Klay v. Humana, Inc., No. 02-16333 (11th Cir. Sept. 1, 2004)

A class action suit was brought by doctors against almost all major HMOs. The doctors alleged that the HMOs conspired with each other to program their computer systems to systematically underpay physicians for their services. The U.S. Court of Appeals for the 11th Circuit held that the doctors should only be certified as a class for their RICO claims against the HMOs, but not their claims for breach of contract, unjust enrichment, and violation of state prompt-pay statutes. Because the RICO claims were based on the corporate policies of the HMOs and not the individual issues of fact that could vary from physician to physician, the certification of a class was appropriate for this claim. As for the breach of contract and unjust enrichment claims, the court held that class certification was not appropriate because, for each claim, individualized issues of fact would likely predominate. In addition, the court found that only 32 states have prompt-pay statutes, so these claims were not shared by the entire class.

After establishing which claims could be brought as part of a class action lawsuit, the court examined whether a class action would be superior to other available methods for the adjudication of the claims. The court held that concentrating the litigation in a single forum would be desirable in this case because it would foster judicial efficiency and avoid unnecessary, repetitious litigation in other states. Also, the problems associated with managing a case of this size would not be sufficiently burdensome to render a class action impracticable.