Posted in Medical Malpractice on February 16, 2022

The Montana Consumer Protection Act (Mont. Code Ann. § 30-14-101 et. seq.) provides powerful remedies to injured consumers.  Specifically, the Act allows for the recovery of statutory treble damages and attorney’s fees as well as the imposition of injunctive relief.  See Mont. Code Ann. §30-14-133.

The CPA generally prevents “unfair or deceptive acts or practices in the conduct of any trade or commerce.”  The Act protects consumers, who are defined as persons “who purchase … goods, services, real property, or information for personal, family, or household purposes.”[1]  The CPA is broad in scope and applies, generally, to any consumer transaction.[2]   Consequently, the CPA serves as a powerful tool to protect aggrieved consumers, and has been used in that regard to protect consumers against car dealers, banks, debt collectors, and the like.

One area that the CPA can be used, in the right context, is in the field of medicine.  The Federal Trade Commission and courts around the country have held that state consumer protection statutes apply to the entrepreneurial aspects of medicine.[3]  Specifically, state consumer protection statutes have been held to apply in circumstances such as:

  • An in vitro fertilization clinic lured patients by advertising exaggerated success rates.
  • A doctor performed a medical procedure without consent.
  • A doctor performed an arguably unnecessary medical procedure.
  • A medical laboratory misrepresented that it had analyzed a medical sample.
  • A nursing home’s billing practices.

Here in Montana, in the case of Code v. Big Sky Cosmetic Surgery, P.C., 2009 MT 215N, the plaintiff, Carol Code, sued her doctor alleging negligence in failing to timely diagnose her skin cancer.

She also sued his business, Big Sky Cosmetic Surgery, under the CPA.  The jury found the doctor negligent and the business liable under the CPA, and awarded total damages of $250,000.

Because of the finding of liability under the CPA, the trial court added attorney’s fees of $84,833 for a total judgment of $333,378.  The Montana Supreme Court affirmed the judgment, finding that “Code presented separate factual and legal grounds for the CPA claim from those she relied upon in support of the professional negligence claim.”  Although the Code decision is a non-precedential memorandum opinion, there is no doubt that the Montana Supreme Court follows the FTC and the majority of courts elsewhere which hold that the entrepreneurial aspects of medicine are covered by the Act.  Indeed, as one court has aptly explained:

It would be a dangerous form of elitism to dole out exceptions to our consumer protection laws merely on the basis of the educational level needed to practice a given profession or, for that matter, the impact which the profession has on society’s health and welfare.[4]

As practitioners, we should be giving careful thought at case inception as to whether, in addition to a malpractice claim, a claim lies under the Act.  This requires expanding the scope of the intake and examining not just what the doctor/provider did wrong, but what their motivation may have been.

Under the right fact pattern, a CPA claim should be asserted in view of the obvious benefits.  Because of the fee shifting provision, the client has a better chance of being made whole as the defendant will be responsible for bearing the plaintiff’s reasonable attorney’s fees and costs.

Moreover, the possibility of statutory treble damages will likewise give the client a better chance of recovering fair compensation.  Further, the assertion of a CPA claim will open the door to a whole different area of relevant discovery that may not be present in a standalone malpractice case, namely, the defendant’s entrepreneurial motivations. (Why did you perform that unnecessary surgery exactly, Doctor?).  If the defendant’s profit motive caused a patient’s injuries, any sympathy which the jury had will be quickly dissipated.

Medicine is increasingly a business.  When medical providers and facilities engage in unscrupulous conduct, they can and should be held accountable under the Montana CPA.

CLASS ACTIONS ALLOWED UNDER MONTANA CONSUMER PROTECTION ACT IN FEDERAL COURT

The Montana Consumer Protection Act is a strong remedy for consumers who are the victims of unfair or deceptive business conduct.  It has been applied broadly to encompass misconduct by banks, debt collectors, car dealers, and mobile home manufacturers among others.  The Act provides for statutory treble damages and attorney’s fees.  But, the Act explicitly prohibits consumers from bringing class actions.[5]  This prohibition has insulated businesses who engage in patterns of fraudulent or deceptive as each consumer has been forced to bring his or her own individual claim.  The prohibition against class actions is also in direct contrast to the clear language of Federal and Montana Rule 23 which specifically authorize class actions for judicial economy.  In the federal court system, the question becomes whether the federal rule trumps the state statute.

In the case of Wittman v. CB1, Inc.[6], the plaintiffs filed a putative class action against a debt collector for assessing a 2.5% surcharge against debtors who pay with credit or debit cards.  Plaintiffs assert that this assessment violates the Fair Debt Collection Practices Act and also the Montana Consumer Protection Act.

The defendant moved to dismiss Wittman’s Consumer Protection Act claim on the basis of the prohibition against class actions codified in the Montana statute.  Magistrate Judge Carolyn Ostby, in an April 2016 Findings and Recommendations, recommended that the debt collector’s motion to dismiss be denied and the claim allowed to proceed.  On June 2, 2016, Judge Brian Morris adopted the recommendations and denied the motion to dismiss, thus allowing the putative class action under the Consumer Protection Act to proceed.  Judge Morris held:

Montana’s consumer protection statutes explicitly prohibit class-action treatment under the statute.  Federal Rule Civil Procedure 23, by contrast, provides the procedure used in federal courts to determine whether a plaintiff may bring a certain action as a class action.  Rule 23 appears to conflict with Montana’s consumer protection statute prohibiting class actions.

The Supreme Court addressed the conflict between Rule 23 and a state statute prohibiting class action suits in Shady Grove Orthopedic Associates, PA v. Allstate Ins. Co., 559 U.S. 393 (2010).  The Supreme Court determined that Rule 23 preempted a New York state law that prohibited class actions in cases that seek penalties or statutory minimum damages.  …

The Court will look only to the part of Justice Scalia’s opinion to which five Justices joined, and the pre-Shady Grove approach in the Ninth Circuit, to determine whether application of the federal rule violates the Rules Enabling Act.  Application of Rule 23 affects only the process of enforcing the litigants’ rights.  The same MCPA provision that prohibits class actions also provides for minimum statutory damages.  The prohibition alters only the procedural means by which that remedy may be pursued.  The class action prohibition itself does not add, subtract, or define any of the necessary elements of the claim.  Each individual plaintiff could proceed with a suit under the MCPA and receive the same remedy regardless of whether the plaintiff brought suit individually or as part of a class action. 

“Rule 23 permits all class actions that meet its requirements.”  Shady Grove.  A state cannot limit this permission to proceed with a class action in federal court “by structuring one party of its statute to track Rule 23 and enacting another part that imposes additional requirements.”

For these reasons, the Court agrees with the Magistrate Judge’s determination that the MCPA class action prohibition remains procedural in nature and that Rule 23 applies to determine whether a claim may be brought as a class action.

With this ruling, it is now settled that a consumer has a right to pursue a class action under the Montana Consumer Protection Act in federal court.  Judge Ostby and Judge Morris properly determined that Federal Rule 23 trumps the prohibition.  This is an excellent result for consumers as it allows them to properly invoke Rule 23 and have unfair and deceptive business conduct prosecuted on a class action basis in federal court.

[1] Mont. Code Ann. §30-14-102.

[2] Baird v. Norwest Bank, 255 Mont. 317 (1993).

[3] See, e.g., FTC Hearing on S. 1984, 97th Cong., 2d Sess., 32-36 (1982) and Burnett v. Spokane Ambulance, 772 P.2d 1027 (Wash. 1989) (discussing entrepreneurial versus malpractice distinctions).

[4] Haynes v. Yale-New Haven Hosp., 699 A.2d 964 (Conn. 1997).

[5] MCA § 30-14-133(1).

[6] Cause No. CV 15-105-BLG-BMM (D. Mont.)