Orthopedic Specialists of New Jersey PA v. Horizon Blue Cross/Blue Shield

518 F. Supp. 2d 128, 2007 WL 2937097
CourtDistrict Court, D. New Jersey
DecidedOctober 3, 2007
DocketCiv. 07-3925
StatusPublished
Cited by11 cases

This text of 518 F. Supp. 2d 128 (Orthopedic Specialists of New Jersey PA v. Horizon Blue Cross/Blue Shield) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orthopedic Specialists of New Jersey PA v. Horizon Blue Cross/Blue Shield, 518 F. Supp. 2d 128, 2007 WL 2937097 (D.N.J. 2007).

Opinion

OPINION and ORDER

FAITH S. HOCHBERG, District Judge.

This matter is before the Court on the Court’s own motion to consider subject matter jurisdiction. On August 16, 2007 Defendant Horizon Blue Cross/Blue Shield of New Jersey (“Horizon”) filed a Notice of Removal from New Jersey Superior Court, Bergen County pursuant to 28 U.S.C. § 1441. On August 21, 2007 the Court ordered both parties to submit additional briefing on jurisdiction. The Court has reviewed the submissions of the parties and has concluded that it lacks subject matter jurisdiction to proceed. Consequently, the Court will remand the parties to New Jersey Superior Court, Bergen County for further proceedings.

I. Background

The Federal Employees Health Benefits Act (“FEHBA” or “Act”), 5 U.S.C. §§ 8901-8914, was enacted in 1959 in order to provide federal employees with health benefits. FEHBA “charges the Office of Personnel Management (‘OPM’) with negotiating contracts with private insurance carriers to provide health benefit plans to federal employees.... ” Houston Cmty. Hosp. v. Blue Cross and Blue Shield of Tex., Inc., 481 F.3d 265, 267 (5th Cir.2007). Pursuant to FEHBA, OPM has the authority to contract for a “Service Benefit Plan,” defined in the Act as a “[g]overnment-wide plan, which may be underwritten by participating affiliates licensed in any number of States.... ” 5 U.S.C. § 8903(1). OPM has contracted for a Service Benefit Plan with the Blue Cross and Blue Shield Association (“Association”), the terms of which are contained in the Service Benefit Plan Master Contract (“Master Contract”) between OPM and the Association. (See Defendant’s Jurisdictional Brief in Response to Court’s Order of August 21, 2007 (“Def.Supp.Br.”) Ex. A1 (2002 Master Contract), B1 (2006 Master Contract).) The daily administration of the Service Benefit Plan is handled by local Blue Cross and Blue Shield companies. Defendant Horizon Blue Cross and Blue Shield administers the Service Benefit Plan in New Jersey.

Plaintiff Orthopedic Specialists of New Jersey (“Orthopedic Specialists”) is a medical services provider. On September 12, 2005 Plaintiff Orthopedic Specialists performed surgery on Emily Diguglielmo. Ms. Diguglielmo was an enrollee of the *131 Service Benefit Plan as a dependent of her husband, who was then an active federal employee. Plaintiff alleges in its complaint that, prior to performing the surgery on Ms. Diguglielmo, Plaintiff received pre-certification from Defendant, at which time Defendant agreed to reimburse Plaintiff for the procedure. Following the surgery, Plaintiff sought reimbursement for the procedure and was paid $24,279 by Defendant Horizon.

Subsequently, Defendant determined that Ms. Diguglielmo’s primary coverage was provided by Medicare. Based on this determination, Defendant declared that its previous payment of $24,279 to Plaintiff on Ms. Diguglielmo’s behalf was a mistake. Defendant then sought to recover the allegedly mistaken payment from Plaintiff pursuant to Defendant’s understanding of section 2.3(g) of the Master Contract between OPM and the Association. 1 In a letter sent August 15, 2006, Plaintiff demanded a total refund from Defendant in the amount of $24,279. When Plaintiff refused to refund the cost of the procedure, Defendant deducted $24,279 from amounts owing to Plaintiff for other reimbursable procedures.

Plaintiff filed suit in the Superior Court of New Jersey, Bergen County, on July 17, 2007 on a theory of promissory estoppel. (See Notice of Removal Ex. 1 (Complaint).) Plaintiff alleges in its complaint that “ORTHOPEDIC would not have performed the surgery but for its reliance on HORIZON’S representations.” (Id. ¶ 6.) Defendant filed a notice of removal on August 16, 2007. On August 21, 2007 this Court ordered additional briefing on jurisdiction. The Court has considered the parties’ additional submissions and concludes that it lacks subject matter jurisdiction to proceed.

II. Analysis

A. Standard

“[T]he general rule that federal courts have an ever-present obligation to satisfy themselves of their subject matter jurisdiction and to decide the issue sua sponte applies equally in removal cases.” See Liberty Mut. Ins. Co. v. Ward Trucking Corp., 48 F.3d 742, 750 (3d Cir.1995); see also Fed. R. Civ. Pro. 12(h) (“Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.”). This Court recognized a serious question about whether the federal officer removal statute, 28 U.S.C. § 1442(a)(1), provided a basis for jurisdiction over Plaintiffs claim. Consequently, the Court ordered additional briefing on this issue, giving the parties ample notice to be heard on this novel and important issue.

Generally, when a party moves “[p]ursuant to [Federal] Rule [of Civil Pro *132 cedure] 12(b)(1), the Court must accept as true all material allegations set forth in the complaint, and must construe those facts in favor of the nonmoving party.” Ballen-tine v. U.S., 486 F.3d 806, 810 (3d Cir. 2007) (citing Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). The same standard applies when the Court raises subject matter jurisdiction sua sponte. See, e.g., Slater v. Skyhawk Transp., Inc., 187 F.R.D. 185, 202 (D.N.J. 1999).

The facts as alleged in Plaintiffs complaint are not in dispute. Therefore the Court will use the same standard applicable to a facial subject matter jurisdiction challenge under Federal Rule of Civil Procedure 12(b)(1). “[A] court evaluating a facial challenge must accept the allegations in the complaint as true, and disposition of the motion becomes purely a legal question.” Sharawneh v. Gonzales, Civ. No. 07-683, 2007 WL 2684250, *1 (E.D.Pa. Sept.10, 2007) (citing Gould Elecs., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000)); see also 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure

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518 F. Supp. 2d 128, 2007 WL 2937097, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orthopedic-specialists-of-new-jersey-pa-v-horizon-blue-crossblue-shield-njd-2007.