‘Sweat Equity Will Pay Off’

No matter the odds, television lawyers always seem to pull rabbits from hats. Working around the clock, they find the in-house memo, executive email or meeting transcript that blows apart the defense’s case and ensures a win for the good guys. 

That just doesn’t happen in real life. In fact, James Williams has a spiel he often pulls out during voir dire to explain that to potential jurors. 

“I say, ‘Look. This isn’t TV. There’s not going to be an aha! moment. We won’t have the smoking gun. You’re going to have to weigh the evidence,’” says Williams, co-managing partner and head of litigation at Chehardy Sherman Williams in New Orleans. “I have this whole speech to let them know there won’t be a clear-cut ‘Oh my God’ moment. 

“And, of course, we happen to have it in this case.”

That moment came in the form of a spreadsheet—one that would help Williams’ firm secure a $421 million jury verdict. 

“I’ve been a lawyer since 1998,” he says, “and this is the first time that I can remember finding a smoking gun.”

It was a long time coming.

Williams’ firm had been representing the St. Charles Surgical Hospital and Center for Restorative Breast Surgery for almost 20 years—since 2006. The hospital’s two founding surgeons, Frank DellaCroce and Scott Sullivan, only treat breast cancer patients post-mastectomy, having developed innovative reconstruction techniques that use a woman’s body tissue to rebuild breasts. Their 39-bed hospital aims to feel more like a spa than a surgery, and patients—and their insurers—pay for that. 

The doctors had heard that Blue Cross executives felt the hospital was falsely upping costs. Yet the insurance company pre-authorized thousands of procedures for the center’s patients, only to routinely refuse payment or pay a fraction of the cost. Between 2015 and 2023, the hospital had sent the insurance company bills for about 7,800 pre-authorized procedures. Blue Cross had provided reimbursement for about 700 of them. In many cases, the company paid nothing. 

According to Williams, Blue Cross maintained that patients are responsible for any costs insurance doesn’t cover, and that “pre-authorization” was only a recognition that a procedure was medically necessary, not a guarantee of payment. 

“They said it in the beginning and all the way through the trial: If you’re owed $421 million, get it from the patients,” Williams says.

By the time St. Charles Surgical Hospital and Center for Restorative Breast Surgery v. Blue Cross Blue Shield of Louisiana was filed in 2023, alleging the insurer had defrauded the doctors by refusing to pay their patients’ claims, other Chehardy lawyers had already twice filed suit against Blue Cross on their clients’ behalf. 

In 2006, the firm argued that Blue Cross had breached its contracts with 88 patients, but the case was dismissed because of a jurisdictional issue. The second suit, filed in 2010, made a similar argument, but ended with a two-day trial and an unsatisfactory jury decision. Williams and his trial team were brought in for the 2023 suit.

Proving the insurance company had committed fraud would be challenging. “We started off thinking we would try to do something on behalf of the patients,” Williams says. “It was frustrating trying to refine the right door to walk through.”

But Williams, a seasoned trial lawyer, is never afraid to “work your file at trial.” 

“One thing I love about the law is that sweat equity will pay off,” he says. 

During the course of those two prior suits, the firm had struggled to get the internal documents they’d requested from the insurer. 

That changed on Friday, Dec. 8, 2023, the day of Chehardy Sherman Williams’ annual holiday party. That night, as Williams and his colleagues celebrated, new attorneys for the insurance company handed the firm a “40,000-page document dump” with no warning. 

With a crucial deposition already scheduled for the following week, Williams and company canceled their weekend plans, made other arrangements for their families, postponed chores and errands. They spent that entire weekend scouring the documents. 

The first aha! moment came when the attorneys found a spreadsheet marked “confidential” and titled “Targeted Provider List.” The two founding doctors were the first providers listed.  

The second? A list titled “blocked” that included the doctors.

For years, Williams says, the doctors felt that the insurance company was singling them out. With these documents in hand, “the clients’ worst fears were confirmed.” 

Fraud cases are notoriously difficult to prove, he says. They can be rich in circumstantial evidence, but light on the direct sort. Not this one. Says Williams, “I remember telling the troops, ‘This case just got a whole lot better.’”

Williams’ team also found evidence that, in practice, there were only two situations that affected Blue Cross’ decision to pay for a pre-authorized treatment in other scenarios: If the person loses their insurance between the time of pre-authorization and the procedure, and if doctors perform a different procedure than the one they were pre-authorized to do. Neither applied to the patients at the Center for Restorative Breast Surgery.

The trial began in September 2024 and lasted nearly three weeks. Williams was confident, but the length of the jury’s deliberations gave him pause. A little over an hour after the case was given to the jury, the lawyers were called back to court to hear the verdict. 

“I was concerned with the speed at which they returned,” Williams says. His team told him later that he began “muttering these profanities under my breath from the hotel to the courthouse.”

He doesn’t remember the profanities, but he does remember the relief he felt when the $421 million award was announced. That number reflects the amount of money the doctors say they billed to the insurance company without any reimbursement. It does not include penalties or punitive damages or attorney fees. At press time, Blue Cross had appealed the decision. 

Williams spoke to jurors after the verdict. He got the sense they were angry “about the level of the fraud. … It was having the list, taking the payments for these claims out of the regular chain of how they’re paid,” he says. “If Blue Cross hadn’t intervened to pick on my clients, the payments would have been automatically processed and paid because they’d been approved at the front end.”

In his closing arguments, Williams had shared a personal story of a difficult time in his career that began to turn around after he saw a rainbow from his office. “I turned to the doctors and I said, ‘I hope today’s your rainbow day, I hope today is the day that it finally starts to go the other direction,’” he says, recognizing the difficulty his clients faced in putting their story out and taking on a company that many of their peers felt was too big to face. “That’s what I felt after the verdict, that joy for them. I was so happy for the doctors, I felt that vindication.”