ADVANCED REHABILITATION, LLC et al v. UNITEDHEALTH GROUP, INC. et al
Filing
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OPINION fld. Signed by Judge Dennis M. Cavanaugh on 10/31/11. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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Plaintiff,
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v.
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UNITEDHEALTH GROUP, INC.,
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UNITEDHEALTHCARE,
UNITEDHEALTHCARE INSURANCE :
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COMPANY OF NEW YORK, INC.,
UNITEDHEALTHCARE INSURANCE :
COMPANY, UNITED HEALTHCARE :
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SERVICE, LLC, OXFORD HEALTH
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PLANS LLC, OXFORD HEALTH
PLANS (NY), INC., OXFORD HEALTH :
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PLANS (NJ), INC., and OXFORD
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HEALTH INSURANCE, INC.,
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Defendants.
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ADVANCED REHABILITATION, LLC,
IRBY SPINE CARE, PC, and SHORE
SPINE CENTER & PHYSICAL
REHABILITATION, PC, on behalf of
themselves and other similarly situated,
Hon. Dennis M. Cavanaugh
OPINION
Civil Action 2:10-cv-0263 (DMC)(MF)
DENNIS M. CAVANAUGH, U.S.D.J.:
This matter comes before this Court on Plaintiffs’ motion for an order granting Plaintiffs
leave to file a second amended complaint. Pursuant to Fed.R.Civ.P. 78, stating that the court has
the authority to provide for submitting and determining the motions on briefs without oral
hearings, no oral argument was heard. After considering all submissions, it is the decision of this
Court that Plaintiffs’ motion for leave to replead is denied.
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I.
BACKGROUND
On March 17th, 2011, this Court issued an Opinion (ECF No. 37) and Order (ECF No. 38)
granting Defendants’ motion to dismiss Plaintiffs’ complaint for failure to state a claim under
Fed.R.Civ.P. 12(b)(6). Plaintiffs now seek relief from the judgment and plead under Federal
Rules of Civil Procedure, 59(e) and 15(a), as such.
Four chiropractic providers filed a complaint on January 15th, 2010 against Defendants
who administer health plans for numerous employers and governmental entities. All Defendants
are out of network providers under the terms of health insurance plans managed by Defendants.
On April 22nd, 2010, the parties stipulated to Plaintiff’s filing of an amended complaint (ECF No.
26) which was, thereafter, filed on May 14th, 2010.
The facts derived from that complaint are as follows. The health plans at issue include
New York State Health Insurance Program/Empire Blue Cross-Blue Shield, the Verizon/United
Healthcare plan, an employee plan for the Port Authority of New York and New Jersey and an
Oxford/Freedom Health Plan. Plaintiffs allege that reimbursement was denied for administration
of a procedure known as manipulation under anesthesia (“MUA”). (Pl.’s Mem. Opp. Mot. 1, Jul.
9th, 2010, ECF No. 32). Plaintiffs further allege that Defendants exercised a “blanket policy of
denying coverage for MUA procedures.” Id. Denial was based on grounds of non-medical
necessity or contentions that they are experimental, at least for treatment of specific conditions.
Plaintiffs also argued that the appeals process was “preordained to deny coverage.” Id.
Each of the four chiropractic providers submitted claims on behalf of a patient who had
been treated with MUA. Each case presented a claim denied initially, and then through the
subsequent appeals process. Plaintiffs’ amended complaint raised breach of contract and breach
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of fiduciary duty claims under the Employee Retirement Income Security Act (“ERISA”) and
under New Jersey state law and sought reimbursement of unpaid claims under ERISA. Further,
Plaintiffs sought a declaratory judgment and a permanent injunction preventing Defendants from
automatically denying coverage for MUA procedures.
This Court concluded, in the Opinion set out on March 17, 2011 (the “Opinion”), that
“every single plan relevant to the complaint [contained] language reserving the right to make
decisions about which procedures to cover, based on the plan’s decision as to medical necessity,
or the plan’s determination as to what is experimental or investigative for a given ailment, illness
or condition.” Advanced Rehab., LLC v. Unitedhealth Group, Inc., No. 10-0263, 2011 WL
995960, at *3 (D.N.J. Mar. 17, 2011). Further, this Court found that Plaintiffs had failed to make
a threshold showing that Defendants acted outside the scope of their entitled decision-making
powers, pursuant to this reservation of authority. Id. This Court, moreover, could not plausibly
infer, from the facts presented by Plaintiff, that there was collusion or bad faith involved in the
appeals process, nor that the process itself was in any way pre-ordained. Id. at *4. Finally, this
Court held that it was not convinced of a basis for finding Defendants’ denials pretextual. Id. at
*3.
II.
STANDARD OF REVIEW
Plaintiffs explicitly couch their motion for relief in Fed.R.Civ.P. 59(e), 60(a) and/or
15(a). (Pl.’s Mem. in Supp. 3, Mar. 31st, 2011, ECF No. 40). Rule 60(a) contemplates a
correction based on clerical mistakes, oversights or omissions and is not applicable here. The
Court will analyze Plaintiffs’ arguments under the remaining two rules, in turn.
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1. Motion to Alter or Amend a Judgment
Motions to alter or amend made pursuant to Fed.R.Civ.P. 59(e) shall be granted where:
“(1) an intervening change in the law has occurred, (2) new evidence not previously available has
emerged, or (3) the need to correct a clear error of law or prevent a manifest injustice arises.”
Gutierrez v. Ashcroft, 289 F.Supp.2d 555, 561 (D.N.J. 2003). The counterpart Local Rule to
Fed.R.Civ.P. 59(e) is L.Civ.R. 7(I), which guides a motion for reconsideration. A motion for
reconsideration is properly granted where the Court overlooked “matters or decisions” which, “if
considered by the Court, might have reasonably altered the result reached.” G-69 v. Degnan, 748
F.Supp. 274, 275 (D.N.J. 1990)
2. Motion for Leave to Amend Complaint
Courts will freely give leave to amend “when justice so requires.” Fed.R.Civ.P. 15(a).
However, leave to amend may be denied where the amendment would be futile, frivolous, or a
waste of time. Foman v. Davis, 371 U.S. 178, 182 (1962); Adams v. Gould, 739 F.2d 858, 868
(3d Cir. 1984), cert. denied, 469 U.S. 1122 (1985). Leave may be denied where the amendments
would not withstand a motion to dismiss or, in other words, where the amendments fail to state a
cause of action upon which relief could be granted. Massarsky v. Gen. Motors Corp., 706 F.2d
111, 125 (3d Cir. 1983).
III.
DISCUSSION
1. Motion to Alter or Amend Judgment
Alteration of a judgment is appropriate where the law has changed, new evidence is
available or an error was made by the Court. Plaintiffs suggest that this Court overlooked certain
factual matters in coming to its conclusion in the Opinion filed March 17th, 2011. However,
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Plaintiffs end up conceding that this Court indeed considered the exact material they fruitlessly
contend was overlooked. See (Pl.’s Mem. in Supp. 9). This Court previously requested further
submission in the form of letters denying reimbursement for medical expenses associated with
the MUA procedures. (Ct.’s Letter, Feb. 23, 2011, ECF No. 34). Plaintiffs admit that the
“[a]mended [c]omplaint details through such correspondence” and that “[t]his material was
considered by the Court.” (Pl.’s Mem. in Supp. 9). The resulting argument is futile because
Plaintiffs offer no new facts and moreover, reveal no facts that appeared before but were
overlooked in error. This Court has reviewed and considered all arguments and submissions that
Plaintiffs allude to in the instant motion hereby finding the renewed arguments to remain
unpersuasive.
2. Motion for Leave to Amend Complaint
The amendments offered by Plaintiffs would not withstand a motion to dismiss and are
therefore futile under Foman. Plaintiffs cite case law which indeed expounds the rule that leave
to amend should be “granted freely,” while failing to recognize or concede that the rule is limited
in its scope. The rule contemplates complaints that are vulnerable to dismissal, rather than those
sought after judgment on a dispositive motion. See Dole v. Arco Chem. Co., 921 F.2d 484, 486
(3d Cir.1990). Relevant to this proposition, Plaintiffs cite Shane v. Fauver, in which the Third
Circuit held that a District Court must ensure that Plaintiffs have a fair opportunity to amend a
complaint to cure a deficiency that would otherwise result in claims vulnerable to dismissal.
Indeed, the Court set out a standard considering judgment of dismissal without leave to amend
proper only when based in bad faith, prejudice, futility or undue delay. 213 F.3d 113, 117 (3d
Cir.2000). Shane is inapplicable here merely because Plaintiffs were given the opportunity to
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amend their complaint during the period in which their complaint was vulnerable to dismissal.1
It was at that point that Plaintiffs were given their “reasonable opportunity to cure the defect.”
Id. at 116.
IV.
CONCLUSION
Plaintiffs do not provide this Court with a change of law, new evidence or revelation of
error in the Opinion filed March 17th, 2011. Further, Plaintiffs were given leave to amend their
initial complaint when that complaint was vulnerable to a motion to dismiss. For the foregoing
reasons, Plaintiffs’ motion for leave to file a second amended complaint is denied.
S/ Dennis M. Cavanaugh
Dennis M. Cavanaugh, U.S.D.J.
Date:
Original:
cc:
October 31 , 2011
Clerk’s Office
All Counsel of Record
Hon. Mark Falk, U.S.M.J.
File
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Plaintiffs initial complaint was filed on January 15th, 2010. Defendants’ motion to
dismiss was filed March 12th, 2010 (ECF No. 12) then was terminated with the filing of the
amended complaint (ECF No. 26) on May 14th.
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