Auto Club Insurance Association et al v. Healthy Living Chiropractic Clinic, PC et al
Filing
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MEMORANDUM AND OPINION, ORDER remanding to the State of Minnesota District Court, Fourth Judicial District, County of Hennepin. The Court declines to rule on the 2 Motion to Dismiss/General by Proactive Imaging LLC, the 5 Motion to Dismiss/General by Najah Abdi Ibrahim, and the 14 Motion to Dismiss/General by Robert Street Pain Relief Center, LLC for lack of jurisdiction.(Written Opinion). Signed by Judge John R. Tunheim on June 9, 2011. (DML)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
AUTO CLUB INSURANCE ASSOCIATION and
MEMBERSELECT INSURANCE COMPANY,
Civil No. 11-0027 (JRT/JSM)
Plaintiffs,
v.
HEALTHY LIVING CHIROPRACTIC CLINIC,
PC; PROACTIVE IMAGING LLC d/b/a
MINNESOTA RADIOLOGY, LLC; ROBERT
STREET PAIN RELIEF CENTER, LLC d/b/a
EDINA PAIN MANAGEMENT ASSOCIATES,
and NAJAH ABDI IBRAHIM,
MEMORANDUM
OPINION AND ORDER
Defendants.
Micheal W. Lowden, LOWDEN LAW FIRM, 4737 County Road 101,
Suite 304, Minnetonka, MN 55345, for plaintiffs.
David W. Asp, Eric C. Tostrud, and Matthew R. Salzwedel,
LOCKRIDGE GRINDAL NAUEN PLLP, 100 Washington Avenue
South, Suite 2200, Minneapolis, MN 55401-2179, for defendants Healthy
Living Chiropractic Clinic, PC and Proactive Imaging LLC.
Jack E. Pierce, PIERCE LAW FIRM, P.A., 6040 Earle Brown Drive,
Suite 420, Minneapolis, MN 55430, for defendant Robert Street Pain
Relief Center, LLC.
Leny K. Wallen-Friedman, WALLEN-FRIEDMAN & FLOYD, PA, 527
Marquette Avenue, Suite 860, Minneapolis, MN 55402, for defendant
Najah Abdi Ibrahim.
After removal from state court, defendants have moved to dismiss this case.
Because a federal court does not have jurisdiction when the sole jurisdictional basis is a
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state law claim that utilizes a federal standard, the Court finds that it lacks jurisdiction
and remands the case to state court.
BACKGROUND
This case involves an alleged scheme to defraud insurers perpetrated by
defendants Healthy Living Chiropractic, PC, Proactive Imaging, LLC d/b/a Minnesota
Radiology, LLC, Robert Street Pain Relief Center, LLC d/b/a Edina Pain Management
Associates, and Najah Abdi Ibrahim (collectively, “defendants”). Auto Club Insurance
Association and MemberSelect Insurance Company (collectively, “AAA”) seeks a
declaratory judgment that it is not required to make payments to defendants based on
violations of Minnesota‟s Professional Firms Act, state anti-kickback law, and fraud.
Further, it seeks reimbursement in the amount of $50,000. AAA filed the case in state
court and defendants removed the matter to federal court based on plaintiffs‟ invocation
of the federal standard that is incorporated in Minn. Stat. § 62J.23, subd. 2, the state antikickback law, referenced in the complaint.
DISCUSSION
I.
STANDARD FOR REMAND
Section 1441(a) of Chapter 28 of the United States Code enables defendants to
remove cases to federal court in any civil action over which “the district courts of the
United States have original jurisdiction.” 28 U.S.C. § 1441(a). District courts have
original jurisdiction over cases involving a federal question. 28 U.S.C. § 1331; 28 U.S.C.
§ 1441(b) (noting that “original jurisdiction founded on a claim or right arising under the
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Constitution, treaties or laws of the United States shall be removable” to federal court).1
When a court has original jurisdiction over certain claims, it has supplemental
jurisdiction over “all other claims that are so related to claims in the action within such
original jurisdiction that they form part of the same case or controversy . . . .” 28 U.S.C.
§ 1367. While a court that dismisses all federal claims has the discretion to maintain
supplemental jurisdiction over remaining state claims, Carlsbad Tech., Inc. v. HIF Bio,
Inc., 129 S. Ct. 1862, 1866 (2009), “[i]n the absence of a federal claim, [a] court [cannot]
exercise supplemental jurisdiction . . . .” Reeve v. Oliver, 41 F.3d 381, 383 (8th Cir. 1994)
(emphasis added).
“Federal question jurisdiction exists if the well-pleaded complaint establishes
either that federal law creates the cause of action or that the plaintiff‟s right to relief
necessarily depends on resolution of a substantial question of federal law.” Williams v.
Ragnone, 147 F.3d 700, 702 (8th Cir. 1998) (internal quotation marks omitted). A court
may find a federal cause of action in a poorly drafted complaint sufficient for original
jurisdiction, however, when the plaintiff asserts that no federal cause of action was
intended, such a liberal reading of the plaintiff‟s complaint is not warranted.
See
Gardner v. First Am. Title Ins. Co., 294 F.3d 991, 994 (8th Cir. 2002). “[J]urisdiction
issues will be raised sua sponte by a federal court when there is an indication that
1
A federal court may also exercise original jurisdiction over claims involving diversity of
citizenship. 28 U.S.C. § 1332(a). The parties have not alleged, nor is the Court independently
aware, that complete diversity of citizenship exists in this case. Furthermore, the amount in
controversy in this case does not meet the statutory minimum of $75,000. See id. § 1332(b).
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jurisdiction is lacking, even if the parties concede the issue. Thomas v. Basham, 931 F.2d
521, 523 (8th Cir. 1991).
II.
FEDERAL ANTI-KICKBACK LEGISLATION
The complaint avers that defendants have violated federal and state anti-kickback
legislation. (See, e.g., Compl. at 11, Aff. of Michael W. Lowden, March 10, 2011, Ex. 1,
Docket No. 18.) However, no private right of action exists under the federal antikickback law. 42 U.S.C. § 1320a-7b(b);United States ex rel. Barrett v. Columbia/HCA
Healthcare Corp., 251 F. Supp. 2d 28, 37 (D.D.C. 2003). Further, AAA clarified at the
hearing on the motions that its intent was to allege violation of state anti-kickback law.
While the complaint mentions the federal law, AAA‟s moving papers refer to Alpha Real
Estate Co. of Rochester v. Delta Dental Plan of Minn., 671 N.W.2d 213 (Minn. Ct. App.
2003), which held simply that the standard of the federal anti-kickback legislation
applies to claims under the state law. Id. at 217 (“As an initial matter, we note that under
Minn. Stat. § 62J.23, subd. 2, the federal anti-kickback statutes and related federal
regulations apply to the state statute until the Commissioner of Health adopts rules
concerning the section. Because such state rules have not yet been adopted, we apply
federal law, and a separate analysis of state law is unnecessary.”). As a result, AAA
argues discussion of the federal standard is necessary to the state claim but is not the
basis of the claim it wishes to bring.
The United States Supreme Court has held that invocation of a federal standard in
a state law claim does not give rise to federal jurisdiction. Merrell Dow Pharm. Inc. v.
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Thompson, 478 U.S. 804, 816-17 (1986) (“We conclude that a complaint alleging a
violation of a federal statute as an element of a state cause of action, when Congress has
determined that there should be no private, federal cause of action for the violation, does
not state a claim „arising under the Constitution, laws, or treaties of the United States.‟”);
see also Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 821 n.2 (1988)
(“[I]ncorporation of federal standard in state-law private action, when no cause of action,
either express or implied, exists for violations of that federal standard, does not make the
action one „arising under the Constitution, laws, or treaties of the United States.‟” (citing
Merrell Dow Pharm. Inc. at 810)).
Regardless of the vaguely worded statements in the complaint, AAA‟s expressed
disavowal of a federal claim together with the Court‟s determination that a violation of
federal law is not pled in the complaint, leaves the Court without jurisdiction over these
claims. As a result, the Court has no discretion to exercise supplemental jurisdiction over
the state law claims, as urged by defendants. The Court therefore remands the case to
state court.
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that the matter is REMANDED to the State of Minnesota
District Court, Fourth Judicial District, County of Hennepin. The Court declines to rule
on the Motion to Dismiss/General by Proactive Imaging LLC [Docket No. 2], the Motion to
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Dismiss/General by Najah Abdi Ibrahim [Docket No. 5], and the Motion to Dismiss/General by
Robert Street Pain Relief Center, LLC [Docket No. 14] for lack of jurisdiction.
LET JUDGMENT BE ENTERED ACCORDINGLY.
DATED: June 9, 2011
at Minneapolis, Minnesota.
____s/
____
JOHN R. TUNHEIM
United States District Judge
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