Fifth Circuit Affirms Dismissals of Provider No Surprises Act Suits

On June 12, 2025, the U.S. Court of Appeals for the Fifth Circuit held, in a pair of No Surprises Act (NSA) cases brought by air ambulance providers against major insurers, that the NSA does not create a general private right of action to enforce or vacate awards determined by the NSA independent dispute resolution (IDR) process. The same panel affirmed dismissal of providers' claims in Guardian Flight, LLC v. Health Care Services Corp., No. 24-10561 (Guardian Flight I) and Guardian Flight v. Medical Evaluators of Texas ASO LLC, No. 24-20051 (Guardian Flight II). In addition to finding that the NSA does not contain a private right of action, the court held that the providers in Guardian Flight I did not have standing to enforce payment on IDR awards under ERISA, nor could they state a claim for unjust enrichment under Texas law. In Guardian Flight II, the court additionally held that the providers had not met the heightened pleading standard for fraud in order to state a claim under an NSA provision providing for judicial vacatur of IDR awards obtained by "corruption, fraud, or undue means," and that the providers could not sue the certified IDR entity (CIDRE), because CIDREs are immune from suit under "arbitral immunity." The Guardian Flight cases presage a oncoming circuit split on the availability of judicial review of IDR awards, given the contrary district court precedent in other circuits.

Guardian Flight I involves allegations by two air ambulance companies against insurer Health Care Services Corporation (HCSC) for lack of timely payment of IDR awards. The facts of this case parallel that of an ongoing suit in the District of Connecticut against other large insurers for non-payment or late payment of IDR awards (Guardian Flight LLC v. Aetna Life Insurance Co. Inc.). In both cases, the air ambulance providers brought causes of action under the NSA, ERISA, and state law. In Guardian Flight I, unlike in Aetna, the district court and the Fifth Circuit on appeal dismissed all the providers' claims. 

First, the Fifth Circuit found that the NSA does not create a private right of action to enforce IDR awards. Instead, the NSA empowers the Department of Health and Human Services (HHS) to enforce compliance with the IDR process. According to the court, "The NSA expressly bars judicial review of IDR awards except as to the specific provisions borrowed from the [Federal Arbitration Act (FAA)]," which provide for judicial vacatur of awards in limited circumstances that plaintiffs conceded were inapplicable. The court rejected the providers' argument that it sought to "enforce" the IDR awards, not "review" them, as a "distinction without a difference." It likewise dismissed the concern raised by the providers and the Department of Justice (DOJ) that lack of a private right of action would frustrate the purpose of the law, citing the NSA's administrative enforcement provisions: 

Congress may have judged it better to have an administrative enforcement mechanism handle most award disputes instead of throwing open the floodgates of litigation. Understandably, Providers would prefer a different mechanism for resolving provider-insurer disputes. But the wisdom of Congress's policy choice is beyond our judicial ken. 

The Fifth Circuit panel also dismissed the Guardian Flight I plaintiffs' ERISA and state law causes of action. Regarding ERISA, the court found that the providers lacked standing as the assignees of ERISA plan beneficiaries, because the beneficiaries, protected by the NSA from balance billing on the disputed claims, suffered no constitutionally sufficient injury. Similarly, the court dismissed the providers' unjust enrichment allegations for failure to state a claim, relying on Texas case law holding that a provider does not provide a benefit to an insurer by providing services to an insured patient.

The panel's opinion in Guardian Flight II incorporated its reasoning from Guardian Flight I, finding that the air ambulance providers' claims against insurers Aetna and Kaiser, seeking vacatur of certain IDR awards, could not go forward unless they met the standard for vacatur under the portion of the FAA that was incorporated into the NSA. In relevant part, the FAA allows a court to vacate an arbitral award "where the award was procured by corruption, fraud, or undue means." 9 U.S.C. § 10(a)(1). The providers argued that vacatur was warranted because the IDR awards in question were obtained via misrepresentation of the applicable qualifying payment amounts (QPA) that the NSA requires insurers to calculate and disclose to providers. The court found that the providers failed to meet the heightened pleading standard required for allegations of fraud, primarily because the plaintiffs did not plausibly allege that any misrepresentations, assuming their accuracy, were intentional: "Providers allege nothing to show that this was anything other than an inadvertent error, as opposed to an intentional scheme to mislead about its QPA." 

Finally, the court in Guardian Flight II overturned the district court's finding that CIDREs are not "arbitrators" and therefore are not immune from suit. The Fifth Circuit panel concluded that, no matter how the NSA refers to CIDREs, they "function more or less exactly like arbitrators" and therefore are covered by arbitral immunity.

Suits arising from dissatisfaction with the IDR process continue to percolate in the lower courts, so additional circuit decisions on these issues may happen in the coming months. The federal government recently issued technical assistance guidance for addressing errors made during the IDR process.

Supreme Court Declines to Decide Whether a Class Action Can Include Both Injured and Uninjured Class Members (for Now)

On June 5, 2025, the Supreme Court voted 8-1 to dismiss as improvidently granted the writ of certiorari issued in LabCorp v. Davis, No. 24-304, declining to decide the issue of whether a damages class bringing a class action under Federal Rule of Civil Procedure 23(b)(3) (Rule 23) can include both injured and uninjured class members.

In LabCorp, a class of legally blind plaintiffs brought suit against LabCorp, a diagnostic laboratory service, alleging that LabCorp's use of touchscreen kiosks for patients to check in for their appointments violated the Americans with Disabilities Act (ADA) and state law. In May 2022, the district court granted the plaintiffs' request to certify a damages class under Rule 23 to include all legally blind individuals who visited a LabCorp patient service center and who "were denied full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations due to LabCorp's failure to make its e-check-in kiosks accessible to legally blind individuals." Davis v. Lab'y Corp. of Am. Holdings, 604 F. Supp. 3d 913, 934 (C.D. Cal. 2022).

LabCorp promptly appealed the certification, arguing, inter alia, that the certification lacked commonality because it included both injured and uninjured class members. On appeal, the Ninth Circuit affirmed the district court's certification order, finding Rule 23 permits certification of a class even if the class potentially includes more than a de minimis number of uninjured class members. Davis v. Lab'y Corp. of Am. Holdings, No. 22-55873, 2024 U.S. App. LEXIS 2937, at *8 (9th Cir. Feb. 8, 2024). 

While the Supreme Court's order dismissing the case as improvidently granted did not include its reasoning, Justice Brett Kavanaugh, the lone dissenter from the dismissal, suggested that the Court did not "want to tackle the threshold mootness question that plaintiffs have raised" given that the district court had refined the class after LabCorp's appeal to the Ninth Circuit. Justice Kavanaugh addressed the merits, arguing that Rule 23 does not authorize the certification of a proposed class that includes injured and uninjured class members because it would defeat Rule 23's commonality requirement. He explained that this was clearly the case in LabCorp because certain class members did not have any injury. 

With this decision, one member of the Court has signaled an interest in clarifying the law in this area, which will be helpful to the ERISA bar that frequently faces Article III and class certification issues, including in cases seeking widespread reprocessing of health claims.

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