Opinion ID: 1790322
Heading Depth: 1
Heading Rank: 3

Heading: other grounds in petition for the writ of mandamus

Text: Having determined that the trial court improperly designated a class, improperly certified this action as a class action, and improperly entered summary judgment, we must determine whether the Circuit Court of Coffee County, Elba Division, should be directed to dismiss the case for failure to exhaust administrative remedies or whether it should be directed to conduct further proceedings. The action in the trial court is a declaratory judgment action against Blue Cross. Blue Cross is a domestic corporation that was doing business by agent in Coffee County at the time the cause of action arose. In accordance with Ala.Code 1975, § 6-3-7 (a domestic corporation may be sued in any county in which it does business by agent or was doing business by agent at the time the cause of action arose), Blue Cross could be sued in Coffee County. As we understand the plaintiffs' action, it is based upon an allegation that Blue Cross's contingency reserve is in excess of an amount adequate for Blue Cross to meet the liability assumed under health care service plans and all expenses in connection therewith and is in excess of an amount adequate for the safeness and soundness of Blue Cross, taking into account past and prospective loss experience; and upon the allegation, therefore, that the plaintiffs, as subscribers to health care service plans of Blue Cross, paid rates, charges, fees, and/or dues that were unreasonably high or excessive and therefore violated Ala. Code 1975, § 10-4-109. The plaintiffs seek a declaration that they (and, presumably, the class that they may ultimately be designated to represent) have paid unreasonably high or excessive rates, charges, fees, and dues, and seek a refund of any amount that may ultimately be determined to be excessive. This may be done by a declaratory judgment action filed in the Circuit Court of Coffee County. It is true that the Legislature has created a Department of Insurance (Ala.Code 1975, § 27-2-1) and has provided for a commissioner of insurance, who shall be selected with special reference to his training and experience and who shall be appointed by the Governor (Ala.Code 1975, § 27-2-2). The commissioner of insurance has the powers and duties provided by Ala.Code 1975, § 27-2-7, and such additional powers and duties as may be provided by other laws of this state. Ala.Code 1975, § 27-2-7(9). In addition to the powers and duties listed in the Alabama Insurance Code (Title 27), the Commissioner has duties and powers prescribed in Ala.Code 1975, Article 6, Chapter 4, of Title 10, especially those powers and duties specified in §§ 10-4-106, -109, -110, -111, -112, -113, and -114. Included within those powers and duties are the power and duty to approve rates, charges, fees, and dues that are consistent with, and to disapprove rates, charges, fees, and dues that are not consistent with, the requirement that rates, charges, fees and dues to be paid by the public for benefits under [health care service plans] and for contracts or certificates covering same shall not be unreasonably high or excessive, shall be adequate to meet the liability assumed under such contracts and all expenses in connection therewith, shall be adequate for the safeness and soundness of the corporation and shall take into account past and prospective loss experience. § 10-4-109. Blue Cross argues that the Circuit Court of Coffee County, Elba Division, has no jurisdiction to try this cause until the plaintiffs have exhausted their administrative remedies. Blue Cross argues that the procedure for conducting an administrative proceeding based on claims such as the plaintiffs make has been provided for in Departmental Regulation No. 65 promulgated by the Commissioner, because that regulation provides not only for hearings under the Alabama Insurance Code, [3] but also for any hearing held by the Commissioner under his discretionary power to hold hearings, which Blue Cross says would be broad enough to cover hearings under § 10-4-109. Plaintiffs contend that Regulation No. 65 is not applicable because of the provisions of § 10-4-115 ([n]o statute ... applying to insurance companies shall be applicable to [health care service corporations] ... or to any contract made by such corporation[s] unless expressly mentioned in this article and made applicable). Plaintiffs further contend that the Commissioner has set the rates, charges, fees, and dues that Blue Cross can charge by approving the contingency reserve plan and that Blue Cross is collecting rates, charges, fees, and dues in excess of what has been approved by the Commissioner. We need not decide whether Departmental Regulation No. 65 is applicable in determining or challenging the rates, charges, fees, or dues to be charged or that were charged by health care maintenance corporations incorporated and operating under the provisions of Ala.Code 1975, Article 6, Chapter 4, Title 10. The Commissioner can promulgate reasonable rules and regulations (§§ 27-2-17(a) and 27-2-7(9)) to assure that rates, charges, fees, and dues to be paid or that are being paid by the public for benefits under health care service plans and contracts or certificates covering the same are not unreasonably high or excessive but are adequate to meet the liability assumed under such contracts and all expenses in connection therewith and adequate for the safeness and soundness of the health care service corporation incorporated and operating under Ala.Code 1975, Article 6, Chapter 4, Title 10. However, this action is not a rate case. In this action, plaintiffs contend that the Commissioner has acted in setting the appropriate rates, by approving the contingency reserve plan, and that Blue Cross has charged rates in excess of the amount that has been approved by the Commissioner in the contingency reserve plan. Plaintiffs also seek a refund for the amount determined to have been an excessive charge by Blue Cross. The plaintiffs' claims can be presented in a declaratory judgment action filed in any county in which the health care service corporation does business by agent or was doing business by agent when the action was filed, without first having an administrative hearing before the Commissioner under the Alabama Administrative Procedure Act, because the Commissioner would not have the power to grant all of the relief sought. With this case in its present posture, we cannot hold that the trial court abused its discretion in failing to remove this action in accordance with Ala.Code 1975, § 6-3-21.1 (Change or transfer of venue for convenience of parties and witnesses or in interest of justice). The trial court may now determine whether the plaintiffs, or any of them, who have not been dismissed may sue as representative parties. They may do so only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, ... and (4) the [plaintiffs] will fairly and adequately protect the interests of the class. Rule 23(a). In this case, the plaintiffs bear the burden of alleging and proving that these requirements are met. If the plaintiffs may sue as a class, the class must be identified with particularity, in accordance with the allegations of the complaint and proof of the four prerequisites to class certification in Rule 23(a). If the prerequisites of Rule 23(a), A.R. Civ.P., are satisfied, the trial court may allow this action to proceed as a class action if there is proof of any one of the four conditions specified in Rule 23(b). 1900470 WRIT GRANTED. The trial court is directed to set aside its order designating a class and certifying this as a class action and to set aside its partial summary judgment for the plaintiffs on the issue of liability. All other relief sought by the petitioner is denied. 190471 APPEAL DISMISSED. HORNSBY, C.J., and MADDOX, SHORES, ADAMS, STEAGALL, KENNEDY and INGRAM, JJ., concur.