A New Jersey appeals court on Wednesday refused to overturn a settlement in a class action suit filed against a medical records company accused of overbilling patients for copies of their medical files.
The settlement, which provided that each class member was eligible to receive $4 as compensation, was challenged by one plaintiff who claimed she did not receive proper notice of the settlement because the notice was sent to her attorney and not directly to her.
The Appellate Division panel said “the only contact defendants had concerning the requested records was with the attorneys and law firms requesting them.
“Therefore, it was reasonable for notice to be sent to the attorneys,” the panel said.
According to the decision, the lead defendant is the records provider, Healthport Technologies of Alpharetta, Georgia. The suit claimed the company charged as much as $200 per file, although the cost could be less if the file were smaller. The lawsuit alleged, however, that Healthport tacked on an unauthorized fee of $5 to each file to certify copies of the records.
An unknown number of plaintiffs joined the class action, which was filed in Essex County Superior Court. The lawsuit alleged violations of the New Jersey Administrative Code and the Consumer Fraud Act, as well as fraudulent and negligent misrepresentation, and unjust enrichment.
Healthport eventually agreed to settle the lawsuit by agreeing to pay $4 to each class member who filed a claim.
As part of the settlement agreement, the decision noted, Healthport would send class action notices to the plaintiffs’ individual attorneys on underlying claims, since those attorneys were the requesters, and that was the only contact information Healthport had. The company had little contact information for the plaintiffs themselves, the court said.
The agreement set a deadline of Oct. 21, 2016, for filing claims. The settlement was approved in Essex County Superior Court.
One potential class member, Diana Dos Santos, missed the deadline and challenged the settlement, saying she did not receive proper notice. Dos Santos also claimed most class members never received proper notice and that the settlement was designed to “minimize defendant’s exposure.”
The judge below rejected Dos Santos’ claim, deeming the method of providing notice reasonable, and she appealed.
“The trial court did not abuse its discretion in determining the class notice was the best notice practicable under the circumstances,” Appellate Division Judges Richard Geiger and William Nugent said in the per curiam decision Wednesday, Goldberg v. Healthport.
Geiger and Nugent said that while notice to individual plaintiffs in a class action was the preferred method, R. 4:32-2(b)(2) does not require individual notice in all circumstances.
The appeals court again noted that the only contact Healthport had for most of the plaintiffs was through their individual attorneys.
“Appellant argues notice should be sent either directly to the underlying patients, or to both the underlying patients and their attorneys,” the court said. “However, the former method overlooks that the attorneys requested the documents and payed the certification fee, and the latter method raises the issue of duplicative claims. In addition, due to privacy considerations, it was unclear who was permitted to provide patient names.”
Dos Santos was represented by Gerald Clark of the Clark Law Firm in Belmar. The class was represented by Michael Rudick of the Livingston office of Chase Kurshan Herzfeld & Rubin. Healthport retained Rebecca Brazzano of the New York office of Thompson Hine, and Seth Litman of the firm’s Atlanta office.
None of the attorneys returned calls seeking comment on the Appellate Division’s ruling.