Valley Children’s Hospital v. Grimmway Enterprises, Inc.; Grimmway Enterprises, Inc. Administrative Group Welfare Plan

• Court: District Court, E.D. California
• Decided: March 26, 2026
• Docket: 1:24-cv-00643
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 VALLEY CHILDREN’S HOSPITAL, a Case No. 1:24-cv-00643 JLT CDB California nonprofit public benefit 12 corporation, ORDER GRANTING IN PART MOTION TO DISMISS 13 Plaintiff, (Doc. 22) 14 v. 15 GRIMMWAY ENTERPRISES, INC., a 16 Delaware corporation; and GRIMMWAY ENTERPRISES, INC. ADMINISTRATIVE 17 GROUP WELFARE PLAN, an employee 18 welfare benefit plan.

19 Defendants. 20 I. INTRODUCTION 21 Valley Children’s Hospital brings this action under 29 U.S.C. § 1132(a)(1)(B), asserting 22 rights they claim were assigned to them by their patient, Patient O.1 They allege Defendants 23 Grimmway Enterprises, Inc. and Grimmway Enterprises, Inc. Administrative Group Welfare Plan 24 wrongfully denied and failed to pay benefits in the amount of $1,797,767.20 owed for Patient O’s 25 treatment at the Hospital. Grimmway moves to dismiss the operative First Amended Complaint, 26 1 As relevant here, 29 U.S.C. § 1132(a)(1)(B), ERISA’s civil enforcement provision, allows plan 27 “participants” or “beneficiaries” to bring suit “to recover benefits due to him under the terms of his plan, to 28 enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of 1 arguing that Plaintiff lacks standing and has otherwise insufficiently pled their claim. (Doc. 22 at 2 7–12.) Plaintiff opposes the motion in full, (Doc. 28), and Defendants filed a reply, (Doc. 29.) For 3 the reasons set forth below, the Motion to Dismiss is GRANTED. 4 II. BACKGROUND2 5 The Administrative Group Welfare Plan (the “Plan”) is an ERISA employee welfare 6 benefit plan operated and administered by Grimmway to provide health benefits to Grimmway 7 employees and their families. (Doc. 18 at 2; ¶ 5.) A third-party, Managed Care Systems (“MCS”), 8 is contracted with the Hospital to act as the Plan’s third-party administrator. (Id. ¶ 6.) 9 The Plan, which governs the relationship between Grimmway and individual patients, 10 states that “[m]edical benefits apply when Covered Charges are incurred by a Covered Person for 11 care of an Injury or Sickness and while the person is covered for these benefits under the Plan.” 12 (Doc. 18, Ex. B at 21.) The Plan further states that “[e]ach Calendar Year, benefits will be paid 13 for the Covered Charges of a Covered Person that are in excess of any copayments.” (Id.) The 14 Plan also contained an explicit anti-assignment provision, stating that “any benefit under this Plan 15 cannot be sold, assigned, transferred, pledge or garnished.” (Id. at 31–32, Ex. B at 18.) 16 Since 2009, the Hospital has been an in-network provider to the Plan, having contracted 17 for such rights with MCS. (Doc. 18 at 3, ¶ 11.) The relationship between the Hospital and the 18 Plan is governed by the Hospital Services Agreement, which states, in part: 19 The parties hereto further agree that MCS or Plan shall be the only person or entity billed, . . . for the Hospital Services rendered 20 hereunder, and that MCS shall be exclusively responsible for the payment and arranging for payment with the Plans for all Hospital 21 Services rendered hereunder. . . . Provider hereby agrees to seek compensation exclusively from Plan for any services rendered to 22 Member under the terms of this Agreement. 23 (Doc. 18 at 138, Ex. D at § 5.3). Except for copayments, coinsurance, and deductibles, the 24 Hospital agreed to never seek payment from Plan members for Covered Charges. (Id.) 25 The Plan sets forth an appeals process (the “Appeals Process”) providing the Hospital 26 with a right to request the review of claim denials and other “Adverse Benefit Determinations.” 27 (Doc. 18 at 4–5, ¶¶ 13–14.) The Appeals Process contains a two-year limitations period following

28 1 the issuance of a Final Adverse Benefit Determination, (id. at 4, ¶ 13) and imposes several 2 specific notice requirements upon MCS as the administrator of the Plan, (id. at 5, ¶15). The 3 Hospital alleges that MCS and Grimmway failed to provide these required notices, thus waiving 4 their ability to require compliance with the Appeals Process, including the two-year limitation on 5 claims following a Final Adverse Benefit Determination. (Id. ¶ 16.) On February 28, 2022 6 (mistakenly pled as 2025), the parties entered into a Tolling Agreement tolling the Hospital’s 7 claims against Grimmway until July 1, 2022. (Id. at 5–6, ¶ 17.) The agreement was later extended 8 until October 1, 2022, resulting in a total tolling period of 216 days. (Id.) 9 Patient O is a minor child covered under the Plan as a dependent of a Covered Person. 10 (Doc. 18 at 6, ¶ 18.) Patient O was born on April 24, 2019, with several serious heart defects. (Id.) 11 That same day, she was transferred and admitted to the Hospital for treatment. (Id.) Upon 12 admission, Patient O purported to assign to the Hospital her right to recover benefits under the 13 Plan. (Id. ¶ 20.) The Hospital then provided physician-approved, medically necessary health 14 services and supplies to Patient O, who was discharged on May 12, 2020. (Id. ¶¶ 21–22.) 15 Pursuant to the Hospital Services Agreement, the Hospital billed Grimmway and the Plan, 16 through MCS, for Patient O’s healthcare costs. (Doc. 18 at 6–7, ¶ 23.) These billed costs totaled 17 $8,188,227.20. (Id. at 7, ¶ 24.) Of this amount, $4,843,851.72 was the contracted reimbursable 18 amount under the Healthcare Services Agreement. (Id. ¶¶ 24–25.) Ultimately, Grimmway only 19 reimbursed the Hospital $3,046,084.21, leaving an outstanding balance of $1,797,767.51. (Id.) As 20 a result, the Hospital brings this action for compensatory damages in the amount of 21 $1,797,767.51. (Doc. 18 at 8.) 22 III. LEGAL STANDARD 23 A Rule 12(b)(6) motion “tests the legal sufficiency of a claim.” Navarro v. Block, 250 24 F.3d 729, 732 (9th Cir. 2001). Dismissal of a claim under Rule 12(b)(6) is appropriate when “the 25 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 26 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). Thus, under Rule 27 12(b)(6), “review is limited to the complaint alone.” Cervantes v. City of San Diego, 5 F.3d 1273, 28 1274 (9th Cir. 1993). 1 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 2 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 3 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The 4 Supreme Court explained: 5 A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that 6 the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a “probability requirement,” but it asks for 7 more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with” a 8 defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’” 9 10 Iqbal, 556 U.S. at 678 (internal citations omitted). “The issue is not whether a plaintiff will 11 ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims. 12 Indeed, it may appear on the face of the pleadings that a recovery is very remote and unlikely but 13 that is not the test.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The Court “will dismiss any 14 claim that, even when construed in the light most favorable to plaintiff, fails to plead sufficiently 15 all required elements of a cause of action.” Student Loan Mktg. Assoc. v. Hanes, 181 F.R.D. 629, 16 634 (S.D. Cal. 1998). To the extent pleading deficiencies can be cured by the plaintiff alleging 17 additional facts, leave to amend should be granted. Cook, Perkiss & Liehe, Inc. v. N. Cal. 18 Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990) (citations omitted). 19 IV. DISCUSSION 20 Defendants move to dismiss the FAC (Doc. 18) in its entirety on standing grounds. First, 21 they argue that Plaintiff lacks the requisite injury-in-fact to establish Article III standing and 29 22 U.S.C. § 1132. Alternatively, they argue that the Hospital lacks prudential standing under ERISA 23 because Patient O’s assignment of benefits is barred by the anti-assignment provision in the Plan. 24 A. Ordering of Issues 25 In a case involving rights arising under a federal statute, the standing analysis involves 26 two separate inquiries: whether the plaintiff has Article III standing and whether the claim falls 27 within the statute’s “zone of interest,” sometimes referred to as “statutory” or “prudential 28 standing.” Generally, the Court must first determine whether the “irreducible constitutional 1 minimum” of Article III standing exists. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). In 2 addition, the Court must determine statutory standing, which “has nothing to do with whether 3 there is case or controversy under Article III.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 4 83, 97 (1998); see also Miller v. Redwood Toxicology Lab’y, Inc., 688 F.3d 928, 934 (8th Cir. 5 2012) (“By contrast [to Article III standing], statutory standing goes to the merits of the claim.”) 6 (citing Bond v. United States, 564 U.S. 211, 217 (2011)). 7 The Supreme Court “has routinely held that when presented with two jurisdictional 8 questions, the Court may choose which one to answer first.” Steel Co., 523 U.S. at 115 (Stevens, 9 J. concurring); see also Sierra Club v. Morton, 405 U.S. 727, 732–41 (1972) (concluding that the 10 petitioner lacked statutory standing without deciding whether Article III injury existed). There 11 exists no mandatory ordering of jurisdictional issues. See Ruhrgas AG v. Marathon Oil Co., 526 12 U.S. 574, 584 (1999) (“While Steel Co. reasoned that subject-matter jurisdiction necessarily 13 precedes a ruling on the merits, the same principle does not dictate a sequencing of jurisdictional 14 issues.”). Rather, a court “has leeway to choose among threshold grounds for denying audience to 15 a case on the merits.” Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 431 16 (2007) (citing Ruhrgas, 526 U.S. at 585; Steel Co., 523 U.S. at 100–01). 17 Courts routinely consider aspects of prudential standing before Article III. See, e.g., 18 Kowalski v. Tesmer, 543 U.S. 125, 129 (2004) (assuming Article III standing to decide the case 19 on third-party standing grounds); Ortiz v. Fibreboard Corp., 527 U.S. 815, 831 (1999) (citing 20 Steel Co., 523 U.S. at 92) (noting that class certification issues “pertain to statutory standing, 21 which may properly be treated before Article III standing”); see also United States v. 22 Approximately $133,803.53 in U.S. Currency Seized from Wash. Mut. Bank, N.A., Acct. 23 #£4420842802, held in the Name of Advantage Fin., 683 F. Supp. 2d 1090, 1094 n.3 (E.D. Cal. 24 2010) (“Because the court concludes that the issue of prudential standing is dispositive, it does 25 not reach the merits of the parties' arguments relating to Article III or statutory standing.”) 26 (internal citations omitted). It is “entirely appropriate to deny standing on prudential grounds if 27 that course is easier, or more clearly right, than to rule on constitutional grounds first.” 13B 28 Wright & Miller, FED. PRAC. & PROC. JURIS. § 3531.15 (3d ed. 2008). That is the case in this 1 instance. 2 B. Valley Children’s Hospital Lacks Derivative Standing Under § 1132(a)(1)(B) 3 Plaintiff lacks statutory standing because, as currently pled, Patient O’s assignment was 4 invalid. Broadly, a valid assignment of healthcare plan benefits from patient to provider confers 5 derivative standing upon the provider. Misic v. Bldg. Serv. Emp. Health & Welfare Tr., 789 F.2d 6 1374, 1378 (9th Cir. 1986). Further, “[a]n assignment of the right to receive payment of benefits 7 generally includes the limited right to sue for non-payment under § 1132(a)(1)(B) . . .” DB 8 Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 852 F.3d 868, 877 n.7 (9th Cir. 2017). 9 But providers “lack derivative standing [when] they do not hold valid assignments.” Id. at 876. 10 Furthermore, “ERISA welfare plan payments are not assignable in the face of an express non- 11 assignment clause in the plan.” Davidowitz v. Delta Dental Plan of Cal., Inc., 946 F.2d 1476, 12 1481 (9th Cir. 1991). An express non-assignment provision relating to a patient’s rights or 13 benefits renders any purported assignment of those rights or benefits invalid, depriving the 14 assignee of derivative standing. 15 The Grimmway Plan contains the following anti-assignment provision: 16 Non-Alienation of Benefits 17 With the Exception of a Qualified Medical Child Support Order, your right to any benefit under this Plan cannot be sold, assigned, 18 transferred, pledge or garnished. 19 (Doc. 18 at 31–32 (“Exhibit B”).)3 With respect to such provisions, the Ninth Circuit’s language 20 is broad and unequivocal: “Anti-assignment clauses in ERISA plans are valid and enforceable.” 21 Spinedex Physical Therapy USA Inc. v. United Healthcare of Ariz., Inc., 770 F.3d 1282, 1296 (9th 22 Cir. 2014) (citing Davidowitz, 946 F.2d at 1481). The anti-assignment provision clearly 23 invalidates Patient O’s transfer of “benefits.” If Plaintiff seeks to recover “benefits,” it is therefore 24 stripped of derivative standing under 29 U.S.C. § 1132(a)(1)(B). 25 Plaintiff’s central argument is that it seeks to recover something other than “benefits,” and 26 thus the anti-assignment provision does not preclude the claims advanced in this suit. (Doc. 28 at 27 6–11.) ERISA’s civil enforcement provision allows a participant or beneficiary “to recover

28 1 benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, 2 or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). 3 Referring to that statutory text, Plaintiff asserts that because Patient O, a beneficiary, “may also 4 bring a civil action to ‘enforce [her] rights under the terms of the [Grimmway Plan,]’ . . . by the 5 Assignment[,] Valley Children’s Hospital is entitled to enforce Patient O’s ‘rights’ under the 6 Grimmway Plan, [including] the right to have her health care providers paid.” (Doc. 28 at 7.) 7 Thus, Plaintiff argues that it does not seek to “recover benefits” on behalf of Patient O at all, 8 instead only attempting to “enforce rights,” thereby falling outside the scope of the non- 9 assignment provision. The Court disagrees. 10 1. Benefits Versus Rights 11 Plaintiff seeks to “recover benefits” under § 1132(a)(1)(B), falling within the scope of the 12 anti-assignment provision and thereby lacking standing under ERISA. The Hospital points to the 13 Plan’s language, stating that the “Grimmway Plan documents describe the rights of beneficiaries, 14 and they include (1) the payment of ‘Covered Charges [] incurred by a Covered Person for care of 15 an Injury or Sickness and while the person is covered for these benefits under the Plan’; (2) which 16 were required to be paid each calendar year; and (3) which are Valley Children’s Hospital’s usual 17 and reasonable charges. (Doc. 18 at 4, ¶ 12 (emphasis added); (Ex. “C” Medical Plan at 22).) But 18 the quoted language almost immediately trails the Plan’s “BENEFIT PAYMENT” section, which 19 states: “Each Calendar Year, benefits will be paid for the Covered Charges of a Covered Person 20 that are in excess of any copayments. Payment will be made at the rate shown under 21 reimbursement rate in the Schedule of Benefits.” (Doc. 18 at 72; (Ex. “C” Medical Plan at 22) 22 (emphasis added).) In other words, the Plan language itself describes payments for “Covered 23 Charges” as benefits, not rights. Put another way, by the terms of the Plan itself, to the extent 24 Patient O has any entitlement to monetary reimbursement for a Covered Charge incurred, that 25 entitlement is to a benefit payment under the Plan.4 “[T]he billings of Valley Children’s Hospital, 26 as alleged [in the FAC and Opposition brief], were Covered Charges.” (Doc. 28 at 6.) Therefore, 27

28 4 Because the “benefits” belong solely to Patient O, this remains true regardless of whether the payment is 1 the Hospital’s claim for compensatory damages is an attempt to “recover [Patient O’s] benefits” 2 under § 1132(a)(1)(B). Because Plaintiff seeks to stand in Patient O’s shoes, attempting to 3 recover payments under the Plan (stemming from a Covered Charge incurred by a Covered 4 Person), it thereby seeks to recover Patient O’s “benefits” under the Plan.5 5 This outcome is consistent with both the Ninth Circuit’s language in DB Healthcare and 6 prior cases in this District. DB Healthcare held that the term “benefit” “quite evidently refers to 7 the specific advantages provided to covered employees, as a consequence of their employment, 8 for particular purposes connected to alleviating various life contingencies.” 852 F.3d at 874. 9 “Benefits to which a beneficiary [under ERISA] is entitled are bargained-for goods, such as 10 medical, surgical, or hospital care . . .” Id. at 875 (quoting Rojas v. Cigna Health & Life Ins. Co., 11 793 F.3d 253, 257 (2d Cir. 2015) (internal citations and quotation marks omitted)).6 “Although 12 the ‘benefits’ provided under ERISA plans are often monetary rather than ‘goods’ in the tangible 13 sense, they are provided only in the event of specified contingencies, as part of an overall 14 compensation package.” Id. In seeking to “enforce Patient O’s . . . right to have her healthcare 15 providers paid [under the Plan],” (Doc. 28 at 7), the Hospital explicitly aims to recover a 16 monetary benefit allegedly provided to Patient O by the Plan in the event of a specified 17 contingency: an incurred Covered Charge. See also Quaresma v. BC Life & Health Ins. Co., 623 18 F. Supp. 2d 1110, 1127–29 (E.D. Cal. 2007) (interpreting a “Benefits Not Transferrable” clause 19 that stated in relevant part: “The right to benefits cannot be transferred” to strip the healthcare 20 provider of standing to sue for payment of services); Aviation W. Charters, LLC v. 21 Unitedhealthcare Ins. Co., No. CV 2:16-436 WBS AC, 2017 WL 3641763 at *1 (E.D. Cal. Aug. 22

23 5 Notably, the Hospital’s FAC sues exclusively for Grimmway’s failure “to pay benefits as required by the Plan,” (Doc. 18 at 8, ¶ 27), titling their singular claim for relief “Failure to Reimburse Health Benefits,” 24 (id. at 7).

25 6 The Hospital points out that DB Healthcare also states that “benefits” “are not payment in exchange for any discrete services.” 852 F.3d at 875. But they remove that language from its proper context. In DB 26 Healthcare, the healthcare provider argued that they themselves were a beneficiary under the plan based solely on the fact that they were entitled to payment for their services which were performed pursuant to 27 the plan. In response, the Court held that “[h]ealth care providers' patients are thus the ones who receive 28 ERISA health benefits, not the providers themselves.” Id. (emphasis added). Conversely, the Hospital 1 24, 2017) (interpreting a provision prohibiting assignment of “Benefits under the Policy to a non– 2 Network provider without [Defendant’s] consent” to strip a healthcare provider of standing to 3 bring a reimbursement claim for emergency transportation).7 4 In a factually similar case, Be Well Providers, LLC v. Anthem Health Plans of Ky., Inc., 5 the plaintiff offered the same argument as the Hospital: that the term “benefits” does not include 6 the right to repayment. 580 F. Supp. 3d 477, 483 (W.D. Ky. 2022). The court disagreed, affording 7 the term “benefit” “its apparently plain meaning: a compensated medical service.” Id. 8 Furthermore, the Be Well Providers court found it material that the “plan documents repeatedly 9 use ‘benefit’ when explaining payments.” Id. Of course, as described above, both the Grimmway 10 Plan and the Hospital’s FAC repeatedly and explicitly refer to “benefits.” Similarly, in Griffin v. 11 Coca-Cola Enters., the Eleventh Circuit specifically held that an anti-assignment clause referring 12 to “Benefits under [the plan]” encompassed repayment for medical care, preventing a patient- 13 beneficiary from assigning his right to payment to a provider-assignee. 686 F. App’x 820, 822 14 (11th Cir. 2017). 15 The Hospital cites no precedent outside of a singular inapposite passage from DB 16 Healthcare to explain why the Court should ascribe a different meaning to the word “benefits.” 17 Because the Hospital sues exclusively for compensatory damages resulting from Grimmway’s 18 alleged failure “to pay benefits as required by the Plan,” (Doc. 18 at 8, ¶ 27), their claim must be 19 dismissed for lack of standing under 29 U.S.C. § 1132(a)(1)(B). Patient O’s assignment of rights 20

21 7 While less explicit than DB Healthcare, other Ninth Circuit cases provide further support for this conclusion. Recently, in Wit v. United Behav. Health, the Court discussed the enforcement of rights where, 22 to “avoid the individualized inquiry involved in assessing whether Plaintiffs may be entitled to benefits under the Plan terms, Plaintiffs framed their denial-of-benefits claims as seeking a procedural remedy 23 only.” 58 F.4th 1080, 1094–95 (9th Cir. 2023), opinion vacated and superseded on reh’g, 79 F.4th 1068 (9th Cir. 2023). While the Court ultimately concluded that the plaintiffs were seeking “benefits,” it 24 suggests that claims properly classified as rights-enforcement under § 1132(a)(1)(B) are those which seek “a procedural remedy only.” Id. See also Vizcaino v. Microsoft Corp., 120 F.3d 1006, 1008, 1013–15 (9th 25 Cir. 1997) (speaking in terms of rights enforcement under § 1132(a)(1)(B) where plaintiffs “sought a [procedural] determination that they were entitled to participate in the plan benefits”); Carrillo v. Humana 26 Health Plan Inc., No. CV 20-0004-TUC-SHR (LAB), 2020 WL 6799157 at *4 (D. Ariz. Oct. 15, 2020), report and recommendation adopted, 2021 WL 1115976 (D. Ariz. Mar. 24, 2021) (“[T]he most natural 27 interpretation of the phrase ‘enforce his rights’ is that it allows the participant to assert his procedural 28 rights.”) (emphasis in original) (citing Sankey v. Hartford Life & Accident Ins. Co., No. 2:09-CV-070, 1 is invalid, thus depriving the Hospital of standing under ERISA. 2 2. Leave to Amend 3 The Court can see no way that the failure-to-reimburse claim can be cured, so dismissal of 4 that claim will be without leave to amend. However, there are general allegations in the FAC that 5 point to a claim that may relate to “rights” under § 1132(a)(1)(B). To “enforce [a patient’s] 6 rights” under the second clause of 29 U.S.C. § 1132(a)(1)(B) means to enforce those rights 7 “which can be granted under a plan separate and distinct from the recovery of benefits awarded 8 thereunder.” Cox v. Keystone Carbon Co., 894 F.2d 647, 650 (3d Cir. 1990)). 9 Under 29 U.S.C. § 1133, ERISA plans must include an appeals process for participants 10 and beneficiaries. An injunction to enforce that procedural right against improper denial of 11 benefits “fits within the second clause” of § 1132(a)(1)(B). Cox, 894 F.2d at 650 (citing, e.g., 12 Blau v. Del Monte Corp., 748 F.2d 1348 (9th Cir. 1984), cert. denied, 474 U.S. 865 (1985)); see 13 also Sankey, 2010 WL 11639830 at *5 (noting that “an action ‘to enforce [a beneficiary’s] rights 14 under the terms of the plan’ includes an action to enforce procedural protections afforded under 15 Section 1133”) (quoting Cox, 894 F.2d at 650). In other words, if a plan administrator were to 16 deny an ERISA beneficiary’s claim for benefits and then deny them their statutorily guaranteed 17 appeals process, the beneficiary may be able to bring suit under § 1132(a)(1)(B) to “enforce their 18 right” to an appeal under the plan. 19 The Hospital alleges that Defendants “failed to comply with their obligations under the 20 Appeals Process.” (Doc. 18 at 4, ¶ 13.) But these procedural allegations—along with 21 accompanying procedural remedies—are not reflected in Plaintiffs’ singular claim for relief, nor 22 in their Prayer for Relief. (Id. at 7–8, ¶¶ 26–30); (Id. at 8, ¶¶ A–D.) In an abundance of caution, 23 the Court will allow the Hospital an opportunity to amend its complaint to assert a procedural 24 claim to the extent they can, consistent with Rule 11, articulate one that is not barred by the anti- 25 assignment provision. 26 V. CONCLUSION 27 Based upon the foregoing, the Court ORDERS: 28 1. The motion to dismiss is GRANTED IN PART in that the failure-to-reimburse 1 | claim is DISMISSED without leave to amend. 2 2. The motion to dismiss is DENIED IN PART to the extent that the plaintiff may 3 | file a Second Amended Complaint (Doc. 18) within 30 days or a notice of dismissal. Failure to 4 | timely file either document will result in dismissal of his case with prejudice pursuant to Rule 5 | 41(b). 6 7 g IT IS SO ORDERED. 9 | Dated: _ March 26, 2026 Cerin | Tower TED STATES DISTRICT JUDGE 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11