Pallister et al v. Blue Cross Blue Shield of Montana

Filing 192

ORDERED: Plaintiffs' Second Amended Class Action Complaint is stricken. Pretrial deadlines, dates and schedule established in Court's Order of 1/12/16 are in full force and effect. Plaintiffs shall file an amended complaint on or before 2/10/17 as ordered and limited to individual claims and remaining issues. Defendants answer to the amended complaint shall be due on or before 2/24/17. Signed by Judge Sam E Haddon on 1/31/2017. (DED)

FILED
JAN 3 1 2017
Clerk, U.S. District Court
District Of Montana
Helena

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION
TYSON S. PALLISTER, MARTIN
MANGAN, and SHIRLEY
MANGAN, on behalf of themselves
and all others similarly situated,
Plaintiffs,

No. CV-09-62-H-SEH

ORDER

vs.
CARING FOR MONTANANS, INC.,
BLUE CROSS AND BLUE SHIELD
OF MONTANA, INC., HEALTH
CARE SERVICES CORPORATION,
INC., and JOHN DOES 3 through 20,
Defendants.
Cause CV-09-25-BU-SEH was filed in state court on February 26, 2009, 1
and removed to this Court on April 1, 2009. 2

1

Doc. 4 (CV-09-25-BU-SEH).

2

Doc. 1 (CV-09-25-BU-SEH).

Cause CV-09-62-H-SEH was filed in state court on February 20, 2008, 3 and
removed to this Court on October 19, 2009. 4
On January 6, 2010, the cases were consolidated for the limited purpose of
addressing pretrial and discovery issues common to both. 5
On July 12, 2010, both cases were stayed pending resolution of related class
action proceedings in state court. 6 The stay was lifted on July 5, 2016. 7
Plaintiffs filed a First Amended Consolidated Class Action Complaint8 in
this Court on July 29, 2016. Defendant Caring for Montanans, Inc. ("CFM")
answered on August 12, 2016. 9
Plaintiffs moved for class certification on August 26, 2016. 10 CFM
opposed. 11

3

Doc. 1-1 (CV-09-62-H-SEH).

4

Doc. 1 (CV-09-62-H-SEH). Removal was effected only after the case had been pending
in state court for over 18 months without service of process being made (see Doc. 1 at 2-3 (CV09-62-H-SEH)).
5

Doc. 44 (CV-09-25-BU-SEH); Doc. 20 (CV-09-62-H-SEH).

6

See Doc. 76 (CV-09-25-BU-SEH).

7

Doc. 180 (CV-09-25-BU-SEH).

8

Doc. 181 (CV-09-25-BU-SEH).

9

Doc. 183 (CV-09-25-BU-SEH).

10

Doc. 184 (CV-09-25-BU-SEH).

11

Doc. 189 (CV-09-25-BU-SEH).
2

The Court issued its Opinion and Order denying Plaintiffs' Motion for Class
Certification 12 on December 27, 2016.
Federal Rule of Civil Procedure 23(±) provides:
A court of appeals may permit an appeal from an order granting
or denying class-action certification under this rule if a petition for
permission to appeal is filed with the circuit clerk within 14 days after
the order is entered.
The time allowed by Rule 23(±) to appeal the Order denying class certification
expired on January 10, 2017. No such appeal was sought.
On January 12, 2017, the Court issued its Order, 13 which, inter alia, vacated
the consolidation of cause numbers CV-09-25-BU-SEH and CV-09-62-H-SEH
and directed Plaintiffs to "file an amended complaint on or before January 27,
201 7, limited to the remaining issues now presented and before the Court in each
of the two cases." 14
Separate Amended Complaints were filed in CV-09-25-BU-SEH 15 and in
CV-09-62-H-SEH 16 on January 27, 2017. Neither complied with the directive in

12

Doc. 207 (CV-09-25-BU-SEH).

13

Doc. 213 (CV-09-25-BU-SEH).

14

Id. at 3-4.

15

Doc. 214 (CV-09-25-BU-SEH).

16

Doc. 191 (CV-09-62-H-SEH).

3

the Court's January 12, 2017, Order that any amended complaint be "limited to the
remaining issues now presented and before the Court in each of the two cases." 17
Rather, both Complaints reasserted essentially the same claims on behalf of the
same plaintiff classes for which this Court had denied certification on December
27, 2016.
Plaintiffs in cause CV-09-25-BU-SEH on January 27, 2017, filed Plaintiffs'
Unopposed Motion for Reconsolidation and for Entry of Judgment 18 and
supporting brie:f1 9, seeking the reconsolidation of CV-09-25-BU-SEH and CV-0962-H-SEH and entry of judgment in favor of Defendants.
In its December 27, 2016, Opinion, the Court denied class certification of
Plaintiffs' two proposed classes:
(a)

17

CFM state class action members who were BRISA insureds and
have breach of fiduciary duty claims against CFM for: ( 1)
failing to provide notice regarding the settlement in [Diaz v.
BCBSM't2°]; and (2) proposing to give ERISA beneficiaries'
funds to Montana Healthcare Foundation. 21

Doc. 213 at 4 (CV-09-25-BU-SEH)

18

Doc. 215 (CV-09-25-BU-SEH).

19

Doc. 216 (CV-09-25-BU-SEH).

20

267 P.3d 756 (Mont. 2011).

21

Doc. 185 at 10.
4

(b)

CFM insureds who, submitted claims on or after March 1,
2001, to the present (or on whose behalf claims were
submitted) to CFM for medical expenses arising from the
automobile/premises accidents where CFM failed to pay the
claim due to the possible availability of automobile or premises
liability insurance, but where CFM did not apply the denial
codes used to define the CFM state class action. 22

In its ruling, the Court held:
1.

Plaintiffs' lacked standing to assert claims arising from: (a) CFM's

failure to tell Plaintiffs of Diaz v. BCBSMT; 23 and (b) CFM' s planned
transfer of $150,000,000 to the Montana Healthcare Fund.
2.

The only class representative for proposed Class (b ), Plaintiff Budd,

did not qualify as a class member as it was undisputed that CFM had paid
his previously withheld benefits.
3.

That Plaintiffs' proposed Class (b)'s claims seeking benefits due had

all been released in the state court class action settlement approved by the
Montana Supreme Court.
Other claims pleaded in the First Amended Consolidated Class Action Complaint24
beyond those for which class certification was sought were not addressed or

22

Doc. 185 at 11.

23

267 P.3d 756 (Mont. 2011).

24

Doc. 181 (CV-09-25-BU-SEH).
5

adjudicated in the December 27, 2016, Opinion and Order denying class
certification.
Plaintiffs' class action certification questions were addressed and resolved
on the merits adversely to Plaintiffs. Permission to reassert the same class claims
which had been dismissed on the merits was not authorized by the Court in its
January 12, 2017, Order. 25 No permission to reassert class claims was sought by
Plaintiffs prior to filing of the separate Plaintiffs' Second Amended Class Action
Complaint26 in cause CV-09-25-BU-SEH and Plaintiffs' Second Amended Class
Action Complaint27 in cause CV-09-62-H-SEH. Moreover, the Court's Order of
January 12, 2017, specifically directed Plaintiffs to file amended pleadings
"limited to the remaining issues now presented and before the Court in each of the
two cases. " 28 Plaintiffs' Second Amended Class Action Complaint29 in cause CV09-25-BU-SEH was directly contrary to the amended pleading limitation in the
Court's Order of January 12, 2017. 30

25

Doc. 213 (CV-09-25-BU-SEH).

26

Doc. 214 (CV-09-25-BU-SEH).

27

Doc. 191 (CV-09-62-H-SEH).

28

Doc. 213 at 4 (CV-09-25-BU-SEH).

29

Doc. 214 (CV-09-25-BU-SEH).

30

Doc. 213 at 4 (CV-09-25-BU-SEH).
6

ORDERED:
1.

Plaintiffs' Second Amended Class Action Complaint3 1 in cause CV-

09-62-H-SEH is stricken.
4.

The pretrial deadlines, dates, and schedule (including the preliminary

pretrial conference set for March 27, 2017) established in the now separated cases
by the Court's Order of January 12, 2016, 32 are in full force and effect.
2.

Plaintiffs shall have one final opportunity to file an amended

complaint on or before February 10, 2017, limited to their individual claims and
the remaining issues before the Court, and without reference to previously pleaded
and denied class action claims.
3.

Defendants' answer to the amended complaint shall be due on or

before February 24, 2017.

~

DATED this 3.l_y.ay of January, 2017.

&~~~~
United States District Judge

31

Doc. 191 (CV-09-62-H-SEH).

32

Doc. 190 (CV-09-62-H-SEH).

7