Frisco Medical Center, L.L.P. and Texas Regional Medical Center, L.L.C. v. Paula Chestnut and Wendy Bolen, on Behalf of Themselves and All Others Similarly Situated ( 2024 )

Supreme Court of Texas
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No. 23-0039
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Frisco Medical Center, L.L.P. and Texas Regional Medical
Center, L.L.C.,
Petitioners,
v.
Paula Chestnut and Wendy Bolen, on Behalf of Themselves and
All Others Similarly Situated,
Respondents
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On Petition for Review from the
Court of Appeals for the Fifth District of Texas
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PER CURIAM
To maintain a class action, plaintiffs must meet the four
requirements of Rule 42(a) of the Texas Rules of Civil Procedure—
commonly referred to as numerosity, commonality, typicality, and
adequate representation—and at least one of the three requirements in
Rule 42(b)—risk of inconsistent adjudications if separate actions, need
for injunctive or declaratory relief for the class as a whole, or
predominance of common questions. TEX. R. CIV. P. 42(a)-(b); Union Pac.
Res. Grp. v. Hankins, 111 S.W.3d 69, 73 (Tex. 2003). Rule 42(d)(1) adds
that “[w]hen appropriate . . . an action may be brought or maintained as
a class action with respect to particular issues.” TEX. R. CIV. P. 42(d)(1).
The question in this case is whether Rule 42(d)(1) allows for class
certification of issues involved in a claim when the claim itself cannot be
certified under Rules 42(a) and (b). We answered “no” in Citizens
Insurance Co. of America v. Daccach, calling Rule 42(d)(1) “a
housekeeping rule” that “cannot be used to manufacture compliance
with the certification prerequisites.” 217 S.W.3d 430, 455 (Tex. 2007)
(citing Castano v. Am. Tobacco Co., 84 F.3d 734, 746 n.21 (5th Cir. 1996)
(applying FED. R. CIV. P. 23(c)(4))). In this case, the court of appeals
misapplied Daccach. We reverse and remand.
Plaintiffs Paula Chestnut and Wendy Bolen, on behalf of
themselves and all others similarly situated, sued Frisco Medical
Center, L.L.P. and Texas Regional Medical Center, L.L.C. (the
hospitals) for charging emergency room patients an evaluation-and-
management-services fee without an agreement with the patients and
without notifying them of the fee prior to treatment. Plaintiffs seek
relief under the Deceptive Trade Practices–Consumer Protection Act,
TEX. BUS. & COM. CODE §§ 17.41-.63, and a declaratory judgment under
the Uniform Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE
§§ 37.001-.011. The hospitals admit to charging the fee but disagree
with plaintiffs about whether they provided adequate notice. The
hospitals also claim that the fee is industry standard, is endorsed by
federal regulation, and requires an individualized determination for
each emergency room patient that cannot be made until after the patient
has received stabilizing treatment.
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The trial court ordered certification of a class including anyone
who, on or after July 10, 2015, received treatment at the hospitals’
emergency room facilities, was assessed a fee, and “made payments
and/or ha[s] a remaining account balance [due] for their visit”—some
60,000 patients. The court determined that the Rule 42(a) prerequisites
were met and that plaintiffs’ claims satisfied all three parts of
Rule 42(b). The court also determined that under Rule 42(d)(1), four
discrete issues should be severed: (i) whether the hospitals have a duty
to inform emergency room patients of the fee prior to the charge being
incurred; (ii) whether language in the hospitals’ form contract with
patients provides a promise or agreement by patients to pay a fee for
their emergency room visits; (iii) whether the Emergency Medical
Treatment and Active Labor Act, 42 U.S.C. § 1395dd, prohibits the
hospitals from disclosing their intention to charge a fee to emergency
room patients prior to the fee being incurred; and (iv) whether the
hospitals disclose their fee in a reasonable manner prior to such charge
being incurred.
The hospitals took this interlocutory appeal challenging the class
certification order. Reviewing the trial court’s order for abuse of
discretion, 1 the court of appeals agreed that plaintiffs’ claims satisfy
Rule 42(a) but concluded that none of the Rule 42(b) criteria are met by
the class’s claims as a whole. ___ S.W.3d ___, 2022 WL 16735383, at *7,
*9, *12 n.8 (Tex. App.—Dallas Nov. 7, 2022). Nevertheless, the court of
appeals held that the Rule 42(b)(2) criterion is satisfied as to three of
1 Compaq Comput. Corp. v. Lapray, 135 S.W.3d 657, 671 (Tex. 2004)
(“[W]e review the [class certification] order for abuse of discretion.”).
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the four discrete issues. Id. at *12. Thus, what survived are three “issue
classes” under Rule 42(d)(1) that do not satisfy any of the Rule 42(b)
criteria when applied to the claims as a whole but that do satisfy
Rule 42(b)(2) when exclusively analyzing that criterion through the lens
of the three discrete issues. The hospitals appealed to this Court,
contending that the court of appeals’ certification of an issue class after
first determining that the claims as a whole do not independently satisfy
Rule 42(b) contravened the requirements of this Court’s opinion in
Daccach.
In Daccach, we cautioned “that Rule 42(d) cannot be used to
manufacture compliance with the certification prerequisites.”
217 S.W.3d at 455. Instead, Rule 42(d), “like its federal counterpart, ‘is
a housekeeping rule that allows courts to sever the common issues for a
class trial.’” Id. (quoting Castano, 84 F.3d at 746 n.21). In Castano, the
Fifth Circuit used the “housekeeping” designation to clarify the
relationship between (i) the requirement that the “cause of action, as a
whole, must satisfy the [prerequisite]”; and (ii) Rule 42(d)(1)’s identical
federal counterpart’s allowance of the certification of issue classes. 84
F.3d at 746 n.21. Castano made clear that Rule 42(d)(1)’s federal
counterpart allowed common issues within an already certified class to
be severed for a tidier trial. Severing an issue “does not save the class
action” because courts “cannot manufacture predominance through the
nimble use” of Rule 42(d)(1)’s federal counterpart. Id. at 745 n.21.
In adopting Castano’s housekeeping language, we affirmed the
same relationship between Rule 42(d) and the Rule 42(a) and (b)
prerequisites. A rule cannot be a housekeeping rule while also creating
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a substantive right to certify an otherwise uncertifiable class.
Rule 42(d)(1) functions as a case-management tool that allows trial
courts to break down class actions that already meet the requirements
of Rule 42(a) and (b) into discrete “issue classes” for ease of litigation.
The court of appeals erred by using Rule 42(d)(1) to manufacture
compliance with Rule 42(b)(2) after determining that the Rule 42(b)
criteria are not satisfied when applied to the claims as a whole. Upon
determining that the claims do not satisfy Rule 42(b), the court of
appeals should have reversed the class certification order and remanded
to the trial court.
The only question that remains, then, is whether the court of
appeals was correct to conclude that the Rule 42(b) criteria are not
satisfied as to plaintiffs’ claims as a whole. Plaintiffs ask this Court “to
reconsider class certification under Rule 42(b)(3) as well as
Rule 42(b)(2)” should we reverse the court of appeals’ judgment.
However, apart from the single request that we “reconsider class
certification under Rule 42(b)(3) as well as Rule 42(b)(2),” plaintiffs did
not challenge the court of appeals’ conclusion that the claims as a whole
fail to satisfy the Rule 42(b) criteria. To the contrary, plaintiffs
embraced the court of appeals’ decision, stating in their response brief
that “[t]here is nothing wrong with the Court of Appeals’ well-reasoned
Opinion” and “[t]he Court of Appeals’ certification of a Rule 42(b)(2)
class in this case was perfectly appropriate in every respect.” The only
pertinent discussion of the Rule 42(b) criteria in plaintiffs’ brief defends
the court of appeals’ decision that Rule 42(b)(2) is satisfied as to the
three discrete issues. The brief does not take the necessary next step of
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arguing that those criteria are satisfied by the claims as a whole.
Though we “liberally, but reasonably, construe[] [briefing] so that the
right to appeal is not lost by waiver,” Lion Copolymer Holdings, LLC v.
Lion Polymers, LLC, 614 S.W.3d 729, 732 (Tex. 2020) (quoting Horton v.
Stovall, 591 S.W.3d 567, 569 (Tex. 2019)), we conclude that plaintiffs
waived any challenge to the court of appeals’ conclusion here by
specifically endorsing the court of appeals’ opinion and by failing to
provide even a single point about why it is wrong regarding certification
of the claims as a whole. See Fredonia State Bank v. Gen. Am. Life Ins.
Co., 881 S.W.2d 279, 284 (Tex. 1994) (discussing the “long-standing
rule” that “error may be waived by inadequate briefing”).
Without hearing oral argument, we grant the petition for review,
reverse the portion of the court of appeals’ judgment affirming
certification of a Rule 42(b)(2) class as to the three discrete issues, affirm
the remainder of the court of appeals’ judgment, and remand the case to
the trial court for further proceedings. TEX. R. APP. P. 59.1.
OPINION DELIVERED: May 17, 2024
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