PMH Helathcare of Califonria, Inc. v. Cigna Healthcare of California, Inc.

• Court: District Court, C.D. California
• Decided: December 12, 2022
• Docket: 2:22-cv-06716
• Status: Unknown

Opinion

Case 2:22-cv-06716-SPG-PLA Document 29 Filed 12/12/22 Page 1 of 5 Page ID #:596

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No. 2:22-cv-06716-SPG (PLAx) 11 PMH LABORATORY, INC.,

12 Plaintiff, ORDER GRANTING PLAINTIFF PMH LABORATORY INC.’S MOTION 13 v. TO REMAND ACTION TO STATE

14 CIGNA HEALTHCARE OF COURT [ECF NO. 17]

15 CALIFORNIA, INC.; CIGNA HEALTH

16 AND LIFE INSURANCE COMPANY;

17 and DOES 1 through 100, inclusive, 18 Defendants. 19 Before the Court is Plaintiff PMH Laboratory, Inc.’s motion to remand this action 20 to state court. (ECF No. 17 (“Mot.”)). Defendants Cigna Healthcare of California and 21 Cigna Health and Life Insurance Company (“Defendants”) opposed the motion and 22 Plaintiff timely replied. (ECF No. 24 (“Opp.”); ECF No. 25 (“Reply”)). The Court has 23 read and considered the matters raised with respect to the motion and concluded that this 24 matter is suitable for decision without oral argument. See Fed. R. Civ. P. 78(b); Local Rule 25 7-15. Having considered the parties’ submissions, the relevant law, and the record in this 26 case, the Court GRANTS Plaintiff’s motion to remand. 27 28 -1- Case 2:22-cv-06716-SPG-PLA Document 29 Filed 12/12/22 Page 2 of 5 Page ID #:597

1 I. BACKGROUND 2 Plaintiff filed its Complaint on August 16, 2022, in Los Angeles County Superior 3 Court. (ECF No. 1-1 (“Compl.”)). On or about August 19, 2022, Plaintiff served 4 Defendants with a copy of the Complaint and Summons in this action (ECF No. 1 at 2). 5 On September 19, 2022, Defendants removed the action to this Court. (ECF No. 1). 6 Defendants based their removal on both federal question and diversity jurisdiction. (Id.). 7 One month later, on October 19, 2022, Plaintiff filed the instant motion to remand this case 8 to state court, arguing that Defendants had not met their burden to demonstrate a federal 9 question.1 10 Plaintiff’s Complaint arises from alleged outstanding payments for Covid-19 testing 11 services provided to holders of insurance policies issued by Defendants. See (Compl.). 12 Specifically, Plaintiff’s Complaint alleges the following claims against Defendants: 13 (1) violation of California Health & Safety Code § 1342.2; (2) violation of California 14 Business & Professional Code § 17200; (3) negligence per se; (4) unjust enrichment; 15 (5) quantum meruit; (6) money had and received; (7) open book account; (8) account 16 stated; and (9) declaratory and injunctive relief. Defendants argue that Plaintiff’s claims 17 necessarily implicate the Employee Retirement Income Security Act (“ERISA”), therefore 18 creating a federal question. 19 II. LEGAL STANDARD 20 Federal courts are courts of limited jurisdiction, with subject-matter jurisdiction only 21 over matters authorized by the Constitution and Congress. See U.S. Const. art. III, § 2, cl. 22 1; Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in 23 state court may be removed to federal court if the federal court would have had original 24 jurisdiction over the suit. 28 U.S.C. § 1441(a). Federal courts have original jurisdiction 25 where an action presents a federal question under 28 U.S.C. § 1331 or due to diversity of 26 citizenship under 28 U.S.C. § 1332. Generally, “[a] cause of action arises under federal 27 28 1 Both parties also acknowledge that Defendants have dropped their argument for diversity jurisdiction. -2- Case 2:22-cv-06716-SPG-PLA Document 29 Filed 12/12/22 Page 3 of 5 Page ID #:598

1 law only when the plaintiff’s well pleaded complaint raises issues of federal law.” Hansen 2 v. Blue Cross of Cal., 891 F.2d 1384, 1386 (9th Cir. 1989). This “well-pleaded complaint 3 rule is the basic principle marking the boundaries of the federal question jurisdiction” in 4 district courts. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987) (internal 5 citation omitted). Additionally, federal courts strictly construe the removal statute against 6 removal jurisdiction and resolve all ambiguities “in favor of remand to state court.” Hunter 7 v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing Gaus v. Miles, Inc., 980 8 F.2d 564, 566 (9th Cir. 1992)). Courts must remand a removed case “[i]f at any time before 9 final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. 10 § 1447(c). 11 III. DISCUSSION 12 Plaintiff’s Complaint states only causes of action under California law. However, 13 Defendants argue that Plaintiff’s suit falls within an exception to the well-pleaded 14 complaint rule for causes of action that are preempted by ERISA. Complete preemption 15 under ERISA § 502(a) allows for removal to federal court even if no federal cause of action 16 has been pled because it is “really a jurisdictional rather than a preemption doctrine.” 17 Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 945 (9th Cir. 2009) 18 (internal citation omitted). 19 However, complete preemption removal is only proper if both prongs of the test set 20 out by the Supreme Court in Aetna Health Inc. v. Davila are met. 542 U.S. 200, 210 (2004). 21 Therefore, in order for removal based on complete preemption to be proper, a defendant 22 must show that (1) a plaintiff seeking to assert a state law claim “at some point in time 23 could have brought [the] claim under ERISA § 502(a)(1)(B);” and (2) there must be “no 24 other independent legal duty that is implicated by a defendant’s actions.” Id. Here, 25 Plaintiff argues removal was not proper because neither prong has been satisfied. Because 26 the court finds that Defendant has not met its burden under the first prong of Davila to 27 demonstrate that Plaintiff could have brought its claims under ERISA § 502(a)(1)(B), the 28 Court does not reach the issue of independent legal duty. -3- Case 2:22-cv-06716-SPG-PLA Document 29 Filed 12/12/22 Page 4 of 5 Page ID #:599

1 ERISA carefully “details who may bring suit and what remedies are available.” 2 Reynolds Metals Co. v. Ellis, 202 F.3d 1246, 1247 (9th Cir. 2000). The list of permissible 3 parties includes plan participants, beneficiaries, the Secretary of labor, and fiduciaries. 29 4 U.S.C. § 1132(a). Non-participant providers cannot bring claims on their own behalf, but 5 must instead rely on their patients’ assignments of their benefits claims. Spinedex Physical 6 Therapy USA Inc. v. United Healthcare of Arizona, Inc., 770 F.3d 1282, 1288–89 (9th Cir. 7 2014). Therefore, as both parties here acknowledge, if a provider-plaintiff does not have 8 any assignments from any of its patients, it could not have brought its claim under ERISA 9 § 502, and ERISA preemption will not allow for removal. See (ECF No. 17-1 at 14–15); 10 see also (ECF No. 24 at 19–20). 11 Here, Plaintiff is a healthcare provider and therefore may only bring an action under 12 ERISA if it possesses patients’ assignments of their benefits. Spinedex, 770 F.3d at 1288– 13 89. However, Plaintiff argues that none of its claims relate to patient assignments. (ECF 14 No. 17-1 at 8). Defendants, for their part, concede that if Plaintiff “assert[s] that it has no 15 assignments from any of the patients at issue or agree[s] that it does not seek reimbursement 16 for any claims for which it does not have a valid assignment,” then it could not bring a 17 claim under ERISA § 502. (ECF No. 24 at 19–20). In its reply, Plaintiff repeatedly states 18 that it does not have any patient assignments. See (ECF No. 25 at 9 (“no patient assignment 19 exist, as PMH does not take patient assignments”)); see also (id. at 10 (“PMH does not 20 obtain assignments from its patients as a general practice and no assignments are known to 21 exist relating to PMH’s claims asserted in the Complaint”)). Because Plaintiff has 22 repeatedly represented to the Court that it does not have any assignments from any of the 23 patients at issue, as Defendants conceded would be sufficient to avoid ERISA preemption, 24 Plaintiff could not have brought its claims under ERISA.2 Thus, Defendants have failed to 25 26

27 2 See Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988) (en banc) 28 (“statements of fact contained in a brief may be considered admissions of the party in the discretion of the district court” and are therefore “conclusively binding on the party who -4- Case 2:22-cv-06716-SPG-PLA Document 29 Filed 12/12/22 Page 5 of 5 Page ID #:600

1 meet their burden under the first Davila prong and ERISA preemption does not apply. 2 Without ERISA preemption, the well-pleaded complaint rule necessitates that this case be 3 remanded to state court. 4 IV. CONCLUSION 5 For the reasons stated above, the Court hereby GRANTS Plaintiff’s motion and 6 remands this action to the Superior Court of California, County of Los Angeles. 7 8 DATED: December 12, 2022

9 HON. SHERILYN PEACE GARNETT UNITED STATES DISTRICT JUDGE 10

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

27 made them”); see also Gospel Missions of Am. v. City of LA, 328 F.3d 548, 557 (9th Cir. 28 2003). -5-