IHC Health Services v. Anthem Blue Cross Life and Health Insurance et al

Filing 17

MEMORANDUM DECISION AND ORDER granting 14 Motion to Change Venue: case is transferred to the Eastern District of California as a more convenient forum. Signed by Judge David Nuffer on 9/12/16 (alt)[Transferred from utd on 9/13/2016.]

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
IHC HEALTH SERVICES, INC. dba
MCKAY DEE HOSPITAL,

MEMORANDUM DECISION AND
ORDER ON [14] MOTION TO DISMISS
OR TO TRANSFER VENUE

Plaintiff,
v.

Case No. 2:16-CV-3-DN

ESKATON PROPERTIES, INC.,

District Judge David Nuffer

Defendant.

Plaintiff IHC Health Services, Inc. dba McKay Dee Hospital (“IHC”) brought suit against
Defendant Eskaton Properties, Inc. (“Eskaton”) under the Employee Retirement Income Security
Act of 1974 (“ERISA”) seeking to recover expenses incurred in the medical treatment and care
of Candace Simplot (“Ms. Simplot”) at McKay Dee Hospital in Ogden, Utah from December 27,
2012, to January 2, 2013. 1 Eskaton seeks dismissal of IHC’s Complaint for lack of standing and
improper venue. 2 Alternatively, Eskaton requests that venue be transferred to the Eastern District
of California as a more convenient forum. 3 Because IHC alleges sufficient facts regarding its
standing and as the District of Utah is a proper venue for this case, dismissal of IHC’s Complaint
is not appropriate. However, because the Eastern District of California is a more convenient
forum, Eskaton’s Motion 4 is GRANTED on its alternative relief of transferring venue.

1

Complaint, docket no. 2, filed Jan. 4, 2016.

2

Defendant Eskaton Properties, Inc.’s Motion and Memorandum to Dismiss the Complaint, or in the Alternative,
Transfer Venue (“Eskaton’s Motion”), docket no. 14, filed Apr. 28, 2016.

3

Id.

4

Id.

BACKGROUND ............................................................................................................................ 2
DISCUSSION ................................................................................................................................. 3
I.
IHC’s Complaint contains sufficient allegations to avoid dismissal for lack of
standing at this time. ............................................................................................... 3
II.
The District of Utah is a proper venue for this case. .............................................. 6
A.
Venue in the District of Utah is not proper under the first prong of
ERISA’s venue provision. .......................................................................... 7
B.
Venue in the District of Utah is not proper under the second prong of
ERISA’s venue provision. .......................................................................... 8
C.
Venue in the District of Utah is proper under the third prong of ERISA’s
venue provision. .......................................................................................... 9
III.
The Eastern District of California is a more convenient forum for this case. ...... 14
ORDER ......................................................................................................................................... 19

BACKGROUND
Eskaton is a California non-profit corporation that operates senior living facilities in the
Greater Sacramento Area. 5 Eskaton operates solely in Northern California. 6 Eskaton is the
sponsor and administrator of the Eskaton Health Plan (the “Plan”), 7 which is insured by Anthem
BlueCross Life and Health Insurance Company (“Anthem”). 8 Eskaton controls and manages the
operation and administration of the Plan, including decisions to not fully approve or reimburse
claims, from its headquarters in Carmichael, California. 9
IHC is a Utah corporation that operates several hospitals in the Intermountain Area,
including McKay Dee Hospital in Ogden, Utah. 10 Ms. Simplot, who is not a party to this action,
is a resident of California and a participant in the Plan. 11

5

Declaration of Bill Pace in Support of Defendant Eskaton Properties, Inc.’s Motion to Dismiss the Complaint, or in
the Alternative, Transfer Venue (“Pace Declaration”) ¶ 2, docket no. 14-1, filed Apr. 28, 2016.

6

Id. ¶¶ 3-4.

7

Id. ¶ 5.

8

Complaint ¶ 8.

9

Pace Declaration ¶¶ 6-7.

10

Complaint ¶ 1; Plaintiff’s Opposition to Defendant’s Motion to Dismiss (“IHC’s Opposition”) at 6, docket no. 15,
filed May 26, 2016.
11

Complaint ¶¶ 3, 13.

2

From December 27, 2012, to January 2, 2013, Ms. Simplot received medical treatment
and care at McKay Dee Hospital for which IHC billed $164,888.28. 12 IHC submitted a claim for
the services rendered to Ms. Simplot to Eskaton for payment. 13 Eskaton paid $72,713.07 to IHC
on the claim, but denied the remaining balance. 14
On January 4, 2016, IHC brought suit under ERISA against Eskaton and Anthem alleging
three causes of action: (1) Recovery of Plan Benefits; (2) Breach of Fiduciary Duties; and (3)
Failure to Produce Plan Documents. 15 Subsequently, on April 6, 2016, IHC voluntarily dismissed
Anthem. 16 On April 28, 2016, Eskaton filed a motion seeking dismissal of IHC’s Complaint for
lack of standing and improper venue, or alternatively, requesting that venue be transferred to the
Eastern District of California as a more convenient forum. 17
DISCUSSION
I.

IHC’s Complaint contains sufficient allegations to avoid dismissal for lack of
standing at this time.

Eskaton raises a facial challenge to IHC’s Complaint pursuant to Rules 12(b)(1) and
12(b)(6) of the Federal Rules of Civil Procedure, arguing that IHC failed to allege sufficient facts
to establish its standing to bring suit under ERISA. 18 “[A] facial attack on the complaint’s
allegations as to subject matter jurisdiction questions the sufficiency of the complaint.” 19 “In

12

Id. ¶¶ 14, 18.

13

Id. ¶ 19.

14

Id. ¶ 20.

15

Id. ¶¶ 35-58.

16

Notice of voluntary Dismissal Without Prejudice of Defendant Anthem BlueCross Life and Health Insurance
Company, docket no. 8, filed Apr. 6, 2016.

17

Eskaton’s Motion.

18

Id. at 1-2.

19

Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995).

3

reviewing a facial attack on the complaint, a district court must accept the allegations in the
complaint as true.” 20
ERISA’s standing provision 21 provides that “[o]nly a ‘participant or beneficiary’ may
bring a civil action ‘to enforce his [or her] rights under the terms of the plan, or to clarify his [or
her] rights to future benefits under the terms of the plan.’” 22 “Healthcare providers generally are
not considered beneficiaries or participants under ERISA and thus lack standing to sue unless
they have a written assignment of claims from a patient with standing to sue under ERISA.” 23
Therefore, an assignee “stands in [the] shoes [of the participant or beneficiary] and, if the
assignment is valid, has standing to assert whatever rights [the participant or beneficiary]
possessed.” 24
IHC’s Complaint alleges the following facts germane to the issue of its standing to bring
suit under ERISA:
•

“Eskaton sponsored [and administered] an employee welfare benefit plan for its
employees[.]” 25

•

“The Plan was established and operated under [ERISA].” 26

•

“[Ms.] Simplot was a participant in [and beneficiary of] the Plan.” 27

•

“[IHC] provided medial services to [Ms. Simplot] from December 27, 2012, to
January 02, 2013[.]” 28

20

Id.

21

29 U.S.C. § 1132(a).

22

Denver Health and Hosp. Auth. v. Beverage Distribs. Co., LLC, 546 Fed.Appx. 742, 745 (10th Cir. 2013)
(quoting 29 U.S.C. § 1132(a)(1)).
23

Id. (internal quotations and punctuation omitted).

24

Id. (internal quotations and punctuation omitted).

25

Complaint ¶¶ 7, 12.

26

Id. ¶ 9.

27

Id. ¶¶ 2, 13.

28

Id. ¶ 14.

4

•

“The billed charges for the treatment rendered to [Ms. Simplot by IHC] were
$164,888.28.” 29

•

“[IHC] submitted a claim to [Eskaton] in a timely manner for [Ms. Simplot’s]
treatment.” 30

•

“[Eskaton] paid $72,713.07 (approximately 44% of Billed Charges) to [IHC] for
this claim[,]” but “partially denied the balance of this claim based on an internal
determination[.]” 31

•

“[IHC] has been an authorized agent of [Ms. Simplot], the claim beneficiary,
throughout all appeals of the claims involved in this matter.” 32

•

“This is an action brought under ERISA.” 33

Viewing the allegations of IHC’s Complaint as true and affording all reasonable
inferences in favor of IHC, 34 sufficient facts are alleged to avoid dismissal for lack of standing at
this time despite IHC’s failure to expressly allege the existence of a written assignment regarding
Ms. Simplot’s claims. This case is brought under ERISA. 35 Ms. Simplot, as a participant in and
beneficiary of the Plan, 36 had standing to bring suit against Eskaton under ERISA. 37 IHC was
Ms. Simplot’s healthcare provider and her authorized agent for purposes of the claims involved
in this case. 38 Given the nature of the case and that healthcare providers do not directly have
standing to sue under ERISA, 39 it is reasonable to infer that IHC received a written assignment
of Ms. Simplot’s claims by virtue of the Complaint’s allegation that IHC is Ms. Simplot’s
29

Id. ¶ 18.

30

Id. ¶ 19.

31

Id. ¶¶ 20-21.

32

Id. ¶ 2.

33

Id. ¶ 15.

34

Holt, 46 F.3d at 1002.

35

Complaint ¶ 15.

36

Id. ¶¶ 2, 13.

37

29 U.S.C. § 1132(a)(1); Denver Health and Hosp. Auth., 546 Fed.Appx. at 745.

38

Complaint ¶¶ 2, 14.

39

Denver Health and Hosp. Auth., 546 Fed.Appx. at 745.

5

authorized agent for purposes of the claims involved in this case. 40 Therefore, IHC would stand
in Ms. Simplot’s shoes and have standing to assert whatever rights that Ms. Simplot possessed
against Eskaton. 41
While it is uncertain whether a valid assignment of Ms. Simplot’s claims actually exists,
the standard of review for Eskaton’s facial challenge to IHC’s Complaint precludes dismissal at
this time. 42 Eskaton may, however, choose to reassert its attack on IHC’s standing to sue under
ERISA on summary judgment where the record is more fully developed and matters outside the
pleadings are considered. 43
II.

The District of Utah is a proper venue for this case.

Eskaton next seeks dismissal of IHC’s Complaint pursuant to Rule 12(b)(3) of the
Federal Rules of Civil Procedure, arguing that the District of Utah is an improper venue. 44 Under
Tenth Circuit precedent:
‘Practice on a motion under rule 12(b)(3) is relatively straight-forward. All wellpleaded allegations in the complaint bearing on the venue question generally are
taken as true, unless contradicted by the defendant’s affidavits. A district court
may examine facts outside the complaint to determine whether its venue is proper.
And, as is consistent with practice in other contexts, such as construing the
complaint, the court must draw all reasonable inferences and resolve all factual
conflicts in favor of the plaintiff.’ 45
“If the defendant presents evidence that venue is improper and the plaintiff responds with
contrary evidence, it may be appropriate for the district court to hold a [R]ule 12(b)(3) motion in

40

Complaint ¶ 2.

41

Denver Health and Hosp. Auth., 546 Fed.Appx. at 745.

42

Holt, 46 F.3d at 1002.

43

Medicomp, Inc. v. United Healthcare Ins. Co., 562 Fed.Appx. 754, 758 (11th Cir. 2014).

44

Eskaton’s Motion at 2-5.

45

Hancock v. American Tel. and Tel. Co., Inc., 701 F.3d 1248, 1260-61 (10th Cir. 2012) (quoting 5B Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure § 1352, at 324 (2004)).

6

abeyance until the district court holds an evidentiary hearing on the disputed facts.” 46
“Alternatively, the district court may deny the Rule 12(b)(3) motion while granting leave to
refile it if further development of the record eliminates any genuine factual issue.” 47
ERISA’s venue provision provides that any action “may be brought in the district where
the plan is administered, where the breach took place, or where a defendant resides or may be
found[.]” 48 IHC’s Complaint alleges that venue is proper in the District of Utah “because the
communications during the administrative appeal process took place between [IHC] and
[Eskaton] in the State of Utah, and the breaches of ERISA and the Plan occurred in the State of
Utah.” 49 The Complaint further alleges that venue is proper in the District of Utah “based on
ERISA’s nationwide service of process provision[.]” 50 Eskaton, on the other hand, argues that
the Complaint fails to “set forth facts that show that either the Plan was administered in Utah or
that Eskaton resides in or can be found in Utah[.]” 51 Eskaton further argues that any breach of
ERISA and the Plan necessarily occurred in California, where Ms. Simplot resides and where its
decisions regarding payments on claims under the Plan are made. 52
A. Venue in the District of Utah is not proper under the first prong of ERISA’s venue
provision.
The first prong of ERISA’s venue provision allows suit to be brought “where the plan is
administered,” 53 which is determined by analyzing “where the plan is managed[.]” 54 There is no

46

Id. at 1261 (internal quotations omitted).

47

Id. (internal quotations omitted).

48

29 U.S.C. § 1132(e)(2).

49

Complaint ¶ 15.

50

Id.

51

Eskaton’s Motion at 3.

52

Id. at 4-5.

53

29 U.S.C. § 1132(e)(2).

7

evidence that Eskaton’s Plan is managed or administered anywhere except California. 55
California is where Eskaton controls and manages the operation and administration of the Plan,
including decisions to not fully approve or reimburse claims. 56 Therefore, proper venue cannot
be found in the District of Utah under the first prong of ERISA’s venue provision. 57
B. Venue in the District of Utah is not proper under the second prong of ERISA’s
venue provision.
The second prong of ERISA’s venue provision allows suit to be brought “where the
breach took place.” 58 “Several cases establish that, under ERISA, the duty is owed to the plan
participant and any breach of duty owed under the plan, occurs at the place where the plan
participant resides.” 59 “The place is the location where the payment is to be made, even though
the services may have been provided at an out-of-state location.” 60 “The breach of an ERISA
plan occurs at the place the policy holder resides and would have received benefits.” 61
Because Ms. Simplot, not IHC, is the participant and beneficiary of the Plan, 62 and
because Ms. Simplot resides in California, 63 the alleged breaches of ERISA and the Plan
occurred in California. 64 The fact that Ms. Simplot received treatment in Utah 65 and that IHC is
54

Palka v. Theodore M. Hylwa, M.D., Inc., 1986 WL 22380, *1 (D. Kan. Sept. 3, 1986) (citing Sprinzen v. Supreme
Court of the State of New Jersey, 478 F.Supp. 722 (S.D. N.Y. 1979); Bostic v. Ohio River Co. (Ohio Div.) Basic
Pension Plan, 517 F.Supp. 627 (S.D. W.Va. 1981)).
55

Pace Declaration ¶¶ 6-7.

56

Id.

57

29 U.S.C. § 1132(e)(2).

58

Id.

59

Island View Residential Treatment Ctr. v. Kaiser Permanente, 2009 WL 2614682, *2 (D. Utah Aug. 21, 2009).

60

Id. (citing Barnum v. Mosca, 2009 WL 982579 (N.D. N.Y. Apr. 13, 2009); Jon N. v. Blue Cross Blue Shield of
Massachusetts, 2008 U.S. Dist. LEXIS 35464 (D. Utah Apr. 29, 2008); Brown Schools, Inc. v. Florida Power Corp.,
806 F.Supp. 146, 151 (W.D. Tex. 1992)).
61

Id.

62

Complaint ¶¶ 2, 13.

63

Id. ¶ 3.

64

Island View Residential Treatment Ctr., 2009 WL 2614682, *2.

8

her authorized agent 66 is of no consequence because IHC stands in Ms. Simplot’s shoes. 67
Therefore, proper venue cannot be found in the District of Utah under the second prong of
ERISA’s venue provision. 68
C. Venue in the District of Utah is proper under the third prong of ERISA’s venue
provision.
The third prong of ERISA’s venue provision allows suit to be brought “where a
defendant resides or may be found.” 69 “[C]ourts have followed the broad application of the
antitrust and copyright venue provisions where a defendant is deemed to [‘reside’ or] be ‘found’
in any district in which personal jurisdiction could be obtained over it.” 70 “Before a federal court
can assert personal jurisdiction over a defendant in a federal question case, the court must
determine (1) whether the applicable statute potentially confers jurisdiction by authorizing
service of process on the defendant and (2) whether the exercise of jurisdiction comports with
due process.” 71
(1) ERISA confers jurisdiction over Eskaton by authorizing nationwide service of
process.
“To determine whether the applicable statute potentially confers jurisdiction over
defendants by authorizing service of process, [the analysis] begin[s] with [Rule] 4(h)(1)” of the
Federal Rules of Civil Procedure, which “governs service upon domestic corporations.” 72 Rule
65

Complaint ¶¶ 1, 14.

66

Id. ¶ 2.

67

Denver Health and Hosp. Auth., 546 Fed.Appx. at 745.

68

29 U.S.C. § 1132(e)(2).

69

Id.

70

Palka, 1986 WL 22380, *2 (citing Varsic v. United States Dist. Court for Cent. Dist. of California, 607 F.2d 245,
248 (9th Cir. 1979); I.A.M. Nat’l Pension Fund v. Wakefield Indus., Inc., 699 F.2d 1254, 1257 (D.C. Cir. 1983)); see
also Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1210 n. 3 (10th Cir. 2000); McCracken v. Auto. Club
of S. California, Inc., 891 F.Supp. 559, 561-62 (D. Kan. 1995); 28 U.S.C. § 1391(c).
71

Peay, 205 F.3d at 1209 (internal quotations omitted).

72

Id. at 1210.

9

4(h)(1) provides that service on a domestic corporation must be made “in a judicial district of the
United States … in the matter prescribed by Rule 4(e)(1) for serving an individual[.]” 73
Rule 4(e)(1) states that “[u]nless federal law provides otherwise, an individual … may be served
in a judicial district of the United States by … following state law for serving a summons in an
action brought in courts of general jurisdiction in the state where the district court is located or
where service is made[.]” 74
In ERISA cases, federal law provides:
Where an action under this subchapter is brought in a district court of the United
States, it may be brought in the district where the plan is administered, where the
breach took place, or where a defendant resides or may be found, and process may
be served in any other district where a defendant resides or may be found. 75
“There is no question that [this language] authorizes nationwide service of process.” 76 “When a
federal statute provides for nationwide service of process, it becomes the statutory basis for
personal jurisdiction.” 77 “Thus, provided that due process is satisfied, [ERISA] confers
jurisdiction over defendants by authorizing service of process on them.” 78
(2) The District of Utah’s exercise of jurisdiction over Eskaton in this case comports
with due process.
“[T]he personal jurisdiction requirement flows from the Due Process Clause of the Fifth
Amendment and restricts judicial power in order to protect the individual’s liberty interest.” 79
“Thus, the proper focus for a personal jurisdiction test should be on protecting an individual’s

73

FED. R. CIV. P. 4(h)(1)(A).

74

Id. at 4(e)(1).

75

29 U.S.C. § 1132(e)(2) (emphasis added).

76

Peay, 205 F.3d at 1210.

77

Id. (internal quotations omitted).

78

Id.

79

Id. at 1211.

10

liberty interest in avoiding the burdens of litigating in an unfair or unreasonable forum.” 80
“Requiring that the individual defendant in a national service of process case only reside
somewhere in the United States does not protect this interest.” 81 Accordingly, “in a federal
question case where jurisdiction is invoked based on nationwide service of process, [such as
cases under ERISA,] the Fifth Amendment requires the plaintiff’s choice of forum to be fair and
reasonable to the defendant.” 82
“To establish that jurisdiction does not comport with Fifth Amendment due process
principles, a defendant must first demonstrate that his liberty interests actually have been
infringed.” 83 “The burden is on the defendant to show that the exercise of jurisdiction in the
chosen forum will make litigation so gravely difficult and inconvenient that he [or she] unfairly
is at a severe disadvantage in comparison to his [or her] opponent.” 84 The following factors aid
in evaluating whether a defendant has met the burden of establishing “constitutionally significant
inconvenience”:
(1) the extent of the defendant’s contacts with the place where the action was
filed; (2) the inconvenience to the defendant of having to defend in a jurisdiction
other than that of his [or her] residence or place of business, including (a) the
nature and extent and interstate character of the defendant’s business, (b) the
defendant’s access to counsel, and (c) the distance from the defendant to the place
where the action was brought; (3) judicial economy; (4) the probable situs of the
discovery proceedings and the extent to which the discovery proceedings will take
place outside the state of the defendant’s residence or place of business; and (5)
the nature of the regulated activity in question and the extent of impact that the
defendant’s activities have beyond the borders of his [or her] state of residence or
business. 85

80

Id. (internal quotations omitted).

81

Id. (internal quotations omitted).

82

Id. at 1212.

83

Id. (internal quotations omitted).

84

Id (internal quotations and punctuation omitted).

85

Id.

11

“[I]t is only in highly unusual cases that inconvenience will rise to a level of constitutional
concern.” 86 “[I]n this age of instant communication and modern transportation, the burdens of
litigating in a distant forum have lessened[.]” 87 However, “[i]f a defendant successfully
demonstrates that litigation in the plaintiff’s chosen forum is unduly inconvenient, then
jurisdiction will comport with due process only if the federal interest in litigating the dispute in
the chosen forum outweighs the burden imposed on the defendant.” 88
Applying “the broad standard set forth above,” 89 Eskaton cannot show that its liberty
interest will be infringed by the District of Utah’s exercise of jurisdiction in this case. Eskaton
has sufficient contacts with Utah. Eskaton has approved the payment of benefit claims for
insureds who have sought treatment in Utah, including a percentage of IHC’s charges for the
medical treatment and care of Ms. Simplot. 90 Eskaton also communicated with IHC, a Utah
corporation, during the administrative appeal process of the claims involved in this case. 91 As
such, Eskaton knew or should have known that a dispute over Ms. Simplot’s benefits could arise
in Utah. 92
Additionally, any inconvenience to Eskaton in defending this case in Utah does not rise
to “the level of constitutional concern.” 93 While Eskaton operates retirement communities and
provides in-home supportive services in the Greater Sacramento Area, 94 it also sponsors and
86

Id. (internal quotations omitted).

87

Id. at 1213 (internal quotations and citations omitted).

88

Id. (internal quotations omitted; emphasis added).

89

Id.

90

Complaint ¶¶ 1, 14, 19-20.

91

Id. ¶¶ 1, 15, 31; IHC’s Opposition at 6.

92

Peay, 205 F.3d at 1213; see also Brightway Adolescent Hosp. v. Hawaii Mgmt. All. Ass’n., 139 F. Supp.2d 1220,
1224 (D. Utah Apr. 25, 2001).
93

Peay, 205 F.3d at 1213.

94

Pace Declaration ¶ 2.

12

administers an employee welfare benefit plan that is regulated by federal law. 95 The Plan gives
Eskaton’s business an interstate character with significant impact beyond the borders of
California when the Plan’s participants seek medical treatment in states other than California. 96
There is also nothing in the record suggesting that Eskaton lacks resources to access counsel in
Utah or that judicial economy considerations make the District of Utah an unfair forum. Further,
“modern methods of communication and transportation greatly reduce the significance of [the]
physical burden” 97 caused by the distance between California and Utah, and the location of
discovery and the convenience of “witnesses are not as important in ERISA [cases] where focus
is generally limited to the administrative record[.]” 98
Therefore, Eskaton has failed to meet its “burden of demonstrating that the … assertion
of jurisdiction will make litigation so difficult and inconvenient that [it] will be at a severe
disadvantage” 99 as compared to IHC. Because Eskaton has “not shown that the … assertion of
jurisdiction will infringe upon [its] liberty interests, [there is no need to] balance the federal
interests at stake in this suit.” 100 Regardless, however, “[w]here Congress has provided for
nationwide service of process, [it is] presume[d] that nationwide personal jurisdiction is
necessary to further congressional objectives.” 101 Eskaton has failed to rebut this presumption.
Accordingly, the District of Utah has personal jurisdiction over Eskaton because ERISA
confers jurisdiction by authorizing nationwide service of process on Eskaton and the exercise of

95

Id. ¶ 5; Complaint ¶¶ 7, 12.

96

Peay, 205 F.3d at 1213; Brightway Adolescent Hosp., 139 F.Supp.2d at 1224.

97

Peay, 205 F.3d at 1213.

98

Danny P. v. Catholic Health Initiatives, 2015 WL 164183, *2 (D. Utah Jan. 13, 2015).

99

Peay, 205 F.3d at 1213.

100

Id. at 1214.

101

Id. at 1213 (internal quotations and punctuation omitted).

13

jurisdiction in this case comports with due process. 102 Because the District of Utah has personal
jurisdiction over Eskaton, the third prong of ERISA’s venue provision 103 is satisfied for the
reason that Eskaton “resides or may be found” in the District of Utah. 104 Therefore, the District
of Utah is a proper venue for this case.
III.

The Eastern District of California is a more convenient forum for this case.

While the District of Utah is a proper venue for this case, this does not necessarily mean
that the District of Utah is the appropriate forum. Eskaton requests that venue be transferred to
the Eastern District of California as a more convenient forum.
Under 28 U.S.C. § 1404(a), the venue of a civil action may be transferred to another
district where it might have been brought “[f]or convenience of parties and witnesses, in the
interest of justice[.]” 105 There is no dispute that this case could have been brought in the Eastern
District of California under any of the three prongs of ERISA’s venue provision. 106 The Eastern
District of California is where the Plan is administered, 107 where the alleged breaches of ERISA
and the Plan occurred, 108 and where Eskaton maintains its principal place of business. 109
Therefore, the Eastern District of California may be a proper venue to transfer this case for
convenience and in the interest of justice.

102

Id. at 1209.

103

29 U.S.C. § 1132(e)(2).

104

Peay, 205 F.3d at 1210 n. 3; Brightway Adolescent Hosp., 139 F.Supp.2d at 1224; McCracken, 891 F.Supp.
at 561-62.
105

28 U.S.C. § 1404(a).

106

29 U.S.C. § 1132(e)(2).

107

Supra at 7-8, Discussion II.A.

108

Id. at 8-9, Discussion II.B.

109

Pace Declaration ¶¶ 2-3.

14

“The party moving to transfer a case pursuant to § 1404(a) bears the burden of
establishing that the existing forum is inconvenient.” 110 “Section 1404(a) is intended to place
discretion in the district court to adjudicate motions for transfer according to an individualized,
case-by-case consideration of convenience and fairness.” 111 Among the factors considered are:
the plaintiff’s choice of forum; the accessibility of witnesses and other sources of
proof, including the availability of compulsory process to insure attendance of
witnesses; the cost of making the necessary proof; questions as to the
enforceability of a judgment if one is obtained; relative advantages and obstacles
to a fair trial; difficulties that may arise from congested dockets; the possibility of
the existence of questions arising in the area of conflict of laws; the advantage of
having a local court determine questions of local law; and, all other considerations
of a practical nature that make a trial easy, expeditious and economical. 112
Among the list of factors for consideration under § 1404(a), only the plaintiff’s choice of
forum, the accessibility of witnesses and other sources of proof, and other practical
considerations are relevant in this case. There is nothing in the record suggesting any variance
among the District of Utah and the Eastern District of California regarding the costs of making
the necessary proof, the enforceability of any judgment obtained, the relative ability to receive a
fair trial, or difficulties from congested dockets. It may be that the Eastern District of California
will permit greater enforceability of any judgment IHC obtains against Eskaton because it is the
location of Eskaton’s headquarters and presumably where Eskaton holds its assets. Additionally,
“when a case is transferred under § 1404(a), the transferee court must apply the same law as
applicable in the transferor court, irrespective of whether the transfer was sought by the plaintiff

110

Crysler Credit Corp. v. Country Crysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991).

111

Id. at 1516 (internal quotations omitted).

112

Id. (internal quotations omitted).

15

or defendant.” 113 This is a federal question case involving application of federal law. Therefore,
“[q]uestions arising in the areas of conflicts of law or local law will not occur in this case.” 114
Generally, “unless the balance is strongly in favor of the [defendant,] the plaintiff’s
choice of forum should rarely be disturbed.” 115 It is also recognized, however, that “the
plaintiff’s choice of forum has ‘less force if the forum has little connection with the operative
facts of the lawsuit.’” 116 With regard to IHC’s choice of forum, Utah lacks any significant
connection with the operative facts of this case other than the fact that it is where Ms. Simplot
received treatment from IHC. 117 While Eskaton communicated with IHC during the
administrative appeal process of the claims, 118 the Plan was not administered in Utah, 119
Eskaton’s decisions about payments were not made in Utah, 120 and the alleged breaches of
ERISA and the Plan did not occur in Utah. 121 The fact that IHC is a Utah corporation 122 has little
importance to the operative facts of this case, as IHC stands in the shoes of Ms. Simplot as her
purported assignee, 123 and Ms. Simplot is a resident of California. 124 The fact that IHC’s counsel

113

Id. at 1515-16.

114

Danny P., 2015 WL 164183, *2.

115

Scheidt v. Klein, 956 F.2d 963, 965 (10th Cir. 1992) (internal quotations and punctuation omitted).

116

Danny P., 2015 WL 164183, *2 (quoting Island View Residential Treatment Ctr., 2009 WL 2614682, *3).

117

Complaint ¶¶ 1, 14.

118

Id. ¶¶ 15, 31.

119

Supra at 7-8, Discussion II.A.

120

Pace Declaration ¶¶ 6-7.

121

Supra at 8-9, Discussion II.B.

122

Complaint ¶ 1; IHC’s Opposition at 6.

123

Denver Health and Hosp. Auth., 546 Fed.Appx. at 745.

124

Complaint ¶ 3.

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is located in Utah is also of no importance, as “the convenience of counsel is irrelevant and
should not be considered in evaluating whether transfer is proper under § 1404(a).” 125
Moreover, IHC misses the mark in its attempt to manufacture a stronger connection to
Utah based on its allegation that Eskaton partially denied the claim for Ms. Simplot’s medical
treatment and care by determining “[t]he charges for the treatment exceeded the usual,
customary, and reasonable charges for the treatment at other facilities.” 126 IHC’s argument
ignores the fact that Eskaton’s determination and its alleged breaches of ERISA and the Plan
occurred in California, not Utah. 127 IHC cites no authority for the proposition that “a
geographically based determination of what is usual, customary, and reasonable” may only be
made through comparison to the charges for treatment at other Utah facilities, as opposed to a
larger geographic area. 128 IHC also fails to elaborate on how the implications from the fact that
Ms. Simplot received treatment and care in Utah give Utah a greater connection to the operative
facts of this case. 129 Without providing meaningful argument and analysis of these implications,
any significant connection to Utah that this case may have is lacking. Therefore, because Utah
lacks any significant connection with the operative facts of this case, IHC’s choice of forum “is
not a controlling factor.” 130
In contrast, the Eastern District of California is the forum with the greatest connection to
the operative facts of this case and, under practical consideration of the facts, is the most

125

David L. v. McGraw-Hill Companies, Inc. Group Health Plan, 2014 WL 1653197, *2 (D. Utah Apr. 23, 2014)
(citing In re Horseshoe Entm’t, 337 F.3d 429, 434 (5th Cir. 2003)).
126

Complaint ¶ 21.B.; see also IHC’s Opposition at 6-7.

127

Supra at 8-9, Discussion II.B; Pace Declaration ¶¶ 6-7.

128

IHC’s Opposition at 6-7.

129

Id.

130

Island View Residential Treatment Ctr., 2009 WL 2614682, *3.

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appropriate forum for this case. 131 The Eastern District of California is where the Plan is
administered, 132 where the alleged breaches of ERISA and the Plan occurred, 133 and where
Eskaton maintains its principal place of business. 134 Moreover, “although the proper laying of
venue is not a factor under § 1404(a), it adds weight to the analysis of transferring ‘in the interest
of justice.’” 135 The fact that IHC has not argued that the Eastern District of California would be
more inconvenient to it also adds weight to transferring this case to the Eastern District of
California in the interest of justice. 136
The accessibility of witnesses and other sources of proof similarly favor transferring this
case to the Eastern District of California. “[A]lthough the convenience of the witnesses is not as
important an issue in this case because the … review in ERISA cases is generally limited to the
administrative record,” 137 the most relevant witnesses and documents are located in California,
not Utah, because California is where the Plan is administered, where Eskaton is headquartered,
and where Eskaton made the decision to partially deny payment for Ms. Simplot’s treatment and
care. 138 IHC provides only cursory argument, without citation to supporting facts and legal
authority, that the District of Utah will better insure the attendance of nonparty witnesses. 139
Therefore, Eskaton has met its burden of establishing that the District of Utah is an
inconvenient forum and that the Eastern District of California is a more convenient forum.

131

Danny P., 2015 WL 164183, *3; David L., 2014 WL 1653197, *2; Jon N., 2008 U.S. Dist. LEXIS 35464.

132

Supra at 7-8, Discussion II.A.

133

Id. at 8-9, Discussion II.B.

134

Pace Declaration ¶¶ 2-3.

135

Danny P., 2015 WL 164183, *3 (quoting 28 U.S.C. § 1404(a)).

136

David L., 2014 WL 1653197, *2.

137

Island View Residential Treatment Ctr., 2009 WL 2614682, *3.

138

Supra at 7-9, Discussion II.A, B; Pace Declaration ¶¶ 2-3, 6-7.

139

IHC’s Opposition at 6-7.

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Accordingly, it is appropriate to transfer the venue of this case to the Eastern District of
California.
ORDER
IT IS HEREBY ORDERED that Eskaton’s Motion 140 is GRANTED on its alternative
relief of transferring venue.
IT IS FURTHER HEREBY ORDERED that this case is transferred to the Eastern
District of California as a more convenient forum.
Signed September 12, 2016.
BY THE COURT

________________________________________
District Judge David Nuffer

140

Docket no. 14, filed Apr. 28, 2016.

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