The Court of Appeals reviewed the trial court’s certification of five classes in Michigan Association of Chiropractors v. Blue Care Network of Michigan, Inc. In considering these classes, the Court adopted the federal requirement that class membership must be capable of determination by objective criteria. Four of the five classes survived this test and were affirmed on appeal with some modifications.
The Michigan Association of Chiropractors (“MAC”) sued the Blue Care Network (“BCN”), alleging in essence “that BCN openly and illegally discriminates against its network’s chiropractic physicians by failing to reimburse them for services for which it reimburses its other network physicians and that its discriminatory practices effectively limit the number of chiropractic physicians that can be network providers.”
The MAC sought to certify five classes. Class 1: The first class consists of those chiropractors who have ever applied for membership in BCN and were denied membership. Class 2: The second class consists of those chiropractors who at one time were members of BCN but who were disaffiliated from BCN against their will. Class 3: The third class consists of those chiropractors who have not sought membership with BCN because doing so would be futile given BCN’s open practice of not allowing chiropractors to become members of BCN. Class 4: The fourth class consists of those chiropractors who are, or have been members of BCN, and who have suffered from harm due to BCN’s policy of requiring its insureds to obtain a referral before seeing a chiropractor and BCN’s open policy of discouraging referrals to chiropractors. Class 5: The fifth class consists of chiropractors who have been economically harmed as a result of BCN’s policies. These policies include, but are not limited to, refusing to reimburse chiropractors for services within their scope of work, reimbursing other providers for these same services, burdensome deductibles and imposing burdensome copays on insured who utilize chiropractors driving patients away from chiropractic care. The trial court certified all five classes.
The Court of Appeals reversed in part and affirmed in part. BCN argued that classes 1, 2, and 3 improperly required a subjective assessment to determine class membership. The Court of Appeals agreed that a class must have objective criteria for determining membership. However, the Court held that only class 3 failed this test for certain, and so decertified that class. The Court noted that the MAC should be provided the opportunity to demonstrate that class 2 membership can be determined by objective evidence. If the MAC can do so, then the class should remain certified. Class 1 met this requirement. The Court went on to hold that the definition of class 5 was too broad to survive the objective test, so the Court modified the class. The Court added the italicized language limiting the class to “chiropractors who have been economically harmed as a result of BCN’s policies that unlawfully discriminate against chiropractors.”
The Court next considered whether the classes met the requirements of commonality and typicality. The Court held that the MAC’s claims for declaratory relief for classes 1, 2, 4, and 5 met these two requirements. Declaratory relief only asked for answers to legal questions common to all the class members. Accordingly, the trial court should have bifurcated the declaratory claims and certified those claims only. Lastly, the Court broadened class 1 to include “those chiropractors who have ever applied for membership in BCN and were denied membership or whom BCN denied the opportunity to apply.”
This case was submitted and argued with the related case of Michigan Association of Chiropractors v. Blue Cross Blue Shield.