Court Opinion

ID: 6319429
Source: CourtListenerOpinion
Date Created: 2022-03-02 19:00:35.3772+00
Date Added: 2024-06-11T09:01:38.664034
License: Public Domain

Case: 21-30148     Document: 00516221220          Page: 1     Date Filed: 03/02/2022

              United States Court of Appeals
                   for the Fifth Circuit
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit

                                                                                 FILED
                                                                             March 2, 2022
                                   No. 21-30148                             Lyle W. Cayce
                                                                                 Clerk

   Mark Wightman, Doctor of Dental Surgery; Courtney
   Wightman, Doctor of Dental Surgery; Wightman
   Family Dental, L.L.C.,

                                                            Plaintiffs—Appellants,

                                       versus

   Ameritas Life Insurance Corporation; DenteMax,
   L.L.C.,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                     for the Eastern District of Louisiana
                           USDC No. 2:19-CV-11628

   Before Wiener, Graves, and Ho, Circuit Judges.
   Per Curiam:*
          This is an appeal from a partial final judgment dismissing as untimely
   plaintiffs’ claims arising under Louisiana’s Preferred Provider Organizations
   Act (“PPO Act”), LA R.S. 40:2203.1-2210. The district court deemed such

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-30148        Document: 00516221220              Page: 2      Date Filed: 03/02/2022

                                         No. 21-30148

   claims delictual and thus subject to a one-year prescriptive period. The
   Supreme Court of Louisiana has not addressed this issue. Last year, it
   determined that claims arising under the Balance Billing Act, La. R.S.
   22:1871, are delictual. That act is arguably similar to the PPO Act. See
   DePhillips v. Hosp. Serv. Dist. No. 1 of Tangipahoa Par., 2019-01496 (La.
   7/9/20); 2020 WL 3867212, reh’g denied, 2019-01496 (La. 9/9/20); 2020
   WL 5405925. However, Louisiana’s Third Circuit Court of Appeal more
   recently distinguished DePhillips and affirmed its previous caselaw holding
   PPO Act claims contractual. For the reasons that follow, we conclude that
   the Supreme Court of Louisiana should have the chance to resolve this issue
   in the first instance.
                                               I.
           Plaintiff-appellant Wightman Family Dental, L.L.C., is a Louisiana
   limited liability corporation. Its members, plaintiffs-appellants Mark
   Wightman D.D.S. and Courtney Wightman D.D.S., are also Louisiana
   citizens. Defendant-appellee Ameritas Life Insurance Corp. is a Nebraska
   corporation. Plaintiffs are dentists who own and operate Wightman Family
   Dental in St. Bernard Parish, Louisiana. DenteMax—the other defendant but
   not a party to this appeal—and Ameritas are “group purchasers and
   brokers.” Plaintiffs characterize Ameritas as a “silent PPO,” 1 which
   Ameritas disputes. This lawsuit arises out of a Preferred Provider

           1
             A PPO (Preferred Provider Organization) is a “. . . contractual agreement or
   agreements between a provider or providers and a group purchaser or purchasers to provide
   for alternative rates of payment specified in advance for a defined period of time in which
   the provider agrees to accept these alternative rates of payment offered by the group
   purchasers to their members whenever a member chooses to use its services.” LA. R.S.
   40:2202(5)(a). A “silent PPO” is an editorialized term for undisclosed networks in which
   payers or managed care companies assume a preferential rate, which the network does not
   disclose to providers.

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   Organization Agreement (“PPO Agreement”) dated February 16, 2009, that
   DenteMax executed with Mark Wightman.
           Plaintiffs entered the PPO Agreement to expand their client base via
   access to DenteMax’s network. Under the PPO Agreement, plaintiffs agreed
   to join the DenteMax PPO Network (“DenteMax Network”), discount fees
   for services provided to Participants in the DenteMax PPO Network, and
   allow DenteMax to grant Payors and Participants access to those discounted
   rates. In May 2012 Ameritas leased the DenteMax PPO network (“Network
   Agreement”), which granted Ameritas access to the reduced PPO
   reimbursement rate that plaintiffs had provided to DenteMax. The Network
   Agreement allowed Ameritas to use the DenteMax Network rates to
   reimburse any participating Provider of services rendered to Ameritas’
   insureds. The district court found that plaintiffs received no notice of the
   Network Agreement from DenteMax or Ameritas.
           Later that year, plaintiffs’ patients presented Ameritas’ benefit cards,
   but after plaintiffs performed services and sought reimbursement, they were
   paid a lower rate that they say was neither disclosed nor published on
   patients’ cards. Thus, when Ameritas’ insureds presented their benefit cards
   to plaintiffs, plaintiffs believed they would be reimbursed at their standard
   rate.
           When the plaintiffs learned that they would be reimbursed at a
   reduced rate, they contacted DenteMax and learned of the Network
   Agreement. Plaintiffs then asked to be terminated from the DenteMax
   Network. Plaintiffs later stipulated to Ameritas’ counsel that all relevant
   transactions in which Ameritas paid plaintiffs for dental services using the
   DenteMax Network rates happened before January 1, 2017, and that
   Ameritas last used the DenteMax Network rates to reimburse plaintiffs on
   June 1, 2016.

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           On July 11, 2019, plaintiffs filed their original complaint asserting
   claims against Ameritas and DenteMax for breach of contract and for
   violations of Louisiana’s PPO Act, which requires insurers to notify health
   care providers when reimbursing those providers at a reduced PPO rate.
   Specifically, plaintiffs allege that Ameritas is liable for the exemplary
   damages under La. R.S. 40:2203.1(G) because: (i) plaintiffs had no
   knowledge of the Network Agreement; (ii) plaintiffs expected Ameritas to
   reimburse them at their full standard rate, as Ameritas’ benefit cards did not
   specifically identify Ameritas as being part of the DenteMax Network; and
   (iii) Ameritas improperly underpaid plaintiffs based on the DenteMax
   Network rate.
           Ameritas and DenteMax filed separate motions to dismiss under rule
   12(b)(6), which the district court granted in part and denied in part. Noting
   lack of caselaw on the PPO Act’s applicability to dental services, the district
   court reasoned that La. R.S. 40:2203.1 covers dentists, and thus denied
   Ameritas’ motion to dismiss on that ground. The plaintiffs then filed an
   amended complaint converting this case into a putative class action.
   DenteMax and Ameritas again moved to dismiss, asserting for the first time
   that plaintiffs’ claims were prescribed under Louisiana law. The district court
   converted these motions to motions for summary judgment after DenteMax
   submitted plaintiffs’ stipulation about their termination from the PPO
   Agreement. 2 On October 27, 2020, the district court granted Ameritas’
   motions and dismissed plaintiffs’ claims for violations of La. R.S. 40:2203.1,

           2
              Plaintiffs alleged in their amended complaint that the “actions of Defendants [in
   refusing to pay the un-discounted rate] are an ongoing breach and continued violation of La
   R.S. 40:2203.1.” When DenteMax attached exhibits to its motion to dismiss showing that
   plaintiffs terminated their contract with DenteMax in February 2016, the district court
   notified the parties that it would convert the motions to dismiss into summary judgment
   motions.

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   for unjust enrichment and for injunctive relief. Specifically, the district court
   concluded that the plaintiffs’ chapter 40 claims are prescribed delictual
   claims, and that the plaintiffs could not bring an unjust-enrichment claim
   against Ameritas because, but for prescription, they would have had a chapter
   40 claim against Ameritas. The district court dismissed Ameritas from this
   case on March 11, 2021, and the plaintiffs timely appealed to this court.
                                          II.
          This case involves the application of Louisiana law. To determine
   Louisiana law, we first look to the final decisions of the Supreme Court of
   Louisiana. See In re Katrina Canal Breaches Litig., 495 F.3d 191, 206 (5th Cir.
   2007) (citing Am. Int’l Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d
   254, 260 (5th Cir. 2003)). In the absence of a final decision from the Supreme
   Court of Louisiana, we “must make an Erie guess and determine, in our best
   judgment, how that court would resolve the issue if presented with the same
   case.” Id. When making the Erie guess, we “must employ Louisiana’s
   civilian methodology, whereby we first examine primary sources of law: the
   constitution, codes, and statutes.” Id.
          Louisiana law requires PPOs to inform health care providers, before
   service is rendered, of any PPO agreements that will affect the providers. La.
   R.S. 40:2203.1(A) provides in pertinent part that the notice duties “shall
   apply to all preferred provider organization agreements that are applicable to
   medical services rendered in this state and to group purchasers,” while
   exempting group purchasers that provide health benefits “through [their]
   own network.” If a PPO fails to comply with the notice requirements, the
   provider is not bound by the preferred-provider agreement. La. R.S.
   40:2203.1(D). Additionally, La. R.S. 40:2203.1(G), the damages provision,
   allows a provider to recover from an offending group purchaser “double the
   fair market value of the medical services provided, but in no event less than

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   the greater of fifty dollars per day of noncompliance or two thousand dollars,
   together with attorney fees to be determined by the court.” Crucial to this
   case, the PPO Act does not set out a prescriptive period for bringing an action
   for violation of La. R.S. 40:2203.1’s notice requirements.
          The threshold question in this case concerns the proper prescriptive
   period for PPO Act claims, because Louisiana applies quite different
   prescriptive periods to delictual claims and contractual claims. Assuming
   that the PPO Act applies to dental services, plaintiffs’ PPO Act claims are
   time-barred if those claims are delictual, but not if those claims are
   contractual. We may certify to Supreme Court of Louisiana dispositive
   questions of Louisiana law for which “there are no clear controlling
   precedents in the decisions of the supreme court[.]” Sup. Ct. of La. R.
   XII, § 1. Finding contradictory authority for this question, we certify this
   question to the Supreme Court of Louisiana.
                                         A.
          In Louisiana, the proper prescriptive period to be applied in any action
   depends on the nature of the cause of action. Roger v. Dufrene, 613 So. 2d 947
   (La. 1993). When a statute does not set forth an applicable prescriptive
   period, courts examine the nature of the duty breached to determine whether
   the action is “contractual,” falling within Louisiana Civil Code article 3499
   or “delictual,” falling within Louisiana Civil Code article 3492. DePhillips,
   2020 WL 3867212, at *4. “The classic distinction between damages ex
   contractu and damages ex delicto is that the former flow from the breach of a
   special obligation contractually assumed by the obligor, whereas the latter
   flow from the violation of a general duty owed to all persons.” State ex rel.
   Guilbeau v. BEPCO, L.P., 2020-0429 (La. App. 1 Cir. 9/20/21), -- So. 3d --,
   2021 WL 4260674, at *6 (Guidry, J., writing separately) (citing DePhillips).
   Where a claim arises out of the “breach of duty as imposed by law, the

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   damages arose ex delicto, and [are] extinguished by the prescription of one
   year.” DePhillips, 2020 WL 3867212, at *7 (quotation marks and emphases
   omitted). See La. Civil Code art. 3492 (“Delictual actions are subject to
   a liberative prescription of one year. This prescription commences to run
   from the day injury or damage is sustained.”).
          As noted above, the Supreme Court of Louisiana has yet to resolve
   whether PPO Act claims are delictual or contractual. Louisiana’s Third
   Circuit Court of Appeals addressed this issue a decade ago and labeled such
   claims contractual. See Gunderson v. F.A. Richard & Assocs., 2009-1498 (La.
   App. 3 Cir. 6/30/10), 44 So. 3d 779, 784. The district court, however,
   concluded that the Supreme Court of Louisiana abrogated Gunderson in the
   more recent DePhillips case. In DePhillips, the Louisiana Supreme Court was
   asked to classify claims arising under the Health Care Consumer Billing and
   Disclosure Protection Act, La. R.S. 22:1871, et seq. (“Balance Billing Act” or
   “Act”). That statute prohibits a contracted health care provider from
   collecting more than the contracted reimbursement rate. See LA. R.S.
   22:1874. Providers owe this duty to “an enrollee or insured,” which is
   defined as “a person who is enrolled in or insured by a health insurance issuer
   for health insurance coverage.” LA. R.S. 22:1872(11). The Louisiana
   Supreme Court reasoned that “this is a duty owed by all ‘contracted health
   care providers’ to all ‘enrollees or insureds,” and is not specific to any
   individual. It is a general duty imposed by statute and, thus, does not arise
   from any special obligation owed by [defendant health care provider] to [the
   plaintiff].” DePhillips, 2020 WL 3867212, at *4 (emphases in original). The
   Court thus concluded, albeit over three dissents, that Balance Billing Act
   claims are delictual. The Court cited, by way of contrast, its recent decision
   in Smith v. Citadel Insurance Co., 2019-00052 (La. 10/22/19), 285 So. 3d
   1062, 1067. In Smith, the Court unanimously held that first-party bad-faith
   claims against insurers are contractual, not delictual. The Court reasoned

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   that “[t]he duty of good faith is an outgrowth of the contractual and fiduciary
   relationship between the insured and the insurer, and the duty of good faith
   and fair dealing emanates from the contract between the parties.” Smith, 285
   So. 3d at 1069.
          There are some similarities between the PPO Act and the Balance
   Billing Act. Like the Balance Billing Act, the PPO Act creates notification
   duties on all PPO-type organizations owed to all health care providers,
   without regard to whether there exists a contract between the PPO and the
   provider. Here, for example, there is no contract between plaintiffs and
   Ameritas. However, Louisiana’s Third Circuit Court of Appeals has issued
   a decision affirming its view that PPO Act claims are contractual, DePhillips
   notwithstanding. Williams v. Bestcomp, Inc., 2020-106 (La. App. 3 Cir.
   12/15/21), 2021 WL 5913438. In Williams, the intermediate court likened
   PPO Act claims more to claims for good faith and fair dealing—held
   contractual in Smith—than to claims arising under the Balance Billing Act,
   because PPO Act duties presuppose the existence of a contractual PPO
   agreement. 2021 WL 5913438, at *17. Here, for example, plaintiffs’ claims
   are traceable to Ameritas’ contract with DenteMax, even though plaintiffs
   never contracted directly with Ameritas. The plaintiffs naturally point to
   Williams as evidence that DePhillips has nothing to do with the PPO Act,
   while the defendants distinguish Williams as non-binding in our Erie inquiry.
                                         III.
          The plaintiffs ask that we certify this question to the Supreme Court
   of Louisiana. We may certify to that court dispositive questions of Louisiana
   law for which “there are no clear controlling precedents in the decisions of
   the supreme court[.]” Sup. Ct. of La. R. XII, § 1. We consider several
   factors in deciding whether to certify a question since “[w]e are acutely aware
   that certification is not a panacea for resolution of those complex or difficult

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   state law questions which have not been answered by the highest court of the
   state.” In re Katrina Canal Breaches Litig., 613 F.3d 504, 509 (5th Cir. 2010)
   (citation and internal quotation marks omitted). Those factors are:
          (1) the closeness of the question and the existence of sufficient
          sources of state law; (2) the degree to which considerations of
          comity are relevant in light of the particular issue and case to
          be decided; and (3) practical limitations of the certification
          process: significant delay and possible inability to frame the
          issue so as to produce a helpful response on the part of the state
          court.
   McMillan v. Amazon.com, Inc., 983 F.3d 194, 202 (5th Cir. 2020) (citation
   omitted). Each factor supports certifying the question about the nature of
   PPO Act claims.
          The Williams decision increases the closeness of the questions before
   us. Louisiana certainly has an important interest in classifying PPO Act
   claims, which classification will have significant practical effects on Louisiana
   health care providers’ ability to protect rights conferred by the PPO Act. Cf.
   Katrina Canal Breaches, 613 F.3d at 509 (“[C]ertification may be advisable
   where important state interests are at stake and the state courts have not
   provided clear guidance on how to proceed.” (quotation marks and citation
   omitted)). Moreover, the determinative issue in this case can be concisely
   certified to the Supreme Court of Louisiana. See Silguero v. CSL Plasma, Inc.,
   907 F.3d 323, 332 (5th Cir. 2018), certified question accepted (Oct. 26, 2018),
   certified question answered, 579 S.W.3d 53 (Tex. 2019); Free v. Abbott Labs.,
   Inc., 164 F.3d 270, 274 (5th Cir. 1999) (noting that certification is most
   advisable “where important state interests are at stake and the state courts
   have not provided clear guidance on how to proceed”).

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                                        ***
          We therefore certify the following question to the Supreme Court of
   Louisiana:
          Are claims arising under the Louisiana’s Preferred Provider
          Organization Act, La. R.S. 40:2203.1, delictual or contractual
          for prescriptive purposes.
   Should the Supreme Court of Louisiana accept our request for an answer to
   this question, we disclaim any intention or desire that it confine its reply to
   the precise form or scope of the question certified. Along with our
   certification, we transfer this case’s record and the briefs submitted by the
   parties. We will resolve this case in accordance with any opinion provided on
   this question by the Supreme Court of Louisiana. Accordingly, the Clerk of
   this court is directed to transmit this certification and request to the Supreme
   Court of Louisiana in conformity with the usual practice of this court.

                                                    A True Copy
                                                    Certified Mar 02, 2022

                                                    Clerk, U.S. Court of Appeals, Fifth Circuit

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