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7th Circuit upholds denial of class action, statutory damages

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Note: This story has been edited to reflect a change by the 7th Circuit Court of Appeals Sept. 22, 2011.

In an appeal of the denial of a proposed class-action lawsuit based on the finding the attorney was inadequate to represent the class, the 7th Circuit Court of Appeals noted that the attorney’s demeanor on appeal didn’t help his cause.

In Blanca Gomez and Joan Wagner-Barnett v. St. Vincent Health Inc., No. 10-2379, Blanca Gomez and Joan Wagner-Barnett, former employees of St. Vincent Health, appealed the District Court’s decision to not certify the proposed class, the denial of the plaintiffs’ requests for statutory penalties, and the amount of damages awarded to Barnett in their suit alleging St. Vincent violated the notice provisions regarding how the two could extend their health insurance coverage within the period prescribed by statute.

Before this case was filed, the District Court dismissed a similar suit, Brown-Pfifer v. St. Vincent Health Inc., No. 1:06-CV-236, 2007 WL 2757526 (S.D. Ind. Sept. 20, 2007), in which those who did not timely receive their COBRA notices sued St. Vincent. During May 2004 and January 2006, nearly 266 of the 1,570 people who received health benefits from St. Vincent and experienced qualifying events didn’t receive timely COBRA notices. The same attorney in Brown-Pfifer, Ronald Weldy, was the attorney in the instant case.

Instead of appealing the dismissal of Brown-Pfifer, the case was re-filed with two new named plaintiffs, Gomez and Barnett. U.S. Judge Sarah Evans Barker found the proposed class counsel would inadequately represent the proposed class, and denied class certification. Ruling on the plaintiffs’ individual claims, the judge awarded no damages to Gomez, as she had testified that she wouldn’t have purchased the COBRA coverage even if she had received the notice on time. Judge Barker awarded Barnett, who testified she would have purchased the coverage and had medical expenses after her employment ended with St. Vincent, $396 in damages. Judge Barker also declined to impose statutory penalties against St. Vincent.

The 7th Circuit Court of Appeals affirmed the lower court in all respects, even though it had some reservations about the District Court’s determination that “such other relief” that may be awarded under the COBRA notification enforcement provision could include an award of medical expenses incurred as a result of the COBRA notification violation, minus deductibles and premiums the beneficiary would have paid to get coverage under COBRA.

“While we are reticent to condone without limitation this method of compensation in COBRA-notification violation cases, we find no error in this particular case. The district court awarded the monetary damages pursuant to subsection 1132(c)(1)’s ‘such other relief’ provision, and the award does not contradict the section’s plain text,” wrote Judge Michael Kanne.

They also affirmed the decision to not impose statutory penalties against St. Vincent, noting the case lacks any evidence of an administrator’s bad faith or gross negligence.

Finally, the judges affirmed the decision that the plaintiffs’ counsel wasn’t an adequate representative of the class. Judge Barker found that Weldy’s actions during his attempts to represent the proposed classes in both suits didn’t make him an adequate class counsel. In Brown-Pfifer, another judge found, among other things, that Weldy wasn’t diligent in prosecuting his proposed class action. In the instant case, he had been ordered to pay expenses in conjunction with St. Vincent’s motion to compel.

The judges found Weldy’s arguments on appeal to be unpersuasive.

“If counsel wished to convince us that the district court abused its discretion by finding him inadequate to represent the proposed class, his demeanor on appeal has not helped his cause. He has (perhaps mistakenly) misrepresented fundamental facts. And he has relied on hyperbole in the place of persuasive argument, failing to refute the district court’s reasoning,” wrote Judge Kanne.
 

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  1. by the time anybody gets to such files they will probably have been totally vacuumed anyways. they're pros at this at universities. anything to protect their incomes. Still, a laudable attempt. Let's go for throat though: how about the idea of unionizing football college football players so they can get a fair shake for their work? then if one of the players is a pain in the neck cut them loose instead of protecting them. if that kills the big programs, great, what do they have to do with learning anyways? nada. just another way for universities to rake in the billions even as they skate from paying taxes with their bogus "nonprofit" status.

  2. Um the affidavit from the lawyer is admissible, competent evidence of reasonableness itself. And anybody who had done law work in small claims court would not have blinked at that modest fee. Where do judges come up with this stuff? Somebody is showing a lack of experience and it wasn't the lawyers

  3. My children were taken away a year ago due to drugs, and u struggled to get things on track, and now that I have been passing drug screens for almost 6 months now and not missing visits they have already filed to take my rights away. I need help.....I can't loose my babies. Plz feel free to call if u can help. Sarah at 765-865-7589

  4. Females now rule over every appellate court in Indiana, and from the federal southern district, as well as at the head of many judicial agencies. Give me a break, ladies! Can we men organize guy-only clubs to tell our sob stories about being too sexy for our shirts and not being picked for appellate court openings? Nope, that would be sexist! Ah modernity, such a ball of confusion. https://www.youtube.com/watch?v=QmRsWdK0PRI

  5. LOL thanks Jennifer, thanks to me for reading, but not reading closely enough! I thought about it after posting and realized such is just what was reported. My bad. NOW ... how about reporting who the attorneys were raking in the Purdue alum dollars?

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