UPMC Pinnacle v. Shapiro

377 F. Supp. 3d 449
CourtDistrict Court, M.D. Pennsylvania
DecidedApril 24, 2019
Docket1:19-cv-00298
StatusPublished

This text of 377 F. Supp. 3d 449 (UPMC Pinnacle v. Shapiro) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
UPMC Pinnacle v. Shapiro, 377 F. Supp. 3d 449 (M.D. Pa. 2019).

Opinion

John E. Jones III, United States District Judge *452Presently pending before the Court is Defendant Joshua D. Shapiro's motion to dismiss the complaint filed by Plaintiffs UPMC Pinnacle and several of its affiliated entities (collectively, "UPMC"). (Doc. 36). Defendant's motion to dismiss has been fully briefed, (Docs. 42, 51, 56, 57-1), and is ripe for disposition. For the reasons that follow, Defendant's motion shall be granted, and the complaint shall be dismissed without prejudice.

I. BACKGROUND

In accordance with the standard of review applicable to a motion to dismiss, the following facts are derived from Plaintiffs' complaint, "documents that are attached to or submitted with the complaint ... and any matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, [and] items appearing in the record of the case." Buck v. Hampton Twp. Sch. Dist. , 452 F.3d 256, 260 (3d Cir. 2006) (internal citation omitted).

After years of "acrimony," the Pennsylvania Office of the Attorney General ("OAG") facilitated a consent decree between UPMC and Highmark Health under the supervision of the Commonwealth Court ("2014 Consent Decree"). Commonwealth ex rel. Kane v. UPMC , 634 Pa. 97, 129 A.3d 441, 448 (2015). Relevant to the instant action, the 2014 Consent Decree included a modification provision which stated that, if any of the parties believed "that modification of this Consent Decree would be in the public interest, ... [and i]f the parties cannot agree on a modification, the party seeking modification may petition the Court for modification and shall bear the burden of persuasion that the requested modification is in the public interest." Memorandum and Order, Commonwealth v. UPMC , No. 334 MD 2014, slip op. at 27 (Pa. Commw. Ct. April 3, 2019) (emphasis removed). The 2014 Consent Decree also stated that the Commonwealth Court would retain jurisdiction over the matter for the duration of the decree's existence "to enable any party to apply to [the Commonwealth Court] for such further orders and directions as may be necessary and appropriate for the interpretation, modification, and enforcement of this Consent Decree." Id. (emphasis removed). The 2014 Consent Decree is set to expire on June 30, 2019. Commonwealth v. UPMC , --- Pa. ----, 188 A.3d 1122, 1124 (2018).

In November 2018, Pennsylvania Attorney General Joshua D. Shapiro ("Defendant" or "General Shapiro") invited representatives from UPMC to his office in Harrisburg. At the meeting, General Shapiro "asserted that he has 'vast authority' over all Pennsylvania nonprofit entities" and that he intended to implement various changes to how Pennsylvania nonprofit health insurers and healthcare providers like UPMC operate. (Doc. 1 at ¶ 27). On December 14, 2018, Executive Deputy Attorney General James Donahue III sent UPMC an outline of the changes General Shapiro envisioned, framed as proposed modifications to the 2014 Consent Decree. (Doc. 1-3). The document was titled Modified Consent Decree and bore the same caption as the 2014 Consent Decree. (Id. ). In a cover letter accompanying that document, *453Executive Deputy General Donahue stated that, "[i]f we reach agreement with you on a modified consent decree, we will announce that the consent decree embodies the principles we expect to apply to all nonprofit charitable health systems." (Doc. 3-3). This was concerning to UPMC because, at the November meeting, General Shapiro informed UPMC that "[n]on-compliance [with his proposed changes] would constitute a violation of Pennsylvania nonprofit laws." (Doc. 1 at ¶ 27). Furthermore, because UPMC is obligated to submit its insurance-policy offerings to various regulatory agencies for approval well before those policies become active, General Shapiro's remarks injected a fear that UPMC would be obligated to adjust its policies to comply with General Shapiro's intended changes, even if UPMC's policies had already been approved by federal regulators-and implemented for consumers-and even if the Commonwealth Court refused to accept General Shapiro's proposed modifications to the 2014 Consent Decree. (Doc. 51 at 6-7).

On December 20, 2018, UPMC sent Executive Deputy General Donahue a series of questions concerning General Shapiro's proposed modifications to the 2014 Consent Decree. UPMC noted, "[w]e have been working diligently to determine UPMC's position on the proposal set forth in your letter of December 14 and want to provide you with several questions that we have about that proposal." (Doc. 3-5 at 1). Throughout their questions, UPMC consistently referenced the "proposed Modified Consent Decree" and the "principles" contained therein. (Id. at 1-2). Relevant to the instant motion, among other questions, UPMC asked, "[d]oes [General Shapiro] contend that [his] authority over nonprofit charitable health systems supersedes the non-interference provisions of the Social Security Act" and the Employee Retirement Income Security Act's "preemption clause[?]" (Doc. 3-5 at 3). In a letter dated January 2, 2019, Executive Deputy General Donahue responded "yes" to both questions. (Doc. 3-6 at 4-5).

On March 18, 2019, UPMC sent a letter to Deputy Attorney General Keli Neary requesting that General Shapiro stipulate that he "does not have authority under Pennsylvania law or independent of the modification provision [outlined in the 2014 Consent Decree] to impose the terms set forth in ... the Proposed Modified Consent Decree" and that certain provisions in "the Proposed Modified Consent Decree ... are not legally enforceable." (Doc. 51-2 at 1). General Shapiro did not respond to UPMC's request. Relatedly, in connection with the instant motion to dismiss, UPMC sought early discovery and submitted several requests for admissions and interrogatories for General Shapiro to complete related to General Shapiro's authority to implement the changes he envisioned without the Commonwealth Court's approval. Although General Shapiro timely responded to UPMC's requests and interrogatories, UPMC moved to compel additional responses, contending that General Shapiro's responses were "inadequate" and that General Shapiro's invocation of various privileges was "meritless." (Doc. 55 at 6).

On February 7, 2019, General Shapiro filed a petition in the Commonwealth Court to modify the 2014 Consent Decree. (Doc. 1 at ¶ 33). General Shapiro's petition also included a request to extend the 2014 Consent Decree indefinitely. UPMC , No. 334 MD 2014, slip op. at 34-35. On February 21, 2019, UPMC filed an answer to General Shapiro's petition in the nature of a motion to dismiss. The matter was fully briefed.

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Bluebook (online)
377 F. Supp. 3d 449, Counsel Stack Legal Research, https://law.counselstack.com/opinion/upmc-pinnacle-v-shapiro-pamd-2019.