Northwestern Memorial Healthcare v. Anthem Blue Cross of California

• Court: District Court, N.D. Illinois
• Decided: August 11, 2025
• Docket: 1:24-cv-02941
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

NORTHWESTERN MEMORIAL ) HEALTHCARE, ) Plaintiff, ) No. 1:24-CV-02941 ) v. ) ) Judge Edmond E. Chang ANTHEM BLUE CROSS OF CALIFORNIA; ) ANTHEM BLUE CROSS LIFE AND ) HEALTH INSURANCE COMPANY ) ) Defendants. )

MEMORANDUM OPINION AND ORDER

Northwestern Memorial Healthcare provided medical treatment to nine pa- tients who were insured by Anthem Blue Cross of California. R. 22, Sec. Am. Compl. ¶ 10.1 After providing the treatment, Northwestern billed Anthem around $550,000. Id. ¶¶ 15–16. But Anthem did not pay this full amount, instead paying Northwestern roughly $258,000 across the nine claims. Id. ¶ 17. So Northwestern sued Anthem, claiming that Anthem breached its implied contract with Northwestern and unjustly benefitted from Northwestern’s actions.2 Sec. Am. Compl. Anthem now moves to dismiss, contending that Northwestern has failed to state a claim for relief. R. 23, Defs.’ Mot. The motion to dismiss is granted in part and dismissed in part. The Employee Retirement Security Act of 1974 (ERISA),

1Citations to the record are “R.” followed by the docket entry number and, if needed, a page or paragraph number.

2The Court has diversity jurisdiction over this case, 28 U.S.C. § 1332(a), because the Plaintiff is an Illinois citizen, the Defendants are both California citizens, and the amount in controversy is more than $75,000. Sec. Am. Compl. at 2–3. 29 U.S.C. § 1001 et seq., does not preempt Northwestern’s state law claims, there is no written contract directly between the parties, and Northwestern conferred several benefits upon Anthem. So Northwestern’s quantum meruit claim survives the motion

to dismiss. But because Northwestern already had a preexisting contractual duty to treat Anthem’s patients, Northwestern’s implied contract claim is dismissed. I. Background The Court accepts all well-pleaded factual allegations in the Complaint as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). From April 2018 to February 2022, Northwestern Memorial Healthcare provided medical treatment to a group of nine patients who were all in-

sured by Anthem Blue Cross of California. Sec. Am. Compl. ¶¶ 10–11. Northwestern charged Anthem around $550,000 for these patients’ care. Id. ¶¶ 15–16. Before Northwestern provided the treatment, it sought pre-authorization from Anthem for the care, confirming with Anthem that the care was medically necessary and covered under the patients’ insurance plans. Anthem pre-authorized all nine of the treatment claims. Id. ¶ 12. So Northwestern provided the medical care—but despite the pre-

authorization, Anthem did not pay the full amount that it was charged. Id. ¶ 17. In- stead, Anthem denied seven of the nine claims and paid Northwestern roughly $258,000 in total. Id. After accounting for the discount that Anthem receives on care from Northwestern, Northwestern alleges that it was underpaid around $183,000. R. 22-1, Sec. Am. Compl., Exh A.

2 So Northwestern brought this suit against Anthem. Specifically, Northwestern brings two claims: First, it alleges that Anthem breached an implied contract with Northwestern by refusing to pay the full amount of the claims. Second, Northwestern

brings a quantum meruit claim, asserting that Anthem unjustly benefitted by receiv- ing unpaid medical care for its customers. Sec. Am. Compl. Anthem now moves to dismiss the Complaint, contending that Northwestern has failed to state a claim for relief. Defs.’ Mot. II. Legal Standard Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include “a short and plain statement of the claim showing that the pleader is entitled

to relief.” Fed. R. Civ. P. 8(a)(2). This short and plain statement must “give the de- fendant fair notice of what the claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555 (cleaned up).3 The Seventh Circuit has explained that this rule “reflects a liberal notice pleading regime, which is intended to ‘focus litigation on the merits of a claim’ rather than on technicalities that might keep plaintiffs out of court.” Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v.

Sorema N.A., 534 U.S. 506, 514 (2002)). “A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted.” Hallinan v. Fraternal Order of Police

3This opinion uses (cleaned up) to indicate that internal quotation marks, alterations, and citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations, 18 Journal of Appellate Practice and Process 143 (2017). 3 of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). “[A] complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (cleaned up). These allegations “must be enough

to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678–79. III. Analysis A. ERISA Preemption As a threshold matter, Anthem argues that Northwestern’s state law claims are preempted by ERISA and thus should be dismissed. R. 24, Defs.’ Br. at 12–13.

But that argument fails; ERISA does not preempt Northwestern’s implied contract and quantum meruit claims. ERISA expressly preempts any state law claims that “relate to any employee benefit plan” that is governed by ERISA. 29 U.S.C. § 1144(a). A state law claim “re- lates to” an ERISA plan “if the claim requires the court to interpret or apply the terms of” that plan. Collins v. Ralston Purina Co., 147 F.3d 592, 595 (7th Cir. 1998). Here,

the Court must first determine whether Northwestern’s nine insurance claims were governed by ERISA plans. If so, then the Court must next determine whether decid- ing the implied contract and quantum meruit claims would require the Court to ex- amine and interpret the terms of the ERISA plans. See id.; Segerberg v. Pipe Fitters’ Welfare Fund, Loc. 597, 918 F. Supp. 2d 780, 784 (N.D. Ill. 2013).

4 Northwestern does not dispute that the nine claims were all governed by ERISA plans. R. 28, Pl.’s Resp. Br. at 12–16. So the only question is whether North- western’s state law claims would require the Court to interpret the terms of the health

insurance plans. Anthem argues that the Court would have to interpret the ERISA plans’ terms to decide whether the care provided was covered by the plans, and thus whether Anthem was obligated to pay for the billed charges. Defs.’ Br. at 13–15. But that argument misses the mark. Before it treated the nine Anthem patients, North- western sought pre-authorization from Anthem for all of the planned care. Sec. Am. Compl. ¶ 12. And Anthem provided that authorization, thereby confirming that all of the expected treatment was medically necessary and covered by the patients’ Anthem

health insurance plans. Id. That means that there is no remaining question about whether the provided treatment was within the scope of the patients’ insurance plans. That question has already been answered by the parties’ conduct—at least as alleged by Northwestern and as the premise of its specific claims. Thus, there is no need for the Court to independently dig into the Anthem plans’ terms to make a de- termination about treatment coverage. So deciding Northwestern’s state-law claims

would not require interpretation or application of the terms of the ERISA plans. Anthem cites to Northwestern Memorial Healthcare v. Anthem Blue Cross and Blue Shield, 2025 WL 1455823 (N.D. Ill. May 21, 2025), and argues that that decision shows that Northwestern’s state law claims here trigger ERISA conflict preemption. Though that opinion did conclude that ERISA preemption applied, it does not change the outcome here. In Northwestern Memorial, like in this case, Northwestern sued 5 Anthem for failing to pay the full billed amount of patients’ insurance claims. Id. at *2. The court reasoned that in order to determine liability and damages on North- western’s claims, it would have to decide whether the care that Northwestern pro-

vided was medically necessary. Id. at *4. And the court explained that to determine medical necessity, it would have to interpret the patients’ ERISA plans, thereby trig- gering conflict preemption. Id. But the court there did not address whether Anthem’s pre-authorization of the patients’ care would eliminate the need to dig into the ERISA plans given the state law claims advanced by Northwestern here. See id. at *4–*5. Thus, the decision does not undermine or conflict with this Court’s rationale that pre- authorization resolves the medical-necessity question and removes the need to exam-

ine the ERISA plan terms. ERISA thus does not preempt Northwestern’s state law claims.4 B. Implied Contract Moving on to the claims themselves, Anthem asserts that Northwestern’s im- plied contract claim fails because Northwestern did not provide consideration for the alleged implied contract. Defs.’ Br. at 6–7. That is correct, and it is fatal to North-

western’s first claim. “[V]alid consideration, on the part of both parties, is one of the essential re- quirements for the formation of a contract.” Marque Medicos Fullerton, LLC v. Zurich

4Fact discovery may reveal that Anthem did not in fact pre-authorize the care that Northwestern provided, or that there is at least a genuine dispute over the pre-authorization, thus requiring a factual resolution. If it turns out that Anthem did not provide pre-authori- zation, then Anthem may re-raise its argument on ERISA preemption. 6 Am. Ins. Co., 83 N.E. 3d 1027, 1044 (Ill. App. 2017). But “consideration cannot flow from an act performed pursuant to preexisting legal duty.” Id. In other words, if a party is already legally obligated to take an action, that action cannot serve as valid

consideration for a contract. Here, Northwestern claims that its treatment of the Anthem patients was the consideration it provided for the contract with Anthem. Pl.’s Resp. Br. at 7. But Northwestern already had a preexisting legal duty to treat the Anthem patients. As Northwestern itself alleges, it had previously entered into a contract with Blue Cross Blue Shield of Illinois that “obligated [Northwestern] to medically treat individuals belonging to health plans financed, sponsored, and/or administrated by member com-

panies belonging to the national Blue Cross Blue Shield Association, of which Anthem is one such member.” Sec. Am. Compl. ¶ 25. So put simply, Northwestern’s contract with Blue Cross Blue Shield required Northwestern to treat Anthem patients, inde- pendent of any contract that Northwestern later formed with Anthem. Northwestern thus had a preexisting legal duty to treat the nine Anthem patients. Thus, the treat- ment that Northwestern provided could not serve as valid consideration for a contract

with Anthem. And because there is no valid consideration, Northwestern fails to properly state an implied contract claim. See Marque Medicos Fullerton, 83 N.E. 3d at 1044. Anthem’s motion to dismiss is granted as to the implied contract claim. C. Quantum Meruit Finally, on Northwestern’s clam for quantum meruit, Anthem argues that Northwestern fails to state a claim because (1) there is a written contract that deals 7 with the same subject matter as the claim and (2) Northwestern does not allege that it conferred a benefit directly on Anthem. Defs.’ Br. at 10–11. Neither of these argu- ments carries the day.

First, Anthem is correct that there is a written contract that deals with the treatment of Anthem patients. As explained above, Northwestern did enter into a written contract with Blue Cross Blue Shield, obligating Northwestern to treat An- them patients. Sec. Am. Compl. ¶ 25. But that written contract is not between North- western and Anthem; it is between Northwestern and Blue Cross Blue Shield. Id. Thus, the contract does not undermine Northwestern’s quantum meruit claim. See Keck Garrett & Assocs. v. Nextel Commc’ns, 517 F.3d 476, 487 (7th Cir. 2008).

In support of its argument that Northwestern’s claim fails due to the Blue Cross Blue Shield contract, Anthem cites Keck Garrett & Associates v. Nextel Com- munications, 517 F.3d 476 (7th Cir. 2008). Defs.’ Br. at 10. In Keck Garrett, the court concluded that “Illinois law does not permit a party to recover on a theory of quasi- contract when an actual contract governs the parties’ relations on that issue.” Keck Garrett, 517 F.3d at 487. But again, there is no contract between Northwestern and

Anthem that governs their relationship with each other. Instead, there is only a con- tract between Northwestern and Blue Cross Blue Shield that discusses Northwest- ern’s obligations to Anthem. Sec. Am. Compl. ¶ 25. That is not enough to knock out the quantum meruit claim. In Keck Garrett, the written contract governing relations between the parties was between the parties themselves. To defeat Northwestern’s quantum meruit claim, the same would have to be true here. Keck Garrett, 517 F.3d 8 at 487. But it is not. There is no written contract specifically between Anthem and Northwestern governing their relationship. Second, Anthem argues that the quantum meruit claim fails because North-

western does not allege any direct benefit conferred upon Anthem. Defs.’ Br. at 11. Instead, Anthem claims that by treating the patients, Northwestern conferred bene- fits only on the patients themselves, not on Anthem as the insurer. Id. But that ar- gument ignores the contents of Northwestern’s Complaint. Anthem is right that a plaintiff bringing a quasi-contract claim must plausibly allege that it conferred a ben- efit on the defendant. Muehlbauer v. General Motors Corp., 431 F. Supp. 2d 847, 852 (N.D. Ill. 2006). But Anthem is wrong in saying that Northwestern failed to make

such allegations. In its Complaint, Northwestern alleges that it directly conferred several bene- fits on Anthem. Northwestern says that by treating Anthem’s patients, Northwestern (1) helped Anthem gain cost savings, (2) provided better customer satisfaction to An- them, (3) allowed Anthem to increase its market share, and (4) gave Anthem the abil- ity to retain the premiums that its customers paid. Sec. Am. Compl. ¶ 22. These are

all benefits that Northwestern conferred on Anthem, not on the patients. So North- western has properly alleged a claim for quantum meruit, and that claim survives the motion to dismiss. IV. Conclusion Anthem’s motion to dismiss, R. 23, is granted in part and denied in part. The motion to dismiss is granted as to Northwestern’s implied contract claim. But the 9 motion is denied as to the quantum meruit claim, so discovery may commence on that claim. ENTERED:

s/Edmond E. Chang Honorable Edmond E. Chang United States District Judge

DATE: August 11, 2025