CIVIL ACTION FILE No. 1:19-cv-00979-SCJ
Agbor Adolph Ebot Tabi, The Law Office of Agbor Ebot Tabi, PC., Acworth, GA, for Plaintiff. Anita Taylor Caldwell, Atlanta, GA, pro se. Cavender C. Kimble, Balch & Bingham, Birmingham, AL, Tashwanda Pinchback Dixon, Balch & Bingham LLP, for Defendants.
Agbor Adolph Ebot Tabi, The Law Office of Agbor Ebot Tabi, PC., Acworth, GA, for Plaintiff.
Anita Taylor Caldwell, Atlanta, GA, pro se.
Cavender C. Kimble, Balch & Bingham, Birmingham, AL, Tashwanda Pinchback Dixon, Balch & Bingham LLP, for Defendants.
HONORABLE STEVE C. JONES, UNITED STATES DISTRICT JUDGE
This matter comes before the Court on, inter alia , Defendant United Healthcare's ("Defendant" or "United") Motion to Dismiss and Motion to Strike Jury Demand and Plaintiff South Fulton Dialysis, LLC's ("Plaintiff" or "South Fulton Dialysis") Motion to Remand. Doc. Nos. ; .
Defendant states that it is incorrectly identified in the Complaint and that is actual name is "UnitedHealthcare Insurance Company." Doc. No. , p. 1. All requests for court action, however, must be made by motion. See Fed. R. Civ. P. 7(b)(1). The parties shall proceed in accordance with Rule 7 to obtain a change of the named parties.
All citations are to the electronic docket unless otherwise noted, and all page numbers are those imprinted by the Court's docketing software.
The facts are drawn from the Complaint (Doc. No. [1-1] ), accepting all the well-pleaded facts as true and viewing them in the light most favorable to Plaintiff, as this Court must do. See Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1057 (11th Cir. 2007).
This case involves a claim for health benefits under a self-funded group health benefit plan (hereinafter, the "Plan") sponsored by Old Dominion Freight Line, Inc., a national trucking company. Doc. No. [1-2]. Old Dominion established the Plan to provide group health benefits to its eligible employees and their dependents. Id. at p. 26 ("You are eligible to participate in this Plan if you are classified as a full-time employee of Old Dominion Freight Line Inc.... [and] [y]our eligible dependents may also participate."). United serves as the Claims Administrator of the Plan. Id. at p. 84 ("Effective October 1, 2014, United Healthcare is the designated third party administrator for health coverage claims and appeals ....").
Generally, at the motion-to-dismiss stage, a court may not consider anything beyond the face of the complaint and any of its attached documents. See Fin. Sec. Assurance., Inc. v. Stephens, Inc., 500 F.3d 1276, 1284 (11th Cir. 2007). Nevertheless, "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's attaching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judgment." Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). Because the Complaint refers to the insurance contract and it is central to Plaintiff's claims, the Court may consider the Plan on a motion to dismiss. See id.
Defendant Anita Taylor Caldwell ("Caldwell") is a beneficiary of the Plan. Doc. No. [1-1], ¶ 7. Between May 16, 2013 and March 31, 2015, Caldwell received dialysis treatment from Plaintiff "approximately three to four times a week." Id. ¶¶ 8–9. Plaintiff alleges that it had a "contract for medical services" with Caldwell, appointing Plaintiff "as an intended beneficiary of the insurance agreement between [Caldwell] and United," where Caldwell promised to pay for her dialysis treatment if United did not pay for the full cost of the treatment. Id. ¶¶ 6–7. Plaintiff further alleges it received an assignment of benefits from Caldwell that she reaffirmed with each treatment she received from Plaintiff. Id. ¶ 8.
Plaintiff claims Caldwell accumulated $1,327,695.00 in medical bills for her dialysis treatment, which has not been paid. Id. ¶¶ 10–11. Consequently, on March 7, 2018, Plaintiff filed a Complaint in the State Court of Clayton County, Georgia against United and Caldwell. See id. Plaintiff asserts state law claims for breach of contract, open account, account stated, unjust enrichment, and quantum meruit against said Defendants. Id. ¶¶ 12–35.
On February 28, 2019, United filed a Notice of Removal in this Court, asserting that this Court has jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e)(1). Doc. No. . Specifically, United contends that all Plaintiff's claims asserted in the Complaint are completely preempted, as they involve exclusive federal remedies available to participants and beneficiaries of employee benefit plans governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (hereinafter, "ERISA"). Id. at p. 1.
Thereafter, on April 16, 2019, United filed a Motion to Dismiss and Motion to Strike Jury Demand based on ERISA preemption. Doc. No. . On May 29, 2019, Plaintiff filed a Motion to Remand. Doc. No. . These matters are now ripe for review, and the Court rules as follows.
The Court must determine whether this case is properly in federal court and, if so, whether Plaintiff's claims must be dismissed.
Removal is proper "in any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). To establish original jurisdiction, an action must satisfy the jurisdictional prerequisite of either federal question jurisdiction, pursuant to 28 U.S.C. § 1331 , or diversity jurisdiction, pursuant to 28 U.S.C. § 1332. Federal question jurisdiction exists when the civil action arises "under the Constitution, laws, or treaties of the United States." Id. § 1331. The burden of establishing federal jurisdiction falls on the party attempting to invoke the jurisdiction of the federal court. See McNutt v. Gen. Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). Courts must strictly construe the requirements of removal jurisdiction and remand all cases in which jurisdiction is doubtful. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941).
The test ordinarily applied for determining whether a claim arises under federal law is whether a federal question appears on the face of the plaintiff's well-pleaded complaint. Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908). Complete preemption, however, is an exception to the well-pleaded complaint rule and exists where the preemptive force of a federal statute is so extraordinary that it converts an ordinary state law claim into a statutory federal claim. Caterpillar, Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) ; see also Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir. 1999) ("When Congress comprehensively occupies a field of law, any civil complaint raising this select group of claims is necessarily federal in character and thus furnishes subject-matter jurisdiction under 28 U.S.C. § 1331.") (citation omitted). The Court looks at the plaintiff's complaint at the time of removal to determine jurisdiction. See Ehlen Floor Covering, Inc. v. Lamb, 660 F.3d 1283, 1287 (11th Cir. 2011). The Court may also review evidence outside of the removal petition so long as it relates to the time of removal. See Sierminski v. Transouth Financial Corp., 216 F.3d 945, 949 (11th Cir. 2000) ("[T]here is no good reason to keep a district court from eliciting or reviewing evidence outside the removal petition.").
A. ERISA Preemption and Subject Matter Jurisdiction
ERISA provides a uniform regulatory regime over employee benefit plans and includes expansive preemption provisions which are intended to ensure that employee benefit plan regulation remains "exclusively a federal concern." Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523, 101 S.Ct. 1895, 68 L.Ed.2d 402 (1981). Namely, ERISA provides for two types of preemption: conflict preemption and complete preemption. Conflict preemption, or defensive preemption, is a substantive defense to preempted state law claims. Jones v. LMR Int'l, Inc., 457 F.3d 1174, 1179 (11th Cir. 2006). This type of preemption arises from ERISA's express preemption provision, Section 514(a), which preempts any state law claim that "relate[s] to" an ERISA plan. 29 U.S.C. § 1144(a). Because conflict preemption is merely a defense, it is not a basis for removal. See Gully v. First Nat'l Bank, 299 U.S. 109, 115–16, 57 S.Ct. 96, 81 L.Ed. 70 (1936) ; see also Ervast v. Flexible Prods. Co., 346 F.3d 1007, 1012 n.6 (11th Cir. 2003) (stating that "defensive preemption ... provides only an affirmative defense to state law claims and is not a basis for removal").
Complete preemption, or super preemption, is a judicially-recognized exception to the well-pleaded complaint rule. It differs from defensive preemption because it is jurisdictional in nature rather than an affirmative defense. Jones, 457 F.3d at 1179 (citing Ervast, 346 F.3d at 1014 ). Complete preemption under ERISA derives from ERISA's civil enforcement provision, Section 502(a), which has such "extraordinary" preemptive power that it "converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65–66, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). Consequently, any "cause of action within the scope of the civil enforcement provisions of § 502(a) [is] removable to federal court." Id. at 66, 107 S.Ct. 1542.
In 2004, the Supreme Court set forth the following, two-prong test to determine whether ERISA completely preempts a state law claim:
[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 pre-empted by ERISA § 502(a)(1)(B).
Aetna Health Inc. v. Davila, 542 U.S. 200, 210, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004). In other words, the Davila two-prong test requires two inquiries: (1) whether the plaintiff could have brought its claim under Section 502(a); and (2) whether no other legal duty supports the plaintiff's claim. Id.
1. Could Plaintiff Have Brought Claims Under ERISA?
The first prong of the Davila test considers whether Plaintiff "could have brought its claim under ERISA § 502(a)(1)(B)." Id. Plaintiff's claims satisfy this test if (1) Plaintiff has standing to sue; and (2) Plaintiff's claims fall within the scope of ERISA. See Connecticut State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1350 (11th Cir. 2009).
A "participant or beneficiary" may bring an ERISA claim. See 29 U.S.C. § 1132(a)(1). Healthcare providers typically are not considered beneficiaries and therefore have no standing to sue under ERISA. See Borrero v. United Healthcare of New York, Inc., 610 F.3d 1296, 1301 (11th Cir. 2010). However, providers, such as Plaintiff, may have standing if they attempt to "derivatively assert the rights of their patients as beneficiaries of an ERISA plan." Id. Providers have standing to sue derivatively if a patient with standing to sue under ERISA assigns his or her claims to the provider. Id. "To sue derivatively, the provider must have obtained a written assignment of claims from a patient with standing to sue under ERISA." Id. at 1302 (citing Hobbs v. Blue Cross Blue Shield of Ala., 276 F.3d 1236, 1241 (11th Cir. 2001) ).
In Hobbs, the Eleventh Circuit held that a provider had no standing when there was no evidence of an assignment. See 276 F.3d at 1241. Here, Plaintiff argues that it is neither a beneficiary nor a participant and that United has failed to carry its burden of showing the existence of a valid assignment. Doc. No. [8-1], pp. 4–5. The Court disagrees. The record reflects that Plaintiff submitted claim forms to United indicating that it had received an assignment from Caldwell. See Doc. No. [4-2] (showing that Plaintiff marked "Y" for yes in box 53 of its claims forms to United, thereby representing that it had an assignment of benefits from Caldwell). In Connecticut State Dental Assoc., the Eleventh Circuit held that claims forms authorizing payment of patient's benefits to the provider "suffice to show an assignment of benefits by" the provider's patients. See 591 F.3d at 1351 ; see also Borrero, 610 F.3d at 1301 (finding similar claims form sufficient to confer standing on providers). Additionally, Plaintiff's own Complaint alleges that it has an assignment of benefits from Caldwell. See Doc. No. [1-1], ¶ 8 ("[Caldwell] would come into Plaintiff's facility for dialysis treatment every other day and upon the presentation of a valid insurance card reaffirming the initial assignment of benefit , Plaintiff would render said treatment to [Caldwell].") (emphasis added). See also Gables Insurance Recovery v. United Healthcare Ins. Co., No. 13-CV-21157, 2013 WL 9575577, at *7 (S.D. Fla. Aug. 8, 2013) ("[The plaintiff's] repudiation of rights is plainly controverted by [the plaintiff's] own [c]omplaint .... Moreover, if [the plaintiff] did not have standing to sue, it could not recover the payment it seeks in the present lawsuit.").
Plaintiff further argues that any assignment of benefits would not give it derivative standing to sue under ERISA because the Plan forbids the assignment of benefits to non-participating healthcare provider. Doc. No. , ¶ 7. Yet the existence of an anti-assignment provision, on its own, does not defeat subject matter jurisdiction. See Griffin v. United Healthcare of Ga., Inc., 754 F. App'x 793, 795–96 (11th Cir. 2018) (analyzing the dismissal of the plaintiff-provider's ERISA claim due to an anti-assignment provision under Federal Rule of Civil Procedure 12(b)(6) , for failure to state a claim, not 12(b)(1), for lack of subject matter jurisdiction); see also Filler v. Blue Cross of Cal., 593 F. App'x 685, 685–86 (9th Cir. 2015) ("As an assignment of his patients' ERISA benefits, [the provider] had both Article III standing and statutory standing to sue, notwithstanding the anti-assignment clauses in the patients' insurance contracts.").
United has also moved to conduct limited jurisdictional discovery on the assignments that Plaintiff obtained from Caldwell to support the existence of Plaintiff's standing. Doc. No. . Because the Court finds that the claims form submitted to United is sufficient to show an assignment of benefits by Caldwell, see Doc. No. [4-2], United's motion is thereby DENIED as moot . Doc. No. .
The Court must also determine whether Plaintiff's claims fall within the scope of ERISA. There are two types of claims that providers make against insurers: those challenging "rate of payment" and those challenging "right of payment." Borrero, 610 F.3d at 1302. Rate of payment claims challenge the amount of payment for a particular service. Right of payment claims challenge non-payment because the insurer denied the services altogether, often because the insurer deemed the services not medically necessary or experimental. Right of payment claims fall with the scope of ERISA. Rate of payment claims do not. Id. The Eleventh Circuit has found that hybrid claims—challenging both the rate of payment and the right of payment—still fall within the scope of ERISA under the Davila complete preemption analysis. See Connecticut State Dental Assoc., 591 F.3d at 1352 ; Borrero, 610 F.3d at 1303.
In the Complaint, Plaintiff alleges that Defendants have failed to pay $1,327,695.00 in medical bills for Caldwell's dialysis treatment. Doc. No. [1-1], ¶¶ 10–11. Based on this language, Plaintiff is making a right of payment claim. Therefore, Plaintiff's claims are within the scope of ERISA.
2. Does Any Other Legal Duty Support Plaintiff's Claims?
In applying the second prong of the Davila test, the Court must inquire as to whether Plaintiff's claims are predicated on an independent legal duty. The Eleventh Circuit has previously held that "[i]f some of a party's claims implicate legal duties dependent on the interpretation of an ERISA plan, the claims are completely preempted." Ehlen, 660 F.3d at 1288 (citation omitted); see also Gables Ins. Recovery, Inc. v. Blue Cross and Blue Shield of Fla., Inc., 813 F.3d 1333, 1338 (11th Cir. 2015) (holding that claims that "necessarily depend upon a breach of the ERISA plan ... do not arise out of a separate duty independent on the plan."). In this case, determining whether Plaintiff is entitled to relief under any of its state law claims would necessarily require the interpretation of the Plan's terms. See All. Med, LLC v. Blue Cross & Blue Shield of Ga., Inc., No. 2:15-CV-00171-RWS, 2016 WL 3208077, at *3 (N.D. Ga. June 10, 2016) (holding that claims for "misrepresentation, fraud, unfair trade practices, theft by deception, and RICO conspiracy" did not "implicate a legal duty independent of those imposed by ERISA" because "[r]esolution of these claims will necessarily require examining the ... plan documents."). Therefore, the Court finds that the second prong of the Davila test is satisfied.
Based on the foregoing, the Court concludes that ERISA completely preempts Plaintiff's state law claims. This Court therefore has subject matter jurisdiction. Accordingly, Plaintiff's Motion to Remand is DENIED . Doc. No. .
To the extent that only some of Plaintiff's state law claims are completely preempted under ERISA, the Court exercises supplemental jurisdiction over any remaining claims pursuant to 28 U.S.C. § 1367(a) because all the claims "arise out of the same general allegations." See Ehlen, 660 F.3d at 1288.
United has also moved the Court to correct the record in order to reflect that its Motion to Take Jurisdictional Discovery and Motion to Stay, see Doc. No.  ), was also intended as a response to Plaintiff's Motion to Remand. Doc. No. . Upon review, said motion is GRANTED .
B. Motion to Dismiss and Motion to Strike Jury Demand
In its Motion to Dismiss, United maintains that Plaintiff's state law claims are both completely and defensively preempted by ERISA and thus must be dismissed. See Doc. No. . As previously addressed, the Court agrees with United that Plaintiff's claims are completely preempted. See supra.
Moreover, defensive preemption defeats claims that seeks relief under state law claims that "relate to" an ERISA plan. See 29 U.S.C. § 1144(a) ; Lordmann Enters. v. Equicor, Inc., 32 F.3d 1529, 1532 (11th Cir. 1994). Because complete preemption exists only where a plaintiff seeks compensatory relief akin to that available under 29 U.S.C. § 1132(a) , "[c]omplete preemption is thus narrower than ‘defensive’ ERISA preemption, which broadly supersedes any and all State laws insofar as they relate to any ERISA plan." Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1281 (11th Cir. 2005) (emphasis in original; alterations omitted) (quoting 29 U.S.C. § 1142(a) ). Consequently, "claims that are completely preempted are also defensively preempted." Id. at 1281 ; Butero, 174 F.3d at 1215 ("If the plaintiff's claims are [completely preempted], then they are also defensively preempted."). As this Court has already found that Plaintiff's claims are completely preempted, it so follows that the claims are defensively preempted and therefore due to be dismissed. See, e.g., Autonation, Inc. v. United Healthcare Ins. Co., 423 F. Supp. 2d 1265, 1273 (S.D. Fla. 2006) (dismissing state law claims preempted by ERISA with prejudice).
United has simultaneously moved to strike Plaintiff's jury demand. See id. at p. 14. "It is well-settled that plaintiffs bringing ERISA claims are not entitled to jury trials under ERISA because such claims are equitable in nature." Rolland v. Textron, Inc., 300 F. App'x 635, 636 (11th Cir. 2008) ; see also Broaddus v. Florida Power Corp., 145 F.3d 1283, 1287 n.** (11th Cir. 1998). As such, United's Motion to Strike Jury Demand is due to be granted.
Therefore, United's Motion to Dismiss and Motion to Strike Jury Demand is GRANTED . Doc. No. . Plaintiff's Complaint is DISMISSED WITHOUT PREJUDICE . The Court, however, grants Plaintiff leave to re-file an amended complaint stating claims under ERISA.
United states that it does not oppose allowing Plaintiff to seek relief under ERISA should it so desire. See Doc. No. [4-1], p. 14.
Accordingly, Plaintiff's Motion to Remand is DENIED . Doc. No. . United's Motion to Dismiss and Motion to Strike Jury Demand is GRANTED . Doc. No. . Plaintiff's Complaint is thereby DISMISSED WITHOUT PREJUDICE with leave to file an amended complaint stating claims under ERISA. Plaintiff shall file an amended complaint, should it so desire, on or before January 13, 2020 . United's Motion to Take Jurisdictional Discovery and Motion to Stay is DENIED as moot . Doc. No. . United's Motion to Correct the Record is GRANTED . Doc. No. .
As there are no further issues outstanding, the Clerk is DIRECTED to CLOSE THIS CASE .
IT IS SO ORDERED this 17th day of December, 2019.