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Small v. Anthem Blue Cross Blue Shield

United States District Court, D. New Jersey

January 30, 2019

TZVI SMALL, M.D., Plaintiff,
v.
ANTHEM BLUE CROSS BLUE SHIELD, HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, as administrators, and DEUTSCHE BANK, JOHN AND JANE DOES 1-10 and ABC CORPORATIONS 1-10, Defendants.

          REPORT & RECOMMENDATION

          CATHY L. WALDOR UNITED STATES MAGISTRATE JUDGE.

          This matter comes before the Court by way of referral from the Honorable John Michael Vazquez to issue a report and recommendation regarding Plaintiff Tvzi Small, M.D.'s Motion to Remand and for Attorneys' Fees (ECF No. 12) and Defendants Anthem Insurance Companies, Inc.'s (“Anthem”) Opposition and Cross Motion for Attorneys' Fees and Costs (ECF No. 31). The Court declined to hear oral argument pursuant to Rule 78 and as set forth more fully below, the Court recommends the Motion to Remand be GRANTED, the attendant Motion for Attorneys' Fees be DENIED, and Defendant Anthem's Cross Motion for Attorney's Fees be DENIED.

         I. BACKGROUND

         Plaintiff first filed this action in Bergen County Superior Court of New Jersey on December 5, 2017, alleging state law claims of quantum meruit, promissory estoppel, fraudulent inducement, and violation of health insurance regulations against the Defendant. (see generally Compl., ECF No. 1-1). Plaintiff was a non-participating or out-of-network provider that rendered medically-necessary services to a patient. (Compl. ¶ 11). According to Plaintiff, after the patient was admitted to the emergency room, Plaintiff contacted Defendant to request prior authorization of the emergency surgery, which Plaintiff allegedly received from Defendant BCBS in writing on August 6, 2016. (Compl. ¶¶ 18, 20).

         Plaintiff performed the surgery and billed a total of $22, 130.91 for services provided. (Compl. ¶ 22). Plaintiff alleges that Defendants paid only $1, 672.41 toward the charges, leaving a balance due of $20, 458.20, and asserts that Defendants, knowing Plaintiff was an out-of-network provider, did not disclose its intention not to pay for the services Plaintiff ultimately provided to the patient. (Compl. ¶¶ 23, 25). Plaintiff pleads quantum meruit, promissory estoppel, fraudulent inducement, and health insurance regulation violation claims and seeks relief for not less than $15, 000, in addition to reasonable attorneys' fees, interests, costs, and expenses. (Compl. ¶¶ 26-50).

         On January 10, 2018, Defendant Anthem removed this action to this Court pursuant to 28 U.S.C. §§ 1331, 1332 1441, and 1446. (Notice of Removal, ECF No. 1 at 2). Defendant's basis for removal was the doctrine of pre-emption, asserting that ERISA is one of the statutes to which the complete preemption doctrine applies and that the patient's health benefit plan falls under ERISA. (Id. at 4). On February 9, 2018, Plaintiff filed his Motion to Remand and for an Award of Attorneys' Fees. (ECF No. 12). Plaintiff argues that Defendant's removal was improper because Plaintiff's state law causes of action are independent of any claims the patient may have under ERISA, and that Plaintiff's claims cannot be preempted by ERISA when they do not have standing to bring a claim under ERISA. (Id. at 2-3). Defendant Anthem filed their Opposition as well as a Cross Motion for Attorneys' Fees and Costs on March 5, 2018. (ECF No. 31). Defendant Deutsche Bank also filed its own Memorandum of Law in Opposition to Plaintiff's Motions on March 5, 2018. On March 12, 2018, Plaintiff filed a Reply. (ECF No. 33). The Court concludes that Plaintiff does not have standing to bring a claim pursuant to ERISA § 502(a). Consequently, there is no federal jurisdiction over this action, and its removal was improper.

         II. LEGAL STANDARD

         The federal removal statute provides, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed…to the district courts of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441. Federal district courts have original jurisdiction over “all civil actions arising under the… laws, or treaties of the United States.” 28 U.S.C. § 1331; see also Parrish v. ARC of Morris Cty., LLC, 193 F.Supp.3d 425, 430 (D.N.J. 2016).

         The party asserting “jurisdiction bears the burden of showing at all stages of the litigation that subject matter jurisdiction is proper in the federal court.” DeJoseph v. Cont'l Airlines, Inc., 18 F.Supp.3d 595, 597 (D.N.J. 2014). The federal removal statute should be “strictly construed against removal…[and] all doubts should be resolved in favor of remand.” Id. There is a “presum[ption] that federal courts lack jurisdiction unless the contrary appears affirmatively from the record.” Id. at 598 (quoting Renne v. Geary, 501 U.S. 312, 316 (1991)).

         III. DISCUSSION

         A. COMPLETE PREEMPTION UNDER ERISA § 502(A)

         In general, the well-pleaded complaint rule ordinarily bars the removal of an action to federal court where federal jurisdiction is not presented on the face of the plaintiff's complaint. Dukes v. U.S. Healthcare, 57 F.3d 350, 353 (3d. Cir. 1995). But, in certain limited circumstances, federal question jurisdiction exists over state law claims where the “state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005). One such limited circumstance exists if the action “falls within the narrow class of cases to which the doctrine of ‘complete pre-emption' applies.” Pascack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d. 393, 400 (3d Cir. 2004) (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004)). “[C]omplete pre-emption recognizes ‘that Congress may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character.'” Id. (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987); see also Progressive Spine & Orthopaedics, LLC v. Anthem Blue Cross Blue Shield, Civ. No. 17-536, 2017 WL 4011203, at *4 (D.N.J. Sept. 11, 2017).

         ERISA's civil enforcement mechanism, § 502(a), is one of those provisions with such “extraordinary pre-emptive power that it converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule, and permits removal.” N.J. Carpenters v. Tishman Constr. Corp., 760 F.3d 297, 303 (3d Cir. 2014) (quoting Davila, 542 U.S. at 209); see also Garrick Cox MD LLC v. Cigna Healthcare, Civ. No. 16-4611 (SDW)(LDW), 2016 WL 6877778, at *2 (D.N.J. Oct. 28, 2016), R&R adopted, 2016 WL 6877740 (D.N.J. Nov. 21, 2016 (remanding case to state court). As a result, state law causes of action that are within the scope of § 502 (a) are completely pre-empted and therefore removable to federal court.

         A claim is completely pre-empted and removable under ERISA § 502(a) if: “(1) the plaintiff could have brought the claim under § 502(a); and (2) no other independent legal duty supports the plaintiff's claim.” N.J. Carpenters, 760 F.3d at 303 (citing Pascack Valley Hosp., 338 F.3d at 400). This two-part analysis, commonly referred to as the Pascack test, is “conjunctive, ...


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