July 13, 2021
California Medical Association (CMA) has filed a petition requesting review of an appellate court opinion in an important case that raises a significant and recurring issue of statewide importance regarding the right of organizations to enforce the state’s unfair competition law to protect themselves and the public from unlawful, unfair, and fraudulent business practices.
The American Medical Association, the California Society of Anesthesiologists, La Cooperativa Campesina de California, La Casa del Diabetico Gualan, and California Rural Legal Assistance Foundation also recently submitted an amicus curiae letter in in support of CMA’s petition for review.
In July 2012, CMA, along with the Los Angeles County Medical Association (LACMA) and a coalition of other health care organizations and providers filed a lawsuit against Aetna to protect patients’ rights to quality health care and to prevent insurers from interfering with patient choice. The lawsuit alleges a systematic practice by Aetna of harassing and terminating contracted physicians from the Aetna network when they refer patients to out-of-network ambulatory surgery centers.
In April 2019, after nearly seven years of protracted litigation, all plaintiffs except CMA agreed to dismiss their claims and Aetna agreed to abandon its counterclaims, so that the lawsuit could be streamlined for CMA to proceed as the sole plaintiff. In November 2019, however, the Los Angeles Superior Court ruled that CMA did not have legal standing to pursue its claims against Aetna on behalf of itself and its physician members.
The court appears to have erroneously concluded that CMA’s expenditures of its own resources didn’t count as injury to the organization because the CMA “was founded to advocate on behalf of its physician members” and the CMA staff time spent fighting these abuses “was typical of the support CMA provides its members in furtherance of CMA’s mission.” That conclusion is erroneous.
California’s Unfair Competition Law (UCL), confers standing on any person or organization that “has suffered injury in fact and has lost money or property as a result of the unfair competition.”
Aetna’s practices at issue in this case both harmed CMA and its members and frustrated the other more expansive purposes of the organization, as CMA was forced to expend resources and money in order to protect its members from Aetna's unfair practices. That is all that is required to establish standing under the UCL.
If the appellate court’s decision is allowed to stand, it would effectively preclude any membership organization from ever seeking relief under the UCL and undercut a central plank of private enforcement of one of the state’s most important consumer-protection laws.