Judge David S. Cunningham, Case Number: 19STCV05681, Date: 2024-12-18 Tentative Ruling

Judge: David S. Cunningham, Case: 19STCV05681, Date: 2024-12-18 Tentative Ruling

Moving Party: Cedars-Sinai Medical Center (“Defendant” or “Cedars-Sinai”)

“This is a class action. . . . Plaintiff alleges that Cedars-Sinai charges an undisclosed fee – the ER Visitation Fee – for seeking treatment at Cedars-Sinai’s emergency room.” (2/14/23 Tentative Ruling Re: Motion for Class Certification, p. 1.)[1]

Here, Cedars-Sinai moves to seal certain exhibits filed by Plaintiff in support of her motion for summary adjudication.

The court may order that a record be filed under seal only if it expressly finds facts that establish:

(1) There exists an overriding interest that overcomes the right of public access to the record;

(3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed;

(Cal. Rules of Court, rule 2.550(d).) “These findings embody constitutional requirements for a request to seal court records, protecting the First Amendment right of public access to civil trials. (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2023 Update) ¶ 9:418, emphasis in original.)

The parties’ agreement to seal documents is not enough to support a motion to seal. (Id. at ¶ 9:417.1 [“Parties sometimes operate under an informal arrangement pursuant to which documents are ‘deemed filed under seal’ unless an objection is made. Such an arrangement ‘is entirely inconsistent with the mandatory requirements of rules 2.550 and 2.551 and the constitutional values informing those requirements.’”].)

“Only the specific words of documents that constitute the sensitive material should be sealed; generally, it is not permissible to seal the entire document.” (Id. at ¶ 9:418.5.)

Defendant seeks to seal Exhibits 8 and 14. According to Defendant, “Exhibit 8 is a confidential internal hospital record (policy and procedure)” (Motion, p. 1), and “Exhibit 14 reflects the names of patients and certain financial information associated with their encounters in the Emergency Department (‘ED’).” (Ibid.)

The Court finds that the motion should be denied without prejudice due to insufficient notice. Defendant e-served the moving papers on 12/4/24, less than 16 court days plus two court days before the hearing.

The motion also is denied without prejudice because Defendant failed to file a supporting declaration as required by rule 2.551(b)(1).

Plaintiff contends the motion is additionally untimely under rule 2.551(b)(3)(B). (See Opposition, pp. 2-3.)

The Court tends to disagree. Rule 2.551(b)(3)(B) requires lodged documents to be placed in the public file if the party that produced the documents in discovery fails to move to seal them within 10 days after receiving notice of lodgment. It is undisputed that Defendant did not move to seal within 10 days. However, Plaintiff fails to cite authority prohibiting the producing party from moving to seal the documents once they are, or should have been, placed in the public file. The plain language of rule 2.551(b)(3)(B) does not prohibit such a motion.

As a matter of guidance, the Court agrees with Defendant as to Exhibit 8. It appears to be a proprietary, trade-secret-type policy document. The Court would be inclined to seal it.

The Court agrees with Defendant in part as to Exhibit 14. The discovery responses are already heavily redacted, but the class-member declarations, which are attached, reveal patient names (all declarations), the names of the patients’ insurance providers (first, second, third, fourth, and fifth declarations), and, in some instances, the specific medical reasons why the declarants went to Defendant’s ED (second and fourth declarations). The Court believes these portions of the declarations should be redacted and sealed, but the remaining portions do not need to be.

As modified, if it were appropriate to reach the merits, the Court would favor granting the motion to seal as to both documents because:

* Exhibits 8 and 14 disclose proprietary, trade-secret-type information and/or patient names, insurer names, and medical information;

* an overriding interest exists in keeping the proprietary, trade-secret-type information and/or patient names, insurer names, and medical information confidential;

* there is a substantial probability that the overriding interest will be prejudiced if the motion is denied;

* with the modifications, the sealing request is narrowly tailored given that it only redacts and seals the portions that disclose the proprietary, trade-secret-type information and/or patient names, insurer names, and medical information; and

[1] Plaintiff is Amy Fleschert.

Opposing Party: Cedars-Sinai Medical Center (“Defendant” or “Cedars-Sinai”)

“The initial complaint alleged causes of action for declaratory relief, violation of the Unfair Competition Law (‘UCL’), and violation of the Consumer Legal Remedies Act (‘CLRA’).” (Ibid.)

“On 12/10/20, Judge Ann Jones granted Plaintiff’s first motion for class certification as to all three causes of action.” (Ibid.)

“On 4/27/21, Judge Jones denied Cedars-Sinai’s motion for judgment on the pleadings.” (Ibid.)

“Then Cedars-Sinai filed a petition for writ of mandate, which the Court of Appeal denied.” (Ibid.)

“On 4/18/22, this Court granted Plaintiff’s motion for leave to file the first amended complaint (‘FAC’), adding a cause of action for breach of contract.” (Ibid.)

“On 6/16/22, the Court overruled the demurrer as to [the] breach of contract and declaratory relief causes of action and sustained it with leave to amend as to the UCL and the CLRA causes of action.” (Id. at p. 2.)

“On 6/22/22, Plaintiff filed the [second amended complaint (‘SAC’)].” (Ibid.)

“On 7/22/22, Cedars-Sinai filed a demurrer to the SAC, challenging the UCL and CLRA causes of action.” (Ibid.)

“On 9/30/22, Plaintiff filed a motion to certify the breach of contract cause of action.” (Ibid.)

“On 2/14/23, the Court heard the second motion for class certification.” (11/30/23 Ruling Re: Motion for Protective Order, p. 2.) “The Court tentatively granted the motion but continued the hearing for supplemental briefing on ‘the feasibility of applying Plaintiff’s damages formula to all putative class members.’” (Ibid.)

“On 3/10/23 and 3/17/23, the parties filed their supplemental briefs.” (5/30/23 Ruling Re: Supplemental Briefs Re: Second Motion for Class Certification, p. 2.)

“On 5/30/23, the Court ‘certif[ied] the contract class as an issue class as to liability’ but denied certification of a damages class.” (2/9/24 Order Re: Transcript and Supplemental Briefing Re: Motion to Amend or Modify, p. 1.) “The Court found . . . that Plaintiff’s damages formula works but that she failed to show that it could be utilized on a class-wide basis in a feasible and manageable manner.” (Ibid.) “The Court made the ruling ‘without prejudice[,]’ granting Plaintiff leave to file ‘a renewed motion to certify the damages class’ in the future.” (Ibid.)

“On 9/11/23, Cedars-Sinai served Plaintiff’s counsel with deposition notices and subpoenas for 57 absent class members.” (11/30/23 Ruling Re: Motion for Protective Order, p. 2.)

“On 9/13/23, the Court held a discovery conference regarding Cedars-Sinai’s deposition notices and subpoenas.” (Ibid.) “In part, the Court granted Plaintiff’s request to file a motion for protective order.” (Ibid., footnote omitted.)

“On 11/30/23, the Court heard Plaintiff’s motion and granted it without prejudice.” (8/26/24 Ruling Re: Motion Re: Permissible Scope of Discovery, p. 2.) “Notably, the Court indicated that Defendant would be provided an opportunity to re-request the depositions after the hearing on Plaintiff’s motion to amend or modify the 5/30/23 certification order, which Plaintiff filed in February 2024.”

“On 2/8/24, Plaintiff’s motion to amend or modify . . . came on for hearing.” (2/9/24 Order Re: Transcript and Supplemental Briefing Re: Motion to Amend or Modify, p. 1.) “Plaintiff argued that the denial of certification of a damages class should be reversed because ‘Defendant’s recent discovery responses demonstrate that it is feasible and manageable to apply the damages formula on a class-wide basis[.]’” (Ibid.) The Court continued the matter for supplemental briefing. (See id. at p. 2.)

“On 3/26/24, the Court denied Plaintiff’s motion without prejudice[,]” finding that Plaintiff failed to establish a basis for changing the contract class from an issue class to a normal, damages-included class. (8/26/24 Ruling Re: Motion Re: Permissible Scope of Discovery, p. 3; see also 3/26/24 Minute Order, pp. 1-2.)

When a plaintiff moves for summary adjudication, “the burden is to produce admissible evidence of each element of a ‘cause of action’ entitling him or her to judgment.” (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2024 Update) ¶ 10:233, emphasis added.) “This means that plaintiffs who bear the burden of proof at trial by a preponderance of evidence must produce evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not.” (Ibid., emphasis in original.) “[O]therwise, he would not be entitled to judgment as a matter of law.” (Ibid., emphasis in original.)

“Defendant has no evidentiary burden until plaintiff produces admissible (and undisputed) evidence on each element of a cause of action.” (Id. at ¶ 10:238, emphasis in original.) “Until that time, plaintiff has not met its burden of producing evidence [citation], and defendant therefore has no burden to oppose.” (Ibid.)

Once the initial burden is met, “the burden shifts to defendant . . . ‘to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.’” (Id. at ¶ 10:233.)

Importantly, “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc. § 437c, subd. (f)(1).)

* Plaintiff and all members of the contract class entered into Conditions of Admission (“COA”) contracts (see Motion, pp. 11-12);

* the COAs are contracts of adhesion and contain the same language (see id. at p. 12);

* “[t]he COA[s] . . . only allow[] Defendant to charge . . . for services actually rendered” (ibid.; see also id. at pp. 13-15);

* instead of covering services rendered, ER Visitation fees “cover the operational, overhead, and administrative costs of running an emergency room” (id. at p. 15; see also id. at pp. 16-17);

* “Defendant had a contractual duty not to charge ER Visitation Fees” (id. at p. 17);

* Plaintiff and the contract class “were excused from performance as a result of Defendant’s breach[es]” (id. at p. 19; see also id. at pp. 20-22); and

* Plaintiff’s motion is procedurally flawed (see Opposition, pp. 8-10 [arguing that (1) the motion seeks “to adjudicate only the elements of duty and breach, while leaving damages for another day[,]” and (2) it is “improper to grant summary adjudication on an interpretation of a contractual ‘issue of duty’ that does not otherwise resolve the entire contract claim”], emphasis in original);

* triable issues exist (see id. at pp. 11-17 [contending (1) the ambiguousness of the COAs creates a triable issue, (2) whether ER Visitation Fees “are tied directly to services rendered” is a triable issue, and (3) Defendant did not admit that ER Visitation Fees “are [] untethered to ‘services rendered’”]);

* Plaintiff fails to show that she and the contract class were excused from performance (see id. at pp. 17-18);

Alternatively, Defendant requests denial or a discovery continuance pursuant to Code of Civil Procedure section 437c(h). (See id. at pp. 19-21.)

* the duty issue can be summarily adjudicated (see Reply, pp. 5-6 [citing Linden Partners v. Wilshire Linden Associates (1998) 62 Cal.App.4^th 508 (“Linden”)]);

* the COA is unambiguous and can be interpreted as a matter of law (see id. at pp. 6-8 [also claiming Defendant’s extrinsic evidence fails to support Defendant’s interpretation]);

* “ER Visitation Fees are not fees for services rendered to individual patients” (id. at p. 8; see also id. at p. 9);

* “Defendant’s ‘expert’ declaration . . . is incompetent and inadmissible” (id. at p. 10; see also id. at p. 9);

* Defendant’s interpretation of “services rendered” fails to create a triable issue (see id. at pp. 10-11);

* Plaintiff’s moving papers demonstrate that Plaintiff and the class were excused from performance (see id. at pp. 11-12);

* if liability is bifurcated, the moving party does not need to show the amount of damages (see id. at pp. 12-13); and

* the Court should deny Defendant’s section 437c(h) request. (See id. at p. 13.)

The first issue is whether Plaintiff’s motion is procedurally improper. The answer is yes in part. Plaintiff’s motion is made on two grounds. One, “there is no defense to the . . . contract cause of action.” (Notice of Motion, p. 2; see also Plaintiff’s Sep. Statement, p. 2 [“no defense” section].) Two, “Defendant had a contractual ‘duty’ not to charge ER Visitation Fees.” (Notice of Motion, p. 2; see also Plaintiff’s Sep. Statement, p. 10 [“duty” section].) The first ground cannot be utilized to procure summary adjudication here.

For the “no defense” ground, Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4^th 226 (“Paramount”) is controlling. A manufacturer of roofing shingles brought a “no defense” motion against an asphalt supplier on the issue of liability “but not on the issue of damages.” (Paramount, supra, 227 Cal.App.4^th at 229.) The burden of proof on a “no defense” motion is to “prove[] each element of the cause of action[.]” (Id. at 241.) Since “damages are an element of a breach of contract cause of action [citation],” the Second District Court of Appeal held that the manufacturer could not “obtain judgment on a breach of contract cause of action in an amount of damages to be determined later.” (Ibid. [holding that a plaintiff cannot “seek summary adjudication of liability only, leaving the resolution of damages to a later trial”]; see also Edmon & Karnow, supra, at ¶ 10:33 [advising that, “when the damages amount is disputed, [a] plaintiff cannot obtain summary adjudication on the liability issue and leave the damages issue for resolution at trial”].) In the instant case, similarly, liability has been bifurcated (see 3/26/24 Minute Order, pp. 1-2 [denying certification as to damages, bifurcating liability, and agreeing to try liability first], and Plaintiff fails to prove the class members’ damages amounts, whether actual damages or nominal damages. (See Motion, pp. 22-24; see also Plaintiff’s Sep. Statement, Undisputed Material Fact (“UMF”) 16 [merely citing the 5/31/23 Notice of Ruling drafted by Plaintiff’s counsel].)[1] These rules and facts render the “no defense” ground defective.

Plaintiff claims Paramount authorizes courts to bifurcate and adjudicate liability. (See Reply, p. 5.)

The Court disagrees. The bifurcation quote comes from a case called Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55 Cal.App.4^th 1084:

The correct procedure below would have been a motion to bifurcate the issue of liability, which the parties could have tried upon the undisputed facts. [Citation.] A decision on the issue of liability against the party on whom liability is sought to be imposed does not result in a judgment until the issue of damages is resolved.

(Dept. of Industrial Relations, supra, 55 Cal.App.4^th at 1097.) Paramount quotes Department of Industrial Relations with approval. There, “[t]he trial court had [] ordered [plaintiff] to move for summary judgment on the issue of [defendant]’s liability, with damages to be determined in a later accounting proceeding.” (Ibid.) On appeal, the First District pointed out that “section 437c makes no provision for a partial summary judgment as to liability” and that “[e]ven summary adjudication may be granted only in limited instances.” (Ibid.) The decision cites the Rutter Guide, noting that “summary judgment or adjudication [is] improper where [the] amount of damages raises [a] factual issue[.]” (Ibid.) Importantly, Paramount clarifies that the First District’s reference to bifurcating liability concerns trial, not summary adjudication, because a “no defense” motion requires proof of the damages amount:

. . . there is no such creature as “partial summary judgment” in California; the proper term is “summary adjudication.” [Citation.] With this clarification, it is apparent that the court’s language is a well-reasoned holding. The court was specifically requested to enter partial summary judgment – summary adjudication – on the issue of liability, leaving damages to be tried. The court rejected the request, because there was no statutory basis for such an order. As we have explained, the governing statute provides that a plaintiff can only obtain summary adjudication of a cause of action if the plaintiff establishes each element of the cause of action entitling it to judgment on that cause of action. The court specifically held that “[a] decision on the issue of liability against the party on whom liability is sought to be imposed does not result in a judgment until the issue of damages is resolved.” [Citation.] Therefore, such a summary adjudication would be improper. We fully agree with the court’s reasoning.

For the “duty” ground, case law is split. Regan Roofing Co. v. Superior Court (1994) 24 Cal.App.4^th 425 (“Regan”) instructs that, “[a]lthough a trial court is authorized to interpret a contractual provision as a matter of law [citation], where such interpretation of contractual duties does not fully dispose of any portion of the action, it is not a proper subject of summary adjudication.” (Regan, supra, 24 Cal.App.4^th at 437.) A newer case, Linden, supra, 62 Cal.App.4^th 508, allows summary adjudication of “an issue of [contractual] duty ‘without regard for the dispositive effect of such ruing on other issues in the litigation.’” (Edmon & Karnow, supra, at ¶ 10:44.2 [quoting Linden, supra, 62 Cal.App.4^th at 522], emphasis in original.)

The Court is inclined to follow Linden because it is a Second District decision.

Nevertheless, Plaintiff’s motion is denied and Defendant’s section 437c(h) request is moot because:

For example, Plaintiff’s assertion – that she and all class members “entered into COAs with Defendant” (Plaintiff’s Sep. Statement, UMF 3; see also id. at UMF 2) – is unestablished and disputed. (See Defendant’s Opposition Sep. Statement, UMF 3.) It is unestablished in that Plaintiff’s own declaration states that she “do[es] not believe [she] received a copy of Defendant’s Conditions of Admission contract during [her] emergency room visit” (Fleschert Decl., ¶ 3), and her purported COA is unsigned. (See Plaintiff’s Appx. of Evidence, Ex. 3, pp. 4-5.) It is disputed in that, according to Defendant, “a portion of the class did not sign the COA at all.” (Defendant’s Opposition Sep. Statement, UMF 3.) If nothing else, the Court would favor a continuance to give Defendant a chance to conduct discovery on this issue.

Plaintiff’s interpretation of the COAs is another unestablished assertion. Plaintiff contends the COAs only permit charges for services rendered. (See Motion, pp. 12-14.) The contention is based on the COAs’ plain language (see ibid.; see also Reply, pp. 6-8), yet this Court already found the plain language ambiguous and held that “[e]vidence is needed to determine the parties’ intent and the correct construction.” (6/21/22 Notice of Ruling Re: Demurrer to FAC, Ex. A, p. 8 [attaching 6/16/22 Tentative Ruling Re: Demurrer]; see also 8/26/24 Ruling Re: Motion Re: Permissible Scope of Discovery, p. 6 [reiterating that “the ‘services rendered’ language is ambiguous”].) Rehashing the plain-language argument does not suffice to satisfy the initial burden.

The same is true of Plaintiff’s next assertion. She argues that, even if the plain language is ambiguous, the COAs should be interpreted against Defendant because Defendant drafted them. (See Motion, pp. 14-15.) In August 2024, she made an identical argument in opposition to Defendant’s motion to set the permissible scope of discovery. The Court disagreed:

. . . Even though the COAs are form contracts, it is not sufficient – at this point in the litigation – to simply construe the words against Defendant as the drafter. That rule controls “only when there is no extrinsic evidence available . . . or where the uncertainty cannot be remedied by other rules of interpretation.” (Rainier Credit Co. v. Western Alliance Corp. (1985) 171 Cal.App.3d 255, 263.) The other rules that Defendant cites allow for extrinsic “evidence of conduct of the parties in performing the contract, custom and usage in the industry, and the circumstances surrounding formation of the agreements.” (Southern Pacific Transportation Co. v. Santa Fe Pacific Pipelines, Inc. (1999) 74 Cal.App.4th 1232, 1242; see also, e.g., Motion Re: Permissible Scope of Discovery, pp. 8-9 [analogizing Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442 and Hamwi v. Citinational-Buckeye Investment Co. (1977) 72 Cal.App.3d 462], 12 [citing Civil Code sections 1647 and 1649 and McCray v. Carlstrom (1964) 226 Cal.App.2d 272]; Reply Re: Motion Re: Permissible Scope of Discovery, pp. 3-4 [citing Lemm v. Stillwater Land & Cattle Co. (1933) 217 Cal. 474 and Oceanside 84, Ltd. v. Fidelity Federal Bank (1997) 56 Cal.App.4th 1441], 5, 7.) Given the ambiguity, given that this is a post-certification discovery motion, and assuming arguendo that Defendant’s representation is true, Defendant arguably should be permitted to ask questions about these matters, namely, whether class members were made aware of the ER Visitation Fees, how they were made aware, the type of notice provided, and whether they agreed to be charged.

(8/26/24 Ruling Re: Motion Re: Permissible Scope of Discovery, p. 6.) Nothing has changed since then. The interpretation issue is still an issue that necessitates discovery, so the “construe against the drafter” argument is premature and does not shift the burden.

Plaintiff’s attempt to define ER Visitation Fee does not change the result. She cites an expert declaration, comments by the Centers for Medicine and Medicaid Services, and medical websites for the proposition that ER Visitation Fees constitute “fees designed to cover the operational, overhead, and administrative costs of running an emergency room[.]” (Motion, p. 15; see also id. at pp. 16-17; Plaintiff’s Sep. Statement, UMFs 9, 10; Reply, pp. 8-9.) However, Defendant’s expert proffers a different definition. (See Gustafson Decl., Ex. D, ¶¶ 10, 35-38 [opining that ER Visitation Fees cover “costs that even Plaintiff cannot plausibly argue are not services rendered” – e.g., “costs associated with the triage nurse that first evaluates patients in the ER”]; see also Defendant’s Opposition Sep. Statement, UMF 9.) This creates a battling-experts scenario and a triable issue.[2] And, regardless, the definition of ER Visitation Fees is a separate issue from whether the COAs allow ER Visitation Fees to be charged.

The Court turns to Plaintiff’s UMF 5. Plaintiff states that Defendant did not disclose the ER Visitation Fees to patients in writing. (See Plaintiff’s Sep. Statement, UMF 5.) The cited evidence does not support the statement and raises a triable issue of fact. Indeed, Defendant’s interrogatory responses identify alleged sources of written disclosures. (See Defendant’s Opposition Sep. Statement, UMF 5; see also Plaintiff’s Appx. of Evidence, Ex. 6, pp. 6-8, 25-26 [attaching responses to special interrogatories 6 and 35].)

Plaintiff’s “overbilling” theory is an individualized, fact-intensive theory, and it is unproven on the current record. The premise of the theory is that every charge of an ER Visitation Fee was an overcharge. (See Motion, pp. 18-19) Again, discovery is needed to determine the definition of ER Visitation Fee and whether the COAs authorize them to be charged. In addition, charging is different than requiring to pay. Plaintiff fails to show the damages amounts, let alone that all class members paid ER Visitation Fees. (See Opposition, pp. 20-21; see also Defendant’s Opposition Sep. Statement, UMFs 12, 16.)

Finally, Plaintiff fails to prove the “excused from performance” element. Plaintiff contends each charging of an ER Visitation Fee, “itself, [was] a material breach that completely excuse[d] [the] class members’ requirement to pay their bill[s].” (Opposition, p. 17; see also Motion, pp. 19-21; Reply, pp. 11-12.) Not only is the contention predicated on Plaintiff’s unestablished interpretation of the COAs, but it also is a factual issue, and the Court has held that Defendant is entitled to discovery. (See Opposition, pp. 10, 11, 17-18, 20; see also 8/26/24 Ruling Re: Motion Re: Permissible Scope of Discovery, p. 7.)

[1] Plaintiff’s citation to the 5/31/23 Notice of Ruling does not include a pincite.

[2] Expert hearings have not been held. Absent hearings, the Court declines to exclude either expert.