THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 INLAND NORTHWEST RENAL CARE CASE NO. C19-1758-JCC-SKV GROUP, LLC, 10 ORDER 11 Plaintiff, v. 12 WEBTPA EMPLOYER SERVICES, LLC and 13 FIRST CHOICE HEALTH NETWORK, INC. 14 Defendants. 15
16 This matter comes before the Court on Defendants’ objections (Dkt. No. 115) to the 17 report and recommendation (“R&R”) of the Honorable S. Kate Vaughan, United States 18 Magistrate Judge (Dkt. No. 113).1 Having thoroughly considered the R&R, the briefing, the 19 relevant record, and finding oral argument unnecessary, the Court OVERRULES Defendants’ 20 objections, ADOPTS the R&R, and DENIES Defendants’ motion for judgement on the pleadings 21 (Dkt. No. 77), and GRANTS in part Plaintiff’s motion to strike (Dkt. No. 93) for the reasons 22 explained below. 23 24 1 In their briefs, both parties refer to Magistrate Judge Vaughan as “the magistrate.” 25 Congress adopted the title of “United States Magistrate Judge” several decades ago. Federal Courts Study Implementation Act of 1990, Pub. L. No. 101-650, § 321 (1990). In the future 26 filings, the parties should use the appropriate title for Judge Vaughan or any of her colleagues. 1 I. BACKGROUND 2 The R&R sets forth the facts and procedural history of this case, which the Court will not 3 repeat here. (See Dkt. No. 113 at 1–7.) Judge Vaughan recommends the Court DENY 4 Defendants’ motion for a judgement on the pleadings and GRANT in part Plaintiff’s motion to 5 strike. (Dkt. No. 113-1 at 1–2.) Defendants object on the grounds that Judge Vaughan 6 misconstrued the caselaw and applied the wrong legal standard. (Dkt. No. 115.) The Court 7 OVERRULES Defendants’ objections and ADOPTS the R&R in full for the reasons stated 8 below. 9 II. DISCUSSION 10 A district court reviews de novo the portions of an R&R to which a party properly 11 objects. See Fed. R. Civ. P. 72(b)(3). The district judge may accept, reject, or modify the 12 recommendations; receive further evidence; or return the matter to the magistrate judge with 13 further instructions. Id. A party properly objects when he or she files “specific written 14 objections” to the magistrate judge’s R&R as required under Federal Rule of Civil Procedure 15 72(b)(2). 16 A. Defendants’ Objections 17 1. Relevant Case Law 18 Defendants contend the R&R contradicts “two substantially identical cases from this 19 Circuit.” (Dkt. No. 115 at 2–5.) As a threshold issue, these cases are unpublished and not binding 20 on this Court. Ninth Circuit Rule 36-3. Moreover, they are factually distinguishable from the 21 present controversy. The first was based, in part, on adverse coverage determinations. LDFS LLC 22 v. IEC Grp. Inc., 2017 WL 3215556 slip op. at 2–3 (D. Ariz. 2017). Moreover, the defendant’s 23 failure in LDFS to meet the relevant healthcare plan’s obligations was dispositive. Id. Said 24 differently, because the claims in LDFS necessarily involved the plan, the plan became a 25 necessary party to the resolution of the claim. Id. As Judge Vaughan correctly noted, those facts 26 are not present here. (See Dkt. No. 113 at 15). And, even if it were binding, the second was 1 decided after Judge Vaughan issued her R&R. See Dedicato Treatment Ctr., Inc. v. IEC Grp., 2 Inc., 2022 WL 18216009 (C.D. Cal. 2022). Therefore, a failure to consider this decision could 3 not have been a source of error. Moreover, like LDFS, it is factually distinguishable. In Dedicato, 4 the plaintiff’s claims were based on misrepresentations about the benefits under the relevant 5 health plan, not contractual claims between the parties. Id., slip op. at 12. 6 Accordingly, the Court FINDS that Judge Vaughan did not err in her application of the 7 relevant case law. 8 2. Application of Legal Standard 9 Motions for judgement on the pleadings are governed by Rule 12(c). See Fed. R. Civ. P. 10 12(c). As Judge Vaughan correctly noted, they are “functionally identical” to Rule 12(b)(6) 11 motions. Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 12 2011). Like a Rule 12(b)(6) motion, a claim survives a Rule 12(c) motion where “the 13 complaint’s factual allegations, together with all reasonable inferences, state a plausible claim for 14 relief.” Id. at 1054. In considering such a motion, a court “must accept all factual allegations in 15 the complaint as true and construe them in the light most favorable to the non-moving party.” 16 Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). 17 Despite this precedent, Defendants argue that Judge Vaughan was wrong to apply the 18 “general Rule 12 standard, which resolves all doubts in the plaintiff’s favor.” (Dkt. No. 115 at 5) 19 (emphasis added). Defendants do not contend that Rule 12(c) does not apply to motions for 20 judgment on the pleadings, nor do they contest the Ninth Circuit law applying this legal standard. 21 Instead, they seek to sidestep the Rule 12 standard for a presumably more deferential standard 22 under Rule 19. (Dkt. No. 115 at 5.) If Judge Vaughan should have applied anything but what the 23 Defendants label a “general Rule 12 standard,” Defendants must provide case law to support this 24 argument. Instead, they cite cases involving Rule 19 analysis. (Id.) Not one supports the notion 25 that the “general Rule 12 standard” would not apply here. 26 Accordingly, the Court FINDS that Judge Vaughan did not err in her application of the 1 legal standard for a Rule 12(c) motion. 2 3. Plaintiff’s Motion to Strike 3 Plaintiff filed a surreply to Defendants’ Rule 12(c) motion, asking Judge Vaughan to 4 strike “a series of false, misleading, and improper arguments in Defendant WebTPA’s Reply” 5 brief. (Dkt. No. 93 at 1.) In response, Judge Vaughan struck three out of four of Defendants’ 6 challenged statements. (Dkt. No. 113 at 25–27.) In so doing, Judge Vaughan made the following 7 statements, which Defendants object to: “nowhere in its opposition did Northwest argue the 8 plaintiff in either case [LDFS] was seeking plan benefits under ERISA,” and “WebTPA 9 mischaracterized the facts in LDFS when it misleadingly quoted an argument from the LDFS 10 plaintiff’s brief.” (Dkt. No. 115 at 10.) 11 In supporting these objections, Defendants’ quote the Plaintiff, who argued that the 12 plaintiff in LDFS was “expressly seeking plan benefits and challenging the plan’s denial of 13 benefits.” (Id.) Defendants then cite LDFS to demonstrate that the group health plan in question 14 were governed by ERISA. (Id.) This belies the point. Just because a plan was governed by 15 ERISA, it does not necessarily follow that a plaintiff is seeking plan benefits under ERISA. 16 Judge Vaughan correctly noted this distinction, (Dkt. No. 113 at 26), and did not err in striking 17 this portion of Defendants’ reply brief. 18 Defendants’ remaining objections to Judge Vaughan’s ruling on the motion to strike are 19 little more than thinly veiled efforts to reiterate the merits of their claims, are filled with 20 conclusory statements, summarize arguments previously presented, and do not demonstrate any 21 error on the part of Judge Vaughan. (Compare Dkt. No. 113 at 25–27, with Dkt. No. 115 at 10– 22 11).
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THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 INLAND NORTHWEST RENAL CARE CASE NO. C19-1758-JCC-SKV GROUP, LLC, 10 ORDER 11 Plaintiff, v. 12 WEBTPA EMPLOYER SERVICES, LLC and 13 FIRST CHOICE HEALTH NETWORK, INC. 14 Defendants. 15
16 This matter comes before the Court on Defendants’ objections (Dkt. No. 115) to the 17 report and recommendation (“R&R”) of the Honorable S. Kate Vaughan, United States 18 Magistrate Judge (Dkt. No. 113).1 Having thoroughly considered the R&R, the briefing, the 19 relevant record, and finding oral argument unnecessary, the Court OVERRULES Defendants’ 20 objections, ADOPTS the R&R, and DENIES Defendants’ motion for judgement on the pleadings 21 (Dkt. No. 77), and GRANTS in part Plaintiff’s motion to strike (Dkt. No. 93) for the reasons 22 explained below. 23 24 1 In their briefs, both parties refer to Magistrate Judge Vaughan as “the magistrate.” 25 Congress adopted the title of “United States Magistrate Judge” several decades ago. Federal Courts Study Implementation Act of 1990, Pub. L. No. 101-650, § 321 (1990). In the future 26 filings, the parties should use the appropriate title for Judge Vaughan or any of her colleagues. 1 I. BACKGROUND 2 The R&R sets forth the facts and procedural history of this case, which the Court will not 3 repeat here. (See Dkt. No. 113 at 1–7.) Judge Vaughan recommends the Court DENY 4 Defendants’ motion for a judgement on the pleadings and GRANT in part Plaintiff’s motion to 5 strike. (Dkt. No. 113-1 at 1–2.) Defendants object on the grounds that Judge Vaughan 6 misconstrued the caselaw and applied the wrong legal standard. (Dkt. No. 115.) The Court 7 OVERRULES Defendants’ objections and ADOPTS the R&R in full for the reasons stated 8 below. 9 II. DISCUSSION 10 A district court reviews de novo the portions of an R&R to which a party properly 11 objects. See Fed. R. Civ. P. 72(b)(3). The district judge may accept, reject, or modify the 12 recommendations; receive further evidence; or return the matter to the magistrate judge with 13 further instructions. Id. A party properly objects when he or she files “specific written 14 objections” to the magistrate judge’s R&R as required under Federal Rule of Civil Procedure 15 72(b)(2). 16 A. Defendants’ Objections 17 1. Relevant Case Law 18 Defendants contend the R&R contradicts “two substantially identical cases from this 19 Circuit.” (Dkt. No. 115 at 2–5.) As a threshold issue, these cases are unpublished and not binding 20 on this Court. Ninth Circuit Rule 36-3. Moreover, they are factually distinguishable from the 21 present controversy. The first was based, in part, on adverse coverage determinations. LDFS LLC 22 v. IEC Grp. Inc., 2017 WL 3215556 slip op. at 2–3 (D. Ariz. 2017). Moreover, the defendant’s 23 failure in LDFS to meet the relevant healthcare plan’s obligations was dispositive. Id. Said 24 differently, because the claims in LDFS necessarily involved the plan, the plan became a 25 necessary party to the resolution of the claim. Id. As Judge Vaughan correctly noted, those facts 26 are not present here. (See Dkt. No. 113 at 15). And, even if it were binding, the second was 1 decided after Judge Vaughan issued her R&R. See Dedicato Treatment Ctr., Inc. v. IEC Grp., 2 Inc., 2022 WL 18216009 (C.D. Cal. 2022). Therefore, a failure to consider this decision could 3 not have been a source of error. Moreover, like LDFS, it is factually distinguishable. In Dedicato, 4 the plaintiff’s claims were based on misrepresentations about the benefits under the relevant 5 health plan, not contractual claims between the parties. Id., slip op. at 12. 6 Accordingly, the Court FINDS that Judge Vaughan did not err in her application of the 7 relevant case law. 8 2. Application of Legal Standard 9 Motions for judgement on the pleadings are governed by Rule 12(c). See Fed. R. Civ. P. 10 12(c). As Judge Vaughan correctly noted, they are “functionally identical” to Rule 12(b)(6) 11 motions. Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 12 2011). Like a Rule 12(b)(6) motion, a claim survives a Rule 12(c) motion where “the 13 complaint’s factual allegations, together with all reasonable inferences, state a plausible claim for 14 relief.” Id. at 1054. In considering such a motion, a court “must accept all factual allegations in 15 the complaint as true and construe them in the light most favorable to the non-moving party.” 16 Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). 17 Despite this precedent, Defendants argue that Judge Vaughan was wrong to apply the 18 “general Rule 12 standard, which resolves all doubts in the plaintiff’s favor.” (Dkt. No. 115 at 5) 19 (emphasis added). Defendants do not contend that Rule 12(c) does not apply to motions for 20 judgment on the pleadings, nor do they contest the Ninth Circuit law applying this legal standard. 21 Instead, they seek to sidestep the Rule 12 standard for a presumably more deferential standard 22 under Rule 19. (Dkt. No. 115 at 5.) If Judge Vaughan should have applied anything but what the 23 Defendants label a “general Rule 12 standard,” Defendants must provide case law to support this 24 argument. Instead, they cite cases involving Rule 19 analysis. (Id.) Not one supports the notion 25 that the “general Rule 12 standard” would not apply here. 26 Accordingly, the Court FINDS that Judge Vaughan did not err in her application of the 1 legal standard for a Rule 12(c) motion. 2 3. Plaintiff’s Motion to Strike 3 Plaintiff filed a surreply to Defendants’ Rule 12(c) motion, asking Judge Vaughan to 4 strike “a series of false, misleading, and improper arguments in Defendant WebTPA’s Reply” 5 brief. (Dkt. No. 93 at 1.) In response, Judge Vaughan struck three out of four of Defendants’ 6 challenged statements. (Dkt. No. 113 at 25–27.) In so doing, Judge Vaughan made the following 7 statements, which Defendants object to: “nowhere in its opposition did Northwest argue the 8 plaintiff in either case [LDFS] was seeking plan benefits under ERISA,” and “WebTPA 9 mischaracterized the facts in LDFS when it misleadingly quoted an argument from the LDFS 10 plaintiff’s brief.” (Dkt. No. 115 at 10.) 11 In supporting these objections, Defendants’ quote the Plaintiff, who argued that the 12 plaintiff in LDFS was “expressly seeking plan benefits and challenging the plan’s denial of 13 benefits.” (Id.) Defendants then cite LDFS to demonstrate that the group health plan in question 14 were governed by ERISA. (Id.) This belies the point. Just because a plan was governed by 15 ERISA, it does not necessarily follow that a plaintiff is seeking plan benefits under ERISA. 16 Judge Vaughan correctly noted this distinction, (Dkt. No. 113 at 26), and did not err in striking 17 this portion of Defendants’ reply brief. 18 Defendants’ remaining objections to Judge Vaughan’s ruling on the motion to strike are 19 little more than thinly veiled efforts to reiterate the merits of their claims, are filled with 20 conclusory statements, summarize arguments previously presented, and do not demonstrate any 21 error on the part of Judge Vaughan. (Compare Dkt. No. 113 at 25–27, with Dkt. No. 115 at 10– 22 11). Consideration of such “objections” would entail de novo review of the entire report, 23 rendering the referral to the magistrate judge useless and causing a duplication of time and effort 24 that wastes judicial resources and contradicts the purposes of the Magistrates Act. See Howard v. 25 Sec’y of Health and Human Servs., 932 F.2d 505, 509 (6th Cir. 1991). 26 1 III. CONCLUSION 2 For the foregoing reasons, the Court hereby FINDS and ORDERS as follows: 3 1. Defendants’ objections to the R&R (Dkt. No. 115) are OVERRULED; 4 2. The Court APPROVES and ADOPTS the R&R (Dkt. No. 113); 5 3. Defendants’ motion for judgement on the pleadings (Dkt. No. 77) is DENIED; 6 4. Plaintiff’s motion to strike is GRANTED in part (Dkt. No. 93) as outlined in the R&R 7 (Dkt. No. 113); 8 5. The Clerk is DIRECTED to send copies of this order to Judge Vaughan. 9 10 DATED this 16th day of February 2023. 11 A 12 13 John C. Coughenour 14 UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26