FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T MAY 28, 2009 THOMAS K. KAH

N CL ERK [DO N OT PUBLISH]
IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 0 8- 15 39 5 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNo. 0 3- 21 29 6- CV-FAM M.D. KENNET H A. TH OMAS, etal.,
Pl ai nt iff s, ve rs us BLUE CROSS an d B LUE SHIELD ASSOCIATION, etal., Defen da nt s, BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA, Defen da nt -Ap pe ll ee, JOSEP H G. JEMSEK, M.D., JEM SEK CLINIC, P.A.,
Res po nd en ts -Ap pe ll an ts .__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt fo r th e So uthe rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ _ (Ma y 28 , 20 09 ) Befo re TJ OFLAT, CARNES andPRYOR, Ci rcu itJu dg es . PER CURI AM: Doc to r Jo se ph G. Jem se k a ndhi s cl in ic ap pe al th e d is tri ctco urt’s o rd er pe rm an en tl y

en joi ni ng sev enof h is co un te rcl ai m s ag ai ns t Bl ue Cro ss Blu e Sh ie ld of Nort h C aro li na . The d is tri ctco urt fo un d t ha t a r ecen t cl as s ac ti on set tl em en t ag reem en t an d i ts jud gm en t en te redinLov e, etal. v . Blu e Cro ss Blu e Sh ie ld Ass ’n, et al ., No. 03 -2 12 96 -CV (S.D. Fl a. Apr . 19 , 20 08 ), effe ct iv el y rel eas edDr. Je m se k’s cl ai m s. We affirm . I. The Lov e cas e was a na ti on wid e cl as s ac ti on fil edinth e Uni te d S ta te s Dis tri ctCo urt fo r th e So ut he rnDis tri ctof F lo rid a in 20 03 . Hun dr ed s o f th ou sa nd s of do ct or s al le ge d t ha t Bl ue Cro ss he al th in su ran ce co m pa ni es us in g “ fee f

or se rv ic e” arran ge m en ts ha d p ro m is edto rei m bu rs e th em

for servi ces pro vi de d t o pa ti en ts in su redby Blu e Cro ss so lo ng as t he servi ces were co ve redan d m ed ic al ly
ne ces sa ry . Howev er, Bl ue Cro ss in st eadde ci de d t o: 2co ve rtl y de ny[] pa ym en ts to ph y si ci an s b as edon fin an ci al ly exp ed ie ntco st an d a ctua ria l cr it eri a rat he r th anm ed ic al ne ces si ty, pr oc es s[ ] ph y si ci an s’ bi ll s u si ng au to m at edpro gr am s wh ic h m an ip ul at e st an da rdco di ng pra ct ic es to art ifi ci al ly redu ce the am ou ntph y si ci an s ar e p ai d, an d . . . syste m at ic al ly de la y [] paym en ts to ga in ex te nd edus e o f th e p hysic ia ns ’ fu nd s. (Lov e Co m

pl ai nt , D.E. 13 85 at 4 ). In s ho rt, t he Lov e act io n a ll eg edth atBlu e Cro ss ch eat eddo ct or s b y de vi si ng way s t o d el ay , di m in is h, an d d en y pro pe rly reque st edpa ym en ts ba se d o n t he ir c os t i ns te adof m ed ic al ne ces si ty. In 2 00 7 B lu e Cro ss ag reedto set tl e th e cas e fo r $1 30 ,00 0,0 00 an d a n a gr eem en t t o c ha ng e m an y of it s b us in es s p ract ic es . Mos t n ot ab ly, Bl ue Cro ss ag reedto us e m ed ic al st an da rd s an d s ci en ti fic ev id en ce i n m ak in g i ts “ m ed ic al ne ces si ty” de te rm in at io ns . The s et tl em en t ag reem en t al so in cl ud eda rel eas e d es ig ne d t o pr ev en t d oc to rs who were m em be rs of t he pl ai nt iff

cla ss fro m

purs ui ng furth er cl ai m s b as edon th e sa m e act io ns by Blu e Cro ss . Not ic es of the pre li m in ary Lov e se tt le m en t wer e m ai le d t o Dr. J em se k a nd th e Je m se k c li ni c in Ju ly 200 7. A su m m ary no ti ce was als o p ub li sh edinUSA Tod ay , th e Wall St reetJo urna l, the Jo urna l o f th e Am eri can Med ic al Ass oc ia ti on , an d t he Am eri canMed ic al News. Nei th er Dr. J em se k n orth e Je m se k c li ni c o pt ed
ou t o f th e p la in ti ff cl as s. Acco rd in gl y , th ey were b ou ndby the set tl em en t ag reem en t wh enth e d is tri ctco urt i ss ue d i ts fin al ap pr ov al inApri l 2 00 8. Th e

3di st ric t co urt’s o rd er en joi ne d J em se k fr om

bri ng in g, ag ai ns t an y

Blu e Cro ss de fen da nt , cla im s t ha t: [A]re, were, orco ul d h av e b een ass ert edag ai ns t an y of t he Rel eas edPart ie s by reaso n o f, ari si ng ou t o f, orinan y way rel at edto th e fac ts , act s, ev en ts , tra ns act io ns , occ urren ces , cou rs es of c on du ct , bu si ne ss pra ct ic es , rep res en ta ti on s, o m is si on s, ci rcu m st an ces , or o th er m at te rs refe ren cedinth e [Lov e] Actio n, o r ad dr es se d i n t he Set tl em en t Ag reem en t, wh ethe r an y su ch Cl ai m was o r co ul d h av e b een ass ert edby any Rel eas in g P arty

on it s o wn be ha lf o r on be ha lf o f ot he r Pers on s . . . . This in cl ud es , witho utli m it at io n an d a s t o R el eas edPart ie s o nl y , any asp ectof a ny fee fo r se rv ic e cl ai m subm it te d b y

any Cla ss Mem

be r. (D.E. 12 86 , at 8 –9 ). Mea nwh il e, a s ep arat e la wsu itwas u nd erway in No rth Caro li nabe twee n Je m se k, h is cli ni c, an d B lu e Cro ss . Dr. Jem se k a ndBlu e Cro ss ha d e nt eredin to a pr ov id er ag reem en t i n 2 00 0. Dr. J em se k t he n d ev el op eda pr act ic e th atsp eci al iz ed in th e tr eatm en t o f Lym e d is eas e. In20 05 , ho wev er, the Nort h C aro li naMed ic al Bo ardbe ga n i nv es ti ga ti ng Dr. Jem se k o n s us pi ci on th athe was o ve r-d ia gn os in g Lym e d is eas e an d i napp ro pr ia te ly treat in g h is pa ti en ts forit . Blu e Cro ss th en no ti fie d Dr. J em se k t ha t i t wo ul d n o l on ge r rei m bu rs e h im for hi s Lym e d is eas e tre atm en ts , whi ch in cl ud edex pe ns iv e lo ng -te rm in tra ve no us an ti bi ot ic s. Eve ntua ll y

Blu e Cro ss dro pp edDr. Jem se k a s a p ro vi de r an d t he m ed ic al bo ard
res tri ct edhi s m ed ic al li cen se foron e y ear.

4Bl ue Cro ss th ensu edDr. Jem se k a ndhi s cl in ic forfrau d a ndbre ach of

co nt ractba se d o n J em se k’s b il li ng Blu e Cro ss forhi s adve ntur es om e Lym e di se as e tr eat m en ts . Blu e Cro ss so ug ht$1 5,0 00 ,00 0 i n d am ag es — the to ta l am ou nt itpa idJemsek

be twee n 2 00 0 a nd20 05 forLym e d is eas e tr eat m en ts . Jem se k
res po nd edto Blu e Cro ss ’ co m pl ai ntby fili ng forba nkrupt cy for bo thhi m se lf a nd hi s cl in ic inth e Uni te d S ta te s B an krup tc y Co urt fo r th e Weste rnDis tri ctof No rth Caro li na . Onc e Bl ue Cro ss ’ cas e was rem ov edto th e NorthCaro li naba nkrupt cy co urt in 20 07 , Jem se k fi le d n in e co m pu ls ory co un te rcl ai m s ag ai ns t Bl ue Cro ss . They were fo r br each of c on tra ct , bre ach of t he im pl ie d c ov en an t o f go odfai th an d fa ir de al in g, qua ntum

m eru it , un fai r an d d ecep ti ve tra de pra ct ic es , frau du le nt
m is rep res en ta ti on , neg li ge ntmis rep res en ta ti on , def am at io n, an d t orti ou s in te rfer en ce wi th a bu si ne ss rel at io ns hi p. Inres po ns e to Jemsek ’s cou nt ercl ai m s, Bl ue Cro ss m ov edth e Fl or id a di st ric t co urt t o e nf

or ce i ts fin al ap pr ov al ord er i n t he Lov e se tt le m en t an d e njo in Je m se k’s co un te rcl ai m s. Th e d is tri ctco urt re ferr edth e m at te r to a m ag is tra te jud ge . The m ag is tra te jud ge fou ndth atsev enof J em se k’s co un te rcl ai m s (a ll bu t th e d efam at io n a ndto rti ou s i nt erfe ren ce wi th a bu si ne ss rel at io ns hi p) aro se fro m th e sa m e fac tu al pre di cat e as Lov e an d t hu s wer e wit hi n t he sco pe of t he 5se tt le m en t an d s ho ul d b e en joi ne d. In Sep te m

be r 20 08 th e d is tri ctco urt ad op te d th e rec omm en da ti on s o f th e m ag is tra te jud ge an d e njo in edsev enof J em se k’s
co un te rcl ai m s. Th is is Jemsek ’s app eal
. II .

“ Inrev ie win g t he di st ric t co urt's de ci si on to gra ntanin jun ct io n . . . we ap pl y anab us e-o f-d is cret io n s ta nd ard .” Adams v. S. Farm Bu reauLife I ns . Co., 49 3 F .3d12 76 , 12 85 (11 th Cir . 20 07 ) (quo ti ng Klay v. Uni te d Hea lt hg ro up , Inc ., 37 6 F .3d10 92 , 10 96 (11 th Cir . 20 04 ). W e rev ie w th e d is tri ctco urt’s p ur el y leg al de te rm in at io ns de no vo . Adam s, 4 93 F.3dat 1 28 5. A. The fir stis su e is whet he r th e Lov e se tt le m en t p recl ud es Dr. Jem se k’s cl ai m s ag ai ns t Bl ue Cro ss . In Ad am s we s ta te d t ha t cl ai m pre cl us io n app li es to cla ss act io ns jus t the same as to ot he r types of l aws ui ts . 49 3 F .3dat 1 28 9 (quo ti ng Twig g v . Sears & Ro eb uc k C o., 1 53 F.3d12 22 , 12 26 (11 th Cir . 19 98 ). “ Inord er fo r cl ai m pre cl us io n t o app ly, fo urele m en ts are re qu ire d: (1) a fi na l ju dg m en t o n th e m eri ts ; (2 ) ren de redby a cou rt o f co m pe te ntjuri sd ic ti on ; (3 ) id en ti ty of th e pa rti es ; (4 ) id en ti ty of th e cau se s o f act io n.” Adam s, 4 93 F.3dat 1 28 9. Inth is cas e, as inAdam s, the fir stth ree e le m en ts are n otdi sp ut ed . Id. Itis cl ear t ha t the Lov e act io n re ach eda fi na l ju dg m en t o n t he m eri ts , th atth e Uni te d 6St at es Dis tri ctCo urt fo r th e So ut he rnDis tri ctof F lo rid a h adjuri sd ic ti on , andth at

Je m se k, h is cli ni c, an d B lu e Cro ss were al l p art ie s i n t he Lov e act io n. Th eref or e, ou r on ly que st io n i s wh ethe r “ th e cau se of a ct io n” all eg edby Jem se k i s t he same as th e cau se of a ct io n t ha t was set tl edinth e ear li er Lo ve cla ss act io n. Se e Ada m s, 49 3 F .3dat 1 28 9. Je m se k a ss ert s t ha t Bl ue Cro ss m us t s ho w an “ id en ti cal factua l p red ic at e”
un de rlyin g b ot h t he Lov e act io n a ndJemsek ’s cou nt ercl ai m s i n o rd er fo r cl ai m pr ecl us io n t o app ly. See M at su sh it a Ele c. In du s. Co . v. Eps te in , 51 6 U.S. 3 67 , 37 6– 77 (19 96 ) (“ Inord er t o a ch ie ve a co m pr eh en si ve set tl em en t tha t wo ul d pr ev en t re li ti ga ti on of s ettl edqu es ti on s atth e co re o f a cl as s ac ti on , a co urt m ay pe rm itth e rel eas e o f a cl ai m ba se d o n t he id en ti cal factua l p red ic at e as th at
un de rlyin g t he cla im s i n t he set tl edcla ss act io n.” ). As J em se k c on ced es , an

“ id en ti cal factua l p red ic at e” re qu ire s o nl y a co m m on nu cl eu s o f op erat iv e fac t. Ada m s, 4 93 F.3dat 1 28 9 (“ Cl ai m pre cl us io n app li es no t o nl y to th e p reci se leg al th eo ry pre se nt edinth e p rev io us li ti ga ti on , bu t t o a ll leg al th eo rie s an d c la im s ari si ng ou t o f th e sa m e o pe rat iv e nuc le us of f act .”) (ci ta ti on an d quo ta ti on m ark s om it te d) . In d et erm in in g wh ethe r cl ai m s s ha re the “ sa m e o pe rat iv e nuc le us of fact ,” we co ns id er wh ethe r th e “pr im ary rig htan d duty are the same.” Id. at12 89 (quo ti ng Man ni ng v. Ci ty of Aub urn, 9 53 F.2d13 55 , 13 58 (11 th Cir . 19 92 )). 7Je m se k’s co un te rcl ai m s i n t he ba nkrupt cy cas e sh are the “ sa m e o pe rat iv e nu cl eu s o f fac t” co ve redby the Lov e se tt le m en t. Ona br oa d s cal e, th e Lov e act io n a ll eg eda na ti on wid e co ns pi racy by Blu e Cro ss li cen se es to di m in is h, d el ay , an d d en y pro pe r cl ai m s fo r m ed ic al ly neces sary pro cedur es . The thrus t o f th e Lov e act io n was th atBlu e Cro ss in te nt io na ll y cam e up wi th va rio us way s, es pe ci al ly usi ng co m

pu te r syste m s, t o d efrauddo ct or s b y refu si ng to pa y

for tre atm en ts th atpro ve d t oo co st ly, reg ard le ss of t he ir m ed ic al ne ces si ty. The

“pr im ary rig htan d duty ” in vo lv edwas B lu e Cro ss ’ co nt ractua l dut y to pa y it s do ct or s fo r m ed ic al ly neces sa ry care gi ve n t o i ts cli en ts , andth e d oc to rs ’
co nt ractua l ri gh t t o re cei ve th atm on ey . See Ad am s, 4 93 F.3dat 1 28 9. Je m se k’s i nd iv idua l cl ai m s ar e b as edon th e sa m e fac ts . Jem se k’s s ev en co un te rcl ai m s ar e fu nd am en ta ll y ba se d o n h is all eg at io n t ha t Bl ue Cro ss bre ach ed it s co nt ractwith h im . Thatco nt ractrequi redBlu e Cro ss to rei m bu rs e Je m se k fo r co ve redservi ces th atwere m ed ic al ly neces sa ry . Jem se k’s cl ai m is th atBlu e Cro ss fai le d t o p ay

hi m “ba se d o n ade si re t o l im itit s co st s.” He a ss ert s tha t Bl ue Cro ss de ni edhi s p aym en t an d e ve ntua ll y term in at edhi s co nt ract“ no t b as edup on
m ed ic al ev id en ce” b utin st eadinord er t o a vo idco st ly buteffe ct iv e tr eat m en ts . (R.E. 13 06 , Exh . 3, at27 –2 9) . Jem se k’s s ev enen joi ne d c la im s i nc lu de d t wo br each of c on tra ctcla im s, qua ntum m eru it(as ki ng forth e p aym en t h e n ev er 8rece iv ed ), frau du le ntan d n eg li ge ntm is rep res en ta ti on(ba se d o n h is rel ia nc e o n t he

ex pe ct edpa ym en ts fro m

Blu e Cro ss ), un fai r an d d ecep ti ve tra de pra ct ic es , and br each of t he im

pl ie d c ov en an t o f go odfai th an d fa ir d eal in g (b as edon th e b reac h of co nt ractan d o n i ts su dd enterm in at io n)
. Je m se k m ak es sev eral att em pt s t o d is ti ng ui sh th e fac tu al pre di cat e o f hi s cl ai m s fr om

th os e in th e Lov e act io n. Fi rs t, h e arg ue s tha t, u nl ik e in th e Lov e act io n, Bl ue Cro ss ch eat edhi m pe rs on al ly andin te nt io na ll y an d t ha t h is cla im s d o no t al le ge a co ns pi racy. Yet J em se k e ve n p le ad edth atBlu e Cro ss “ an d i ts affi li at es ” to oksi m il ar p os it io ns an d c utoff pa y m en t fo r th e tr eat m en t o f Lym e di se as e in ot he r st at es . Mor eo ve r, whi le Jemsekbe li ev es th athe ha s a c la im ag ai ns t o nl y

on e Bl ue Cro ss li cen se e whi ch he all eg es ha s s in gl edhi m ou t fo r
m is tre atm en t, i t s tand s t o re as on th atm any do ct or s fe ltth e sa m e way be fo re le arn in g o f th e Lov e cl as s ac ti on . ThatJemsek ’s cla im s ar e in hi s m in d u ni qu e to hi m se lf a ndto on e st at e’s Bl ue Cro ss li cen se e is no t i nc on si st en t wi th th e Lov e act io n’s cl ai m s o n b eh al f of th ou sa nd s o f do ct or s ag ai ns t Bl ue Cro ss li cen se es
na ti on wid e.

Seco nd , Jem se k a rg ue s t ha t the Lov e act io n c on cern edsu rrep ti ti ou s ac ti on to di m in is h t he am ou ntof p aym en ts owedto do ct or s, wh il e h is ownall eg at io ns 9in vo lv e up- fro ntrefu sa ls to pa y fortre atm en t atall an d t he ev en tu al can cel la ti on of hi s p ro vi de r st atus . Jem se k a ls o a rg ue s t ha t the Lov e act io n p rimaril y ad dr es se s frau d und ert ak enth ro ug h c om pu te r bi ll in g s y st em s, a fa ctth atis ab se ntfro m hi s own cla im s. Howev er, the “pr im ary rig htan d dut y ” in vo lv edan d v io la te d i s the same. Ada m s, 4 93 F.3dat 1 28 9. Bl ue Cro ss ha d adu ty to p ay form ed ic al ly neces sa ry tre atm en ts an d J em se k, l ik e th e o th er d oc to rs , hadth e ri gh t t o c ol le ctth os e pa ym en ts . The Lo ve act io n’s fa ctua l p red ic at e b ro ad ly enco m pa ss es th e fac ts
un de rlyin g B lu e Cro ss ’ syste m ic effo rts to de frau d d oc to rs by deny in g, di m in is hi ng , or d el ay in g p aym en ts on th e b as is of c os t i ns te adof m ed ic al
ne ces si ty. Altho ug h o nl y on e p artof B lu e Cro ss ’ co ns pi racy inv ol ve d i ts
co m pu te r syste m , th atsame cos t-c ut ti ng un de rta ki ng lo gi cal ly enco m pa ss es st op pi ng all pa ym en ts forexpe ns iv e Lym e d is eas e tr eat m en ts ev enth ou gh no ne w
m ed ic al ev id en ce ab ou t Lym e d is eas e h adco m e to li gh t. See , e.g., Ad am s, 4 93 F.3 d a t 1 29 0 (“ The Adam s C la ss Acti on . . . al le ge d a n o ve rarc hi ng sch em e o f frau d andde cep ti on by Sou th ernFarm inco nn ect io n wi th th e sa le of t he se fle xi bl e pr em iu m types of p ol ic ie s, a b ro adnu cl eu s o f fac t tha t wo ul d e nc om pa ss th e fraud cl ai m s n ow b ei ng all eg edby the ap pe ll an ts .”); In re Pru de nt ia l In s. Am eri ca Sa le s Prac ti ce Li ti g., 1 48 F.3d28 3, 3 11 (3dCir . 19 98 ) (“ The nam edpl ai nt iff s . . . all 10ha ve cla im s ar is in g fr om th e fraudul en t s ch em e p erp etrat edby Prud en ti al . That
ov erar ch in g s ch em e is th e li nc hp in of [ th e co m pl ai nt ], reg ard le ss whet he r eac h cl as s m em

be r al le ge s a c hu rn in g c la im , a va ni sh in g p rem iu m cla im , an i nv es tm en t pl ancla im , or s om e o th er i nju ry .”). Mo reo ve r, th e n ot ic e o f se tt le m en t tha t was sen t t o J em se k s ta te d t ha t the Lov e act io n i nv ol ve d a ll eg at io ns th atBlu e Cro ss was l iabl e fo r, am on g o th er th in gs , “ Fai li ng to pa y

for‘ m ed ic al ly neces sa ry ’ se rv ic es inacco rdwith m em be r pl ando cu m en ts . . . [an d] Co nc eal in g a nd/o r m is rep res en ti ng th e u se of i m pr op er gu id el in es an d c rit eri a to de ny, del ay , and/o r reduc e p aym en t fo r m ed ic al ly
ne ces sa ry co ve redservi ces . . . .” (D.E. 13 85 , at 2 ). Tho se all eg at io ns , of wh ic h Je m se k h adco ns tru ct iv e kno wled ge , sh ou ldha ve ale rte d h im to th e fac t tha t the Lov e act io n s ub st an ti al ly ove rlapp edwith h is bankrupt cy co un te rcl ai m s. 1 W e h ol d t ha t Dr. J em se k’s co un te rcl ai m s an d t he Lov e act io n, b ot h o f whi chari se ou t o f Bl ue Cro ss ’ co nn iv in g t o d en y , di m in is h, o r de la y pa ym en t fo r
That languag e in the notice of settlement destroy s J emsek’s a rgument that the notice of 1 settlement in the L ove ac tion violated his due proce ss rig hts. W e have stated that to satisfy due proce ss, a notice of

settlement in a cla ss action must inform the plaintiffs " whether claims like theirs wer e litigated in the ea rlier a ction." A dams, 493 F.3d at 1285–86 (alterations omi tted). The c lass' claims " must be adequately described and the notice must also contain information rea sonably

nece ssary

to make a de cision to remain a c lass member a nd be bound by

the final judgme nt." I d. (citingIn re N issan Motor Corp. Antitrust L itig., 552 F .2d 1088, 1104–05 (5th Cir. 1977). After

revie w of the f

ull notice of settlement, we are satisfied that it is clear enough to satisfy due proc ess. 11co ve redservi ces ba se d o n c os t i ns te adof m ed ic al ne ces si ty, sh are the same

op erat iv e nuc le us of f

act . See Ad am s, 4 93 F.3dat 1 28 9– 91 . The n ot ic e o f
se tt le m en t s en t t o J em se k fu rth er p ro vi de d h im with fa ir n ot ic e th atcla im s b as ed
on th e sa m e th eo ry

an d fa ctua l p red ic at e as hi s h adbe enli ti ga te d a ndwere b ei ng pe rm an en tl y

set tl ed . Accor di ng ly, th e d is tri ctco urt d idno t err in fin di ng th at Je m se k’s co un te rcl ai m s wer e rel eas edby the set tl em en t ag reem en t af te r he fai le d to op t o ut . B. Dr. Jem se k n ex t co nt en ds th atun de r Kla y v. Hu m an a, In c., 38 2 F .3d12 41 (1 1t h C ir. 2 00 4) , th e Lov e act io n c ou ldno t h av e certi fie d J em se k’s cl ai m s fo r cl as s t reatm en t, an d t hu s ca nn otpre cl ud e th ei r se parat e p ur su it . In Kl ay we al lo wedcla ss cert ifi cat io n fo r frau d- ba se d R ICO cl ai m s ag ai ns t h eal th in su ran ce co m pa ni es , bu t re fu se d t o a ccep t the cert ifi cat io n o f br each of c on tra ctact io ns br ou gh t ag ai ns t the co m

pa ni es . 38 2 F .3dat 1 26 0, 1 26 7. We hel d t ha t al th ou gh th e in su ran ce co m

pa ni es th atwithh el d p aym en ts all eg ed ly didso un de r m any si m il ar co nt ract s an d a cco rd in g t o age ne ral sch em e, th e co m m onfact s wer e “ dwa rfedby th e in di vi du al iz edis su es of f actto be res ol ve d.” Id. at12 64 . In s ho rt, the va rio us
m ean s t ha t the co m

pa ni es all eg ed ly use d t o b reac h t he do ct or s’ con tra ct s wer e to o di ffer en t, an d b as edon to o m an y di ffer en t m ed ic al -p ract ic e-s pe ci fic pro cedur es , 12fo r cl as s ce rti fic at io n t o b e ap pr op ria te . Id. at12 63 –6 7. J em se k a rg ue s t ha t Kl ay

is th e rea so n t ha t h is ba nkrupt cy co un te rcl ai m s wer e n ev er ex pl ic it ly certi fie d fo r in cl us io n i n t he Lov e act io n, an d t ha t b ecau se th ey were ex cl ud edLov e sh ou ldno t pr ecl ud e th em . Bu t “ ev enwhen th e co urt d oe s n otha ve po wer t o a dju di cat e a cl ai m , itm ay st il l ap pr ov e rel eas e o f th atcla im as aco nd it io n o f se tt le m en t o f anact io n b efo re it .” Inre Co rru ga te d C on ta in er An ti tru stLit ig ., 64 3 F .2d19 5, 2 21 (5t h C ir. Ap r. 19 81 ) (al te rat io ns an d quo ta ti onm ark s o m it te d) ; see als o M at su sh it a Ele c. In du s. 2 Co . v. Eps te in , 51 6 U.S. 3 67 , 37 6– 77 (19 96 ). Giv ena br oa d e no ug h s et tl em en t ag reem en t—whi chitcle arl y was— an d p ro vi de d t ha t J em se k h adno ti ce o f itan d
anop po rtu ni ty to o ptou t, i t i s p erfe ct ly accep tabl e fo r th e Lov e act io n t o p recl ud e hi s cl ai m s, ev enif t he y

co ul d n otha ve be enpa rt o f th atact io n i ts el f. See Mat su sh it a, 51 6 U.S. at37 6– 77 (“ [A] cou rt m ay pe rm itth e rel eas e o f a cl ai m ba se d o n t he id en ti cal factua l p red ic at e as th atun de rlyin g t he cla im s i n t he set tl ed cl as s ac ti on ev enth ou gh th e cl ai m was n otpre se nt edan d m ig htno t h av e b een pr es en tabl e inth e cl as s ac ti on .”) (quo ti ng TBK Partne rs , Ltd . v. West ernUni on Co rp ., 67 5 F .2d45 6, 4 60 (2dCir . 19 82 )).
See B onner v. City

of Prichar d, 661 F.2d 1206, 1209 ( 11th Cir. 1981) (en ba nc) 2 (adoptingas bindingprec edent a ll decisions of the for mer F ifth Circuit handed down prior to October 1, 1981). 13C.

Nex t, Dr. J em se k c on te nd s t ha t the di st ric t co urt’s i nju nc ti onag ai ns t h is
co un te rcl ai m s s ho ul d n otbe en fo rcedbe cau se itvi ol at edth e au to m at ic st ay inhi s ba nkrupt cy

cas e. Je m se k a rg ue s t ha t wh enhe fil edforbankrupt cy inNort h Caro li nain20 06 , hi s b an krup tc y est at e, in cl ud in g h is co un te rcl ai m s ag ai ns t Bl ue Cro ss , were cemente d i nt o the ba nkrupt cy cas e b y th e au to m at ic st ay

is su edun de r 11 U.S.C. § 3 62 . There fo re, h e arg ue s, i n t he su m m er o f 20 07 whenth e Fl or id a di st ric t co urt o rd eredth atth e n ot ic e o f se tt le m en t b e se ntto Jemsek , itha d n o po wer o ve r hi s co un te rcl ai m s. Acco rd in g t o J em se k, the Flo rid a d is tri ctco urt
co ul d n otfor ce h im

to ch oo se whet he r to op t o utof t he Lov e act io n b ecau se fo rci ng hi m

to m ak e th atch oi ce i m

pr op erl y ex erci se d c on tro l o ve r hi s b an krup tc y es ta te . Und er 1 1 U.S.C. § 36 2( a), fi li ng forba nkrupt cy as J em se k d idop erat es as a st ay ag ai ns t: [T]he co m

m en cem en t o r co nt in ua ti on . . . of
. . . [an ] act io n o r pr oc eed in g ag ai ns t the de bt or

th atwas o r co ul d h av e b een co m m en cedbe fo re the co m m en cem en t o f th e cas e u nd er thi s t it le , or t o re co ve r a cl ai m ag ai ns t the de bt or th ataro se be fo re the co m m en cem en t o f th e cas e u nd er thi s t it le
. . . [o r] (3) an y

actto ob ta in po ss es si on of p ro pe rty of the est at e o r of pro pe rty fro m th e es ta te or t o e xe rci se co nt ro l o ve r pr op erty of t he est at e.

1411 U.S.C. § 3 62 (a)( 1– 3) . Und er the pl ai n l an gu ag e o f th e st atut e, Je m se k’s

co un te rcl ai m s ag ai ns t Bl ue Cro ss are n ot“ ag ai ns t the de bt or ,” an d t hu s wer e n ot
subjec t t o the au to m at ic st ay . See Cro sb y v. Mo nr oe Co un ty, 39 4 F .3d13 28 , 13 31 n.2 (11 th Cir . 20 04 ) (“ The au to m at ic st ay pro vi si on of t he Ban krup tc y Co de , 11 U.S.C. § 3 62 , do es no t ex te ndto laws ui ts in it ia te d b y th e d eb to r.”); Sei ko Eps on Co rp . v. Nu -Ko te Int ern at io na l, In c., 19 0 F .3d13 60 , 13 64 (Fed . Cir . 19 99 ) (“ The
ru le [§ 3 62 (a)] . . . pe rm it s cl ai m s b y th e d eb to r an d c ou nt ercl ai m s t o p ro ceed .”); Mar it im e Ele c. Co ., Inc . v. Un it edJer se y Ban k, 9 59 F.2d11 94 , 12 05 (3dCir
. 19 91 ) (“ Thu s, wi th in on e cas e, act io ns ag ai ns t a d eb to r wil l b e su sp en de d e ve n th ou gh clo se ly relat edcla im s as se rte d b y th e d eb to r m ay

co nt in ue . Ju di ci al pr oc eed in gs res ti ng on co un te rcl ai m s an d t hi rd -p arty cla im s as se rte d b y

a de fen da nt -d eb to r are no t s ta y ed . . .”). Theref or e, th e b an krup tc y

st ay crea te d b y

§ 36 2 d idno t “ cem en t” Jemsek ’s cla im s i nt o h is sea le d e st at e an d t he reb y sh ie ld th em fro m th e Fl or id a d is tri ctco urt’s o rd er i n t he Lov e act io n. J em se k’s
co un te rcl ai m s wer e n otst ay ed , so th ere i s n o re as on why th e jud gm en t i n t he Lov e act io n c ou ldno t fo recl os e th em . See Ma rti n- Trig on a v . Cha m pi on Fed . Sav . and Loa n As s’n, 8 92 F.2d57 5, 5 77 (7t h C ir. 1 98 9) (st at in g t ha t § 36 2( a) h as “ no po li cy of p rev en ti ng pe rs on s wh om th e b an krup t h as su edfro m pro te ct in g t he ir le ga l ri gh ts .”). 15Nordi d the Flo rid a d is tri ctco urt i m pr op erl y “ ex erci se co nt ro l o ve r pr op erty of th e es ta te ” u nd er § 36 2( a)(3 ) by requ iri ng Jemsekto ch oo se whet he r to op t o ut of th e Lov e act io n. Gi ve n t ha t h is co un te rcl ai m s, tho ug h t he y m ay be “pr op erty

of th e es ta te ,” were n otst ay edby the auto m at ic ba nkrupt cy st ay , th ey

were o pe n t o po ss ib le de featby Blu e Cro ss ’ de fen se s. Itwou ldno t m ak e se ns e und er a p la in read in g o f th e st atut e to tre atrai si ng a de fen se ag ai ns t a n on -s tay edco un te rcl ai m as an“ ex erci se of c on tro l o ve r pr op erty .” See M art in -Tri go na , 89 2 F .2dat 5 77 (“ True , th e b an krup t's cau se of a ct io n i s an ass etof t he est at e; bu t as th e d efen da nt in th e b an krup t's su itis no t, b y op po si ng th atsu it , see ki ng to tak e p os se ss io n o f it , [§ 36 2](a)( 3) is no m or e ap pl ic ab le th an(a)(1 ) is .”). Giv enth atBlu e Cro ss was fr ee t o d efen d a ga in stJemsek ’s cou nt ercl ai m s, th ere i s n o re as on to ba r th e Fl or id a d is tri ctco urt fr om si m pl y ask in g J em se k t o
m ak e h is own ele ct io n abo utth os e co un te rcl ai m s. See In r e San tang el o, 3 25 B.R. 87 4 (B an kr . M.D. Fla. 2 00 5) . In Sa nt an ge lo , as i n thi s ca se , deb to rs ina ba nkrupt cy

pro ceed in g fa il edto op t o utof acla ss act io n a ndwou ndup bo un d b y th e cl as s s et tl em en t o rd er. W e ag ree wi thth e b an kr up tc y co urt’s re as on in g i n San tang el o: Wha t the Dis tri ctCo urt d iddo was g iv e p ro sp ect iv e cl as s m em be rs , in cl ud in g t he de bt or s, a c ho ic e; th ey co ul d re m ai n m em

be rs of t he cla ss an d be bo un d b y

th e se tt le m en t o r, in st ead , op t o utof t he cla ss an d s ep arat el y

16pu rs ue th ei r cl ai m s. Th e Dis tri ctCo urt d idno t re qu ire th e d eb to rs to joi n i n

th e cl as s ac ti on . Rath er, the Dis tri ctCo urt en te redanord er p ro vi di ng th at cl as s m em

be rs wou ldbe bo un d b y

th e se tt le m en t i f th ey

di d n otti m el y

op t ou t o f th e cl as s.

. . . . Deb to rs ho ld in g c la im s as pl ai nt iff s, l ik e th e d eb to rs he re, m us t p la y by the sa m e ru le s o f pr oc edur e as an y ot he r pl ai nt iff

. Debt or s wi th cla im s i nv ol ve d in a cl as s ac ti on su itm

us t d eci de whet he r to rem ai n i n acla ss or o ptou t. The co urt ad m in is te rin g acla ss act io n s ui t d oe s n otvi ol at e th e au to m at ic st ay or e xe rci se an y

co nt ro l o ve r th e cl ai m

by requ iri ng de bt or s t o m ak e th is el ect io n. No r is th e st ay

vi ol at edbe cau se th e d eb to rs are n ow b ou ndby the ap pr ov edset tl em en t. Ag ai n, n o c ou rt a ndno party forc edth is res ul t o n t he de bt or s o r ot he rwis e ex erci se d c on tro l o ve r th ei r pr op erty . San tang el o, 3 25 B.R. at88 1. In sh ort, the di st ric t co urt d idno t i m pe rm is si bl y ex erci se co nt ro l o ve r Je m se k’s co un te rcl ai m s s im pl y by ask in g h im

whet he r he de si redto op t o utof the Lov e act io n. Th eref or e Je m se k re m ai ns bo un d b y hi s de ci si on no t t o o ptou t an d b y th e jud gm en t en te redinth e Lov e act io n.

D. Fin al ly, Dr. Jem se k c on te nd s t ha t i t was in equi tabl e to en joi n h is
co un te rcl ai m s. He as se rts th atitwas u nf ai r fo r Bl ue Cro ss to waitun ti l the Lov e act io n h adreac he d afin al , bi nd in g s et tl em en t b efo re i t ra is edth e p os si bi li ty tha t th e Lov e se tt le m en t co ul d a ffec t the ba nkrupt cy su itinNort h C aro li na . The di st ric t co urt ad op te d t he m ag is tra te jud ge ’s fin di ng th atBlu e Cro ss ’ at te m ptto fo recl os e Je m se k’s co un te rcl ai m s was no t i ne qu it ab le , andin st eadth atall owi ng Je m se k t o p ur su e a d oubl e rec ov ery by bei ng a m em be r of th e Lov e cl as s an d a ls o 17ret ai ni ng hi s co un te rcl ai m s wo ul d b e u nf ai r. W e rev ie w th e d is tri ctco urt’s reject io n o f Je m se k’s equi tabl e d efen se foranab us e o f di sc ret io n. Se e San de rs v. Doo ly Cou nt y , 24 5 F .3d12 89 , 12 91 (11 th Cir . 20 01 ). Je m se k m ak es two equi tabl e arg um en ts : fi rs t, tha t l ach es bars Blu e Cro ss fro m rai si ng th e Lov e se tt le m en t; an d s eco nd , th atbe cau se hi s co un te rcl ai m s i n th e b an krup tc y

act io n wer e co m

pu ls ory an d t rig ge redby Blu e Cro ss ’ or ig in al la wsu itag ai ns t h im , itis un fai r to all ow Bl ue Cro ss to in te nt io na ll y eli ci t, an d t he n de st ro y , hi s cl ai m s. Nei th er o f th es e arg um en ts is co nv in ci ng . Fi rs t, J em se k ra is es hi s l ach es arg um en t fo r th e fi rs t t im e o n app eal
.

“ Arg um en ts rai se d fo r th e fi rs t t im e o n app eal are n otpro pe rly befo re thi s C ou rt.” Hur le y v. Mo or e, 23 3 F .3d12 95 , 12 97 (11 th Cir . 20 00 ); s ee al so Blu e Cro ss Blu e Sh ie ldof Al ab am a v . W ei tz , 91 3 F .2d15 44 , 15 49 (11 th Cir . 19 90 ) (rejec ti ng an equi tabl e aff

irmativ e d efen se as u nt im el y an d wai ve d wh enrai se d fo r th e fi rs t t im e on ap pe al ). W e rejectJemsek ’s lac he s d efen se be cau se he fai le d t o ra is e itbe lo w. Seco nd , we fai l t o s ee wh y th e co m pu ls ory na tu re o f Je m se k’s
co un te rcl ai m s m ak es itin equi tabl e fo r Bl ue Cro ss to de fen d a ga in stth em . If Je m se k wi sh edto pre se rv e h is co un te rcl ai m s, h e co ul d h av e d on e so qu it e eas il y by op ti ng ou t o f th e Lov e act io n. As th e m ag is tra te jud ge ob se rv ed , th e in equi tabl e res ul t wo ul d b e al lo win g J em se k t o p ur su e rec ov ery in bo th th e Lov e 18act io n andhi s b an krup tc y co un te rcl ai m s. Th e d is tri ctco urt d idno t ab us e it s di sc ret io n i n d en y in g J em se k’s equi tabl e d efen se ag ai ns t the in jun ct io n. AFFIRMED.

19