The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION .
PAUL REED CIVIL ACTION NO. 6:20-CV-01354
VERSUS JUDGE SUMMERHAYS
UNITED STATES OF AMERICA MAGISTRATE JUDGE AYO
RULING AND ORDER
Defendant, the United State of America (“Defendant” or “the Government”), has filed a
motion in limine seeking an order “excluding evidence regarding amounts billed by medical
providers over and above amounts the medical providers accepted as payment in full from third
party medical funding companies.”! Alternatively, the Government seeks a ruling that “evidence
of the involvement of third-party funding companies must be admitted as it is relevant to issues of
causation, bias and credibility.”* The Government’s motion is DENIED IN PART and GRANTED
IN PART. The motion is DENIED to the extent it seeks to exclude evidence of the total amounts
paid by the third-party funder, and GRANTED to the extent it seeks admission of evidence of the
involvement of a third-party funding company that is otherwise relevant and properly founded.
I. Arguments.
The Government asserts (and Plaintiff concedes*) that HMR Funding, LLC (“HMR
Funding”)—a third-party litigation funding company—paid the providers for certain medical
services provided to Plaintiff prior to litigation, but negotiated to pay discounted amounts of those
Rec. Doc. 30 at 1.
3 “Plaintiff sustained injuries in the subject accident that necessitated interventional pain management and surgical
treatment. The medical providers required advance payment that Mr. Reed could not afford. To move beyond the
impasse, an agreement was made between [Plaintiff and certain of his medical providers] for HMR Funding [a third-
party litigation funding company] to purchase the medical providers[‘] accounts receivable at a discount, whereby
HMR Funding would bill the plaintiff for the entire amount owed, regardless of whether [P]laintiff prevails on his
auto accident claim.” Rec. Doc. 39 at 6.
charged by the providers. The Government argues that, under an exception to the collateral source
doctrine, Plaintiff should only be allowed to claim as damages the discounted amounts actually
paid by HMR Funding, not the amounts charged by providers. Alternatively, the Government
argues that evidence of HMR Funding’s involvement is admissible because that involvement is
relevant to the providers’ bias and credibility. Specifically, the agreements with HMR Funding
allegedly require the providers to represent that the medical services and treatments provided to
Plaintiff “related to injuries sustained in the accidents or other occurrences which are the basis of
claims or litigation.”
Plaintiff argues that, regardless of any discount HMR Funding received, the terms of his
agreements with his providers make him liable for the entire amount charged. Accordingly,
Plaintiff contends that his patrimony has been reduced by the entire amount charged, and the
collateral source doctrine allows him to claim the entire charged amount for treatment.
Additionally, Plaintiff argues that the Government waived its right to offer any evidence to
impeach the providers’ credibility by not doing so at their trial depositions.
IL. Applicability Of The Collateral Source Rule
Under Louisiana's collateral source rule, “payments made to or benefits conferred upon an
injured party from sources other than the tortfeasor, notwithstanding that such payments or benefits
cover all or a part of the harm for which the tortfeasor is liable, are not credited against the
tortfeasor's liability.”> As the Louisiana Supreme Court has articulated this doctrine, “a tortfeasor
may not benefit, and an injured plaintiff's tort recovery may not be reduced, because of monies
received by the plaintiff from sources independent of the tortfeasor's procuration or contribution.”
4 Rec. Doc. 30-3 at 1.
3 Kadlec Med. Ctr. v. Lakeview Anesthesia Assocs., 527 F.3d 412, 425 (Sth Cir. 2008).
§ George v. Progressive Waste Sols. of La, Inc., 2022-01068 (La. 12/9/22), 355 So. 3d 583, 589 (quoting Bozeman y.
State of La., DOTD, 03-1016, p. 9 (La. 7/2/04), 879 So.2d 692, 698).
Generally speaking, this doctrine applies to prevent reduction of a tort plaintiff's recovery if he
has incurred some diminution of his patrimony in order to secure the collateral payments, for
example, discounted fees for medical services necessitated by the injury for which suit is brought.
The collateral source rule is subject to exceptions based on the way in which the reduction in fees
was obtained. It does not apply, for example, if the discount was obtained through Medicaid,’ or
when the discount was negotiated with the provider by the plaintiff’s attorney.®
Courts considering issues similar to the instant dispute have determined, however, that the
collateral source rule does apply in situations like the one presently before the Court. The most
persuasive of these decisions is that of the Louisiana Supreme Court in George v. Progressive
Waste Sols. of La, Inc.’ There, the plaintiff’s medical provider assigned its right to recover the
charges billed to the plaintiff to a third-party litigation funding organization in exchange for a
payment totaling fifty percent of the total charges billed. The plaintiff’s attorney later executed a
guaranty in favor of the litigation funder for the total amount the provider charged to the plaintiff. □□
Neither agreement released the plaintiff from responsibility for the entire amount charged by the
provider. The Louisiana Supreme Court held that “[iJn the absence of any evidence that plaintiff
is not liable for the full billed medical charges in this matter, defendant cannot benefit from any
reduction as a result” of an agreement between a plaintiff’s medical provider and a third-party
litigation funding organization.!!
Ochoa y. Aldrete'? also involved HMR Funding paying a discounted rate for medical
services provided to a plaintiff. There, the Louisiana Fifth Circuit held that the plaintiff was
7 Bozeman 879 So. 2d at 705.
8 Hoffman v. 21st Century N. Am. Ins. Co., 2014-2279 (La. 10/2/15), 209 So. 3d 702, 707.
? 2022-01068 (La. 12/9/22), 355 So. 3d 583.
10 Id. at 586.
1! George, 355 So. 3d at 590.
12 21.632 (La. App. 5 Cir. 12/8/21), 335 So. 3d 957.
allowed to offer evidence of the entire amounts charged by the providers because the defendants
failed to prove he was not liable for the total amounts under the relevant agreerments.'? Because
the plaintiff remained responsible for the total amounts, he “[had] not actually received a benefit
from the discount negotiated between the third-party funding company and the healthcare
providers.”!*
Other federal district courts in Louisiana have reached the same conclusion. In Robert v.
Maurice, for example, which involved facts and arguments substantially similar to those here,
the Eastern District of Louisiana concluded that “[i]f Defendants seek to limit the amount of
Plaintiff's recovery, they will have to prove that Plaintiff is not liable for the full amount of the
medical bills.”!° The Middle District of Louisiana followed similar reasoning and came to the
same conclusion in Whitley v. Pinnacle Ent., Inc. of Delaware.”
The same result must obtain here. The Government has offered no evidence that Plaintiff
has been released from responsibility for paying the entire, non-discounted amounts charged by □
his providers, so evidence of that amount is admissible to prove damages. Plaintiff executed
agreements in favor of his medical providers, assigning them his right to recover any amount he
receives arising from the subject collision up to the total amounts they have charged him.'* Those
agreements expressly provide that Plaintiff remains liable to the providers for the total,
undiscounted invoice amounts.!” The Government points to two purchase agreements executed
between Plaintiffs providers and an affiliate of HMR Funding, both of which assign to HMR
13 Td. at 967.
14 Id.
5 No. CV 18-11632, 2020 WL 9074826 (E.D. La. Sept. 30, 2020).
16 Robert, 2020 WL 9074826 at *7. See also Thomas v. Chambers, No. CV 18-4373, 2019 WL 8888169, at *2 (E.D.
La. Apr. 26, 2019); Collins v. Benton, No. CV 18-7465, 2021 WL 638116, at *4 (E.D. La. Feb. 17, 2021).
1TNo. CV 15-00595-BAJ-RLB, 2017 WL 1051188 (M.D. La. Mar. 20, 2017).
18 Rec. Docs. 30-2 at 1; 39-1 at 1, 4, 8, 12, 15, 19, 23, 26.
19 Td.
Funding the right to recover the full amount charged to Plaintiff.” Neither party identifies the
original agreement between any provider and HMR Funding, which is referred to in the purchase
orders.”! However, nothing in the record indicates Plaintiff owes less than the full amounts charged
by his providers. In sum, Plaintiff is entitled to offer evidence of those total amounts charged by
his providers.
The Government cites Bowling v. Brown,” and Williams v. IOS Ins. Risk Retention,? in
support of its motion, but each case is distinguishable. Bowling concerned a motion to compel
documents from the third-party medical funder, rather than a motion in limine. While the court
concluded the documents sought were relevant to whether the collateral source rule applied, it was
because certain previously produced documents suggested a relationship between the funder and
the plaintiff's counsel, which may have implicated the collateral source exception under □
Hoffman.*
In Williams, the court drew attention to the central facts that “Plaintiffs themselves were
not parties to any of these [funding] agreements, and...no suggestion has been made that Plaintiffs
themselves agreed to be responsible to anyone for any medical bills or for the Difference [between
the charged and discounted amounts] should their recovery at trial fall short.””° The agreements
here show the opposite—Plaintiff’s assignments to his providers specifically provide that he would
remain responsible to pay the full amounts charged by the providers, no matter the outcome of
litigation.”°
20 Rec. Does. 30-3, 30-4.
21 Td.
22 No. 20-CV-504, 2021 WL 3666848 (W.D. La. Aug. 18, 2021).
23 No. CV 18-2472, 2019 WL 937848 (E.D. La. Feb. 26, 2019).
4 Bowling, 2021 WL 3666848 at *3.
25 Williams, 2019 WL 937848 at *3.
26 See note 18, supra.
Accordingly, the Government’s motion in limine is DENIED to the extent it seeks to
exclude evidence of the total amounts charged to Plaintiff by his medical providers to prove his
damages.
IW. Admissibility For Impeachment
The Government alternatively argues that, if Plaintiff is permitted to offer evidence of the
full charges by his providers, evidence of involvement by third-party medical funders should also
be admissible as relevant to issues of bias and credibility.?” Plaintiff asserts without authority that
the Government has waived its right to offer evidence to impeach his providers because the
relevant providers will only testify by deposition.”®
Under Federal Rule of Evidence 401, evidence is relevant if it “has any tendency to make
a fact more or less probable than it would be without the evidence,” and that fact is “of consequence
in determining the action.” Other courts that evidence of third-party funding arrangements is
potentially relevant to issues of causation, bias, and/or credibility.” Here, the Government will
have to lay the proper foundation showing that this evidence is relevant to causation, bias, and/or
credibility.
Accordingly, the Government’s motion is GRANTED to the extent the Government will
be allowed to offer evidence at trial of the existence of the financial arrangements between
Plaintiff’s providers and third-party funders, provided they are otherwise admissible and relevant.
27 Rec. Doc. 30-1 at 8.
78 Rec. Doc. 39 at 7.
29 See, e.g., Bowling, 2021 WL 3666848 at *3; Robert, 2020 WL 9074826 at *8; Thomas, 2019 WL 8888169 at *4;
Collins, 2021 WL 638116 at *8; McClain v. Sysco New Orleans, No. CV 19-1801, 2020. WL 11028497, at *12 (E.D.
La. July 17, 2020).
IV. Medicaid
Plaintiff devotes a significant part of his opposition to arguing that the amount that
Medicaid might have paid—or would pay in another instance—for Plaintiff’s treatments should
not be taken to be the reasonable allowable medical damages.*? The Government’s motion does
not, however, request a ruling on this issue.
V. Conclusion
Considering the above,
IT IS HEREBY ORDERED the Government’s Motion in Limine Regarding Third Party
Medical Funding [Rec. Doc. 30] is GRANTED IN PART and DENIED IN PART. The motion is _.
GRANTED to the extent the Government may offer evidence regarding the existence of
agreements between Plaintiff's medical providers and third-party funding organizations, if
otherwise admissible and relevant. The motion is DENIED to the extent Plaintiff may offer
evidence regarding the total amounts charged for medical treatments for which he remains
responsible.
THUS DONE AND SIGNED this (Pray of September, 2023 in Lafayette, LA.
HKG
LAH
ON. ROBERT R. SUMMER _/
UNITED STATES DISTRICT JUB
3° Rec. Doc. 39 at 7-13.