METRO SPECIALTY SURGERY CENTER LLC v. UNITED HEALTHCARE SERVICES, INC.
ORDER. The Court ORDERS the Surgery Center to file a statement of claims by January 27, 2016, setting forth the legal basis for each of its claims against UHC. Because a removing defendant bears the burden of proving that federal jurisdiction is p roper, Walker v. Trailer Transit, Inc., 727 F.3d 819, 825 (7th Cir. 2013), UHC must file a response to the Surgery Center's statement of claims by February 8, 2016, specifically asserting why federal jurisdiction is proper based on the Surge ry Center's statement of claims. To the extent UHC alleges that the Surgery Center is pursuing any claim under ERISA § 502(a), UHC must apply the three-factor test set forth in Jass, 88 F.3d at 1487. The Surgery Center may file a reply by February 16, 2016. Signed by Judge Jane Magnus-Stinson on 1/13/2016. (BGT)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
METRO SPECIALTY SURGERY CENTER
UNITED HEALTHCARE SERVICES, INC.,
On December 23, 2015, Defendant United HealthCare Services, Inc. (“UHC”) removed
this case from Clark County Circuit Court to federal court pursuant to 28 U.S.C. § 1441, alleging
that this Court has original federal question jurisdiction pursuant to the Employee Retirement
Income Security Act of 1974 (“ERISA”) over Plaintiff Metro Specialty Surgery Center LLC’s (the
“Surgery Center”) action against UHC. [Filing No. 2.] Specifically, UHC contends that the
Surgery Center’s action is removable to federal court because of “two exceptions to the wellpleaded complaint rule: the complete preemption doctrine and the substantial federal question
doctrine” under ERISA. [Filing No. 2 at 3.]
“[F]ederal courts are obligated to inquire into the existence of jurisdiction sua sponte . . .
[and] a court in doubt of its own jurisdiction generally is well-advised to solicit the parties’ views
on the subject.” Evergreen Square of Cudahy v. Wisconsin Hous. & Econ. Dev. Auth., 776 F.3d
463, 465 (7th Cir. 2015). Because whether a case is removable from state to federal court based
on ERISA preemption “presents several difficult and technical issues,” Jass v. Prudential Health
Care Plan, Inc., 88 F.3d 1482, 1486 (7th Cir. 1996), the Court will solicit the parties’ views before
this case proceeds.
UHC’s Notice of Removal asserts that the Surgery Center sued UHC because UHC
allegedly “wrongfully recouped $95,759.11 from Surgery Center by taking funds that [UHC] owed
to Surgery Center for recent services rendered to different patients in order to correct overpayments
that [UHC] had previously remitted to Surgery Center for services provided to earlier
patients . . . .” [Filing No. 2 at 1-2.] UHC concedes that the Surgery Center’s Complaint does not
specifically reference ERISA. [Filing No. 2 at 3.] UHC emphasizes, however, that because the
Surgery Center is suing UHC as the patient’s assignee of the claim, “the State Court Action is a
civil action that includes claims that legally arise under ERISA because they all relate to benefits
payable under an ERISA plan.” 1 [Filing No. 2 at 3.]
The Court typically determines whether federal question jurisdiction exists “by examining
the plaintiff’s well-pleaded complaint, for it is long-settled law that a cause of action arises under
federal law only when the plaintiff’s well-pleaded complaint raises issues of federal law.” Jass,
88 F.3d at 1486 (citation omitted). A defendant cannot remove a case to federal court simply by
asserting a federal question in a responsive pleading. Id. Instead, “[t]he issues raised in the
plaintiff’s complaint, not those added in the defendant’s response, control the litigation.” Id.
An exception to the well-pleaded complaint rule exists “where Congress has completely
preempted a given area of state law.” Id. The United States Supreme Court extended the complete
preemption exception to ERISA cases in Metropolitan Life Ins. Co. v. Taylor, holding that the
doctrine “applied to certain ERISA claims because Congress intended to make all suits that are
The Seventh Circuit Court of Appeals has held that if an assignment is valid, a provider of
medical services can sue an insurer as assignee of a participant under ERISA. Kennedy v.
Connecticut Gen. Life Ins. Co., 924 F.2d 698, 700 (7th Cir. 1991); see also Penn Chiropractic
Ass’n v. Independence Hosp., 802 F3d 926 (7th Cir. 2015) (reaffirming holding of Kennedy but
distinguishing the facts of that case because “Plaintiffs do not rely on a valid assignment from any
cognizable under ERISA’s civil enforcement provisions federal question suits.” Id. (citing
Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987)). But “a claim brought under
ERISA § 502(a) provides the basis for complete preemption whereas [a claim brought under
ERISA] § 514(a) provides the basis for conflict preemption.” Jass, 88 F.3d at 1488 (citing Rice v.
Panchal, 65 F.3d 637, 640 (7th Cir. 1995)). This distinction is important because
complete preemption is an exception to the well-pleaded complaint rule that has
jurisdictional consequences. If a state law claim has been “displaced,” see Taylor,
481 U.S. at 60, and therefore completely preempted by § 502(a), then a plaintiff’s
state law claim is properly “recharacterized” as one arising under federal law.
Taylor, 481 U.S. at 64. But state law claims that are merely subject to “conflict
preemption” under § 514(a) are not recharacterized as claims arising under federal
law; in such a situation, the federal law serves as a defense to the state law claim,
and therefore, under the well-pleaded complaint rule the state law claims do not
confer federal question jurisdiction. Thus, complete preemption under § 502(a)
creates federal question jurisdiction whereas conflict preemption under § 514(a)
Rice, 65 F.3d at 640 (some citations omitted).
The Seventh Circuit has held that three factors are relevant for determining whether a claim
is brought under ERISA § 502(a): (1) whether the plaintiff is eligible to bring a claim under that
section; (2) whether the plaintiff’s cause of action falls within the scope of an ERISA provision
that the plaintiff can enforce via § 502(a); and (3) whether the plaintiff’s state law claim cannot be
resolved without an interpretation of the contract governed by federal law. Jass, 88 F.3d at 1487;
see also Klassy v. Physicians Plus Ins. Co., 371 F.3d 952, 955 (7th Cir. 2004) (applying same three
UHC alleges that the Surgery Center’s claims are subject to complete preemption under
ERISA § 502(a) and, thus, the Surgery Center’s state court action is removable to this Court.
[Filing No. 2 at 2.] While that may be true, because a plaintiff is the master of the complaint,
Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831 (2002), the Court needs
more information from the Surgery Center regarding the nature of the claims it is pursuing before
it can determine the propriety of removal.
For the reasons set forth herein, the Court ORDERS the Surgery Center to file a statement
of claims by January 27, 2016, setting forth the legal basis for each of its claims against UHC.
Because a removing defendant bears the burden of proving that federal jurisdiction is proper,
Walker v. Trailer Transit, Inc., 727 F.3d 819, 825 (7th Cir. 2013), UHC must file a response to
the Surgery Center’s statement of claims by February 8, 2016, specifically asserting why federal
jurisdiction is proper based on the Surgery Center’s statement of claims. To the extent UHC
alleges that the Surgery Center is pursuing any claim under ERISA § 502(a), UHC must apply the
three-factor test set forth in Jass, 88 F.3d at 1487. The Surgery Center may file a reply by
February 16, 2016.
Date: January 13, 2016
Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana
Electronic Distribution via CM/ECF:
Stephanie L. Boxell
FAEGRE BAKER DANIELS LLP (Indianapolis)
Philip John Gutwein, II
FAEGRE BAKER DANIELS LLP (Indianapolis)
Shannon L. Melton
SURGCENTER DEVELOPMENT LLC
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