Lucile Salter Packard Children's Hospital at Stanford v. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc.

N.D. California

Lucile Salter Packard Children's Hospital at Stanford v. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc.

DecidedOctober 4, 2022

Docket3:21-cv-09606

StatusUnknown

This text of Lucile Salter Packard Children's Hospital at Stanford v. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. (Lucile Salter Packard Children's Hospital at Stanford v. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Lucile Salter Packard Children's Hospital at Stanford v. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc., (N.D. Cal. 2022).

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LUCILE SALTER PACKARD Case No. 21-cv-09606-EMC CHILDREN’S HOSPITAL AT STANFORD, 8 Plaintiff, ORDER GRANTING UNIVERSITY 9 DEFENDANTS’ MOTION TO v. DISMISS 10 BLUE CROSS BLUE SHIELD Docket No. 32 11 HEALTHCARE PLAN OF GEORGIA, INC., et al., 12 Defendants. 13 14 15 I. OVERVIEW 16 Plaintiff Lucile Salter Packard Children’s Hospital at Stanford brings suit against 17 Defendants Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. (“Blue Cross GA”), the 18 Board of Regents of the University System of Georgia, and the Georgia Institute of Technology 19 (“University Defendants”). Plaintiff claims it is owed compensation from University Defendants 20 for services provided to a non-party patient (“Patient D”)—an alleged enrollee of a health plan 21 “sponsored, administered, and/or financed by” University Defendants. See Docket No. 27 22 (“FAC”). Plaintiff bases its claims on theories of quantum meruit and breach of an implied-in-fact 23 contract. Id. 24 Now pending is University Defendants’ 12(b)(6) motion to dismiss Plaintiff’s suit. Docket 25 No. 32 (“MTD”). University Defendants present three arguments in support of dismissal: (1) 26 Plaintiff’s claims are barred by the Eleventh Amendment; (2) the Court lacks diversity jurisdiction 27 over Defendants because they are not citizens for diversity purposes; and (3), Plaintiff has not 1 For the following reasons, the Court GRANTS University Defendants’ motion to dismiss based 2 on the Eleventh Amendment. The order does not address the validity of the underlying contract 3 claim. 4 II. ANALYSIS 5 A. Rule 12(b)(6) 6 Federal Rule of Civil Procedure 8(a)(2) requires a “pleading that states a claim for relief” 7 to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” 8 Fed. R. Civ. P. 8(a)(2). A pleading that fails to meet this standard may be dismissed pursuant to 9 Rule 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss after 10 the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic 11 Corporation v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations [in the pleading] 12 ‘must . . . suggest that the claim has at least a plausible chance of success.’” Levitt v. Yelp! Inc., 13 765 F.3d 1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations in the [pleading] as 14 true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek 15 v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). “A claim has facial 16 plausibility when the Plaintiff pleads factual content that allows the court to draw the reasonable 17 inference that the Defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The 18 plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer 19 possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). The 20 Ninth Circuit treats Eleventh Amendment immunity as a quasi-jurisdictional affirmative defense 21 that will be waived if not asserted. See Tritchler v. Cnty. of Lake, 358 F.3d 1150 (9th Cir. 2004) 22 (citing ITSI TV Prods., Inc. v. Agric. Ass’ns, 3 F.3d 1289, 1291 (9th Cir.1993)). Thus, dismissal 23 under 12(b)(6) is appropriate where a defendant validly raises the Eleventh Amendment.1 See 24 Wagnon v. Rocklin Unified Sch. Dist., No. 217CV01666TLNKJN, 2021 WL 1214571 (E.D. Cal. 25

26 1 Considering the quasi-jurisdictional nature of the Eleventh Amendment, see Tritchler, 358 F.3d 1150, the Court also notes that a 12(b)(2) motion to dismiss may have been an appropriate 27 mechanism to move for dismissal. See Loucks v. Kaiser Found. Hosps., No. 20-CV-01216-EMC, 1 Mar. 31, 2021). 2 B. Eleventh Amendment 3 The Eleventh Amendment of the United States Constitution provides: “The Judicial power 4 of the United States shall not be construed to extend to any suit in law or equity, commenced or 5 prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects 6 of any Foreign State.” U.S. Const. amend. XI. The Supreme Court has construed the text of the 7 Amendment broadly, such that “an unconsenting State is immune from suits brought in federal 8 courts by her own citizens as well as by citizens of another state.” Pennhurst State Sch. & Hosp. 9 v. Halderman, 465 U.S. 89, 100 (1984); Beentjes v. Placer Cty. Air Pollution Control Dist., 397 10 F.3d 775, 777 (9th Cir. 2005) (“The ultimate guarantee of the Eleventh Amendment is that 11 nonconsenting States may not be sued by private individuals in federal court.”) (internal citation 12 omitted). This rule “extends to suits by citizens against their own state and certain actions against 13 state agencies and state instrumentalities.” Holz v. Nenana City Pub. Sch. Dist., 347 F.3d 1176, 14 1180 (9th Cir. 2003) (internal citations and quotation marks omitted). 15 University Defendants seek dismissal for failure to state a claim upon which relief can be 16 granted, contending they are immune from suit in federal court under the Eleventh Amendment. 17 See MTD. Eleventh Amendment immunity applies if University Defendants are properly 18 characterized as arms of the state of Georgia. See Holz, 347 F.3d at 1180. Numerous cases have 19 concluded that University Defendants are properly characterized as such. See, e.g., Nicholl v. Bd. 20 of Regents of Univ. Sys. of Ga., 706 F. App’x 493, 495 (11th Cir. 2017) (“The Board is considered 21 a state entity that is an arm of the state of Georgia for purposes of the Eleventh Amendment.”) 22 (citing Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613, 616–17 (2002)); Duva v. Bd. 23 of Regents of the Univ. Sys. of Georgia, 654 F. App’x 451, 453 (11th Cir. 2016) (“[T]he Board is 24 an agency of the State of Georgia.”); Baggett v. Georgia Inst. of Tech., No. 1:07-CV-1399-WSD- 25 AJB, 2009 WL 10665814, at *n.4 (N.D. Ga. Jan. 8, 2009) (“It is undisputed that under Georgia 26 law, the Board of Regents and the universities it operates, including Georgia Tech, are arms of the 27 State of Georgia.”); Peacock v. Riggsbee, 309 F. Supp. 542, 543 (N.D. Ga. 1970) (Eleventh 1 Therefore, University Defendants constitute arms of the state of Georgia and are entitled to 2 Eleventh Amendment immunity. 3 III. CONCLUSION 4 The Court finds that Plaintiff’s suit against University Defendants is barred by the 5 Eleventh Amendment of the United States Constitution, and GRANTS University Defendants’ 6 motion to dismiss. The Clerk is instructed to enter Judgment in favor of University Defendants. 7 This order disposes of Docket No. 32. 8 9 IT IS SO ORDERED.

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LUCILE SALTER PACKARD Case No. 21-cv-09606-EMC CHILDREN’S HOSPITAL AT STANFORD, 8 Plaintiff, ORDER GRANTING UNIVERSITY 9 DEFENDANTS’ MOTION TO v. DISMISS 10 BLUE CROSS BLUE SHIELD Docket No. 32 11 HEALTHCARE PLAN OF GEORGIA, INC., et al., 12 Defendants. 13 14 15 I. OVERVIEW 16 Plaintiff Lucile Salter Packard Children’s Hospital at Stanford brings suit against 17 Defendants Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. (“Blue Cross GA”), the 18 Board of Regents of the University System of Georgia, and the Georgia Institute of Technology 19 (“University Defendants”). Plaintiff claims it is owed compensation from University Defendants 20 for services provided to a non-party patient (“Patient D”)—an alleged enrollee of a health plan 21 “sponsored, administered, and/or financed by” University Defendants. See Docket No. 27 22 (“FAC”). Plaintiff bases its claims on theories of quantum meruit and breach of an implied-in-fact 23 contract. Id. 24 Now pending is University Defendants’ 12(b)(6) motion to dismiss Plaintiff’s suit. Docket 25 No. 32 (“MTD”). University Defendants present three arguments in support of dismissal: (1) 26 Plaintiff’s claims are barred by the Eleventh Amendment; (2) the Court lacks diversity jurisdiction 27 over Defendants because they are not citizens for diversity purposes; and (3), Plaintiff has not 1 For the following reasons, the Court GRANTS University Defendants’ motion to dismiss based 2 on the Eleventh Amendment. The order does not address the validity of the underlying contract 3 claim. 4 II. ANALYSIS 5 A. Rule 12(b)(6) 6 Federal Rule of Civil Procedure 8(a)(2) requires a “pleading that states a claim for relief” 7 to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” 8 Fed. R. Civ. P. 8(a)(2). A pleading that fails to meet this standard may be dismissed pursuant to 9 Rule 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss after 10 the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic 11 Corporation v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations [in the pleading] 12 ‘must . . . suggest that the claim has at least a plausible chance of success.’” Levitt v. Yelp! Inc., 13 765 F.3d 1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations in the [pleading] as 14 true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek 15 v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). “A claim has facial 16 plausibility when the Plaintiff pleads factual content that allows the court to draw the reasonable 17 inference that the Defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The 18 plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer 19 possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). The 20 Ninth Circuit treats Eleventh Amendment immunity as a quasi-jurisdictional affirmative defense 21 that will be waived if not asserted. See Tritchler v. Cnty. of Lake, 358 F.3d 1150 (9th Cir. 2004) 22 (citing ITSI TV Prods., Inc. v. Agric. Ass’ns, 3 F.3d 1289, 1291 (9th Cir.1993)). Thus, dismissal 23 under 12(b)(6) is appropriate where a defendant validly raises the Eleventh Amendment.1 See 24 Wagnon v. Rocklin Unified Sch. Dist., No. 217CV01666TLNKJN, 2021 WL 1214571 (E.D. Cal. 25

26 1 Considering the quasi-jurisdictional nature of the Eleventh Amendment, see Tritchler, 358 F.3d 1150, the Court also notes that a 12(b)(2) motion to dismiss may have been an appropriate 27 mechanism to move for dismissal. See Loucks v. Kaiser Found. Hosps., No. 20-CV-01216-EMC, 1 Mar. 31, 2021). 2 B. Eleventh Amendment 3 The Eleventh Amendment of the United States Constitution provides: “The Judicial power 4 of the United States shall not be construed to extend to any suit in law or equity, commenced or 5 prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects 6 of any Foreign State.” U.S. Const. amend. XI. The Supreme Court has construed the text of the 7 Amendment broadly, such that “an unconsenting State is immune from suits brought in federal 8 courts by her own citizens as well as by citizens of another state.” Pennhurst State Sch. & Hosp. 9 v. Halderman, 465 U.S. 89, 100 (1984); Beentjes v. Placer Cty. Air Pollution Control Dist., 397 10 F.3d 775, 777 (9th Cir. 2005) (“The ultimate guarantee of the Eleventh Amendment is that 11 nonconsenting States may not be sued by private individuals in federal court.”) (internal citation 12 omitted). This rule “extends to suits by citizens against their own state and certain actions against 13 state agencies and state instrumentalities.” Holz v. Nenana City Pub. Sch. Dist., 347 F.3d 1176, 14 1180 (9th Cir. 2003) (internal citations and quotation marks omitted). 15 University Defendants seek dismissal for failure to state a claim upon which relief can be 16 granted, contending they are immune from suit in federal court under the Eleventh Amendment. 17 See MTD. Eleventh Amendment immunity applies if University Defendants are properly 18 characterized as arms of the state of Georgia. See Holz, 347 F.3d at 1180. Numerous cases have 19 concluded that University Defendants are properly characterized as such. See, e.g., Nicholl v. Bd. 20 of Regents of Univ. Sys. of Ga., 706 F. App’x 493, 495 (11th Cir. 2017) (“The Board is considered 21 a state entity that is an arm of the state of Georgia for purposes of the Eleventh Amendment.”) 22 (citing Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613, 616–17 (2002)); Duva v. Bd. 23 of Regents of the Univ. Sys. of Georgia, 654 F. App’x 451, 453 (11th Cir. 2016) (“[T]he Board is 24 an agency of the State of Georgia.”); Baggett v. Georgia Inst. of Tech., No. 1:07-CV-1399-WSD- 25 AJB, 2009 WL 10665814, at *n.4 (N.D. Ga. Jan. 8, 2009) (“It is undisputed that under Georgia 26 law, the Board of Regents and the universities it operates, including Georgia Tech, are arms of the 27 State of Georgia.”); Peacock v. Riggsbee, 309 F. Supp. 542, 543 (N.D. Ga. 1970) (Eleventh 1 Therefore, University Defendants constitute arms of the state of Georgia and are entitled to 2 Eleventh Amendment immunity. 3 III. CONCLUSION 4 The Court finds that Plaintiff’s suit against University Defendants is barred by the 5 Eleventh Amendment of the United States Constitution, and GRANTS University Defendants’ 6 motion to dismiss. The Clerk is instructed to enter Judgment in favor of University Defendants. 7 This order disposes of Docket No. 32. 8 9 IT IS SO ORDERED. 10 11 Dated: October 4, 2022 12 13 ______________________________________ EDWARD M. CHEN 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27

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