Patrick Shih, M.D., P.A. v. Blue Cross & Blue Shield of Texas Inc<b><font color="red">Case remanded to 113th Judicial District Court of Harris County, Texas.</font></b>

CourtDistrict Court, S.D. Texas
DecidedFebruary 10, 2022
Docket4:21-cv-01530
StatusUnknown

This text of Patrick Shih, M.D., P.A. v. Blue Cross & Blue Shield of Texas Inc<b><font color="red">Case remanded to 113th Judicial District Court of Harris County, Texas.</font></b> (Patrick Shih, M.D., P.A. v. Blue Cross & Blue Shield of Texas Inc<b><font color="red">Case remanded to 113th Judicial District Court of Harris County, Texas.</font></b>) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Patrick Shih, M.D., P.A. v. Blue Cross & Blue Shield of Texas Inc<b><font color="red">Case remanded to 113th Judicial District Court of Harris County, Texas.</font></b>, (S.D. Tex. 2022).

Opinion

UNITED STATES DISTRICT COURT February 14, 2022 SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk HOUSTON DIVISION

PATRICK SHIH, M.D., P.A., § § Plaintiff, § § VS. § CIVIL ACTION NO. 4:21-CV-01530 § BLUE CROSS & BLUE SHIELD OF § TEXAS INC, et al., § § Defendants. §

MEMORANDUM & ORDER Pending before the Court is Plaintiff Patrick Shih, M.D., P.A.’s Motion for Reconsideration of the Court’s Order denying remand on August 20, 2021 (Doc. 33), as well as the Parties’ Joint Motion to Modify the Scheduling Order (Doc. 39). The Court held a hearing on these motions on December 17, 2021, at which it took the motions under advisement. Plaintiff subsequently submitted a Notice of Supplemental Authority (Doc. 44), and Defendant responded (Doc. 46), as to the Motion for Reconsideration. After considering the Parties’ oral argument and the various filings related to the issue of remand, the Court DENIES IN PART AND GRANTS IN PART Plaintiff’s Motion for Reconsideration. The Court, which now retains jurisdiction over this case, also GRANTS the Parties’ Joint Motion to Modify. (Doc. 39.) The Court sets forth its reasoning below. I. BACKGROUND Plaintiff Patrick Shih, M.D., P.A. (“Shih”) brought this medical billing dispute against Blue Cross & Blue Shield of Texas, Inc. (“BCBSTX” or “Defendant”) and various employers whose health plans BCBSTX administers. Shih allegedly provided both emergent and pre- 1 / 15 authorized non-emergent medical services, as an out-of-network provider, to over 200 patients with BCBSTX plans, and that BCBSTX underpaid Shih by nearly $4 million. Shih sued Defendants in state court on six contract theories, as well as for tortious interference, violation of unspecified Texas health laws, and violation of the Texas Prompt Payment of Claims Act. BCBSTX removed.

Shih filed a Motion to Remand on June 9, 2021. (Doc. 21.) The Court denied that motion at a hearing on August 20, 2021; it also issued a Memorandum & Opinion (“Order”) as to the bases of its decision for the benefit of the parties. (Doc. 32.) Plaintiff filed a Motion for Reconsideration (Doc. 33) as to the Court’s ruling on the Motion to Remand. The Motion for Reconsideration is now before the Court. Also pending is an Agreed Motion to Modify the Scheduling Order (Doc. 39). II. MOTION FOR RECONSIDERATION A. Legal Standards “Rule 59(e) governs motions to alter or amend a final judgment,” while “Rule 54(b)

allows parties to seek reconsideration of interlocutory orders and authorizes the district court to ‘revise[] at any time’ ‘any order or other decision . . . [that] does not end the action[.]’” Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017) (quoting Fed. R. Civ. P. 54(b)). The Court has not yet issued a final judgment and thus applies Rule 54(b). Under Rule 54(b), “district courts have inherent power to reconsider interlocutory orders and reopen any part of a case before entry of a final judgment.” Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991) (internal citations omitted). Nevertheless, motions for reconsideration under Rule 54, like those under Rule 59, “serve the narrow purpose of allowing a party to correct manifest errors of law or fact or to present newly discovered evidence.” Waltman v. Int’l. Paper

2 / 15 Co., 875 F.2d 468, 473 (5th Cir. 1989); see also S. Snow Mfg. Co. v. SnoWizard Holdings, Inc., 921 F. Supp. 2d 548, 565 (E.D. La. 2013). “[T]his broad discretion must be exercised sparingly in order to forestall the perpetual reexamination of orders and the resulting burdens and delays.” SnoWizard, 921 F. Supp. 2d at 564–65. “A motion for reconsideration may not be used to rehash rejected arguments or introduce new arguments.” LeClerc v. Webb, 419 F.3d 405, 412 n.13 (5th

Cir. 2005). Classic reasons for granting reconsideration include: “(1) the judgment is based upon a manifest error of fact or law; (2) newly discovered or previously unavailable evidence exists; (3) manifest injustice would otherwise result; (4) there has been serious misconduct by counsel; and (5) an intervening change in controlling law alters the appropriate outcome.” Livingston Downs Racing Ass’n, Inc. v. Jefferson Downs Corp., 259 F. Supp. 2d 471, 475–76 (M.D. La. 2002). This case concerns ERISA preemption. ERISA preemption is governed, as the parties agree, by the two-prong test of Aetna Health Inc. v. Davila, 542 U.S. 200 (2004). Under Davila’s conjunctive test, removal is appropriate if (1) the plaintiff, “at some point in time, could have

brought Plaintiff’s claim under ERISA § 502(a)(1)(B),” and (2) “there is no other independent legal duty that is implicated by a defendant’s actions.” Id. at 210. B. Reconsideration of Remand Plaintiff offers three grounds for reconsideration: (1) as to the first Davila prong, that the Court erroneously deemed a jurisdictional argument waived; (2) that the Court misapplied the standard for the second Davila prong and failed to specifically address the “Memorial Hospital Rule”; and (3) that the Court improperly shifted the burden of proof for removal to the Plaintiff. In the alternative to remand, Plaintiff seeks leave to voluntarily dismiss its claims relating to patient encounters forming the basis of federal jurisdiction.

3 / 15 1. Davila Prong One In the Order now on reconsideration, the Court held: Shih also contends that the Blue Cross plans at issue contained anti-assignment provisions that void any alleged assignments—but this argument is based on the plans’ general anti-assignment provision and ignores their express carve-out for a “written assignment of benefits.” And to the extent that Shih contended in [its] Reply Brief that the anti-assignment’s carve-out provision was not triggered because the “written assignment [was not] delivered to the Carrier with the claim for benefits,” that argument was not raised in the Motion to Remand and therefore will not be considered.

(Doc 32, at 3-4) (citations omitted). Plaintiff argues that it was a clear error of law to exercise subject-matter jurisdiction based on a finding that Plaintiff waived the anti-assignment issue. See, e.g., Wisconsin Dep’t of Corr. v. Schacht, 524 U.S. 381, 389 (1998) (citations omitted) (“No party can waive the defect or consent to jurisdiction . . . No court can ignore the defect; rather a court, noticing the defect, must raise the matter on its own.”); Goodrich v. U.S., 3 F.4th 776, 778–79 (5th Cir. 2021) (“Jurisdiction cannot be waived, and it is the duty of a federal court first to decide, sua sponte if necessary, whether it has jurisdiction before the merits of the case can be addressed. When courts lack subject matter jurisdiction over a case, they lack the power to adjudicate the case and must dismiss it.”) (internal quotation marks and citations omitted). Because jurisdiction is not waivable, Plaintiff urges the Court to “give a fresh eye to the anti-assignment issue, and its potential implications to the validity of the any judgment rendered in this Court.” Doc. 33, at 6-7. The Court agrees with Plaintiff that subject-matter jurisdiction cannot be waived. It thus reconsiders the applicability of the anti-assignment provision on the merits.

4 / 15 i.

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Patrick Shih, M.D., P.A. v. Blue Cross & Blue Shield of Texas Inc<b><font color="red">Case remanded to 113th Judicial District Court of Harris County, Texas.</font></b>, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patrick-shih-md-pa-v-blue-cross-blue-shield-of-texas-incbfont-txsd-2022.