Court rules to disqualify law firm as counsel in Horizon Healthcare payment claims case

By Kasey Schefflin-Emrich | Jan 9, 2019

MIAMI — The U.S. District Court for the Southern District of Florida has granted a motion to disqualify a law firm from representing plaintiffs in a case involving alleged wrongful denial of payment claims.

The court based its Dec. 27 ruling on Rule 1-4.7 (a), which states “a lawyer must not represent a client if: (1) the representation of 1 client will be directly adverse to another client; or (2) there is a substantial risk that the representation of 1 or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.”

The court document states BioMatrix Speciality Pharmacy filed a complaint against Horizon Healthcare Services, alleging they wrongfully denied payment of hemophilia medications and services claims. BioMatrix obtained DLA Piper to represent them.

According to the document, Horizon said DLA Piper should be disqualified from serving as BioMatrix’s counsel because Horizon had a long-standing and existing attorney-client relationship with DLA Piper. Additionally, many of the cases where DLA Piper represented Horizon involved issues substantially related to those in this present case. In the document, Horizon notes a phone call that took place in December 2017 between a Horizon in-house lawyer and a DLA Piper partner in which they discussed the unpaid claims that BioMatrix is seeking payment for in this lawsuit. DLA Piper and Horizon ended their relationship in May 2018 and two months later DLA Piper filed the present complaint against Horizon.

“Horizon argues that the telephone call between the DLA Piper partner and Horizon’s in-house lawyer violated Rule 4-1.7(a), R. Regulation Fla. Bar, which prohibits a lawyer or law firm from representing a client if ‘the representation of one client will be directly adverse to another client,’” the document states. “Additionally, Horizon argues that even if DLA Piper were found to have properly terminated its attorney-client relationship with Horizon before filing the instant lawsuit, its representation of the BioMatrix Plaintiffs in this case violates Rule 4- 1.9(a), R. Regulating Fla. Bar, which prohibits a lawyer or law firm from representing ‘another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent.’”

In the court document, DLA Piper said the telephone call was a “‘professional courtesy’ that did not rise to the level of legal representation on behalf of BioMatrix and denies that any confidential information was exchanged during the call.”

DLA Piper claimed that when it represented Horizon it didn’t represent BioMatrix on matters that would be adverse to Horizon, and also that the issues in the present lawsuit aren’t “substantially related” to those in cases where it represented Horizon.

“Horizon had denied BioMatrix’s claims because it did not find the plan’s sponsor to be a legitimate ‘small employer,’ but rather a fraudulent entity created by the BioMatrix Plaintiffs to ’funnel windfall profits’ to them,” the document states. “DLA Piper argues that none of the prior cases it handled for Horizon involved the same employer group or any dispute about the validity of a small employer group. Furthermore, DLA Piper argues that nothing in the present case would involve DLA Piper ‘attacking [any] work that the [firm] performed for the former client,’—here, Horizon—and, thus, the ‘substantially related’ standard is not breached.”

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