[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 04-16017 March 9, 2006
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 04-01247-CV-HS-S
RHONDA KIZZIRE, on behalf of herself
and all others similarly situated,
LARRY CALVIN MARTIN, et al.,
Plaintiffs-Appellants,
versus
BAPTIST HEALTH SYSTEM, INC.,
AMERICAN HOSPITAL ASSOCIATION,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_________________________
(March 9, 2006)
Before EDMONDSON, Chief Judge, BLACK and FAY, Circuit Judges.
BLACK, Circuit Judge:
Appellants Rhonda Kizzire, Larry Calvin Martin, and Michael R. Dennis
appeal the district court’s grant of summary judgment in favor of Baptist Health
System, Inc. (BHS) and American Hospital Association (AHA) on the majority of
their claims and dismissal of their remaining claim. Appellants’ primary
allegation is that BHS violated its contractual obligations as a charitable
organization under 26 U.S.C. § 501(c)(3) by charging uninsured patients more for
health care than insured patients. They further allege BHS violated the Emergency
Medical Treatment and Active Labor Act (EMTALA), 42 U.S.C. § 1395dd, by
improperly conditioning emergency medical treatment on their ability to pay. The
district court held all claims but the EMTALA claim were barred by res judicata
because of prior judgments entered against Appellants in Alabama state court, and
dismissed the EMTALA claim for failure to state a claim for relief. We affirm.
I. BACKGROUND
BHS, a nonprofit entity, is the largest healthcare provider in Alabama.
Between 1999 and 2002, Appellants, all uninsured, each received emergency
medical care at BHS. After Appellants failed to pay their medical bills, BHS
initiated collection suits against them in Alabama state court. Default judgments
were entered against Kizzire and Dennis, and Martin consented to judgment in
favor of BHS.
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In 2004, Appellants filed a putative class action complaint against BHS and
AHA,1 alleging numerous federal and state claims.2 Their primary allegation is
that § 501(c)(3), which confers tax-exempt status on nonprofit hospitals, creates a
contract between BHS and the federal government to provide charity healthcare
for uninsured individuals. They contend BHS has breached its contract with the
government by charging uninsured individuals more for health care than it charges
insured individuals and argue they can pursue claims for breach of this contract as
its intended third-party beneficiaries. They also allege AHA, the national trade
association for nonprofit hospitals, conspired with, and aided and abetted BHS to
breach its contract with the government by advising BHS on ways to collect
inflated rates from uninsured patients. Finally, Appellants allege BHS violated
EMTALA by improperly conditioning emergency medical treatment on their
ability to pay.
1
This case was one of several clone lawsuits filed in courts across the country on behalf
of uninsured patients challenging the billing practices of tax-exempt hospitals. On October 19,
2004, the Judicial Panel on Multidistrict Litigation rejected motions to transfer and consolidate
this case and 27 similar cases. In re Not-For-Profit Hosps./Uninsured Patients Litig., 341 F.
Supp. 2d 1354, 1355-56 (J.P.M.L. 2004).
2
Specifically, the complaint alleged nine counts: (1) third party breach of contract;
(2) breach of contract; (3) breach of duty of good faith and fair dealing; (4) breach of charitable
trust; (5) violations of EMTALA; (6) unjust enrichment/constructive trust; (7) civil conspiracy;
(8) aiding and abetting breach of contract; and (9) injunctive/declaratory relief.
3
BHS and AHA filed motions to dismiss, arguing all claims but the
EMTALA claim were barred by res judicata because of the judgments entered
against Appellants in the state collection suits. BHS also filed a motion to dismiss
the EMTALA claim for failure to state a claim upon which relief could be granted.
After construing the motions to dismiss on res judicata grounds as motions for
summary judgment, the district court granted BHS’s and AHA’s motions,
dismissing the EMTALA claim for failure to state a claim and holding Appellants’
remaining claims were barred by res judicata. Kizzire v. Baptist Health Sys., Inc.,
343 F. Supp. 2d 1074 (N.D. Ala. 2004). This appeal followed.
II. STANDARD OF REVIEW
“Barring a claim on the basis of res judicata is a determination of law” that
we review de novo. Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1238 (11th Cir.
1999) (citation omitted). When reviewing a district court’s grant of summary
judgment, we must determine if genuine issues of material fact exist, viewing the
evidence and all factual inferences in the light most favorable to the nonmoving
party. Dees v. Johnson Controls World Servs., Inc., 168 F.3d 417, 421 (11th Cir.
1999). We review de novo the district court’s grant of a motion to dismiss for
failure to state a claim, accepting the allegations in the complaint as true and
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construing them in the light most favorable to the nonmoving party. Hill v. White,
321 F.3d 1334, 1335 (11th Cir. 2003).
III. DISCUSSION
A. Res Judicata
BHS and AHA argue res judicata bars Appellants from litigating the
majority of their claims because of the prior judgments entered against them in
Alabama state court. We agree.
When we are “asked to give res judicata effect to a state court judgment,
[we] must apply the res judicata principles of the law of the state whose decision
is set up as a bar to further litigation.” Amey, Inc. v. Gulf Abstract & Title, Inc.,
758 F.2d 1486, 1509 (11th Cir. 1985) (quotation omitted). Because BHS and
AHA contend Alabama judgments bar this action, the res judicata principles of
Alabama apply.
Under Alabama law, “the essential elements of res judicata are (1) a prior
judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) with
substantial identity of the parties, and (4) with the same cause of action presented
in both actions.” Equity Res. Mgmt., Inc. v. Vinson, 723 So. 2d 634, 636 (Ala.
1998). If all four elements are met, any claim that was, or could have been,
adjudicated in the prior action is barred from future litigation. Id. Appellants
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concede the first three elements are met; however, they contend the cause of action
presented in this case is different from that in the collection suits.
Alabama uses the “substantial evidence” test to determine whether two
causes of action are the same for res judicata purposes. Id. at 637. Under this test,
res judicata applies when the same evidence substantially supports both actions.
Id. As the Supreme Court of Alabama has explained:
[i]t is well-settled that the principal test for comparing causes of
action for the application of res judicata is whether the primary right
and duty or wrong are the same in each action. Res judicata applies
not only to the exact legal theories advanced in the prior case, but to
all legal theories and claims arising out of the same nucleus of
operative facts.
Old Republic Ins. Co. v. Lanier, 790 So. 2d 922, 928 (Ala. 2000) (quotations and
citations omitted).
In Reed v. Brookwood Med. Ctr., 641 So. 2d 1245 (Ala. 1994), the Supreme
Court of Alabama applied these principles to a case very similar to this one. After
an emergency room patient failed to pay his bill, the hospital filed a collection suit
and obtained a judgment in its favor. Id. at 1246. The patient then brought an
action against the hospital for fraud, breach of contract, outrage, and defamation,
alleging the hospital had wrongfully sued him to collect its bill. Id. The court
held res judicata barred the subsequent action, reasoning “the manner in which the
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claim is labeled in the complaint does not necessarily determine the nature of the
claim.” Id. at 1247. Applying the substantial evidence test, the court found the
two causes of action were the same because “[e]vidence as to whether Reed was
liable on [his] debt is also necessary to prove or disprove Reed’s present claims of
breach of contract, fraud, outrage, and defamation.” Id.
Like the plaintiff in Reed, Appellants attempt to avoid the res judicata effect
of the Alabama judgments by re-labeling their claims. They argue their current
claims are based on broad issues regarding BHS’s tax-exempt status and thus do
not involve the same subject matter or evidence as the prior collection suits, which
were confined to the narrow issue of their medical bills. This argument, however,
is unavailing for the reasons set out in Reed. What is at issue in this case is
whether Appellants were denied charity (i.e., free or discounted) health care.
Thus, the two lawsuits involve the same nucleus of operative fact—Appellants
received emergency medical care at BHS and were charged what they believed to
be unreasonable rates. Their current claims are merely different legal theories
through which to challenge the reasonableness of the charges.
As such, the same evidence substantially supports both suits. In the
collection suits, BHS needed to show Appellants owed the full amount of their
bills, which necessarily required the court to determine the reasonableness of the
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charges.3 In this suit, Appellants would need to show the charges were
unreasonable. Because the same evidence substantially supports both suits, all
four elements of res judicata are established under Alabama law, and Appellants
are precluded from litigating their current claims.
B. EMTALA
Appellants also seek recovery under EMTALA, arguing BHS violated the
statute by conditioning emergency medical treatment on their ability to pay. The
district court dismissed this claim for three reasons: (1) Appellants failed to allege
an EMTALA violation; (2) their claim for “economic and other damages” did not
allege compensable injuries under EMTALA; and (3) their claim was time-barred
by EMTALA’s statute of limitations. Because we conclude their claim is time-
barred, we need not address the alternate reasons discussed by the district court.
Under EMTALA, participating hospitals must screen any individual who
comes to its emergency room seeking treatment in order to determine whether the
individual has an emergency medical condition. § 1395dd(a). If such a condition
exists, the hospital must then provide stabilizing treatment before discharging or
transferring the patient. § 1395dd(b). An EMTALA violation thus arises when a
3
In fact, the reasonableness of the charges was established in the collection suits by an
unrebutted affidavit of BHS’s Legal Coordinator. It states, “the claim . . . is just, true, and
correct and . . . all just and lawful offsets, payments, and credits have been allowed.”
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hospital either fails to adequately screen a patient, or discharges or transfers the
patient without first stabilizing his emergency medical condition. Harry v.
Marchant, 291 F.3d 767, 770 (11th Cir. 2002) (en banc). EMTALA also prohibits
hospitals from delaying medical screening or treatment in order to inquire about an
individual’s method of payment or insurance status. § 1395dd(h). However,
“reasonable registration processes,” including asking about an individual’s
insurance status, are allowed if they do not delay screening or treatment. 42
C.F.R. § 489.24(d)(4).
Under § 1395dd(d)(2)(C), a civil action under EMTALA must be brought
within two years of the date of the alleged violation. Appellants’ claim is
therefore time-barred because, as Appellants concede, they all received emergency
care at BHS more than two years before filing their complaint. They resist this
result, arguing BHS committed ongoing EMTALA violations by engaging in
wrongful collection practices, which should toll the statute of limitations.
Congress enacted EMTALA, however, to remedy the narrow problem of
emergency rooms turning away indigent patients. Harry, 291 F.3d at 770. There
is simply no indication Congress intended EMTALA to address hospitals’ bill
collection practices as well. We therefore affirm the district court’s dismissal of
Appellants’ EMTALA claim because it is time-barred.
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IV. CONCLUSION
The district court did not err in holding the majority of Appellants’ claims
were barred by res judicata. Nor did the district court err in dismissing
Appellants’ EMTALA claim. We accordingly affirm the district court’s decision.
AFFIRMED.
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