Noetzel v. Hawaii Medical Service Association
ORDER GRANTING DEFENDANT HAWAII MEDICAL SERVICE ASSOCIATION'S MOTION FOR PARTIAL SUMMARY JUDGMENT re granting (41) Motion for Partial Summary Judgment in case 1:15-cv-00310-SOM-KJM - Signed by JUDGE SUSAN OKI MOLLWAY o n 12/27/2016. "HMSA's motion for partial summary judgment is granted. No later than January 13, 2017, each party is directed to file a statement of no more than 500 words of what issues remain to be adjudicated and what proce edings are proposed in this case prior to entry of judgment." Associated Cases: 1:15-cv-00310-SOM-KJM, 1:15-cv-00317-SOM-KJM (emt, )CERTIFICATE OF SERVICEParticipants registered to receive elec tronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
HAWAII MEDICAL SERVICE
HAWAII MEDICAL SERVICE
CIVIL NO. 15-00310 SOM-KJM
CIVIL NO. 15-00317 SOM-KJM
ORDER GRANTING DEFENDANT
HAWAII MEDICAL SERVICE
ASSOCIATION’S MOTION FOR
PARTIAL SUMMARY JUDGMENT
ORDER GRANTING DEFENDANT HAWAII MEDICAL SERVICE
ASSOCIATION’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Before this court is a motion for partial summary
judgment brought by Defendant Hawaii Medical Service
HMSA requests a judicial determination that the
Employee Retirement Income Security Act of 1974, 29 U.S.C. §§
1001 et seq., preempts the state statutes relied on by Plaintiff
See HMSA’s Motion for Partial Summary
Judgment, ECF No. 41, PageID # 704.
Relying heavily on its
reasoning in declining to remand this removed case, this court
grants HMSA’s motion for partial summary judgment.
Pursuant to an ERISA plan, HMSA provided Noetzel with
health insurance coverage for injuries she suffered in a car
See HMSA Concise Statement of Facts, ECF No. 42,
PageID #s 736-37; see also Noetzel’s Petition for Determination
of Claim, Exhibit A to HMSA’s Notice of Removal, ECF No. 1-2,
PageID #s 12-13.
Noetzel filed a motor vehicle tort action in
Hawaii state court, which she ultimately settled.
See ECF No.
42, PageID # 737; ECF No. 1-2, PageID # 13.
Upon learning of the settlement, HMSA notified Noetzel
that it intended to seek reimbursement from the settlement
proceeds for the health benefits provided to her, pursuant to
the reimbursement terms of its ERISA plan.
See ECF No. 42,
PageID # 738; ECF No. 1-2, PageID # 13-14.
The plan’s “Guide to
Benefits” gave HMSA the following:
a right to be reimbursed for any benefits we
provide, from any recovery received from or on
behalf of any third party or other source of
recovery in connection with the injury or
illness, including, but not limited to, proceeds
Settlement, judgment, or award;
. . . .
We shall have a first lien on such recovery
proceeds, up to the amount of total benefits we
pay or have paid related to the injury or
illness. You must reimburse us for any benefits
paid, even if the recovery proceeds obtained (by
settlement, judgment, award, insurance proceeds,
or other payment):
Do not specifically include medical expenses;
Are stated to be for general damages only;
Are for less than the actual loss or alleged loss
suffered by you due to the injury or illness;
Are obtained on your behalf by any person or
entity, including your estate, legal
representative, parent, or attorney;
Are without any admission of liability, fault, or
causation by the third party or payor.
Our lien will attach to and follow such recovery
proceeds even if you distribute or allow the
proceeds to be distributed to another person or
entity. Our lien may be filed with the court,
any third party or other source of recovered
money, or any entity or person receiving payment
regarding the illness or injury.
ECF No. 10-2, PageID # 158.
Noetzel filed a Petition for Determination of Validity
of Claim of Lien of HMSA in state court.
See ECF No. 1-2.
Petition asked the state court for a determination that, under
Haw. Rev. Stat. §§ 431:13-1-3(a)(10) and 663-10, HMSA was not
entitled to reimbursement from the settlement proceeds, because
those proceeds “[did] not correspond to special damages
recovered in the subject settlement.”
See id., PageID # 15.
Noetzel read Haw. Rev. Stat. § 663-10 as permitting recovery by
an insurer, such as HMSA, of benefits paid for only special, not
general, damages in a settlement.
See id., PageID # 14.
HMSA removed the civil action to federal court,
asserting that this court had original jurisdiction over the
matter because Noetzel’s state law claims were completely
preempted by ERISA § 502(a), 29 U.S.C. § 1132(a).
1, PageID #s 3-4.
See ECF No.
Noetzel responded by filing a Motion to
Remand, contending that her claims implicated only state law,
were not completely preempted by ERISA, and thus were not a
matter over which this court had federal question jurisdiction.
See ECF No. 6.
The Magistrate Judge issued his Findings and
Recommendation to Grant Elizabeth Noetzel’s Motion to Remand.
See ECF No. 16, PageID # 236.
The F & R recommended remand on
the ground that, under the two-part test set forth by the United
States Supreme Court in Aetna Health Inc. v. Davila, 542 U.S.
200, 210 (2004), Noetzel’s action was not completely preempted
by ERISA § 502(a).
See id., PageID #s 238-43.
This court disagreed with the Magistrate Judge and
denied Noetzel’s Motion to Remand, concluding that Noetzel’s
claims were completely preempted by ERISA § 502(a).
v. Haw. Med. Serv. Ass’n, 2016 WL 1698264, at *14 (D. Haw. Apr.
Noetzel unsuccessfully sought reconsideration.
Noetzel v. Haw. Med. Serv. Ass’n, 2016 WL 4033099, at *1 (D.
Haw. July 27, 2016).
In the present Motion for Partial Summary Judgment,
HMSA seeks a substantive determination that Haw. Rev. Stat. §§
431:13-103(a)(10) and 663-10 cannot be applied “to preclude
enforcement of HMSA’s lien from the proceeds of Noetzel’s
See ECF No. 41-1, PageID #s 711-12.
STANDARD OF REVIEW.
Summary judgment shall be granted when “the movant
shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a) (2010).
See Addisu v. Fred Meyer, Inc.,
198 F.3d 1130, 1134 (9th Cir. 2000).
A movant must support his
position that a material fact is or is not genuinely disputed by
either “citing to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including
those made for the purposes of the motion only), admissions,
interrogatory answers, or other materials”; or “showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.”
Fed. R. Civ. P.
One of the principal purposes of summary judgment is
to identify and dispose of factually unsupported claims and
Celotex Corp. v. Catrett, 477 U.S. 317, 323–24
Summary judgment must be granted against a party that
fails to demonstrate facts to establish what will be an
essential element at trial.
See id. at 323.
A moving party
without the ultimate burden of persuasion at trial—-usually, but
not always, the defendant—-has both the initial burden of
production and the ultimate burden of persuasion on a motion for
Nissan Fire & Marine Ins. Co. v. Fritz Cos.,
210 F.3d 1099, 1102 (9th Cir. 2000).
The burden initially falls on the moving party to
identify for the court those “portions of the materials on file
that it believes demonstrate the absence of any genuine issue of
T.W. Elec. Serv., Inc. v. Pac. Elec.
Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing
Celotex Corp., 477 U.S. at 323).
“When the moving party has
carried its burden under Rule 56(c), its opponent must do more
than simply show that there is some metaphysical doubt as to the
Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986) (footnote omitted).
The nonmoving party must set forth specific facts
showing that there is a genuine issue for trial.
Serv., Inc., 809 F.2d at 630.
At least some “‘significant
probative evidence tending to support the complaint’” must be
Id. (quoting First Nat’l Bank of Ariz. v. Cities
Serv. Co., 391 U.S. 253, 290 (1968)).
See Addisu, 198 F.3d at
1134 (“A scintilla of evidence or evidence that is merely
colorable or not significantly probative does not present a
genuine issue of material fact.”).
“[I]f the factual context
makes the non-moving party’s claim implausible, that party must
come forward with more persuasive evidence than would otherwise
be necessary to show that there is a genuine issue for trial.”
Cal. Arch’l Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818
F.2d 1466, 1468 (9th Cir. 1987) (citing Matsushita Elec. Indus.
Co., 475 U.S. at 587).
Accord Addisu, 198 F.3d at 1134 (“There
must be enough doubt for a ‘reasonable trier of fact’ to find
for plaintiffs in order to defeat the summary judgment
All evidence and inferences must be construed in the
light most favorable to the nonmoving party.
Inc., 809 F.2d at 631.
T.W. Elec. Serv.,
HMSA contends that ERISA preempts Haw. Rev. Stat. §§
431:13-103(a)(10) and 663-10, the state statutes Noetzel relies
See ECF No. 41-1, PageID # 710.
HMSA says that neither of
these state statutes “can be applied to preclude enforcement of
HMSA’s lien from the proceeds of Noetzel’s settlement.”
41-1, PageID # 712.
The parties do not dispute that Noetzel’s Preferred
Provider Plan with HMSA qualifies as an ERISA plan and that
Noetzel was a beneficiary of that plan.
See HMSA Concise
Statement of Facts, ECF No. 42, PageID # 737; Noetzel’s Concise
Statement of Facts, ECF No. 47, PageID # 776.
See also Noetzel
v. Haw. Med. Serv. Ass’n, 2016 WL 1698264, at *5 (D. Haw. Apr.
27, 2016) (noting in court order that “Noetzel does not dispute
that HMSA’s Preferred Provider Plan qualifies as an ERISA plan
and that she was a beneficiary of the Plan”).
Neither HMSA nor
Noetzel raises any factual dispute relating to this motion.
HMSA seeks only a legal determination that ERISA precludes
application of two state statutes that Noetzel views as
protecting her from HMSA’s reimbursement claim.
This court begins with Noetzel’s request that, if this
court has difficulty interpreting the two state statutes in
issue, this court certify questions of the applicability and
interpretation of state law to the Hawaii Supreme Court.
orders declining to remand Noetzel’s claims and then declining
to reconsider that remand ruling, this court set forth in some
detail the state and federal rulings it was relying on.
present order turns on precisely those state and federal rulings
and this court's analyses of those rulings.
Just as this court
viewed those rulings as providing sufficient guidance to this
court earlier, this court sees no need to certify questions to
the Hawaii Supreme Court on the present motion.
HMSA points out, the critical issue raised by the present motion
is whether ERISA preempts application of state laws.
goes to how federal law operates on state laws, not on the
meaning of any state law standing on its own.
applying federal law is at the heart of what federal courts do;
federal courts do not typically burden state courts with
questions about how federal law operates.
The present motion seeks a substantive ruling that
Noetzel’s claims are preempted by ERISA.
That is precisely what
the court determined in declining to remand Noetzel’s claims.
That is, although Noetzel pled her claims as if they were based
purely on state law, this court found federal questions raised
because Noetzel’s claims were completely preempted by ERISA.
Consistent with the reasoning in both the denial of remand and
the denial of reconsideration of that remand order, this court
grants partial summary judgment to HMSA, determining that
Noetzel’s claims are preempted by ERISA for the very reasons set
forth in this court’s earlier orders on the subject.
HMSA’s motion for partial summary judgment is granted.
No later than January 13, 2017, each party is directed to file a
statement of no more than 500 words of what issues remain to be
adjudicated and what proceedings are proposed in this case prior
to entry of judgment.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 27, 2016.
/s/ Susan Oki Mollway
Susan Oki Mollway
United States District Judge
Elizabeth Noetzel v. Hawaii Medical Service Association, Civ. No. 15-00310
SOM-KJM; and Hawaii Medical Service Association v. Elizabeth Noetzel, Civ.
No. 15-00317 SOM-KJM (consolidated cases); ORDER GRANTING DEFENDANT HAWAII
MEDICAL SERVICE ASSOCIATION’S MOTION FOR PARTIAL SUMMARY JUDGMENT.
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