United States District Court, W.D. North Carolina, Asheville Division
SANDRA M. PETERS, on behalf of herself and all others similarly situated, Plaintiff,
AETNA INC., AETNA LIFE INSURANCE COMPANY, and OPTUMHEALTH CARE SOLUTIONS, INC., Defendants.
MEMORANDUM OF DECISION AND ORDER
REIDINGER UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on the Plaintiff's
Motion for Class Certification [Doc. 144].
12, 2015, the Plaintiff Sandra M. Peters filed this putative
class action against the Defendants Aetna, Inc., Aetna Life
Insurance Company (collectively, “Aetna”), and
OptumHealth Care Solutions, Inc. (“Optum”),
asserting claims pursuant to the Racketeer Influenced and
Corrupt Organizations Act, 18 U.S.C. § 1961, et seq.
(“RICO”) and the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. § 1001, et
seq. (“ERISA”). [Doc. 1]. In her Complaint, the
Plaintiff alleged that Aetna engaged in a fraudulent scheme
with Optum and other subcontractors, whereby insureds were
caused to pay the subcontractors' administrative fees
because the Defendants misrepresented such fees as medical
expenses. The Plaintiff alleged that these misrepresentations
allowed Aetna to illegally (i) obtain payment of the
subcontractors' administrative fees directly from
insureds when the insureds' deductibles have not been
reached; (ii) use insureds' health spending accounts to
pay for these fees; (iii) inflate insureds' co-insurance
obligations using administrative fees; (iv) artificially
reduce the amount of available coverage for medical services
when such coverage is subject to an annual cap; and (v)
obtain payment of the administrative fees directly from
employers when an insured's deductible has been exhausted
or is inapplicable. [Id.].
Plaintiff asserted two claims based on RICO violations. In
Count I of the Complaint, the Plaintiff alleged that Aetna
and its subcontractors, including Optum, violated 18 U.S.C.
§ 1962(c) by engaging in acts of mail and wire fraud in
furtherance of a common purpose to collect administrative
fees from Aetna insureds and plans by improperly
characterizing them as payment for covered medical expenses,
and as such, constitute an associated-in-fact
“enterprise” as defined in 18 U.S.C. §
1961(4). Alternatively, the Plaintiff alleged that Aetna has
conducted multiple bilateral association-in-fact RICO
enterprises with each of its subcontractors. In Count II of
the Complaint, the Plaintiff alleged that the Defendants
conspired to violate 18 U.S.C. § 1962(c), in violation
of 18 U.S.C. § 1962(d). The Plaintiff also asserted two
claims under ERISA, alleging that the Defendants breached
their fiduciary duties as plan administrators, in violation
of 29 U.S.C. § 1132(a)(2) (Count III) and 29 U.S.C.
§ 1132(a)(1), (a)(3), and/or 29 U.S.C. § 1104
and Optum moved to dismiss the action pursuant to Rules
12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure, arguing that the Plaintiff lacked standing to
assert her claims and that her Complaint otherwise failed to
state claims upon which relief can be granted. [Docs. 37,
39]. On August 31, 2016, the Court entered an Order granting
in part and denying in part the Defendants' motions.
[Doc. 54]. Specifically, the Court concluded that the
Plaintiff had standing to assert claims regarding Aetna's
actions with respect to Optum but that the Plaintiff lacked
standing to assert any claims with respect to Aetna's
interactions with other subcontractors. [Id. at
18-20]. Further, the Court granted the Defendants'
motions with respect to the Plaintiff's RICO claims and
dismissed those claims with prejudice. The Court denied the
Defendants' motions with respect to the Plaintiff's
ERISA claims. [Id. at 34].
Plaintiff now moves this Court to grant class certification
pursuant to Federal Rule of Civil Procedure 23(b)(1) and
(b)(3), or in the alternative, pursuant to Federal Rule of
Civil Procedure 23(c)(4).
Defendants oppose the Plaintiff's motion for class
certification, arguing that: (1) the proposed classes do not
satisfy Rule 23(a)'s commonality requirement; (2) the
Plaintiff cannot demonstrate through classwide evidence that
all proposed class members suffered injury; (3) the proposed
classes do not satisfy Rule 23(a)'s typicality and
adequacy requirements; (4) the Plaintiff does not specify
what “equitable” relief the proposed members seek
or how they would prove their entitlement to it; (5) the
proposed classes do not satisfy Rule 23(b)(1); (6) the
proposed classes fail Rule 23(b)(3)'s predominance and
superiority requirements because individualized inquiries
would overwhelm any “class” proceeding; and (7)
because the proposed classes are overrun with individualized
issues of liability, causation, and injury, there is no basis
for issue certification under Rule 23(c)(4). [Doc. 162].
Court held a hearing on the motion for class certification on
March I, 2019. Having been fully briefed and argued, this
matter is ripe for disposition.
STANDARD OF REVIEW
class action is an exception to the usual rule that
litigation is conducted by and on behalf of the individual
named parties only.” Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 348 (2011) (citation and internal
quotation marks omitted). To justify a departure from that
usual rule, “a class representative must be part of the
class and possess the same interest and suffer the same
injury as the class members.” Id. at 348-49
(quoting East Tex. Motor Freight Sys., Inc. v.
Rodriguez, 431 U.S. 395, 403 (1977)). Thus, in seeking
the certification of a class action, a putative class
representative must demonstrate as a threshold matter that
she is a member of the proposed class and that the other
class members are “readily identifiable” or
“ascertainable.” EQT Prod. Co. v. Adair,
764 F.3d 347, 358 (4th Cir. 2014) (“A class cannot be
certified unless a court can readily identify the class
members in reference to objective criteria.”).
this threshold determination has been made, the Court must
then determine whether the readily identifiable class should
be certified. Rule 23(a) of the Federal Rules of Civil
Procedure sets forth the four prerequisites that an action
must satisfy in order to be certified as a class action: (1)
the class must be so numerous that joinder of all members is
impracticable (“numerosity”); (2) there must be
questions of law or fact common to the class
(“commonality”); (3) the claims or defenses of
the representative parties must be typical of the claims and
defenses of the class as a whole (“typicality”);
and (4) the representative party must fairly and adequately
protect the interests of the class (“adequacy of
representation”). Fed.R.Civ.P. 23(a). “Rule 23(a)
ensures that the named plaintiffs are appropriate
representatives of the class whose claims they wish to
litigate. The Rule's four requirements - numerosity,
commonality, typicality, and adequate representation -
effectively limit the class claims to those fairly
encompassed by the named plaintiff's claims.”
Dukes, 564 U.S. at 349 (citations and internal
quotation marks omitted).
addition to satisfying the requirements of Rule 23(a),
“the class action must fall within one of the three
categories enumerated in Rule 23(b).” Gunnells v.
Healthplan Servs., Inc., 348 F.3d 417, 423 (4th Cir.
2003). Here, the Plaintiff seeks certification under Rule
23(b)(1) and (3), which provide, respectively, as follows:
(1) prosecuting separate actions by or against individual
class members would create a risk of:
(A) inconsistent or varying adjudications with respect to
individual class members that would establish incompatible
standards of conduct for the party opposing the class; or
(B) adjudications with respect to individual class members
that, as a practical matter, would be dispositive of the
interests of the other members not parties to the individual
adjudications or would substantially impair or impede their
ability to protect their interests;
(3) the court finds 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. The matters pertinent to these
(A) the class members' interests in individually
controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the
controversy already begun by or ...