Hamilton v Raleigh General Hospital LLC, 2017 WL 833050 (S.D.W.V. March 2, 2017).

In this action, a District Court in West Virginia granted the plaintiff’s motion to remand, reasoning that a complaint should be read as a whole to determine membership of a putative class for the purpose of determining whether the amount in controversy exceeds the CAFA minimum.

The plaintiff brought a putative class action in the Circuit Court of Raleigh County alleging that the defendants overcharged her and other similarly situated patients for copies of medical records in violation of West Virginia law. The plaintiff was a patient at Raleigh General Hospital, LLC (“Raleigh General”), a defendant in the suit. She alleged she was charged excessive fees for her medical records in violation of West Virginia Code § 16-29-1.  The plaintiff asserted that defendants Medi-Copy Services, Inc. (“Medi-Copy”) and CIOX Health, LLC (“CIOX”) “fulfilled all or a substantial portion of the medical records requests that were processed for the Raleigh General facility located in Beckley, West Virginia.”

CIOX removed the action to federal court pursuant to CAFA. The plaintiff filed a motion to remand, which the District Court granted.

CIOX claimed it had serviced approximately 80,000 requests for records made to health care providers in West Virginia by patients or their attorneys during the relevant time period, which resulted in invoices totaling more than $7,000,000 and payments in excess of $5,500,000. Statutory penalties for the charges associated with those records could total at least $64 million. CIOX used the above numbers to support its contention that the amount in controversy was well in excess of the CAFA minimum of $5,000,000.

The plaintiff argued that CIOX’s numbers could not properly support CAFA jurisdiction, because CIOX’s calculations accounted for medical records requested by all West Virginia patients, rather than just Raleigh General patients and because it lumped together both lawful and unlawful charges, where only unlawful charges should have been used.[1] CIOX countered that all West Virginia patients should be included in the putative class based on the broad language used to describe the class in the plaintiff’s amended class action complaint.

While the District Court conceded that the plaintiff’s class definition was broad, it found that when read as a whole, the complaint “clearly limit[ed] its allegations to Raleigh General patients.”

Because the removing party bears the burden of proof, and CIOX did not present any numbers reflecting invoices and payments for medical records requested from Raleigh General patients only, the Court found CIOX failed to “meet its burden of producing evidence sufficient to establish, by a preponderance of the evidence, that the amount in controversy exceeds $5,000,000.”

[1] The plaintiff also alleged three other bases for remand, but because the Court held the amount in controversy was not satisfied, it did not address her other arguments.


Posted by Amanda Laviage.