Crowder signs preliminary approval order in PPO class action

Amelia Flood Jun. 3, 2009, 10:00am

The settlement of a class action suit against a Preferred Provider Organization (PPO) that began in 2005 has gotten the initial green light from Madison County Circuit Judge Barbara Crowder.

Crowder signed a preliminary approval order in the case Wednesday. A "fairness hearing" is set for Sept. 3.

The suit, brought by chiropractor Frank Bemis as class representative, alleges that the PPO network owned by The Cincinnati Insurance Company and Cincinnati Casualty Company, wrongfully discounted medical bills, the company took PPO deductions it was not legally entitled to and failed to channel patients to participating physicians.

Bemis's original complaint alleged the company was guilty of consumer fraud, unjust enrichment and civil conspiracy theories of relief.

The suit had been removed to federal court after Cincinnati argued that an amended complaint added new claims such as breach of contract. The amended complaint modified the class definition and added common law theories of relief.

Cincinnati argued that the suit fell under the federal court's jurisdiction because its nature and size qualified under the Class Action Fairness Act (CAFA).

The U.S. District Court for the Southern District of Illinois ruled in 2006 that Cincinnati failed to prove its case under CAFA and sent the case back to Madison County.

According to the preliminary approval order of June 3, class members will have until Aug. 4 to opt out of the suit.

Bemis is represented by the LakinChapman firm. LakinChapman has been designated lead counsel for the case.

Cincinnati is represented by Steven Schwartz of Brown and James P.C. according to court records.

The case is Madison case number 05-L-178.

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