The U.S. Fifth Circuit Court of Appeals recently reversed a Texas district court’s denial of class certification in the case of Wilson v. Centene Management1. In the litigation, three Texans filed suit against Centene Management Company, Celtic Insurance Company, Superior HealthPlan, and Centene Company of Texas, (collectively referred to as “Superior”), alleging that the insurance companies’ provider lists were inaccurate, resulting in overpayment for access to healthcare.
Case Background
Plaintiffs Cynthia Wilson, Erin Angelo, and Nicholas Angelo filed suit on behalf of all Texans who purchased an “Ambetter from Superior HealthPlan” policy between January 1, 2014, through December 31, 2021. The plans were sold and managed through Texas’ Affordable Care Act (ACA) marketplace website, the Texas Health Insurance Exchange.
Plaintiffs allege Superior’s provider directories contained hundreds of providers who were unavailable to offer care. As a result, policyholders overpaid for access to their available health care professionals. Both Texas and federal law require network adequacy to be “sufficient in number and types of providers” 45 C.F.R. § 156.230(a)(1)(ii).
Cynthia Wilson, a breast cancer patient, purchased an Ambetter plan in January 2017 after reviewing its in-network provider list. Later that year, after developing shingles, she sought treatment from her Ambetter-assigned primary care physician, who turned out to be a pediatrician unable to treat her. After contacting nine other in-network physicians—all of whom Ambetter denied—Wilson ultimately had to seek out-of-network care and was never able to use her Ambetter policy.
Erin and Nicholas Angelo similarly purchased their policy in December 2016 after reviewing its provider list. At the time, Erin was pregnant with twins in a high-risk pregnancy that required care from a maternal fetal medicine specialist listed in Ambetter’s directory. Shortly after enrolling, she learned the specialist no longer accepted Ambetter insurance due to its poor payment record. Ambetter referred her to the nearest obstetrician who was located four hours away. The Angelos ultimately paid out of pocket to be seen by Erin’s original obstetrician. As Erin’s due date approached, Ambetter referred her to a clinic, but then refused to pay the bill, leading the clinic to refuse care. Ambetter then referred her to a free clinic, where she delivered twins. The premature babies required care in the NICU, generating a $20,000 bill that Ambetter refused to pay, despite the fact that the hospital was supposedly in-network.
District Court Ruling
The plaintiffs alleged breach of contract, breach of warranty, and violations of the Texas Deceptive Trade Practice Act. After Superior moved to dismiss, the magistrate judge recommended dismissal of the breach of warranty and Deceptive Trade Act claims but found that the plaintiffs had adequately pleaded a breach of contract claim. That claim was based on promises and expectations created by the Ambetter contract, including an accurate provider directory, necessary medical coverage, and a health plan that complied with the ACA. The district court adopted the recommendations, allowing the breach of contract claim to proceed.
The plaintiffs then moved for class certification. According to their expert, Ambetter’s provider directory contained an average of 49% of practitioners who were not active network participants, and “every 1% change in network size is associated with a 0.29% change in policy premium.” Based on these statistics, they contend that all policy holders were overcharged.
Superior opposed the motion, arguing that it had never promised a specific number of providers and challenging the plaintiffs’ damage model, moving to strike the expert’s testimony.
The district court referred both the class cert motion and the motion to strike to a different magistrate judge. The magistrate denied Superior’s motion to strike, but recommended denying class certification, characterizing the plaintiffs’ argument as an “overcharge-by-theory” that was insufficient to establish an “injury-in-fact” for standing purposes under Article III.
In particular, the magistrate judge concluded that the plaintiffs’ expert’s opinion demonstrated only correlation, not causation, and failed to establish the connection between network size and higher premiums. As a result, the suit did not “present a justiciable case or controversy under Article III.”
The plaintiffs objected to the magistrate’s report and recommendations, which the district court adopted in full, and the plaintiffs appealed.
Fifth Circuit’s Stance
The Fifth Circuit addressed the question: What is “the appropriate means by which to evaluate whether a plaintiff has standing to represent a class?” Angell v. GEICO Advantage Ins. Co., 67 F.4th 727, 733 (5th Cir. 2023).
To establish Article III standing, of course, a plaintiff must demonstrate (1) a concrete injury in fact, (2) traceable to the defendant’s behavior, and (3) likely be resolved by a judicial relief. In a class action, the proposed representative must also have standing to represent the class members who allegedly suffered the same type of injury.
To determine whether the plaintiffs have standing at the class certification stage, the Fifth Circuit formally rejected the “more intensive ‘standing approach,’” while adopting the “more forgiving ‘class certification’ approach.”
Under this approach, the court looks only at whether the named plaintiff suffered a real—not hypothetical—injury. If so, it then considers whether the plaintiff has representative capacity under Rule 23(a).
Under the so-called “standing approach”, by contrast, the court would have to evaluate both the named plaintiffs’ injuries and those of the putative class. If the injuries were not sufficiently similar, the named plaintiff would lack standing and class certification would fail on that basis alone.
In this particular case, the Fifth Circuit held that the lower courts erred in treating the plaintiffs’ expert report as failing to establish the substantive claim. That type of merits-based evaluation is unnecessary, the court reiterated, at the certification stage. Noting that “the use of expert testimony at the class certification stages often presents complex questions regarding the degree to which the court should engage in merits-based inquiries,” the Fifth Circuit concluded that the plaintiffs “have alleged and provided evidence for an injury-in-fact (overcharges for a health insurance policy that contained materially inaccurate and insufficient provider lists), causation (the amount of overcharge is fairly traceable to the discrepancy between the promised network size and the actual network size), and redressability (if the Plaintiffs are successful, they will be refunded their overpayment).”
None of the purported substantive deficiencies in the plaintiffs’ damage theory, the court of appeals found, “were related to the relationships among class members to the alleged liability or damages,” and therefore did not fall within the limited, merits-based inquiries permissible at the class-certification stage. Because the lower courts prematurely used this merits-based evaluation to deny class certification on Article III grounds, the Fifth Circuit vacated the district court’s order and remanded for further proceedings.
Conclusion
The Fifth Circuit’s decision in Wilson v. Centene clarifies that, at the certification stage, the focus should be on whether the named plaintiff has established Article III standing, without regard to the potential standing of absent class members. Further, while the court is permitted (indeed, required at times) to consider the merits of the class’ claims to the extent they might be necessary to evaluate the elements of Rule 23, a district court should not simply skip to a judicial resolution of the substantive merits of the named plaintiffs’ claims.
1 Wilson v. Centene Management Company, No.24-50044, 2025 WL 1981287 (5th Cir. July 17, 2025).
