South Florida Ear, Nose and Throat v. Blue Cross and Blue Shield of Florida Inc.
Filing
24
OPINION AND ORDER granting 7 Plaintiff's Motion to Dismiss for Lack of Jurisdiction and Motion to Remand to State Court and 20 Plaintiff's Supplemental Motion for Remand and Attorneys' Fees. Within FOURTEEN (14) DAYS of this Opini on and Order, Plaintiff shall file an affidavit and supporting invoices detailing the attorney's fees and costs incurred in responding to the Notice of Removal. Defendant may file a response within FOURTEEN (14) DAYS thereafter. Defendant' ;s Motion to Dismiss 11 is denied as moot. The Clerk is directed to remand the case to the Small Claims Division of the Twentieth Judicial Circuit in and for Lee County, Florida. The Clerk is further directed to terminate all pending motions and deadlines and close this case. Signed by Judge John E. Steele on 12/5/2013. (MAB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SOUTH FLORIDA EAR, NOSE AND THROAT,
PLLC,
Plaintiff,
vs.
Case No.
BLUE CROSS AND
FLORIDA, INC.,
BLUE
SHIELD
2:13-cv-178-FtM-29UAM
OF
Defendant.
___________________________________
OPINION AND ORDER
South Florida Ear, Nose and Throat, PLLC (South Florida ENT)
sued Blue Cross and Blue Shield of Florida, Inc. (Blue Cross) in a
Florida small claims court for just over $1,000 on a breach of
contract claim. Believing this should be made into a federal case,
Blue Cross removed the action to federal district court, asserting
federal question jurisdiction because the claim was completely
preempted by the Employee Retirement Income Security Act (ERISA).
Plaintiff now seeks a remand to state court to proceed on its
breach of contract claim.
Agreeing with plaintiff, the Court
remands the case to state court.
I.
This matter comes before the Court on Plaintiff’s Motion to
Dismiss for Lack of Subject Matter Jurisdiction and Remand to Small
Claims Court (Doc. #7) filed on March 21, 2013.
Defendant filed
Defendant’s Memorandum of Law in Opposition to Plaintiff’s Motion
to Remand and Plaintiff’s Motion to Dismiss for Lack of Subject
Matter Jurisdiction (Doc. #12) and Defendant’s Motion to Dismiss
(Doc. #11) on April 11, 2013.
Plaintiff filed an Answer to
Defendant’s Motion to Dismiss for Failure to State a Claim (Doc.
#14) and a Memorandum of Law (Doc. #15) on April 26, 2013.
On June 13, 2013, plaintiff was granted leave to proceed
without counsel until the pending motions were resolved (Doc. #17),
but after reviewing the issues raised in the motions, the Court
vacated the prior Order (Doc. #18). Plaintiff retained counsel and
a Supplement Motion for Remand and Attorneys’ Fees (Doc. #20) was
filed on November 13, 2013.
On November 22, 2013, defendant filed
a Response to Plaintiff’s Supplemental Motion for Remand and
Attorneys’ Fees (Doc. #22).
II.
In 2011, defendant Blue Cross and plaintiff South Florida ENT
entered into a Physician Medical Services Agreement.
Exh. #1.)
(Doc. #12,
Section 2.8(f) of the agreement provides that:
[Defendant] is entitled to treat individuals covered
through other entities as Insureds under this Agreement
if such entities are then operating as brand licensees
entitled to utilize the Blue Cross and/or Blue Shield
Brands . . . [i]t is acknowledged and agreed that, while
such Insureds will be accessing services through this
Agreement, the determination as to coverage shall be made
by the applicable entity operating under a license or
sub-license with the Blue Cross and Blue Shield
Association.
(Id. at p. 13.)
-2-
In 2012, plaintiff performed sinus surgery and two follow-up
procedures on a patient covered by an insurance policy administered
by Empire Blue Cross and Blue Shield (Empire Blue Cross).
#7, p. 1.)
(Doc.
The patient was treated as an insured under the
Physician Medical Services Agreement, and defendant paid plaintiff
for the initial procedure but not for the two follow-up procedures.
(Doc. #2, p. 1.)
Plaintiff attempted to collect for the follow-up
procedures through the administrative procedures provided in the
agreement, but to no avail.
(Id.)
On February 5, 2013, plaintiff filed a civil suit for breach
of contract in the Small Claims Division for the Twentieth Judicial
Circuit in and for Lee County, Florida, in order to recover the
$1,045.56 owed by defendant for the follow-up procedures.
(Id.)
Defendant removed the case to federal district court on March 7,
2013.
(Doc. #1.)
In its notice of removal, defendant stated that
the patient’s insurance plan administered by Empire Blue Cross is
a
self-funded
healthcare
benefit
plan
provided
by
the
Pall
Corporation and is governed by ERISA, 29 U.S.C. § 1001, et seq.
(Id. at pp. 2-3.)
Because the patient’s plan is regulated by
ERISA, defendant asserted that plaintiff’s state law claim is
completely preempted by ERISA, thus creating federal question
jurisdiction.
(Id. at p. 2.)
Plaintiff challenges the removal to federal court, asserting
that its state law claim is not completely preempted by ERISA, and
-3-
seeks to remand the case to state court.
(Doc. #7.)
Defendant
responds that removal was proper because plaintiff’s claim could
(and should) be recast as an ERISA claim.
Nonetheless, defendant
simultaneously asserts that plaintiff’s claim, when deemed an ERISA
claim, should be dismissed because defendant “is not the ERISA plan
sponsor, the ERISA plan administrator, or even a third party claims
administrator.
action.”
As such, it is not a proper party defendant in this
(Doc. #11, p. 3.)
III.
Any civil action filed in state court may be removed by the
defendant to federal court if the case could have originally been
brought in federal court.
28 U.S.C. § 1441(a).
The burden of
establishing subject matter jurisdiction for purposes of removal is
on the defendant.
Leonard v. Enterprise Rent A Car, 279 F.3d 967,
972 (11th Cir. 2002) (citing Williams v. Best Buy Co., 269 F.3d
1316, 1318 (11th Cir. 2001)).
Removal jurisdiction is construed
narrowly and “all doubts about jurisdiction should be resolved in
favor of remand to state court.”
Univ. of S. Ala. v. Am. Tobacco
Co., 168 F.3d 405, 411 (11th Cir. 1999).
Pursuant to 28 U.S.C. § 1331, federal question jurisdiction
exists when a plaintiff’s cause of action “arises under” federal
law.
Thus, a case filed in state court which arises under federal
law may be removed to federal court.
28 U.S.C. § 1441(a).
Generally, a case can arise under federal law under § 1331 in two
-4-
ways: First, a case arises under federal law when federal law
creates the cause of action asserted.
Second, a case arises under
federal law if there is a state law claim in which a federal issue
is “(1) necessarily raised, (2) actually disputed, (3) substantial,
and (4) capable of resolution in federal court without disrupting
the federal-state balance approved by Congress.”
Gunn v. Minton,
133 S. Ct. 1059, 1065 (2013) (summarizing the holding in Empire
Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006)).
Whether a federal question appears must ordinarily be determined on
the face of the plaintiff’s well-pleaded complaint.
Conn. State
Dental Ass’n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343
(11th Cir. 2009) (citing Louisville & N. R. Co. v. Mottley, 211
U.S. 149, 152 (1908)).
While the Supreme Court has shown an unfailing commitment to
the well-pleaded complaint rule, it has recognized an exception if
a cause of action is completely preempted by federal law.
A complaint purporting to rest on state law . . . can be
recharacterized as one “arising under” federal law if the
law governing the complaint is exclusively federal. See
Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8 (2003).
Under this so-called “complete preemption doctrine,” a
plaintiff’s “state cause of action [may be recast] as a
federal claim for relief, making [its] removal [by the
defendant] proper on the basis of federal question
jurisdiction.” 14B Wright & Miller § 3722.1, p. 511.
Vanden v. Discover Bank, 556 U.S. 49, 61 (2009) (alterations in
original). “Complete preemption is a narrow exception to the wellpleaded complaint rule and exists where the preemptive force of a
-5-
federal statute is so extraordinary that it converts an ordinary
state law claim into a statutory federal claim.”
Dental Ass’n,
591
F.3d
at
1343
(citing
Conn. State
Caterpillar,
Inc.
v.
Williams, 482 U.S. 386, 393 (1987)). While a federal question does
not appear on the face of South Florida ENT’s complaint, Blue Cross
asserts
that
the
claim
falls
within
the
complete
preemption
exception to the well-pleaded complaint rule.
ERISA is a statute which can indeed completely preempt a state
law claim.
Complete preemption applies where a plaintiff asserts
a state law claim that seeks relief available under ERISA’s civil
enforcement provision, 29 U.S.C. § 1132(a).
Ass’n, 591 F.3d at 1344. (citing
481 U.S. 58, 65-66 (1987)).
Conn. State Dental
Metro. Life Ins. Co. v. Taylor,
The civil enforcement provision “has
such ‘extraordinary’ preemptive power that it ‘converts an ordinary
state common law complaint into one stating a federal claim for
purposes of the well-pleaded complaint rule.’”
Id. (quoting
Taylor, 481 U.S. at 65-66).1
1
This is not to be confused with the form of ERISA preemption
known as defensive preemption. Jones v. LMR Int’l, Inc., 457 F.3d
1174, 1179 (11th Cir. 2006). Defensive preemption is derived from
ERISA’s explicit preemption provision contained in 29 U.S.C. §
1144(a).
Section 1144(a) states that ERISA provisions “shall
supersede any and all State laws insofar as they may now or
hereafter relate to any [ERISA] plan.”
The issue of defensive
preemption is substantive and can be raised as an affirmative in
both federal and state court. Ervast v. Flexible Products Co., 346
F.3d 1007, 1014 (11th Cir. 2003). Defensive preemption, however,
cannot serve as a basis for removal. Id.
-6-
Whether complete preemption exists under ERISA is governed by
Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004).
Ehlen Floor
Covering, Inc. v. Lamb, 660 F.3d 1283, 1287 (11th Cir. 2011).
“The
Davila test asks (1) whether the plaintiff[] could have ever
brought [its] claim under ERISA § 502(a) and (2) whether no other
legal duty supports the plaintiff[’s] claim.”
one
of
Davila
entails
two
inquiries:
Id. at 1287.
first,
“Step
whether
the
plaintiff[’s] claims fall within the scope of ERISA § 502(a), and
second, whether ERISA grants the plaintiff[] standing to bring
suit.”
Id. (citing Conn. State Dental Ass’n, 591 F.3d at 1350).
South Florida ENT’s claim does not fall within the scope of
ERISA § 502(a).
brought
by
“a
ERISA § 502(a)(2) allows a civil action to be
participant,
under
beneficiary[,]
[29
U.S.C.
§
or
fiduciary
1109].”
29
for
appropriate
relief
U.S.C.
§
1132(a)(2).
Section 1109 allows recovery against, “‘[a]ny person
who is a fiduciary with respect to a plan who breaches any of the
responsibilities, obligations, or duties imposed upon fiduciaries
by this subchapter.’
29 U.S.C. § 1109(a).”
Inc.,
1287.
660
F.3d
at
Plaintiff
is
Ehlen Floor Covering,
not
a
participant,
beneficiary or fiduciary of its patient’s ERISA plan, and defendant
is not an ERISA entity or fiduciary under the patient’s ERISA plan,
as defendant itself asserts.
As both parties indicate, defendant
does not manage, administer, or serve as financial administrator to
the ERISA plan.
Because defendant is not an ERISA entity, the
-7-
first prong of the Davila test is not satisfied.
See Cotton, 402
F.3d at 1289; Gowen v. Assurity Life Ins. Co., No. CV 512-034, 2013
WL 1192580, at *7 (S.D. Ga. Mar. 22, 2013); Evans v. Infirmary
Health Servs, Inc., 634 F. Supp. 2d 1276, 1288-89 (S.D. Ala. 2009).
Additionally, nothing in ERISA would grant plaintiff standing to
bring suit.
The second step of the Davila test requires the court to
determine whether plaintiff’s claim implicates a duty independent
of ERISA.
Here, plaintiff contends that defendant promised to pay
for medical services pursuant to the Physician Medical Services
Agreement, but failed to do so.
The Court finds that plaintiff’s
claim does not involve a right to payment under the patient’s ERISA
plan. It is the terms of and compliance with the Physician Medical
Services Agreement which are in dispute, not the patient’s ERISA
plan.
Plaintiff’s claim rests on the duties set forth in the
agreement, not the ERISA plan.
Because plaintiff’s claim is
supported by an independent legal duty, the second prong of the
Davila test is not satisfied.
Therefore, this Court lacks subject matter jurisdiction over
plaintiff’s breach of contract claim, and plaintiff’s motion to
remand to small claims court is granted.
-8-
V.
Section 1447(c) provides that “[a]n order remanding the case
may
require
payment
of
just
costs
and
any
actual
expenses,
including attorney fees, incurred as a result of the removal.”
U.S.C. § 1447(c).
28
Absent unusual circumstances, a court may only
award attorney’s fees under § 1447(c) if “the removing party lacked
an objectively reasonable basis for seeking removal.”
Franklin Capital Corp., 546 U.S. 132, 141 (2005).
Martin v.
The objectively
reasonable standard does not require a showing that the defendant’s
position was “frivolous, unreasonable, or without foundation.” Id.
at 138-39.
“The reasonableness standard was ultimately the result
of balancing ‘the desire to deter removals sought for the purpose
of prolonging litigation and imposing costs on the opposing party,
while not undermining Congress’ basic decision to afford defendants
a right to remove as a general matter, when the statutory criteria
are satisfied.’”
Bauknight v. Monroe County, Fla., 446 F.3d 1327,
1329 (11th Cir. 2006) (quoting Martin, 546 U.S. at 140).
Here, defendant attempted to transform a simple breach of
contract claim valued at $1,045.56 into a complex ERISA case
without an objectively reasonable basis.
removal,
plaintiff
numerous
was
motions
required
to
and
responses
obtain
-9-
an
As a result of the
have
been
attorney.
filed
Under
and
these
circumstances, the Court will award plaintiff a reasonable amount
of attorney’s fees and costs.
Accordingly, it is now
ORDERED:
1.
Plaintiff’s Motion to Dismiss for Lack of Subject Matter
Jurisdiction and Remand to Small Claims Court (Doc. #7) is GRANTED.
The Clerk is directed to remand the case to the Small Claims
Division of the Twentieth Judicial Circuit in and for Lee County,
Florida.
The Clerk is further directed to terminate all pending
motions and deadlines and close this case.
2.
Within FOURTEEN (14) DAYS of this Opinion and Order,
Plaintiff shall file an affidavit and supporting invoices detailing
the attorney’s fees and costs incurred in responding to the Notice
of Removal.
Defendant may file a response within FOURTEEN (14)
DAYS thereafter.
3.
Defendant’s Motion to Dismiss (Doc. #11) is DENIED AS
MOOT.
DONE AND ORDERED at Fort Myers, Florida, this
December, 2013.
Copies: Counsel of record
-10-
5th
day of
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