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East Coast Advanced Plastic Surgery v. Horizon Blue Cross Blue Shield of New Jersey

United States District Court, D. New Jersey

September 14, 2018

EAST COAST ADVANCED PLASTIC SURGERY,, Plaintiff,
v.
HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, JOHN AND JANE DOES 1-10 and ABC CORPORATIONS 1-10,, Defendants.

          REPORT AND RECOMMENDATION

          HON. MICHAEL A. HAMMER, UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         This matter comes before the Court on the motion of Plaintiff, East Coast Advanced Plastic Surgery (“ECA”), to remand the action to the Superior Court of New Jersey Law Division, Bergen County. See Plaintiff's Motion to Remand, D.E. 5. The District Court referred this matter to the Undersigned to issue a Report and Recommendation. This Court has considered the matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth herein, the Court respectfully recommends that the District Court grant Plaintiff's motion and remand this matter to the Superior Court of New Jersey, Law Division, Bergen County.

         II. BACKGROUND

         Plaintiff ECA is a medical practice group with offices located in Essex County, New Jersey. Complaint, D.E. 1-1, at ¶¶ 1, 5, 13. On January 29, 2015, two doctors employed or contracted by ECA, Drs. Cerio and Loghmanee, performed a double mastectomy and deep inferior epigastric perforator (“DIEP”) reconstructive surgery on Patient AR. Id. at ¶¶ 18-21. AR had health insurance through the UFCW Local 464A Welfare Services Fund (the “Fund”). The Fund was a self-insured plan that Defendant Horizon Blue Cross Blue Shield of New Jersey (“BCBS”) administered.

         Understanding that BCBS was the Fund's agent, ECA sought pre-authorization from BCBS before Drs. Cerio and Loghmanee performed the surgery. According to ECA, BCBS knew that ECA was an out-of-network provider, and yet responded that pre-authorization was not necessary for this procedure. Id. at ¶ 27. The Fund has since posited that BCBS was not its authorized representative, and that BCBS was not authorized to represent that pre-authorization was unnecessary. Id. at ¶ 29.

         Plaintiff billed BCBS $207, 135.00 for Dr. Cerio and $262, 975.00 for Dr. Loghmanee, for a total of $470, 210.00 for the procedure. Id. at ¶¶ 22-24. According to Plaintiff, BCBS paid a total of $9, 306.63, leaving a balance of $460, 903.37.[1] Id. at ¶ 25.

         ECA filed the instant action on March 7, 2018 in New Jersey Superior Court, Law Division, Bergen County. See Exh. A to Notice of Removal, D.E. 1-1. ECA's Complaint sets forth claims for breach of contract (Count One), estoppel (Count Two), account stated (Count Three), and fraudulent inducement (Count Four). See Complaint, D.E. 1-1. As ECA puts it, “this dispute is about the amount of the payment, not the right to payment.” Brief in Support of Motion to Remand, May 16, 2018, D.E. 5-1, at 7.

         On April 16, 2018, BCBS removed this case from state court on the basis of federal question pursuant to 28 U.S.C. § 1331. See Notice of Removal, D.E. 1. Although there is no ERISA claim explicitly plead in the Complaint, BCBS contends that ERISA completely preempts ECA's state law claims. Id. Accordingly, BCBS argues that this Court has jurisdiction under 28 U.S.C. § 1331. Id. ECA filed the motion to remand on May 16, 2018. ECA contends that it lacks standing to assert an ERISA claim, and that its claims are independent state law causes of action that are not preempted by ERISA.

         III. Analysis

         A decision to remand is dispositive. In re U.S. Healthcare, 159 F.3d 142, 146 (3d Cir. 1998) (“[A]n order of remand is no less dispositive than a dismissal order of a federal action for lack of subject matter jurisdiction where a parallel proceeding is pending in the state court.”). Accordingly, this Court addresses Plaintiff's motion via Report and Recommendation.

         Removal of a civil case to a federal court is governed by 28 U.S.C. § 1441. A defendant may remove an action brought originally in state court only if the plaintiff could have filed the complaint within the original jurisdiction of the federal court. 28 U.S.C. § 1441(b); see also 28 U.S.C. §1441(a) (“Except as otherwise 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 . . . to the district court of the United States....”). A federal court lacking subject matter jurisdiction over a case must remand the matter to state court. 28 U.S.C. § 1447(c); see Farina v. Nokia, Inc., 625 F.3d 97, 114 (3d Cir. 2010) (noting that a federal court cannot proceed without subject matter jurisdiction, nor can a party waive such jurisdiction). BCBS, as the party asserting federal jurisdiction by way of removal, bears the burden of establishing that subject matter jurisdiction exists at all stages in which the case is properly before the federal court. Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004). Section 1441 is to be construed strictly; all doubts must be resolved in favor of remand. Id.; see also Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992) (“[R]emoval statutes are to be strictly construed against removal and all doubts should be resolved in favor of remand.”) (citations omitted) (internal quotations marks omitted); Abels v. State Farm Fire & Casualty Co., 770 F.2d 26, 29 (3d Cir. 1985) (“Because lack of [federal] jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile, the removal statute should be strictly construed and all doubts should be resolved in favor of remand.”) (citations omitted).

         In determining whether an action should be remanded to state court, “a district court must focus on the operative complaint at the time the petition for removal was filed.” Group Hospitalization & Med. Servs. v. Merck-Medco Managed Care, LLP. 295 F.Supp.2d 457, 461-462 (D.N.J. 2003). District courts have federal question subject matter jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. In order for a claim to arise under federal law, the “well-pleaded complaint” must establish “either that federal law creates the cause of action or that the plaintiffs['] right to relief necessarily depends on resolution of substantial question of federal law.” Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 27-28 (1983).

         An exception to the well-pleaded complaint rule is the doctrine of complete preemption, which “‘operates to confer original federal jurisdiction notwithstanding the absence of a federal cause of action on the face of the complaint.'” New Jersey Carpenters and the Trs. Thereof v. Tishman Constr. Corp.760 F.3d 297, 302 (3d Cir. 2014) (quoting In re U.S. Healthcare, Inc., 193 F.3d 151, 160 (3d Cir. 1999)). The Supreme Court has recognized the “complete preemption” doctrine in claims pursuant to § 502(a) of ERISA. See ...


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