Employers Insurance Company of Wasau v. First State Orthopaedics, P.A. ( 2024 )

IN THE SUPREME COURT OF THE STATE OF DELAWARE
EMPLOYERS INSURANCE §
COMPANY OF WASAU; § No. 27, 2023D
HELMSMAN MANAGEMENT §
SERVICES, LLC; LIBERTY § Court Below: Superior Court
INSURANCE CORPORATION; § of the State of Delaware
LIBERTY MUTUAL FIRE §
INSURANCE COMPANY; LM § C.A. No. S19C-01-051 (S)
INSURANCE CORPORATION; §
THE FIRST LIBERTY §
INSURANCE CORPORATION; §
and WASAU UNDERWRITERS §
INSURANCE COMPANY, §
§
Defendants Below, §
Appellants/Cross-Appellees, §
§
v. §
§
FIRST STATE ORTHOPAEDICS, §
P.A., on behalf of itself and all others §
similarly situated, §
§
Plaintiff Below, §
Appellee/Cross-Appellant. §
Submitted: October 18, 2023
Decided: January 8, 2024
Before VALIHURA, TRAYNOR, LEGROW, GRIFFITHS, Justices; and
DANBERG, Chief Judge,1 constituting the Court en Banc.
Upon appeal from the Superior Court of the State of Delaware. REVERSED.
1
Chief Judge Danberg is sitting by designation under Del. Const. art. IV, § 12 and Supreme Court
Rules 2(a) and 4(a), to complete the quorum.
Kevin J. Connors, Esquire, MARSHALL DENNEHEY WARNER COLEMAN &
GOGGIN, Wilmington, Delaware; Andrew Hatchett, Esquire (argued), Tiffany
Powers, Esquire, ALSTON & BIRD LLP, Atlanta, Georgia, for Defendants Below,
Appellants/Cross-Appellees Employers Insurance Company of Wausau, et al.
John S. Spadaro, Esquire (argued), JOHN SHEEHAN SPADARO, LLC,
Wilmington, Delaware; Jonathan L. Parshall, Esquire, Lauren A. Cirrinicione,
Esquire, MURPHY & LANDON, Wilmington, Delaware, for Plaintiff Below,
Appellee/Cross-Appellant First State Orthopaedics.
LEGROW, Justice:
Each side in this declaratory judgment action appeals aspects of the Superior
Court’s decision awarding summary judgment to the appellee. Despite the numerous
issues the parties raised, resolution of this appeal turns on the appellee’s standing to
file this action. The appellee’s complaint sought a declaration that a billing code
utilized by the appellant to deny insurance coverage to the appellee’s patients
violated Delaware’s workers’ compensation law. The appellant, however,
implemented a new billing system six months before the appellee filed this action,
and none of the codes that the appellant uses in its new system contains the
challenged language in the old code.
The Superior Court held that the appellant’s pre-suit voluntary discontinuation
of the code did not divest the appellee of standing because (i) the appellant never
conceded that the challenged code violated Delaware law, and the appellant
therefore might resume using the code in the future; and (ii) the appellant had not
“corrected” its response to 19 invoices for which it denied coverage using the
challenged code.
We conclude that the appellee lacked standing to bring the case. In concluding
otherwise, the Superior Court applied mootness principles. Although both doctrines
assess a controversy’s justiciability, mootness and standing involve distinct
inquiries. Under the mootness doctrine, a party’s voluntary cessation of challenged
conduct after litigation commences ordinarily does not moot an otherwise live
controversy. But a defendant’s voluntary cessation of conduct before litigation
begins generally renders a controversy non-justiciable for lack of standing. In this
case, the appellant stopped using the challenged code six months before the appellee
filed its complaint. Accordingly, the appellee’s request for a declaration regarding
the code’s compliance with Delaware’s workers’ compensation law did not seek to
redress an actual or imminent injury. And the appellant’s alleged failure to correct
its responses to 19 invoices could not confer standing because the prospective relief
that a declaratory judgment affords would not redress the injury caused by the
statements already issued to the appellee’s patients.
We therefore reverse the Superior Court’s opinion granting summary
judgment to the appellee.
I. FACTUAL AND PROCEDURAL BACKGROUND
The factual background relevant to this appeal is undisputed and relatively
uncomplicated.
A. Factual Background
Appellee, First State Orthopaedics, P.A. (“FSO”), is a Delaware orthopaedic
practice.2 Appellants Employers Insurance Company of Wausau Liberty Insurance
Corporation, Liberty Mutual Fire Insurance Company, LM Insurance Corporation,
The First Liberty Insurance Corporation, and Wausau Underwriters Insurance
2
App. to Opening Br. at A366 (Amend. Compl.).
2
Company are insurance companies operating under the Liberty Mutual Group.3
These insurers underwrite workers’ compensation insurance in Delaware.4
Appellant Helmsman Management Services, LLC (“Helmsman”) is a wholly-owned
subsidiary of Liberty Mutual Holding Company, Inc., providing third-party claims
administration services to Liberty Mutual’s Group members, including the other
Appellants.5 Collectively, Appellants are referred to as “Liberty.”
In 2017 and 2018, Liberty routinely issued Explanation of Benefits forms to
FSO using “Code x553.” Those forms purported to deny coverage of workers’
compensation bills for procedures that FSO performed.6 The Explanation of
Benefits generated by Code x553 stated:
THIS SERVICE NOT AUTHORIZED BY CASE MANAGER.
PLEASE CONTACT THE CASE MANAGER FOR FURTHER
INFORMATION.7
FSO argues that this denial contravenes certain sections of the Delaware
Workers’ Compensation Code because the response fails to provide a meaningful
explanation for the reason for the denial.8 FSO relies on three sections of Title 19 to
support its position. First, 19 Del. C. § 2362(b) mandates that
3
Id. at A368.
4
Id.
5
Id. at A368–69.
6
Id. at A370.
7
Id.
8
Id. at A369–70.
3
[a]ll medical expenses shall be paid within 30 days after bills and
documentation for said expenses are received by the employer or its
insurance carrier for payment, unless the carrier or self-insured
employer notifies claimant or the claimant’s attorney in writing that
said expenses are contested or that further verification is required.9
And 19 Del. C. § 2322F(h) provides that “[a]n employer or insurance carrier
shall be required to pay a health care invoice within 30 days of receipt of the invoice
as long as the claim contains substantially all the required data elements necessary
to adjudicate the invoice, unless the invoice is contested in good faith.”10 FSO argues
that these two sections require an insurance carrier, or its third-party claims
administration service, to promptly pay or contest claims.11
The centerpiece to FSO’s claim in its Complaint is a third section of the
workers’ compensation statute: 19 Del. C. § 2322F(e).12 Section 2322F(e) specifies
that “[d]enial of payment for health care services provided pursuant to this chapter,
whether in whole or in part, shall be accompanied with written explanation of reason
for denial.”13 FSO contends that this section requires an insurer who denies coverage
to set forth its reasons for doing so.14
9
19 Del. C. § 2362(b).
10
19 Del. C. § 2322F(h).
11
App. to Opening Br. at A370 (Amend. Compl.).
12
Id.
13
19 Del. C. § 2322F(e).
14
App. to Opening Br. at A371 (Amend. Compl.).
4
According to FSO, although Code x553 purports to deny coverage because
the “service [is] not authorized by the case manager,” the explanation lacks any
discernible meaning and prevents the claimant or provider—in this case FSO—from
contesting the denial.15 FSO’s claim below turned on whether Section 2322F(e)
requires an insurer to provide a “meaningful” explanation when it denies coverage
and, in turn, whether Code x553 provides such an explanation.
B. Procedural Background
FSO filed its original complaint (the “Complaint”) containing the above
allegations on February 1, 2019.16 Six months earlier, however, in August 2018,
Liberty began using new bill review software for reasons unrelated to this
litigation.17 Unlike Liberty’s previous software, the new software did not contain
any coverage denials with the same language as Code x553.18 After the software
migration was completed in 2018, Liberty no longer issued coverage denials using
the language in Code x553.19
In addition to setting forth the reasons why Code x553 allegedly violates the
workers’ compensation statute, the Complaint sought relief on behalf of FSO
15
Id.
16
Id. at A33 (Compl.); id. at A1–2 (Superior Court Docket).
17
Id. at A765 (Third Affidavit of Jannie Miller); App. to Answering Br. at B46 (Miller Dep.).
18
App. to Opening Br. at A765 (Third Affidavit of Jannie Miller); App. to Answering Br. at B46,
B49 (Miller Dep.).
19
App. to Opening Br. at A765 (Third Affidavit of Jannie Miller).
5
individually and as assignee of certain patients who had received coverage denials
using Code x553 language.20 During the litigation, FSO identified 19 uncorrected
responses to patient invoices for which it sought relief.21
FSO also sought class certification so that it could represent the interests of
any Delaware patient or entity that received a coverage denial containing Code x553
language.22
The Complaint sought only one form of relief: a declaratory judgment. Count
I asked the Superior Court to enter a declaratory judgment as to “the parties’ rights,
duties, statutes or other legal relations,”23 stating:
28. Contrary to the defendants’ contentions, the [challenged
Explanation of Benefits] do[oes] meet the requirements of 19 Del. C.
§§ 2362(b), 2322F(e), and 2322F(h). This is because, though the
[challenged Explanation of Benefits] purport[s] on their face to deny
coverage for the health care invoice(s) in question, they do not set
forth any reason for the carrier or TPA’s denial of coverage.
20
Id. at A36 (Compl.). As best we can discern from the record, there are 19 uncorrected patient
invoices that FSO contends gave it standing to file the Complaint. First State Orthopaedics, P.A.
v. Emp.’s Ins. Co. of Wausau, 2022 WL 18228287, at *4 (Del. Super. Dec. 29, 2022) (“Plaintiff
responds that it is not only challenging the general language of Code x553 but also 19 discrete
invoices sent within the three-year period before the complaint was filed.”). But FSO’s attempt to
include these invoices in the record is of limited value. Attached to its brief in opposition to
Liberty’s Motion for Summary Judgment are numerous invoices containing Code x553. See App.
to Opening Br. at A903–25, A937–40 (Exs. B, E & F to FSO’s Brief in Opposition to Liberty’s
Motion for Summary Judgment). These poorly scanned invoices barely are legible, and the Court
hardly can decipher when Liberty issued the coverage denials or which Explanation of Benefits
codes it used.
21
First State Orthopaedics, P.A., 2022 WL 18228287, at *6 (“Nor have Defendants provided me
with the corrected explanations, or corrected the incorrect denials that it sent to patients over the
years, including the 19 patients as to which Plaintiff claims to be an assignee.”).
22
App. to Opening Br. at A41–42 (Compl).
23
Id. at A47. FSO also sought attorneys’ fees and costs.
6
29. The defendants’ use of the [challenged Explanation of
Benefits] is in violation of 19 Del. C. §§ 2362(b), 2322F(e), and
2322F(h), and therefore contrary to law.24
Liberty moved to dismiss FSO’s Complaint in September 201925 but did not
initially challenge FSO’s standing.26 Liberty first raised standing in a letter to the
court filed after briefing on its motion was complete.27 In its letter, Liberty argued
that FSO lacked standing because Liberty “voluntarily terminated the allegedly
deficient explanation before FSO filed its Complaint and for reasons independent of
this litigation.”28
On May 12, 2020, the Superior Court denied Liberty’s motion to dismiss.
Although Liberty raised its standing argument belatedly, the court nevertheless
addressed the issue.29 The court held that FSO had standing despite Liberty having
abandoned Code x553 during the software migration because Liberty’s defense of
the code during the litigation left “the specter of its use in the future.”30 As to the
24
Id. at A46.
25
Id. at A61–66 (Liberty’s Motion to Dismiss).
26
Id. at A191–93 (Liberty’s Reply Brief in Support of Motion to Dismiss).
27
Id. at A248 (Liberty’s Post-Hearing Letter).
28
Id.
29
First State Orthopaedics, P.A. v. Emp.’s Ins. Co. of Wausau, 2020 WL 2458255, at *3 (Del.
Super. May 12, 2020).
30
First State Orthopaedics, P.A., 2020 WL 2458255, at *3. The court also indicated that, “[i]f the
defendants were serious about ending the practice, they could reach an agreement with [FSO] to
do so. They have not and as a result I believe there remains a controversy to be litigated.” During
the proceedings however, Liberty offered on several occasions to enter into a stipulation
7
merits of FSO’s claim, the court held that under Section 2322F(e), a coverage denial
must be meaningful and that, at that stage in the litigation, the court could not
conclude that Code x553 met that requirement.31
On November 6, 2020, FSO filed its Amended Complaint, adding a new
subclass for class certification, expanding the declaratory relief sought, and adding
a new purported injury:
28. Contrary to the defendants’ contentions, the [challenged
Explanation of Benefits] do not meet the requirements of 19 Del. C.
§§ 2362(b), 2322F(e), and 2322F(h). This is because, though the
[challenged Explanation of Benefits] purport on their face to deny
coverage for the health care invoice(s) in question, they do not set
forth any reason for the carrier or TPA’s denial of coverage.
preventing it from ever using again Code x553 or the language contained therein. Id.; see App. to
Opening Br. at A352 (Hearing on Motion for Reargument) (The Court: “I will turn to the defense.
Is there any hope to have the two parties or the two lawyers -- the two groups of lawyers in this
case put their heads together to reach some sort of stipulated resolution?” Liberty’s Counsel:
“Certainly. I think we would agree that we -- we weren’t using the code when we started, that we
would never use the code again in the future. If the Court enters an order that we are not allowed
to use this code in the future, I don’t know why that applies to us as a company, a group of
defendants.”); id. at A996 (Liberty’s Opposition to FSO’s Motion for Class Certification)
(“Moreover, Defendants have offered to stipulate to a consent judgment with FSO that precludes
Defendants from ever using the challenged denial code again in the future, and FSO’s corporate
designee testified that the proposed consent judgment would provide all the relief that FSO seeks
in this litigation”); id. at A1183 (Hearing on Summary Judgment) (Liberty’s Counsel: “So then
the other thing is, well, what about going forward? And again, because of the discontinued pre-
suit, we don’t think you need a consent judgment, we don’t think there was standing to begin with.
It was discontinued pre-suit. But we are willing to, because we have no interest in using this code
again; we are willing to stipulate that we have discontinued the code and that we are no longer
interested in using it again in the future.” The Court: “Well, when you say no longer interested,
you would no longer use it in the future?” Counsel: “Yes. Which means stipulate to a binding
judgment from the Court saying you are not allowed to use it. And we, of course, would be legally
required to follow Your Honor’s order.”).
31
First State Orthopaedics, P.A, 2020 WL 2458255, at *3.
8
29. The defendants’ use of the [challenged Explanation of
Benefits] is in violation of 19 Del. C. §§ 2362(b), 2322F(e), and
2322F(h), and therefore contrary to law. In addition, the defendants
have not undertaken to provide class members with a revised or
corrected explanation in place of, in substitution of, or in supplement
to, the offending “non-explanation”; and this, too, is contrary to law.32
In April 2021, FSO filed its Motion for Class Certification under Rule
23(b)(2).33 FSO sought to represent the following classes:
Class A
All persons or entities who, at any time since January 31, 2016,
submitted to one or more of the defendants a health care invoice with
respect to care provided to a Delaware workers’ compensation claimant
where —
(i) the defendant responded to the submission by stating that
THIS SERVICE [IS] NOT AUTHORIZED BY CASE MANAGER.
PLEASE CONTACT THE CASE MANAGER FOR FURTHER
INFORMATION, and
(ii) the defendant neither paid all or any part of the invoice within 30
days of receipt, nor communicated in writing, within 30 days of receipt,
any other basis for withholding payment for the invoice.
Class B
All members of Class A who have not received from any defendant a
revised or corrected explanation in place of, in substitution of, or in
supplement to, the putative explanation set forth above.34
32
App. to Opening Br. at A377 (Amend. Compl.) (emphasis added).
33
Super. Ct. Civ. R. 23(b)(2) (“The party opposing the class has acted or refused to act on grounds
generally applicable to the class, thereby making appropriate final injunctive relief or
corresponding declaratory relief with respect to the class as a whole.”).
34
App. to Opening Br. at A416 (FSO’s Motion for Class Certification).
9
In March 2022, Liberty filed its Motion for Summary Judgment, arguing that
it was entitled to judgment because: (1) FSO lacked standing; (2) the dispute was
moot because Liberty was willing to enter into a consent judgment and reissue the
uncorrected invoices; (3) FSO’s claim was barred by the relevant statute of
limitations; and (4) Code x553 did not violate Section 2322F(e).35 Relevant to this
appeal, Liberty explained that its current bill review software did not contain Code
x553 or any other explanation-of-benefits code with similar language.36 Liberty
argued that its defense of the discontinued code was not relevant because the plaintiff
bears the burden of proving standing, including that the injury likely will recur, not
that it is merely possible.37
In its opposition to Liberty’s motion, FSO argued that it had standing despite
Liberty’s pre-Complaint elimination of Code x553 because Liberty had not corrected
some of its coverage denials that contained Code x553 and continued to defend its
use of the code.38 This, FSO argued, would be remedied by relief in the form of a
declaratory judgment “confirming that claim denials under Section 2322F(e) must
set forth meaningful explanations.”39
35
Id. at A534–38 (Liberty’s Motion for Summary Judgment).
36
Id. at A539.
37
Id. at A548.
38
Id. at A884 (FSO’s Opposition to Motion for Summary Judgment).
39
Id. at A885–86.
10
On December 29, 2022, the Superior Court issued its opinion resolving both
motions.40 The court first denied FSO’s Motion for Class Certification on the basis
that FSO had failed to prove that class certification was appropriate in this context,
given that Liberty already had ceased using Code x553 and a declaratory judgment
stating that Code x553 violated Section 2322F(e) would bind Liberty regardless of
whether it expressly applied to FSO or the entire proposed class.41
The court then considered each of Liberty’s summary judgment arguments.
The court rejected Liberty’s argument that FSO’s Complaint was untimely under the
three-year statute of limitations. The court reasoned that although Liberty began
using Code x553 more than three years before FSO filed suit, FSO filed the
Complaint in its capacity as its patients’ assignee, and Liberty had denied coverage
for certain invoices issued to those patients within the three-year limitations period.42
The court next addressed Liberty’s argument that Code x553 met Section
2322F(e)’s requirements.43 The court reiterated its previous holding that Section
2322F(e) required an insurer to provide a “meaningful explanation for a denial” that
could “be readily understood.”44 The court then held that FSO had raised a material
40
First State Orthopaedics, P.A, 2022 WL 18228287.
41
Id. at *3–4.
42
Id.43
Id. at *8.
44
Id.
11
factual dispute as to whether it understood the meaning of Code x553 such that it
could “make an informed decision whether or not to challenge particular denials.”45
As to Liberty’s standing argument, the Superior Court concluded that FSO
had standing because: (1) the 19 uncorrected claim denials presented an ongoing
injury; and (2) Liberty’s unwillingness to “admit that [it] violated 19 Del. C. §
2322F(e)” created an actual and imminent injury to FSO that could be redressed by
a declaratory judgment stating that claim denials must be meaningful.46
The court reasoned that:
The challenged conduct and the dispute over it are ongoing.
Defendants have not proffered a global effort to withdraw their
explanation, or to correct them with new explanations. Even if
Defendants have corrected the explanation for Plaintiff’s patients, the
challenged claim denials remain the operative explanation for other
numerous patient claims in Delaware. Defendants’ designee would not
concede that the claim denials must communicate an actual basis in fact
or law for insurer’s position. Thus, there remains an ongoing dispute
between the parties. I find that [FSO] has standing.47
The court also held that Liberty failed to carry its burden on the mootness
defense because it could resume using Code x553 in the future, it had not corrected
45
Id. at *10.
46
Id. at *5–7.
47
Id. at *7. The court’s reliance on uncorrected denials issued to other unidentified patients in
Delaware to establish standing seems to contravene the court’s simultaneous decision denying
FSO’s Motion for Class Certification. See id. at *3.
12
all of the explanations containing Code x553, and FSO’s requested relief would have
a “practical effect” on the existing dispute.48
The court then entered summary judgment sua sponte for FSO. The court
reasoned that Code x553 did not, as a matter of law, provide a meaningful
explanation.49 The court entered the following declaratory judgment, “I declare that
the response to request to pay medical bills pursuant to Delaware’s Workers’
Compensation Law requires a meaningful response from an insurance carrier
denying the request. The response at issue here, Code x553, does not comply with
the Delaware Workers’ Compensation Law.”50
C. Contentions on Appeal
Liberty appealed the Superior Court’s opinion, arguing that the court erred
when it denied Liberty’s Motion for Summary Judgment as to standing, the statute
of limitations, and Code x553’s compliance with Section 2322F(e).51 FSO cross-
appealed, arguing that the court erred when it denied the Motion for Class
Certification because FSO met all of Rule 23(b)(2)’s elements and the court
therefore lacked discretion to deny certification.52
48
Id. at *7.
49
Id. at *8.
50
Id. at *10.
51
Opening Br. at 4–7.
52
Answering Br. at 32–34.
13
II. STANDARD OF REVIEW
This Court reviews the Superior Court’s grant of summary judgment de
novo.53 We also review questions of justiciability, including standing, de novo.54
III. ANALYSIS
Although both parties raise issues for our consideration, we need only address
Liberty’s standing argument to resolve this appeal. Because we conclude that FSO
did not have standing when it filed its Complaint, we do not reach the parties’ other
arguments.
In order to adjudicate a matter, a court must have a justiciable controversy
before it.55 Justiciability describes “whether a case is properly suited for resolution
by” a court.56 The four aspects of justiciability include standing, mootness, ripeness,
and political question.57 Although Liberty only raised standing in this appeal, the
53
State Farm Mut. Auto. Ins. Co. v. Davis, 80 A.3d 628, 632 (Del. 2013).
54
Brookfield Asset Mgmt., Inc. v. Rosson, 261 A.3d 1251, 1262 (Del. 2021).
55
Crescent/Mach 1 Partners, L.P. v. Dr. Pepper Bottling Co. of Texas, 962 A.2d 205, 208 (Del.
2008) (quoting Warren v. Moore, 1994 WL 374333, at *2 (Del. Ch. July 6, 1994)).
56
Rucho v. Common Cause, 588 U.S. —, —, 139 S.Ct. 2484, 2491 (2019).
57
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006) (“The doctrines of mootness,
ripeness, and political question all originate in Article III's ‘case’ or ‘controversy’ language, no
less than standing does.”). See Bankruptcy Litigation § 1:2 (“Issues of justiciability can arise, for
example, in instances where a matter is not ripe, where an advisory opinion is sought, where a
matter is moot, where a party lacks standing, and where the parties in the dispute do not hold
adverse interests.”); 13B Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 3531.12 (3d ed.) (“Although discrete names have been given to the several nominate
categories of justiciability, they are tied closely together. Standing generates the most excitement,
because it focuses directly on the question whether a particular interest or injury is adequate to
invoke the protection of judicial decision. Ripeness and mootness easily could be seen as the time
dimensions of standing. Each assumes that an asserted injury would be adequate; ripeness then
14
parties’ arguments and the Superior Court’s decision require us to discuss the
distinction between mootness and standing. FSO’s arguments frequently conflate
the two doctrines, but they are not the same, and the standards should not be
muddled.58
The United States Supreme Court has recognized that the interrelatedness
between standing and mootness can prove troublesome for courts to disentangle.59
To oversimplify the distinction between the two, “standing generally assesses
whether [the plaintiff’s personal] interest exists at the outset, while the doctrine of
mootness considers whether it exists throughout the proceedings.”60 Moreover, the
“[s]tanding doctrine functions to ensure, among other things, that the scarce
resources of the [] courts are devoted to those disputes in which the parties have a
concrete stake.”61 By contrast, when “mootness is an issue, the case has been
asks whether an injury that has not yet happened is sufficiently likely to happen, and mootness
asks whether an injury that has happened is too far beyond a useful remedy. Political-question
analysis also is affected by the extent of individual injury.”).
58
West Virginia v. Env’t Prot. Agency, 587 U.S. —, —, 142 S. Ct. 2587, 2594 (2022) (“The
distinction between mootness and standing matters.”).
59
Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 189 (2000) (“[T]he
Court of Appeals confused mootness with standing. The confusion is understandable, given this
Court's repeated statements that the doctrine of mootness as ‘the doctrine of standing set in a time
frame: The requisite personal interest that must exist at the commencement of the litigation
(standing) must continue throughout its existence (mootness).’” (quoting Arizonans for Off. Eng.
v. Arizona, 520 U.S. 43, 68 n.22 (1997))).
60
Uzuegbunam v. Preczewski, 592 U.S. —, —, 141 S. Ct. 792, 796 (2021).
61
Friends of the Earth, Inc., 528 U.S. at 191.
15
brought and litigated, often [] for years[,] [and] [t]o abandon the case at an advanced
stage may prove more wasteful than frugal.”62
Under Article III of the United States Constitution, a plaintiff bears the burden
of proving standing, which includes three prongs.63 First, the plaintiff must allege
an injury in fact, which is both concrete and actual or imminent.64 An actual or
imminent injury is one that is neither hypothetical nor conjectural. 65 Second, the
plaintiff must show that the injury is caused by the defendant’s actions.66 A plaintiff
can meet this prong by demonstrating that the injury is “fairly traceable” to the
defendant’s “complained-of conduct.”67 And third, the plaintiff must show that their
requested relief is likely to redress the injury.68 We generally follow Article III’s
standing requirements.69
62
Id. at 191–92.
63
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103–04 (1998) (quoting Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560 (1992)) (“The ‘irreducible constitutional minimum of standing’
contains three requirements . . . this triad of injury in fact, causation, and redressability constitutes
the core of Article III’s case-or-controversy requirement.”).
64
Steel Co., 523 U.S. at 103.
65
Id.
66
Id.
67
Id. (citing Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41–42 (1976)).
68
Steel Co., 523 U.S. at 103 (citing FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231(1990)).
69
Dover Hist. Soc’y v. City of Dover Plan. Comm’n, 838 A.2d 1103, 1110 (Del. 2003) (following
Article III standing, “(1) the plaintiff must have suffered an injury in fact—an invasion of a legally
protected interest which is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical; (2) there must be a causal connection between the injury and the
conduct complained of—the injury has to be fairly traceable to the challenged action of the
defendant and not the result of the independent action of some third party not before the court; and
16
In contrast, a party seeking to employ the mootness doctrine, typically the
defendant, bears the burden of establishing that the controversy has become moot.70
The mootness doctrine addresses cases where a controversy existed at the time the
plaintiff commenced litigation but the controversy later dissolves.71 Where a
defendant voluntarily discontinues their conduct in response to a complaint being
filed, we apply the mootness doctrine.72 In those cases, voluntary cessation does not
automatically deprive the court of jurisdiction to hear the case.73 Under the mootness
standard, the defendant bears the “heavy” burden of proving the controversy has
become moot.74
(3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a
favorable decision.” (quoting Soc’y Hill Towers Owners’ Ass’n v. Rendall, 210 F.3d 168, 175–76
(3d Cir. 2000))). See also Albence v. Higgin, 295 A.3d 1065, 1086 (Del. 2022) (“Delaware’s
standards for determining standing are generally the same as the requirements for establishing
Article III standing in federal court. Unlike the federal courts, however, where standing may be
subject to stated constitutional limits, we apply the concept of standing as a matter of self-restraint
to avoid the rendering of advisory opinions at the behest of parties who are mere intermeddlers.”
(internal quotations and citations omitted)).
70
Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 98 (1993) (“While the initial burden of
establishing the trial court’s jurisdiction rests on the party invoking that jurisdiction, once
that burden has been met courts are entitled to presume, absent further information, that
jurisdiction continues. If a party to an appeal suggests that the controversy has, since the rendering
of judgment below, become moot, that party bears the burden of coming forward with the
subsequent events that have produced that alleged result.”).
71
State Farm Mut. Auto. Ins. Co., 80 A.3d at 632.
72
Los Angeles Cnty. v. Davis, 440 U.S. 625, 631 (1979).
73
Id.74
United States v. W.T. Grant Co., 354 U.S. 629, 633 (1953); see also Already, LLC v. Nike, Inc,
568 U.S. 85, 96 (2013) (“[T]he voluntary cessation standard requires the defendant to show that
the challenged behavior cannot reasonably be expected to recur . . . .”).
17
When, however, a defendant ceases engaging in the challenged conduct
before a lawsuit is filed, the correct doctrine to be applied is standing, not
mootness.75 For the reasons that follow, FSO did not prove standing to bring its
declaratory judgment claim because it could not satisfy the first or third prongs of
the standing analysis.76 The Superior Court therefore should have dismissed FSO’s
claims.
A. FSO cannot demonstrate injury in fact.
The Superior Court held that FSO demonstrated injury in fact,
notwithstanding Liberty’s pre-suit abandonment of Code x553, because (1) Liberty
had not corrected the 19 claim denials, and (2) Liberty continued to defend Code
x553 on its merits, thereby suggesting it could resume using the code in the future.77
As to the uncorrected claim denials, past harm does not automatically establish an
imminent injury,78 and, as explained in Section III(B) of this Opinion, a declaratory
75
Renne v. Geary, 501 US 312, 320 (1991) (“[T]hat [mootness] doctrine will not revive a dispute
which became moot before the action commenced. ‘Past exposure to illegal conduct does not in
itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any
continuing, present adverse effects.’” (quoting O’Shea v. Littleton, 414 U.S. 488, 495–96 (1974))).
76
The parties do not dispute that FSO meets the second prong of the standing analysis.
77
First State Orthopaedics, P.A, 2022 WL 18228287, at *7.
78
Adarand Constructors, Inc., 515 U.S. at 210–11 (“[T]he fact of past injury, ‘while presumably
affording [the plaintiff] standing to claim damages . . . , does nothing to establish a real and
immediate threat that he would again suffer similar injury in the future’ with respect to conferring
standing.” (quoting Los Angeles v. Lyons, 461 U.S. 95, 105 (1983))). FSO’s designee conceded
in deposition that Liberty’s offer to agree never to use Code x553 would provide the same relief
that FSO sought via summary judgment. Accordingly, FSO failed to show that FSO faced
imminent harm. App. to Opening Br. at A719–20 (Hutchinson Dep.).
18
judgment does not provide retrospective relief and therefore would not redress a
purported injury.79
The Superior Court erred in concluding that Liberty’s defense of Code x553
on its merits established an injury in fact. That defense had no bearing on FSO’s
standing under the circumstances of this case. First, the record amply demonstrated
that there was no real or immediate risk that Liberty would continue to use Code
x553. Although Liberty argued the code was consistent with Delaware law, Liberty
declared that it would not use Code x553 again;80 consistently offered to enter into
a stipulation or consent order not to use the code;81 confirmed that its new billing
system did not include Code x553 language;82 and adopted the new billing system
independently of and before the litigation began.83
79
Los Angeles, 461 U.S. at 129 (Marshall, J., dissenting) (“[M]onetary relief would plainly
provide redress for his past injury, and prospective relief would reduce the likelihood of any
future injury.”).
80
Video of Oral Argument, at 26:30–25:40 (Oct. 18, 2023) [hereinafter Oral Argument].
81
App. to Opening Br. at A551–52 (Liberty’s Motion for Summary Judgment) (“Defendants are
willing to enter a consent judgment that would prevent them from ever using Code x553—or any
other code that refers to prior authorization—in response to a Delaware workers’ compensation
claim.”); id. at A766 (Liberty’s Motion for Summary Judgment); id. at A344–45 (Hearing on
Motion for Reargument) (“[W]e would volunteer to a consent order and judgment to the effect that
we will never use this code again in the future.”); id. at A353 (“[W]e are willing to agree to a
consent order. We are willing to -- we would enter into an agreement with the plaintiff that we will
not use this specific code in the future and would like to be able to resolve it on that basis.”).
82
Id. at A355 (Hearing on Motion for Reargument) (“The code is gone. We’ve moved to a new
platform and a new system. The codes that were provided in that new system by a third-party
provider doesn’t use this language anymore.”).
83
Id. at A765 (Third Affidavit of Jannie Miller) (“The decision to switch bill-review platforms did
not have anything to do with pending or threatened litigation.”). Liberty consistently made that
representation throughout the trial court proceedings and FSO does not argue anything to the
19
In addition, although we sympathize with the lower court’s frustration with
Liberty’s at-times-confusing position—consistently defending Code x553 while
representing that its use had been permanently discontinued84—the court’s analysis
regarding Liberty’s theoretical future use of the billing code conflated mootness with
standing.85 The cases on which the court and FSO relied involved a party’s cessation
contrary. Id. at A476, A486 (Liberty’s Response to Interrogatories); id. at A539 (Employer’s
Motion for Summary Judgment); id. at A999 (Liberty’s Opposition to FSO’s Motion for Class
certification); id. at A1178 (Hearing on Summary Judgment).
84
Id. at A1144 (The Court: “Given the argument that you’ve made here today, and we can limit it
if you want to non-certified, do you believe that the explanation given under Code x553 would be
appropriate under Delaware law?” Liberty’s Counsel: “I do.”); id. at A1183 (Liberty’s Counsel:
“So then the other thing is, well, what about going forward? And again, because of the discontinued
pre-suit, we don’t think you need a consent judgment, we don't think there was standing to begin
with. It was discontinued pre-suit. But we are willing to, because we have no interest in using this
code again; we are willing to stipulate that we have discontinued the code and that we are no longer
interested in using it again in the future.” The Court: “Well, when you say no longer interested,
you would no longer use it in the future?” Liberty’s Counsel: “Yes. Which means stipulate to a
binding judgment from the Court saying you are not allowed to use it. And we, of course, would
be legally required to follow Your Honor's order.”); id. at A1186 (Liberty’s Counsel: “Now, they
actually don’t ask in the briefs that that consent judgment make us say that it was an unlawful
practice. And so one of the things that you hear on the mootness argument is that, are you
continuing to defend the code. And Your Honor raised that, of course, at the motion to dismiss
stage, that we will continue to defend the code. I believe the record in this case is justified in that
defense, because, again -- not defending that we used it correctly. We have never said that. But the
question is whether it was a written explanation of reason for denial, and we believe that the
evidence has suggested that. If it can resolve the case for us to say, hey, it was not a picture of
clarity, we might talk about that. But the question is, what does that mean implication-wise for an
attorney who has a serial litigant, a serial plaintiff, and who was apparently seeking attorneys’ fees
that we think are disallowed. And so for us to admit a legal violation that we don't think we
committed, and the plaintiff is going to somehow try to use that as some type of ammunition and
armor to inappropriately then litigate a question of attorneys’ fees -- and at this point, we’ve
actually spent a lot on the case because we had to take discovery to show that they did, in fact,
understand the code.”).
85
Friends of the Earth, Inc., 528 U.S. at 190 (“[I]n a lawsuit brought to force compliance, it is the
plaintiff’s burden to establish standing by demonstrating that, if unchecked by the litigation, the
defendant’s allegedly wrongful behavior will likely occur or continue, and that the ‘threatened
injury [is] certainly impending.’” (quoting Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)));
Renne, 501 U.S. at 320 (“[T]hat [mootness] doctrine will not revive a dispute which became moot
20
of conduct after litigation was filed. But concerns that a defendant will resume
challenged conduct once litigation is dismissed relate to the “capable of repetition
yet evading review” exception to the mootness doctrine. No such exception applies
to standing.86
The Superior Court centered its standing analysis on Sanborn v. Geico
General Insurance Co., a case involving a defendant’s voluntary cessation of
conduct after the plaintiff filed its complaint.87 In Sanborn, the plaintiff filed a
complaint seeking a declaration that her insurance company’s policy of refusing to
pursue deductible recovery violated Title 21 of the Delaware Code.88 After the
plaintiff filed her complaint, the insurance company—GEICO—implemented a new
claims-handling policy that conformed to the plaintiff’s requested relief.89 After
changing its policy, GEICO moved for summary judgment, arguing that the plaintiff
lacked standing because she failed to show that she had suffered an injury in fact and
before the action commenced. ‘Past exposure to illegal conduct does not in itself show a present
case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present
adverse effects.’” (quoting O’Shea, 414 U.S. at 495–96)).
86
Friends of the Earth, Inc., 528 U.S. at 191 (“[I]f a plaintiff lacks standing at the time the action
commences, the fact that the dispute is capable of repetition yet evading review will not entitle the
complainant to a federal judicial forum.”).
87
First State Orthopaedics, P.A, 2022 WL 18228287, at *5–6 (quoting Sanborn v. Geico Gen. Ins.
Co., 2016 WL 520010, at *7–8 (Del. Super. Feb. 1, 2016)).
88
Sanborn, 2016 WL 520010, at *1.
89
Id. at *2. Its efforts to change the policy started before the plaintiff filed the complaint.
21
failed to show that a declaratory judgment would redress her injury.90 The Superior
Court in Sanborn held that the plaintiff had demonstrated standing because:
[a]t the time Ms. Sanborn filed this action, GEICO’s then-current
policy did not routinely seek recovery of the deductibles of its insured
until the applicable deductible was exhausted. Shortly after Ms.
Sanborn filed her lawsuit, GEICO’s new claims-handling policy was
implemented. The new policy provides that GEICO will assert its
subrogation rights and protect its insureds’ interests, regardless of
whether the applicable deductible has been exhausted. Although
GEICO’s new policy adheres to 21 Del. C. § 2118(a)(2)(f), GEICO has
made it clear, in this litigation and as recently as at oral arguments on
October 26, 2015, that GEICO still disagrees with the Court’s decision
in Stratton and does not believe its former policy violated 21 Del. C. §
2118(a)(2)(f). Accordingly, and despite the new claims-handling
policy, GEICO still maintains the position that the insurer is not
required to pursue recovery of an insured’s deductible until the
deductible is exhausted.91
Although the Sanborn parties and the court framed the issue as one concerning
the plaintiff’s standing, settled law establishes that the justiciability question before
the Sanborn court actually was mootness. Again, because standing is assessed at
the time a complaint is filed, GEICO’s policy change after the plaintiff filed her
complaint would not prevent her from establishing standing.92
The decision in Sanborn underscores the importance of distinguishing
standing from mootness when justiciability questions arise. For instance, while
90
Id. at *7.
91
Id. (emphasis added).
92
Uzuegbunam, 592 U.S. at —, 141 S. Ct. at 796; Sanborn, 2016 WL 520010, at *7.
22
purportedly addressing the plaintiff’s standing, the court considered GEICO’s
refusal to concede that its old policy violated the Delaware statute despite having
implemented a new, conforming policy and stated, “[t]he discrepancy between
GEICO’s policy and its interpretation of the statute render the injury suffered by Ms.
Sanborn one that is capable of evading review. Therefore, the Court determines that
Ms. Sanborn has plead[ed] the existence of an injury sufficient to establish
standing.”93 But the “evading review” exception does not apply to the standing
doctrine.94 Sanborn therefore is best understood as a mootness case, and the
Superior Court’s reliance on Sanborn and on concerns that Liberty would re-deploy
Code x553 was mistaken for purposes of resolving FSO’s standing. 95
FSO’s reliance on Knox v. Service Employees International Union, Local
100096 and Cooper v. Charter Communications Entertainments I, LLC97 is similarly
misplaced.98 In Knox, the Supreme Court held that a union’s consistent defense of
its challenged practices preserved the controversy between the parties even though
93
Sanborn, 2016 WL 520010, at *8.
94
Burroughs v. State, — A.3d —, —, 2023 WL 5603971, at *5 (Del. Aug. 30, 2023) (“There are
two generally recognized exceptions to the mootness doctrine: ‘situations that are capable of
repetition but evade review or matters of public importance.’” (quoting Gen. Motors Corp. v. New
Castle Cnty., 701 A.2d 819, 823 n.5 (Del. 1997))).
95
Friends of the Earth, Inc., 528 U.S. at 189.
96
567 U.S. 298 (2012).
97
760 F.3d 103 (1st Cir. 2014).
98
Answering Br. at 50.
23
the union ceased the practice and offered the plaintiffs relief while the appeal was
pending.99 Knox does not, as FSO contends, support the proposition that a
defendant’s consistent defense of the merits of their conduct creates the injury in fact
required to establish standing.100 Instead, Knox addresses a scenario in which a
defendant’s voluntary cessation of conduct during litigation will fail to moot a
controversy.101 For the same reasons, Cooper does not do the legwork that FSO
believes it does because, again, the defendant there ceased the disputed conduct after
the complaint was filed, and for those reasons, the First Circuit held that the claims
were not moot.102
Finally, FSO argues that because Liberty did not raise its mootness argument
on appeal, it implicitly waived its standing argument.103 FSO posits that Liberty has
conceded the existence of a live controversy by failing to renew its mootness
argument.104 This argument falters for two reasons. First, as discussed above at
length, standing and mootness are distinct doctrines, and Liberty is free to argue that
FSO lacks standing without also arguing that the controversy is moot. In fact, it
99
Knox, 567 U.S. at 307.
100
Answering Br. at 51.
101
Knox, 567 U.S. at 307.
102
Cooper, 760 F.3d at 106–07.
103
Answering Br. at 51.
104
Id. at 51–52.
24
would be inconsistent for Liberty to argue that the same action—cessation of
challenged conduct—both divested FSO of standing and mooted the action. When
a litigant argues that a controversy has become moot, inherent in that argument is
the assumption that, at one point, the plaintiff had standing.105 Second, and more
importantly, even if Liberty’s shifted position could be viewed as a concession as to
standing, litigants cannot waive standing requirements, and courts retain their ability
to consider justiciability at any time.106
B. FSO cannot demonstrate redressability.
The Superior Court also erred in concluding that FSO’s injury could be
redressed in this action. Under the standing doctrine’s redressability prong, the relief
sought must be capable of redressing the plaintiff’s injury or grievance.107 “To
105
See Friends of the Earth, Inc., 528 U.S. at 189.
106
FW/PBS, Inc, 493 U.S. at 230–31 (quoting Allen v. Wright, 468 U.S. 737, 750 (1984))
(“Although neither side raises the issue here, we are required to address the issue even if the courts
below have not passed on it . . . and even if the parties fail to raise the issue before us. The federal
courts are under an independent obligation to examine their own jurisdiction, and standing ‘is
perhaps the most important of [the jurisdictional] doctrines.’); In re Pressman-Gutman Co., Inc.,
459 F.3d 383, 402 n.20 (3d Cir. 2006) (“Article III standing, which, of course, is not subject to
waiver.”). Because we previously adopted Article III’s standing requirements, this Court also must
independently consider whether a plaintiff has standing. See Dover Hist. Soc’y, 838 A.2d at 1110
(following Article III standing, “(1) the plaintiff must have suffered an injury in fact—an invasion
of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent,
not conjectural or hypothetical; (2) there must be a causal connection between the injury and the
conduct complained of—the injury has to be fairly traceable to the challenged action of the
defendant and not the result of the independent action of some third party not before the court; and
(3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a
favorable decision.” (quoting Soc’y Hill Towers Owners’ Ass’n, 210 F.3d at 175–76)).
107
Albence, 295 A.3d at 1085.
25
determine whether an injury is redressable, a court will consider the relationship
between ‘the judicial relief requested’ and the ‘injury’ suffered.”108 Additionally,
the plaintiff must show that it is likely, not just speculative, that the requested relief
will redress the injury.109 Here, FSO sought solely declaratory relief, which affords
only prospective, i.e., forward-looking, relief.110 Where a plaintiff seeks a
declaratory judgment, it must show that, absent a favorable outcome in litigation,
the defendant’s wrongful conduct will go unchecked.111 This principle precludes an
action for declaratory judgment where the defendant ceased engaging in the
contested conduct before the complaint was filed unless the plaintiff can prove a real
and immediate risk of future injury.112 FSO has not carried that burden here.
108
California v. Texas, 593 U.S. —, —, 141 S. Ct. 2104, 2115 (2021).
109
Oceanport Indus., Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 904 (Del. 1994).
110
Hampson v. State ex rel. Buckson, 233 A.2d 155, 156 (Del. 1967) (“The principal purpose of
the [declaratory judgment] statute is to provide preventive justice.”); Warth v. Seldin, 422 U.S.
490, 515 (1975) (“If in a proper case the association seeks a declaration, injunction, or some other
form of prospective relief, it can reasonably be supposed that the remedy, if granted, will inure to
the benefit of those members of the association actually injured.” (emphasis added)).
111
Friends of the Earth, Inc., 528 U.S. at 190 (“[I]n a lawsuit brought to force compliance, it is
the plaintiff’s burden to establish standing by demonstrating that, if unchecked by the litigation,
the defendant’s allegedly wrongful behavior will likely occur or continue, and that the ‘threatened
injury [is] certainly impending.’” (quoting Whitmore, 495 U.S. at 158)); O’Shea, 414 U.S. at 495–
96 (“Past exposure to illegal conduct does not in itself show a present case or controversy
regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects.”).
112
Adarand Constructors, Inc., 515 U.S. at 211 (“[T]o maintain its claim for forward-looking
relief, our cases require [the plaintiff] to allege that the use of [the contested clauses] in the future
constitutes ‘an invasion of a legally protected interest which is (a) concrete and particularized, and
(b) actual or imminent, not conjectural or hypothetical.’” (quoting Lujan, 504 U.S. at 560)); Golden
v. Zwickler, 394 U.S. 103, 108 (1969) (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S.
270, 273 (1941) (“The difference between an abstract question and a ‘controversy’ contemplated
by the Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it would
26
FSO sued Liberty on behalf of patients whose bills were rejected with Code
x553 on the Explanation of Benefits. Given Liberty’s discontinuation of Code x553
before FSO filed suit, the only injury that FSO arguably pleaded relates to the
existing, uncorrected claim denials.113 Because a declaratory judgment stating that
Code x553 violates the statute would not redress the injury that those patients have
suffered, the claim denials do not confer standing to FSO.114
The declaratory judgment that the Superior Court entered confirms this
conclusion. The court declared that “the response to request to pay medical bills
be possible, to fashion a precise test for determining in every case whether there is such a
controversy. Basically, the question in each case is whether the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties having adverse legal
interests, of sufficient immediacy any reality to warrant the issuance of a declaratory judgment”);
cf. Cnty. of Riverside v. McLaughlin, 500 U.S. 44, 51 (1991) (“At the core of the standing doctrine
is the requirement that a plaintiff ‘allege personal injury fairly traceable to the defendant’s
allegedly unlawful conduct and likely to be redressed by the requested relief’ . . . Plaintiffs alleged
in their complaint that they were suffering a direct and current injury as a result of this detention,
and would continue to suffer that injury until they received the probable cause determination to
which they were entitled. Plainly, plaintiffs’ injury was at that moment capable of being redressed
through injunctive relief.”).
113
FSO argues that it has standing because Liberty never corrected its response to these invoices.
Answering Br. at 46–49. (“Though the defendants hammer away at their supposed pre-suit
abandonment of Code x553, they do not dispute that ‘discontinuing’ the code does nothing to
‘discontinue’ its effect. This means that, once a provider is saddled with the code’s tautological
explanation, that provider remains without an explanation for as long as the denial remains
uncorrected.’); id. at 46. But for the same reasons discussed above, relief in the form of FSO’s
requested declaratory judgment would do nothing to “discontinue” the effect of any uncorrected
denials.
114
Steel Co., 523 U.S. at 109–110 (“Because respondent alleges only past infractions of EPCRA,
and not a continuing violation or the likelihood of a future violation, injunctive relief will not
redress its injury. . . . Having found that none of the relief sought by respondent would likely
remedy its alleged injury in fact, we must conclude that respondent lacks standing to maintain this
suit, and that we and the lower courts lack jurisdiction to entertain it.”).
27
pursuant to Delaware’s Workers’ Compensation Law requires a meaningful
response from an insurance carrier denying the request. The response at issue here,
Code x553, does not comply with the Delaware Workers’ Compensation Law.”115
Nothing in that declaration required Liberty to reissue the claim denials with new
codes. The court simply declared that using Code x553 violates Section 2322F(e).
And FSO correctly did not seek that relief because the Superior Court could not have
awarded what would essentially have amounted to an injunction.116
In fact, during our Court’s oral argument, FSO conceded that the court would
have had to provide “corresponding declaratory relief” to redress the injury caused
by the uncorrected claim denials.117 FSO then acknowledged that it would have to
seek an injunction to correct previous claim denials and that the relief the Superior
Court granted was “entirely about future conduct.” 118 When pressed for an answer
as to how relief that only concerns future conduct could redress past conduct, FSO
ultimately conceded that only an injunction would require Liberty to reissue the
invoices that contained Code x553.119
115
First State Orthopaedics, P.A., 2022 WL 18228287, at *10 (emphasis added).
116
Diebold Computer Leasing, Inc. v. Com. Credit Corp., 267 A.2d 586, 591 (Del. 1970)
(“[U]ltimate coercive relief would be injunctive.”).
117
Oral Argument at 32:12–33:20.
118
Oral Argument at 35:02–35:20, 35:50–35:55.
119
Oral Argument at 35:59–36:45.
28
And although it held that FSO had standing, the Superior Court’s opinion
reflects the non-redressability of FSO’s past-conduct claim. In its opinion denying
Liberty’s Motion for Summary Judgment, the court acknowledged that FSO’s
“declaratory judgment claim is based on [Liberty’s] general practice of sending
[Explanations of Benefits] with Code x553 to patients, [while] [t]he claims it asserts
as assignee are specific claims, arising from specific transactions.”120 The court was
hesitant to award anything other than prospective relief, stating “injunctive relief is
not necessary or warranted, as I am unwilling to punish [Liberty] for past conduct,
particularly given their abandonment of the use of Code x553.”121 We are unable to
reconcile that statement with the court’s holding that the declaratory judgment it
entered would redress the existing, uncorrected denials.
In summary, because the forward-looking relief that FSO sought—a
declaratory judgment—would not redress the only existing or imminent injury it can
point to—the previously submitted invoices—FSO lacked standing when it filed its
Complaint.
120
First State Orthopaedics, P.A., 2022 WL 18228287, at *4.
121
Id. During oral argument on the Motion for Summary Judgment, the Superior Court
acknowledged that it did not have jurisdiction to enter an injunction. App. to Opening Br. at A1173
(Hearing on Summary Judgment) (The court: “I don’t have any power to issue injunctions, at least
it’s very, very limited.”).
29
IV. CONCLUSION
For the foregoing reasons, the Superior Court erred in denying Liberty’s
Motion for Summary judgment as to FSO’s standing. We therefore REVERSE the
Superior Court’s opinion. Jurisdiction is not retained.
30