NEUROLOGICAL SURGERY ASSOCIATES P.A. V AETNA LIFE INSURANCE COMPANY
OPINION fld. Signed by Judge Stanley R. Chesler on 6/4/14. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
AETNA LIFE INSURANCE COMPANY
Civil Action No. 12-5600 (SRC)
This matter comes before the Court on the motion for summary judgment, pursuant to
FED. R. CIV. P. 56, by Defendant Aetna Life Insurance Company (“Aetna”). For the reasons set
forth below, Defendants’ motion will be granted.
This case arises out of a dispute between Plaintiff, a medical services provider, and
Aetna, an insurer, over payment for medical services rendered by Plaintiff to a non-party insured.
The Complaint contends that the non-party insured executed an assignment of benefits which
confers beneficiary status on Plaintiff under ERISA. The Complaint asserts five claims: 1)
violation of ERISA; 2) breach of fiduciary duty under ERISA; 3) breach of contract; 4)
promissory estoppel; and 5) negligent misrepresentation. Defendant has moved for summary
judgment on all counts in the Complaint.
Summary judgment is appropriate under FED. R. CIV. P. 56(a) when the moving party
demonstrates that there is no genuine issue of material fact and the evidence establishes the
moving party’s entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986). A factual dispute is genuine if a reasonable jury could return a verdict for
the non-movant, and it is material if, under the substantive law, it would affect the outcome of
the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “In considering a motion
for summary judgment, a district court may not make credibility determinations or engage in any
weighing of the evidence; instead, the non-moving party's evidence ‘is to be believed and all
justifiable inferences are to be drawn in his favor.’” Marino v. Indus. Crating Co., 358 F.3d 241,
247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255).
“When the moving party has the burden of proof at trial, that party must show
affirmatively the absence of a genuine issue of material fact: it must show that, on all the
essential elements of its case on which it bears the burden of proof at trial, no reasonable jury
could find for the non-moving party.” In re Bressman, 327 F.3d 229, 238 (3d Cir. 2003) (quoting
United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991)). “[W]ith
respect to an issue on which the nonmoving party bears the burden of proof . . . the burden on the
moving party may be discharged by ‘showing’ – that is, pointing out to the district court – that
there is an absence of evidence to support the nonmoving party’s case.” Celotex, 477 U.S. at
Once the moving party has satisfied its initial burden, the party opposing the motion must
establish that a genuine issue as to a material fact exists. Jersey Cent. Power & Light Co. v.
Lacey Township, 772 F.2d 1103, 1109 (3d Cir. 1985). The party opposing the motion for
summary judgment cannot rest on mere allegations and instead must present actual evidence that
creates a genuine issue as to a material fact for trial. Anderson, 477 U.S. at 248; Siegel Transfer,
Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1130-31 (3d Cir. 1995). “[U]nsupported allegations .
. . and pleadings are insufficient to repel summary judgment.” Schoch v. First Fid.
Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990). “A nonmoving party has created a genuine
issue of material fact if it has provided sufficient evidence to allow a jury to find in its favor at
trial.” Gleason v. Norwest Mortg., Inc., 243 F.3d 130, 138 (3d Cir. 2001).
If the nonmoving party has failed “to make a showing sufficient to establish the existence
of an element essential to that party’s case, and on which that party will bear the burden of proof
at trial, . . . there can be ‘no genuine issue of material fact,’ since a complete failure of proof
concerning an essential element of the nonmoving party’s case necessarily renders all other facts
immaterial.” Katz v. Aetna Cas. & Sur. Co., 972 F.2d 53, 55 (3d Cir. 1992) (quoting Celotex,
477 U.S. at 322-23).
Defendant’s motion for summary judgment
Defendant moves for summary judgment on the Complaint on three grounds: 1) Plaintiff
lacks standing to pursue contract and ERISA claims against Aetna; 2) Plaintiff failed to exhaust
administrative remedies; and 3) all state law claims are preempted by ERISA. Because this
Court finds that Defendant has shown that it is entitled to judgment as a matter of law that
Plaintiff lacks standing to pursue this action, and that the state law claims are preempted by
ERISA, the second argument need not be reached.1
As to the first point, Aetna contends that the benefit plan at issue contains a provision
requiring that coverage may be assigned only with its consent, which it did not give. As such,
Aetna contends, because Plaintiff pursues its claims as an assignee under the contract, and
because that assignment is invalid under the anti-assignment provision in the contract, Plaintiff
lacks standing to pursue these claims.
In opposition, Plaintiff argues that Plaintiff has standing to sue as an ERISA beneficiary,
pursuant to 29 U.S.C. § 1132(a)(1)(B). Plaintiff contends that it is thus granted standing under
ERISA “regardless of the presence of any anti-assignment provisions.” (Pl.’s Opp. Br. 6.) It is
certainly true, as Plaintiff contends, that assignee medical services providers often sue for
benefits as beneficiaries of ERISA plans and that their standing to sue is often recognized by
courts. This does not, however, deal with the argument made by Aetna, that the anti-assignment
provision in the contract at issue precludes them from having standing. On this point, Plaintiff
argues that, as a federal statute, ERISA preempts the operation of all state law, including the state
law of anti-assignment provisions in contracts.
In support, Plaintiff cites only one case, Neuner v. Horizon Blue Cross Blue Shield (In re
LymeCare, Inc.), 301 B.R. 662, 682 (Bankr. D.N.J. 2003), which notes, seemingly
parenthetically, in a two-sentence footnote, that a previous ruling that an anti-assignment
provision was valid and enforceable under New Jersey law would not apply to a medical plan
Although this Court need not reach the failure to exhaust argument, the Court notes that
it is not satisfied from the evidence of record that there has been an adequate demonstration that a
New York rider applied to the Plan provisions.
governed by ERISA. As the sole support for Plaintiff’s position, this seems fairly weak.2
Although the Third Circuit has not addressed this question, the majority position appears
to be contrary to Plaintiff’s position. In 2004, the Eleventh Circuit surveyed the cases and
Considering this issue, we are persuaded by the reasoning of the majority of
federal courts that have concluded that an assignment is ineffectual if the plan
contains an unambiguous anti-assignment provision. See, e.g., City of Hope Nat'l
Med. Ctr. v. Healthplus, Inc., 156 F.3d 223, 229 (1st Cir. 1998) (“Consistent with
the other circuits which have addressed this issue, we hold that ERISA leaves the
assignability or non-assignability of health care benefits under ERISA-regulated
welfare plans to the negotiations of the contracting parties.”); St. Francis Reg'l
Med. Ctr. v. Blue Cross & Blue Shield of Kan., Inc., 49 F.3d 1460, 1464-65 (10th
Cir. 1995) (“ERISA’s silence on the issue of the assignability of insurance
benefits leaves the matter to the agreement of the contracting parties.”);
Davidowitz v. Delta Dental Plan of Cal., Inc., 946 F.2d 1476, 1478 (9th Cir.
1991) ("As a general rule of law, where the parties' intent is clear, courts will
enforce non-assignment provisions.") . . .
Physicians Multispecialty Group v. Health Care Plan of Horton Homes, Inc., 371 F.3d 1291,
1295 (11th Cir. 2004).
The Eleventh Circuit found the analysis of the Ninth Circuit in Davidowitz especially
persuasive. Id. at 1295-96. In short, in Davidowitz, the Ninth Circuit relied on two principles.
First, “[t]his Court is unwilling to say that the underlying ERISA policies benefited by
assignments outweigh the benefits promoted by [the insurer’s] non-assignment structure.”
Davidowitz, 946 F.2d at 1480. Second:
Both the Supreme Court and this Court have stated that Congress carefully
considered assignment of both pension and welfare plan benefits, and consciously
decided to prohibit pension plan assignments but remain silent on welfare
Moreover, as observed by Judge Wolfson in Cohen v. Independence Blue Cross, 820 F.
Supp. 2d 594, 604 (D.N.J. 2011), none of the ERISA plans at issue in Neuner contained antiassignment clauses.
benefits. The court cannot agree with Appellees that Congressional silence on
welfare benefit assignment shows a Congressional intent to mandate assignability.
On the contrary, if Congress had intended this result, it could have said so.
Having carefully considered the subject and chose to remain silent, this Court
must conclude that Congress intended not to mandate assignability, but intended
instead to allow the free marketplace to work out such competitive, cost effective,
medical expense reducing structures as might evolve.
Id. This Court finds this reasoning persuasive. Moreover, the Ninth Circuit considered the issue
of the validity of anti-assignment provisions not to be a matter of state law, but as a matter of
federal common law. Id. This nullifies Plaintiff’s argument that the validity of anti-assignment
provisions is a matter of state law which is preempted by ERISA.
Although the Third Circuit has not decided this issue, sister courts in this circuit have
agreed with the majority position stated above. See, e.g., Torpey v. Blue Cross Blue Shield of
Tex., 2014 U.S. Dist. LEXIS 11412 (D.N.J. Jan. 30, 2014); N. Jersey Brain & Spine Ctr. v. St.
Peter's Univ. Hosp., 2013 U.S. Dist. LEXIS 138040 (D.N.J. Sept. 25, 2013); Cohen v.
Independence Blue Cross, 820 F. Supp. 2d 594, 605 (D.N.J. 2011).
This Court concludes that the anti-assignment provision in the benefit plan is valid and
enforceable. The insured’s assignment of rights or benefits to Plaintiff is void. Plaintiff thus
lacks standing under ERISA to pursue this action. Because ERISA preempts duplicative or
supplemental state law causes of action, Plaintiff’s state law claims are preempted.3 Aetna
Health Inc. v. Davila, 542 U.S. 200, 209 (U.S. 2004) (“any state-law cause of action that
duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the
clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted.”)
Plaintiff’s opposition brief does not dispute Defendant’s argument that ERISA
preemption entitles it to summary judgment on the three claims arising under state law.
On these bases alone, the motion for summary judgment will be granted as to the Complaint in
its entirety. The Court need not reach Defendant’s other arguments, but notes that Defendant
also succeeds in arguing that its determination under the Plan to deny benefits was neither
arbitrary nor capricious. The burden of proof on this issue rests with Plaintiff, and Plaintiff’s
opposition brief does not address the matter. Plaintiff has thus failed to point to any evidence
that Aetna’s decision to deny benefits was arbitrary or capricious.
Pursuant to Federal Rule of Civil Procedure 56(a), Defendant has shown that Plaintiff
lacks standing to pursue this action and that it is therefore entitled to judgment as a matter of law
on all claims in the Complaint. The motion for summary judgment is granted, and Judgment on
the Complaint in its entirety is entered in favor of the Defendant.
s/ Stanley R. Chesler
STANLEY R. CHESLER, U.S.D.J.
Dated: June 4, 2014
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