CAPE REGIONAL MEDICAL CENTER v. CIGNA HEALTH AND LIFE INSURANCE COMPANY

Filing 32

OPINION. Signed by Judge Joseph H. Rodriguez on 6/14/2018. (dmr)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CAPE REGIONAL MEDICAL CENTER :
on assignments of 52 individual patients,
Plaintiffs,

:

v.

:

CIGNA HEALTH AND LIFE INS. CO.,
Defendant.

Hon. Joseph H. Rodriguez
Civil Action No. 17-5284
OPINION

:
:

This matter has come before the Court on Defendant’s Motion to
Dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6)
for failure to state a claim. The Court has considered the submissions of the
parties and decides this motion on the papers pursuant to Federal Rule of
Civil Procedure 78(b). For the reasons stated here, Defendant’s motion
[Doc. 12] will be granted.
Background
Plaintiff Cape Regional Medical Center, as assignee, seeks
reimbursement of approximately $357,416.47 of allegedly underpaid
benefits from Defendant Cigna Health and Life Insurance Company for
emergency medical services provided to 52 individual patients who were
beneficiaries of Defendant’s health benefits plan governed by ERISA. 1

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Plaintiff has stipulated to dismissal with prejudice of Counts Two (Breach
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Motion to Dismiss Standard
Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss
“for failure to state a claim upon which relief can be granted[.]” For a
complaint to survive dismissal under Rule 12(b)(6), it must contain
sufficient factual matter to state a claim that is plausible on its face.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the
plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id.
Further, a plaintiff must “allege sufficient facts to raise a reasonable
expectation that discovery will uncover proof of her claims.” Connelly v.
Lane Const. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the
sufficiency of a complaint, district courts must separate the factual and
legal elements. Fowler v. UFMC Shadyside, 578 F.3d 203, 210-11 (3d Cir.
2009) (“Iqbal ... provides the final nail-in-the-coffin for the ‘no set of facts’
standard that applied to federal complaints before Twombly.”). The Court
“must accept all of the complaint’s well-pleaded facts as true,” Fowler, 578

of Contract) and Four (Breach of Fiduciary Duty). As such, the claims at
issue in this motion are Counts One (Failure to Comply with Emergency
Service Cost Sharing Requirement of N.J.A.C. 11:4-37) and Three (Failure
to Make All Payments Pursuant to Member’s Plan under 29 U.S.C.
§1132(a)(1)(B)).
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F.3d at 210, “and then determine whether they plausibly give rise to an
entitlement for relief.” Connelly, 809 F.3d at 787 (citations omitted).
Restatements of the elements of a claim, however, are legal conclusions
and, therefore, not entitled to a presumption of truth. Burtch v. Milberg
Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011).
Discussion
Count One, alleging a violation under N.J. Admin. Code § 11:4-37, is
preempted by ERISA because it is a claim for benefits allegedly due under
section 502(a)(1)(B) of the federal statute. Congress enacted ERISA to
create “a uniform regulatory regime over employee benefit plans.” Aetna
Health Inc. v. Davila, 542 U.S. 200, 208 (2004); see New Jersey Carpenters
& the Trustees Thereof v. Tishman Const. Corp. of New Jersey, 760 F.3d
297, 303 (3d Cir. 2014) (“Congress enacted ERISA to ensure that benefit
plan administration was subject to a single set of regulations and to avoid
subjecting regulated entities to conflicting sources of substantive law.”). To
determine whether a state law claim is completely preempted under Section
502(a), a court must determine that (1) the plaintiff could have brought the
action under Section 502(a) of ERISA and (2) no independent legal duty
supports the plaintiff’s claim. Pascack Valley Hosp. v. Local 464A UFCW
Welfare Reimbursement Plan, 388 F.3d 393, 400 (3d Cir. 2004); see

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also Davila, 542 U.S. at 210 (holding that state law claim is completely
preempted when action could have been brought under Section
502(a)(1)(B) and no other legal duty independent of ERISA exists).
A claim may be brought under Section 502(a) of ERISA by a
participant or beneficiary “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); see
also Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 53 (1987). In determining
whether a plaintiff’s state law claims “are predicated on a legal duty that is
independent of ERISA,” Pascack Valley, 388 F.3d at 393, a court “must
examine whether interpretation or application of the terms and scope of
the ERISA insurance plan form an ‘essential part’ of Plaintiff’s
claims.” North Jersey Brain & Spine Ctr. v. Conn. Gen. Life Ins. Co., No. 104260, 2011 WL 4737067, at *6 (D.N.J. June 30, 2011). Thus, this prong
often turns on whether a plaintiff's claims are “inextricably intertwined
with the interpretation and application of ERISA plan coverage and
benefits.” Id. at *7.
In this case, Plaintiff claims that it received valid assignments and has
brought ERISA claims pursuant to the assignments. Therefore, Plaintiff’s
claim could be brought pursuant to Section 502(a). Indeed, whether

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Plaintiff has a right to recover depends entirely on interpretation of terms
and provisions of the ERISA plan. There is no independent basis for
Plaintiff’s claim for benefits. “[C]ourts routinely preempt state common law
claims like the one[] raised here that involve denial of benefits under an
ERISA-governed plan.” Advanced Orthopedics & Sports Medicine Institute
v. Empire Blue Cross Blue Shield, Civ. No. 17-8697, 2018 WL 2758221, *7
(D.N.J. June 7, 2018). See also Cohen v. Horizon Blue Cross Blue Shield of
New Jersey, Civ. No. 15-4525, 2017 WL 685101, *6-7 (D.N.J. Feb. 21, 2017)
(finding claim of violation of New Jersey emergency services regulation at
N.J. Admin. Code § 11:24-5.3 completely preempted). Accordingly, Count
One is preempted by ERISA and must be dismissed.
Even if Count One was not preempted by ERISA, it still must be
dismissed because N.J. Admin. Code. § 11:4-37.3 does not provide a private
right of action. See R.J. Gaydos Ins. Agency, Inc. v. Nat’l Consumer Ins. Co.,
773 A.2d 1132, 1144 (N.J. 2001) (“New Jersey courts have generally
declined to infer a private right of action in statutes where the statutory
scheme contains civil penalty provisions.”).
To determine if a statute confers an implied private right of
action, courts consider whether: (1) plaintiff is a member of the
class for whose special benefit the statute was enacted; (2) there
is any evidence that the Legislature intended to create a private
right of action under the statute; and (3) it is consistent with the

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underlying purpose of the legislative scheme to infer the
existence of such a remedy.
Id. at 1143. “The Court considers the same factors to determine if an
administrative regulation confers an implied private right of action.” N.J.
Thoroughbred Horsemen’s Ass’n v. Alpen House U.L.C., 942 F. Supp. 2d
497, 504 (D.N.J. 2013) (citing Jalowiecki v. Leuc, 440 A.2d 21, 25-26 (N.J.
Super. Ct. App. Div. 1981)). There is no indication that the New Jersey
Legislature intended to create a private right of action under § 11:437.3. See N.J. Thoroughbred Horsemen’s, 942 F. Supp. 2d at 504-05; R.J.
Gaydos Ins. Agency, Inc., 773 A.2d at 1148 (“refusing to recognize implied
private cause of action against insurance company in light of
comprehensive regulation of insurance industry”). Rather, New Jersey’s
Commissioner of Insurance possesses the exclusive power to enforce the
regulation and impose penalties in the case of violations. Therefore, Count
One will be dismissed.
Next, Count Three seeking ERISA plan benefits will be dismissed
because it fails to satisfy fundamental pleading requirements. Specifically,
the Complaint does not identify facts such as the dates upon which services
were rendered for each patient, the nature of the services provided to each
patient, the amounts charged to each patient, the terms of the assignments

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of benefits, the specific plans or policies that are controlling, or the
provisions of plans that Defendant allegedly violated.
The bald allegation that Plaintiff, as an out-of-network provider, was
not paid the entirety of what it was owed is insufficient to survive a motion
to dismiss. See Re: Complete Foot & Ankle v. CIGNA Health & Life Ins. Co.,
Civ. No. 17-13742, 2018 WL 2234653, *2 (D.N.J. May 16, 2018) (under
same facts, finding Complaint that contained little more than an assertion
that plaintiff was owed more than it was paid for the services it provided
insufficient under Fed. R. Civ. P. 8 and dismissing plaintiff’s argument that
motion to dismiss should be denied because defendant failed to produce the
relevant plan documents because “Plaintiff, as an alleged assignee, steps
into the beneficiaries’ shoes, who at all times had access to the Plans.”);
LeMoine v. Empire Blue Cross Blue Shield, Civ. No. 16-6786, 2018 WL
1773498, at *6 (D.N.J. Apr. 12, 2018) (granting motion to dismiss, finding
plaintiff “fail[ed] to plausibly plead which portions of [benefit plans] have
been violated); Atlantic Plastic & Hand Surgery, PA v. Anthem Blue Cross
Life & Health Ins. Co., Civ. No. 17-4600, 2018 WL 1420496, at *10-11
(D.N.J. Mar. 22, 2018) (dismissing claim where plaintiff’s “threadbare
allegations” did not point “to any provision of a . . . benefit plan suggesting”
an entitlement to payment).

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Plaintiff’s failure to identify the specific plans or policies that are
controlling is also problematic in that Defendant cannot determine whether
its relevant policies contained anti-assignment clauses. See American
Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield, 890
F.3d 445 (3d Cir. 2018) (holding that anti-assignment clauses in ERISAgoverned health insurance plans are enforceable).
In short, Plaintiff has not pled a sufficient factual basis that would
allow the Court to infer that the Defendant is liable for a plausible claim of
wrongful denial of benefits under section 502(a)(1)(B) of ERISA, which
requires a plaintiff to demonstrate entitlement to “benefits due to him
under the terms of his plan.” 29 U.S.C. § 1132(a)(1)(B) (emphasis added).
Accordingly, Count Three will be dismissed.
Conclusion
For these reasons, Defendant’s Motion to Dismiss the Complaint will
be granted. An Order will accompany this Opinion.

Dated: June 14, 2018

/s/ Joseph H. Rodriguez
JOSEPH H. RODRIGUEZ
U.S.D.J.

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