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BAUMAN v. U.S. HEALTHCARE

March 31, 1998

STEVEN BAUMAN and MICHELLE BAUMAN, Individually and as Administrators ad prosequendum of the Estate of MICHELINA BAUMAN, Deceased, Plaintiffs,
v.
U.S. HEALTHCARE, INC., KENNEDY MEMORIAL HOSPITAL, Washington Township Division, KAMILA NEMEH, M.D., and JOHN DOE(S) (1-5), Defendants.



The opinion of the court was delivered by: BROTMAN

OPINION

 BROTMAN, J.

 This is a medical malpractice case against a physician, a hospital, and a healthcare insurance provider. Plaintiffs Steven and Michelle Bauman ("Plaintiffs") filed the above-captioned negligence action in the Superior Court of New Jersey, Law Division, Camden County. Defendant U.S. Healthcare, Inc. ("U.S. Healthcare") removed the action to this Court, asserting federal jurisdiction based on Section 502(a)(1)(B) of the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B) ("Section 502(a)").

 Presently before this Court is defendant U.S. Healthcare's Motion to Dismiss or, in the Alternative, for Summary Judgment. Plaintiffs counter with a Motion for Remand to New Jersey State Court in which they challenge the applicability of Section 502(a) to the present action and contend that removal was inappropriate. Plaintiffs also seek reimbursement of attorney's fees associated with their motion pursuant to 28 U.S.C. § 1447(c).

 I. BACKGROUND

 Michelina Bauman ("Michelina") was born on May 16, 1995. She and her mother were discharged from the hospital twenty-four hours later. Michelina died on May 18, 1995, the day following her discharge. Plaintiffs contend that she died from a virulent infection that went undiagnosed and developed into meningitis.

 Defendant Kennedy Hospital is the health care facility at which she was born. Defendant Kamilah Nemeh, M.D. ("Dr. Nemeh") was the discharging physician at Kennedy Hospital. Defendant U.S. Healthcare is a Pennsylvania corporation which wholly owns a subsidiary corporation known as The Health Maintenance Organization of New Jersey, Inc. ("HMO-NJ"). HMO-NJ is a health maintenance organization that furnishes employee health care benefit benefits to plan participants, including Plaintiffs, pursuant to employee benefit plans established under ERISA.

 On May 12, 1997, Plaintiffs filed its Complaint. The counts involving U.S. Healthcare can be summarized as follows:

 
Count One alleges that U.S. Healthcare acted negligently in adopting a policy that "encouraged, pressured, and/or directly or indirectly required that its participating physicians discharge newborn infants and their mothers from the hospital within 24 hours of the infant's birth."
 
Count One also alleges that U.S. Healthcare is vicariously liable for the negligent actions of its agents Dr. Nemeh and Kennedy Hospital in discharging Michelina Bauman from the hospital after only 24 hours.
 
Count Two alleges that U.S. Healthcare acted recklessly indifferent to the health consequences of its policy "governing discharge of mothers and newborns from the hospital within 24 hours of birth knowing, among other things, that many infants would be at risk for developing life-threatening disease after leaving the hospital and that these guidelines would result in life-threatening delays in the diagnosis and treatment of these diseases."
 
Count Five alleges that U.S. Healthcare acted negligently in (1) "adopting policies with respect to hospital utilization by its participating physicians that discouraged these physicians from re-admitting infants to the hospital when health problems were identified subsequent to the newborns original discharge from the hospital" and in (2) "failing to exercise due care in the selection, supervision, training, and/or monitoring of Dr. Nemeh as a participating provider of health services."
 
Count Six alleges that U.S. Healthcare acted negligently in "not providing for [an in-home] visit by a participating provider despite assurances under its L'il Appleseed Program that such a visit would be provided and despite a telephone call . . . from the Baumans requesting this service." *fn1"

 On June 12, 1997, U.S. Healthcare removed this case to federal court. It then moved to dismiss the Complaint pursuant to Section 514(a) of ERISA, 29 U.S.C. § 1144(a), or, in the alternative, for summary judgment. Plaintiffs have responded by moving to remand this action to state court for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c) (Supp. 1996).

 II. DISCUSSION

 A. PLAINTIFFS' MOTION TO REMAND

 Defendants removed this action on the grounds that Section 502(a) and the "complete preemption" exception to the "well-pleaded complaint rule" provided this Court with subject matter jurisdiction. Plaintiffs, however, challenge the propriety of this removal by asserting that Section 502(a) does not govern this action. They argue that this Court should remand the action to state court for lack of subject matter jurisdiction. As a result, this Court must review the complaint, the petition for removal, the statutes pursuant to which U.S. Healthcare ...


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