Judgment Not Binding on Class Members Without Prior Notice

In a case that could have a significant impact on class action litigation, the U.S. Court of Appeals for the Sixth Circuit in Faber v. Ciox Health, LLC, held that an order granting the defendant’s summary judgment after class certification, but before absentee class members had been notified, only binds the named plaintiffs and not the class. Experts suggest that the moving party in class actions should consider asking for modification of scheduling orders to avoid a ruling that is not binding on the class.

Claims Against Ciox Dismissed

In Faber, the plaintiffs brought claims in a putative class action case against Ciox Health, LLC, alleging Ciox overcharged them for copies of their medical records. Ciox is a medical-records provider that contracts with hospitals to help patients access their medical records. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) prohibits charging patients more than reasonable fees for their records. The plaintiffs styled their HIPAA-based claims as common law claims because HIPAA does not provide a private right of action.

Three months before the district court certified the class, Ciox filed dispositive motions to dismiss the plaintiffs’ claims. The district court granted summary judgment to the defendant. The Sixth Circuit affirmed that dismissal, stating that under Tennessee common law no duty existed for Ciox to not overcharge the plaintiffs.