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Class Action Defense Cases–ChartOne v. Raglon: Arkansas Supreme Court Affirms Class Action Certification Of Lawsuit Alleging Fees Charged For Medical Records Exceeded Amounts Allowable By Statute

Class Action Complaint Challenging as Excessive Fees Charged for Medical Records Properly Certified as Class Action because Defense Challenges to Class Action Treatment Went to Issues of Damages or to the Merits, Neither of Which Defeat Class Action Certification Arkansas Supreme Court Holds

Plaintiff filed a putative class action in Arkansas state court against ChartOne, “a health-information management company that provides copying services of medical records for doctors, hospitals, and other medical-care providers throughout Arkansas,” alleging that the fees it charged for copying medical records exceeded the amount allowed by statute. The class action complaint also alleged that ChartOne charged shipping and postage fees that either were not incurred or were reimbursed by the healthcare provider. ChartOne, Inc. v. Raglon, ___S.W.3d ___ (Ark. April 24, 2008) [Slip Opn., at 1-2]. Plaintiff moved the trial court to certify the litigation as a class action; defense attorneys argued that class action treatment was not appropriate because the proposed definition of the class “was ambiguous and provided no objective criteria by which to ascertain the members of the class,” and because plaintiff failed to satisfy the statutory requirements for class action certification. Id., at 2. A representative of ChartOne testified at the class certification hearing that it was not possible to tell from company records whether a particular individual was charged a notary fee, id., at 2-3. Ultimately, the trial court granted plaintiff’s motion and certified a class action covering those “who requested a copy of medical records from a healthcare provider located in Arkansas and who paid ChartOne (1) base fees, clerical fees, retrieval fees and/or page fees as part of a charge for copying medical records, which resulted in charges being in excess of $5 for the first five pages and 25¢ for each page thereafter; and/or (2) shipping charges.” Id., at 3. The Arkansas Supreme Court affirmed.

The Supreme Court addressed first defense objections to the definition of the class. Defense attorneys argued that membership in the class could not be determined in any “reasonable or feasible manner” because “there is no way of ascertaining the per-page charges without reviewing the actual requests for records that are stored with the patients’ medical files” and that a manual, file-by-file review of more than 120,000 files would be required. ChartOne, at 5. Plaintiff responded that membership in the class was readily determinable from ChartOne’s billing records, and that the objective raised by the defense went to damages rather than whether class action treatment was appropriate, id. The Arkansas Supreme Court agreed that class actions must provide a “precise definition” of the putative class, and explained that such a definition ensures that only “those people who are actually harmed by the defendant’s wrongful conduct will participate in the relief ultimately awarded.” Id., at 6. Nonetheless, it agreed that defendant’s objections went to damages, not the definition of the class itself. Id., at 6-7. In particular, the Court was unimpressed by the argument that ChartOne’s “failure to maintain accurate records” could serve to defeat class certification. Id., at 9.

The Supreme Court also rejected a defense challenge based on whether, as a matter of law, ChartOne was statutorily prohibited from charging a postage fee. ChartOne, at 9. This argument goes to the merits only, which is improper for consideration at the class action certification stage, id., at 11. The Court also easily rejected defense challenges to the predominance, superiority and typicality requirements for class action certification. With respect to predominance, the individual issues identified by defense attorneys went to damages, not commonality in proof as to liability, see id., at 11-13. Put simply, the Supreme Court held that the trial court did not abuse its discretion in concluding that “issue of whether the prices charged by ChartOne exceeded those allowed [by statute] was the single most common issue that predominated over all others.” Id., at 13. As for superiority, the Supreme Court agreed with the lower court that resolving the overarching legal issues in a single action was superior to requiring thousands of individual actions on the matter, and that the class action litigation would be manageable, id., at 14-15. Finally, the mere fact that each class member’s damage claim may differ from one to another, and therefore differ from the proposed class representative, does not defeat class certification: a class representative’s claim is not “atypical” simply because the amount of damage she or he has suffered is not identical to the damage suffered by each member of the class. Id., at 16-17.

Accordingly, the Arkansas Supreme Court affirmed the trial court order granting class action status to litigation against ChartOne. ChartOne, at 17.

Download PDF file of ChartOne v. Raglon