Judge: David S. Cunningham, Case: 19STCV09558, Date: 2023-04-17 Tentative Ruling

Case Number: 19STCV09558    Hearing Date: April 17, 2023    Dept: 11

19STCV09558 (Braun)

Tentative Ruling Re: Motion for Leave to File Third Amended Complaint

Date:                           4/17/23

Time:                          10:30 am

Moving Party:           Sandra Braun (“Plaintiff”)

Opposing Party:        West Hills Surgical Center and West Hills Hospital (collectively “Defendants”)

Department:              11

Judge:                        David S. Cunningham III

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TENTATIVE RULING

Plaintiff’s third amended complaint (“TAC”) appears to fail to state claim under the Confidentiality of Medical Information Act (“CMIA”).

However, instead of denying Plaintiff’s motion for leave, the Court intends to give Plaintiff one more chance to try to allege a violation of the statute by submitting a revised TAC or, alternatively, a fourth amended complaint.

BACKGROUND

This is a putative class action. 

The operative complaint is the second amended complaint (“SAC”).  It alleges that Plaintiff reached an agreement with West Hills Surgical Cener to pay the full amount for an outpatient surgery at West Hills Surgical Center.  Subsequently, West Hills Hospital charged her $500 for “Hospital Services” even though she “never actually stepped foot into the West Hills Hospital” and “was completely unaware that she received any services from staff employed by West Hills Hospital.”  (SAC, ¶ 39.)

The SAC also alleges that, assuming arguendo that “West Hills Hospital performed some sort of nominal authorized service[,]” it billed the “vague ‘Hospital Services’ at rates far in excess of any reasonable rate[.]”  (Id. at ¶ 43.)

On 5/28/21, Judge Ann Jones overruled Defendants’ demurrer to the SAC’s Consumer Legal Remedies Act and Unfair Competition Law causes of action, sustained the demurrer without leave to amend as to the breach of contract cause of action, and denied Defendants’ motion to strike the class allegations.

Here, Plaintiff moves for leave to file a TAC.

DISCUSSION

The TAC alleges a new cause of action under the CMIA – i.e., Civil Code section 56.10 – and new subclasses related to the new cause of action.  (See TAC, ¶¶ 55, 68-80.)[1]

Plaintiff contends the motion for leave should be granted because the amendments are necessary to “conform [the allegations] with the discovery provided to date.”  (Motion, p. 5 [asserting that “Plaintiff has discovered that . . . Defendants shared Plaintiff’s Personal Medical and Health Insurance Information” and that “[t]he sharing of the information is how [West Hills Hospital] was able to invoice Plaintiff and her insurance company”].) 

Plaintiff claims granting the motion will not prejudice Defendants because the request for leave is timely, and Plaintiff has not moved for class certification yet.  (See id. at p. 6.)

Defendants contend the motion should be denied because (A) the CMIA cause of action fails to state a claim, (B) the TAC ignores that West Hills Surgical Center disclosed to Plaintiff that her medical information would be shared with third-parties, and (C) the TAC includes other allegations that are contrary to the evidence.  (See Opposition, pp. 10-15.)

The Court reject points (B) and (C) at this stage.  Defendants cite multiple documents to disprove the TAC’s new allegations.  (See Opposition, pp. 11-15 [citing Exhibits 2, 3, 4, 6, 7, 10, and 11 to the Hayes-Kibreab declaration].)  The Court declines to analyze the evidence here but welcomes Defendants to raise their evidentiary arguments in a proper evidentiary motion – class certification, summary judgment, etc.

Point (A) is a different story.  Section 56.10 states:

(a) A provider of health care, health care service plan, or contractor shall not disclose medical information regarding a patient of the provider of health care or an enrollee or subscriber of a health care service plan without first obtaining an authorization, except as provided in subdivision (b) or (c).

* * *

(c) A provider of health care or a health care service plan may disclose medical information as follows:

(1) The information may be disclosed to providers of health care, health care service plans, contractors, or other health care professionals or facilities for purposes of diagnosis or treatment of the patient. This includes, in an emergency situation, the communication of patient information by radio transmission or other means between emergency medical personnel at the scene of an emergency, or in an emergency medical transport vehicle, and emergency medical personnel at a health facility licensed pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.

(2) The information may be disclosed to an insurer, employer, health care service plan, hospital service plan, employee benefit plan, governmental authority, contractor, or other person or entity responsible for paying for health care services rendered to the patient, to the extent necessary to allow responsibility for payment to be determined and payment to be made. If (A) the patient is, by reason of a comatose or other disabling medical condition, unable to consent to the disclosure of medical information and (B) no other arrangements have been made to pay for the health care services being rendered to the patient, the information may be disclosed to a governmental authority to the extent necessary to determine the patient's eligibility for, and to obtain, payment under a governmental program for health care services provided to the patient. The information may also be disclosed to another provider of health care or health care service plan as necessary to assist the other provider or health care service plan in obtaining payment for health care services rendered by that provider of health care or health care service plan to the patient.

(Cal. Civ. Code § 56.10, subds. (a), (c), emphasis added.)  The TAC identifies two instances when Defendants allegedly shared Plaintiff’s and the putative class members’ medical information without authorization – when West Hills Surgical Center “ask[ed] [West Hills Hospital] to perform laboratory services” and when West Hills Hospital “sought re-imbursement for services from Plaintiff and the Class’ third-party insurance carriers.”  (TAC, ¶¶ 76, 77.)  Subsection (c)(1) – “disclos[ure] to providers of health care, health care service plans, contractors, or other health care professionals or facilities for purposes of diagnosis or treatment of the patient” – seems to apply to the first instance.  (Cal. Civ. Code § 56.10, subd. (c)(1).)  Subsection (c)(2) – “disclos[ure] to an insurer, employer, health care service plan, hospital service plan, employee benefit plan, governmental authority, contractor, or other person or entity responsible for paying for health care services rendered to the patient, to the extent necessary to allow responsibility for payment to be determined and payment to be made – seems to apply to the second instance.  (Id. at § 56.10, subd. (c)(2).)  Accordingly, the Court is inclined to find that the current version of the TAC fails to state a claim under the CMIA.

Does this mean the motion for leave should be denied?  No.  Judicial policy favors amendments and should be exercised liberally.  (See id. at ¶¶ 6:638.)  “The policy . . . is so strong that it is a rare case in which denial of leave to amend can be justified.”  (Howard v. County of San Diego (2010) 184 Cal.App.4^th 1422, 1428.)  Indeed, “[l]eave to amend should be denied only where the facts are not in dispute, and the nature of the plaintiff’s claim is clear, but under substantive law, no liability exists and no amendment would change the result.”  (Edwards v. Superior Court (2001) 93 Cal.App.4^th 172, 180.)  Given these rules, the Court intends to give Plaintiff one more chance to try to allege a violation of the statute by submitting a revised TAC or, alternatively, a fourth amended complaint.  Another chance is especially appropriate because the amount of prejudice to Defendants is de minimis since the timeliness of the CMIA cause of action is uncontested, Plaintiff has not filed the motion for class certification, and there is no trial date.