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University Spine Center v. Empire Blue Cross and Blue Shield

United States District Court, D. New Jersey

July 17, 2018

UNIVERSITY SPINE CENTER, on assignment of Menachem G., Plaintiff,
v.
EMPIRE BLUE CROSS AND BLUE SHIELD and JOHN DOE, being a fictitious name for the Plan Administrator whose identity is presently unknown, Defendants.

          OPINION

          WILLIAM J. MARTINI, U.S.D.J.

         Plaintiff University Spine Center brings this action against Defendant Empire Blue Cross & Blue Shield, alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq., in connection with Defendant's partial failure to reimburse Plaintiff for medical services rendered to a participant (the “Patient”) of Defendant's health insurance plan (the “Plan”). This matter comes before the Court on Defendant's motion to dismiss pursuant to Federal Rule of Procedure 12(b)(1) and (b)(6). There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, Defendant's motion is GRANTED and Plaintiff's Complaint is DISMISSED WITH PREJUDICE. Defendant's request for attorneys' fees and costs is DENIED.

         I. BACKGROUND

         Plaintiff is a healthcare provider in Passaic County, New Jersey. Compl. ¶ 1. Defendant is a health insurance company responsible for the Plan at issue here. See id. ¶ 2. On July 9, 2012, Plaintiff performed several spinal procedures on Patient. See id. ¶¶ 6- 7. Plaintiff submitted claim forms to Defendant for reimbursement of those services in the amount of $528, 736.00, but Defendant only reimbursed $22, 042.64 of that amount. Id. ¶¶ 10-11. Plaintiff subsequently filed this action on March 16, 2018, seeking $298, 366.96 in reimbursement from Defendant, alleging several ERISA violations, including failure to make all plan payments, breach of fiduciary duty and failure to produce requested documentation. See id. ¶¶ 18-41. Plaintiff asserts that Patient assigned his Plan benefit rights to Plaintiff and that it is “enabled to bring this action by virtue of the assignment.” See id. ¶¶ 8-9.

         Defendant now moves to dismiss Plaintiff's complaint (the “Complaint”). See Def.'s Mem. of Law in Supp. of Its Mot. to Dismiss (“Def.'s Mem.”), ECF No. 8-1. Defendant asserts, and Plaintiff does not deny, that Plaintiff is an out-of-network healthcare provider that did not have a contract with Defendant at the time that it rendered services to Patient. See id. at 6. Defendant also argues that Plaintiff's claims are subject to a two-year contractual limitation, which renders them time-barred. See id. at 31-33. Defendant raises several other issues with the Complaint, which the Court need not address further for reasons stated below.

         Plaintiff filed a two-page letter brief in lieu of a formal opposition, requesting that the Court stay Defendant's motion and grant Plaintiff leave to file an amended complaint. See Br. in Opp'n (“Pl.'s Opp'n”), ECF No. 14. Plaintiff reasons, “Rather than argue over the effect that the specific anti-assignment provision in [Patient's] Plan has on Plaintiff's standing in this matter, and waste scarce judicial resources in deciding the Motion, Plaintiff would rather re-file with a perfected claim of standing through a power of attorney.” Id. at 1. Plaintiff asserts, “The Third Circuit expressly stated in Am. Orthopedic & Sports Med. v. Indep. Blue Cross Blue Shield, that a provider may obtain standing through a Power of Attorney.” Id. Plaintiff further claims that the remainder of the purported deficiencies raised by Defendant can easily be cured by an amended pleading. Id. at 1-2. Plaintiff attached a notice of cross-motion for leave to amend its complaint, but it did not include a copy of the proposed amended complaint in compliance with the District of New Jersey Local Civil Rule 15.1(a). See Notice of Cross-Motion, ECF No. 14-1.

         In its reply, Defendant responds that the Court should deny Plaintiff's request for leave to amend the Complaint because Plaintiff has not alleged that it intends to prosecute this action as Patient's attorney-in-fact. See Def.'s Reply Mem. of Law in Supp. of Mot. to Dismiss (“Def.'s Reply”) 5-9, ECF No. 15. Defendant also argues that any attempt to amend the Complaint would be futile. See id. at 9-13. Defendant reiterates that Plaintiff's ERISA claims are time-barred by the two-year limitation provision in the Plan. See id. at 13-14. Finally, Defendant moves for its attorneys' fees and costs because Plaintiff initiated this matter despite its lack of standing and its “serial filing of complaints, without basis in law or fact, cannot be ignored nor should be tolerated[.]” See id. at 14.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(1) provides for the dismissal of a complaint for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). There are two types of challenges to subject-matter jurisdiction: (1) facial attacks, which challenge the allegations of the complaint on their face; and (2) factual attacks, which challenge the existence of subject-matter jurisdiction, quite apart from any pleadings. Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). In reviewing a factual attack, like the one in this case, the court may consider evidence outside the pleadings, and no presumptive truthfulness attaches to the plaintiff's allegations. Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000); Gotha v. United States, 115 F.3d 176, 178-79 (3d Cir. 1997). The plaintiff bears the burden of proving that jurisdiction exists. Gould Elecs., 220 F.3d at 178.

         Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998).

         Although a complaint need not contain detailed factual allegations, “a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, such that it is “plausible on its face.” See Id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While “[t]he plausibility standard is not akin to a ‘probability requirement' . . . it asks for more than a sheer possibility.” Id.

         III. DISCUSSION

         This case represents yet another in a long line of cases filed by Plaintiff against insurers for reimbursement of out-of-network procedures. See, e.g., Univ. Spine Ctr. v. Horizon Blue Cross Blue Shield of N.J., No. 16-cv-8021, 2018 WL 2134060, at *2 n.2 (D.N.J. May 9, 2018), appeal docketed, No. 18-2279 (3d Cir. June 12, 2018).[1] The Third Circuit recently determined that anti-assignment clauses in ERISA plans are enforceable. See Am. Orthopedic & Sports Med. v. Indep. Blue Cross Blue Shield, 890 F.3d 445, 453 (3d Cir. 2018) (“We now . . . hold that anti-assignment clauses in ERISA-governed health insurance plans as a general matter are enforceable.”). The Plan at issue here contains an anti-assignment clause, which reads:

Only Covered Persons can receive the benefits provided under this Contract for payment. Therefore, except as otherwise specifically set forth elsewhere in this Contract, any attempt to assign benefits or payments for benefits will be void unless authorized by us in writing, and no benefits, ...

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