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Growden v. Good Shepherd Health System

Court of Appeals of Texas, Sixth District, Texarkana

May 9, 2018

JESSICA GROWDEN, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Appellant
v.
GOOD SHEPHERD HEALTH SYSTEM, THE GOOD SHEPHERD HOSPITAL, INC., AND GOOD SHEPHERD MEDICAL CENTER, Appellees

          Date Submitted: April 4, 2018

          On Appeal from the 124th District Court Gregg County, Texas Trial Court No. 2016-647-B

          Before Morriss, C.J., Moseley and Burgess, JJ.

          OPINION

          JOSH R. MORRISS III CHIEF JUSTICE.

         When Jessica Growden took her minor daughter to the emergency room at Good Shepherd Medical Center (Good Shepherd)[1] in Longview, she signed a form contract that included a clause in which she acknowledged that she was "responsible for the total charges for services rendered." About one month later, Growden received a statement from Good Shepherd charging her $25, 308.92 for her daughter's brief stay[2] at the emergency room and demanding that she pay the total amount due within thirty days. Feeling that those charges substantially exceeded the reasonable value of the services provided, Growden, who was uninsured, filed suit on behalf of herself, and others similarly situated, seeking a declaratory judgment that Good Shepherd's contract permits it to bill for, and to collect, only the reasonable value of the treatment it provided, and that she and others similarly situated are liable for only the reasonable value of the services provided by Good Shepherd. After Good Shepherd unconditionally waived and wrote off all of Growden's bill, and before a class was certified, the trial court dismissed the suit for lack of subject-matter jurisdiction.

         In this appeal, Growden asserts that the trial court's dismissal of her suit should be overturned because the trial court erred in two ways: (A) ruling that her class-action claims were mooted by Good Shepherd's unilateral act to resolve her individual underlying claim and (B) not recognizing that her claim for attorney fees under the Declaratory Judgments Act[3] (the DJA) survived the resolution of her individual underlying claim. We agree. We reverse the trial court's judgment dismissing Growden's class-action claims and her claim for attorney fees and remand those claims to the trial court for further proceedings. We reach these results because (1) the mooting of Growden's individual underlying claims did not moot her class-action claims and (2) Growden's claim for attorney fees survived any mootness problem.

         (1) The Mooting of Growden's Individual Underlying Claims Did Not Moot Her Class-Action Claims

         Growden originally sued Good Shepherd seeking only a declaratory judgment under the DJA. She alleged that the contract she signed when she presented her daughter for treatment at Good Shepherd provided that she was "responsible for the total charges for services rendered." She also alleged that, about a month later, she received a statement from Good Shepherd charging her $25, 308.92 for her daughter's emergency room treatment and demanding that it be paid within thirty days. Growden, who was uninsured, alleged that those charges were based on Good Shepherd's "Chargemaster" rates that were substantially higher than the charges for the same services for commercially insured patients and for patients covered by Medicare, Medicaid, or workers' compensation. She sought a declaratory judgment on behalf of herself and a class of all persons similarly situated[4] that Good Shepherd's billing practices as they relate to the putative class members were unfair, unconscionable, and/or unreasonable; that Good Shepherd's contract did not permit it to bill and demand payment from her and the putative class members at the Chargemaster rates; and that she and the putative class members were liable for only the reasonable value of the services provided by Good Shepherd. Growden also sought to recover costs and attorney fees on behalf of herself and the putative class members. Two days after filing her petition, Growden filed a motion for class certification and a request for a scheduling order.

         Almost eleven months after Growden filed her petition, Good Shepherd sought to dismiss Growden's suit for lack of jurisdiction. Good Shepherd claimed that Growden's suit had become moot because she paid nothing for the emergency care for her daughter and because it had waived and written off the charges. Good Shepherd attached the affidavit of its agent, who averred that neither Growden nor her daughter had paid anything for the services provided to her daughter, that Good Shepherd had written off Growden's bills, and that it would make no further attempts to collect the bills.[5] After Growden pointed out that Good Shepherd had merely written off her bills and challenged the sufficiency of that action to moot her claims, Good Shepherd filed another affidavit of its agent, who further averred that Good Shepherd had unconditionally waived and written off Growden's bills and that it did not report her unpaid bills as uncollectable bad debt to any credit agency.[6] After a hearing and additional briefing by the parties, the trial court granted Good Shepherd's Motion to Dismiss.

         Growden complains that the trial court should not have found that Good Shepherd's unconditional waiver of her hospital bills mooted her class-action claims. She asks us to apply what has been called the picking-off exception to the mootness doctrine[7] and argues that her standing should relate back to the date she filed her petition, before Good Shepherd waived her bills. Although Growden acknowledges that the Texas Supreme Court has not adopted the picking-off exception, she cites various federal cases that have recognized the exception and analogizes the exception to the inherently transitory exception that has been adopted by the Texas Supreme Court. See Heckman v. Williamson Cty., 369 S.W.3d 137, 161 (Tex. 2012).

         Before a court may exercise subject-matter jurisdiction, a plaintiff must have standing. See Abbott v. G.G.E., 463 S.W.3d 633, 646 (Tex. App.-Austin 2015, pet. denied) (citing Tex. Dep't of State Health Servs. v. Balquinta, 429 S.W.3d 726, 739 (Tex. App.-Austin 2014, pet. dism'd)). If a plaintiff lacks standing to assert a claim, then a court has no jurisdiction to hear it. Heckman, 369 S.W.3d at 150; DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304 (Tex. 2008). To have standing, the plaintiff "must have suffered a 'concrete injury[, ]' and a 'real controversy' must exist between the parties such that it can be resolved by the court." In re Estate of Forister, 421 S.W.3d 175, 177 (Tex. App.-San Antonio 2013, pet. denied) (quoting Heckman, 369 S.W.3d at 154). This standing requirement applies to each claim asserted by a plaintiff. Thus, a court must dismiss a claim if the plaintiff lacks standing to assert it, and it must dismiss the entire action for want of jurisdiction if the plaintiff lacks standing to assert any of its claims. Heckman, 369 S.W.3d at 150- 51. In addition, a plaintiff who seeks a declaratory judgment must show an actual or threatened injury and that the declaration sought will resolve the controversy. See Brooks v. Northglen Ass'n, 141 S.W.3d 158, 163-64 (Tex. 2004); M.D. Anderson Cancer Ctr. v. Novak, 52 S.W.3d 704, 707- 08 (Tex. 2001). If she cannot show an actual or threatened injury, then her claims for a declaratory judgment must be dismissed. Novak, 52 S.W.3d at 707-08.

         Requirements of standing apply to class actions as well. Heckman, 369 S.W.3d at 151 (citing Sw. Bell Tel. Co. v. Mktg. on Hold Inc., 308 S.W.3d 909, 915 (Tex. 2010)). A class-action plaintiff "must still prove that [s]he individually ha[s] standing to sue." Id. (citing Novak, 52 S.W.3d at 710). If she has standing on some claim individually, then she "has standing to pursue class certification as to that claim." Id. at 154. Standing is a threshold issue that the court must consider "before reaching the separate issue of whether it can certify the putative class." Id. at 151 (citing Novak, 52 S.W.3d at 710). "[I]f the named plaintiff lacks individual standing, the court should dismiss the entire suit for want of jurisdiction." Novak, 52 S.W.3d at 711.

         Just as a court may not decide a case when a plaintiff lacks standing, neither can it decide a case that has become moot during the course of the litigation. Heckman, 369 S.W.3d at 162 (citing Nat'l Collegiate Athletic Ass'n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999)). "A case becomes moot if, since the time of filing, there has ceased to exist a justiciable controversy between the parties-that is, if the issues presented are no longer 'live, ' or if the parties lack a legally cognizable interest in the outcome." Id. (citing Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001)). In other words, if the court's ruling on the merits can no longer affect the parties' rights or interests, the case is moot. Id. (citing VE Corp. v. Ernst & Young, 860 S.W.2d 83, 84 (Tex. 1993) (per curiam)). When a case becomes moot, the court is required to "vacate any order or judgment previously issued and dismiss the case for want of jurisdiction." Id. (citing Speer v. Presbyterian Children's Home & Serv. Agency, 847 S.W.2d 227, 229-30 (Tex. 1993)). Whether a plaintiff's claims have become moot is a question of law that we review de novo. Id. at 149-50 (citing Speer, 847 S.W.2d at 229).

         In this case, Growden had been billed by Good Shepherd for the services it rendered to her daughter in an amount that Growden contends exceeded the reasonable value of those services. Thus, initially Growden could show a threatened injury that could be resolved by her requested declaration that, under Good Shepherd's contract, she was liable for only the reasonable value of the services rendered. Therefore, at the time she filed her petition and motion for certification of a class action, Growden had standing to bring her declaratory judgment action. See Brooks, 141 S.W.3d at 163-64; Novak, 52 S.W.3d at 707-08. It is undisputed, however, that Growden did not pay any part of the bill and that Good Shepherd has now unconditionally waived Growden's bill. Consequently, Growden can no longer show an actual or threatened injury on her underlying claim, and any controversy between Good Shepherd and Growden as to that claim has been extinguished. Further, no requested declaration would provide any relief to Growden or affect the legal relations of the parties and thus would be advisory. See Houston Chronicle Pub. Co. v. Thomas, 196 S.W.3d 396, 401 (Tex. App.-Houston [1st Dist.] 2006, no pet.). Since Growden's underlying claims have become moot, she no longer has standing to assert her individual declaratory judgment claims. See Heckman, 369 S.W.3d at 162; Thomas, 196 S.W.3d at 401. Therefore, dismissal of her underlying individual claim was proper.

         However, Growden also asserted claims on behalf of a class of similarly situated persons. Generally, when the individual claims of a named plaintiff have been satisfied before a class has been certified, the purported class action must also be dismissed for mootness. Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1045 (5th Cir. 1981). But in some circumstances, a named plaintiff's interest may become moot without affecting the class' interest in the suit. Heckman, 369 S.W.3d at 162. Because of the tension created when a class of plaintiffs continues to have a live claim against the defendant in spite of the mooting of the named plaintiff's individual claim, courts have recognized certain exceptions to the mootness doctrine in class-action lawsuits. Id.

         The Texas Supreme Court has recognized several exceptions to the mootness doctrine in the class-action context, and it has adopted the inherently transitory exception.[8]Id. at 161 (citing Novak, 52 S.W.3d at 708-09) (discussing, but not applying, exception adopted by United States Supreme Court in Sosna v. Iowa, 419 U.S. 393, 401-02 (1975));[9]see also Williams, 52 S.W.3d at 184 (discussing, but not applying, "capable of repetition, yet evading review" exception[10] to mootness doctrine); Gen. Land Office of Tex. v. OXY U.S.A., Inc., 789 S.W.2d 569, 571-72 (Tex. 1990) (discussing, but not applying, "collateral consequences" exception[11] to mootness doctrine). We have not found any case in which the Texas Supreme Court or a Texas court of appeals has recognized the picking-off exception to the mootness doctrine. However, because "federal courts have extensively explored mootness in the class action context and have developed a body of exceptions, " we look to "their decisions for guidance." Heckman, 369 S.W.3d at 163; see Ford Motor Co. v. Sheldon, 22 S.W.3d 444, 452 (Tex. 2000) ...


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