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University Spine Ctr. v. Anthem Blue Cross Life and Health Ins. Co.

United States District Court, D. New Jersey

February 2, 2018

University Spine Ctr.
v.
Anthem Blue Cross Life & Health Ins. Co.

          Daniel C. Nowak, Esq. Callagy Law, P.C. Counsel for Plaintiff.

          Amanda L. Genovese, Esq. Troutman Sanders LLP Counsel for Defendant.

          LETTER OPINION FILED WITH THE CLERK OF THE COURT

          SUSAN D. WIGENTON, U.S.D.J.

         Before this Court is Defendant Anthem Blue Cross Life and Health Insurance Company's “Defendant” Motion to Dismiss Plaintiff University Spine Center's “Plaintiff” Complaint pursuant to Federal Rule of Civil Procedure 12b1 and 6. This Court having considered the parties' submissions, and having reached its decision without oral argument pursuant to Federal Rule of Civil Procedure 78, for the reasons discussed below, GRANTS Defendant's motion in part and DENIES Defendant's motion in part.

         BACKGROUND & PROCEDURAL HISTORY

On or about August 31, 2015, Plaintiff, a healthcare provider located in Passaic County, New Jersey, provided medical services to Clinton L. “Patient”. Compl. ¶¶ 4-5. Plaintiff alleges it obtained an assignment of benefits from Patient in to bring a claim under the Employee Retirement Income Security Act of 1974 “ERISA”, 29 U.S.C. § 1002, et seq. Id. ¶ 6. Plaintiff then demanded reimbursement from Defendant in the amount of $301, 568.00, of which Defendant paid $9, 771.48. Id. ¶¶ 7-8. Plaintiff alleges that it “engaged in the applicable administrative appeals process maintained by Defendant” but Defendant denied the appeal and refused to make additional payment. Id. ¶¶ 9-11. On August 31, 2017, Plaintiff filed a three-count Complaint in the Superior Court of New Jersey, Law Division, Passaic County, alleging breach of contract, failure to make payments pursuant to Patient's Plan, and breach of fiduciary duty. [1] Dkt. No. 1-1. Defendant removed to this Court on October 19, 2017 and filed the instant motion to dismiss on December 4, 2017, alleging Plaintiff lacks standing to bring suit and has failed to state claims upon which relief can be granted. Dkt. Nos. 1, 7. Plaintiff filed its opposition on January 22, 2018 and Defendant replied on January 29, 2018. Dkt. Nos. 9, 10.[2]

         DISCUSSION

         A.

         The Federal Rules of Civil Procedure provide that a complaint must be dismissed if the district court lacks subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). “Ordinarily, Rule 12(b)(1) governs motions to dismiss for lack of standing, as standing is a jurisdictional matter.” N.J. Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 372 n.3 (3d Cir. 2015). However, in a case where a party claims derivative standing to sue under ERISA § 502(a), a motion to dismiss for lack of standing is “properly filed under Rule 12(b)(6).” Id. Therefore, the standard of review for both of Plaintiff's Rule 12(b) motions is the same.

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This Rule “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted); see also Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (stating that Rule 8 “requires a ‘showing, ' rather than a blanket assertion, of an entitlement to relief”). In considering a Motion to Dismiss under Rule 12(b)(6), the Court must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips, 515 F.3d at 231 (external citation omitted). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (discussing the Iqbal standard).

         B.

         Defendant first argues that Plaintiff lacks standing to bring a claim. ERISA Section 502(a) permits claims brought by a “participant” or “beneficiary.” 29 U.S.C. § 1132(a) (1)-(4). A “participant” is defined as “any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit.” 29 U.S.C. § 1002(7). A “beneficiary” is defined as “a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8). Here, it is uncontested that Plaintiff is neither a participant nor a beneficiary as defined by ERISA. Rather, Plaintiff asserts it has derivative standing by virtue of an assignment of Patient's benefits to Plaintiff. (Compl. ¶ 6.)

         “Healthcare providers that are neither participants nor beneficiaries in their own right may obtain derivative standing by assignment from a plan participant or beneficiary.” N.J. Brain & Spine, 801 F.3d at 372. Here, Defendant challenges the validity of Plaintiff's alleged assignment as “suspect” because it is dated four days prior to the date of Patient's medical services and “only vaguely alleges that Plaintiff received ‘an assignment of benefits.'” (Dkt. No. 1-1 Ex. B; Def.'s Br. at 7-8.) However, the assignment was dated within days of the medical procedure at issue, it identifies “Blue Cross” as Patient's insurance provider, and is signed by Patient. (Dkt. No. 1-1 Ex. ...


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