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East Coast Advanced Plastic Surgery v. Blue Cross Blue Shield of Texas

United States District Court, D. New Jersey

June 11, 2019

EAST COAST ADVANCED PLASTIC SURGERY, Plaintiff,
v.
BLUE CROSS BLUE SHIELD OF TEXAS and EASTERN CONCRETE MATERIALS, INC., Defendants.

          REPORT AND RECOMMENDATION

          HON. LEDA DUNN WETTRE UNITED STATES MAGISTRATE JUDGE.

         Before the Court is plaintiff East Coast Advanced Plastic Surgery's motion to remand this action to the Superior Court of New Jersey, Law Division, Morris County. (ECF Nos. 4, 6). Defendant Eastern Concrete Materials, Inc. ("Eastern Concrete") opposes the motion. (ECF No. 5). The Honorable Susan D. Wigenton, U.S.D.J., referred the motion to the undersigned for a Report and Recommendation. The Court heard oral argument on die motion on June 3, 2019. Having considered the parties' submissions and argument, and for good cause shown, the Court recommends that the motion to remand be GRANTED.

         I. BACKGROUND

         Plaintiff is a private healthcare services provider with an office located in Denville, New Jersey. (Compl. ¶ 1, ECF No. 1-1). Defendant Eastern Concrete sponsors and administers a self-insured health plan through which it provided benefits to its employee "R.B." (Id. ¶¶ 8, 15). Defendant Blue Cross Blue Shield of Texas ("BCBSTX") is the claims administrator for Eastern Concrete's health plan. (Id. ¶ 4). Plaintiff alleges that at all relevant times, it was a "non- participating or out-of-network provider that rendered medically-necessary services" to R.B. (Id., ¶ 13). Specifically, on July 23, 2015, November 24, 2015, May 13, 2016, and October 24, 2016, R.B. underwent mastectomy, breast reconstruction, and cyst removal surgeries. (Id. ¶¶ 17, 31, 38, 45). Plaintiff asserts that it contacted BCBSTX by telephone prior to each surgery to request pre-authorization, and each time BCBSTX advised that "there was no authorization or precertification required" in order to be paid the usual, customary, and reasonable rates for medical services it provided to R.B. (Id. ¶¶ 16, 24, 30, 37, 44). Plaintiff alleges that it relied on what it characterizes as BCBSTX's pre-surgery approvals to its detriment, ultimately billing a total of $364, 132.77 for the surgeries, of which defendants paid $1, 353.23. (Id. ¶¶ 50-51).

         On January 4, 2019, plaintiff filed suit in the Superior Court of New Jersey, Law Division, Morris County asserting claims for promissory estoppel and unjust enrichment. The complaint specifically states that plaintiffs claims arise under state law, and not under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., or any other federal law. (Id. ¶ 10). With the consent of BCBSTX, Eastern Concrete removed the action to this Court on February 19, 2019, arguing that plaintiffs state law claims for recovery of benefits are completely preempted by ERISA, (Notice of Removal ¶¶ 4-12, ECF No. 1). Plaintiff timely filed the instant motion to remand on March 21, 2019. (ECF No. 4).

         II. ANALYSIS

         A. Legal Standards

         A defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). But, "[i]fat any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). Here, defendant as the removing party bears the burden of demonstrating that the case is properly before the federal court. Frederico v. Home Depot, 507 F.3d 188, 193 (3d Cir. 2007). "Removal statutes are to be strictly construed, with all doubts to be resolved in favor of remand." Brown v. JEVIC, 575 F.3d 322, 326 (3d Cir. 2009).

         The district court has subject matter jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. A claim arises under federal law where the "well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiffs right to relief necessarily depends on resolution of a 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). In certain cases, however, a complaint that presents only state law claims and no other bases for federal jurisdiction may nonetheless be removed to federal court pursuant to the doctrine of complete preemption. See Pascack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 399 (3d Cir. 2004) (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004)). Complete preemption "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 Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987)); see NJ. Carpenters & the Trustees Thereof v. Tishman Constr. Corp. of N.J., 760 F.3d 297, 302 (3d Cir. 2014) ("[C]omplete preemption operates to confer original federal subject matter jurisdiction notwithstanding the absence of a federal cause of action on the face of the complaint." (quotation omitted)); Lazorko v. Pennsylvania Hosp., 237 F.3d 242, 248 (3d Cir. 2000).

         "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, 760 F.3d at 303 (quoting Davila, 542 U.S. at 209). In analyzing whether plaintiffs state law claims are completely preempted by ERISA, the Court applies the two-pronged Pascacktest to determine whether: "(1) the plaintiff could have brought the claim under § 502(a); and (2) no other independent legal duty supports the plaintiffs claim." Id.; Pascack, 388 F.3d at 400. With respect to the first prong of the Pascack test - whether plaintiff could have brought its claim pursuant to ERISA - the court considers: "1(a) whether the plaintiff is the type of party that can bring a claim pursuant to Section 502(a)(1)(B), and 1(b) whether the actual claim that the plaintiff asserts can be construed as a colorable claim for benefits pursuant to Section 502(a)(1)(B)." Progressive Spine & Orthopaedics, LLC v. Anthem Blue Cross Blue Shield, Civ. A. No. 17-536 (KM), 2017 WL 4011203, at *5 (D.NJ. Sept. 11, 2017).

         With respect to Pascack''s second prong, "a legal duty is 'independent' if it is not based on an obligation under an ERISA plan, or if it 'would exist whether or not an ERISA plan existed.'" NJ. Carpenters, 760 F.3d at 303 (quoting Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 950 (9th Cir. 2009)). As the Pascack test is "conjunctive, a state-law cause of action is completely preempted only if both of its prongs are satisfied." Id.

         B. Pascack Test Prong 1

         1. Type of Party

         First, the Court considers whether plaintiff is the type of party that can bring a claim under § 502(a)(1)(B). That section provides that a "participant or beneficiary" may bring a claim pursuant to ERISA. 29U.S.C. § 1132(a)(1). A "participant" is "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." 29U.S.C. § 1002(7). A "beneficiary" is "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." Id. ยง ...


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