In an important decision for membership organizations seeking to challenge unfair business practices under California’s Unfair Competition Law (“UCL”), on July 17, 2023, the California Supreme Court ruled in favor of the California Medical Association (“CMA”), finding that its diversion of resources sufficed to provide standing to challenge a health insurer’s business practices.
Specifically, the Court found that the significant amount of time that CMA had expended defending the rights of physicians to refer patients to out of network ambulatory surgical centers when in their professional medical judgment it was in patients’ interest to do so, gave the CMA standing to challenge Aetna’s practice of terminating or threatening to terminate physicians who made such referrals. The Court held:
We hold that the UCL’s standing requirements are satisfied when an organization, in furtherance of a bona fide, preexisting mission, incurs costs to respond to perceived unfair competition that threatens that mission, so long as those expenditures are independent of costs incurred in UCL litigation or preparations for such litigation. When an organization has incurred such expenditures, it has ‘suffered injury in fact’ and ‘lost money or property as a result of the unfair competition.’ (§ 17204.) . . . . For these reasons, the trial court erred in granting summary judgment for the defense. We therefore reverse the judgment of the Court of Appeal, which affirmed the grant of summary judgment.
The Supreme Court’s opinion is linked here.
Whatley Kallas, LLP has been representing the CMA for years fighting Aetna’s practice.