Texas Supreme Court rules ExxonMobil is entitled to information about medical payments

Healthcare providers who have treated patients injured by fire and explosion at an ExxonMobil chemical plant near Houston must disclose information about what they billed others for the same services, the Supreme Court has ruled from Texas.

In an unsigned notice published on Friday, the high court overturned the decisions of the 14th District Court of First Instance and Court of Appeal. The lower courts had found that ExxonMobil’s discovery request imposed an undue burden on medical providers who provided services in exchange for a promise – called a letter of protection – that they would be paid out of the proceeds of any lawsuit.

“The denied discovery was necessary to develop a defense that goes to the heart of the ExxonMobil case, namely that supplier prices were unreasonable,” the opinion says.

The Supreme Court issued a similar ruling in May in another case, titled In re K&L Auto Crushers. The court overturned decisions by the Dallas trial court and Court of Appeals that blocked a discovery claim by a defendant in a personal injury lawsuit.

The ExxonMobil case went to the Supreme Court after an explosion in July 2019 at the company’s Baytown, Texas olefin plant that injured 66 people, local media reported. Nearly 60 lawsuits have been filed by employees of contractors who worked at the plant, claiming more than $ 1 billion in damages, according to court documents.

ExxonMobil sent subpoenas to medical providers who treated the plaintiffs, but District Court Judge Daryl Moore in Houston denied the company’s request to enforce them. A divided panel with the 14th Houston Court of Appeals upheld the trial court’s decision.

ExxonMobil appealed to the Supreme Court.

The United States Chamber of Commerce and tort reform groups have filed an amicus brief claiming that while the defendants in the lawsuits are not allowed to investigate whether the medical bills are reasonable, the plaintiffs’ lawyers will be able to inflate the amounts recovered. The risk of exaggerated damages is even worse when punitive damages are awarded because they cost the defendant twice the amount of the actual damages.

House attorneys have said that medical providers who have signed letters of protection generally ask for the “chargemaster” rate, which is not what they are actually paid by other patients or their insurers, but serves simply a reference for negotiations.

“In the absence of evidence, obtained through the discovery, of the actual costs of the suppliers for the types of services concerned, the jurors are misled into believing that the prices of the leaders reflect the actual losses of the plaintiffs” , the brief said. “This results in higher verdicts than would otherwise be appropriate, resulting in a windfall for plaintiffs and their lawyers. “

The Texas Civil Justice League made similar arguments in a separate amicus brief. “By denying the relevant discovery, this trial judge put a very heavy finger on the scales of justice in this case and exposed a civil defendant to potential liability for excessive damages not actually suffered by the plaintiffs,” said the memory.

Complainants in the ExxonMobil case argued that the company’s discovery request sought irrelevant information, was too onerous, and would require disclosure of trade secrets and confidential information.

The Supreme Court, however, said ExxonMobil scaled back its discovery request after the 14th District Court of Appeals ruled that a request for discovery of information about a healthcare provider in a separate case was too much. large. ExxonMobil dropped eight of 18 deposition requests and 14 of 26 document requests in order to comply with the appeals court ruling, the Supreme Court said.

The notice says the trial court abused its discretion by not granting ExxonMobil’s request to execute its more carefully tailored request for documents. The court ruled that the decision left ExxonMobil with no adequate recourse on appeal.

“Although the vendors are not parties to this action – a fact relevant to determining whether discovery requests present an undue burden, our rules expressly allow the discovery of relevant information from third parties,” the notice said. “And here, the letters of protection under which the providers have obtained a financial interest in resolving these claims compensate for the non-party status of the providers when balancing the loads and the benefits of discovery.”

About the photo: Flames and smoke rise after a fire broke out at an Exxon Mobil facility on Wednesday, July 31, 2019, in Baytown, Texas (Jon Shapley / Houston Chronicle via AP )

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