Hialeah Anesthesia Specialists, LLC et al v. Coventry Health Care of Florida, Inc.
Filing
22
ORDER granting 10 Motion to Remand to State Court. Closing Case. Signed by Judge Darrin P. Gayles on 6/29/2017. (zvr) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-cv-25194-GAYLES
HIALEAH ANESTHESIA
SPECIALISTS, LLC, et al.,
Plaintiffs,
v.
COVENTRY HEALTH CARE OF
FLORIDA, INC.,
Defendant.
/
ORDER
THIS CAUSE comes before the Court on the Motion to Remand filed by Plaintiffs Hialeah
Anesthesia Specialists, LLC; Palmetto Anesthesia Specialists, LLC; South Florida Anesthesia &
Pain Treatment, P.A.; and Treasure Coast Anesthesia Group, P.A. [ECF No. 10]. Defendant
Coventry Health Care of Florida, Inc. (“Coventry”), removed this action, pursuant to 28 U.S.C.
§ 1441, from the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County,
Florida, to this Court on December 14, 2016. The Plaintiffs now seek to remand the action back
to state court, arguing that Coventry’s notice of removal was untimely and that their claims are
not completely preempted by the Employee Retirement Income Security Act, 29 U.S.C. § 1001
et seq. (“ERISA”). The Court has carefully considered the parties’ briefs, the record in this case,
and the applicable law, and is otherwise fully advised in the premises. For the reasons that follow,
the motion to remand shall be granted.
I.
BACKGROUND
The Plaintiffs are medical groups who provided anesthesiology services to patients covered
under health plans insured, operated, or administered by Coventry. Compl. ¶¶ 14, 17. The Plaintiffs
1
are out-of-network providers—they do not have outstanding agreements with Coventry for the
treatment of Coventry patients. Id. ¶ 19. Each Plaintiff billed Coventry for anesthesiology services
it provided to Coventry patients at its individual rate with the understanding that Coventry had
agreed to pay it the reasonable value for its services. Id. ¶ 21. Coventry adjudicated the claims for
payment for these services and determined that they were covered under each patient’s individual
plan; and, while it paid the Plaintiffs for the services, it did so at rates lower than what the Plaintiffs charged. Id. ¶¶ 18, 22.
On May 13, 2016, the Plaintiffs filed a civil action in the Circuit Court of the Eleventh
Judicial Circuit in and for Miami-Dade County, Florida, alleging claims for breach of implied-infact contract and unjust enrichment/breach of implied-in-law contract. See id. ¶¶ 41-66. During
the course of the state court litigation, on November 14, 2016, the Plaintiffs produced a spreadsheet identifying the specific medical claims at issue, including patient names, dates, diagnoses,
service codes, and amounts charged. Notice of Removal ¶¶ 3-4. Some of these patients had health
plans governed by ERISA. Id. ¶ 4. Based on the facts contained in the spreadsheet, Coventry
removed the case to this Court. The Plaintiffs subsequently filed the instant motion to remand.
II.
LEGAL STANDARD
Under 28 U.S.C. § 1441, a case filed in state court can be removed to federal court if the
district court has original jurisdiction, which exists if there is federal question jurisdiction under
28 U.S.C. § 1331 or diversity jurisdiction under 28 U.S.C. § 1332. Federal question jurisdiction
requires that a case “arise under” the “Constitution, laws, or treaties of the United States.” 28
U.S.C. § 1331. Generally, a case “arises under” federal law if federal law creates the cause of
action or if a substantial disputed issue of federal law is a necessary element of a state law claim.
Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 13 (1983). Diversity jurisdiction requires fully diverse citizenship of the parties and an amount in controversy over $75,000,
2
assessed at the time of removal. 28 U.S.C. § 1332(a); see also Ehlen Floor Covering, Inc. v. Lamb,
660 F.3d 1283, 1287 (11th Cir. 2011).
The removing party bears the burden of proof regarding the existence of federal subject
matter jurisdiction, City of Vestavia Hills v. Gen. Fid. Ins. Co., 676 F.3d 1310, 1313 n.1 (11th
Cir. 2012), and it bears the burden of demonstrating that removal is proper, Williams v. Best Buy
Co., 269 F.3d 1316, 1319 (11th Cir. 2001). A district court is required to “‘strictly construe the
right to remove’ and apply a general ‘presumption against the exercise of federal jurisdiction, such
that all uncertainties as to removal jurisdiction are to be resolved in favor of remand.’” Scimone v.
Carnival Corp., 720 F.3d 876, 882 (11th Cir. 2013) (internal punctuation marks omitted) (quoting
Russell Corp. v. Am. Home Assur. Co., 264 F.3d 1040, 1050 (11th Cir. 2001)). However, the court
must be equally as vigilant in protecting a defendant’s right to proceed in federal court as it is in
respecting the state court’s right to retain jurisdiction. Pretka v. Kolter City Plaza II, Inc., 608 F.3d
744, 766 (11th Cir. 2010) (citing Wecker v. Nat’l Enameling & Stamping Co., 204 U.S. 176, 186
(1907)).
III.
DISCUSSION
A.
Preemption
The perennial well-pleaded complaint rule holds that federal question jurisdiction over an
action exists only when the plaintiff’s claims, as stated in the complaint, arise under federal law
notwithstanding any federal defenses. See Louisville & Nashville R.R. v. Mottley, 211 U.S. 149,
152 (1907). The Plaintiffs’ Complaint here alleges only state law claims, so there is no jurisdiction
under the well-pleaded complaint rule. However, “when a federal statute wholly displaces the statelaw cause of action through complete pre-emption,” the state law claim can be removed, because
“[w]hen the federal statute completely pre-empts the state-law cause of action, a claim which
comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality
3
based on federal law.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003).
ERISA is one of those federal statutes. Complete preemption is available under ERISA’s
civil enforcement mechanism, section 502(a) of the statute 1—a provision 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.’” Aetna Health Inc. v. Davila, 542
U.S. 200, 209 (2004) (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65-66 (1987)). A state
law claim must fit within the civil enforcement provision to be completely pre-empted. Taylor, 481
U.S. at 66. To determine whether a claim is preempted in this way, a court must engage in the twopart test set forth by the Supreme Court in Aetna Health Inc. v. Davila by inquiring “(1) whether
the plaintiff could have brought its claim under § 502(a); and (2) whether no other legal duty supports the plaintiff’s claim.” Conn. State Dental Ass’n v. Anthem Health Plans, Inc., 591 F.3d 1337,
1345 (11th Cir. 2009) (citing Davila, 542 U.S. at 210).
The first part of the Davila test “is satisfied if two requirements are met: (1) the plaintiff’s
claim must fall within the scope of ERISA; and (2) the plaintiff must have standing to sue under
ERISA.” Id. at 1350. As to the first requirement of this first part, the Eleventh Circuit in Connecticut
State Dental, adopted a “‘rate of payment’ versus ‘right of payment’ test,” under which “claims
involving only underpayment are not preempted,” while “claims that were partially denied because
coverage was not afforded for all the submitted procedures may be preempted.” Id. at 1349-50
(citing Lone Star OB/GYN Assocs. v. Aetna Health Inc., 579 F.3d 525, 533 (5th Cir. 2009)); see
also Borrero v. United Healthcare of N.Y., Inc., 610 F.3d 1296, 1302 (11th Cir. 2010) (“[A] ‘rate
of payment’ challenge does not necessarily implicate an ERISA plan, but a challenge to the ‘right
of payment’ under an ERISA plan does.”).
1
A “participant or beneficiary” may sue under the civil enforcement provision “to recover benefits due to him under
the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under
the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B).
4
The parties seem to agree that the Connecticut State Dental test can be (and has been)
applied in cases between a provider and insurer in which the provider’s claims arise under the terms
of its provider agreement with the insurer. See, e.g., Sheridan Healthcorp, Inc. v. Aetna Health
Inc., 161 F. Supp. 3d 1238, 1245-46 (S.D. Fla. 2016). The agreement ends there, however, as Coventry contends that the test can be invoked only in this type of case. See, e.g., Alliance Med, LLC
v. Blue Cross & Blue Shield of Ga., Inc., No. 15-0171, 2016 WL 3208077, at *3 (N.D. Ga. June
10, 2016) (stating that the test “is irrelevant in cases involving out-of-network providers because
a ‘rate of payment’ dispute is governed by the provider agreement”). The Plaintiffs, by contrast,
assert that the test applies in cases, such as this one, where an out-of-network provider brings claims
under an implied contract with the insurer. See, e.g., Coast Plaza Doctors Hosp. v. Ark. Blue Cross
& Blue Shield, No. 10-6927, 2011 WL 3756052, at *4 (C.D. Cal. Aug. 25, 2011).
The Court must resolve this disagreement, and Coast Plaza is instructive in doing so. There,
plaintiff Coast Plaza (an out-of-network Blue Cross Blue Shield provider) provided medical treatment to the insureds of the defendants (Blue Cross Blue Shield companies). The insureds all
agreed by assignments of benefits to have the defendants pay Coast Plaza. However, the defendants issued checks directly to the insureds, from whom Coast Plaza was typically unable to collect.
Coast Plaza filed suit in California state court asserting various state law claims, alleging that the
defendants intentionally paid the patients in retaliation for Coast Plaza’s refusal to become an innetwork provider. The defendants removed the matter to federal court, arguing that Coast Plaza’s
state law claims were completely preempted under ERISA. Id. at *1.
Though Coast Plaza did not have “a ‘direct’ contractual relationship of the same nature as
those present in ‘in-network’ provider agreements,” the court looked to California law recognizing
that medical providers have an “implied-in-law right to recover for the reasonable value of their
services.” Id. at *4 (quoting Bell v. Blue Cross of Cal., 31 Cal. Rptr. 3d 688, 695 (Ct. App. 2005)).
5
According to the court, this implied-in-law right “implicates a legal duty owed by Defendantsinsurers that is independent of any ERISA-governed plan.” Id. Finding that Coast Plaza had an
implied contract with Blue Cross, the court held that ERISA did not completely preempt Coast
Plaza’s claims and granted its motion to remand. Id.
The broad conclusion of the court in Bell v. Blue Cross of California, which informed the
Coast Plaza court’s decision, that medical providers have an implied-in-law right to recover from
insurers, was itself premised on a California statutory provision mandating that insurers reimburse
providers for emergency services and care provided to their enrollees. Bell, 31 Cal. Rptr. 3d at
694-95 (citing Cal. Health & Safety Code § 1371.4(b)). This Court has been unable to find a decision of any court making a similar holding to Bell’s under Florida law (and the parties have not
directed it to any), though a statutory provision similar to the one on which the Bell court relied
can be found in Florida law. Section 641.513 of the Florida Statutes mandates, inter alia, that an
insurer reimburse a medical provider who does not have a contract with an insurer but provides
emergency services to the insurer’s enrollees. Notably, Florida courts have found that state law
claims brought under this provision by healthcare providers who rendered emergency medical services to an insurer’s subscribers were not preempted by ERISA. See, e.g., C.N. Guerriere, M.D.,
P.A. v. Aetna Health, Inc., No. 07-1441, 2007 WL 3521369 (M.D. Fla. Nov. 15, 2007). Granted,
the Plaintiffs here do not assert claims under section 641.513, but they do rely on that provision
in arguing for the recognition of an implied contractual relationship between them and Coventry.
See Compl. ¶¶ 24-27. Their argument in favor of this recognition is supported by a recently enacted
Florida statutory provision (taking effect July 1, 2016), which creates an obligation for insurers
to pay fees to an out-of-network “provider of covered nonemergency services provided to an
insured.” Fla. Stat. § 627.64194(3) (emphasis added); see also Pls.’ Reply at 4 n.2. The Court need
not announce a holding as sweeping as Bell’s to rule on the Plaintiffs’ motion, but it certainly can
6
see how such a holding—grounded in Florida statutory law—could be warranted.
*
*
*
The Eleventh Circuit in Connecticut State Dental explains that rate-of-payment/right-ofpayment test “is a useful means for assessing preemption of healthcare provider claims based upon
a breach of an agreement separate from an ERISA plan.” 591 F.3d at 1350 (emphasis added).
Coventry argues that the use of the language “an agreement” necessarily means that the test applies
only in cases arising from breach of an express provider agreement between an in-network provider
and the insurer.
The Court disagrees. No part of Connecticut State Dental supports the proposition that an
express written provider agreement must be present before the rate-of-payment/right-of-payment
test can apply and that, in the absence of a written agreement, any claim for payment must be preempted. In the Court’s view, Connecticut State Dental leaves the proverbial door sufficiently open
that the test could come into play in a case like this one, involving allegations of an implied “agreement”—be it implied-in-fact or implied-in-law—between an out-of-network provider and an
insurer.
At the very least, there is an uncertainty as to the breadth of the “an agreement” language.
It could extend to cover an implied agreement like the one the Plaintiffs allege existed between each
of them and Coventry. In such case—provided that the Plaintiffs assert only a rate-of-payment
dispute—the claims would not be preempted and, thus, there would be no jurisdiction. Or it could
not so extend. In such case—provided that Coventry satisfies the other Davila requirements—the
claims would be completely preempted and, thus, there would be jurisdiction. As this uncertainty
casts doubt on the propriety of the Court’s subject-matter jurisdiction, the Court must resolve the
uncertainty in favor of remand. See Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 412 (11th
Cir. 1999) (“[A]ll doubts about jurisdiction should be resolved in favor of remand . . . .”); Burns
7
v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (“[W]here plaintiff and defendant clash
about jurisdiction, uncertainties are resolved in favor of remand.”). To effect this resolution, the
Court must find that the Connecticut State Dental test governs in the instant circumstances. It
would not be appropriate to hamstring the Plaintiffs’ ability to keep their case in state court by
depriving them of the opportunity to invoke the test and show whether their claims fit squarely
within its bounds.
To apply the test, the Court must determine the character of the Plaintiffs’ claims: do they
challenge the rate of payment the Plaintiffs received from Coventry, or do they seek the right to
be paid? In Connecticut State Dental, the Eleventh Circuit found that two of the plaintiffs’ claims
were preempted because they were “hybrid claims.” 591 F.3d at 1350-51. In other words, the complaint “challenged both the rate of payment and the right of payment under the ERISA plan because it alleged that the administrator both paid them the wrong rate and denied payment altogether
for ‘medically necessary’ services, a coverage determination defined by the beneficiary’s ERISA
plan.” Borrero, 610 F.3d at 1302. These Plaintiffs’ Complaint is not based on any claims that were
partially denied by Coventry. The Complaint concerns only claims which Coventry has adjudicated,
deemed covered by the respective patients’ health plans, and paid, so there is no “hybrid claim”
issue. The Complaint is also not derivative of claims the patients could have brought to vindicate
any right under ERISA. Instead, the Plaintiffs sue Coventry to remedy a breach of quasi-contractual
obligations owed to them alone, not to Coventry’s insureds. And they seek to hold Coventry
accountable to pay them a fair market value for the services they provided to Coventry’s insureds.
See Sheridan Healthcorp, 161 F. Supp. 3d at 1246 (“Sheridan is in fact suing Defendants only for
breach of its agreement, and in so doing, does not assert allegations of any ERISA violations. . . .
No interpretation of the ERISA-regulated employee health benefit plan is necessary to decide this
case.”). In short, it is clear that the Plaintiffs do not allege that Coventry has not paid them; they
8
allege simply that Coventry has not paid them enough.
So applying the Connecticut State Dental test leads to one conclusion: this dispute is wholly
over the rate of payment. Consequently, the Court finds that the Plaintiffs’ claims fall outside the
scope of section 502(a) of ERISA. 2 See Final Order of Remand at 4-5, Recovery Vill. at Umatilla,
LLC v. United Behavioral Health, Inc., No. 15-62374, ECF No. 37 (S.D. Fla. Sept. 12, 2016)
(finding that “because Plaintiff’s claims are rate of payment, rather than right of payment claims,
and because they are based on contractual principles beyond the scope of ERISA, these claims are
not completely preempted by ERISA”); Order Granting Pl.’s Mot. to Remand at 5, Recovery Vill.
at Umatilla, LLC v. Blue Cross & Blue Shield of Fla., Inc., No. 15-61414, ECF No. 52 (S.D. Fla.
Aug. 28, 2015) (“If all the claims at issue were pre-authorized and paid by Defendants, as Plaintiff
contends, such claims would not fall within the scope of ERISA, and [the plaintiff]’s state-law
claims would not be completely preempted. . . . [T]he Court must resolve doubt regarding its subjectmatter jurisdiction in favor of remand.”). No further analysis under Davila is necessary. See Orthopaedic Care Specialists, P.L. v. Blue Cross & Blue Shield of Fla., Inc., No. 12-81148, 2013 WL
12095594, at *2 (S.D. Fla. Mar. 5, 2013) (remanding case after finding only that the defendant
failed to meet the first requirement of the first prong of Davila).
The Plaintiffs’ claims are not preempted. Accordingly, the motion to remand is granted.
B.
Fees and Costs
In the event the Court granted their motion, the Plaintiffs seek an award of attorney’s fees
and costs. Under 28 U.S.C. § 1447(c), “[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,” but
2
That a scant few of the plans involved happen to be ERISA plans does not alter this conclusion. The Court would
not be required to interpret or even look to ERISA to resolve these claims. See Blue Cross of Cal. v. Anesthesia
Care Assocs. Med. Grp., Inc., 187 F.3d 1045, 1051 (9th Cir. 1999) (“[T]he bare fact that the [ERISA] Plan may be
consulted in the course of litigating a state law claim does not require that the claim be extinguished by ERISA’s
enforcement provision.”); see also Sheridan Healthcorp., 161 F. Supp. 3d at 1246.
9
payment may be awarded, “[a]bsent unusual circumstances[,] . . . only where the removing party
lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Capital Corp.,
546 U.S. 132, 141 (2005). The Court finds that Coventry did have an objectively reasonable basis
for seeking removal, given the above-noted uncertainty regarding the breadth of the Connecticut
State Dental test’s application to cases brought against insurers by out-of-network providers.
The Plaintiffs also argue that fees and costs are warranted because Coventry’s removal was
untimely. An untimely removal can give rise to an award of fees and costs. See Taylor Newman
Cabinetry, Inc. v. Classic Soft Trim, Inc., 436 F. App’x 888, 893 (11th Cir. 2011) (per curiam).
However, the Court finds that Coventry’s removal was timely. See S. Broward Hosp. Dist. v. Coventry Health & Life Ins. Co., No. 14-61157, 2014 WL 6387264, at *4 (S.D. Fla. Nov. 14, 2014)
(“A review of the Plaintiff’s Complaint shows that Defendants were not on notice of which claims
were at issue in the instant lawsuit because it does not identify any of them. . . . The Court finds
that Defendants obtained notice of the potential argument for ERISA preemption at the time the[]
claims were identified . . . , the date when Plaintiff produced a spreadsheet which disclosed the
medical claims at issue.”). Because the claims at issue here were not identified in the Complaint,
the Court will not hold that Coventry should have “guess[ed]” as to this action’s removability based
on the Complaint’s use of a few ERISA-related buzzwords and phrases, as this would “encourag[e]
premature, and often unwarranted, removal requests.” Goldstein v. GFS Mkt. Realty Four, LLC,
No. 16-60956, 2016 WL 5215024, at *5 (S.D. Fla. Sept. 21, 2016) (quoting Vill. Sq. Condo. of
Orlando, Inc. v. Nationwide Mut. Fire Ins. Co., No. 09-1711, 2009 WL 4855700, at *4 (M.D. Fla.
Dec. 10, 2009)). The Plaintiffs’ request for fees and costs is denied.
IV.
CONCLUSION
Based on the foregoing, it is ORDERED AND ADJUDGED that the Plaintiffs’ Motion
to Remand [ECF No. 10] is GRANTED. This action is REMANDED in its entirety to the Circuit
10
Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida.
IT IS FURTHER ORDERED that the Plaintiffs’ request for an award of attorney’s fees
and costs, pursuant to 28 U.S.C. § 1447(c), is DENIED.
This action is CLOSED.
DONE AND ORDERED in Chambers at Miami, Florida, this 28th day of June, 2017.
________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?