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Cohen v. Horizon Blue Cross Blue Shield of New Jersey

United States District Court, D. New Jersey

March 31, 2017

JASON D. COHEN, MD, FACS and PROFESSIONAL ORTHOPAEDIC ASSOCIATES, PA AS ASSIGNEE AND DESIGNATED AUTHORIZED REPRESENTATIVE OF PATIENT JE, and PATIENT JE, Plaintiffs,
v.
HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY. Defendants

          OPINION

          Katharine S. Hayden, U.S.D.J.

         This matter comes before the Court upon a motion (D.E. 32) filed by plaintiffs to remand this case to New Jersey state court on the ground that plaintiffs' claims are not preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”). For the reasons set forth below, plaintiffs' motion is denied.

         I. Background

         On or about May 15, 2015, plaintiffs filed a complaint in New Jersey state court seeking to recover benefits allegedly due for emergency medical services rendered to patient JE by Jason Cohen, a shareholder of Professional Orthopaedic Associates, PA (“POA”). Horizon Blue Cross Blue Shield of New Jersey (“Horizon”) first received a copy of the complaint on May 27, 2015 and filed a timely notice of removal on June 26, 2015, pursuant to 28 U.S.C. § 1331 and § 1441(a) and (c), based on the position that plaintiffs “seek to recover benefits from Horizon under the terms of an employee benefit plan governed by ERISA and bring[] claims for benefits within Section 502(a) of ERISA, 29 U.S.C. § 1132(a), over which this court has federal question jurisdiction pursuant to 28 U.S.C. § 1131.” Plaintiffs filed an amended complaint (hereinafter, the “complaint”) on December 7, 2015 (D.E. 19).

         According to the complaint, Horizon is the plan administrator for JE's employer provided health insurance plan. (Compl., ¶ 4.) On or about January 6, 2014, Cohen and POA sought payment from Horizon by filing a claim for emergency surgery and procedures Cohen performed on JE. (Compl., ¶ 18.) The services provided were “out-of-network, ” meaning that Cohen and POA did not have a contract with Horizon to accept any agreed upon rates. (Compl., ¶¶ 20-21.) With respect to out-of-network services, JE signed certain agreements with Cohen and POA making him personally responsible for all medical charges and assigning all rights and benefits due from Horizon to them, including standing to appeal and/or sue on the basis of Horizon's claim payment decisions. (Compl., ¶¶ 13-17.)

         On or about March 13, 2014, Horizon made a single payment of $100, 507.58 on a claim that Cohen submitted for the above-referenced medical services. (Compl., ¶ 25.) On July 31, 2014, Horizon sent a refund request for $97, 820.00, stating that it had overpaid for the services rendered to JE. (Compl., ¶ 26.) After denying an appeal by Cohen and POA, and in satisfaction of its refund request, Horizon allegedly “took back” $97, 820.06 from claims being paid to Cohen by Horizon on behalf of 30 different patients it insured. (Compl., ¶ 31.) Cohen and POA then filed another appeal which was also denied, giving rise to the instant action.

         The complaint pleads violations of N.J.A.C. 11:24-5.3 (“Emergency and urgent care services”) and the New Jersey Healthcare Information and Technologies Act (“HINT”), in addition to a common law cause of action for unjust enrichment. Plaintiffs' motion to remand to state court on the basis that ERISA does not preempt claims for payment under N.J.A.C. 11:24-5.3 and HINT has been fully briefed (D.E. 32, 39, 40).

         The Court makes its decision on the papers.

         II. Standard of Review

         “Any civil action brought in state court may be removed by the defendant to the federal district court in the district where such action is pending, if the district court would have original jurisdiction over the matter.” U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 389 (3d Cir. 2002) (citing 28 U.S.C. § 1441(a)). Thus, removal is not appropriate if the case does not fall within the district court's original federal question jurisdiction and the parties are not diverse. Id. The party asserting jurisdiction bears the burden of showing that at all stages of the litigation the case is properly before the federal court. Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004).

         “Under the well-pleaded complaint rule, a cause of action ‘arises under' federal law, and removal is proper, only if a federal question is presented on the face of the plaintiff's properly pleaded complaint.” Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 353 (3d Cir. 1995). However, the Supreme Court has recognized an exception to the well-pleaded complaint rule. Id. “Congress may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character.” Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987).

         III. Analysis

         Plaintiffs argue that remand is proper because their state law claims under N.J.A.C. 11:24-5.3 and HINT create legal obligations that are independent of the terms of an ERISA plan and thus do not fall within the scope of ERISA's preemption clause. ERISA contains a preemption clause providing that the act “shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. § 1144(a) (emphasis added). The Supreme Court has noted the “expansive sweep of the preemption clause[, ]” see Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987), and, in a recent decision, elaborated on the current state of the ERISA preemption doctrine:

First, ERISA pre-empts a state law if it has a ‘reference to' ERISA plans. To be more precise, where a State's law acts immediately and exclusively upon ERISA plans . . . or where the existence of ERISA plans is essential to the law's operation . . ., that ‘reference' will result in pre-emption. Second, ERISA pre-empts a state law that has an impermissible ‘connection with' ERISA plans, meaning a state law that governs . . . a central matter of plan administration or interferes with nationally uniform plan administration. A state law also might have an impermissible connection with ERISA plans if ‘acute, albeit indirect, economic effects' of the state law ‘force an ERISA plan to adopt a certain scheme of ...

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