Plastic Surgery Group, P.C. v. United Healthcare Insurance Co.

64 F. Supp. 3d 459, 2014 U.S. Dist. LEXIS 171746, 2014 WL 6980148
CourtDistrict Court, E.D. New York
DecidedDecember 11, 2014
DocketNo. 14-cv-1798 (JFB)(ARL)
StatusPublished
Cited by32 cases

This text of 64 F. Supp. 3d 459 (Plastic Surgery Group, P.C. v. United Healthcare Insurance Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Plastic Surgery Group, P.C. v. United Healthcare Insurance Co., 64 F. Supp. 3d 459, 2014 U.S. Dist. LEXIS 171746, 2014 WL 6980148 (E.D.N.Y. 2014).

Opinion

JOSEPH F. BIANCO, District Judge.

Plaintiff, a medical practice specializing in plastic surgery, filed this lawsuit in state court, alleging that defendants (“United”) breached a contract to pay health insurance benefits assigned to plaintiff by its patients. The benefits-due for one patient, known as Jane Doe, form the primary dispute in this lawsuit. When Jane Doe was treated by plaintiff, she was insured by defendants through the “Group Life and Health Benefits Plan” (“the Plan”) sponsored and administered by her employer, American Airlines.

United removed this action and now moves to dismiss it, while plaintiff moves to remand it. Although plaintiff styled its causes of action under New York law, the allegations in the complaint make clear that plaintiff asserts a right to be paid benefits under the Plan, which raises a colorable federal claim under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. This case does not involve merely the amount of payment because the complaint and the Plan documents reveal that any shortfall in benefits is due to a dispute over the medical necessity of Jane Doe’s treatment, which could only be resolved by interpreting the Plan. Furthermore, plaintiff has identified no independent legal obligation implicated by United’s withholding of payments to plaintiff, which is essential to amount-of-payment claims. Therefore, plaintiffs claims are completely preempted by ERISA and plaintiffs motion to remand is denied.

Furthermore, for the reasons discussed herein, United’s motion to dismiss is granted because no claim lies against United, who is not named as the plan administrator. ERISA Sections 502(a)(3) and 503 do not provide alternative avenues of relief against United, because § 502(a)(1)(B) would provide adequate relief to plaintiff if it sued the proper party. Although the Court grants plaintiffs request to amend the complaint to include the proper party, all claims against United are dismissed.

I. Background

A. Factual Background

The following facts, are taken from the complaint. The Court assumes these facts to be true for the purpose of deciding these motions.

Plaintiff is a medical practice specializing in plastic surgery. (Compl. ¶ 1.) On [462]*462April 15, 2011, and November 15, 2011, plaintiff provided services to Jane Doe, who received health care benefits coverage through United and assigned her benefits to plaintiff. {Id. at ¶¶ 1, 25-26) Plaintiff alleges that it received approval from United before it treated Jane Doe on both days, and that United paid plaintiff $27,747.00 for those services. {Id. ¶¶ 2, 4.)

Despite having paid plaintiff, United later determined that it overpaid for the services provided to Jane Doe, and demanded that plaintiff return most of the funds in July 2012. {Id. ¶¶ 32-33.) Plaintiff alleges that it appealed the repayment demand, and that United acknowledged it was an error. {Id. ¶¶ 34-37.) However, approximately one year later, in August 2013, United began withholding reimbursements due for plaintiffs treatment of other patients, who plaintiff refers to as Patients A, B, C, and D (“Patients A-D”). {Id. ¶¶ 6, 39.) According to plaintiff, United’s sole reason for withholding these payments was its determination that it had overpaid for the services plaintiff provided to Jane Doe. {Id. ¶¶ 39^45.)

B. The Plan

In 2011, when she received plaintiffs services, Jane Doe was enrolled in the “Group Life and Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries for employees of American Airlines” (“the Plan”). (Knoblach Decl. ¶ 3.) Relevant portions of the Plan are quoted and cited herein. In short, it entitled Jane Doe to coverage for “medically necessary” treatment, and authorized United to recoup overpayments by withholding future payments to Jane Doe or her provider.

C. Procedural History

Plaintiff filed the complaint in this action on February 6, 2014, in the Supreme Court of the State of New York, County of Nassau. The complaint asserts four causes of action under New York law: the first for a declaratory judgment, the second for injunctive relief, the third for unjust enrichment, and the fourth for breach of contract. Defendants removed the entire action to this Court on March 19, 2014.

On May 16, 2014, defendants filed a motion to dismiss the complaint in its entirety, pursuant to Federal Rule of Civil Procedure 12(b)(6). On June 23, 2014, plaintiff opposed the motion to dismiss and filed a cross-motion to remand this action to state court. Defendants responded in opposition to the remand motion and replied in further support of their motion to dismiss on July 8, 2014, and plaintiff filed a reply in further support of its remand motion on July 17, 2014. The Court heard oral argument on July 29, 2014.

II. Plaintiff’s Motion To Remand

A. Legal Standard

Generally, a case may be removed from state court to federal court “only if it could have originally been commenced in federal court on either the basis of federal question jurisdiction or diversity jurisdiction.” Citibank, N.A. v. Swiatkoski, 395 F.Supp.2d 5, 8 (E.D.N.Y.2005) (citing 28 U.S.C. § 1441(a)); see also 28 U.S.C. § 1441. If a federal district court determines that it lacks subject matter jurisdiction over a case removed from state court, the case must be remanded. 28 U.S.C. § 1447(c). “When a party challenges the removal of an action from state court, the burden falls on the removing party ‘to establish its right to a federal forum by competent proof.’ ”1 In re Me[463]*463thyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., No. 1:00-1898, MDL 1358(SAS), M 21-88, 2006 WL 1004725, at *2 (S.D.N.Y. Apr. 17, 2006) (quoting R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 655 (2d Cir.1979)). Further, “[i]n light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability.” Lupo v. Human Affairs Int’l, Inc., 28 F.3d 269, 274 (2d Cir.1994) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)); accord Fed. Ins. Co. v. Tyco Int’l Ltd., 422 F.Supp.2d 357, 367 (S.D.N.Y.2006).

In short, United carries the burden to show that removal was proper because plaintiffs claims raise a federal question, which would provide subject-matter jurisdiction to this Court.

B. ERISA Preemption

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Bluebook (online)
64 F. Supp. 3d 459, 2014 U.S. Dist. LEXIS 171746, 2014 WL 6980148, Counsel Stack Legal Research, https://law.counselstack.com/opinion/plastic-surgery-group-pc-v-united-healthcare-insurance-co-nyed-2014.