Court Opinion

ID: 6499781
Source: CourtListenerOpinion
Date Created: 2022-07-13 20:00:28.490461+00
Date Added: 2024-06-11T09:15:29.961484
License: Public Domain

UNITED STATES COURT OF APPEALS             FILED
                          FOR THE NINTH CIRCUIT                JUL 13 2022
                                                           MOLLY C. DWYER, CLERK
                                                            U.S. COURT OF APPEALS
KAISER FOUNDATION HEALTH PLAN,            No.   19-17283
INC., a foreign non-profit corporation,
                                          D.C. No.
               Plaintiff-Appellant,       1:19-cv-00301-DKW-WRP
                                          District of Hawaii,
 v.                                       Honolulu

THE QUEEN'S MEDICAL CENTER, INC.,; ORDER
NORTH HAWAII COMMUNITY
HOSPITAL, INC.; MOLOKAI GENERAL
HOSPITAL; DOES, 1-10, inclusive,

               Defendants-Appellees.

KAISER FOUNDATION HEALTH PLAN,            No.   20-15438
INC., a foreign non-profit corporation,
                                          D.C. No.
               Plaintiff-Appellee,        1:19-cv-00301-DKW-WRP
                                          District of Hawaii,
 v.                                       Honolulu

THE QUEEN'S MEDICAL CENTER, INC.,;
NORTH HAWAII COMMUNITY
HOSPITAL, INC.; MOLOKAI GENERAL
HOSPITAL,

               Defendants-Appellants,

and

DOES, 1-10, inclusive,

               Defendant.

Before: O’SCANNLAIN, MILLER, and LEE, Circuit Judges.
      Kaiser’s petition for rehearing is granted. See Dkt. No. 64. The

memorandum disposition filed on February 8, 2022 is withdrawn and is replaced

by a memorandum disposition filed concurrently with this order. No further

petitions for rehearing will be entertained.

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                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUL 13 2022
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

KAISER FOUNDATION HEALTH PLAN,                  No.    19-17283
INC., a foreign non-profit corporation,
                                                D.C. No.
                Plaintiff-Appellant,            1:19-cv-00301-DKW-WRP

 v.
                                                MEMORANDUM*
THE QUEEN'S MEDICAL CENTER, INC.,;
NORTH HAWAII COMMUNITY
HOSPITAL, INC.; MOLOKAI GENERAL
HOSPITAL; DOES, 1-10, inclusive,

                Defendants-Appellees.

KAISER FOUNDATION HEALTH PLAN,                  No.    20-15438
INC., a foreign non-profit corporation,
                                                D.C. No.
                Plaintiff-Appellee,             1:19-cv-00301-DKW-WRP

 v.

THE QUEEN'S MEDICAL CENTER, INC.,;
NORTH HAWAII COMMUNITY
HOSPITAL, INC.; MOLOKAI GENERAL
HOSPITAL,

                Defendants-Appellants,

and

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
DOES, 1-10, inclusive,

                Defendant.

                  Appeal from the United States District Court
                            for the District of Hawaii
                 Derrick Kahala Watson, District Judge, Presiding

                      Argued and Submitted January 21, 2022
                                Honolulu, Hawaii

Before: O’SCANNLAIN, MILLER, and LEE, Circuit Judges.

      The Queen’s Medical Center (QMC) operates hospitals in Hawaii that

provide emergency care; Kaiser Foundation Health Plan is a health maintenance

organization (HMO). In the past, the two had a series of written contracts setting

the price Kaiser would pay QMC for services that QMC rendered to Kaiser

enrollees. But in May 2019, QMC informed Kaiser that it was terminating those

contracts and that in the future it would provide emergency care to Kaiser members

at 100 percent of billed charges and would “balance bill” Kaiser members for any

amounts Kaiser did not pay.

      Kaiser sued QMC in federal district court, seeking declaratory and injunctive

relief. Specifically, it sought a declaration stating that Kaiser was obligated to pay

QMC only the reasonable value of services rendered to Kaiser members under the

principles of quantum meruit, as well as an injunction prohibiting QMC from

demanding more. It also sought a declaration that the Hawaii Health Maintenance

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Organization Act, Haw. Rev. Stat. § 432D-8, prohibits QMC from “balance

billing” Kaiser members, and an injunction prohibiting QMC from seeking

payment from them. The district court dismissed all of Kaiser’s claims without

leave to amend.

      QMC then sought attorney’s fees under Haw. Rev. Stat. § 607-14, but the

district court adopted a magistrate judge’s recommendation that fees be denied.

Kaiser appeals the dismissal of its claims, and QMC cross-appeals the denial of its

motion for attorney’s fees. The district court had jurisdiction under 28 U.S.C.

§ 1332. We have jurisdiction under 28 U.S.C. § 1291, and we vacate in part, affirm

in part, and remand with instructions to dismiss for lack of jurisdiction.

      1.     The district court did not decide whether Kaiser had standing to bring

its claims, but we are obliged to examine standing before addressing the merits.

See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101 (1998). In the rate-

related claims, Kaiser requests a declaration stating that principles of restitution

dictate that it must pay QMC only the reasonable value of services rendered to

Kaiser enrollees. It seeks this declaration to establish the measure of recovery to

which QMC would be entitled in subsequent litigation. But at oral argument, QMC

expressly and unequivocally disclaimed any right to seek such recovery from

Kaiser, stating that it lacks any legal entitlement to be reimbursed by Kaiser for the

cost of emergency services it provides to Kaiser enrollees. This representation to

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the court by QMC constitutes a judicial admission that is “binding in any forum in

which the same controversy arises.” ACLU of Nev. v. Masto, 670 F.3d 1046, 1065

(9th Cir. 2012). In light of that commitment from QMC, Kaiser cannot show a

“substantial likelihood” that a declaration would redress any injury, so it lacks

standing to seek such relief. Mayfield v. United States, 599 F.3d 964, 971–72 (9th

Cir. 2010) (quoting Johnson v. Stuart, 702 F.2d 193, 196 (9th Cir. 1983)). For

similar reasons, Kaiser lacks standing to seek an injunction. Clapper v. Amnesty

Int’l USA, 568 U.S. 398, 410 (2013). We therefore vacate the district court’s

dismissal with prejudice as to these claims and remand with instructions to dismiss

for lack of jurisdiction.

      2.     Kaiser also seeks a declaration and an order preventing QMC from

balance billing its enrollees, but it lacks standing to pursue this relief as well. “At

the pleading stage, the plaintiff must ‘clearly . . . allege facts demonstrating’ each

element” of standing. Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (quoting

Warth v. Seldin, 422 U.S. 490, 518 (1975) (ellipsis in original)). Kaiser has not

sufficiently alleged that it will be injured if QMC bills Kaiser members for

amounts exceeding the rate set under the previous contract, nor has it alleged facts

to support a theory of representational standing. See Smith v. Pacific Props. & Dev.

Corp., 358 F.3d 1097, 1101–02 (9th Cir. 2004) (citing Hunt v. Washington State

Apple Advert. Comm’n, 432 U.S. 333, 343 (1977)). We therefore vacate the district

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court’s dismissal with prejudice as to these claims and remand with instructions to

dismiss for lack of jurisdiction.

      3.     In the cross-appeal, QMC seeks attorney’s fees under Haw. Rev. Stat.

§ 607-14, which provides that the losing party shall pay the prevailing party’s

attorney’s fees “in all actions in the nature of assumpsit.” Because a judgment need

not be on the merits for a prevailing party to recover fees, our resolution of

Kaiser’s claims does not moot the cross-appeal. See Ranger Ins. Co. v. Hinshaw,

79 P.3d 119, 124 (Haw. 2003). Although QMC did not object to the magistrate

judge’s recommendation that it was not entitled to fees, we may review this

challenge because “failure to object to the magistrate’s report, ‘standing alone’

does not constitute [forfeiture].” Robbins v. Carey, 481 F.3d 1143, 1147 (9th Cir.

2007) (quoting Martinez v. Ylst, 951 F.2d 1153, 1156 (9th Cir. 1991)). We review

de novo whether the district court correctly interpreted and applied the relevant

statute granting attorney’s fees. Kona Enters., Inc. v. Estate of Bishop, 229 F.3d

877, 883 (9th Cir. 2000).

      “When the recovery of money damages is not the basis of a claim factually

implicating a contract, the action is not ‘in the nature of assumpsit.’” Leslie v.

Estate of Tavares, 994 P.2d 1047, 1053 (Haw. 2000). Kaiser sought declaratory

and injunctive relief; it did not seek money damages. This action is therefore not in

the nature of assumpsit, and QMC is not entitled to attorney’s fees.

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The parties shall bear their own costs on appeal.

VACATED IN PART and AFFIRMED IN PART; REMANDED.

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