¹ Others—such as physicians who wish to maintain individual or small-group practices without affiliation with managed care organizations (MCOs), or who are affiliated with such organizations but disagree with their philosophy or decisions—may similarly wish to assert more force in the health care industry. The plight of the patient, however, is more acute. Physicians have strong groups, such as the American Medical Association (AMA), lobbying on their behalf. Other physician groups have also organized to oppose managed care practices. See Peter T. Kilborn, Doctors Organize to Fight Corporate Intrusion, N.Y. TIMES, July 1, 1997, at A12. In contrast, patients— with the exception of older Americans, who have the American Association of Retired Persons (AARP) advocating for them—generally do not have organizations with great lobbying power safeguarding their interests. Compare La Fond, John Q. & Durham, Mary L., Cognitive Dissonance: Have Insanity Defense and Civil Commitment Reforms Made a Difference?, 39 VILL. L. REV. 71, 76 (1994)Google Scholar (noting how courts have urged legislatures to enact laws that protect “those groups who have traditionally lacked political power, such as prisoners, poor people, minorities and patients“), with Bruce Alpert, Breaux Defends Medicare Changes: Gamble Taken on Tough Issue, NEW ORLEANS TIMES-PICAYUNE, July 8, 1997, at A1, available in 1997 WL 4230751 (noting that the AARP is senior citizens’ largest lobbying group for Medicare reform). This Article will not address the use of the class action device in health care litigation by those other than patients.

² Quality, cost and access comprise the “three-legged stool” of health care policy. See Mayo, Thomas W., Foreword: Nonfinancial Barriers to Health Care, 32 HOUS. L. REV. 1187, 1187 (1996)Google Scholar (citing articles). Parties attacking some aspect of health care target either its quality, cost, access or some combination thereof.

³ FED. R. CIV. P. 23 (authorizing class actions in the federal courts and outlining procedures for their maintenance, conduct, notice, judgment, dismissal, compromise etc.). This Article solely addresses class actions in the federal court system. States have their own class action rules, many of which resemble the federal rule. See, e.g., ARIZ. R. CIV. P. 23; DEL. CH. R. 23. But see FLEMING JAMES, JR. ET AL., CIVIL PROCEDURE § 10.22, at 567 (4th ed. 1992) (discussing how attitudes of states toward class actions vary).

⁴ The drafters of Rule 23 “had dominantly in mind vindication of ‘the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.'” Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231, 2246 (1997) (quoting Benjamin Kaplan, Prefatory Note, The Class Action: A Symposium, 10 B.C. IND. & COM. L. REV. 497, 497 (1969)). “The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.” Id. (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)). Aggregating several small claims into a large class gives the class suit enough value to be worth a representative litigant's, and an attorney's, time and effort. See id.

⁵ See id. at 2257.

⁶ See cases cited infra notes 192, 212, 231.

⁷ Impact litigation is “litigation oriented toward the change of institutional norms or practices, rather than the resolution of individual problems.” White, Lucie E., Mobilization on the Margins of the Lawsuit: Making Space for Clients to Speak, 16 N.Y.U. REV. L. & SOC. CHANGE 535, 535 n.1 (1989)Google Scholar.

⁸ See Miller, Arthur R., Of Frankenstein Monsters and Shining Knights: Myth, Reality, and the “Class Action Problem”, 92 HARV. L. REV. 664, 678 (1979)Google Scholar. Currently, class actions are not in great favor. See Marcus, Richard L., They Can 't Do That, Can They? Tort Reform Via Rule 23, 80 CORNELL L. REV. 858, 858 (1995)Google Scholar. Recent concerns over their use in the securities and mass torts areas have sparked a flurry of law review articles and at least two Supreme Court cases, as well as misgivings about their impact on existing federal legislation. For thoughtful discussions on the advantages and disadvantages of mass tort and securities fraud class action suits, see Coffee, John C., Class Wars: The Dilemma of the Mass Tort Class Action, 95 COLUM. L. REV. 1343, 1353-55 (1995)Google Scholar (discussing developments and changes in mass tort class actions as well as proposals for reform); Cox, James D., Making Securities Fraud Class Actions Virtuous, 39 ARIZ. L. REV. 497, 499-508, 515-23 (1997)Google Scholar (discussing reasons for distrust of securities class actions and discussing the reform measures of the Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737 (codified in scattered sections of 15 U.S.C.A (West 1997)). For recent Supreme Court cases discussing the status of class action settlements, see Amchem Products, Inc. v. Windsor, 117 S. Ct. 2231, 2252 (1997) (upholding class decertification and vacating district court injunction against individuals who failed timely to opt out of an asbestos class action settlement, because requirements for class certification of commonality of issues of fact and law and adequacy of representation were not met); Matsushita Electric Industrial Co. v. Epstein, 516 U.S. 367, 378, 386 (1996) (holding that state class action settlement judgment has a preclusive effect on pending litigation of an exclusive federal claim arising under the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a-78ll (1994)).

Concerns about federal securities class action lawsuits stem partially from use of the so-called “Delaware settlement.” In a Delaware settlement, a corporation can settle all related state and federal claims in the context of a state court class action even though the federal claims, such as securities law claims, may have been the plaintiffs’ only valid claims and could not have been litigated in state court. See, e.g., Epstein v. MCA, Inc., 126 F.3d 1235, 1248-51 (9th Cir. 1997) (opinion on remand) (holding that state court judgment approving a Delaware settlement did not have preclusive effect in a related federal securities lawsuit, because a conflict of interest existed between class counsel in the state court action and plaintiff class of shareholders, thereby rendering representation of the class inadequate); Brief of C.L. Grimes as Amicus Curiae in Support of Respondents * 1 , Matsushita (No. 84-1809), available in 1995 WL 782814 (emphasizing that Delaware settlement is an egregious misuse of class action procedure that should be put to an end).

⁹ Kaplan, supra note 4, at 497; see also Califano v. Yamaski, 442 U.S. 682, 701 (1979) (“[T]he class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion … .“); cf Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809 (1985) (stating that in a class action of plaintiffs whose claims average about $100, “most of the plaintiffs would have no realistic day in court if a class action were not available“).

¹⁰ Winter, Steven L., The “Power” Thing, 82 VA. L. REV. 721, 739 (1996)Google Scholar.

¹¹ See Coffee, John C., Jr., Rescuing the Private Attorney General: Why the Model of the Lawyer As Bounty Hunter Is Not Working, 42 MD. L. REV. 215, 216 (1983)Google Scholar; see also Associated Indus., Inc. v. Ickes, 134 F.2d 694, 704 (2d Cir.) (referring to private persons who vindicate the public interest as “private Attorney Generals“), rev'd, 320 U.S. 707, 707 (1943) (vacating court of appeals’ order and remanding to determine if the liabilities and obligations incurred under the Bituminous Coal Act, 15 U.S.C. § 828 (1994) (repealed Sept. 6, 1996), survive the Act's expiration).

¹² See Coopers & Lybrand v. Livesay, 437 U.S. 463, 476 (1978) (“Certification of a large class may so increase the defendant's potential damages liability and litigation costs that he may find it economically prudent to settle and to abandon a meritorious defense.“); Castano v. American Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996). For a general discussion of the intense pressure on defendants to settle class actions, see In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1298-99 (7th Cir. 1995).

¹³ For examples of popular media advancing consumer awareness of managed care tactics, see sources cited infra note 56.

¹⁴ See Ellyn E. Spragins, Beware Your HMO, NEWSWEEK, Oct. 23, 1995, at 54, 54 (reassuring that “[y]ou can protect yourself and your family“).

¹⁵ See Gleick, Elizabeth, Picking a Health Plan: A How-To Guide, TIME, Jan. 29, 1996, at 60Google Scholar, 61 (discussing impact of health maintenance organization (HMO) “gag clauses” on patient care); Spragins, supra note 14, at 55-56 (same).

¹⁶ 29 U.S.C. §§ 1001-1461 (1994).

¹⁷ Trakman, Leon E., David Meets Goliath: Consumers Unite Against Big Business, 25 SETON HALL L. REV. 617, 617 (1994)Google Scholar. Class actions have proven useful in remedying situations in which consumer victims are treated similarly, have comparable losses, share an interest in redressing those losses and seek to advance a public interest in deterring future conduct such as that which caused them injury. See id. at 618; see also Marshall, Shauna I., Class Actions As Instruments of Change- Reflections on Davis v. City and County of San Francisco, 29 U.S.F. L. REV. 911, 912 (1995)Google Scholar (reflecting on how a class action with subclasses helped litigants and class counsel achieve the broad shared goal that united them despite individual differences).

¹⁸ See, e.g., sources cited infra note 56 and accompanying text.

¹⁹ See, e.g., sources cited infra note 56 and accompanying text.

²⁰ Consumers of financial services, for example, have achieved some measure of success in disputing as classes the actions of banks in imposing surcharges. Cf Trakman, supra note 17, at 620-21 (although criticizing a class action settlement with Wells Fargo Bank ending a dispute over surcharges imposed for checks returned due to insufficient funds). Such consumers, and consumers challenging prejudgment and prehearing remedies, debt collection practices and credit reporting procedures, to name a few, see 4 HERBERT NEWBERG & ALBA CONTE, NEWBERG ON CLASS ACTIONS § 21.01, at 21-2 to -3 (3d ed. 1992), have taken advantage of the class action device to try to recompense their individually minor damages at low cost, with more force but less inconvenience and stress than if each had filed suit. See generally Durrett v. John Deere Co., 150 F.R.D. 555, 561 (N.D. Tex. 1993) (summarizing the case for the efficiency and benefits of a consumer class action); 4 NEWBERG & CONTE, supra, § 21.01, at 21-3 to -9 (same).

²¹ See Capron, Alexander M., Containing Health Care Costs: Ethical and Legal Implications of Changes in the Methods of Paying Physicians, 36 CASE W. RES. L. REV. 708, 711 (1986)Google Scholar (“[T]he dominant method by which consumers pay for health services and by which physicians are compensated is the fee-for-service method.“). Fee-for-service (FFS) is intended to encompass systems in which compensation actually is based on services rendered as well as systems in which a provider is compensated for services in accordance with the usual or customary cost of or charge for those services. See generally Randall, Vernellia R., Managed Care, Utilization Review, and Financial Risk Shifting: Compensating Patients for Health Care Cost Containment Injuries, 17 PUGET SOUND L. REV. 1, 14-15 (1993)Google Scholar (explaining the private insurers’ FFS model and the government's cost or charge model of the mid-1980s). In this system, physicians generally maintain private practices (either individually or in groups), hold privileges at hospitals and receive fees based on the services they performed. See Capron, supra, at 712. Hospitals similarly charge patients for services provided.

²² By 1986, public or private insurers made 70% of payments to providers. See Randall, supra note 21, at 14 (citing GEORGE J. ANNAS ET AL., AMERICAN HEALTH LAW 131 (1990)).

²³ See id. at 15-16 (contending that individuals with health insurance lack incentives to economize).

²⁴ See ANNAS ET AL., supra note 22, at 131 (stating that “a majority of Americans receive their health insurance as part of their employee benefits“).

²⁵ Third-party payers, however, are now motivated by profit and are “rigorously looking for ways to control the untamed beast.” Randall, supra note 21, at 15.

²⁶ See I.R.C. § 419 (1994); see also Capron, supra note 21, at 713-15 (stating that expenditures are inflated because physicians lack incentives to provide the most economical treatment); Randall, supra note 21, at 14-15 (noting that both FFS and cost-basis reimbursement created powerful incentives for all players in the health care system not to economize). See generally Lu, Elaine, Recent Development, The Potential Effect of Managed Competition in Health Care on Provider Liability and Patient Autonomy, 30 HARV. J. ONLEGIS. 519, 523-25 (1993)Google Scholar.

²⁷ See PHYSICIAN PAYMENT REVIEW COMM'N, 1995 ANNUAL REPORT TO CONGRESS 182 (1995) [hereinafter PPRC 1995 REPORT] (citing Katharine R. Levit et al., National Health Spending Trends 1960-1993, HEALTH AFF., Winter 1994, at 14, 15). Health care spending topped one trillion dollars for the first time in 1996. See Robert Pear, Spending on Health Grew Slowly in 1996, N.Y. TIMES, Jan. 13, 1998, at A14.

²⁸ See PPRC 1995 REPORT, supra note 27, at 182; Pear, supra note 27, at A14.

²⁹ See PPRC 1995 REPORT, supra note 27, at 182-83.

³⁰ See id. at 183.

³¹ The Farmer's Union began its Cooperative Health Association in Oklahoma in 1929, see Randall, supra note 21, at 20, and the Western Clinic in Tacoma, Washington, contracted with lumber mills to provide medical care for their employees for a set monthly fee around the turn of the century. See WILLIAM M. MERCER, INC., INTEGRATED HEALTH PLANS: MANAGED CARE IN THE 90s 3 (1990). Some date the development of managed care even earlier. See, e.g., Furrow, Barry R., Managed Care Organizations and Patient Injury: Rethinking Liability, 31 GA. L. REV. 419, 427-28 (1997)Google Scholar (discussing how “[i]n the 1800s businesses such as railroads, sugar plantations, and lumber companies wanted to attract immigrant labor and retain it, often in isolated locations … [of the] United States” and, in order to do so, “pioneered capitated health care and organized delivery of services“).

³² In the 1930s, two physicians started a prepaid group health delivery plan in Los Angeles, the Ross-Loos Health Plan. It is “the oldest HMO still in existence.” See Randall, supra note 21, at 20 & n.76; see also PAUL STARR, THE SOCIAL TRANSFORMATION OF AMERICAN MEDICINE 301 (1982) (noting that by 1935 the Ross-Loos Clinic had enrolled more than 12,000 employees and their 25,000 dependents). Also, in the 1930s and 1940s, industrialist Henry Kaiser established prepaid medical plans for his employees in California and the Pacific Northwest. See WILLIAM M. MERCER, INC., supra note 31, at 3. After World War II, Kaiser Permanente Health Plan opened to public enrollment. See id.; see also Randall, supra note 21, at 21 n.79 (stating that by 1988, Kaiser Health Foundation Plan had become “the largest prepaid plan in the U.S.“). See generally Capitation, Integration, and Managed Care: Lessons from Early Experiments, 275 JAMA 957 (1996) (tracing the latest “structural transition” of the health care industry toward managed care, from its roots to present efforts).

³³ The Health Maintenance Organization Act of 1973 defines an HMO as “a public or private entity which … provides basic and supplemental health services to its members,” 42 U.S.C. § 300e(a) (1994), “for a basic health services payment.” Id. § 300e(b)(l); see also Anderson v. Humana, Inc., 24 F.3d 889, 890 (7th Cir. 1994) (stating that an HMO “offers, for a fixed fee, as much medical care as the patient needs“).

³⁴ See Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1327 (5th Cir. 1992).

³⁵ See Abraham, Kenneth S. & Weiler, Paul C., Enterprise Medical Liability and the Evolution of the American Health Care System, 108 HARV. L. REV. 381, 395 (1994)Google Scholar. Kenneth Abraham and Paul Weiler note that, as a result of diagnosis-related groups, and presumably of the corresponding changes in the private payment systems, “[t]he distinction between medical and economic concerns has become greatly blurred.” Id.

³⁶ See id.

³⁷ See id.

³⁸ Id. at 397.

³⁹ See Mechanic, David & Schlesinger, Mark, The Impact of Managed Care on Patients’ Trust in Medical Care and Their Physicians, 275 JAMA 1693, 1694 (1996)Google Scholar; Pittman, Larry J., ERISA'S Preemption Clause and the Health Care Industry: An Abdication of Judicial Law-Creating Authority, 46 FLA. L. REV. 355, 361 (1994)Google Scholar (citing Morreim, E. Haavi, Cost Containment and the Standard of Medical Care, 75 CAL. L. REV. 1719, 1720 (1987)Google Scholar).

⁴⁰ MARSHA GOLD ET AL., MATHEMATICA POLICY RESEARCH, INC., ARRANGEMENTS BETWEEN MANAGED CARE PLANS AND PHYSICIANS: RESULTS FROM A 1994 SURVEY OF MANAGED CARE PLANS app. A, at 3 (1995) (report submitted to the Physician Payment Review Commission, Washington, D.C.).

⁴¹ Lu, supra note 26, at 528; see Furrow, Barry R., The Changing Role of the Law in Promoting Quality in Health Care: From Sanctioning Outlaws to Managing Outcomes, 26 HOUS. L. REV. 147, 171 (1989)Google Scholar (stating that “measuring the behavior of the providers [is accomplished] … [t]hrough implementation of clinical algorithms, outcome-based studies, application of quality control principles from industry, and large-scale analysis of practice patterns“).

⁴² See Christensen, Kate T., Ethically Important Distinctions Among Managed Care Organizations, 23 J.L. MED. & ETHICS 223, 226-27 (1995)Google Scholar (summarizing the structural features of MCOs that maximize the ethical treatment of patients). See generally Kilcullen, Jack K., Groping for the Reins: ERISA, HMO Malpractice, and Enterprise Liability, 22 AM. J.L. & MED. 7, 25-28 (1996)Google Scholar (discussing a range of organizational structures where the payer is the provider).

⁴³ By structuring bonus systems in this manner, organizations shift the risk of financial loss from themselves to physicians or other providers. See Randall, supra note 21, at 6. See generally Perdue, Jim M. & Baxley, Stephen R., Cutting Costs—Cutting Care: Can Texas Managed Care Systems and HMOs Be Liable for the Medical Malpractice of Physicians?, 27 ST. MARY's L.J. 23, 48-49 (1995)Google Scholar (describing how the actuarial risks are shifted to the provider).

⁴⁴ See, e.g., Oakley, David J. & Kelley, Eileen M., HMO Liability for Malpractice of Member Physicians: The Case of IPA Model HMOs, 23 TORT & INS. L.J. 624, 636 (1988)Google Scholar (noting that 20% is typically withheld from FFS payments to physicians).

⁴⁵ See id. at 636 & n.45 (outlining the guidelines for physician's “withhold“).

⁴⁶ For simplicity's sake, this Article will discuss the issues it raises with reference to physicians. Some of the concerns expressed or cases described, however, could similarly relate to or be alleged against other health care providers, such as nurses, nurse-practitioners, psychologists or technologists.

⁴⁷ See, e.g., Oakley & Kelley, supra note 44, at 635-36.

⁴⁸ See Randall, supra note 21, at 30.

⁴⁹ See Furrow, supra note 31, at 474.

⁵⁰ See id. at 482.

⁵¹ See Mehlman, Maxwell J., The Patient-Physician Relationship in an Era of Scarce Resources: Is There a Duty to Treat?, 25 CONN. L. REV. 349, 379-83 (1993)Google Scholar (noting that physicians sometimes provide medical services with the knowledge they will not be reimbursed; conversely, physicians may deny treatment if they suspect they might not be reimbursed).

⁵² Increasingly, even the qualifications of personnel in health care institutions reflect a more businesslike tenor. In the 1994-1995 school year, 13 medical schools offered combined doctor of medicine (M.D.) and master's of business administration (M.B.A.) degree programs. See Bazansky, Barbara et al., Educational Programs in U.S. Medical Schools, 274 JAMA 716, 720 (1995)Google Scholar; see also Henry, John Bernard, The Effect of Changing Technology on Manpower in Pathology and Laboratory Medicine, 111 ARCHIVES PATHOLOGY & LABORATORY MED. 662, 665-66 (1987)Google Scholar (predicting that the demand for pathologists will decrease as technology improves and with the advent of a competitive, cost-conscious health care industry, but that there will be a “growing national need” for those with a combination M.D./M.B.A. degree to face the changes); Schechter, Gary L., Maintaining Quality in a Discount Store Arena, 122 ARCHIVES OTOLARYNGOLOGY 90, 90-91 (1996)CrossRefGoogle Scholar (describing the increasingly businesslike nature of the health care industry); cf Florence Nightingale Nursing Serv., Inc. v. Blue Cross and Blue Shield, 832 F. Supp. 1456, 1460-61 (N.D. Ala. 1993) (criticizing a physician trained in “cost containment” acting as chief claims evaluator for Blue Cross as lacking objectivity in her determination of a reasonable rate for medical services because she used her employer's low hourly rate for nursing services).

⁵³ Abraham & Weiler, supra note 35, at 396.

⁵⁴ Cf. ANDERS, GEORGE, HEALTH AGAINST WEALTH 63, 66 (1996)Google Scholar (noting that some HMOs have spent huge sums of money for purely aesthetic reasons rather than for providing health care).

⁵⁵ See Stern, Joanne B., The Benign History of a Scam: The HMO Experience (As Seen by a Health Lawyer), 1 DEPAUL J. HEALTH CARE 395, 404-05 (1997)Google Scholar.

⁵⁶ Gleick, supra note 15, at 60; see also Spragins, supra note 14, at 54 (“Some can be counted on in a pinch, but many delay or deny crucial care if you require expensive tests or procedures.“).

⁵⁷ See, e.g., Wald, Martin, Why a Law Firm Is Not a Business, LEGAL INTELLIGENCER, Nov. 27, 1995, at 3Google Scholar (arguing that lawyers are no longer held in high regard because they do not recognize that their role is to prevent or help resolve disputes, not to run a business that is purely in the pursuit of profit; law firms operating as businesses have suffered from increased government regulation, and their lawyers from emotional and drug abuse problems, stress and long working hours). The Supreme Court's decision in Florida Bar v. Went For It, Inc., 515 U.S. 616 (1995), for example, prompted significant discussion about the purpose of the profession and the role of money-making in it. See Chasing After Ethics: Does the Aggressive Pursuit of Business Contaminate the Profession of Lawyering? What Are the Limits in Pushing Legal Services upon the Needy but Grieving?, RECORDER, Aug. 21, 1995, at 8, available in LEXIS, News Library, Arcnws File (transcript of a discussion on LEXIS Counsel Connect, an online service for lawyers).

⁵⁸ See DOUG UNDERWOOD, WHEN MBAS RULE THE NEWSROOM 91 (1995).

⁵⁹ See N.R. Kleinfield, The Downsizing of America: In the Workplace Musical Chairs, N.Y. TIMES, Mar. 4, 1996, at Al (printing a graph that depicts Chase Manhattan Corporation's assets increasing while its workforce shrank over the same time period); Steve Lohr, Downsizing: How It Feels to Be Fired, N.Y. TIMES, Mar. 17, 1996, at E5 (collecting and publishing readers’ responses to the New York Times series, “The Downsizing of America“); Robert J. Samuelson, Are Workers Disposable?, NEWSWEEK, Feb. 12, 1996, at 47, 47 (describing the fear of “the era of the disposable worker“); Allan Sloane, The Hit Men, NEWSWEEK, Feb. 26, 1996, at 44, 45 (discussing the backlash generated by corporate layoffs and rising stock prices); Louis Uchitelle & N.R. Kleinfield, On the Battlefields of Business, Millions of Casualties, N.Y. TIMES, Mar. 3, 1996, at A1 (describing how the number of workers has fallen while graphically showing the increase in business revenues).

⁶⁰ See Schuck, Peter H., Rethinking Informed Consent, 103 YALE L.J. 899, 931 (1994)Google Scholar (stating that “employers and other large groups can and sometimes do act as consumer proxies“).

⁶¹ Cf. Forsyth v. Humana, Inc., 827 F. Supp. 1498, 1501 (D. Nev. 1993) (employers and employees bringing class action suit against Humana under the Employee Retirement Income Security Act (ERISA), the Sherman Act and the Racketeer Influenced and Corrupt Organizations Act (RICO)).

⁶² The recent United Parcel Service workers’ strike marked the first time in nearly two decades that the public sided with a union. See Paul Magnusson et al., A Wake-Up Call: The Teamsters’ Win Means That Workers Can No Longer Be Taken for Granted, BUS. WK., Sept. 1, 1997, at 28, 28.

⁶³ See infra notes 79-83 and accompanying text.

⁶⁴ Furrow, supra note 41, at 161. The AMA agrees with Furrow. During the health care reform debate, the AMA Council on Ethical and Judicial Affairs opined, “Cost alone is not a reason for including or excluding treatment, but cost relative to effectiveness or benefit is highly relevant.” Council on Ethical and Judicial Affairs, American Med. Ass'n, Ethical Issues in Health Care System Reform: The Provision of Adequate Health Care, 272 JAMA 1056, 1059 (1994).

⁶⁵ Furrow, supra note 41, at 161-62.

⁶⁶ Wickline v. State, 239 Cal. Rptr. 810, 819-20 (Ct. App. 1986).

⁶⁷ See id.; see also infra text accompanying note 149 (noting that, in dicta, the Wickline court stated that an MCO may be liable for harm caused by defects in the design or implementation of cost-containment mechanisms).

⁶⁸ “[T]he physician who complies without protest with the limitations imposed by a third party payor, when his medical judgment dictates otherwise, cannot avoid his ultimate responsibility for his patient's care.” Wickline, 239 Cal. Rptr. at 819.

⁶⁹ Id.

⁷⁰ “HMO managers often declare at national conferences that the physician can no longer be an advocate for the patient.” Annas, George J., Patients’ Rights in Managed Care—Exit, Voice, and Choice, 337 NEW ENG. J. MED. 210, 213 (1997)Google Scholar.

⁷¹ See Stayn, Susan J., Note, Securing Access to Care in Health Maintenance Organizations: Toward a Uniform Model of Grievance and Appeal Procedures, 94 COLUM. L. REV. 1674, 1705 (1994)Google Scholar; see also Mechanic & Schlesinger, supra note 39, at 1693 (stating that financial arrangements between HMOs and physicians have adversely affected the degree of trust between patient and physician).

Council on Ethical and Judicial Affairs, American Med. Ass'n, Ethical Issues in Managed Care, 273 JAMA 330, 331 (1995) (footnote omitted).

⁷² See PPRC 1995 REPORT, supra note 27, at 194, which states that:

For more on enterprise liability as it relates to class action suits, see infra Part III.A.1.

⁷³ See Gordon, Geoffrey H. et al., Physician-Patient Communication in Managed Care, 163 W.J. MED. 527, 527 (1995)Google Scholar (stating that “good physician-patient communication … improves biologic and psychosocial health care outcomes and enhances patient satisfaction“); Mechanic & Schlesinger, supra note 39, at 1693.

⁷⁴ See Gordon et al., supra note 73, at 527 (stating that doctors should “educate and coach patients in the management of common health problems” and should “consider sharing decisionmaking responsibilities with the patient” to help patients adjust to the new method of care in managed care plans).

⁷⁵ See Weissman, Joel, Uncompensated Hospital Care: Will It Be There If We Need It?, 27'6 JAMA 823, 823 (1996)Google Scholar (noting that in 1994, the proportion of the population that was uninsured was 17.3%).

⁷⁶ See id. at 826. Cost shifting is the practice by most hospitals of charging higher prices to some health insurers to offset lower prices paid by others. Therefore, the actual cost of the treatment is not reflected in the insurance payment. See id.; see also ANNAS ET AL., supra note 22, at 131, 140 (noting that for those who receive insurance through employers, the impact of rising health care costs has been “partially disguised,” and stating that cost-sharing arrangements, which are based on the theory that consumers will utilize more services if insulated from the “true costs” of care, may have contributed to obscuring the true cost of treatment). In 1994, the ratio of payments to costs for private payers was 124%. See Weissman, supra note 75, at 826.

⁷⁷ About 85% of Americans under age 65 have health insurance of some type. See Rothstein, Mark A., The Use of Genetic Information for Nonmedical Purposes, 9 J.L. & HEALTH 109, 113 (1995)Google Scholar. Of the Americans under age 65 who have group insurance, 70% obtain it through employment. See id.; see also BUREAU OF THE CENSUS, U.S. DEP't OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES 100 (1991) (reporting that, in 1988, 150.4 million Americans received health care coverage through employee benefits plans).

⁷⁸ Patients and beneficiaries remain unaware of the value of their benefits because, although they are technically income, they need not be reported on tax returns. See I.R.C. § 106 (1994).

⁷⁹ See Jost, Timothy Stoltzfus, Oversight of the Quality of Medical Care: Regulation, Management, or the Market?, 37 ARIZ. L. REV. 825, 825-26 (1995)Google Scholar.

⁸⁰ One may measure the quality of health care by analyzing an entity's structure, process or outcome. See id. at 826 n.7. Structure is used more often than outcome because it is easier to measure. See id. Outcome, although difficult to assess, is the most important variable. See id.

⁸¹ See, e.g., NEV. REV. STAT. §§ 695G.010-.260 (1997); Act of May 29, 1997, ch. 97-159, 1997 Fla. Sess. Law Serv. 1827-35 (West) (to be codified in scattered sections of volumes 18D and 18E of the Florida Statutes); see also More States Join Nationwide Trend of Regulating Managed Care Networks, 66 U.S.L.W. 2026 (July 8, 1997) (citing legislative efforts in Connecticut, Colorado, Florida, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, Ohio, Oregon and Texas).

⁸² “The preeminent [accreditation] organization for managed care organizations has become the National Committee for Quality Assurance (NCQA). NCQA is an independent, nonprofit standard unsetting organization that surveys and accredits managed care organizations.” Furrow, supra note 31, at 458.

⁸³ See Jost, supra note 79, at 837 (suggesting that developments in information technology and the health care industry would allow for development of managed care report cards that would “empower consumers (or other purchasers) to make choices among providers“).

⁸⁴ See Furrow, supra note 31, at 426-27 (arguing that market competition would force MCOs to compete “on the basis of both quality and cost,” but noting that, in practice, “cost still drives the marketing of these organizations to employers and large groups“).

⁸⁵ See id. at 444, 482-84 (discussing MCOs’ use of primary care physicians as gatekeepers who control costs).

⁸⁶ Similarly, patients “frequently must obtain approval from the organization to receive many specialty services and nonemergency procedures.” Rodwin, Marc A., Consumer Protection and Managed Care: Issues, Reform Proposals, and Trade-Offs, 32 Hous. L. REV. 1319, 1331 (1996)Google Scholar.

⁸⁷ See TOM L. BEAUCHAMP & JAMES F. CHILDRESS, PRINCIPLES OF BIOMEDICAL ETHICS 142 (4th ed. 1994).

⁸⁸ See Schuck, supra note 60, at 900.

⁸⁹ Rule 23 underwent major revision in 1966, just in time for lawyers representing the poor and civil rights lawyers to use it. See Mark C. Weber, Preclusion and Procedural Due Process in Rule 23(b)(2) Class Actions, 21 U. MICH. J.L. REFORM 347, 350-51 (1988). Lawyers representing those involved in the antiwar and environmental movements similarly “saw class actions as a useful means to vindicate their clients’ rights.” Id. at 351. These groups generally used Rule 23, especially subdivision (b)(2), which provides for judgments binding all class members, to assert that some government or private action contravened a statute or the Constitution. See id. at 352. In this way, groups of people who previously had been disenfranchised gained power.

⁹⁰ See JAY KATZ, THE SILENT WORLD OF DOCTOR AND PATIENT 100-01 (1984).

⁹¹ See STARR, supra note 32, at 142, 144.

⁹² See id.

⁹³ See Suddick, Richard P. & Harris, Norman O., Historical Perspectives of Oral Biology: A Series, 1 CRITICAL REVIEWS ORAL BIOLOGY & MED. 135, 135 (1990)Google Scholar.

⁹⁴ See, e.g., discussion infra note 95.

⁹⁵ The use of the male modifier here is purposeful. Although women have always been an integral part of the health care profession, they initially were funneled into nursing, rather than medical school. See TERESA AMOTT & JULIE MATTHAEI, RACE, GENDER, AND WORK 121 (1991). The result was an institutionalized “sexual division of labor” between male physicians and female nurses until relatively recently. See id. at 121 & 369 n.94 (stating how, in the United States, midwives were replaced by males in the early 1900s).

⁹⁶ 105N.E. 92, 93 (N.Y. 1914), overruled by Bing v. Thuring, 143 N.E.2d 3, 8 (N.Y. 1957).

⁹⁷ See id.

⁹⁸ See id.

⁹⁹ See id.

¹⁰⁰ See id.

¹⁰¹ See id.

¹⁰² 464 F.2d 772, 776-77 (D.C. Cir. 1972).

¹⁰³ See id. at 777.

¹⁰⁴ Id.

¹⁰⁵ See id. at 778.

¹⁰⁶ It is a matter for debate whether law precedes ethics or ethics guides the law. In the area of informed consent, however, it seems that the law guided ethics. “[P]aternalism really characterized the practice of medicine for the centuries up to approximately 1965.” Meinhardt, Robyn & Landis, Kenneth W., Bioethics Update: The Changing Nature of the Doctor/Patient Relationship, 16 WHITTIER L. REV. 177, 183 (1995)Google Scholar (citing Siegler, Mark, The Progression of Medicine from Physician Paternalism to Patient Autonomy to Bureaucratic Parsimony, 145 ARCHIVES INTERNAL MED. 713 (1985)Google Scholar). The court decided Schloendorff in 1914, and scholars have targeted 1957, when Salgo v. Leland Stanford Jr. University Board of Trustees, 317 P.2d 170 (Cal. Dist. Ct. App. 1957), was decided, as the year in which “a recognizable, relatively robust form” of informed consent emerged. Schuck, supra note 60, at 900 (citing K.ATZ, supra note 90, at 60).

¹⁰⁷ In some respects, the patients in Schloendorff and Canterbury were lucky. At least they found their way to court and were heard. Less fortunate patients, whose claims went unheard for various reasons, exercised no autonomy in medical settings. See, e.g., Randall, Vernellia R., Slavery, Segregation and Racism: Trusting the Health Care System Ain 't Always Easy! An African American Perspective on Bioethics, 15 ST. LOUIS U. PUB. L. REV. 191 (1996)Google Scholar (discussing several examples of nonconsensual medical treatment of and experimentation on African Americans).

¹⁰⁸ 105 N.E. 92, 93 (N.Y. 1914). One exception, of course, is in an emergency. See id. Interestingly, the plaintiff did not prevail in Schloendorff because she had sued the hospital, not the physicians. See id. at 94. The court refused to hold the hospital responsible for the physicians’ actions because it was not the physicians’ employer. See id.

¹⁰⁹ 464 F.2d 772, 779 (D.C. Cir. 1972); see also Cobbs v. Grant, 502 P.2d 1, 8 (Cal. 1972) (stating that a doctor's failure to disclose low probability risks to a patient before a treatment can be the basis for a cause of action).

¹¹⁰ Canterbury, 464 F.2d at 780 (footnotes omitted). The patient in Canterbury thus stated a cause of action because he claimed his physicians had not disclosed the risk of paralysis to him or his mother. See id. at 794.

¹¹¹ See Walter, Paula, The Doctrine of Informed Consent: To Inform or Not to Inform?, 71 ST. JOHN's L. REV. 543, 547(1997)Google Scholar.

¹¹² See Shea v. Esensten, 107 F.3d 625, 629 (8th Cir. 1997).

¹¹³ See Contract Issues and Quality Standards of Managed Care: Hearing Before the Subcomm. on Health and Env't of the House Comm. on Commerce, 104th Cong. 164-70 (1996) (statement of Dr. Raymond Scalettar, consultant to (and former Commissioner of) the Joint Commission on Accreditation of Healthcare Organizations); see also James Dao, New Pataki Bill Offers Protection to H.M.O. Clients, N.Y. TIMES, May 9, 1996, at A1 (describing proposals to regulate more tightly the managed care industry as “responses to rising public concern about the quality of medical care given under some of the state's managed-care plans“).

¹¹⁴ See Mechanic & Schlesinger, supra note 39, at 1694-95.

¹¹⁵ See, e.g., Shea v. Esensten, 107 F.3d 625, 629 (8th Cir. 1997) (holding that financial incentives to discourage physicians from providing essential health care referrals must be disclosed to the patient and failure to do so breaches ERISA's fiduciary duties). Cf. Most, John A., Autonomy and Rights: Dignity and Right, 11 J. CONTEMP. HEALTH L. & POL'Y 473, 474 (1995)Google Scholar (stating that “autonomy, as it has become enshrined today, is going to be hard to live with in a time of scarcity“).

¹¹⁶ See Wickline v. State, 239 Cal. Rptr. 810, 819 (Cal. 1987), which stated, in dicta, that the physician who complies without protest with the limitations imposed by a third party payor, when his medical judgment dictates otherwise, cannot avoid his ultimate responsibility for his patient's care. He cannot point to the health care payor as the liability scapegoat when the consequences of his own determinative medical decisions go sour.

¹¹⁷ See Sage, William M., ‘Health Law 2000': The Legal System and the Changing Health Care Market, HEALTH AFF., Fall 1996, at 9Google Scholar, 11.

¹¹⁸ See, e.g., Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1332 (5th Cir. 1992) (stating that a prospective decision-making system influences a patient's options more than a retrospective system, because a patient knows in advance that the plan will reject certain proposed treatments and thus will likely choose the treatment that the plan will cover).

¹¹⁹ See generally Faden, Ruth, Managed Care and Informed Consent, 7 KENNEDY INST. ETHICS J. 377, 377-79 (1997)CrossRefGoogle Scholar (reviewing the general forms of gag clauses, how the intolerance of the American public led to state and federal laws prohibiting gag clauses and the ill effect of gag clauses on informed consent due to a decrease in information and options provided to patients).

¹²⁰ The federal government and several states have passed regulations and statutes setting forth patients’ rights in this regard. See Milt Freudenheim, Pioneering State for Managed Care Considers Change, N.Y. TIMES, July 14, 1997, at A1. The AMA Council on Ethical and Judicial Affairs says that “as part of the process of giving patients informed consent to treatment, physicians should disclose all available treatment alternatives, regardless of cost, including those potentially beneficial treatments that are not offered under the terms of the plan.” Council on Ethical and Judicial Affairs, supra note 71, at 332.

¹²¹ See, e.g., ARIZ. REV. STAT. ANN. § 20-1076(A)(6) (West Supp. 1997) (requiring that a description of any incentives or penalties intended to encourage providers to withhold services or avoid referrals be provided to all enrollees); GA. CODE ANN. § 33-21-13(c)(3)(H) (Supp. 1997) (requiring disclosure of any limited utilization incentive plans); MINN. STAT. § 72A.20(33) (1995) (prohibiting financial incentives for providers that are “based solely on the number of services denied or referrals not authorized by the provider“); Medicare and Medicaid Programs; Requirements for Physician Incentive Plans in Prepaid Health Care Organizations, 61 Fed. Reg. 13,430, 13,448 (Mar. 27, 1996) (requiring organizations with physician incentive plans to disclose the following to any Medicare beneficiaries who request it: whether the physician incentive plan affects the use of referral services; the type of incentive arrangement; whether stop-loss protection is provided; and a summary of any survey results if the plan was required to conduct a survey). Various states and the AMA have attempted to abolish gag rules. See AMA and States Take Action Against Gag Rules, HEALTHCARE ALERT, Spring 1996, at 9, 9; Susan Brink & Nancy Shute, America's Top HMOs: Are HMOs the Right Prescription?, U.S. NEWS & WORLD REP., Oct. 13, 1997, at 60, 63 (noting that state legislatures passed a record number of laws on managed care in 1997, including state laws banning gag clauses and requiring disclosure of financial incentives); Freudenheim, supra note 120, at A1 (documenting nationwide proposals for increased regulation of HMOs); see, e.g., California Leads Backlash to H.M.O.s, N.Y. TIMES, May 2, 1996, at B8 (describing two proposed initiatives in California seeking to ban gag clauses: the Patient Protection Act of 1996, backed by the California Nurses Association and Ralph Nader, and another led by Service Employees International Union).

¹²² See HEALTH, EDUC., AND HUMAN SERVS. DIV., U.S. GEN. ACCOUNTING OFFICE, MANAGED CARE: EXPLICIT GAG CLAUSES NOT FOUND IN HMO CONTRACTS, BUT PHYSICIAN CONCERNS REMAIN 2-3 (1997) (Rep. No. 97-175 to Congressional Requesters) (reporting that some physicians and health care lawyers believe that other clauses “such as those that bar physicians from disparaging the plan, soliciting patients to join another health plan, or revealing confidential plan information” provide more meaningful restrictions on the information physicians convey to their patients).

¹²³ This example slightly overstates the situation. Withholds and bonuses generally are calculated on the basis of a physician network's statistics rather than on the number of referrals or tests any one physician orders. See Stone, Deborah A., The Doctor as Businessman: The Changing Politics of a Cultural Icon, 22 J. HEALTH POL. POL'Y & L. 533, 547 (1997)Google Scholar. This is not always the case, though. See id. (discussing a number of factors some plans use in determining withholds, such as the number of patients hospitalized, tests ordered, referrals to specialists and the amount of drugs prescribed). And even when it is the case, the specter of finances still influences decision making. See Furrow, supra note 41, at 148-49; Randall, supra note 21, at 34.

¹²⁴ After the seminal case of Brown v. Board of Education, 347 U.S. 483 (1954), for example, segregation continued throughout the South, and even in parts of the North. For subsequent cases finding segregation in schools, see, for example, Alvarado v. El Paso Independent School District, 593 F.2d 577 (5th Cir. 1979); Dowell v. Board of Education of Oklahoma City Public Schools, 307 F. Supp. 583 (W.D. Okla. 1970); Booker v. Board of Education of City of Plainfield, Union County, 212 A.2d 1 (N.J. 1965). In Brown, even a judicial pronouncement could not change social practices and make African-American citizens feel welcome in formerly all-white educational institutions. Legislation attempting to rectify matters in the health care industry similarly will not necessarily make patients feel they are receiving appropriate care simply because the laws are on the books.

¹²⁵ Lu, supra note 26, at 538; see also Pellegrino, Edmund D., Ethics of Managed Care Plans, 271 JAMA 1668, 1668-69 (1994)CrossRefGoogle Scholar (noting that under managed care, a “physician's loyalties are … divided among the needs of his or her patients, the needs of all patients served by the system, the plan's economic directives, and his or her own self-interest“); Pittman, supra note 39, at 371 (noting that physicians “will cut back on the information they give to the patient about the nature of the treatment required … [because of the] disincentive to recommend standard treatment [of which] the utilization reviewer may not approve” and thus not reimburse the physician for rendering such services).

¹²⁶ See Perdue & Baxley, supra note 43, at 27 (using this term rather than labels that connote caregiving when referring to physicians).

¹²⁷ See Stone, Alan A., Law's Influence on Medicine and Medical Ethics, 312 NEW ENG. J. MED. 309, 312 (1985)Google Scholar, which states:

¹²⁸ See Sage, supra note 117, at 12; see also Farrell, Margaret G., ERISA Preemption and Regulation of Managed Health Care: The Case for Managed Federalism, 23 AM. J.L. & MED. 251, 251-52 (1997)Google Scholar (discussing ERISA's “indeterminate provision for the preemption of state law“); Jordan, Karen A., Tort Liability for Managed Care: The Weakening of ERISA 's Protective Shield, 25 J.L. MED. & ETHICS 160, 161 (1997)Google Scholar (noting that ERISA's absence of substantive regulation of health plans “creat[es] a regulatory vacuum that often fails to protect plan participants and beneficiaries“).

¹²⁹ See supra note 77.

¹³⁰ 965 F.2d 1321 (5th Cir. 1992).

¹³¹ 77 F.3d 1270 (10th Cir.), cert, denied, 117 S. Ct. 66 (1996).

¹³² See, e.g., Bailey, Jane D., ERISA Preemption, 74 DENV. U. L. REV. 473, 474, 483-84 (1997)Google Scholar (noting that Cannon reflects ERISA preemption of state-law even when preemption results in nonrecovery for the plaintiff); Kilcullen, supra note 33, at 40 (citing Corcoran as an example of a case in which tort claims against HMOs arising out of negligent operation of quality assurance mechanisms may fail); Pittman, supra note 39, at 378-80 (criticizing the Corcoran court's reliance on broad U.S. Supreme Court language to extend ERISA's state law preemption to any theory of liability arising during a utilization reviewer's investigation); Randall, supra note 21, at 68 (discussing Corcoran with respect to the limitations imposed by ERISA on claims against third-party payers and utilization review organizations); Scheutzow, Susan O., A Framework for Analysis of ERISA Preemption in Suits Against Health Plans and a Call for Reform, 11 J.L. & HEALTH 195, 210 (1996-1997)Google Scholar (contrasting Cannon where the plaintiff was denied any recovery due to ERISA preemption with another factually similar case where no ERISA preemption was found and the plaintiff recovered $89 million); Craig M. Stephens, Note, ERISA: The Inevitable but Unexpected Hurdles of the Plaintiffs Welfare Benefit Plan, 20 AM. J. TRIAL ADVOC. 151, 178-79 (1996) (citing Cannon as an example of a case in which a plaintiff was denied any remedy under the law due to ERISA preemption of his health plan).

¹³³ See 965 F.2d at 1322-24.

¹³⁴ See 11 F.3d at 1271-72.

¹³⁵ See, e.g., Tolton v. American Biodyne, Inc., 48 F.3d 937, 939, 942 (6th Cir. 1995) (bringing wrongful death action based on decedent being “refused benefits pursuant to utilization review“); Kuhl v. Lincoln Nat'l Health Plan, Inc., 999 F.2d 298, 300 (8th Cir. 1993) (wrongful death claim based on delayed preauthorization for surgery); cf Settles v. Golden Rule Ins. Co., 927 F.2d 505, 507 (10th Cir. 1991) (wrongful death action alleging decedent's heart attack was caused by termination of his health insurance coverage).

¹³⁶ In Corcoran, the court admitted that its result meant that “the Corcorans [had] no remedy, state or federal, for what may have been a serious mistake.” 965 F.2d at 1338.

Some courts, in cases not involving UR decisions, have displayed a willingness to rule that ERISA preemption is not so all encompassing, but it remains to be seen (a) whether those courts will reiterate such positions in cases involving UR; and (b) if so, whether other courts will follow them. In Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 356 (3d Cir. 1995), the U.S. Court of Appeals for the Third Circuit ruled that medical negligence cases had to be remanded to the state court from which they had been removed even though the medical care at issue had been provided pursuant to the terms of employee benefits plans. The court held that claims “merely attacking] the quality of benefits … received” are not claims for benefits under § 1132. See id.; see also New York State Conference of Blue Cross and Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 649 (1995) (holding that state statute requiring hospitals to collect surcharges from patients whose commercial insurance coverage is purchased by employee health plans governed by ERISA and surcharges from HMOs insofar as their membership fees are paid by an ERISA plan did not “relate to” employee benefits plans within meaning of ERISA's preemption provision and thus was not preempted); Rice v. Panchal, 65 F.3d 637, 641 (7th Cir. 1995) (“Although the precise boundaries of § 502(a)'s complete preemption are not clear, one prerequisite of complete preemption under § 502(a) is a plaintiff eligible to bring a claim under that section.“). See generally Jordan, supra note 128 (analyzing the methods by which courts are permitting state-law claims under ERISA).

Dukes and Rice presented their courts with “straight,” that is, non-UR-related medical malpractice claims. See Rice, 65 F.3d at 638-39; Dukes, 57 F.3d at 360-61. Therefore, the holdings do not impact directly on the types of cases discussed in this Article. Moreover, the Dukes court explicitly left open the possibility that some quality-of-care issues might present ERISA questions, see id. at 358, and that health care providers might be able to establish their own malpractice standards through contract. See id. at 359. Each of these possibilities would, of course, leave additional gaps in remedy. See id. at 359 n.5.

¹³⁷ The Texas legislature has attempted to provide its citizens a statutory remedy for clinical injury caused by an MCO's failure to “exercise ordinary care when making health treatment decisions.” Act of May 12, 1997, ch. 163, § 1, 1997 Tex. Sess. Law Serv. 318 (West) (to be codified at TEX. Civ. PRAC. & REM. CODE ANN. § 88.002(a)). A conglomeration of related insurance companies has challenged the law on preemption grounds. See Compl. for Declaratory J. and Permanent Inj. ¶ 1, Corporate Health Ins., Inc. v. Texas Dep't of Ins., No. H-97-2072, (S.D. Tex. filed June 16, 1997) (copy on file with author).

¹³⁸ See Pittman, supra note 39, at 357.

¹³⁹ See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987).

¹⁴⁰ This list of possible state-law claims is illustrative rather than exhaustive. For a more complete list, see Chittenden III, William A., Malpractice Liability and Managed Health Care: History and Prognosis, 26 TORT & INS. L.J. 451, 487, 489 (1991)Google Scholar (discussing a variety of direct and vicarious liability theories for malpractice, as well as “breach of contract, negligent misrepresentation, intentional infliction of emotional distress, breach of an implied duty of good faith and fair dealing, tortious interference with the physician-patient relationship, [and] fraud“), cited in Stayn, supra note 71, at 1706n.218.

¹⁴¹ See, e.g., Anderson v. Humana, Inc., 24 F.3d 889, 891 (7th Cir. 1994) (holding that district court properly dismissed a state-law claim, alleging failure to disclose certain information about the incentive structure, because of federal ERISA preemption).

¹⁴² Extracontractual damages are generally not available in ERISA lawsuits. See Mertens v. Hewitt Assocs., 508 U.S. 248, 272 n.6 (1993) (cataloging the various courts of appeals’ decisions which analyzed the statutory language and legislative history of § 502(a)(2)-(3) with respect to damages).

¹⁴³ See, e.g., Harris v. Blue Cross Blue Shield, 995 F.2d 877, 878 (8th Cir. 1993) (plaintiff sought treatment for breast cancer); see also infra notes 236-38 and accompanying text (discussing the Harris case).

¹⁴⁴ 489 U.S. 101, 115(1989).

¹⁴⁵ Cf. id. (stating that “[n]either general principles of trust law nor a concern for impartial decisionmaking … forecloses parties from agreeing upon a narrower standard of review“).

¹⁴⁶ See O'Neil, Paul, Protecting ERISA Health Care Claimants: Practical Assessment of a Neglected Issue in Health Care Reform, 55 OHIO ST. L.J. 723, 748 (1994)Google Scholar.

¹⁴⁷ See, e.g., Schachner v. Blue Cross & Blue Shield, 77 F.3d 889, 897-98 (6th Cir.), cert denied, 117 S. Ct. 173(1996).

¹⁴⁸ See supra notes 66-69 and accompanying text (discussing Wickline v. State, the 1986 case suggesting MCO liability for harm caused by UR procedures); infra note 149 and accompanying text (same).

¹⁴⁹ 239 Cal. Rptr. 810, 819 (Ct. App. 1986); see also Lumley v. Board of Regents for the Univ. of Mich, and Univ. Health Servs. of the Univ. of Mich., 544 N.W.2d 692, 697 (Mich. Ct. App. 1996) (affirming state university hospital's vicarious liability for physician negligence); Bush v. Dake, No. 86-2576NM-2, slip op. (Mich. Cir. Ct. Apr. 27, 1989), discussed in Pittman, supra note 39, at 373-74; supra notes 66-69 (noting that the Wickline court also seemingly imposed a duty on the treating physician to advocate more forcefully for his patient).

¹⁵⁰ 271 Cal. Rptr. 876, 884-85 (Ct. App. 1990) (holding that the HMO could be liable if the UR decision had been a substantial factor in the patient's death). In cases in which the patient is already ill, liability under Wilson may be difficult to establish.

¹⁵¹ The courts have split on this issue. See, e.g., Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1495 (7th Cir. 1996) (holding that ERISA preemption applied in a claim involving vicarious liability claim for negligence of a provider physician and nurse); Prudential Health Care Plan, Inc. v. Lewis, No. 95-6255, 1996 WL 77018, at *2 (10th Cir. Feb. 21, 1996) (unpublished disposition) (citing ERISA and ruling that it does not preempt such claims); Pacificare of Okla., Inc. v. Burrage, 59 F.3d 151, 153 n.2 (10th Cir. 1995) (same); Ricci v. Gooberman, 840 F. Supp. 316, 317-18 (D.N.J. 1993) (holding that state claims stemming from vicarious liability theory are preempted by ERISA because the relationship between a provider and administrative plan relates to the plan). For similar reasoning, but concerning preemption for removal purposes rather than substantive preemption, see Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 361 (3d Cir. 1995) and Prihoda v. Shpritz, 914 F. Supp. 113, 117-18 (D. Md. 1996).

¹⁵² “Enterprise liability” in this sense is merely a term for vicarious liability imposed on the basis of apparent authority or nondelegable duty. See Jackson v. Powell, 743 P.2d 1376, 1378-79 (Alaska 1987). But see Kilcullen, supra note 33, at 47-50 (arguing that enterprise liability claims against health plans should be similar to products liability claims). See generally Janulis, Diane M. & Hornstein, Alan D., Damned If You Do, Damned If You Don ‘t: Hospitals’ Liability for Physicians’ Malpractice, 64 NEB. L. REV. 689, 696-702 (1985)Google Scholar (discussing agency theories of liability against hospitals); Sage, William M. et al., Enterprise Liability for Medical Malpractice and Health Care Quality Improvement, 20 AM. J.L. & MED. 1, 9-15 (1994)Google Scholar (discussing health plan accountability and improved quality as the benefits of enterprise liability); Griner, David D., Note, Paying the Piper: Third-Party Payor Liability for Medical Treatment Decisions, 25 GA. L. REV. 861 (1991)Google Scholar (discussing the justification for third-party payer liability).

¹⁵³ See, e.g., Jackson, 743 P.2d at 1385 (holding that hospital could not be held vicariously liabile for negligence or malpractice of independent contractor/physician under enterprise liability). Recently courts have been more receptive to allowing plaintiffs to sue under an enterprise liability theory. See, e.g., McEvoy v. Group Health Coop., 570 N.W.2d 397, 400 (Wis. 1997) (holding that the common law tort of bad faith does apply to HMOs making out-of-network benefit decisions); Abraham & Weiler, supra note 35, at 389 (stating that only the Supreme Court of Alaska has held that a hospital's legal responsibility for malpractice by its physicians is non-delegable and nonwaivable).

¹⁵⁴ See, e.g., Clark v. McDaniel, 546 N.W.2d 590, 592 (Iowa 1996) (holding that fraudulent representation claim must be proven by clear and convincing evidence); OMI Holdings v. Howell, 918 P.2d 1274, 1299 (Kan. 1996) (holding that plaintiff must establish fraud by silence with clear and convincing evidence).

¹⁵⁵ 18 U.S.C. §§ 1961-1968 (1994).

¹⁵⁶ See, e.g., Teti v. U.S. Healthcare, Inc., No. 88-9808, 1989 U.S. Dist. LEXIS 14041, at *4-5, *6-7 (E.D. Pa. Dec. 28, 1989) (unpublished opinion) (sustaining dismissal of plaintiffs’ complaint that HMO's alleged concealment of the Compensation Referral Fund from purchasers of health care coverage constituted a pattern of fraudulent nondisclosure that violates RICO because plaintiffs’ alleged injury arose from the HMO's alleged misrepresentations and not from any investment of funds by the HMO, and because plaintiffs failed to establish that an “innocent” or “passive” enterprise existed that was injured by the RICO “person“).

¹⁵⁷ See Barry R. Furrow, Litigation over Quality in Managed Care: Individual Malpractice/Negligence Claims in Arbitration and Litigation (chart distributed at Annual Meeting, American Society of Law, Medicine & Ethics, Boston, Massachusetts, Sept. 29-30, 1995) (on file with author).

¹⁵⁸ See. e.g., Hurlock v. Park Lane Med. Ctr., Inc., 709 S.W.2d 872, 883-84 (Mo. 1986) (holding that defendant-physician need not be judged by the standard of the plaintiffs expert, but merely the standard of the profession at large). See generally Mehlman, supra note 51, at 352 (discussing the medical malpractice standard of care as that of a reasonable physician under the circumstances); Silver, Theodore, One Hundred Years of Harmful Error: The Historical Jurisprudence of Medical Malpractice, 1992 Wis. L. REV. 1193, 1213Google Scholar (noting that physicians establishing their own standard of care is an anomaly in tort law).

¹⁵⁹ See Furrow, supra note 157.

¹⁶⁰ Cf. Sage, supra note 117, at 12-13 (noting that the “inevitable convergence” of the coverage and delivery of health care is affecting plaintiffs’ rights and remedies in the legal system).

¹⁶¹ Alternatively, one or more plaintiffs might attempt to sue a group of defendants simply by naming one or more defendants and asking the court to certify a defendant class. See FED. R. CIV. P. 23. But see Henson v. East Lincoln Twp., 814 F.2d 410, 412 (7th Cir. 1987) (holding that the language of Rule 23 precludes defendant class actions). This Article focuses on cases in which plaintiffs seek to represent a class.

¹⁶² See FED. R. CIV. P. 23(c)(3) advisory committee's note, 1966 revision.

¹⁶³ See id.

¹⁶⁴ Properly defining the class, by describing a group of people who meet all the requirements of Rule 23 and who have suffered injury concrete enough to confer standing, is crucial. The definition can affect justiciability and standing issues in the case itself. See MANUAL FOR COMPLEX LITIGATION, § 30.1, at 212 (3d ed. 1995). Further, it determines who will be bound by any judgment that results. See id. § 30.14, at 217 (noting that class definition is of “critical importance“). Both defendants and plaintiff class representatives have cause for concern in this regard. Defendants may seek to define a class broadly in a case they are settling or one in which they are confident of winning to ensure that the settlement or decision will determine many potential plaintiffs’ rights. Plaintiffs seeking to represent a class will want not only to ensure an accurate definition of those affected by the conduct at issue but also to prevent intervenors from claiming they should also be class representatives. See, e.g., Doe v. Guardian Life Ins. Co. of Am., No. 89 C 7955, 1992 U.S. Dist. LEXIS 3214, at *58-62 (N.D. Ill. Mar. 19, 1992) (holding that a class including all plan members might not be certified because of conflicts of interest among those plan members who have claims and those who do not).

¹⁶⁵ Satisfying these four requirements does not end the inquiry, for “[t]hese are necessary but not sufficient conditions for a class action.” FED. R. CIV. P. 23 advisory committee's note, 1966 revision; see also In re A.H. Robins Co., Inc., 880 F.2d 709, 727-28 (4th Cir. 1989) (holding that in addition to meeting all four requirements under Rule 23(a), an action must fall into one of three factual classifications of Rule 23(b) for certification as a class action). In addition to finding that a proposed class satisfies Rule 23(a), the court must also certify the class action as coming within one or more of the three categories set forth in Rule 23(b). These are the subsections of the rule that segregate cases according to their factual settings and the legal and practical implications of their decision. See JACK H. FRIEDENTHAL ET AL., CIVIL PROCEDURE § 16.2, at 725-37 (2d ed. 1993).

¹⁶⁶ See General Telephone Co. of the Northwest, Inc. v. Equal Employment Opportunity Comm'n, 446 U.S. 318, 330 (1980).

¹⁶⁷ FED. R. CIV. P. 23(a)(1).

¹⁶⁸ See Hum v. Dericks, 162 F.R.D. 628, 634 (D. Haw. 1995).

¹⁶⁹ FED. R. CIV. P. 23(a)(2).

¹⁷⁰ A court certifying a class under Rule 23(b)(3) must find that common questions predominate and that the class action is a superior method of adjudicating the matters at hand.

¹⁷¹ See Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1197 (6th Cir. 1988) (stating that a class action lawsuit may be appropriate where a common question, such as defendant's liability, can be determined on a class-wide basis); Diehl v. Twin Disc, Inc., 1995 U.S. Dist. LEXIS 7569, at *8 (N.D. Ill. May 30, 1995) (stating that a class action may proceed based on single common question); Wadleigh v. Rhone-Poulenc Rorer, Inc., 157 F.R.D. 410, 416 (N.D. Ill. 1994) (stating that for a class action in negligence, what defendants knew or should have known would be a common question given that all defendants were privy to the same information); see also In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 817 (3d Cir. 1995) (finding that “Rule 23(a) does not require that class members share every factual and legal predicate to meet the commonality and typicality standards“).

¹⁷² FED. R. CIV. P. 23(a)(3). A claim is typical if it arises from the same event or practice giving rise to the other class members’ claims, on the same legal basis. See Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596-97 (7th Cir. 1993).

¹⁷³ See General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 157 n. 13 (1982).

¹⁷⁴ Class certification issues are within the district court's discretion. See Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981); In re American Med. Sys., Inc., 75 F.3d 1069, 1083 (6th Cir. 1996); In re Agent Orange Prod. Liab. Litig., 818 F.2d 145, 168 (2d Cir. 1987).

¹⁷⁵ FED. R. CIV. P. 23(a)(4).

¹⁷⁶ East Tex. Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 216 (1974)); see also Weiss v. York Hosp., 745 F.2d 786, 831 (3d Cir. 1984) (upholding district court's finding of liability in favor of class, but not the individual doctor). Courts engage in two inquiries in determining whether named parties will adequately represent a class: first, they determine whether the named parties’ interests conflict with those of the class; second, they ensure that class counsel is competent to pursue the case. See Falcon, 457 U.S. at 157 n.13. This second requirement also ensures that absent class members receive due process. Cf. Hansberry v. Lee, 311 U.S. 32, 45 (1940) (holding that petitioner incenwas deprived of due process of law when trial court ordered petitioner bound to a judgment in an earlier litigation to which the petitioner was not a party).

¹⁷⁷ Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142 (1990). The Court was discussing congressional intent that employee benefits plans not be subject to a different set of standards in each jurisdiction in which they operated. See New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 115 S. Ct. 1671, 1677-78(1995).

¹⁷⁸ See, e.g., In re School Asbestos Litig., 789 F.2d 996, 1010 (3d Cir. 1986) (noting that when a class action involves the substantive law of many states, it increases the difficulty in resolving them). If ERISA preempts all or virtually all state-law claims that can be asserted, then there is no fear of the Delaware settlement criticized in the securities area. See supra note 8 (discussing generally Delaware settlements). This is because there is no state-law cause of action on which a state court could base jurisdiction over a lawsuit and thus over a settlement that involves “exclusively federal” claims such as those existing in securities law. All claims would be governed by ERISA and could be litigated in either state or federal court. Conversely, if ERISA does not preempt all possible state-law causes of action, then the state-court remedies are more, not less, valuable to plaintiffs than their ERISA claims as ERISA is currently drafted and interpreted. See supra note 142 and accompanying text (discussing the unavailability of extracontractual damages under ERISA). Therefore, defendants could not settle more valuable federal claims in the context of suits involving both state claims and federal claims that states cannot adjudicate.

¹⁷⁹ See, e.g., In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 817-18 (3d Cir. 1995) (admonishing the district court for failing to utilize subclassifications (e.g., statutory schemes or geographic residences) to resolve asserted differences among cases in a class action) (citing School Asbestos Litig., 789 F.2d at 1011).

¹⁸⁰ “Enterprise liability has been described as the tort law equivalent to Brown v. Board of Education.” Kilcullen, supra note 33, at 10.

¹⁸¹ See, e.g., Schleier v. Kaiser Found. Health Plan, 876 F.2d 174, 177-78 (D.C. Cir. 1989); Boyd v. Albert Einstein Med. Ctr., 547 A.2d 1229, 1235 (Pa. Super. 1988). But see Raglin v. HMO Ill., Inc., 595 N.E.2d 153, 156-57 (Ill. App. Ct. 1992) (holding that HMO was not vicariously liable for negligence of its contracted doctors); Chase v. Independent Practice Ass'n, 583 N.E.2d 251, 253-55 (Mass. App. Ct. 1991) (holding that an independent practice association that contracted for an HMO's services was not vicariously liable for a doctor's negligence); Harrel v. Total Health Care, 781 S.W.2d 58, 60 (Mo. 1989) (applying a statute that formerly exempted health service corporations from liability of physician's malpractice).

¹⁸² See Mechanic & Schlesinger, supra note 39, at 1694.

¹⁸³ In this sense, the advent of enterprise liability may resemble the initial approval of market share liability in certain products liability cases and the initial acceptance of fraud on the market theories in the securities area. In both of these instances changes in the substantive law paved the way for class certification. See, e.g., Blackie v. Barrack, 524 F.2d 891, 905-08 (9th Cir. 1975) (applying fraud on the market theory in a securities class action); Sindell v. Abbott Lab., 607 P.2d 924 (Cal. 1980) (adopting market share liability in diethylstilbestrol cases); Hymowitz v. Eli Lilly & Co., 539 N.E.2d 1069, 1078 (N.Y. 1989) (same); cf. Miller, supra note 8, at 669-76 (arguing that the increase in class actions after 1966 was a function of changes made by Congress, the courts, society and the legal profession).

¹⁸⁴ In 1996, for example, Aetna Life & Casualty Co., a large health insurer, announced plans to purchase a large managed care provider, U.S. Healthcare, Inc. See Leslie Eaton, Aetna to Buy U.S. Healthcare in Big Move to Managed Care, N.Y. TIMES, Apr. 2, 1996, at A1. The merger would create “the nation's single biggest medical benefits company.” Id.; see also Milt Freudenheim, Managed Care Empires in the Making, N.Y. TIMES, April 2, 1996, at D1 (noting the trend of mergers between HMOs or insurance companies and traditional health plans). News reports at that time indicated that about 58 million people were enrolled in HMOs and 81 million more were enrolled in “less tightly disciplined varieties of managed health care.” Milt Freudenheim, Health Care in the Era of Capitalism, N.Y. TIMES, April 7, 1996, at E6 (citing American Association of Health Plans statistics).

¹⁸⁵ See, e.g., Sage, supra note 117, at 17 (noting that as health care systems become more corporate-like, delivery practices become more uniform and less patient-specific).

¹⁸⁶ See id. at 11.

¹⁸⁷ See id. at 17 (describing the procedural effect of large-scale managed care on the judicial system).

¹⁸⁸ Cf. ROBERT H. JERRY, II, UNDERSTANDING INSURANCE LAW 189 (2d ed. 1996) (discussing how standardization “pervade[s] modern commerce” and is “the rule with regard to insurance contracts,” but carries the risk that the “superior” party will take advantage of the “weaker, less informed party“); Ostas, Daniel T. & Darr, Frank P., Redrafting U.C.C. Section 2-207: An Economic Prescription for the Battle of the Forms, 73 DENV. U. L. REV. 403, 404 (1996)Google Scholar (discussing how factors such as industrialization, mass-markets and the creation of large firms has lead to increased use of standardized forms).

¹⁸⁹ See Telephone Interview with D. Brian Hufford, Esq. (June 24, 1996) (on file with author).

¹⁹⁰ The interaction of ERISA's three-tiered preemption provisions virtually ensures that state law will not govern claims relating to self-insured plans. See 29 U.S.C. § 1144 (1994).

¹⁹¹ See generally EMPLOYMENT BENEFITS RESEARCH INSTITUTE, FUNDAMENTALS OF EMPLOYEE BENEFIT PROGRAMS 37-38 (5th ed. 1997) (discussing how a self-insuring employer “assumes the financial risk for the health plan” and funds a health plan both through segregated accounts and on a pay-as-you-go basis out of general funds).

¹⁹² See, e.g., Anderson v. Humana, Inc., 24 F.3d 889, 891 (7th Cir. 1994) (rejecting a statutory claim alleging that class was misled into selecting an HMO by fraudulent information); Teti v. U.S. Healthcare, Inc., No. 88-9808, 1989 U.S. Dist. LEXIS 14041, at *3 (E.D. Pa. Dec. 28, 1989) (unpublished opinion) (dismissing fraudulent disclosure claim); Class Action Compl. ¶ 8, Weiss v. CIGNA Healthcare, Inc., 972 F. Supp. 748 (S.D.N.Y. 1997) (No. 96 Civ. 1107 (SHS)) (class action alleging that important medical decisions concerning patients’ treatment were not made by the patients’ primary care physician, but by MCO “bureaucrats” who are primarily motivated by cost reduction); Class Action Compl. ¶ 7, Drolet v. Healthsource, Inc., 968 F. Supp. 757 (D.N.H. 1997) (No. 96-166-B) (copy on file with author) (alleging health plan's nondisclosure policies affected beneficiaries’ ability to make informed medical decisions); Mot. for Class Certification and Request to Exceed Page Limit at 1-2, Lynch v. Intergroup Healthcare Corp., No. CV 94-15694 (Ariz. Super. Ct. filed June 27, 1995) (copy on file with author) (class action alleging that HMO “intentionally failed to disclose a system of financial incentives given to contracting physician groups to encourage them to reduce the medical services” provided to HMO enrollees).

¹⁹³ See supra Part II.A. 1 for a discussion of the use of financial incentives to limit care in managed care. Such incentives represent structural attempts to control health care costs, but the plaintiffs’ concerns in bringing the cases described are with health care quality.

¹⁹⁴ See. e.g., Anderson, 24 F.3d at 891; Mot. for Class Certification at 9, Lynch (No. CV 94-15694).

¹⁹⁵ See. e.g., Anderson, 24 F.3d at 892; Mot. for Class Certification at 9, Lynch (No. CV 94-15694).

¹⁹⁶ See, e.g., Compl. ¶ 3, Weiss (No. 96-1107); Compl. ¶ 7, Drolet (No. 96-166-B).

¹⁹⁷ See, e.g., Class Action/Jury Trial Demanded at 1, Teti v. U.S. Healthcare, Inc., No. 88-9808, 1989 U.S. Dist. LEXIS 14041 (E.D. Pa. Dec. 28, 1989) (copy on file with author).

¹⁹⁸ See Anderson, 24 F.3d at 891-92; Teti, 1989 U.S. Dist. LEXIS 14041, at *2.

¹⁹⁹ See Electronic mail message from Ron Kilgard, plaintiffs’ attorney (June 9, 1996) (on file with author). Specifically, the court refused to certify a class in part because “the class representatives had to be current enrollees of [the defendant MCO].” Id. Once the class representative in that case learned of the managed care incentive system, she disenrolled from the defendant MCO. See id. In the court's view, this meant that she would not present claims that were typical of those of the class. See Lynch, sub nom. Askins v. Intergroup Healthcare Corp., No. CV 94-15694, slip op. at 2 (Ariz. Super. Ct. Feb. 28, 1996). Moreover, the court stated that the representative would not fairly and adequately represent the interests of her class. See id. at 1.

²⁰⁰ These cases differ both as to the types of claims asserted and as to the types of classes pled. See discussion supra Part III.A.1.

²⁰¹ First Am. Compl. ¶ 14, Lynch (No. CV 94-15694).

²⁰² See id. ¶¶ 15-19.

²⁰³ See id. ¶¶ 9-11; Mot. for Class Certification at 2, Lynch (No. CV 94-15694).

²⁰⁴ ARIZ. REV. STAT. ANN. § 13-2314 (West 1995).

²⁰⁵ See First Am. Compl. ¶¶ 14-23, Lynch (No. CV 94-15694).

²⁰⁶ See Class Action Compl. ¶ 20, Weiss v. Cigna Healthcare, Inc., 972 F. Supp. 748 (S.D.N.Y. 1997) (No. 96 Civ. 1107); Class Action Compl. ¶ 33, Drolet v. Healthsource, Inc., 968 F. Supp. 757 (D.N.H. 1997) (No. 96-166-B). Section 502 of ERISA authorizes actions by beneficiaries for breach of fiduciary duty. See 29 U.S.C. § 1132(a)(2) (1994). Section 409 of ERISA more completely describes the extent of fiduciary duties. See id. § 1109; see also Shea v. Esensten, 107 F.3d 625, 627 (8th Cir. 1997) (holding that plaintiffs complaint stated a claim for breach of fiduciary duty under ERISA because the plan failed to disclose “behind-the-scenes” incentives to reduce care).

²⁰⁷ Compl. ¶ 18, Drolet (No. 96-166-B); see Class Action Compl. ¶ 21, Weiss (No. 96 Civ. 1107 (SHS)). See generally Weiss v. Cigna Healthcare, Inc., 972 F. Supp. 748 (S.D.N.Y. 1997) (failing to address class certification issues, but dismissing claims alleging various breaches of fiduciary duty and allowing claim alleging breach of fiduciary duty for implementing an undisclosed gag-order policy); Drolet v. Healthsource, Inc., 968 F. Supp. 757, 759-62 (D.N.H. 1997) (denying defendants’ motion to dismiss predicated on the argument that plaintiff failed sufficiently to allege an injury in fact; holding that defendant qualifies as a fiduciary; and remanding the case with instructions for parties to submit a proposal to address class certification issues).

²⁰⁸ See Compl. at 28, Weiss (No. 96 Civ. 1107 (SHS)); Compl. at 31-32, Drolet (No. 96-166-B). Plaintiffs also requested “restitution of the fair value of the premiums they have paid [to the defendants] for inadequate healthcare benefits.” Compl. ¶ 79, Weiss (No. 96 Civ. 1107 (SHS)); Compl. ¶ 81, Drolet (No. 96-166-B). This claim for monetary relief seems to be the type of “incidental relief that can sometimes be accorded in a 23(b)(2) class action. See, e.g., Rice v. City of Philadelphia, 66 F.R.D. 17, 20 (E.D. Pa. 1974) (holding that damages may be allowable under 23(b)(2) class action if they flow automatically from injunctive relief and are subject to ready calculation by uniform standards).

²⁰⁹ See, e.g., Bridges v. Blue Cross and Blue Shield Ass'n, 935 F. Supp. 37, 39 (D.D.C. 1996); McConocha v. Blue Cross and Blue Shield, 898 F. Supp. 545, 548 (N.D. Ohio 1995); Ambrose v. Blue Cross & Blue Shield, Inc., 891 F. Supp. 1153, 1155 (E.D. Va. 1995), aff'd, 95 F.3d 41 (4th Cir. 1996) (unpublished table decision).

²¹⁰ See Rai, Arti Kaur, Rationing Through Choice: A New Approach to Cost-Effectiveness Analysis in Health Care, 72 IND. L.J. 1015, 1017 n.7 (1997)Google Scholar.

²¹¹ In some of the cases, employers joined the class as plaintiffs. See, e.g., Forsyth v. Humana, Inc., 827 F. Supp. 1498, 1505-09 (D. Nev. 1993) (describing the two classes certified as a Premium Payor Class, consisting of “individual or entities paying all or a portion of the … premiums” during a specified period, and a Co-Payor Class, consisting of “employees who obtained health insurance benefits” from the defendants).

²¹² See, e.g., Hoover v. Blue Cross and Blue Shield, 855 F.2d 1538, 1540 (11th Cir. 1988); Jhamb v. California Physicians Serv., No. C-93-2962, 1996 WL 61281, at *1 (N.D. Cal. Feb. 6, 1996); Burris v. IASD Health Servs. Corp., No. 4-94-CV-10845, 1995 U.S. Dist. LEXIS 15913, at *3 (S.D. Iowa Oct. 2, 1995); McConocha v. Blue Cross and Blue Shield, 898 F. Supp. 545, 548 (N.D. Ohio 1995); Ambrose v. Blue Cross & Blue Shield, Inc., 891 F. Supp. 1153, 1155 (E.D. Va. 1995), aff'd, 95 F.3d 41 (4th Cir. 1996) (unpublished table decision); Misch v. Community Mut. Ins. Co., 896 F. Supp. 734, 737 (S.D. Ohio 1994); Everson v. Blue Cross and Blue Shield, 898 F. Supp. 532, 536 (N.D. Ohio 1994); Forsyth v. Humana, Inc., 827 F. Supp. 1498, 1503 (D. Nev. 1993); White v. Blue Cross & Blue Shield United, No. 95 CV 26, 1995 WL 465845, at *2 (Wis. Cir. Ct. July 12, 1995).

²¹³ See, e.g., Hoover, 855 F.2d at 1540; Jhamb, 1996 WL 61281, at *1; Burris, 1995 U.S. Dist. LEXIS 15913, at *2 (referring to a 20% deductible for nonselect providers only); McConocha, 898 F. Supp. at 547; Ambrose, 891 F. Supp. at 1155; Misch, 896 F. Supp. at 737; Everson, 898 F. Supp. at 537; Forsyth, 827 F. Supp. at 1501; White, 1995 WL 465845, at *1.

²¹⁴ See, e.g., Ambrose, 891 F. Supp. at 1155; Misch, 896 F. Supp. at 734; Everson, 898 F. Supp. at 537; Forsyth, 827 F. Supp. at 1501; White, 1995 WL 465845, at *1.

²¹⁵ See, e.g., Hoover, 855 F.2d at 1540; Jhamb, 1996 WL 61281, at *1; Burris, 1995 U.S. Dist. LEXIS 15913, at *3; McConocha, 898 F. Supp. at 547; Ambrose, 891 F. Supp. at 1155; Misch, 896 F. Supp. at 737; Everson, 898 F. Supp. at 537; Forsyth, 827 F. Supp. at 1501; White, 1995 WL 465845, at *1.

²¹⁶ See, e.g., Hoover, 855 F.2d at 1540; Jhamb, 1996 WL 61281, at * 1; McConocha, 898 F. Supp. at 574; Ambrose, 891 F. Supp. at 1155; Misch, 896 F. Supp. at 737; Everson, 898 F. Supp. at 537; Forsyth, 827 F. Supp. at 1501; White, 1995 WL 465845, at *1.

²¹⁷ See, e.g., Hoover, 855 F.2d at 1540; Burris, 1995 U.S. Dist. LEXIS 15913, at *4; McConocha, 898 F. Supp. at 550; Misch, 896 F. Supp. at 737; Everson, 898 F. Supp. at 535; Forsyth, 827 F. Supp. at 1503.

²¹⁸ See 29 U.S.C. § 1132(a)(1)(B) (1994) (granting a plan participant the ability to bring a civil action “to recover benefits due to him under the terms of the plan“); see, e.g., Hoover, 855 F.2d at 1541; McConocha, 898 F. Supp. at 546; Everson, 898 F. Supp. at 535.

²¹⁹ See, e.g., Jhamb, 1996 WL 61281, at *1; White, 1995 WL 465845, at *1.

²²⁰ See, e.g., White, 1995 WL 465845, at *3.

²²¹ See, e.g., Jhamb, 1996 WL 61281, at *1; White, 1995 WL 465845, at *1.

²²² See, e.g., Jhamb, 1996 WL 61281, at *1.

²²³ See, e.g., Everson, 898 F. Supp. at 541; Ambrose v. Blue Cross & Blue Shield, Inc., 891 F. Supp. 1153, 1159 (E.D. Va. 1995), aff'd, 95 F.3d 41 (4th Cir. 1996) (unpublished table decision); Forsyth v. Humana, Inc., 827 F. Supp. 1498, 1516 (D. Nev. 1993).

²²⁴ See, e.g., Forsyth, 827 F. Supp. at 1509. The Sherman Act criminalizes the monopolization or attempted monopolization of any trade or commerce that affects interstate commerce. See 15 U.S.C. § 2 (1994).

²²⁵ It took only five on-line pages to rule that class certification was appropriate. See Misch v. Community Mut. Ins. Co., No. C-l-94-428, 1995 U.S. Dist. LEXIS 5059, at *1 (S.D. Ohio Feb. 15, 1995). The text of the approved class notice occupied three additional pages. See id. at *6-8.

²²⁶ Id. at * 1.

²²⁷ See, e.g., Colo. Blues to Pay $3 Million to Settle Copayment Lawsuits, MANAGED CARE WK., Apr. 24, 1995, available in LEXIS, Market Library, Iacnws File (describing how a $3 million fund was created to settle class action lawsuits brought by those covered under the “preferred provider organization” program); Louisiana, Virginia Blues Battle Copayment Issue, MANAGED CARE WK., June 26, 1995, available in LEXIS, Market Library, Iacnws File (describing how Blue Cross and Blue Shield of Louisiana settled a class action lawsuit by agreeing to refund as much as $5.1 million in excess copayments, while Trigon Blue Cross and Blue Shield of Virginia entered into an agreement with Virginia's attorney general to refund $23 million in excess copayments and to pay a $5 million fine); Minnesota Blues Settles Inflated Copayment Lawsuit, MANAGED CARE WK., July 10, 1995, available in LEXIS, Market Library, Iacnws File (describing a $3.9 million settlement in Minnesota).

²²⁸ See Kathryn A. Roe, Whose Discounted Rate Is It?, LEGAL TIMES, Mar. 4, 1996, at S31, S32; Angela Zimm, State Launches Investigation into Health Insurer Practices, DAILY REC., Sept. 28, 1995, at 1.

²²⁹ See Roe, supra note 228, at S32.

²³⁰ For example, the district court in Everson v. Blue Cross and Blue Shield of Ohio, 898 F. Supp. 532 (N.D. Ohio 1994), dismissed plaintiff Everson's ERISA and RICO claims regarding discounting practices because the contract at issue was unambiguous. See id. at 535, 538. The contract said in part:

Id. at 537-38 (footnote omitted) (quoting Exhibit C, Group Contract § 9.5). At the same time, however, the court permitted companion claims of plaintiffs who apparently had not received the same group contract to proceed. See id. at 538, 542, 545 (granting defendant's motion to dismiss as to plaintiffs RICO claim only).

²³¹ See Compl. at 1, Grijalva v. Shalala, 946 F. Supp. 747 (D. Ariz. 1996) (No. 93-711 TUC ACM) (on file with author).

²³² See id. at 17-18.

²³³ See id. at 17-19. The plaintiffs alleged that their HMOs had denied them service and had failed to provide effective notice of, appeals from, or hearings regarding the denials. See id.

²³⁴ See id. at 18-19.

²³⁵ See Comp. at 17, Grijalva (No. 93-711 TUC ACM) (certifying a class of “all persons, nationwide, who were enrolled in Medicare risk-based health maintenance organizations or competitive medical plans during the three years prior to this lawsuit,” with subclasses) (copy on file with author). The plaintiffs prevailed on a significant portion of their case at summary judgment. See Grijalva, 946 F. Supp. at 750-51.

²³⁶ See Harris v. Blue Cross Blue Shield, 995 F.2d 877, 878 (8th Cir. 1993). It is not apparent from this opinion that the case was filed as a class action, but Sheldon Weinhaus, counsel for the plaintiff, has confirmed that it was. See Telephone Interview with S. Sheldon Weinhaus, Esq. (June 25, 1996).

²³⁷ See Harris, 995 F.2d at 879. A similar case, Henderson v. Bodine Aluminum, Inc., 70 F.3d 958 (8th Cir. 1995), filed by the same counsel, proceeded on an individual rather than a class action basis, in part because of the time factor. See Telephone Interview with Weinhaus, supra note 236. While Harris claimed an ERISA violation, see 995 F.2d at 878-79, the Henderson plaintiff claimed violations of the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12101-12213 (1994); Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e (claim available because the plan administrator/ sponsor was her employer); and the Missouri Human Rights Act, Mo. REV. STAT. ch. 213. See Compl. at 11, Henderson v. Bodine Aluminum, Inc., No. 4:95CV01051CAS (E.D. Mo. filed June 13, 1995) (copy on file with author).

²³⁸ For statistics on the number of women affected by breast cancer, see Wolf, Denise S., Who Should Pay for “Experimental” Treatment? Breast Cancer Patients vs. Their Insurers, 44 AM. U. L. REV. 2029, 2031 & n.6 (1995)Google Scholar.

²³⁹ In these days of preauthorization of treatment and prospective and concurrent UR, a health care coverage dispute arises not so much over money as over access to the care in question. See Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1331 (5th Cir. 1992); see also Hines v. Sheehan, No. 94-P-H, 1995 U.S. Dist. LEXIS 11031, at *3 (D. Me. July 26, 1995) (class action challenging a Medicaid regulation restricting reimbursement for liquid dietary supplement for patients with acquired immune deficiency syndrome (AIDS)).

²⁴⁰ See, e.g., Doe v. Guardian Life Ins. Co. of Am., No. 89 C 7955, 1992 U.S. Dist. LEXIS 3214, at *l-3 (N.D. Ill. 1992) (alleging class-wide improper denial of payment for treatment of manic depressive disease). It is also possible to imagine a case involving, for example, patients who want their MCO to provide particular preventive services recommended by the medical profession.

²⁴¹ See Rosenberg, David, Class Actions for Mass Torts: Doing Individual Justice by Collective Means, 62 IND. L.J. 561, 564 (1987)Google Scholar.

²⁴² See id. at 561.

²⁴³ See id. at 561-62; see also Yeazell, Stephen C., Collective Litigation as Collective Action, 1989 U. ILL. L. REV. 43Google Scholar (discussing both advantages and disadvantages of collective litigation, including class actions).

²⁴⁴ See, e.g., Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231, 2231 (1997) (discussing situations in which people are unknowingly brought into class action suits).

²⁴⁵ See Coffee, John C., Jr., Class Wars: The Dilemma of the Mass Tort Class Action, 95 COLUM. L. REV. 1343, 1346 (1995)Google Scholar; Coffee, John C., Jr., The Corruption of the Class Action: The New Technology of Collusion, 80 CORNELL L. REV. 851, 853 (1995)Google Scholar [hereinafter Coffee, The Corruption of the Class Action]; Coffee, supra note 11, at 229-30; Macey, Jonathan R. & Miller, Geoffrey P., The Plaintiffs’ Attorney's Role in Class Action and Derivative Litigation: Economic Analysis and Recommendations for Reform, 58 U. CHI. L. REV. 1, 1 (1991)Google Scholar.

²⁴⁶ See Note, In-Kind Class Action Settlements, 109 HARV. L. REV. 810, 811 (1996). For an anecdotal example, see Barry Meier, Math of a Class-Action Suit: ‘Winning’ $2.19 Costs $91.33, N.Y. TIMES, NOV. 21, 1995, at A1, which describes how 715,000 current and former mortgage holders brought a class action suit against Bank of Boston for keeping excessive amounts of its customers’ money in escrow accounts. While the settlement amounted to $40 million, the 300,000 current mortgage holders footed the $8.5 million attorney bill. See id.

²⁴⁷ See, e.g., Hayden v. Blue Cross and Blue Shield, 843 F. Supp. 1427, 1436, 1439 (M.D. Ala. 1994) (deciding a partial summary judgment against class action plaintiffs because of ERISA preemption).

²⁴⁸ See Leubsdorf, John, Co-opting the Class Action, 80 CORNELL L. REV. 1222, 1225 (1995)Google Scholar (stating that one benefit would be shielding defendants from further litigation).

²⁴⁹ See Wilton, Timothy, The Class Action in Social Reform Litigation: In Whose Interest?, 63 B.U. L. REV. 597, 623 (1983)Google Scholar.

²⁵⁰ All litigation, of course, is time-consuming, but class actions may be especially so. See, for example, Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 159-61 (1974), where the class certification decision was litigated for eight years and suffered through three trips between the district court and the court of appeals before the Supreme Court ruled on a class notice issue. A majority of the Court warned that courts deciding certification issues should not examine the merits of the case until after certification is determined. See id. at 170.

²⁵¹ See, e.g., 42 U.S.C. § 1983 (1994) (prohibiting individuals acting under color of state law from depriving anyone of equal protection or equal privileges and immunities); id. § 1985 (preventing individuals from conspiring to deprive anyone of equal protection or equal privileges and immunities); id. §§ 2000e-2 to -3 (guaranteeing equal employment opportunity).

²⁵² 42 U.S.C. §§ 12101-12213 (1994).

²⁵³ 29 U.S.C. §§ 621-634 (1994). The same legal incentive structures, namely financial recovery for the class, and thus, the attorney, that explain the shortfall of class actions in general may also hinder the private law enforcement function of class action suits in the civil rights context. See, e.g., Coffee, supra note 11, at 235-36 (suggesting that entrepreneurial attorneys who predominate in the areas of private antitrust and securities class actions, shareholder derivative actions and mass tort and product liability cases, and who have been responsive to the incentive structure surrounding class actions are beginning to migrate into areas of civil rights, environmental and poverty law where “ideological” attorneys—or those motivated more by political goals than financial gain—have traditionally predominated). But see Lebowitz, Noah D., Comment, An Amendment to Rule 23: Encouraging Class Actions in Section 504 and ADA Employment Discrimination Cases, 30 U.S.F. L. REV. 477, 478 (1996)Google Scholar (supporting use of class actions in ADA cases, but noting that courts have refused to certify classes in many employment-related cases).

²⁵⁴ See, e.g., 42 U.S.C. § 2000a(d) (1994) (listing the conditions on which discrimination or segregation by an establishment is supported by state action); id. § 2000e-2(k) (1994) (allocating burden of proof in disparate impact cases); id. § 12112(b)(5)(A)-(B) (defining discrimination against a disabled but otherwise qualified employee or job applicant to include not accommodating “known physical or mental limitations,” unless making such accommodations “would impose an undue hardship on the operation of the business“).

²⁵⁵ See, e.g., Castano v. American Tobacco Co., 84 F.3d 734, 752 (5th Cir. 1996) (decertifying a class of smokers because the collective wisdom of individual juries is necessary before the court will commit the fate of an entire industry or a class of millions to a single jury); Georgine v. Amchem Prods., Inc., 83 F.3d 610, 626, 635 (3d Cir. 1996) (decertifying class of people allegedly harmed by asbestos because class did not satisfy adequacy, typicality and predominance prerequisites for certification), aff'd sub nom., Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231, 2252 (1997); In re American Med. Sys., Inc., 75 F.3d 1069, 1085 (6th Cir. 1996) (decertifying class action status to medical device product liability litigation because individual questions of law and fact predominated over common issues); In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1303-04 (7th Cir. 1995) (directing district court judge to decertify class of hemophiliacs because of the risk of entrusting potential multibillion dollar liability to a single jury). But see Ahearn v. Fibreboard Corp., 162 F.R.D. 505, 530 (E.D. Tex. 1995) (approving asbestos settlement); Preliminary Approval for Big GM Settlement, N.Y. TIMES, July 5, 1996, at A15 (reporting that a Louisiana judge tentatively approved the same type of settlement rejected in General Motors Corp. Pick-Up and Bloyed).

²⁵⁶ See FED. R. CIV. P. 23(b)(3) advisory committee's note, 1966 revision.

²⁵⁷ See, e.g.. In re A.H. Robins Co., Inc., 880 F.2d 709 (4th Cir. 1989) (injuries caused by a defective intrauterine device (Dalkon Shield)); In re Agent Orange Prod. Liab. Litig., 818 F.2d 145 (2d Cir. 1987) (exposure of Vietnam veterans to dioxin in the herbicide Agent Orange). “[T]hese cases have generally involved the centrality of a single issue.” Georgine, 83 F.3d at 628. A.H. Robins concerned a joint tortfeasor issue; Agent Orange involved the military contractor defense. Compare A.H. Robins, 880 F.2d at 741, with Agent Orange, 818 F.2d at 173. See Castano, 84 F.3d at 746 n.23, for citations to cases in which courts denied class certification for strict products liability claims.

²⁵⁸ See, e.g., Coffee, John C., Jr., Rethinking the Class Action: A Policy Primer on Reform, 62 IND. L.J. 625 (1987)Google Scholar; see also Georgine, 83 F.3d at 618 n.2 (listing articles). In addition, volume 80, number four of the Cornell Law Review is an entire symposium issue devoted to mass torts class action settlements, settlement class actions and the Georgine case.

²⁵⁹ These so-called “settlement classes” usually establish private dispute resolution procedures whereby members of the class present their evidence of damages for adjudication in an administrative- type proceeding. See Georgine, 83 F.3d at 624-25; In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 778 (3d Cir. 1995) [hereinafter GMPick-Up]. Settlement classes can also arise in cases that were initially genuinely litigated; in these cases, “[a] settlement class is a device whereby the court postpones formal class certification until the parties have successfully concluded a settlement.” Georgine, 83 F.3d at 625 n.9.

²⁶⁰ See, e.g., Georgine, 83 F.3d at 618 (decertifying a class exposed to asbestos and leaving “legislative solutions to legislative channels“).

²⁶¹ See, e.g., Castano, 84 F.3d at 743. One of the court's primary reasons for decertifying the Castano class was its concern over variations among state-law claims at trial. See id.; see also In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1300 (7th Cir. 1995) (decertifying a class of hemophiliacs on the grounds that one six-person jury will have the power to decide the fate of an entire industry, making settlement much more likely whether or not the industry is really liable).

²⁶² See Rhone-Poulenc Rorer, 51 F.3d at 1298-99.

²⁶³ See, e.g., GM Pick-Up, 55 F.3d at 821 (citing Coffee, John C., Jr., Understanding Plaintiffs’ Attorney: The Implications of Economic Theory for Private Enforcement of Law Through Class and Derivative Actions, 86 COLUM. L. REV. 669, 691 (1986)Google Scholar, for the conclusion that the unique vulnerability of class actions to collusive settlements benefiting plaintiffs’ attorneys rather than clients is the most persuasive reason why class actions produce unsatisfactory results and discussing the potential for financial incentives to prompt attorneys to urge settlements at low figures as an exchange for a high fee award).

²⁶⁴ Cf. Kane, Mary Kay, Of Carrots and Sticks: Evaluating the Role of the Class Action Lawyer, 66 TEX. L. REV. 385, 389 (1987)Google Scholar (discussing how clients exercise little control over their attorneys in class action suits, and, therefore, class action attorneys make many substantive decisions normally reserved for clients).

²⁶⁵ See id. at 394. The named representatives are selected and “may be consulted … [however], the lawyer in the modern class action plays a more dominant role than the traditional adversarial model envisions.” Id.

²⁶⁶ The court must issue notice of, hold a hearing on and approve all class action settlements. See FED. R. CIV. P. 23(e). This is only one aspect of the way in which a court in a class action case acts as “protector of the absentees’ interests, in a sort of fiduciary capacity.” GM Pick-Up, 55 F.3d at 784.

²⁶⁷ See Coffee, John C., Jr., The Regulation of Entrepreneurial Litigation: Balancing Fairness and Efficiency in the Large Class Action, 54 U. CHI. L. REV. 877, 883-84 (1987)Google Scholar.

²⁶⁸ See H.R. CONF. REP. NO. 104-369, at 31 (1995), reprinted in 1996 U.S.C.C.A.N. 730, 730 (indicating that private securities litigation and legislation is in part a response to “manipulation by class action lawyers of the clients whom they purportedly represent“).

²⁶⁹ See Georgine v. Amchem Prods., Inc., 83 F.3d 610, 634 (3d Cir. 1996) (observing that the Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737, 737, reflected “congressional inhospitability” toward class actions, but noting that such statutory reform may implicate due process concerns), aff'd sub nom., Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231, 2252(1997).

²⁷⁰ See Burns, Jean Wegman, Decorative Figureheads: Eliminating Class Representation in Class Actions, 42 HASTINGS L.J. 165, 181 (1990)Google Scholar; Downs, Howard M., Federal Class Actions: Diminished Protection for the Class and the Case for Reform, 73 NEB. L. REV. 646, 650 (1994)Google Scholar. For an example of one company's attempt to curtail the number of class actions filed against it by claiming that this was the case, see Robyn Meredith, Chrysler Lawsuit Takes Aim at Class Actions, N.Y. TIMES, Mar. 27, 1996, at A14.

²⁷¹ See Coffee, supra note 267, at 886.

²⁷² This is especially true in cases that settle, as most do. See Coffee, The Corruption of the Class Action, supra note 245, at 854. In consumer cases in which attorneys gained lucrative fees, plaintiff class members sometimes only received certificates for discounts on future purchases of the product in question. See, e.g., In re Domestic Air Transp. Antitrust Litig., 148 F.R.D. 297, 320 (N.D. Ga. 1993) (flight discount certificates); New York v. Nintendo of Am., Inc., 775 F. Supp. 676, 679 (S.D.N.Y. 1991) (five-dollar discount coupon); In re Cuisinart Food Processor Antitrust Litig., Nos. H 81-196, H 81-610, H 81-444, H 81-194, H 81-170, H 81-193, H 81-71, H 195, 1983 WL 153, at *4 (D. Conn. Oct. 24, 1983) (discount coupons with maximum cash value of $100). Many criticize the current class action system because attorneys are rewarded with excessive fees, often greater than the plaintiffs’ awards, from a “common fund”. See, e.g., McGovern, Francis E., Resolving Mature Mass Tort Litigation, 69 B.U. L. REV. 659, 689 (1989)Google Scholar (finding that in some mass tort cases, contingency fees range from 30 to 40%); see also In re Oracle Sec. Litig., 132 F.R.D. 538, 544 (N.D. Cal. 1990) (discussing how increasing the percentage of class counsel's share of the recovery could produce attorney windfalls that are unrelated to the quantity or quality of services provided). Cases primarily seeking injunctive relief, however, less often involve huge awards of attorneys’ fees; in such cases, fees are usually awarded pursuant to statutes requiring payment of the fees and costs of the prevailing party. See generally MANUAL FOR COMPLEX LITIGATION, supra note 164, §§ 24.11- .13, at 186-93 (describing various fee payment procedures); Coffee, supra note 263, at 678 n.26 (explaining that a “reasonable fee is based on a percentage of the funds bestowed on the class” (quoting Blum v. Stenson, 465 U.S. 886, 900 n. 16 (1984))).

²⁷³ See Coffee, supra note 263, at 670-71.

²⁷⁴ See White, supra note 7, at 550-52 (detailing a speak-out of the Alliance of Disability Recipients).

²⁷⁵ See Burns, supra note 270, at 165.

²⁷⁶ See id. at 181.

²⁷⁷ See Georgine v. Amchem Prods., Inc., 83 F.3d 610, 633-34 (3d Cir. 1996) (overruling trial court's determination that settlement proposal was fair enough to warrant class notice), aff'd sub nom., Amchem Products, Inc. v. Windsor, 117 S. Ct. 2231, 2252 (1997); Bloyed v. General Motors Corp., 916 S.W.2d 919 (Tex. 1996) (detailing the problems with such situations).

²⁷⁸ See, e.g., In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 55 F.3d 768, 780 (3d Cir. 1995) (determining that each class member would receive a $1000 certificate to use toward the purchase of a new General Motors vehicle to replace one with a defective gas tank); Bloyed, 916 S.W.2d at 952 (same).

²⁷⁹ Cf. Robert Pear, U.S. Issues Rules for H.M.O.'s in an Effort to Protect Patients, N.Y. TIMES, Mar. 27, 1996, at B8 (discussing a recently enacted law restricting HMO's ability to offer financial incentives that are designed to induce doctors to limit services they provide to patients under Medicare and Medicaid). Inspired mainly by the UR cases, various actors have proposed legislative changes. Texas has attempted to eliminate the ERISA preemption hurdle altogether in certain cases. See TEX. INS. CODE ANN. §§ 21.58A-6 to -6A (West Supp. 1998) (setting forth appeals process, including review by independent review organizations). The statute currently faces a court challenge. See Corporate Health Ins., Inc. v. Texas Dep't of Ins., No. H-97-2072 (S.D. Tex. filed June 16, 1997) (copy on file with author) (arguing that this statute will be detrimental to Texans in managed care plans and is preempted by ERISA). On the federal level, the Corcoran court expressed a desire that Congress act. Cf. Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1334 (5th Cir. 1992) (discussing the difficulties created by Congress's broad drafting of ERISA). Some legislative proposals, which as of yet have not succeeded, would amend ERISA to provide plan beneficiaries additional remedies. See, e.g., Employee Health Insurance Accountability Act of 1997, S. 1136, 105th Cong. (1997) (providing that preemption rules shall not apply to certain state law actions in order to protect health insurance policy-holders). One commentator has called for what in effect would be an ERISA claim for bad-faith activity with regard to benefits. See O'Neil, supra note 146, at 780. Another has suggested that patients claiming injuries due to UR decisions should follow an administrative procedure similar to that used to adjudicate workers’ compensation disputes in most states. See Randall, supra note 21, at 73. Under such a system, patients would waive the right to recover for pain and suffering in exchange for a strict liability standard and, presumably, a quicker path to finality. See id. at 76-77. Yet another commentator has suggested alternative dispute resolution. See Stayn, supra note 71, at 1709 (calling for a uniform recourse system including both grievance and appeal mechanisms). Indeed, the health care plan proposed by the Clinton administration would have incorporated an alternative dispute resolution system. See THE WHITE HOUSE DOMESTIC POLICY COUNCIL, THE PRESIDENT's HEALTH SECURITY PLAN 189 (1993). These are a few of the ideas percolating through the legislative system.

²⁸⁰ See Pearl, David, Legal Issues Arising Out of Medical Provisions for Ethnic Groups, 4 HEALTH MATRIX 243, 257 (1994)Google Scholar. Commenting on the British health care system, the Honorable David Pearl has opined that revising judicial review of health care decisions “to enable class actions to be more readily available” would help various ethnic groups ensure that the system addresses their needs. See id.

²⁸¹ See discussion supra notes 228-29.

²⁸² Note the different group contracts described in Everson. See supra note 230 and accompanying text. Presumably Blue Cross and Blue Shield of Ohio will alter their insurance contracts to protect themselves from further discount lawsuits. See Everson v. Blue Cross and Blue Shield, 898 F. Supp. 532, 538-39 (N.D. Ohio 1994) (following the rule applied in several circuits and construing the ambiguous insurance contract in favor of the insured).

²⁸³ For one account of the frustration, see generally Michael Jonathan Crinfeld, Tilting at HMOs, CAL. LAWYER, Feb. 1997, at 48 (discussing the obstacles to successful plaintiff litigation under ERISA).

²⁸⁴ For example, cases such as Weiss and Drolet appear to involve relatively small individual claims. See supra note 208 and accompanying text.

²⁸⁵ See. e.g., DEP't OF HEALTH, EDUC. AND WELFARE, REPORT OF THE SECRETARY's COMMISSION ON MEDICAL MALPRACTICE 12 (1973) (finding that fewer than one court trial was held for every 10 claims in 1970).

²⁸⁶ Stayn, supra note 71, at 1708.

²⁸⁷ See Hemp, Susan J., The Right to Remedy: When Should an Abused Nursing Home Resident Sue?, 2 ELDER L.J. 195, 219 (1994)Google Scholar; see also Trakman, supra note 17, at 617 (discussing an individual plaintiff's limited options to sue large companies due to lack of resources).

²⁸⁸ See Hemp, supra note 287, at 219.

²⁸⁹ Class actions may be particularly inappropriate when they present immature claims or new, untested theories of liability. See Castano v. American Tobacco Co., 84 F.3d 734, 752 (5th Cir. 1996).

²⁹⁰ See Hemp, supra note 287, at 219.

²⁹¹ See id.

²⁹² See 1 NEWBERG & CONTE, supra note 20, § 5.21, at 5-25; Rodwin, supra note 86, at 1370-72.

²⁹³ See Stayn, supra note 71, at 1708 n.229. Stayn proposes the development of a universal complaint and appeal procedure in HMOs. See id. at 1709.

To some, it may seem anomalous to suggest a class action in an environment where delays can be injurious. Class actions do take a long time to litigate. See discussion supra note 250. As will be explained, however, for all but the named plaintiff or plaintiffs, a class action can expeditiously resolve a legal issue. See infra notes 304-05 and accompanying text.

²⁹⁴ ERISA requires each employee benefits plan to establish an internal appeals procedure through which a patient contesting a benefits determination can challenge the plan administrator's decision. See 29 U.S.C. §§ 1021-1022 (1994).

²⁹⁵ See Rodwin, supra note 86, at 1348 (noting patients’ reluctance to complain both because they might jeopardize their relationships with their physicians and MCOs and because complaining “might even subject the complainant to reprisal“).

Fear of retaliation may also discourage potential class members from expressing interest in a lawsuit. See 1 NEWBERG & CONTE, supra note 20, § 3.06, at 3-35. Many class members, however, can benefit from a favorable class action judgment by merely standing quietly by, without expressing interest. In a class action pursued under Federal Rule of Civil Procedure 23(b)(2), for example, all class members are bound regardless of their opinion of the litigation; there is no opportunity to opt out. Thus, class members can benefit despite their fear.

²⁹⁶ See supra notes 3-5 and accompanying text.

²⁹⁷ See 1 NEWBERG & CONTE, supra note 20, §§ 5.02-.03, at 5-4 to -6, § 5.07, at 5-12 to -13. Even critics of the class action, as it is currently structured, admit that there are situations in which the class action device is used to advance noble goals, providing great benefit to class members. See Leubsdorf, supra note 248, at 1223 (remarking that those who speak out against current manipulation of the class action by defendants “are afraid that … an institution that lawyers and scholars have shaped to assist the relatively powerless will be turned against the powerless by the powerful“); see also Coffee, supra note 263, at 679 (listing “obvious advantages” of class actions).

²⁹⁸ The Cornell symposium referred to earlier focused on settlement class actions in mass torts cases. The concerns about use of the class action to achieve a Delaware settlement and congressional action regarding class actions arose in the securities area. See discussion supra notes 178, 268-69.

²⁹⁹ Coffee, supra note 263, at 705.

³⁰⁰ See JERRY, supra note 188, at 129, 189; cf. Belkin, Gary S., The New Science of Medicine, 19 J. HEALTH POL. POL'Y & L. 801, 806-07 (1994)Google Scholar (discussing the increasing reverence among physicians for standardization associated with aggregation).

³⁰¹ The Weiss and Drolet cases, for example, have overlapping counsel. Compare Weiss v. Cigna Healthcare, Inc., 972 F. Supp. 748, 750 (S.D.N.Y. 1997) (plaintiff represented by D. Brian Hufford), with Drolet v. Healthsource, Inc., 968 F. Supp. 757, 757 (D.N.H. 1997) (same). Similarly, the attorney for the plaintiff in Harris later filed Henderson, an individual lawsuit based on substantially similar facts. See supra notes 236-37 and accompanying text.

³⁰² See 29 U.S.C. § 1451 (1994) (providing for fee shifting for any prevailing party). Defendants pay prevailing plaintiffs’ attorneys’ fees as a separate matter rather than basing them on the size of the plaintiffs’ award and thus potentially subtracting them from funds intended for the plaintiffs. See id.

³⁰³ See 29 U.S.C. § 1132(a)(3) (1994); Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1338 (5th Cir. 1992) (holding that extracontractual damages of emotional distress and mental anguish sought by plaintiffs are not recoverable in an ERISA § 502(3) action).

³⁰⁴ The named plaintiff or plaintiffs, however, must endure more delay in obtaining relief than in a normal case. See 1 NEWBERG & CONTE, supra note 20, § 5.24, at 5-27.

³⁰⁵ See Garth, Bryant G., Studying Civil Litigation Through the Class Action, 62 IND. L.J. 497, 501-02 (1987)Google Scholar (summarizing eight reasons why certification is important in settlement negotiations and further reporting the results of a study that revealed that almost 80% of certified class actions in the Northern District of California settled and that 67% of uncertified class actions were either dismissed or won by defendant through summary judgment). Like most litigation, usually class actions settle prior to trial. See id. at 501. Certification greatly affects chances of settlement, which indicates that class members gain even more power through use of the class action device than through simple litigation. See id. at 502. When settlements accomplish few of the class’ goals, however, it is apparent that settlement in the class action context is potentially more dangerous for class members than settlement in the usual litigation context because of the amount of control attorneys have. See Burns, supra note 270, at 182-83; Macey, Jonathan R. & Miller, Geoffrey P., The Plaintiffs’ Attorney's Role in Class Actions and Derivative Litigation: Economic Analysis and Recommendations for Reform, 58 U. CHI. L. REV. 1, 3 (1991)Google Scholar; Steinman, Joan, The Effects of Case Consolidation on the Procedural Rights of Litigants: What They Are, What They Might Be, Part II: Non-Jurisdictional Matters, 42 UCLA L. REV. 967, 978 (1995)Google Scholar. This is especially true if the settlement occurred before the suit was ever filed. See In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 55 F.3d 768, 788 (3d Cir. 1995).

³⁰⁶ Res judicata is the term traditionally used to describe two effects: (1) claim preclusion, which is a valid final adjudication of a claim that precludes a second action on that claim or any part of it; and (2) issue preclusion (or collateral estoppel), which is an issue of fact or law, actually litigated and resolved by a valid final judgment that binds the parties in a subsequent action, whether on the same or a different claim. See Baker v. General Motors Corp., 118 S. Ct. 657, 664 n.5 (1998) (citing RESTATEMENT (SECOND) OF JUDGMENTS §§ 17-19, 27 (1982)).

³⁰⁷ when unclaimed funds remain after distribution from judgment or settlement amounts, for example, courts have approved distribution of the money to charity or to other good purposes. See 2 NEWBERG & CONTE, supra note 20, § 10.19, at 10-50; see also Powell v. Georgia-Pacific Corp., 119 F.3d 703, 707 (8th Cir. 1997) (affirming, in a race discrimination case, deposit of residual settlement moneys in scholarship fund for African Americans); Nelson v. Greater Gadsden Hous. Auth., 802 F.2d 405, 409 (11th Cir. 1986) (approving utilization of unclaimed funds to increase energy efficiency in a case involving utility allowances to tenants in public housing); cf. New York v. Keds Corp., No. 93 CIV. 6708 (CSH), 1994 WL 97201, at *1 (S.D.N.Y. Mar. 21, 1994) (distributing $5.7 million to charities after price-fixing case involving more than five million pairs of shoes with overcharges of $1.00 and $1.25 per pair); United States v. Exxon Corp., 561 F. Supp. 816, 856 (D.D.C.) (establishing energy conservation trust in government escrow account to disburse damages paid by oil company that overcharged customers), aff'd, 773 F.2d 1240 (Temp. Emer. Ct. App. 1983).

³⁰⁸ See generally Law, Sylvia A., A Right to Health Care That Cannot Be Taken Away: The Lessons of Twenty-Five Years of Health Care Advocacy, 61 TENN. L. REV. 771, 777 (1994)Google Scholar (noting that lawyers must “think in systemic and social terms, not simply about the particular individual case” in order to provide an effective remedy for people seeking health care).

³⁰⁹ See FED. R. CIV. P. 23(c)(3) advisory committee's note, 1966 revision.

³¹⁰ See Class Action Compl. at Ex. A, Weiss v. Cigna Healthcare, Inc., 972 F. Supp. 748 (S.D.N.Y. 1997) (No. 96-1107 (SHS)) (naming New York subsidiary as a defendant in lawsuit).

³¹¹ See id. passim.

³¹² See id. at 28-29 (seeking injunctions against Cigna that would force revisions of the company's documents, policies and advertisements).

³¹³ 29 U.S.C. § 1001(b) (1994); see O'Neil, supra note 146, at 723 (stating that “this purpose is clear in the Act and its legislative history“).

³¹⁴ See Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 152-53 (1984) (Brennan, J., dissenting); see also Pittman, supra note 39, at 357-61 (stating that ERISA's primary purpose is to protect plan beneficiaries).

³¹⁵ See discussion supra notes 211-30; see also Stephenson v. Shalala, 87 F.3d 350, 354 (9th Cir. 1996) (stating that plaintiff class protested the Medicare Act's lack of a cap on hospital outpatient charges).

³¹⁶ See discussion supra Part III.A.3.

³¹⁷ Insurers now seem to recognize this. Some have begun to explain it in their policies. See Everson v. Blue Cross and Blue Shield, 898 F. Supp. 532, 536-38 (N.D. Ohio 1994).

³¹⁸ See cases cited supra note 192.

³¹⁹ See, e.g., Pacificare of Okla., Inc. v. Burrage, 59 F.3d 151, 155 (10th Cir. 1995); Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1322-25 (5th Cir. 1992); Wickline v. State, 239 Cal. Rptr. 810, 812-17 (Cal. 1987).

³²⁰ See cases and discussion supra notes 130-36. Similar claims arise in the Medicaid system, where they present state action issues. In Catanzano v. Dowling, 60 F.3d 113, 115 (2d Cir. 1995), the plaintiff, who was disabled, had been prescribed 24-hour-a-day home health care. After a hospitalization, however, a “fiscal assessment” representative at the home health agency ruled that the plaintiff was only entitled to twelve hours of home health care per day. See id. The plaintiff challenged the action based on lack of notice and hearing. See id.

³²¹ See discussion supra note 136.

³²² Cf. Hum v. Dericks, 162 F.R.D. 628, 639-40 (D. Haw. 1995) (considering lack of informed consent and issues of numerosity and predominance when denying class certification in clinical injury case).

³²³ See Fox v. HealthNet, No. 219692 (Cal. Super. Ct. 1993) resulting in a verdict for $89.3 million in damages for the family of a patient who had died of breast cancer. See Fox v. Health Net, 29 TRIALS DIGEST 54, available in 1993 WL 794305, at *1. The patient's HMO, HealthNet, had prospectively denied coverage of high-dose chemotherapy autologous bone marrow transplant (HDC-ABMT). See Furrow, supra note 31, at 447. Although she eventually received the treatment by paying for it herself, the patient nonetheless died, allegedly because of the delay in receiving treatment caused by the HMO's denial. See id. Thus, a decision regarding access to care arguably led to a quality problem, clinical injury and a large award for the decedent's family. See id. The case was later settled for five million dollars. See id.; Erick Eckhom, $89 Million Awarded Family Who Sued H.M.O., N.Y. TIMES, Dec. 30, 1993, at A1; Larry Singer, Rationing: Can't Live With It, Can't Live Without It, CHI. DAILY L. BULL., Aug. 22, 1994, at 6, available in Westlaw, 8/22/94 CHIDLB 6. A UR decision could result in the same sort of expensive clinical injury, as, of course, could garden-variety malpractice cases.

³²⁴ See, e.g., Hensler, Deborah R. & Peterson, Mark Amendment, Understanding Mass Personal Injury Litigation: A Socio-Legal Analysis, 59 BROOK. L. REV. 961, 1021 (1993)Google Scholar (discussing how mass media has played a key role in several mass torts by informing injured individuals of the existence and courses of litigation).

³²⁵ See, e.g., Teti v. U.S. Healthcare, Inc., No. 88-9808, 1989 U.S. Dist. LEXIS 14041, at *2-3 (E.D. Pa. Nov. 20, 1989); Mot. for Class Certification and Request to Exceed Page Limit at 7, Lynch v. Intergroup Healthcare Corp., No. CV 94-15694 (Ariz. Super. Ct. filed June 27, 1995).

³²⁶ See, e.g., Shea v. Esensten, 107 F.3d 625, 628 (8th Cir. 1997) (finding breach of ERISA's fiduciary duty when an HMO's financial incentives to discourage a doctor from providing essential health care referrals were not disclosed).

³²⁷ See, e.g., Shea, 107 F.3d at 628-29. As discussed earlier, the AMA has stated that such disclosures are ethically required. See supra notes 120-21. Further, an MCO failing to make such disclosures in the context of providing Medicare and Medicaid care now would violate the federal regulations previously discussed. See supra notes 121-22. See generally Ruskin, Andrew, Capitation: The Legal Implications of Using Capitation to Affect Physician Decision-Making Processes, 13 J. CONTEMP. HEALTH L. & POL'Y 391, 400-06 (1997)Google Scholar (discussing the impact of capitation on physician decision making and legal theories for holding an MCO liable for physician misconduct).

³²⁸ These class members received medical insurance for care provided by physicians operating under conflicts of interest, which is likely to be priced lower than the medical insurance they thought they were getting—insurance covering care provided by physicians not operating under such conflicts. See Mot. for Class Certification at 9-10, 17-18, Lynch (No. CV 94-15694).

³²⁹ No. 93-711 TUC ACM (D. Ariz, filed Nov. 15, 1993); see also supra note 231-35 and accompanying text (discussing the Grijalva case).

³³⁰ See, e.g., Henderson v. Bodine Aluminum, Inc., 70 F.3d 958, 960 (8th Cir. 1995). This case involved a health plan's refusal to cover the “experimental” treatment, HDC-ABMT, for breast cancer, costing substantially more than the standard chemotherapy. See id. The cost of HDC-ABMT can exceed $100,000 per patient. See Wolf, supra note 238, at 2040.

³³¹ “[C]laims arising out of form contracts are particularly appropriate for class action treatment.” Hoban v. USLife Credit Life Ins. Co., 163 F.R.D. 509, 513 (N.D. 111. 1995) (certifying class, in part, because of court's view that class resolution of dispute over fraudulent practices with regard to second mortgage insurance policies would be “more efficient than to allow a multitude of individual adjudications over a form insurance certificate“); cf. Chicken Delight, Inc. v. Harris, 412 F.2d 830, 831 (9th Cir. 1969) (certifying class in regards to a challenge to provisions in a standard franchise agreement, but not to the alleged retail pricing issue). Insurance documents, and by extension the managed care documents used by the newer integrated corporations, are notoriously standardized. In cases involving comprehensive general liability policies, for example, courts and parties have referred to versions of each standardized revision of the form policy in shorthand. See, e.g., Chemical Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 89 F.3d 976, 982 (3d Cir. 1996) (referring to general liability policies by reference to the particular type of exclusion clause it contained).

Sometimes insurers argue that common questions do not predominate because various employers differ in their understandings of the plan documents. In these cases, insurers attack commonality by saying each employer must testify about its understanding of the meaning of the insurance contract or health care coverage documents. See Doe v. Guardian Life Ins. Co., No. 89 C 7955, 1992 U.S. Dist. LEXIS 3214, at *42-43, *46 (N.D. 111. Mar. 19, 1992). Even if this is a valid argument, which may depend on the claims asserted and the governing law, it in no way diminishes the utility of the class action device to determine some issues, such as the meaning of the disputed provision. Cf. FED. R. Civ. P. 23(C)(4)(A) (authorizing class certification for only certain issues).

³³² See In re School Asbestos Litig., 789 F.2d 996, 1009 (3d Cir. 1986).

³³³ See id. at 1010. Plaintiffs’ counsel had “undertaken an extensive analysis of the variances in products liability among the jurisdictions” and had created four categories into which all applicable state legal rules could be placed. Id. Although skeptical, the appellate court did approve. See id.; see also Diehl v. Twin Disc, Inc., No. 94-C50031, 1995 U.S. Dist. LEXIS 7569, at *8-9 (N.D. 111. May 30, 1995) (holding, in ERISA case alleging unlawful modification of health insurance benefits, the fact that class members were covered under six separate insurance agreements was not a barrier to certification; “this inquiry is not necessary to determine the question of liability, rather it is necessary to determine the amount of damages … . [T]he need to determine individual questions after the resolution of common questions does not preclude a finding of commonality.“).

³³⁴ See School Asbestos Litig., 879 F.2d at 1000.

³³⁵ See In re Asbestos Prods. Liab. Litig. (No. VI), 771 F. Supp. 415, 417 & n.4 (J.P.M.L. 1991).

³³⁶ See id. at 424.

³³⁷ 789 F.2d at 1000; see also Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231, 2253 (1997) (Breyer, J., concurring and dissenting) (discussing the importance of settlement to asbestos litigation, overlooked by the majority, due to the number of workers exposed and the delays, inefficiency and inconsistent recoveries in the resulting lawsuits).

³³⁸ Genetic discrimination is “the denial of rights, privileges or opportunities on the basis of information obtained from genetically-based diagnostic and prognostic tests.” Gostin, Larry, Genetic Discrimination: The Use of Genetically Based Diagnostic and Prognostic Tests by Employers and Insurers, 17 AM. J.L. & MED. 109, 110 (1991)Google Scholar. See generally National Human Genome Research Institute, Department of Health & Human Servs., Health Insurance in the Age of Genetics (July 1997) http://www.nhgri.nih.gov/NEWS/Insurance (discussing the expanding use of genetic information to deny health insurance coverage).

³³⁹ See OFFICE OF TECH. ASSESSMENT, U.S. CONGRESS, GENETIC MONITORING AND SCREENING IN THE WORKPLACE 83-94 (1990); Gostin, supra note 338, at 110-11.

³⁴⁰ Those with a genetic predisposition are, to varying degrees, either more likely or certain to develop a disease at some point Most disease genes identified so far are “single gene” diseases, in which the presence of a single mutated (or “misspelled“) gene can cause disease. See Reauthorization of the National Institutes of Health: Hearings Before the Senate Comm. on Labor and Human Resources, 104th Cong. 72 (1996) (statement of Francis S. Collins, Richard D. Klausner and Kenneth Olden). Other diseases, such as certain cancers, diabetes and Alzheimer's disease, “are much more complex and may involve the interactions of many genes as well as environmental factors.” Id.

³⁴¹ Researchers at Harvard Medical School have conducted a survey indicating that a fair amount of genetic discrimination occurs. See Ince, Susan, Predictive Testing: A Bite of the Apple, HARV. HEALTH LETTER, June 1995, at 3, 4Google Scholar. See generally Karen H. Rothenberg, Genetic Information and Health Insurance: State Legislative Approaches, 23 J.L. MED & ETHICS 312 (detailing state efforts to prohibit such “genetic discrimination“). Insurers or employers who self-insure have also been known to change the terms of benefits plans to limit coverage once they learn that an employee has a high-cost illness. See, e.g., McGann v. H & H Music Co., 946 F.2d 401, 404 (5th Cir. 1991) (noting that because employee welfare benefits are not vested, employer could reduce lifetime benefit for persons suffering from AIDS). For criticism of rulings such as McGann, see generally Greci, Carl A., Note, Use It and Lose It: The Employer's Absolute Right Under ERISA Section 510 to Engage in Post-Claim Modifications of Employee Welfare Benefit Plans, 68 IND. L.J. 177 (1992)Google Scholar.

³⁴² Such ERISA claims can be raised under ERISA section 514, see 29 U.S.C. § 1144 (1994) (authorizing actions to recover benefits due), or ERISA section 510, see 29 U.S.C. § 1140 (prohibiting discrimination in the provision or attainment of benefits).

³⁴³ 42 U.S.C. §§ 12101-12212 (1994). The ADA contains a provision exempting underwriting, but says nothing specific about genetics. See Wolf, Susan M., Beyond “Genetic Discrimination “: Toward the Broader Harm of Geneticism, 23 J.L. MED. & ETHICS 345, 352 n.14 (1995)Google Scholar (discussing the inadequacy of an antidiscrimination approach to genetics); see also Gostin, supra note 338, at 109 (noting that the ADA may not provide sufficient protection for employees and insureds from genetic discrimination).

³⁴⁴ Section 1983 cases, which must involve some state action, may allege deprivation of procedural due process, substantive due process or equal protection. See 42 U.S.C. § 1983 (1994); Babe, Brett D., For Every Right There Is a Remedy: Civil Rights Litigation Pursuant to 42 U.S.C § 1983, 9 ME. B.J. 226, 226 (1994)Google Scholar. Possible equal protection claims may arise from the fact that some genetic predictors are associated with particular races or ethnic groups. See Pearl, supra note 280, at 246 (noting that persons of African Caribbean descent are more likely to develop sickle cell anemia); cf. Wolf, supra note 343, at 345 flikening genetic discrimination to racism and sexism). Title VI of the Civil Rights Act of 1964,42 U.S.C. § 2000d (1994), also prohibits “programs and activities that receive federal financial assistance, including hospitals, nursing homes, HMOs, and doctors, from discriminating on the basis of race, color, or national origin.” Watson, Sidney Dean, Minority Access and Health Reform: A Civil Right to Health Care, 22 J.L. MED. & ETHICS 127, 130 (1994)Google Scholar. Title VI, however, relies primarily on administrative enforcement, thus making its effectiveness dependent on the “political will of the administration in power.” Id.

³⁴⁵ Compare deMeurers v. HealthNet, No. 239338, an arbitration decision in which the panel ruled that the HMO had intentionally interfered with doctor-patient relationship in denying coverage of HDC-ABMT and awarded the plaintiff more than one million dollars. See HMO Interfered with Relationship of Doctor and Patient, EMPLOYEE BENEFIT PLAN REV., Jan. 1996, at 55, available in LEXIS, Busfin Library, ABI File. The arbitration panel said that the HMO's conduct may be “a viable new tort” and constitutes “extreme and outrageous behavior exceeding all bounds usually tolerated in a civilized society.” Id. (quoting the arbitration panel). For a general discussion of the deMeurers case, see Contract Issues and Quality Standards for Managed Care: Hearings Before the Subcomm. on Health and Env't of the House Comm. on Commerce, 104th Cong. 146 (1996) (statement of Alan Charles deMeurers, husband of the late Christine Nesmith deMeurers, who died of breast cancer after having her treatment denied by her HMO); Around the State: Briefs, 7 WORLD ARB. & MEDIATION REP. 103,103 (1996); Erik Larson, The Soul of an HMO, TIME, Jan. 22, 1996, at 44,44.

Additionally, two other areas of concern come to mind, although neither necessarily relates specifically to health care coverage. When an employer is a plan administrator or self-insures, or when the genetic information causes an adverse employment decision, a plaintiff may have Title VII claims. See Kristie A. Deyerle, Comment, Genetic Testing in the Workplace: Employer Dream, Employee Nightmare—Legislative Regulation in the United States and the Federal Republic of Germany, 18 COMP. LAB. L.J. 547, 567 n.159 (1997) (noting that in a disparate impact case, the plaintiff only needs to prove that a “facially neutral policy has a disproportionate effect on a protected class“; the employer's intent is irrelevant); see also id. at 549-50 (discussing how no court in the United States has yet to adjudicate an alleged employment discrimination based on genetic makeup, but arguing that the potential for discrimination exists because “[e]xisting anti-discrimination legislation will not deter employers from using genetic technology to discriminate against workers based on their genetic constitutions“); Gostin, supra note 338, at 137-41 (discussing two examples of possible disparate impact cases based on genetic or gender discrimination); see, e.g., Perkins v. Lake County Dep't of Utilities, 860 F. Supp. 1262, 1276, 1280 (E.D. Ohio 1994) (denying defendant's motion for summary judgment in an employment discrimination claim alleging disparate treatment due to plaintiffs status as American Indian even though plaintiff was less than one-sixteenth Indian); Deyerle, supra, at 549 n.17 (discussing a class action lawsuit brought in federal district court in California in which plaintiff-employees of Lawrence Berkeley National Laboratory alleged that employer tested only African American employees for sickle cell anemia (a disease almost exclusively associated with that ethnic group) and that it tested for pregnancy and syphilis without employees’ consent on blood and urine samples obtained during a mandatory medical examination).

Another concern, which may arise either wjthin or outside the employment context, is privacy. Privacy issues arise when insurers obtain genetic information without the insured's consent or when they require disclosure of genetic information in order to obtain insurance. See Doe v. Southeastern Pa. Transp. Auth., 886 F. Supp. 1186, 1187 (E.D. Pa. 1994) (employee sued employer for alleged invasion of privacy which occurred when employer was scanning medical records to check insurance payments), rev'd, 72 F.3d 1133, 1143 (3d Cir. 1995). A number of bills have been introduced to attempt to address such concerns. See Bennett, Sylvia, Congress Tackles a Full Agenda: Genetic Issues to FDA Reform, 88 J. NAT'L CANCER INST. 402, 402-03 (1996)CrossRefGoogle Scholar (listing and explaining the proposed Health Insurance Reform Act of 1996, S. 1028, 104th Cong.; the Genetic Privacy and Nondiscrimination Act of 1995, H.R. 2690, 104th Cong, (establishing limitations with respect to the disclosure and use of genetic information); and the Genetic Information Nondiscrimination in Health Insurance Act of 1995, H.R. 2748, 104th Cong.). The Health Insurance Reform Act of 1996 has been enacted and is now the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936, which specifically prohibits group health insurance plans from using genetic information to establish rules for eligibility or continued eligibility. See id. at 1940, sec. 101(a), § 701(b)(1)(B) (codified at 29 U.S.C.A. § 1181(b)(1)(B) (West Supp. 1997)); id. at 1945, sec. 101(a), § 702(a)(1)(F) (codified at 29 U.S.C.A. § 1182(a)(1)(F)); id. at 1956, sec. 102(a), § 2701(b)(1)(B) (codified at 29 U.S.C.A. § 300gg(b)(l)(B)).

³⁴⁶ This is specifically authorized under Rule 23(c)(4)(A). See MANUAL FOR COMPLEX LITIGATION, supra note 164, § 30.17, at 222-23. But see Doe v. Guardian Life Ins. Co., No. 89 C 7955, 1992 U.S. Dist. LEXIS 3214, at *55-56, *62 (citing superiority concerns and refusing to certify 23(b)(3) class of persons alleging improper denial of payment for treatment of manic depressive disease as a “mental illness” within meaning of policies—but indicating it might consider 23(b)(1) or 23(b)(2) certification if the parties provide more information).

³⁴⁷ A formulary is a list of drugs a plan can obtain at a discount from a manufacturer. See Furrow, supra note 31, at 448.

³⁴⁸ A patient who needs a drug not listed on her plan's formulary may be able to obtain only its generic equivalent. See Morreim, E. Haavi, Diverse and Perverse Incentives of Managed Care: Bringing Patients into Alignment, 1 WID. L. SYMP. J. 89, 98 n.27 (1996)Google Scholar. Patients, however, sometimes react differently to the generic equivalents than to brand-name formulations. See id.

³⁴⁹ See Furrow, supra note 31, at 449.

³⁵⁰ See Morreim, E. Haavi, Moral Justice and Legal Justice in Managed Care: The Ascent of Contributive Medicine, 23 J.L. MED. & ETHICS 247, 247 (1995)Google Scholar (discussing how this radiation treatment is a superior, but far more costly, alternative).

³⁵¹ See Eddy, D.M., Applying Cost-Effectiveness Analysis: The Inside Story, 268 JAMA 2575, 2575 (1992)Google Scholar.

³⁵² See Jacobson, Peter D. & Rosenquist, C.J., The Introduction of Low-Osmolar Contrast Agents in Radiology, 260 JAMA 1586, 1587 (1988)Google Scholar.

³⁵³ See id. at 1586; see also Morreim, supra note 350, at 258 n.7 (listing examples of other treatments that are somewhat superior but vastly more costly).

³⁵⁴ The availability of physician prescription waivers and of approvals for use of the newer dye for at-risk patients may negate liability for traditional malpractice. See Furrow, supra note 31, at 449. Liability might result from failure to disclose the more expensive option, or from failure to provide it despite plan language promising, for example, the most effective and up-to-date treatment. See, e.g., Morreim, supra note 348, at 100-01.

³⁵⁵ See Grijalva v. Shalala, 946 F. Supp. 747, 749-50 (D. Ariz. 1996).

³⁵⁶ See supra notes 231-35. In Grijalva, the plaintiffs’ allegations of lack of notice, appeal and hearing are examples of such constitutional due process claims. See Grijalva, 946 F. Supp. at 760.

³⁵⁷ See Catanzano v. Dowling, 60 F.3d 113, 120 (2d Cir. 1995) (holding that home health care agencies’ decisions constitute state action in case challenging system of decision making). Allegations of delay in decision making by the Health Insurance Plan of New York, for example, may provide fodder for such a lawsuit. Cf. Esther B. Fein & Elisabeth Rosenthal, Delays by H.M.O. Leaving Patients Haunted by Bills, N.Y. TIMES, Apr. 1, 1996, at A1. The General Accounting Office has recently expressed concern that California should more closely oversee Medicaid managed care. See Rodwin, supra note 86, at 1333 (similarly noting that “[a] report by the Department of Health and Human Services (HHS) Inspector General indicates that serious problems exist with service access and enrollment procedures in Medicare HMOs“).

³⁵⁸ See Law, supra note 308, at 793.

³⁵⁹ Id.; see also Rodwin, Marc A., Consumer Protection and Managed Care: The Need for Organized Consumers, HEALTH AFF., Fall 1996, at 110, 110Google Scholar, 116 (explaining that the disparity between the abilities of producers and consumers of medical services to protect their respective interests stems partly from the consumers’ unorganized status and their lack of means to exert purchasing power or make their voice heard collectively).