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Richard Lipsky, Roseland Ambulatory Surgery Center, LLC v. Connecticut General Life Insurance Co.

United States District Court, D. New Jersey

May 30, 2014

RICHARD LIPSKY, ROSELAND AMBULATORY SURGERY CENTER, LLC, and MHA, LLC d/b/a Meadowlands Hospital, Plaintiffs,
v.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, PHIL MANN, and JOHN DOES 1 through 100, Defendants.

OPINION

WILLIAM J. MARTINI, District Judge.

Plaintiffs Richard Lipsky, Roseland Ambulatory Surgery Center, LLC, and MHA, LLC d/b/a Meadowlands Hospital filed suit alleging that Defendant Connecticut General Life Insurance Company, and its spokesman, Defendant Phil Mann, committed defamation when Mann accused Roseland of fraud in a published newspaper article. Plaintiffs' Amended Complaint was dismissed with prejudice on September 24, 2013 by Judge Dennis Cavanaugh, to whom the case was then assigned. On October 22, 2013, Plaintiffs moved to reopen the case and file an amended pleading pursuant to Federal Rules of Civil Procedure 59(e) and 15(a)(2). This decision addresses that motion, along with Defendants' cross-motion to re-open the case pursuant to Rule 59(e). There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, Plaintiffs' motion is GRANTED, and Defendants' motion is DENIED.

I. BACKGROUND

A. Plaintiff File Their Original Complaint

Plaintiff Roseland Ambulatory Hospital ("Roseland") is an ambulatory surgical center in Roseland, New Jersey. Plaintiff MHA, LLC is a New Jersey hospital. Plaintiff Richard Lipsky owns Roseland and MHA. Defendant Connecticut General Life Insurance Company ("CGLIC") is an insurance company. Defendant Phil Mann is a spokesman for CGLIC.

The facts of this case are closely related to a separately filed case called Connecticut General Life Insurance Co. v. Roseland Ambulatory Surgery Center, LLC (" Connecticut General "), filed on the docket as civil action number 12-5941. Connecticut General concerns a practice called cost-sharing. For present purposes, costsharing is a practice that allows insurers to incentivize their insureds to get care from innetwork providers. Under cost-sharing, patients who see an out-of-network provider have to pay some of the cost of care from their own pocket. These costs take the form of co-insurance payments and deductibles (for simplicity, the Court refers to these out of pocket payments together as "co-insurance"). In Connecticut General, CGLIC is alleging that Roseland, an out-of-network hospital, failed to charge co-insurance to CGLIC insureds. CGLIC argues that waiving co-insurance allowed Roseland to attract patients-and out-of-network reimbursements-that Roseland otherwise would not have gotten. In its pleading, CGLIC takes the position that Roseland's practice violated ERISA and amounted to common law fraud.

On November 16, 2012, after CGLIC filed Connecticut General, an article about the Connecticut General case (the "Article") was published on the The Record's website, northjersey.com. The Article, which is the subject of the instant case, was published under the headline, "Cigna Subsidiary Suing N.J. Surgical Center for $6.6M." The article included the following language:

There are a number of facilities and doctors in New Jersey that pursue an out-of-network business model, " said Phil Mann, a Cigna spokesman. That strategy is responsible for "driving up claim costs, with significantly higher charges than those billed by in-network doctors and facilities, " he said. "The waiver of costsharing as a routine business practice is deceptive and fraudulent. Providers who engage in this are driving higher costs for all New Jersey consumers."

After the Article was published, Plaintiffs filed a two-count Complaint against CGLIC in New Jersey Superior Court alleging that Mann's statement ("the Statement") amounted to defamation and trade libel. Plaintiffs subsequently amended their Complaint to name Phil Mann as a Defendant.

B. Defendants Remove the Action and Move to Dismiss

On January 7, 2013, Defendants removed the action to federal court, and the case was assigned to the Honorable Katharine S. Hayden. ECF No. 1. On January 14, 2013, the case was reassigned to the Honorable Dennis M. Cavanaugh. ECF No. 4. On February 11, 2013, Defendants moved to dismiss the Amended Complaint. ECF No. 10. On September 24, 2013, Judge Cavanaugh issued an opinion granting the motion to dismiss. Because the instant motions require this Court to effectively reconsider Judge Cavanaugh's decision, the Court will describe Judge Cavanaugh's decision in detail.

Judge Cavanaugh began by addressing the elements of a defamation claim. First, Judge Cavanaugh noted that a defamation claim could not be predicated on statements of opinion unless the statements imply "false underlying objective facts." Connecticut General, 2013 WL 5354511 at *2 (quoting Lynch v. New Jersey Educ. Ass'n, 161 N.J. 152, 167 (1999)). Judge Cavanaugh explained that courts determine truth or falsity by considering "content, verifiability, and context." Id. (quoting Lynch, 161 N.J. at 170). Judge Cavanaugh continued:

Content requires that we look at the nature and importance of the speech. For instance, does the speech in question promote self-government or advance the public's vital interests, or does it predominantly relate to the economic interests of the speaker? Context requires that we look at the identity of the speaker, his ability to exercise due care, and the identity of the targeted audience.

Id. (quoting Senna v. Florimont, 196 N.J. 469, 497 (2008)). Judge Cavanaugh noted that even if a purportedly defamatory statement fails to explicitly name a plaintiff, the statement can still be defamatory if "those who read or hear the [statement] reasonably understand the plaintiff to be the person intended.'" ...


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