Plaintiffs claimed that out-of-network intensive outpatient program services were inappropriately priced by defendants in violation of RICO and ERISA.  Initially, the Court declined to certify the class on adequacy and commonality grounds, while also determining that plaintiffs had failed to demonstrate eligibility for prospective injunctive relief, and therefore rejecting certification under Rule 23(b)(1) and/or 23(b)(2); with respect to damages, the Court was unable to determine, on the record before it at the time, whether plaintiffs satisfied their numerosity or predominance burdens. In so holding, the Court found that “receipt of a balance bill is required for class members to demonstrate an Article III injury,” thereby rejecting “plaintiffs’ argument that injury stems from the underpayment of the disputed claims itself, regardless of balance billing….  In sum, the record before the Court indicates that some, though not most, class members received balance bills.” Therefore, there was not “any way to identify whether plaintiffs have proven numerosity.”

On renewed motion for certification, plaintiffs continued to argue that, for Article III standing purposes, receipt of an inflated balance bill was, in and of itself, an injury-in-fact.  The Court, however, disagreed: “Plaintiffs offer no explanation for what the concrete injury could possibly be as conferred by receipt of balance bill, if not accompanied by payment, and not counting the already excluded underpayment of disputed claims.”  Thus, the Court undertook a review of plaintiffs’ proffered evidence with regard to “those putative class members who have actually paid on balance bills or who plaintiffs show are required to do so.”

As to numerosity, the Plaintiffs “collected balance billing evidence from a limited sample of four providers with a relatively high volume of claims, out of a total of 1,548 providers who treated putative class members and found evidence that at least 37 individuals are known to have made payments in response to those bills…. For twenty-seven of these patients, the evidence comes in the form of a summary table from the provider simply listing the amount paid rather than a picture of the bill. Together with the five named plaintiffs, this brings the total number of class members who have demonstrated payment history to thirty-seven, which plaintiffs argue allows for a reasonable inference that the forty-member threshold can easily be crossed when the total size of the putative class is taken into account.”  After reviewing the record, the Court found that, for class certification purposes, numerosity had been met: “In just a short discovery window, plaintiffs were able to find evidence that thirty-seven putative class members paid on balance bills. Even assuming that defendants are correct some of these reflect charges not relevant to the class definition, plaintiffs’ argument is compelling that it is highly likely when all providers—over 1,500 in total—are considered, at least forty individuals will have paid on relevant charges. Having so found, going bill by bill with an eye towards identifying whether defendants’ raised objections demand each one be removed from the pool of evidence plaintiffs offer would be precisely the sort of ‘free-ranging merits inquiry’ disallowed at this juncture.”

With respect to predominance:

“First, defendants assert that plaintiffs identify no class-wide methodology to prove receipt or payment of balance bills. The arguments as to why this is so lack substance. Though defendants raise some valid questions as to the details of each payment in plaintiffs’ sample of thirty-seven, this is not the same as demonstrating plaintiffs’ offered solution of requesting records from the relevant providers cannot work. Indeed, as plaintiffs note, the process of obtaining the relevant records from the providers is relatively straightforward. This sets this case apart from Olean, as well, to which defendants point, where the question centered around the sufficiency of plaintiffs’ statistical model to identify the fact and amount of injury attributable to the alleged wrongdoing. That is categorically different from this case, where the task is merely to identify class members who paid any amount on a balance bill for a relevant service.

“Second, defendants claim the standard of review issue predominates. The Court finds the existence of only two standards of review does not predominate over the relevant common questions. Though plaintiffs have produced enough class members to satisfy numerosity, discovery revealed that the number of putative class members, and therefore the number of relevant plans, is far lower than earlier thought. The number of plans through which the parties would have to sort is therefore significantly lower than defendants’ motion suggests…. Plaintiffs perhaps exaggerate how binary and rote the sorting task will be. However, the relevant question is not whether the task is completely rote; rather, it is whether this task will predominate over the common questions identified. Because ascertaining the appropriate standard as to each plan is not an overly complicated task, and because ultimately a fact-finder will be tasked with answering at most two questions, the issue does not defeat predominance.”

 

L.D. v. United Behavioral Health, No.20-2254, Rec. Doc. 516 (N.D.Cal. Oct. 3, 2025).