United States District Court, D. Utah, Central Division
EAGLE AIR MED CORPORATION, a Utah corporation; and VALLEY MED FLIGHT INC., a North Dakota corporation, Plaintiffs,
SENTINEL AIR MEDICAL ALLIANCE, LLC, a Wyoming limited liability company; JEFFREY FRAZIER, an individual; and DOES 1 through 10, Defendants.
ORDER AND MEMORANDUM DECISION
CAMPBELL U.S. DISTRICT COURT JUDGE
August 30, 2019, the court granted in part and denied in part
the motion for summary judgment brought by Defendants
Sentinel Air Medical Alliance, LLC, and Jeffrey Frazier
(“Sentinel”). Sentinel now asks the court to
reconsider part of that order. (ECF No. 441.) Additionally,
Plaintiffs Eagle Air Med Corporation and Valley Med Flight,
Inc. (“Eagle”) have asked the court to clarify a
portion of its summary judgment order. (ECF No. 438.) For the
reasons stated below, Sentinel's motion for
reconsideration is granted, and Eagle's motion for
clarification is denied.
discussed in more detail in the summary judgment order, Eagle
provides emergency air ambulance services, and Sentinel is a
consultant that provides recommendations to insurance
companies regarding how much they should pay Eagle for its
flights. Eagle Air Med Corp. v. Sentinel Air Med. All.,
LLC (“Eagle Air”), Case No.
16-cv-00176, 2019 WL 4140918 at *1 (D. Utah Aug. 30, 2019).
Eagle's defamation cause of action primarily challenged
statements Sentinel made in the letters it sent to the
insurance providers. In a typical letter, Sentinel identified
the amount Eagle billed, calculated an estimate of
Eagle's costs for that flight, and then compared those
costs to the amount Medicare would have paid for the flight,
the amount a competing provider would have charged for the
flight, and the amount Sentinel believed the insurer should
pay for the flight. So, for example, in one letter, Sentinel
made the following statements:
Billed charges for this transport amount to $29, 659. . . .
In this case, an accurate estimate of [Eagle's] costs
[is] $6, 400. . . .
Reimbursement provided under Medicare for this transport
would be $5, 368. . . .
Sentinel has a contracted provider that would have performed
this transport for $8, 700. . . .
[Eagle's billed] charges represent 552 percent of the
Medicare reimbursement rate, 340 percent of charges from a
competing provider, and 463 percent of the cost of providing
the service. . . .
A reasonable reimbursement for this transport would be $11,
900. This represents 221 percent of the Medicare
reimbursement rate and provides [Eagle] with an 86 percent
Id. at *1-2. Sentinel's letters also noted that
the transportations provided by Eagle were not medically
necessary, that Eagle's charges were
“egregious” or “among the most egregious in
the industry, ” and, in one instance, that Eagle was
possibly engaged in self-referrals. Id.
court held that Sentinel's calculation of Eagle's
estimated costs was not defamatory because it was
“materially accurate.” Id. at *7. It
also concluded that the medical necessity statements carried
no defamatory meaning and that identifying Eagle's
charges as “egregious” was non-actionable
opinion. Id. at *6, 9. Neither party challenges any
of these conclusions.
court also ruled that there were triable issues of fact
regarding whether Sentinel's self-referral statement and
profit margin calculations were defamatory. Id. at
*8-9. Sentinel now asks the court to reconsider that part of
in a footnote, the court indicated that its order had
addressed every defamatory statement at issue in the action,
and accordingly, that the profit margin and self-referral
statements were the only claims remaining for trial.
Id. at *4 n.1. Eagle maintains that two other
issues-whether Sentinel's cost calculations are
implicitly defamatory and whether Sentinel made false
comparisons to competing providers-should also be addressed
at trial. Eagle asserts that Sentinel was aware of these
statements but chose not to challenge them in its summary
judgment motion. Eagle asks the court to clarify that these
statements remain viable, notwithstanding the footnote in the
Appropriate Pleading Standard
the motion for reconsideration and the motion for
clarification turn, in part, on the sufficiency of
Eagle's pleadings. In its motion for reconsideration,
Sentinel contends that neither the profit margin calculations
nor the self-referral statement were included in the
operative First Amended Complaint (“FAC”). (ECF
No. 6.) Similarly, in its opposition to Eagle's motion
for clarification, Sentinel argues that Eagle never alleged a
defamation claim based on either the implications of
Sentinel's cost calculations or the contract provider
comparisons. Accordingly, Sentinel requests that Eagle be
barred from proceeding to trial on any of these issues.
parties agree that, under Utah law, defamation must be pled
specifically. Dennett v. Smith, 445 P.2d 983, 984
(Utah 1968) (“[T]he language complained of must be set
forth in words or words to that effect . . . . [T]he
defendant should not be required to resort to the ofttimes
expensive discovery process to drag from a litigant what he
really intends to do to his adversary.”). But they
dispute whether a complaint in federal court is required to
satisfy this same standard. Upon reviewing the cases
submitted by the parties, the court concludes that
generally-and certainly in this district-a heightened
pleading standard applies.
recent District of Utah case stated, “[t]his
specificity requirement is not only a Utah construct: federal
courts have consistently interpreted Fed.R.Civ.P. 8(a) as
requiring that defamation claims be pleaded with
particularity to provide a defendant with fair notice.”
Rowe v. DPI Specialty Foods, Inc., Case No.
2:13-cv-00708-DN-DJF, 2015 WL 13047675 at *4 (D. Utah Aug.
20, 2015) (citing Bushnell Corp. v. ITT Corp., 973
F.Supp. 1276, 1287 (D. Kan. 1997); McGeorge v. Cont'l
Airlines, Inc., 871 F.2d 952, 955 (10th Cir. 1989);
Nogle v. Sand Canyon Corp., Case No. 12-CV-23-S,
2012 WL 4857772 at *6 (D. Wy. Oct. 11, 2012); 5 Charles
Wright & Arthur Miller et al., Federal Practice and
Procedure §§ 1245, 1357 (3d ed.)).
cases from the District of Utah agree. For example, in
Boisjoly v. Morton Thiokol, Inc., 706 F.Supp. 795
(D. Utah 1988), the court explicitly applied Utah's
pleading standard to a complaint in federal court:
The Court holds that the conclusory allegations in paragraph
seventy-one do not meet the particularity requirements with
which a defamation claim must be alleged. Utah law requires
that a claim must identify the defamatory statement either by
its “words or words to that effect;” general
conclusory statements are inadequate. . . . Paragraph
seventy-one clearly fails to allege, in “words or words
to that effect, ” a single specific defamatory
statement by defendant MTI.
Id. at 799-800.
case, Celli v. Shoell, 995 F.Supp. 1337 (D. Utah
1998), did not go quite as far. It noted that “the
court applies federal pleading standards rather than looking
to . . . Utah law.” Id. at 1346. But it
nevertheless still agreed that some level of heightened
pleading was required even under the federal standards:
“In the case of a defamation claim, the allegations in
the complaint must afford the defendant sufficient notice of
the allegedly defamatory communications to allow him to
defend himself. . . . [F]ederal pleading standards generally
require the complaint to state the specific words of the
allegedly defamatory statement in order to allow the
defendant to frame a responsive pleading.” Id.
(citing Goldstein v. Kinney Shoe Corp., 931 F.Supp.
595, 597 (N.D. Ill. 1996)).
cases submitted by Sentinel reinforce this conclusion.
See, e.g., Pike v. City of Mission, Kan.,
731 F.2d 655, 661 (10th Cir. 1984) (a “broad conclusory
allegation” is insufficient to plead defamation if it
includes “insufficient facts concerning time, place,
actors, or conduct to enable defendants to respond”)
(rev'd on other grounds, Canfield v. Douglas
County, 619 Fed.Appx. 774 (10th Cir. 2015)); Phantom
Touring, Inc. v. Affiliated Publ'ns, 953 F.2d 724,
728 n.6 (1st Cir. 1992) (“In our view, a defendant is
entitled to knowledge of the precise language challenged as
defamatory, and the plaintiff therefore is limited to its
complaint in defining the scope of the alleged defamation. If
plaintiff wished to enlarge its case beyond the six articles
originally challenged, it should have sought to amend the
complaint.”); Royal Pac. Ltd. v. Faith
Elec. Mfr. Co., Ltd., 322 F.Supp.3d 1178, 1185
(D.N.M. 2018) (“Federal courts relying on a Rule 8
standard have held that some specificity about the allegedly
defamatory communication is required in order to give the
defendant adequate notice.”).
has identified no District of Utah or Tenth Circuit cases
that support a less stringent pleading standard. But during
oral argument, it did cite two federal cases from New York
for the proposition that such specific pleading is not
necessary. In one, the Second Circuit held that under the
federal pleading rules, “[t]he central concern is that
the complaint ‘afford defendant sufficient notice of
the communications complained of to enable him to defend
himself.'” Kelly v. Schmidberger, 806 F.2d
44, 46 (2d Cir. 1986) (quoting Liguori v. Alexander,
495 F.Supp. 641, 647 (S.D.N.Y. 1980)). Similarly, in
Griffin-Nolan v. Providence Washington Insurance
Co., No. 504CV1453FJSGJD, 2005 WL 1460424 (N.D.N.Y. June
20, 2005), the court ruled that “[s]ince federal law
governs the procedural issues in this case, . . . the
heightened pleading requirement of New York Civil Practice
Law and Rules § 3016(a) does not apply to this
action.” Id. at *12.
cases do not support departing from the standard articulated
in the District of Utah cases. After all, “sufficient
notice of the communications complained of to enable [a
defendant] to defend himself” implies a fair amount of
specificity. Kelly, 806 F.2d at 46. Moreover, the
complaint in the Griffin-Nolan action was actually
quite specific in identifying the alleged defamation.
See Complaint at ¶ 48, Griffin-Nolan v.
City of Syracuse, No. 04cv01453, 2004 WL 3513361 (Dec.
15, 2004). In holding that New York's state rules did not
apply, the Griffin-Nolan court was only responding
to the plaintiff's contention that defamation had to be
pled verbatim. It is unclear how vague a pleading could
be before the Griffin-Nolan court would require
more, as that issue was not before the court.
the hearing, Eagle submitted a notice of supplemental
authority listing three other federal cases that discuss the
application of federal pleading standards to defamation
cases.(ECF No. 468.) While these cases, in
varying degrees, reject strict state pleading requirements in
favor of more liberal federal pleading standards, none of
them endorse standards that are as broad as Eagle desires.
See, e.g., Rivera v. Allstate Ins. Co., 140
F.Supp.3d 722, 728 (N.D. Ill. 2015) (holding that although
the amended complaint “[did] not specifically
mention” certain documents, the defendant “cannot
plausibly contend that the amended complaint left [the
defendant] unaware of the basis for Plaintiffs'
defamation claim”); C&M Prop. Mgmt. v. Moark,
LLC, No. 2:15-cv-336-GZS, 2016 WL 1298098 at *3 (D. Me.
Mar. 31, 2016) (agreeing that discovery could be used to
“clarif[y] the factual allegations” of the
complaint, but only after noting that the complaint included
“specific allegations as to each element of the
defamation cause of action”); Muzikowski v.
Paramount Pictures Corp., 322 F.3d 918, 926 (7th Cir.
2003) (noting that a complaint was sufficient because it
“list[ed] in great detail” the alleged
reviewing these cases, the court is inclined to follow the
standards adopted by other District of Utah judges. The court
is persuaded that in the defamation context, the pleadings
should “identify the defamatory statement either by its
‘words or words to that effect.'”
Boisjoly, 706 F.Supp. at 800; see also
Rowe, 2015 WL 13047675 at *6 (“[E]vidence which
materially varies from the ‘words or words to that
effect' alleged in the Complaint will be
the court notes that its conclusions below regarding the
sufficiency of Eagle's pleadings would not change even if
it applied the more liberal standard implied by some of the
cases Eagle cites. In the court's view, two of the
statements challenged by Sentinel were sufficiently pled and
two were not properly pled, and this is true whether the
pleading standard is construed liberally or more narrowly.
Profit Margin Calculations
letters included calculations regarding the size of
Eagle's profit margins. For example, in the letter
excerpted above, Sentinel warned that “[Eagle's
billed] charges represent . . . 463 percent of the cost of
providing the service” and recommended that “[a]
reasonable reimbursement for this transport would be $11,