Naranjo v. Doctors Medical Center of Modesto, Inc.(2023) 90 Cal.App.5th 1193
Hospital’s failure to disclose an ER fee supports a claim under the Consumer Legal Remedies Act.
After receiving a bill for emergency medical treatment at Doctors Medical Center of Modesto (Hospital), Joshua Naranjo filed a class action lawsuit seeking declaratory and injunctive relief. Naranjo alleged the Hospital’s failure to disclose the emergency room evaluation and management service (EMS) fee included in his bill violated the Consumer Legal Remedies Act (CLRA) and the unfair competition law (UCL). The trial court sustained the Hospital’s demurrer and entered a judgment of dismissal. Naranjo appealed.
The Court of Appeal reversed. First, the court held the Hospital had a duty to disclose its EMS fee because it had exclusive knowledge of the fee, which was not reasonably ascertainable by patients, and the Hospital’s failure to disclose its EMS fee could support CLRA liability. Departing from three recent appellate decisions holding that hospitals had no duty to disclose EMS fees, the court explained that none of those decisions had addressed the “exclusive knowledge” issue. Next, the court held that, contrary to the rationale of prior decisions, requiring disclosure of the potential EMS fee was consistent with state and federal laws requiring the provision of emergency medical services before questioning the patient or others about payments, and requiring the disclosure of certain fee information. Moreover, those laws do not create a safe harbor from CLRA and UCL claims—a safe harbor exists only if a statutory provision bars the litigation or expressly permits the conduct. Finally, the court held that Naranjo adequately alleged that the Hospital had exclusive knowledge of its EMS fee billing practices (which information he lacked); that the EMS fee was material to his decision to receive emergency treatment; that he would not have consented to the emergency treatment if the EMS fee had been disclosed; and that he sustained damages by paying part of the EMS fee. Accordingly, the trial court erred by sustaining the Hospital’s demurrer to Naranjo’s CLRA claim and to the UCL claim premised on his CLRA claim.
The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson, Peder K. Batalden, and Lacey Estudillo at the appellate firm Horvitz & Levy LLP, and is republished with permission.
For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800 or email@example.com.