Elizabeth Harwood v. Wheaton Franciscan Services, Inc. , 2019 WI App 53 ( 2019 )

2019 WI App 53COURT OF APPEALS OF WISCONSIN
PUBLISHED OPINION
Case No.: 2018AP1836
Complete Title of Case:
ELIZABETH HARWOOD,
PLAINTIFF-RESPONDENT,
V.
WHEATON FRANCISCAN SERVICES, INC., WHEATON FRANCISCAN
MEDICAL GROUP, INC. AND WHEATON FRANCISCAN HEALTHCARE -
ST. FRANCIS, INC.,
DEFENDANTS-APPELLANTS.
Opinion Filed: August 20, 2019
Submitted on Briefs: April 11, 2019
Oral Argument:
JUDGES: Brash, P.J., Kessler and Brennan, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYS: On behalf of the defendants-appellants, the cause was submitted on the
brief of Mark E. Larson and Bradley S. Foley of Gutglass, Erickson,
Bonville, & Larson, S.C., Milwaukee.
Respondent
ATTORNEYS: On behalf of the plaintiff-respondent, the cause was submitted on the
brief of Robert J. Welcenbach of Welcenbach Law Offices, S.C.,
Milwaukee, Scott Borison of Legg Law Firm LLC, Frederick, MD, and
John Craig Jones of Jones & Hill, LLC, Oakdale, LA.
2019 WI App 53COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
August 20, 2019
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.
Appeal No. 2018AP1836 Cir. Ct. No. 2017CV12998
STATE OF WISCONSIN IN COURT OF APPEALS
ELIZABETH HARWOOD,
PLAINTIFF-RESPONDENT,
V.
WHEATON FRANCISCAN SERVICES, INC., WHEATON FRANCISCAN
MEDICAL GROUP, INC. AND WHEATON FRANCISCAN HEALTHCARE -
ST. FRANCIS, INC.,
DEFENDANTS-APPELLANTS.
APPEAL from an order of the circuit court for Milwaukee County:
ELLEN R. BROSTROM, Judge. Affirmed.
Before Brash, P.J., Kessler and Brennan, JJ.
No. 2018AP1836
¶1 BRENNAN, J. Wheaton Franciscan Services, Inc., (Wheaton Franciscan)1
and two other defendants appeal an order certifying a class and appointing plaintiff
Elizabeth Harwood as class representative. Harwood alleged that Wheaton Franciscan
violated WIS. STAT. § 146.83(3f)(b)4.-5. (2017-18)2 by charging Harwood and others at
least $28 each in illegal added fees for copies of their health records.3 Harwood moved
to certify a class that included all persons in Wisconsin who were Wheaton Franciscan
patients (or persons they authorized in writing to obtain their medical records) who were
charged retrieval fees or certification fees for the six years preceding the filing of the
complaint. The proposed class excluded certain persons and entities, including any
persons who did not pay the fees.
¶2 The trial court decided the motion, applying the newly revised version of
the class certification rule, WIS. STAT. § 803.08, which went into effect after this action
was filed. The parties do not dispute the application of the current statute and they do not
dispute that it was adopted with the express purpose of harmonizing Wisconsin’s class
action statute with the federal class action statute and federal case law. They dispute only
1
Three entities are named as defendants: Wheaton Franciscan Services, Inc.; Wheaton
Franciscan Medical Group, Inc.; and Wheaton Franciscan Healthcare–St. Francis, Inc. We refer to an
individual defendant by name only where necessary to describe its particular actions. Otherwise, we refer
to defendants collectively as “Wheaton Franciscan.”
2
All references to the Wisconsin Statutes are to the 2017-18 version unless otherwise noted.
3
WISCONSIN STAT. § 146.83 states that, with an exception that is not relevant here, “a health
care provider may charge no more than” the amounts specified in the statute for paper copies, microfiche
or microfilm, X-ray prints, and applicable shipping costs and applicable taxes. See § 146.83(3f)(b)1.-3.,
6. Only if the requester is someone other than “the patient or a person authorized by the patient” may
health care providers also charge retrieval and certification fees—“a single $8 charge” for certification
and “a single retrieval fee of $20[.]” Sec. 146.83(3f)(b)4.-5. The complaint alleges that in providing
requested copies of health records, the defendants had “routinely charg[ed] patients or persons authorized
by the patient, an $8.00 certification fee, a $20.00 retrieval fee, processing, basic or other fees not
authorized by the statute” (emphasis added).
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whether the trial court erroneously exercised its discretion when it ruled that Harwood
had satisfied the requirements for the class to be certified under the current version.
¶3 The trial court rejected Wheaton Franciscan’s arguments as “represent[ing]
defenses to the merits of the Plaintiff’s case [that] do not preclude certifying the class,”
and quoted Messner v. Northshore University HealthSystem, 669 F.3d 802, 811 (7th Cir.
2012), which stated that “[a] court should not turn the class certification proceedings into
a dress rehearsal for the trial on the merits.” Its decision focused on the fact that
Harwood had “provided a list of forty-four invoices, as well as the invoices themselves
with the patient names redacted, representing separate clients … that have been allegedly
charged improper fees for certified medical records in violation of WIS. STAT. § 146.83.”
¶4 Noting that the revised class action statute that took effect July 1, 2018,4
“imposes more stringent requirements than the prior version of WIS. STAT. § 803.08 and
applicable case law,” the trial court concluded that Harwood had satisfied the
requirements—that the proposed class is large enough to make it impractical to proceed
without a class action, that the members of the proposed class share a common interest,
that Harwood’s claim is typical of the claims of the class, and that Harwood, the named
party, will provide adequate representation to the proposed class. The trial court further
concluded that “questions of law and fact predominate over any questions affecting only
individual members, and that a class action is superior to individual actions for fairly and
efficiently adjudicating the controversy.” It therefore certified the class.
4
On December 21, 2017, WIS. STAT. § 803.08 was repealed and recreated by Supreme Court
Order with the stated purpose of aligning the statute with the federal class action Federal Rules of Civil
Procedure Rule 23. The revisions took effect on July 1, 2018, and our supreme court left to the discretion
of the circuit courts whether application of the reformed statute “would not be feasible or would work
injustice” to any pending proceeding within the court. The statute was then further revised by the
legislature (2017 Wis. Act 235), but that revision has no bearing on this case.
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No. 2018AP1836
¶5 The revised class certification rule directed Wisconsin courts to look to
federal case law for guidance. Just like Wisconsin law, federal appellate courts “review
class-certification decisions deferentially, in recognition of the fact that [Federal Rule of
Civil Procedure] 23 gives the district courts broad discretion to determine whether
certification of a class-action lawsuit is appropriate.” Ervin v. OS Rest. Servs., Inc., 632
F.3d 971, 976 (7th Cir. 2011) (citation omitted). Federal appellate courts will “reverse
the class-certification decision only when [they] find an abuse of discretion.” Id. For the
reasons set forth, we conclude that the trial court correctly considered the relevant facts,
applied the legal standard set forth in the newly revised WIS. STAT. § 803.08 consistent
with federal law on class certification, kept its analysis focused on the class certification
question, and reached a reasonable decision. We affirm.
BACKGROUND
¶6 Because Wheaton Franciscan challenges the trial court’s ruling as an
erroneous exercise of discretion, we include a detailed background section to make clear
what evidence and arguments the parties presented to the trial court prior to its decision
to certify the class.
¶7 Harwood was injured in a car accident in August 2015 and filed a personal
injury claim. She signed HIPAA releases5 authorizing the release of medical information
to her attorneys. Harwood’s attorneys requested certified medical bills from Wheaton
Franciscan - St. Francis and provided the HIPAA release signed by Harwood to evidence
her written consent. Wheaton Franciscan Services responded to the request and charged
5
“HIPAA” stands for Health Insurance Portability and Accountability Act. A HIPAA release
form is a type of form wherein a patient consents to the release of his or her health care information to a
third party.
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No. 2018AP1836
$31.14 to be paid to Wheaton Franciscan Medical Group. Harwood’s attorneys paid the
charges to obtain the certified medical bills.
¶8 Harwood’s attorneys also requested certified medical records from St.
Francis Hospital, again providing the HIPAA release signed by Harwood. Wheaton
Franciscan Services responded to the request on behalf of St. Francis Hospital and
charged $61.31 to be paid to “St. Francis.” Again, Harwood’s attorney paid the fee to
obtain her certified medical records. Harwood reimbursed her attorneys “for all charges
incurred from [Wheaton Franciscan].”
¶9 Harwood alleged in the complaint that Wheaton Franciscan charged
Harwood and others “a certification fee, processing fee, basic or retrieval fees” for both
medical record requests made by Harwood’s attorneys, who were persons authorized in
writing by Harwood to access that information. In the class certification motion,
Harwood provided copies of forty-four invoices from Wheaton Franciscan entities that
showed the certification and retrieval charges for health care record requests that had
been made by persons who authorized counsel in writing to request the records.
¶10 Harwood served on Wheaton Franciscan requests for admission.
¶11 In response to Request No. 3—“Admit that you charged a person
authorized in writing by Elizabeth Harwood basic, processing, certification or retrieval
fees”—two of the Wheaton Franciscan entities6 provided the following response:
6
Wheaton Franciscan Healthcare–St Francis, Inc., and Wheaton Franciscan Medical Group, Inc.
provided identical responses to the first set of requests for admission. The third entity, Wheaton
Franciscan Services, Inc., responded to both above requests: “Object to the form and foundation. Subject
to the objections, Wheaton Franciscan Services, Inc. did not and does not process, respond to, or charge
for release of any medical information and therefore denies this and all the following requests for
admission.”
5
No. 2018AP1836
Object to the form and lack of foundation. Subject to the
objections and assuming the reference is to [Harwood’s counsel],
admits that statutorily allowed certification and retrieval fees, as
well as statutorily allowed copying fees, were charged. Denies that
any charges for basic or processing fees were presented.
¶12 In response to Request No. 9—“Admit that since July 1, 2011, you charged
at least 100 persons authorized in writing by the patient a certification, processing, basic
or retrieval fee to obtain the patient’s medical records”— the Wheaton Franciscan entities
provided the following response:
Object to the form, lack of foundation, and being beyond the scope
of the plaintiff’s claim. Subject to the objections, this defendant
cannot reasonably ascertain as to whether or not this request is
true.
¶13 Harwood also issued a first set of interrogatories that included a question as
to who handled the relevant invoicing, and the same Wheaton Franciscan entities (in a
jointly filed response) answered that “Wheaton Franciscan Healthcare–St. Francis, Inc.
personnel processed the request for medical records and Wheaton Franciscan Medical
Group personnel processed the request for medical billing.” Asked whether defendants
“made any errors or mistakes in connection with” the relevant invoices, the entities
answered, “[I]f an error includes an interpretation of the law retrospectively determined
to be erroneous, it was made in good faith.” Asked to identify the methodology Wheaton
Franciscan used to determine when to charge basic fees, retrieval fees, processing fees,
and certification fees, the Wheaton Franciscan entities first “den[ied] that these answering
defendants charged a basic fee or processing fee[,]” then added the following: “Based on
information discovered to date … and based on state Department of Health Services and
Wisconsin Health Information Management Association guidance.”
Harwood’s class certification motion.
¶14 On February 23, 2018, Harwood filed her class certification motion.
6
No. 2018AP1836
¶15 On March 30, 2018, Wheaton Franciscan moved the trial court to stay
proceedings pending a decision by this court in a separate case that also involved class
certification issues. The trial court granted Wheaton Franciscan’s motion to stay
proceedings in part, permitting plaintiff to issue interrogatories. After the separate case
resolved in a way that did not affect the questions presented in this case, the trial court
lifted the stay and set a briefing schedule and a motion hearing.
¶16 In its brief opposing the class certification motion, Wheaton Franciscan
objected to certification in part based on its contention that certification was premature
because the proposed certification “raises several other issues that need to be explored in
discovery[.]”
¶17 First, Wheaton Franciscan argued that it was unclear whether the holding in
Moya v. Aurora Healthcare, Inc., 2017 WI 45, ¶2, 375 Wis. 2d 38, 894 N.W.2d 405,
“permits any attorney with a client with a valid HIPAA authorization to be a participant
in the proposed class, including attorneys representing defendants in personal injury
actions.” Moya addressed the question of “whether an attorney whose client authorized
him via a HIPAA release form to obtain her health care records may benefit from this fee
exemption.” Id. (emphasis added, footnote omitted). Our supreme court answered that
such an attorney may do so: “[A]n attorney authorized by his or her client in writing via
a HIPAA release form to obtain the client’s health care records is a ‘person authorized by
the patient’ under WIS. STAT. § 146.83(3f)(b)4.-5. and is therefore exempt from
certification charges and retrieval fees under these subdivisions.” Id.
¶18 Second, Wheaton Franciscan argued that it was as yet undetermined
“whether the fees charged were based on good faith guidance.”
7
No. 2018AP1836
¶19 Third, Wheaton Franciscan argued that it was undetermined whether
Harwood was an adequate representative because, “[f]or example, she listed her
residence as being in Milwaukee, but she in fact resides in Oak Creek, Wisconsin.”
¶20 Fourth, Wheaton Franciscan argued that it was undetermined how many of
the forty-four Wheaton Franciscan invoices were actually paid.
¶21 Wheaton Franciscan also argued that further discovery was necessary. It
argued that this case was analogous to the facts in Szabo v. Bridgeport Machines, Inc.,
249 F.3d 672 (7th Cir. 2001), in which the appellate court reversed the district court’s
sweeping class certification7 and remanded for further proceedings, inviting the district
court “to deny Szabo’s request for class certification or certify a more limited class.” Id.
at 678. The flaw in the district court’s analysis, Szabo held, was that it had accepted as
true all of the complaint’s allegations when deciding whether to certify the class. Id. at
675. Wheaton Franciscan quoted the following language from Szabo:
Certifying classes on the basis of incontestable allegations in the
complaint moves the court’s discretion to the plaintiff’s
attorneys—who may use it in ways injurious to other class
members, as well as ways injurious to defendants. Both the absent
class members and defendants are entitled to the protection of
independent judicial review of the plaintiff’s allegations.
Id. at 677 (emphasis added). In a sur-reply brief, Wheaton Franciscan further argued that
WIS. STAT. § 803.08, the statute governing class actions, had been “substantively
changed” by the revisions enacted by the Wisconsin Supreme Court Order to harmonize
Wisconsin law with federal law and that this change “undermin[ed] the legal basis” for
7
The Szabo district court had certified a nationwide class; the appellate court held that “[i]f any
class treatment is appropriate, a class limited to a single state (or customers of a single dealer) would be
more practical.” Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 678 (7th Cir. 2001).
8
No. 2018AP1836
granting plaintiff’s motion. Noting that the Judicial Council had stated that its “intent
was to craft a Wisconsin class action rule that tracks as closely as possible federal
practice so that Wisconsin courts and practitioners can look to the well-developed body
of federal case law interpreting [Federal Rule of Civil Procedure] 23 for guidance,” see
Judicial Council Committee Notes, 2017, § 803.08, Wheaton Franciscan argued that
federal case law required more discovery before a ruling on class certification in this
case. Finally, it argued that in addition to the four requirements a plaintiff must satisfy,
federal courts had recognized a fifth requirement of “ascertainability,” and that federal
case law had recently adopted a more rigorous ascertainability requirement, creating a
heightened standard for plaintiffs to meet. It cited language from cases that imposed on
plaintiffs additional burdens of proof about ascertainability—a 2014 Wisconsin district
court case and a 2012 Third Circuit case, Marcus v. BMW of North America, LLC, 687
F.3d 583, 593 (3rd Cir. 2012).
¶22 At the motion hearing, Harwood argued that she had satisfied the
requirements of WIS. STAT. § 803.08.
¶23 The statute requires the plaintiff to first establish three facts about the
proposed class and the representative—referred to as numerosity, commonality, and
typicality—and one fact about the plaintiff’s ability to represent the class. A plaintiff
must show that:
(a) The class is so numerous that joinder of all members is
impracticable.
(b) There are questions of law or fact common to the class.
(c) The claims or defenses of the representative parties are typical
of the claims or defenses of the class.
(d) The representative parties will fairly and adequately protect the
interests of the class.
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No. 2018AP1836
WIS. STAT. § 803.08(1).
¶24 The statute next requires that the trial court must find “that the questions of
law or fact common to class members predominate over any questions affecting only
individual members, and that a class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.” WIS. STAT. § 803.08(2)(c). These
are referred to as the predominancy and superiority requirements. The statute states that
“[t]he matters pertinent to these findings include”:
1. The class members’ interests in individually controlling the
prosecution or defense of separate actions.
2. The extent and nature of any litigation concerning the
controversy already begun by or against class members.
3. The desirability or undesirability of concentrating the litigation
of the claims in the particular forum.
4. The likely difficulties in managing a class action.
Id.
¶25 Harwood argued that she satisfied the first four requirements of WIS. STAT.
§ 803.08(1). She argued that the forty-four invoices she had filed with the trial court
showed “at least 40 different times where [Wheaton Franciscan patients] were charged
the fees that we are contesting were illegally charged.”8 Harwood argued the forty-four
invoices satisfied the numerosity requirement because it would be impractical to join
forty-four individuals in this action. She argued that the commonality requirement was
met because under Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011), the test for
8
She noted that at least one of the invoices in the exhibit was dated August 2017, which was
evidence that refuted defendants’ claim that after May 2017 they had stopped billing certification and
retrieval charges to attorneys who requested health records pursuant to a client’s written HIPAA release.
10
No. 2018AP1836
commonality is whether there is “cause to believe that all [class members’] claims can be
productively litigated at once.” Dukes held that the plaintiff’s alleged common
contention “must be of such a nature that it is capable of classwide resolution—which
means that determination of its truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one stroke.” Id. Harwood argued that she “has the
same identical claim” as the other class members and thus, the answers to each of the
relevant parts of the plaintiff’s claim and defendants’ defenses—whether there were
illegal charges, whether they were charged intentionally or negligently, whether there
was unjust enrichment, whether the charges were made in good faith—would be the
same. For the same reasons, Harwood argued, the typicality requirement was met. She
argued that she was an adequate class representative because “[s]he has the same interests
of the class,” which is that “[s]he would like her money back. She would like the illegal
fees back; that’s what the class would want.” Additionally, Harwood’s counsel argued
that he is adequate to represent the class in this case based on past experience with class
action suits.
¶26 Harwood argued that she also satisfied the predominancy and superiority
requirements of WIS. STAT. § 803.08(2)(c). She argued that “the common issues resolve
all of the claims…. [N]ot only are they predominant, they are the only issues before the
[c]ourt.” As to whether class action was “superior to other available methods for fairly
and efficiently adjudicating the controversy,” she started by referencing the reasoning of
Cruz v. All Saints Healthcare System, Inc., 2001 WI App 67, 242 Wis. 2d 432, 625
N.W.2d 344, which also concerned alleged overcharging of patients in violation of WIS.
STAT. § 146.83. In that case, this court held:
We believe that given the economic realities of this case,
class action may be the only effective means to implement the
legislature’s intent to provide redress for unreasonable charges….
The individual amounts at issue are small and not likely to justify
individual suits. These economic factors make this case ideally
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No. 2018AP1836
suited to class action. Here, the aggregation of small claims, when
joined as a class, becomes worthwhile to litigate.
Cruz, 242 Wis. 2d 432, ¶9.
¶27 Harwood argued that class action was a superior method for adjudicating
the claims:
The real issue is that [defendants] are betting if the [c]ourt
denies the class, that these people will not be in a position to bring
a claim. They will not be able to find a lawyer who is willing to go
forward on a claim and keep in mind, the actual damage claim is
roughly $28. The likelihood of them finding a lawyer who is
willing to step in a case over $28 is so low, and that’s what the
Cruz court found significant as to why it was important[.]
¶28 Finally, Harwood noted that “the manageability of this class is pretty
straightforward because every single charge is reflected on an invoice that the Defendant
has. They sent the invoices so we know the name of the person and what they charged.
This is not going to be a complicated case in that sense.”
¶29 In response, Wheaton Franciscan reiterated its argument that part of the
proposed class definition (“[a]ll persons in Wisconsin who: (i) were a patient of the
Defendants or a person authorized by a patient of the Defendants in writing to obtain the
patient’s medical records”) included “a person authorized by a patient,” while Moya held
only that “an attorney authorized by his or her client in writing via a HIPAA release form
to obtain the client’s health care records is a ‘person authorized by the patient’ under
WIS. STAT. § 146.83(3f)(b)4.-5. and is therefore exempt from certification charges and
retrieval fees under these subdivisions.” See Moya, 375 Wis. 2d 38, ¶2. Wheaton
Franciscan further argued that the class should not be certified because it had offered an
affidavit of the CEO stating that one of the defendants “had nothing to do with any of this
in this case[.]” Wheaton Franciscan stated that the plaintiff’s proposed class included
those who were charged retrieval or certification fees by the defendants “directly or
12
No. 2018AP1836
indirectly,” and counsel argued that the class should not be certified because defendants
“don’t know what directly or indirectly means.”
¶30 Wheaton Franciscan argued that Harwood had not satisfied the statutory
requirements for certification. It argued the numerosity requirement was not supported
because one of the forty-four invoices presented was from Wheaton Franciscan–St.
Joseph Campus, an entity that does not have any relationship to the named defendants,
and one of the invoices came from Wheaton Franciscan–Franklin, and “some further
exploration” was needed to determine whether it was a separate entity. As to
commonality, it argued that it was not satisfied because “given the factual questions that
are being presented at this time[,]” the resolution of the litigation would not generate
common answers for the class. It argued that the typicality requirement was not satisfied:
“We are not basing on the same legal theory here at this point in time.” It argued that the
adequacy of Harwood to represent the class and whether she had adverse interests to the
class was “something that needs to be factually explored” and that her affidavit was an
insufficient basis for making that determination. Addressing the superiority requirement,
Wheaton Franciscan referenced a pending Wisconsin case against a different defendant
relating to health record charges and stated, “At this point in time, we have to sort out
these issues to make sure we’re not having overlapping classes involved in this case.”
Wheaton Franciscan made no predominancy argument. Wheaton Franciscan instead
merely argued that “[a] round of discovery need[ed] to occur” and stated that “there are a
number of legal issues and factual issues that need to be explored in this case[.]” It asked
the trial court to deny the motion.
¶31 The trial court noted its familiarity with the legal standards of class
certification due to “considerable class action experience as a practicing attorney both in
Wisconsin and around the country under the federal rules.” It started the hearing by
questioning Harwood about whether she had any evidence of numerosity because the trial
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No. 2018AP1836
court had not seen the affidavit that attached copies of the forty-four invoices. The
affidavit was located, and the hearing proceeded. After the parties’ arguments, the trial
court questioned Harwood about proof of damages as to each member of the class, the
relevance of wrongly named defendants, and the proposed class’s exclusion for persons
charged by Ciox and IOD, third-party providers who manage record requests and charge
people for them. Harwood explained that this lawsuit involved only people directly
billed for health records by Wheaton Franciscan. For example, Harwood noted that Ciox
was named as a defendant in a separate suit, and by excluding from the class persons who
had been charged by Ciox, plaintiff ensured that there was no overlap between the cases.
¶32 The trial court stated that it was “tentatively persuaded that this class should
be certified.” It stated, “I recognize that the federal rule creates a heightened scrutiny
based on demonstrable facts and not just pleading” and added, “I think the Plaintiff has
done that here with the invoices submitted, and that’s the primary evidence because it
really goes to all of the issues.” It acknowledged the factual issues raised by Wheaton
Franciscan, and noted that “most of those go to the merits of the case, potential defenses,
inability to prove damages or whatever it might be, but that’s not what I’m deciding
today.” The trial court stated that “because written decisions have the effect of greatly
clarifying thought processes,” it would not make a ruling from the bench and would
instead issue a written decision.
Decision and order.
¶33 The written decision certified a class and appointed Harwood the
representative.
¶34 The trial court noted that the revised WIS. STAT. § 803.08 took effect after
this case and the motion at issue were filed. Nevertheless, the trial court held “that the
application of the new rule is both feasible and would not work an injustice” and that
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No. 2018AP1836
under the new rule “there is no prejudice to [Harwood] in applying it.” The trial court
further stated that the application of the new rule benefited both parties to the extent that
“[Wheaton Franciscan] get[s] the benefit of a more rigorous analysis, which in turn
corresponds to less appellate risk for [Harwood].” Therefore, it applied the revised
version.
¶35 The trial court held that, after reviewing the submissions of the parties and
hearing oral argument, the proposed class “met the requirements for class certification”
and ordered the class to be certified. It concluded that the numerosity requirement was
satisfied, noting the evidence included forty-four invoices and the potential of many
more, “considering how many patients and patient records the Defendants deal with on a
yearly basis.” It concluded that it was impracticable to bring all the interested parties
before the trial court without a class action.
¶36 The trial court found that the commonality requirement was satisfied
because all of the members of the proposed class “allegedly suffered the same injury—
being wrongfully overcharged for retrieval and certification fees[,]” and because “[t]he
determination of the truth or falsity of this contention will resolve the issue of liability for
all class members.” It further noted that all the proposed class members “share the same
statutory remedies … for actual and exemplary damages.”
¶37 The trial court concluded that the typicality requirement was satisfied
because “there are almost identical claims between Ms. Harwood and the proposed class
members.”
¶38 The trial court concluded that the adequacy requirement was satisfied
because it found that Harwood’s claim was substantially similar to unnamed class
members and her interests were not contrary or antagonistic. It noted Harwood’s
counsel’s experience in this specific area of litigation.
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No. 2018AP1836
¶39 As to predominancy, the trial court concluded that the proposed class all
suffered the same alleged harm, and this issue predominated over any questions affecting
only individual members. Given that the case involved small amounts of money at issue
for individual claimants, and given that the legislature’s prescribed calculations of
damages for statute violations would make damages calculations straightforward for class
members, the trial court concluded that a class action was superior to any other method of
adjudicating the case.
¶40 This appeals follows.
DISCUSSION
I. Standard of review.
¶41 A trial court’s decision to grant or deny a motion for class certification is
committed to the trial court’s discretion. Hermanson v. Wal Mart Stores, Inc., 2006 WI
App 36, ¶3, 290 Wis. 2d 225, 711 N.W.2d 694. A trial court exercises its discretion
when it considers the facts of record and reasons its way to a rational, legally sound
conclusion. McCleary v. State, 49 Wis. 2d 263, 277, 182 N.W.2d 512 (1971). We affirm
discretionary decisions if the trial court applied the correct law to the facts of record and
reached a reasonable decision. Hermanson, 290 Wis. 2d 225, ¶3. Federal law likewise
commits class certification decisions to the discretion of the district courts. See Mullins
v. Direct Dig., LLC, 795 F.3d 654, 659 (7th Cir. 2015).
II. Allowable fees for copies of patient health care records.
¶42 The statute allegedly violated in this case is WIS. STAT. § 146.83, which
governs access to patient health care records. Under § 146.83(3f), a health care provider
shall, subject to exceptions that are inapplicable here, provide copies of a patient’s health
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No. 2018AP1836
care records “if a person requests copies of a patient’s health care records, provides
informed consent, and pays the applicable fees under par. (b).” Sec. 146.83(3f)(a).
¶43 Pursuant to WIS. STAT. § 146.83(3f)(b), health care providers may impose
certain costs on the person requesting health care records under § 146.83(3f)(a):
(b) Except as provided in sub. (1f), a health care provider may
charge no more than the total of all of the following that apply for
providing the copies requested under par. (a):
1. For paper copies: $1 per page for the first 25 pages; 75 cents per
page for pages 26 to 50; 50 cents per page for pages 51 to 100; and
30 cents per page for pages 101 and above.
2. For microfiche or microfilm copies, $1.50 per page.
3. For a print of an X-ray, $10 per image.
4. If the requester is not the patient or a person authorized by the
patient, for certification of copies, a single $8 charge.
5. If the requester is not the patient or a person authorized by the
patient, a single retrieval fee of $20 for all copies requested.
6. Actual shipping costs and any applicable taxes.
Sec. 146.83(3f)(b) (emphasis added). According to § 146.83(3f)(b)4. and 5., the patient
or a person authorized by the patient are exempt from the certification charge and
retrieval fee.
¶44 As noted above, a recent case raised the question of “whether an attorney
whose client authorized him via a HIPAA release form to obtain her health care records
may benefit from this fee exemption.” Moya, 375 Wis. 2d 38, ¶2 (emphasis added,
footnote omitted). Our supreme court answered that they may:
[A]n attorney authorized by his or her client in writing via a
HIPAA release form to obtain the client’s health care records is a
“person authorized by the patient” under WIS. STAT.
§ 146.83(3f)(b)4.-5. and is therefore exempt from certification
charges and retrieval fees under these subdivisions.
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No. 2018AP1836
Id.
III. The trial court applied the correct legal standard to the relevant facts and
reached a reasonable decision.
¶45 The parties acknowledge that this appeal is subject to an erroneous exercise
of discretion standard of review. We affirm discretionary decisions if the trial court
applied the correct law to the facts of record and reached a reasonable decision.
¶46 Wheaton Franciscan does not challenge any findings of fact. Its arguments
all relate to whether the trial court applied the correct law. First, it argues that the trial
court’s written decision lacks the “rigorous analysis” required under federal class action
law. Second, it argues that the proposed class includes “any person who requests health
records with a patient’s written permission,” and our supreme court’s decision in Moya
held only that “an attorney who is authorized via a HIPAA release is a ‘person authorized
by the patient’” under WIS. STAT. § 146.83(3f)(b)4.-5. Third, it argues that the evidence
is insufficient to answer the questions of numerosity, commonality, typicality, and
adequacy. Fourth, it argues that federal law requires that the parties have an opportunity
for more discovery before the class certification motion is decided. We address these
arguments in turn.
A. The trial court carefully analyzed the application of the law to the facts
as required by state and federal class action law.
¶47 Wheaton Franciscan spends much of its brief arguing that the similarity of
the trial court’s order to the language of an order certifying a class in a separate case
shows that the trial court did not “exercise independent judgment in its written decision
granting the motion to certify the class” and that it “adopted and applied many of the
factual and legal determinations of another trial court[’s order.]” Wheaton Franciscan
asserts that “the trial court did not engage in an analysis of the facts specific to this case
in reaching conclusions specific to this case.” It argues the trial court’s analysis is not the
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No. 2018AP1836
“rigorous analysis” that federal law requires before certifying a class. See General Tel.
Co. of the Sw. v. Falcon, 457 U.S. 147, 161 (1982) (“[A] Title VII class action, like any
other class action, may only be certified if the trial court is satisfied, after a rigorous
analysis, that the prerequisites of [Federal Rule of Civil Procedure] 23(a) have been
satisfied.”).
¶48 We have carefully reviewed the record and read the relevant transcripts.
See Randall v. Randall, 2000 WI App 98, ¶7, 235 Wis. 2d 1, 612 N.W.2d 737 (“[W]e
may search the record to determine if it supports the court’s discretionary decision.”).
See also State v. Pharr, 115 Wis. 2d 334, 343, 340 N.W.2d 498 (1983) (if the trial court
“fails to set forth its reasoning in exercising its discretion ... the appellate court should
independently review the record to determine whether it provides a basis for the trial
court’s exercise of discretion”).
¶49 As reflected in the above description of the hearing and order, the trial court
clearly focused on the facts specific to this case and reached conclusions specific to this
case. For example, because the trial court had not seen the affidavit submitted with the
copies of the invoices, it started by questioning Harwood about the lack of evidence of
numerosity at the outset of the hearing, stating, “Unless I missed it in the Plaintiff’s
submission, I don’t see any evidence pertaining to numerosity.”
¶50 After Wheaton Franciscan asserted that two of the forty-four invoices
Harwood had submitted came from entities that were separate from the named defendants
even though “Wheaton Franciscan” was a part of their names, the trial court questioned
Harwood:
Let me ask another question directly following up on
defense counsel’s argument. The idea that there may be wrongly
named defendants … I don’t believe has bearing on the
certification issue. That may be a defense, but in only one sense
does it give me pause which is the numerosity. If you have 45
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No. 2018AP1836
invoices and in fact only two of them pertain to named defendants,
that might give me concern on numerosity.
Harwood responded that defendants had put forth no evidence that the two entities on the
invoices were not truly Wheaton Franciscan entities. The trial court then asked “another
numerosity question”: “Why in the definition of the proposed class is the Plaintiff
excluding Ciox and IOD?” Harwood answered that a separate case with the same legal
basis was already pending against others who had overcharged for patient records, and
persons who had been billed by those entities are “not going to be a member of this class
because they are already [members of the other class].” Harwood explained that this
exclusion “addresses” the potential concern that in certifying this class the trial court
would inadvertently include class members whose billing claims were being litigated in
another action.
¶51 In its eleven-page order, the trial court set forth the applicable legal
standards for each statutory requirement and stated a factual basis for concluding that
each had been satisfied. We conclude that the record is replete with evidence that the
trial court in this case relied on “facts that are of record or that are reasonably derived by
inference from the record” and reached “a conclusion based on a logical rationale
founded upon proper legal standards.” See McCleary, 49 Wis. 2d at 277.
B. The trial court’s definition of the class is consistent with Moya’s
holding because the holding merely confirmed that patient-authorized
lawyers are among those exempt from certification and retrieval fees.
¶52 Wheaton Franciscan argues that the trial court erred in the scope of the
class certified because “[t]he trial court’s proposed class is more broad than the Moya
court’s holding.” It argues that “[t]he Moya court did not address unrepresented patients
and the addition of this new class of patients should have not occurred without further
investigation, as patients requesting their own records while being provided care may not
be charged fees.”
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No. 2018AP1836
¶53 We understand Wheaton Franciscan to be arguing that the problem with the
class is that it includes more than just lawyers who have obtained HIPAA releases from
clients and requested health care records on their behalf—which is what the Moya court
was focused on. However, the focus of the class certification is on the question: who
was charged certification and retrieval fees contrary to the statute? Moya answered a
different question, and its answer is relevant to this case in only one regard. Wheaton
Franciscan fails to explain how a class that includes verbatim the words of the statute is
based on an improper legal standard. The fact that the Moya holding is that an attorney
is, for purposes of WIS. STAT. § 146.83, “a person authorized by the patient” reflects only
the fact that a defendant had argued that the statute implicitly excluded attorneys. The
statute already provides an answer to the question Wheaton Franciscan appears to imply
is unanswered, which is, who qualifies as a “person authorized by the patient”? The
statute contains the relevant definition:
(5) “Person authorized by the patient” means the parent, guardian,
or legal custodian of a minor patient … the person vested with
supervision of the child … the guardian of a patient adjudicated
incompetent in this state, the personal representative, spouse, or
domestic partner under ch. 770 of a deceased patient, any person
authorized in writing by the patient or a health care agent
designated by the patient as a principal under ch. 155 if the patient
has been found to be incapacitated under s. 155.05(2), except as
limited by the power of attorney for health care instrument.
WIS. STAT. § 146.81(5) (emphasis added). In Moya, the question presented, see Moya,
375 Wis. 2d 38, ¶2, was whether attorneys with a HIPAA release form from a patient
were included in the category of “any person authorized in writing by the patient.” The
court answered that they were. Id. The Moya holding is thus irrelevant to this case other
than to establish that the statute means that attorneys who request health records pursuant
to a HIPAA release form cannot be charged certification and retrieval fees. Where the
statute plainly states that certain fees cannot be charged to “a person authorized by the
patient,” and the statute further contains a definition of that phrase that has been held to
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No. 2018AP1836
include—but not to solely consist of—lawyers, there is no reason that the class must be
limited to attorneys based on the Moya holding.
C. The trial court’s conclusion that the evidence was sufficient to satisfy
WIS. STAT. § 803.08(1) requirements of numerosity, commonality,
typicality, and adequacy was based on the law and the facts and is
reasonable.
¶54 We start by noting that it is considered to be in the public interest as
declared by the legislature to permit class actions when the prerequisites are satisfied.
Mercury Records Prods., Inc. v. Economic Consultants, Inc., 91 Wis. 2d 482, 490, 283
N.W.2d 613 (Ct. App. 1979). “In the interest of simplifying the lawsuit and avoiding a
multiplicity of litigation, a class action is proper even if each member of the class has a
separate cause of action for money damages.” Id.¶55 Wheaton Franciscan objects that numerosity is not satisfied because there
were two invoices of the forty-four submitted that came from entities other than the
defendants. It further objects that plaintiff’s suggestion that there are large numbers of
potential class members is mere speculation. Neither of these objections holds water.
Wheaton Franciscan did not dispute that forty-two invoices were issued by its billing
department. That number is sufficient to satisfy the numerosity requirement, so even if
the two invoices defendants challenged (without evidence) were struck, there are forty-
two identified class members, and it does not matter for purposes of class certification if
that is all there are.
¶56 As to commonality, Wheaton Franciscan argues that the order “opens up
the class definition to patients unrepresented by counsel,” and that this “should have not
occurred without further investigation, as patients requesting their own records while
being provided care may not be charged fees.” Wheaton Franciscan appears to be
arguing that unrepresented patients were never charged certification and retrieval fees
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No. 2018AP1836
and therefore did not need to be made part of the class, but the definition of the class
excludes such persons anyway: section (ii) of the definition limits the class to those who
“[w]ere charged a retrieval and/or a certification fee by Defendants[.]”
¶57 Wheaton Franciscan argues that a determination of typicality and adequacy
was unsupported by enough evidence: “While the trial court contends Ms. Harwood’s
claim is substantially similar to unnamed class members, that conclusion is speculative
and without a basis in evidence.” In light of the claims in this case—that individuals
were charged $28 in fees that the statute does not permit Wheaton Franciscan to charge—
this argument is almost specious. Harwood alleges that she was charged these fees, and
she supplied invoices to establish that. Harwood also alleges that others were charged
these fees despite the statute’s prohibition, and she has provided evidence of at least
forty-two such charges. The trial court concluded that her claim was substantially similar
in that each was overcharged by $28, each had the same legal basis for the claim, and
each had the same claim to statutory damages if the violation is established. There is
evidence to support the trial court’s conclusion that the claims of the representative and
the class members shared commonality and typicality, and that the adequacy requirement
has been met.
¶58 Wheaton Franciscan did not present additional arguments on the
predominance and superiority requirements other than to argue that the evidence was not
sufficient to support the conclusion that the plaintiff had satisfied these requirements. We
disagree. As noted at the hearing, the claims of all the class members and the
representative are not only predominant; they are the only claims each member makes.
As to superiority, the case law is clear that public policy favors class actions especially
where the amount in controversy is so small that the wronged party is unlikely ever to
obtain judicial review of the alleged violation without a class action.
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No. 2018AP1836
D. Federal case law does not require additional discovery in this case
prior to class certification.
¶59 Wheaton Franciscan relies heavily on two federal cases for the proposition
that the trial court erred by failing to require more discovery and by granting certification
prematurely. The first case is Livingston v. Associates Finance, Inc., 339 F.3d 553 (7th
Cir. 2003), and the second is Szabo, 249 F.3d 672. Wheaton Franciscan argues that the
trial court “accepted the allegations of the complaint and Ms. Harwood’s motion to
certify a class, and granted class certification before the defense had any opportunity to
engage in significant discovery.”
¶60 However, we have reviewed these cases, and we find that neither supports
Wheaton Franciscan’s position. Livingston was a case in which borrowers claimed that
the lender had violated the Truth in Lending Act and moved to certify a class. Id., 339
F.3d at 554. Defendants responded with a motion to compel arbitration as required by
the loan contract. Id. After it found the arbitration agreement unenforceable, the district
court proceeded to certify the class. Id. at 556. “The district court reached the class
certification question by considering [defendant’s] motion to dismiss class claims as its
substantive response to the [plaintiffs’] motion for class certification, despite the court’s
earlier decision staying all briefing and discovery on the issue.” Id.. The Seventh Circuit
reversed on the grounds that the defendants had not been given “adequate opportunity to
respond substantively” to the class certification motion:
The district court’s failure to provide [defendants] with an
adequate opportunity to respond substantively to the [plaintiffs’]
class certification motion, particularly in light of the court’s
decision to stay all briefing and discovery into that question,
effectively denied [defendants’] due process rights on the question.
Accordingly, the court’s decision to certify the class must be
vacated.
Id. at 558-59 (emphasis added; citation omitted).
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No. 2018AP1836
¶61 Livingston thus stands for a much narrower proposition than Wheaton
Franciscan suggests. First, it is primarily concerned with the applicability of an
arbitration agreement, and second, the error it was correcting was the district court’s
“failure to provide [defendants] with an adequate opportunity to respond substantively to
the [plaintiffs’] class certification motion[.]” See id. There is no parallel to this case
because here the defendants were given adequate opportunity to respond substantively to
the class certification motion.
¶62 Szabo likewise fails to support the proposition that the trial court in this
case erroneously exercised its discretion when it decided the motion without permitting
further discovery. In Szabo, the district court certified a nationwide class on the basis of
the complaint alone. Id., 249 F.3d at 674-75. The Seventh Circuit reversed, saying that
“[c]ertifying classes on the basis of incontestable allegations in the complaint moves the
court’s discretion to the plaintiff’s attorneys—who may use it in ways injurious to other
class members, as well as ways injurious to defendants.” Id. at 677 (emphasis added).
“Both the absent class members and defendants are entitled to the protection of
independent judicial review of the plaintiff’s allegations.” Id. What happened in this
case is precisely what the appellate court in Szabo said should happen. The trial court
independently reviewed the allegations and did not base its certification ruling on the
complaint alone. The plaintiff provided evidence in the form of invoices and answers to
interrogatories. The trial court questioned Harwood closely about the evidence at the
hearing and gave no ruling from the bench, stating that it would issue a written decision
after more thought. Here, Wheaton Franciscan received “the protection of independent
judicial review of the plaintiff’s allegations.” See id.¶63 Though each of these federal appellate opinions reverses a district court’s
too-hasty ruling, the facts in those cases are distinguishable from what happened in the
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No. 2018AP1836
trial court in this case. Neither shows that it was error for the trial court to proceed to a
decision on the evidence presented by the parties.
¶64 While it put forth the heightened ascertainability requirements in language
from Third Circuit opinions,9 Wheaton Franciscan’s sur-reply brief also cited a Seventh
Circuit case, Mullins, 795 F.3d at 657 and a 2014 district court case from the Eastern
District of Wisconsin. The citation did not advise the trial court that in Mullins, the
Seventh Circuit rejected the “heightened ascertainability” requirement adopted by the
Third Circuit with eleven pages of analysis, see id. at 661-672. The Mullins court said,
“Nothing in [Federal Rule of Civil Procedure] 23 mentions or implies it, and we are not
persuaded by the policy concerns identified by other courts.” Id. at 672. We agree with
the Mullins court that nothing in Federal Rule of Civil Procedure 23 imposes the
heightened requirement imposed by the Third Circuit in Marcus, 687 F.3d 583, and we
conclude that Harwood has established ascertainability to the degree required.
¶65 We note in addition that the record reflects that when Wheaton Franciscan
was asked to “[a]dmit that since July 1, 2011, [it] charged at least 100 persons authorized
in writing by the patient a certification, processing, basic or retrieval fee to obtain the
patient’s medical records,” two of the Wheaton Franciscan entities responded: “this
defendant cannot reasonably ascertain as to whether or not this request is true[.]”
Wheaton Franciscan has access to its own billing records. After having an opportunity
for discovery, Wheaton Franciscan is not now entitled to delay the class certification on
the grounds that further discovery is needed because it has already asserted that it could
9
For example, Marcus v. BMW of North America, LLC, 687 F.3d 583, 593 (3rd Cir. 2012).
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No. 2018AP1836
not “reasonably ascertain” the truth of that allegation, which is the crux of the case.
Wheaton Franciscan cannot have it both ways.
¶66 For these reasons, we conclude that the trial court properly exercised its
discretion in granting the class certification motion, and we affirm.
By the Court.—Order affirmed.
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