Ibsen v. Caring for Montanans, Inc.

Ibsen v. Caring for Montanans, Inc., 2016 MT 111 (May 11, 2016) (Cotter, J.) (6-0, aff’d)

Issue: (1) Whether the district court erred in holding that the UTPA does not create a private right of action, and (2) whether the district court erred in holding that Ibsen’s claims could not be maintained as common law claims.

Short Answer: (1) No, and (2) no.


Facts: Ibsen owns and operates the Urgent Care Plus clinic in Helena. He bought health insurance for clinic employees from Blue Cross and Blue Shield of Montana (BCBSMT) through a Chamber of Commerce program, “Chamber Choices.” In July 2013, Health Care Service Corporation bought BCBSMT’s health insurance business and BCBSMT changed its name to Caring for Montanans, Inc.

Based on its review of BCBSMT’s business practices between 2006-2010, the Montana state auditor fined BCBSMT/Caring $250,000 in February 2014 for numerous discrepancies, including improper medical premium billing in violation of the UTPA. Caring did not challenge or appeal the fine.

In April 2014, Ibsen filed a complaint and class action against Caring and Health Care, alleging violations of the Unfair Trade Practices Act on the basis of charging Ibsen and similarly situated employers excessive premiums, and using the excess money to pay kickbacks to the Chamber. In addition to its class allegations, the complaint also alleged breach of fiduciary duty, UTPA violations, breach of contract, and unjust enrichment.

Procedural Posture & Holding: Holding that the UTPA does not provide a private right of action beyond that provided by § 33-18-242, MCA, regarding claims handling or settlement practices, the district court granted Health Care’s motion to dismiss and Caring’s motion for summary judgment. Ibsen appeals, and the Supreme Court affirms.

Reasoning: (1) After reviewing the history of the UTPA, the Court concludes the legislature intended to limit the expansion of private causes of action after Klaudt. Section 242 is the only provision that affords a private right of action, and does so only for insureds and third-party claimants. Ibsen is neither. “A party may always allege and recover damages in a common law cause of action upon proof of a common law claim, but a party is not entitled to obtain private enforcement of a regulatory statute that is not intended by the legislature to be enforceable by private parties.” ¶ 41.

(2) Each count in Ibsen’s complaint relies upon incorporation of the Montana Insurance Code. These are not purely common-law claims, and are not permitted under the UTPA.