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Saturday, May 02, 2020

New SCOTN Case: Court Holds That Tennessee Consumer Protection Act Applies to Health Care Providers Acting in Business Capacities

Yesterday, the Tennessee Supreme Court released its opinion in Franks v. Sykes, No. W2018-00654-SC-R11-CV (Tenn. May 1, 2020).  The syllabus from the opinion reads:
A person who is injured because of an unfair or deceptive act or practice that affects the conduct of any trade or commerce has a cause of action under the Tennessee Consumer Protection Act of 1977 (“the Act”), Tennessee Code Annotated sections 47- 18-101 to -132 (2013 & Supp. 2019). We granted review to determine whether the Act applies to the business aspects of a health care provider’s practice. The plaintiffs were injured in car accidents and received hospital medical services. The hospitals did not bill the plaintiffs’ health insurance companies but filed hospital liens against the plaintiffs’ claims for damages arising from the accidents. The hospital liens were for the full amount of the hospital bills with no reduction for the plaintiffs’ health insurance benefits. The plaintiffs sued the hospitals, asserting the filing of undiscounted hospital liens was an unlawful practice under the Act. The trial court dismissed the case, ruling that the plaintiffs had failed to state a cause of action. The Court of Appeals affirmed, holding that the Act did not apply to a claim in which the underlying transactions involved medical treatment. We hold that the Act applies to health care providers when they are acting in their business capacities. The plaintiffs, who were consumers of medical services, may state a claim under the Act against the hospitals for conduct arising out of the hospitals’ business practices. We reverse and remand this case to the trial court for further proceedings. 
Here is a link to the unanimous slip opinion:

NOTE: This is a must-read opinion for any attorney who handles personal injury cases affected by Tennessee substantive law.  Two quick takeaways: first, the Court did not decided "whether the section of the [Tennessee Consumer Protection] Act [("TCPA")] relied on by Franks and Edwards encompasses conduct under the Hospital Lien Act and whether the liens filed by the Hospitals were false or deceptive under the Act," Franks, slip op. at 9, that remains to be decided by the trial court upon remand; and, second, look for the Tennessee Hospital Association to seek to get the TCPA amended so that it does not apply to hospitals in this context (which should not happen because that would be unfair to the citizens of Tennessee).

Further, to use a Southern idiom, this is a classic example of the old saying that pigs get fat and hogs get slaughtered.  The hospitals got greedy here and turned into hogs.  

Lastly, this post is related to a prior blog post from February 18, 2019, to wit:

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