Lee Memorial Health System v. Blue Cross And Blue Shield of Florida, Inc. et al

MOTION to dismiss for failure to state a claim

M.D. Fla.August 29, 2016

FLORIDA BLUE STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION CASE NO. 8:16-cv-02320-JSM-AAS LEE MEMORIAL HEALTH SYSTEM, Plaintiff, vs. BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC., AND HORIZON HEALTHCARE SERVICES, INC. D/B/A BLUE CROSS BLUE SHIELD OF NEW JERSEY, HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY AND HORIZON BCBSNJ Defendants. ___________________________________/ DEFENDANTS’ MOTION TO DISMISS COMPLAINT AND INCORPORATED MEMORANDUM OF LAW Defendants, BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC., (“Florida Blue”) and HORIZON HEALTHCARE SERVICES, INC., D/B/A BLUE CROSS BLUE SHIELD OF NEW JERSEY, HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY AND HORIZON BCBSNJ (“Horizon BCBS”), move to dismiss the Complaint pursuant to Federal Rule of Civil Procedure Rule 12(b)(6). The Complaint attempts to bring state-law claims which are completely – and defensively - preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. For this and all other reasons outlined below, the Complaint fails to state a plausible claim for which relief may be granted. Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 1 of 21 PageID 286 2 I. INTRODUCTION AND SUMMARY OF ALLEGATIONS LEE MEMORIAL HEALTH SYSTEM (“Lee Memorial”) operates a health care system in Lee County, Florida. According to Lee Memorial, “Heather Picardi gave birth prematurely to her son, Nicholas Picardi, who was a covered dependent of Heather Picardi under her [Horizon BCBS] policy.” Complaint at ¶14. Lee Memorial rendered treatment to Heather Picardi “in conjunction with complications arising from her pregnancy” and then “submitted claims” in order to obtain payment under Heather Picardi’s health plan(s). Id., at ¶13 and ¶15. Once the claims were submitted, Lee Memorial allegedly began receiving conflicting information about the status of its claims. “Initially, the claim relating to [son] Nicholas Picardi was denied” on the basis that authorization had not been obtained for the full episode of care. Id., at ¶16. Later, Lee Memorial was allegedly told “that authorization for the entire 124 days of the hospital stay of Nicholas Picardi would not be disputed” as a new authorization would be issued. Id., at ¶18. When Lee Memorial still did not receive payment, it “made further inquiry” and was told the “new authorization number had not been processed properly.” Id., at ¶19. “After additional delay in receiving payment,” Lee Memorial then learned of a “technical problem” concerning its provider number but was assured “that payment would be forthcoming.” Id., at ¶20. Ultimately, Lee Memorial was informed in January 2014 that the claim for benefits was being denied. Id., at ¶21. The denial arose from a “determination . . . that primary coverage for the treatment of Nicholas Picardi was afforded under a separate [Horizon BCBS] group policy held by the father of Nicholas Picardi and that the coverage afforded by the mother’s [Horizon BCBS] policy was only secondary. Id., at ¶22. Lee Memorial then discovered that “because any claim that could now be filed under the father’s [Horizon BCBS] policy would be beyond on year,” that claim Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 2 of 21 PageID 287 3 would be untimely under the father’s health plan. Id., at ¶23. Lee Memorial alleges it pursued a “final appeal of the claim denial” in September 2014, but that appeal was denied. Id., at ¶24. On the basis of these twenty-six (26) general allegations which are common to all state- law counts of the Complaint, Lee Memorial sues Florida Blue and Horizon BCBS to rectify the claim denial. Although the hospital casts this dispute in state-law terms of declaratory relief, breach of contract, estoppel, negligent misrepresentation, breach of fiduciary duty, unjust enrichment and breach of good faith and fair dealing, the content of the claims makes clear that Lee Memorial is challenging the manner in which the Defendants processed the claims for benefits and the decision that no benefits are payable under the mother’s (or the father’s) group health plan. Since both of the health plans are self-funded employee welfare benefit plans within the meaning of ERISA, and since Lee Memorial could have brought its claims under the ERISA civil remedy provision to recover the disputed benefits, the state-law claims fall within ERISA’s exclusive purview.1 The fact that Lee Memorial avoids pleading a direct claim for the recovery of benefits pursuant to ERISA’s civil remedy provision is immaterial to the preemption analysis. In fact, on two occasions the Eleventh Circuit has stressed that a medical provider plaintiff cannot circumvent ERISA preemption by avoiding mention of ERISA or even by expressly disavowing interest in pursuing an ERISA claim. Gables Ins. Recovery, Inc. v. Blue Cross & Blue Shield of Florida, Inc., 813 F.3d 1333, 1337 n.1 (11th Cir. 2015) (“We are not bound by the labels used in the complaint or [plaintiff’s] disclaimer that ERISA does not govern its claims.”); and Borrero v. 1 Summary Plan Descriptions of the self-funded ERISA plans may be reviewed by this Court on this motion to dismiss. See Brooks v. Blue Cross and Blue Shield of Florida, Inc., et al., 116 F.3d 1364, 1668-69 (11th Cir. 1997) (citing Venture Assoc. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993) and noting that “where the plaintiff refers to certain documents in the complaint and those documents are central to the plaintiff’s claim, then the court may consider the documents part of the pleadings for purposes of Rule 12(b)(6) dismissal, and the defendant attaching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judgment.”). The Summary Plan Descriptions for the two ERISA plans have been furnished previously in conjunction with Defendants’ Joint Notice of Removal, at D.E. 1. Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 3 of 21 PageID 288 4 Florida Blue Healthcare of New York, Inc., 610 F.3d 1296, 1303 (11th Cir. 2010) (rejecting as “unavailing” the effort by medical provider plaintiffs to expressly disclaim causes of action under ERISA in their state-law Complaint as a means of trying to escape ERISA’s complete preemptive effect). At its core, this is a dispute over whether one (or both) of the applicable ERISA health plans has an obligation to provide benefits for services that Lee Memorial contends are “covered” under those plans. The Complaint is founded on a series of misdeeds that allegedly occurred in the course of the Defendants’ handling of the claims for benefits. All of the misdeeds surround alleged failures in ERISA plan administration. Lee Memorial alleges that Florida Blue “fail[ed] and refus[ed] to make timely and sufficient payment for covered services rendered to Nicholas Picardi,” and further failed to communicate accurately “relating to the adjudication of the claim.” Complaint at ¶37(a)-(b) (emphasis supplied). Lee Memorial contends the Defendants fell short of their duty to “conduct a reasonable investigation of Lee Memorial’s claim for payment.” Id., at ¶47. Finally, and in the most simple terms, Lee Memorial believes Defendants “wrongfully refus[ed] to pay claims for covered services.” Id. at ¶57(d), ¶99(e) (emphasis added). These are the actions (or inactions) that give rise to this lawsuit. These are the actions that ERISA is designed to remedy. Although Lee Memorial approaches the problem of a denial of payment from various directions, each state-law claim seeks the same form of relief. Whether it is a judicial declaration that Defendants “are liable to Lee Memorial for [the] hospital charges,” or the prevention of “unjust enrichment” caused by the Defendants’ purported failure to properly “administer the claims arising from the treatment of Heather Picardi and Nicholas Picardi,” Lee Memorial seeks to impose liability against Defendants due to the decision to withhold benefits under those Plans. Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 4 of 21 PageID 289 5 See Complaint’s claim for declaratory relief at ¶32, and claim for unjust enrichment at ¶64. Since the underlying ERISA health plans form an essential part of Lee Memorial’s theories of relief, and since the Defendants’ potential liability is based on the administration of the plan(s), all of the state law claims fall within the scope of § 502(a)(1)(B) and are completely preempted. II. ARGUMENT A. Plaintiff Challenges The Administration of ERISA Plans And Therefore Its State Law Claims Are Completely Preempted by the Act. Complete preemption exists where “Congress ‘so completely preempts a particular area that any civil complaint raising this select group of claims is necessarily federal in character.’” Darcangelo v. Verizon Communications, Inc., 292 F.3d 181, 187 (4th Cir. 2002), citing Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). Section 502 of ERISA, 29 U.S.C. § 1132(a), is one such statute which completely preempts state law claims involving rights of participants and beneficiaries to recover benefits under employee welfare benefit plans. See Taylor, 481 U.S. at 63-66, 107 S.Ct. 1542. As set forth in Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987), the preemptive force of § 502 of ERISA is especially broad. Congress clearly expresses an intent that the civil enforcement provisions of ERISA § 502(a) be the exclusive vehicle for actions by ERISA-plan participants and beneficiaries asserting improper processing of a claim for benefits, and that varying state causes of action for claims within the scope of § 502(a) would pose an obstacle to the purposes and objectives of Congress. Id. at 52, 107 S.Ct. at 1555. Examining the structure of ERISA's text and the legislative history, the Court concluded that: [T]he detailed provisions of § 502(a) set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 5 of 21 PageID 290 6 remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA. Id. at 54, 107 S.Ct. at 1556 (emphasis added). Thus, ERISA contains a carefully crafted and comprehensive civil enforcement mechanism that reflects policy choices by Congress to provide very specific and exclusive types of civil enforcement remedies in the ERISA context. The Supreme Court reaffirmed the validity of Pilot Life in Aetna Health Inc. v. Davila, --- U.S. ----, 124 S.Ct. 2488, 2494, 159 L.Ed.2d 312 (2004) (re-emphasizing the teachings of Pilot Life while concluding that any state law will be preempted by Section 502 “if it provides a separate vehicle to assert a claim for benefits outside of, or in addition to, ERISA’s remedial scheme.”). The Davila Court clarified the doctrine of complete preemption of claims under § 502 of ERISA and phrased the test as follows: [I]f an individual brings suit complaining of a denial of coverage for medical care, where the individual is entitled to such coverage only because of the terms of an ERISA regulated employee benefit plan, and where no legal duty (state or federal) independent of ERISA or the plan terms is violated, then the suit falls within the scope of ERISA § 502(a)(1)(B). In other words, if an individual, at some point in time could have brought his claim under ERISA § 502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant’s actions, then the individual’s cause of action is completely preempted by ERISA § 502(a)(1)(B). Davila, 124 S.Ct. at 2496 (citation omitted) (emphasis added). Thus, under the Davila analysis, a state-law claim is completely preempted if: (1) the plaintiff, at some point in time, could have brought the claim under ERISA’s civil enforcement provision, and (2) the state law cause of action is “not entirely independent of the federally regulated [ERISA plan] itself.” Id. The first question presented by the Davila test is whether a plaintiff has standing to assert a claim under ERISA’s civil enforcement provision. As set forth in § 502(a)(1)(B), an action Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 6 of 21 PageID 291 7 may be brought by a “participant” or “beneficiary” to recover benefits due to him under the terms of the plan, to enforce rights under the plan, or to clarify rights to future benefits under the terms of the plan. See § 502(a)(1)(B). As it represented on the Claim Forms it submitted to Florida Blue in order to request benefits under the ERISA plan(s), Lee Memorial accepted an assignment from its patient. See Claim Forms at D.E. 1-9; Connecticut State Dental Ass’n, 591 F.3d 1337, 1352-54 (11th Cir. 2009) (recognizing the defendant health plan’s right to rely on representations of assignments contained within standardized health insurance Claim Forms to show derivative standing for ERISA complete preemption purposes). This assignment equips Lee Memorial with derivative standing to access the ERISA remedy system. The second element for complete preemption under § 502(a) – the absence of any independent legal duty supporting the state law claim – is also satisfied. See Davila, 124 S.Ct. at 2496. In determining whether a legal duty is entirely independent of an ERISA plan, the analysis rests on whether the alleged liability is derived from or dependent upon the existence and administration of an ERISA regulated benefit plan. See Id. at 2498. In Davila, a participant and a beneficiary in an ERISA regulated employee benefit plan sued their HMOs for failing to exercise ordinary care with respect to certain coverage decisions, in alleged violation of the Texas Health Care Liability Act (“THCLA”). See Id. at 2492-93. The plaintiffs maintained that the defendants’ refusal to cover requested services violated the “duty to exercise ordinary care when making healthcare treatment decisions” and that the statutory violation proximately caused their injuries. Id. at 2493. The Fifth Circuit Court of Appeals determined that the plaintiffs’ THCLA claims were not duplicative of any ERISA cause of action and thus were not preempted by ERISA. See Id. at 2494. Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 7 of 21 PageID 292 8 In reversing the Fifth Circuit, the Supreme Court noted that § 502(a) of ERISA constituted an “integrated enforcement mechanism” which was “essential to accomplish Congress’ purpose of creating a comprehensive statute for the regulation of employee benefit plans.” Id. The Supreme Court further noted that, as set forth in Pilot Life, “any state law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore preempted.” Id. at 2495. Finally, in concluding that the plaintiffs’ claims were “completely preempted” by ERISA, the Supreme Court held that the duties imposed by THCLA did not arise independently of ERISA or the plan terms because the interpretation of the subject benefit plans formed an essential part of the plaintiffs’ statutory claims and such liability existed only because of the defendants’ administration of the ERISA plans. Id. at 2498. Thus, the Supreme Court determined the plaintiffs’ claims were not entirely independent of the federally regulated contract. Id. The Court noted that, in essence, the plaintiffs were simply seeking to remedy “denials of coverage promised under the terms of the ERISA-regulated employee benefit plans” which could have been addressed through § 502(a)(1)(B) and did not “attempt to remedy any violation of a legal duty independent of ERISA.” Id. at 2497-98. Complete preemption of the statutory claim in Davila was driven by the fact that no court could consider whether the Texas duty of ordinary care had been violated without considering whether the claim decision was correct under the terms of the ERISA plan. As a logical and practical matter, if the defendant ERISA health plan administrator (i.e., Aetna) was correct in denying benefits under the terms of the plan, it could not be said to have violated a so-called separate duty of ordinary care under the terms of the Texas law. The same holds true in this Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 8 of 21 PageID 293 9 dispute. No court could conceivably declare the Defendants are liable to Lee Memorial (under a state-law action for declaratory relief) without considering whether benefits are payable under the terms of the ERISA health plans. As Lee Memorial acknowledges, the provider contract creates a duty to pay “for covered services” rendered to Nicholas Picardi, “a covered dependent under a [Horizon BCBS] plan.” Complaint at ¶37(a) (emphasis supplied). There must be a predicate finding that the services in controversy are indeed “covered” by the applicable ERISA plan. Thus, Lee Memorial is not proceeding under any theories of relief that are truly independent of the ERISA plan. In Borrero v. Florida Blue Healthcare of New York, Inc., 610 F.3d 1296 (11th Cir. 2010), the Eleventh Circuit found that medical providers’ state law claims which challenged the failure of payment were completely preempted by ERISA. Notably, the Borrero court found complete preemption despite the medical providers’ attempt to “undermine their own standing” by “disclaiming [their reliance] on the assignments of benefits” by their patients. Borrero, 610 F.3d at 1303. The plaintiffs in Borrero went so far as to allege on the face of their Complaints they did “not otherwise seek benefits or other remedies under [ERISA].” Id. The Eleventh Circuit rejected the plaintiffs’ “attempt to characterize their claims as eluding the scope of ERISA,” and found instead that “the factual allegations raise precisely the type of ERISA determinations that trigger complete preemption and convert the otherwise state law claims into federal claims.” Id. Despite the medical providers’ efforts to distance their claims from the ERISA plans, the court found the claims were “substantially dependent upon interpretation” of those plans. Id. Relying on Connecticut State Dental and the teachings of Davila, the Eleventh Circuit looked in Borrero to “the content of the [physicians’] claims” which necessarily required an examination of the terms of the ERISA plans in order to determine the rights of the parties. Id. at 1304-05. Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 9 of 21 PageID 294 10 The providers in Borrero tried to avoid the impact of the Eleventh Circuit’s holding just six months earlier in Connecticut State Dental. The Borrero physicians insisted their state-law claims, “based predominantly on their own contracts with United, implicated legal duties independent of ERISA because state law, not ERISA, define[d] the contractual obligations of the parties.” Borrero, 610 F.3d at 1304. While this may have been “true in the abstract,” the Eleventh Circuit followed its mandate under Davila to “evaluate each claim by its actual content.” Id. Once the Eleventh Circuit scrutinized the claims in Borrero, the court found “the content of the claims necessarily requires [inquiry] into aspects of the ERISA plans because of the invocation of terms defined under the plans.” Id., (emphasis supplied). Just like the state- law claims of the provider plaintiffs in Borrero, the state-law claims of Lee Memorial “about wrongfully denied benefits . . . relate directly to the coverage afforded by the ERISA plans.” Id. Lee Memorial fairs no better than the medical providers in Borrero who could not escape complete preemption by attempting to rely on their own written provider contracts. Furthermore, courts recognize that medical provider plaintiffs cannot seize upon purported representations of coverage to manufacture duties that are supposedly “independent” of the ERISA plan. For example, in Montefiore Med. Center v. Teamsters Local 272, 642 F.3d 321 (2nd Cir.2011), the Second Circuit held that phone conversations between the ERISA insurer and a medical provider as to patient coverage did not create a separate duty because the plan contemplated the pre-approval process. In other words, the very act of confirming coverage was a by-product of the plan and its provisions. Id., at 332 (“Whatever legal significance these phone conversations may have had, . . . they did not create a sufficiently independent duty under Davila — indeed, as Montefiore concedes, this pre-approval process was expressly required by Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 10 of 21 PageID 295 11 the terms of the Plan itself and is therefore inextricably intertwined with the interpretation of Plan coverage and benefits.”). The alleged false statements of material fact that form the crux of Lee Memorial’s claim for negligent misrepresentation are really just representations that concern the processing of the claim. Indeed, as Lee Memorial announces at paragraph 50 of its Complaint, if the Defendants “intended to ultimately deny health care coverage reimbursement,” they should have “timely disclos[ed] such basis to Lee Memorial.” But the duty to timely and accurately disclose the basis of a claim denial is rooted firmly in ERISA itself. ERISA's regulations provide time restrictions on a plan's administrative review of a claim for benefits. 29 C.F.R. § 2560.503-1. Thus, the duty that Lee Memorial alleges to exist under Florida law is hardly independent of the ERISA statute. To the contrary, that duty is dependent on the ERISA plans and the federal regulations that pertain to claim determinations under those plans. The Eleventh Circuit adopted a line of reasoning similar to Montefiore in Gables Insurance Recovery, 813 F.3d at 1335. In Gables Insurance Recovery, a medical collections company brought various state-law claims against an ERISA plan insurer. Certain state-law claims rested on a purported “oral contract” formed when the medical provider’s office called for confirmation of coverage. Id. at 1336. During those communications the health insurer allegedly agreed there was coverage under the health insurance policy and thus it would pay for the service. Id. The plaintiff insisted that its oral contract claim (as well as its quantum meruit, open account, and account stated claims) did not depend on whether the insurer had a duty to pay for services under the ERISA plan. Id. at 1337. The Eleventh Circuit disagreed. The court summarized the plaintiff’s state-law claims as falling into two groups, both of which were completely preempted by ERISA: Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 11 of 21 PageID 296 12 Gables essentially brought two types of claims. In Counts I and III, Gables asserted third party beneficiary claims based on a breach of the underlying ERISA plan. In Counts II, IV, V, and VI, Gables alleged contractual or quasi-contractual claims that purportedly are based on Florida Blue's oral agreements to cover the services rendered. Neither set of claims arises out of a separate duty independent of the ERISA plan. Id. (emphasis added). The Eleventh Circuit found the plaintiff in Gables Insurance Recovery had “expressly tether[ed] Florida Blue's preauthorization to its obligations under the ERISA insurance plan.” Id. at 1338. The “tethering” was accomplished by allegations that the medical provider contacted Florida Blue “to confirm coverage of the patient and for the subject services under the subject health care plan,” and the ERISA insurer agreed “that the patient was covered under the health care plan.” Id. Here, the tethering occurs by virtue of Lee Memorial’s repeated invocation of terms that implicate the coverage determinations under the ERISA plans. Lee Memorial’s lawsuit rests on the premise that it submitted “a claim for payment for covered services.” Complaint at ¶42 (emphasis supplied); see also Complaint at ¶11 (describing a payment obligation under the provider contract that is triggered when Lee Memorial renders “covered services” to a policyholder); and Complaint at ¶37(a) (describing the failure to make payment “for covered services” rendered to a member of the Horizon BCBS plan); Complaint at ¶57(d)- (e) (alleging a wrongful refusal to pay claims “for covered services” and a wrongful denial of “claims for covered services.”). Lee Memorial alleges it bestowed a benefit upon Heather Picardi that Defendants should have furnished “as a policy benefit.” Complaint at ¶65 (emphasis supplied). Lee Memorial also alleges a number of failures on the part of Florida Blue when it purportedly breached its implied duty of fair dealing. See Complaint at Count VII. Each one of those duties, however, centers on Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 12 of 21 PageID 297 13 ERISA-based duties to properly review a claim for benefits. Hence, the implied duty of good faith and fair dealing cannot be analyzed without examining the threshold question of whether benefits are owed pursuant to the terms of the ERISA plans. That is why the Eleventh Circuit rejected medical providers’ similar efforts to advance a state-law claim for breach of the implied duty of good faith and fair dealing in the Connecticut State Dental case. Id., 591 F.3d 1351 (“What we have, then, is really a hybrid claim, part of which is within § 502(a) and part of which is beyond the scope of ERISA. Because Rutt and Egan complain, at least in part, about denials of benefits and other ERISA violations, their breach of contract claim implicates ERISA.”). As in Connecticut State Dental, Lee Memorial herein complains “at least in part” about denials of benefits “and other ERISA violations.” The case for complete preemption here is even more compelling than Connecticut State Dental. This is a controversy about the right to payment under the controlling ERISA plans. It is not a controversy about the rate of payment. Nowhere does Lee Memorial allege that it was paid the wrong amount. Instead, Lee Memorial alleges “the policy benefit” was wrongfully denied in its entirety. Defendants maintain that all of Plaintiff’s state-law claims are “completely” preempted by ERISA under the Davila test, but even if any isolated state-law claim could escape the complete preemption doctrine, a second – and more sweeping form – of ERISA preemption would nonetheless require dismissal. Once removal jurisdiction attaches (as it has) on the basis of a single completely preempted state-law claim, this Court is then free to consider whether any other state-law claims “relate to” an ERISA plan within the meaning of ERISA’s express preemption clause, 29 U.S.C. § 1144(a). See Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1215 (11th Cir. 1999) (once “complete” ERISA preemption was found to exist over employee’s state-law contract and fraud claims stemming from life insurer’s denial of Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 13 of 21 PageID 298 14 application for group coverage, court could then examine and dismiss the employer’s state-law claims under the broader “defensive” preemption test). The express preemption clause states that ERISA “shall supersede any all State laws insofar as they may now or hereafter relate to any employee benefit plan.” Id. (emphasis supplied). Although the concepts are related, they are not coextensive. “Complete preemption is [ ] narrower than ‘defensive’ ERISA preemption, which broadly “supersede[s] any and all State laws insofar as they ... relate to any [ERISA] plan.” ERISA § 514(a), 29 U.S.C. § 1144(a). Therefore, a state-law claim may be defensively preempted under § 514(a) but not completely preempted under § 502(a). In such a case, the defendant may assert preemption as a defense, but preemption will not provide a basis for removal to federal court.” Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1281 (11th Cir. 2005); see also Jones v. LMR Int'l, Inc., 367 F. Supp. 2d 1346, 1350 (M.D. Ala. 2005), aff'd, 457 F.3d 1174 (11th Cir. 2006) (“Of course, claims which are completely preempted are necessarily defensively preempted.”) ERISA's preemption clause is “deliberatively expansive” and “not limited to ‘state laws specifically designed to affect employee benefit plans.’” Pilot Life Ins. Co., 481 U.S. 41, 45-46, 107 S. Ct. 1549, 1552, 95 L. Ed. 2d 39 (1987). Under Supreme Court precedent, a state-law claim “relates to” an ERISA plan, and is therefore preempted, “if it has a connection with or reference to such a plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S. Ct. 2890, 2900, 77 L. Ed. 2d 490 (1983). Put another way, where “the existence of [an ERISA] plan is a critical factor in establishing liability” under a state cause of action, the state law claim is preempted. Ingersoll–Rand Co., 498 U.S. 133, 136, 139–40, 111 S. Ct. 478, 112 L. Ed. 2d 474 (1990). The Eleventh Circuit adheres to the following test for ERISA “defensive” preemption: “A party's state law claim ‘relates to’ an ERISA benefit plan for purposes of ERISA preemption Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 14 of 21 PageID 299 15 whenever the alleged conduct at issue is intertwined with the refusal to pay benefits.” Garren v. John Hancock Mutual Life, 114 F.3d 186, 187 (11th Cir. 1997) (emphasis added) (citing Farlow v. Union Cent. Life Ins. Co., 874 F.2d 791 (11th Cir. 1989) (plaintiffs' state law claims are preempted where the claims were both contemporaneous with the insurer's refusal to pay benefits and the alleged conduct was intertwined with the refusal to pay benefits)). The Garren test is satisfied based on the allegations of the Complaint. By Lee Memorial’s own account, the alleged misconduct is inseparable from the refusal to pay benefits. As Lee Memorial puts it, Florida Blue breached the provider agreement by “failing and refusing to furnish timely and accurate information and decisions relating to the adjudication of the claim.” Complaint at ¶37(b) (emphasis supplied). Similarly, Lee Memorial’s claims against Florida Blue for breach of fiduciary duty and breach of good faith and fair dealing are rooted in the premise that benefits are owed under the mother (or the father’s) ERISA plans. These claims squarely attack the claim adjudication process and the underlying decision to withhold plan benefits for “covered” and “medically necessary” services. See Complaint at Counts V and VII. Likewise, the claim for unjust enrichment against Horizon BCBS rests on the allegation that Horizon BCBS “was obligated to … pay for such hospital services” rendered to Heather and Nicholas Picardi. Complaint at ¶63. That obligation stems from only one source – the ERISA self-funded plans that Horizon BCBS administered. But-for the ERISA plans, Defendants owe no conceivable obligation of any kind in connection with the services rendered to ERISA plan participants Heather and Nicholas Picardi. The state-law claims all share a profound nexus with the self-funded ERISA plans. The claims all require an assessment of the coverage question and a determination as to which, if any, ERISA plan is obligated to provide benefits for the services in question. As a result, the claims Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 15 of 21 PageID 300 16 are “defensively” preempted under the broad “relate to” test of § 514(a), in the event that any one claim is not “completely” preempted by § 502(a). Alcalde v. Blue Cross & Blue Shield of Florida, Inc., 62 F. Supp. 3d 1360 (S.D. Fla. 2014) (applying “defensive” preemption principles under § 514(a) and dismissing physician’s state-law claims for breach of oral contract, open account, quantum meruit, and violation of Florida Deceptive and Unfair Trade Practices Act); and Miami Children's Hosp., Inc. v. Kaiser Found. Health Plan, Inc., 2009 WL 1532125, *5 (S.D. Fla. May 29, 2009) (applying “defensive” preemption principles under § 514(a) and dismissing hospital’s state-law breach of contract claim based on a Letter of Agreement because “[t]he dispositive issue as to [hospital’s] breach of agreement claim is whether the services provided by [hospital] to [patient] are covered by Kaiser.”). B. Even If Certain State-Law Claims Could Escape Complete And Defensive Preemption by ERISA, Plaintiff Fails To Plead Cognizable Claims. 1. Promissory/Equitable Estoppel and Negligent Misrepresentation The elements required to establish promissory estoppel liability under Florida law are: (1) a promise made by the promisor; (2) which the promisor should reasonably expect to induce action or forbearance on the part of the promisee, (3) that in fact induced such action or forbearance, and that (4) injustice can be avoided only by enforcement of the promise. White Holding Co., LLC v. Martin Marietta Materials, Inc., 423 F. App'x 943, 947 (11th Cir. 2011) (citing W.R. Grace & Co. v. Geodata Servs., Inc., 547 So.2d 919, 924 (Fla.1989)). Lee Memorial’s estoppel claim is defective for several reasons. First, the hospital did not change its position based on anything that Florida Blue represented. To properly state a claim for promissory estoppel under Florida law requires more than mere reliance. It requires reliance that causes a detrimental change of position. Pinnacle Port Community Ass'n, Inc. v. Orenstein, 872 F.2d 1536, 1543 (11th Cir.1989). Nowhere does Lee Memorial allege that it would not have Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 16 of 21 PageID 301 17 rendered the care to the newborn child of Heather Picardi “but for” the representation by Florida Blue. Second, promissory estoppel is not available as a remedy when there is a written agreement that addresses the relevant issues. Mangravite v. Univ. of Miami, 838 F. Supp. 2d 1326, 1333 (S.D. Fla. 2011). Here, the ERISA plans address the subject of whether “the hospital services provided to Nicholas Picardi [would be accepted]” for payment. Complaint at ¶41 (summarizing the alleged representation). Third, claims for promissory estoppel must be “definite as to terms and time.” W.R. Grace & Co., 547 So.2d at 924 (Fla.1989); see also Long v. Murray, 2009 WL 4042961, at *6 (M.D. Fla. Nov. 20, 2009) (relief under a theory of promissory estoppel is only available when the promise is definite, of a substantial nature, and established by clear and convincing evidence.). All that Lee Memorial alleges is that after it commenced the care, it was told (by some unidentified person at some unidentified time) “the claim would be paid.” This is too vague to sustain relief under a theory of promissory estoppel. The claim for negligent misrepresentation “sounds in fraud” and must be alleged with “particularity” under Fed. R. Civ. P. 9(b). McGee v. JP Morgan Chase Bank, NA, 520 Fed.Appx. 829, 831 (11th Cir. 2013). This heightened pleading standard may be satisfied if the complaint sets forth precisely what statements were made, the time and place of each statement and the person responsible for making it, the content of such statements and the manner in which they misled the plaintiff, and what the defendant obtained as a consequence of the fraud. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir.1997). Lee Memorial’s pleading fails to satisfy this standard. “It is devoid of specifics regarding the time, place and substance of the alleged fraud.” Chapman v. Abbott Labs., 930 F. Supp. 2d 1321, 1324 (M.D. Fla. 2013). Furthermore, the claim is brought against two defendants, Florida Blue and Horizon BCBS, yet Lee Memorial vaguely attributes the alleged fraudulent statements to both defendants Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 17 of 21 PageID 302 18 without informing each defendant of the nature of its unique statements. As a result, the claim for negligent misrepresentation cannot stand. 2. Breach of Fiduciary Duty “To state a claim for a breach of fiduciary duty Plaintiff must allege: (1) the existence of a fiduciary duty, (2) a breach of that duty, and (3) damage proximately caused by that breach.” Fleeger v. Wachovia Bank, 2012 WL 6534560, *6 (M.D. Fla. Nov. 21, 2012) (citing Gracy v. Eaker, 837 So.2d 348, 353 (Fla.2002)). “To establish a fiduciary relationship, a party must allege some degree of dependency on one side and some degree of undertaking on the other side to advise, counsel, and protect the weaker party.” Bankest Imports, Inc. v. Isca Corp., 717 F.Supp. 1537, 1541 (S.D.Fla.1989) (citing Barnett Bank of W. Florida v. Hooper, 498 So.2d 923 (Fla.1986)). “The fact that one party places trust or confidence in the other does not create a confidential relationship in the absence of some recognition, acceptance, or undertaking of the duties of a fiduciary on the part of the other party.” Id., at 927–28. In Hogan v. Provident Life and Accident Insurance Co., 665 F.Supp.2d 1273, 1286 (M.D. Fla. 2009), the plaintiff sued for breach of fiduciary duty alleging Unum, as holding company of Provident Life and Accident Insurance Co., “adjusted, reviewed, evaluated, handled, approved, and/or denied” his disability insurance benefits. These allegations “d[id] not suggest that Unum accepted any trust extended by Hogan.” Id. at 1287. The court found the plaintiff’s allegations were “conclusory” in merely reciting the elements of the cause of action for breach of fiduciary duty and alleging that Unum accepted plaintiff’s trust. Id. Here, Lee Memorial does not allege any facts sufficient to give rise to a fiduciary relationship between a hospital and a health insurer. As the Hogan court noted, “[t]here is no fiduciary relationship between an insurer and an insured under Florida law.” Hogan, 665 F.Supp.2d at 1286 (citing Time Ins. Co., Inc. v. Burger, 712 Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 18 of 21 PageID 303 19 So.2d 389, 391 (Fla. 1998)). If an insurer does not stand in a fiduciary relationship with its own insured, it surely does not stand in a fiduciary relationship with a health care provider. At most, that is a debtor-creditor relationship. It does not trigger any “fiduciary” obligations. 3. Unjust Enrichment A provider of health care does not confer a benefit upon a health plan insurer merely by delivering a service to individuals who are enrolled in that plan. Hialeah Physicians Care, LLC v. Connecticut General Life Ins. Co., 2013 WL 3810617, *4 (S.D. Fla. 2013) (dismissing with prejudice a medical provider’s claims for quantum meruit and unjust enrichment while noting: “HPC can hardly be said to have conferred any benefit, even an attenuated one, upon the Plan's insurer by providing Plan beneficiaries with health care services.”); Adventist Health Sys./ Sunbelt, Inc. v. Med. Sav. Ins. Co., 2004 WL 6225293, *6 (M.D. Fla. 2004) (rejecting hospital’s effort to plead against a health insurer under quantum meruit and unjust enrichment theories because “as a matter of commonsense, the benefits of healthcare treatment flow to patients, not insurance companies”). Lee Memorial suggests it bestowed a benefit on Florida Blue and Horizon BCBS “by providing medical services” which should have been available “as a policy benefit.” Complaint at ¶65. This proposition falls well short of establishing any plausible claim for relief under a theory of unjust enrichment. See e.g., Broad St. Surgical Ctr. v. Unitedhealth Grp., Inc., 2012 WL 762498, *9 (D.N.J. Mar. 6, 2012) (dismissing claims for unjust enrichment and quantum meruit because a health insurer “derives no benefit” when a health care provider renders services to a patient); and Joseph M. Still Burn Ctrs. v. AmFed Nat’l Ins. Co., 702 F. Supp.2d 1371, 1377 (S.D. Ga. 2010) (“This is not a typical quantum meruit case in which services were clearly conferred directly upon the party being sued and the central issue is whether those services had Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 19 of 21 PageID 304 20 value or constituted a benefit to the defendant. Here, medical services were directly performed for and conferred upon Mr. Kossum, not Defendants, and no cognizable, let alone measurable, benefit or value to Defendants has been identified by Plaintiff.”) III. CONCLUSION Lee Memorial’s claims constitute an impermissible attempt to circumvent ERISA and obtain benefits outside of ERISA’s remedial scheme. However, as the Supreme Court cautioned in Davila, “a state cause of action that provides an alternative remedy to those provided by the ERISA civil enforcement mechanism conflicts with Congress’ clear intent to make the ERISA mechanism exclusive.” Davila, 124 S.Ct. at 2498, n. 4, citing Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990). Lee Memorial’s claims “directly conflict with ERISA’s requirements that plans be administered and benefits be paid, in accordance with plan documents.” Egelhoff v. Egelhoff ex rel Breiner, 532 U.S. 141, 150, 121 S.Ct. 1322, 1324-25, 149 L.Ed.2d 264 (2001). The state-law Complaint should be dismissed in its entirety as completely and defensively preempted by ERISA. WHEREFORE, Defendants Florida Blue and Horizon BCBS respectfully request the entry of an Order dismissing the Complaint and granting such other relief as this Court deems just and proper. Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 20 of 21 PageID 305 21 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on August 29, 2016, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF system. I also certify that the foregoing document is being served this day via transmission of Notices of Electronic filing generated by CM/ECF on Joel W. Walters, Esquire, Walters, Levine, Klingensmith & Thomison, P.A., 1819 Main Street, Suite 1110, Sarasota, Florida 34236, telephone: 941-364-8787, Facsimile: 941-361- 3023, email: jwalters@walterslevine.com, counsel for Plaintiff. s/Daniel Alter DANIEL ALTER Florida Bar No. 0033510 dan.alter@gray-robinson.com JEFFREY T. KUNTZ Florida Bar No. 26345 Jkuntz@gray-robinson.com GRAY ROBINSON, P.A. 401 East Las Olas Boulevard, Suite 1000 Fort Lauderdale, Florida 33301 Telephone: (954) 761-8111 Counsel for Defendants Florida Blue and Horizon BCBS Case 8:16-cv-02320-JSM-AAS Document 9 Filed 08/29/16 Page 21 of 21 PageID 306