, the common interest privilege, and were barred by the statute of limitations. Consequently, the court granted Dignity's motion to strike the cross-complaint and ordered Mounts to pay Dignity's attorney fees and costs.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that all of Mounts' claims were based on conduct protected by the litigation privilege (Civil Code § 47, subd. (b)) and the common interest privilege (Civil Code § 47, subd. (c)). The court also found that Dignity's actions were immune under federal law (42 U.S.C. § 11137) and that some claims were barred by the statute of limitations. The appellate court upheld the trial court's orders granting the motion to strike and awarding attorney fees to Dignity. View "Dignity Health v. Mounts" on Justia Law

Farzam Salami received emergency services at Los Robles Regional Medical Center on three occasions in 2020. He signed a conditions of admission contract agreeing to pay for services rendered, as listed in the hospital's chargemaster. Los Robles billed him for these services, including a significant emergency services fee (EMS fee). Salami paid part of the discounted bill but disputed the EMS fee, claiming it covered general operating costs rather than services actually rendered. He argued that had he known about the EMS fee, he would have sought treatment elsewhere.Salami sued Los Robles in December 2021 for breach of contract and declaratory relief. The trial court sustained Los Robles's demurrer to the first amended complaint (FAC), finding that Salami did not allege he performed his duties under the contract or that Los Robles failed to perform its duties. The court also found that the breach of contract claim could not be cured by amendment. Salami was granted leave to amend to assert claims under the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). In his third amended complaint (TAC), Salami alleged that Los Robles failed to disclose the EMS fee adequately.The Court of Appeal of the State of California, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that Los Robles had no duty to disclose the EMS fee beyond including it in the chargemaster. The court referenced recent cases, including Moran v. Prime Healthcare Management, Inc., which held that hospitals are not required to provide additional signage or warnings about EMS fees. The court concluded that Los Robles complied with its statutory and regulatory obligations, and Salami's claims under the UCL and CLRA failed as a result. The judgment in favor of Los Robles was affirmed. View "Salami v. Los Robles Regional Medical Center" on Justia Law