The opinion of the court was delivered by: Hayden, District Judge.
For the reasons expressed in the Report and Recommendation of
the Honorable Ronald J. Hedges. United States Magistrate Judge,
filed on February 25, 1999; and this Court receiving no objection
It is on this 1st day of April, 1999
ORDERED that this action is remanded to the Superior Court of
New Jersey, Law Division, Monmouth County; and it is further
ORDERED that the Report and Recommendation of the United
States Magistrate Judge is adopted and incorporated as the
Opinion of this Court.
HEDGES, United States Magistrate Judge.
REPORT AND RECOMMENDATION
On December 16, 1998, I issued an Order directing third-party
defendant U.S. Healthcare, Inc. ("Healthcare"), to show cause why
this civil action should not be remanded. In response, Healthcare
submitted a memorandum of law. There was no oral argument. Rule
This civil action originated with the filing of the Complaint
on February 11, 1998 in the Superior Court of New Jersey, Law
Division, Monmouth County. Plaintiff Monmouth-Ocean Collection
Service, Inc. ("plaintiff"), was designated in the Complaint as
the assignee of Kimball Medical Center, MCOC Emergency Physicians
and Jersey Shore Radiology Associates. Noach Klor and Michla Klor
were named as defendants. Plaintiff alleged in the First Count of
the Complaint that defendants were indebted to Kimball Medical
Center for "goods, sold and delivered, services rendered, and/or
on a certain book account in the sum of $11,358.00." Plaintiff
alleged in the Second Count that defendants were indebted to MCOC
Emergency Physicians for "goods sold and delivered, services
rendered, and/or on a certain book account the sum of $155.00."
Plaintiff alleged in the Third Count that defendants were
Jersey Shore Radiology Associates for "goods sold and delivered,
services rendered, and/or on a certain book account in the sum of
On June 19, 1998, defendants filed a Third-Party Complaint.
Healthcare was named as the third-party defendant. The
Third-Party Complaint alleged that Noach Klor "has multiple
sclerosis and receives regular treatment at Kimball Medical
Center, plaintiff's assignee." Paragraph 3. It further alleges
that, for a certain period of time, Noach Klor's "medical
expenses were covered through Medicare and Charity Care."
Paragraph 4. Michla Klor is alleged to have seen a Healthcare
newspaper advertisement and to have responded to that
advertisement with a request for information. Paragraphs 5-7.
Thereafter, Healthcare enrolled Noach Klor in a "Medicare Plan,"
after which Michla Klor requested that he be disenrolled.
According to the Third-Party Complaint, as a result of Noach
Klor's enrollment with Healthcare, neither Medicare nor Charity
Care would pay for hospitalization in October of 1995 and,
inasmuch as Noach Klor did not have a referral from a primary
physician, neither would Healthcare. Paragraphs 8-16.
In the First Count of the Third-Party Complaint, the Klors
alleged that the advertisement was misleading and in violation of
the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. In the Second
Count of the Third Party Complaint, the Klors alleged that
Healthcare misrepresented Noach Klor's enrollment status to
Kimball Medical Center and that, as a result of the
misrepresentation, Healthcare "should be held liable for the cost
of the medical services rendered." Paragraph 24. In the Third
Count, the Klors alleged that Healthcare negligently failed to
advise Noach Klor that he should have secured a referral from a
primary care physician before being hospitalized.
Under the First Count, the Klors seek treble damages and
attorney's fees pursuant to N.J.S.A. 56:8-19. Under the Second
and Third Counts, the Klors seek indemnification from Healthcare
should they be held liable to plaintiff.
Healthcare removed this civil action on August 14, 1998.
Healthcare alleged that the Third-Party Complaint stated a
federal question under 28 U.S.C. § 1331, that the Third-Party
Complaint stated a claim for Medicare benefits against
Healthcare, that Noach Klor was a Medicare beneficiary enrolled
in Healthcare, and that the sole remedy of the Klors was to
pursue an appeals process with the Health Care Financing
I conducted an initial scheduling conference on December 16,
1998. I questioned whether this civil action was removable and
issued the pending Order to Show Cause.*fn1
The removal statutes are to be strictly construed with doubt as
to the propriety of removal resolved in favor of remand. See,
e.g., Sun Buick, Inc. v. Saab Cars USA, Inc., 26 F.3d 1259, 1267
(3d Cir. 1994). Only actions that could have originally been
brought in federal court may be removed. Franchise Tax Bd. v.
Construction Laborers Vacation Trust, 463 U.S. 1, 9-10, 27-28,
103 S.Ct. 2841, 77 L.Ed.2d 420 (1983).
Examination of the Complaint reveals that there is no diversity
jurisdiction. Thus, removal must be predicated on the existence
of a federal question. Charter Fairmount Institute, Inc. v. Alta
Health Strategies, 835 F. Supp. 233, 234 (E.D.Pa. 1993). "In
order for a case to be removable under § 1441 and § 1331, the
well-pleaded complaint rule requires the federal question be
presented on the face of the plaintiff's properly pleaded
complaint." Railway Labor Executives Ass'n v. Pittsburgh & Lake
Erie R.Co., 858 F.2d 936,
939 (3d Cir. 1988). The plaintiff is the master of the claim and
may "avoid federal jurisdiction by exclusive reliance on state
law." Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107
S.Ct. 2425, 96 L.Ed.2d 318 (1987) (footnote omitted). "[A] case
may not be removed to a federal court on the basis of a federal
defense ***." Allstate Ins. Co. v. 65 Sec. Plan, 879 F.2d 90,
93 (3d Cir. 1989).
Here, the "well-pleaded complaint" alleges only state law
causes of action against defendants. It does not present a
federal question on its face. The question thus arises whether a
third-party defendant such as Healthcare may invoke the removal
statutes. I am satisfied that Healthcare may not.
Any discussion of removal must begin with 28 U.S.C. § 1441. It
provides, in pertinent part:
(a) Except as otherwise expressly provided by Act of
Congress, any civil action brought in a State court
of which the district courts of the United States
have original jurisdiction, may be removed by the
defendant or the defendants, to the district court of
the United States for the district and division
embracing the place where such action is pending. For
purposes of removal under this chapter, the
citizenship of defendants sued under fictitious names
shall be disregarded.
(b) Any civil action of which the district courts
have original jurisdiction founded on a claim or
right arising under the Constitution, treaties or
laws of the United States shall be removable without
regard to the citizenship or residence of the
parties. Any other such action shall be removable
only if none of the parties in interest properly