Wightman v. Ameritas Life Ins ( 2022 )

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opinion should not be published and is not precedent except under the limited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.
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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.
2
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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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