UNIVERSITY SPINE CENTER v. BLUE SHIELD OF CALIFORNIA
OPINION. Signed by Chief Judge Jose L. Linares on 11/16/17. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No.: 17-8673 (JLL)
UNIVERSITY SPINE CENTER,
On assignment of William S.
BLUE SHIELD OF CALIFORNIA,
LINARES, Chief District Judge.
This matter comes before the Court by way of Defendant Blue Shield of California’s
(“Defendant”) Motion to Dismiss Plaintiff University Spine Center’s (“Plaintiff’) Complaint
pursuant to Rules 12(b)(l) and 12(b)(6) of the federal Rules of Civil Procedure. (ECF No. 3).
Plaintiff has submitted opposition and Defendant has submitted a reply. (ECF Nos. 4, 5). For the
reasons stated herein, the Court grants Defendant’s Motion to Dismiss Plaintiffs Complaint.
On July 7, 2015, Plaintiff, a healthcare provider located in New Jersey, provided medical
services for William S. (“Patient”). (ECF No. 1-1 (“Compl.”)
1, 4). Plaintiff obtained an
assignment of benefits from Patient in order to bring this claim under the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C.
1002, et seq. (Id.
6). Pursuant to the
assignment of benefits, Plaintiff asserts that it prepared Health Insurance Claim Fonns (“HICFs”)
formally demanding reimbursement from Defendant in the amount of S 153,363.00 for the medical
services provided by Plaintiff to Patient. (Id.
$9,258.53 for the aforementioned treatment. (Id.
7). Plaintiff alleges that Defendant oniy paid
Thereafier, Plaintiff avers that it engaged
in the applicable administrative appeals process maintained by Defendant. (Id.
additionally asserts that it requested, among other items, a copy of the Summary Plan Description,
Plan Policy, and identification of the Plan Administrator/Plan Sponsor. (Id.
denied Plaintiffs appeal and did not remit the remaining balance of $144,104.12. (Id.
Additionally, Plaintiff alleges that Defendant did not produce the documents Plaintiff requested.
In light of the foregoing, Plaintiffs Complaint alleges the following claims: (1) Breach of
Contract’; (2) Failure to make all Payments pursuant to Member’s Plan under 29 U.S.C.
1132(a)(l)(B); and (3) Breach of Fiduciary Duty under 29 U.S.C.
1 104(a)(l), and 29 U.S.C.
1132(a)(3), 29 U.S.C.
Accordingly, Defendant filed this Motion to
Pursuant to Federal Rule of Civil Procedure 12 (b)(1), the Court must dismiss a complaint
if it lacks subject matter jurisdiction. “Ordinarily, Rule 12(b)(l) governs motions to dismiss for
lack of standing, as standing is ajunsdictional matter.” N.J 3,-am & Spine Ctr.
F.3d 369, 372 n.3 (3d Cir. 2015).
Aetna, Inc., $01
However, when statutory limitations to sue are non-
jurisdictional, as is the case where a party claims derivative standing to sue under ERISA
a motion to dismiss challenging such standing is “properly filed under Rule 12(b)(6).”
Plaintiff has agreed to voluntarily dismiss Count I. (ICE No. 4 at 4). Therefore, the Court need not analyze this
claim and grants Defendant’s Motion to Dismiss Count I.
Regardless, “a motion for lack of statutory standing is effectively the same whether it comes under
Rule 12(b)(l) or 12(b)(6).” Id. (citation omitted).
On a motion to dismiss for lack of standing, the plaintiff “bears the burden of establishing’
the elements of standing, and ‘each element must be supported in the same way as any other matter
on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence
required at the successive stages of the litigation.” FOCUS v. Allegheny Cly. Ct. Corn. FL, 75
F.3d 834, $38 (3d Cir. 1996) (quoting Lttjan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)). “For
the purpose of determining standing, [the court] must accept as true all material allegations set
forth in the complaint, and must construe those facts in favor of the complaining party.” Storino
v. Borough ofFoint Fleasant Beach, 322 F.3d 293, 296 (3d Cir. 2003) (citing Wart/i v. Se/din, 422
U.S. 490, 501 (1975)).
§ 502 (a) of ERISA “a participant or beneficiary” may bring a civil action to, inter
a/ia, “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). Accordingly, standing to sue under ERISA is “limited to participants and beneficiaries.”
§ 1132(a)(3); see a/so Fascack Valley Hosp., Inc. v. Local 464A UFCW Welfare
Reirnbursernent F/an, 388 F.3d 393, 400—01 (3d Cir. 2004) (holding that ERISA is limited to
participants and beneficiaries and that if plaintiff lacks standing to sue under ERISA, then the
Court also lacks federal subject matter jurisdiction to hear the claim);
As ERISA is silent on the issue of standing, Third Circuit precedent sets forth that a
healthcare provider may bring a cause of action by acquiring derivative standing through an
assignment of rights from the plan participant or beneficiary to the healthcare provider. NJ. Brain
& Spine Ctr., $01 F.3d at 372. “Healthcare providers that are neither participants nor beneficiaries
in their own right may obtain derivative standing by assignment from a plan participant or
beneficiary.” Id. (citing CardioNet, Inc. v. Cigna Health Coip., 751 F.3d 165, 176 n.10 (3d Cir.
As a consequence, the issue presently before this Court hinges upon whether Patient
successfully assigned his rights to Plaintiff under the terms of Defendant’s insurance plan.
Defendant argues that any purported assignment of right from Patient, the plan participant, is void
since the applicable health benefits plan contains an anti-assignment clause that expressly prohibits
Patient from assigning his rights and/or benefits without Defendant’s consent. (ECF No. 3-1 at 2).
In response, Plaintiff argues that the purported anti-assignment clause is unenforceable. (ECF No.
4 at 1). Plaintiff supports its argument with the following two assertions: (1) the anti-assignment
clause is inapplicable to the Plaintiff and therefore the Defendant’s standing argument fails; and
(2) Defendant has waived any purported anti-assignment clause through a course of dealing with
Plaintiff. (Id.). F or the reasons discussed herein, the Court agrees with Defendant that the antiassignment clause bars Plaintiff from bringing this action.
Applicability of Anti-Assignment Provision
Patient’s insurance plan contains an anti-assignment clause, which states that “Coverage
or any Benefits of this Plan may not be assigned without the written consent of Blue Shield.” (ECF
No. 3-6 at 61). Defendant claims that it did not give consent for Patient to assign his benefits to
Plaintiff and, therefore, the anti-assignability clause applies and Plaintiff lacks standing. (ECF No.
3-1 at 9).
In opposition, Plaintiff argues that the anti-assignment clause is unenforceable against it as
a health care provider, relying on a decision from the Court of Appeals for the Fifth Circuit. (ECF
No. 4 at 7). This Fifth Circuit decision interpreted anti-assignment clauses, such as the one at issue
here, to apply only to third-party assignees who may obtain assignments to cover unrelated debts.
Hermann Hosp. v. MEBA Med. & Benefits Plan, 959 F.2d 569, 575 (5th Cir. 1992) (“We interpret
the anti-assignment clause as applying only to unrelated, third-party assignees—other than the
health care provider of assigned benefits—such as creditors who might attempt to obtain voluntary
assignments to cover debts having no nexus with the Plan or its benefits, or even involuntary
alienations such as attempting to garnish payments for plan benefits.”), overrttled on other grottnds
byAccessMediqtttp, L.L.C. v. United Health Care Ins. Co., 69$ F.3d 229 (5th Cir. 2012).
Though the Third Circuit has not specifically spoken on the enforceability of antiassignment clauses in ERISA-governed plans, a majority of circuits and district courts in the Third
Circuit have given effect to anti-assignment provisions and denied standing. See, e.g., Physicians
Mtdtispecialty Grp. v. Health Care Plan of Horton Homes, Inc., 371 F.3d 1291, 1295—96 (11th
Cir. 2004) (“[A]n unambiguous anti-assignment provision in an ERISA-governed welfare benefit
plan is valid and enforceable.”); LeTottrneau Lifelike Orthotics & Prosthetics, Inc. v. Wa/-Mart
Stores, Inc., 29$ F.3d 348 (5th Cir. 2002) (reversing district court and holding that anti-assignment
clause in ERISA plan was enforceable); City ofHope Nat ‘1 Med. Ctr. v. HeatthPttts Inc., 156 F.3d
223, 229 (1st Cir. 199$) (“[W]e 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. B/tie Cross & Bitte Shield of Kan., Inc., 49 F.3d 1460,
1464—65 (10th Cir. 1995) (“ERISA’s silence on the issue of assignability of insurance benefits
leaves the matter to the agreement of the contracting parties.”); Davidowitz v. Delta Dental Plan,
Inc., 946 F.2d 1476, 1481 (9th Cir. 1991) (“The court concludes that ERISA welfare plan payments
are not assignable in the face of an express non-assignment clause in the plan.”); Advanced
Orthopedics & Sports Med.
B/tie Cross B/tie Shield of Mass.. No. 14-7280 (FLW), 2015 U.S.
Dist. LEXIS 93855, at *9 (D.N.J. July 20, 2015) (“[C]ourts routinely enforce anti-assignment
clauses contained in ERISA-govemed welfare plans.”); Prof’l Orthopedic Assocs., PA v. arefirst
BttieCross BltieShield, No. 14-4486 (MAS), 2015 U.S. Dist. LEXIS 84996, at *10 (D.N.J. June
30, 2015) (“[T]he majority of circuits addressing the [anti-assignment enforceability] question as
well as other courts in this district have considered the issue and held such provisions to be
enforceable.”); Specialty Sttrgeiy of Middletown v. Aetna, No. 12-4429 (JLL), 2014 U.S. Dist.
LEXIS 85371, at *10 (D.N.J. June 24, 2014) (“Courts in the District of New Jersey have thus far
held that unambiguous anti-assignment provisions in group healthcare plans are valid and
In light of the foregoing, the Court has carefully reviewed the anti-assignment provision
and finds it to be clear and unambiguous. See Cohen v. Horizon B/tie Cross Elite Shield ofN.i,
No. 15-4525 (JLL), 2015 U.S. Dist. LEXIS 140344, at *11 (D.N.J. Oct. 15, 2015) (citing Somerset
Orthopedic Assocs., F.A. v. Horizon B/tie Cross & B/tie Shield of N.i, 345 N.J. Super. 410, 422—
23 (App. Div. 2001)). In fact, nearly identical anti-assignment language was recently upheld as
enforceable in this district against a purported assignee seeking recovery from a health plan based
on alleged underpayments. See Kaval Orthopaedic Ctr., P.C. v. Empire Bhie Cross B/tie Shield,
No. 16-9059 (CCC), 2017 U.S. Dist. LEXIS 153763, at *7 (D.N.J. Sep. 21, 2017) (“The coverage
and any benefits under the Plan are not assignable by any Member without the written consent of
Therefore, the Court concludes that the anti-assignment clause is valid and
enforceable against Plaintiff
Waiver of Anti-Assignment Provision
Plaintiff contends in its opposition that Defendant waived enforceability of the antiassignment clause through its direct course of dealing with Plaintiff. (ECF No. 4 at 8). Relying
on New Jersey Law, Plaintiff states that an anti-assignment clause
instrument, a course of
be waived by a written
dealing, or even passive conduct, i.e., taking no action to invalidate the
assignment vis-a-vis the assignee.” (Id.
Garden State Bldgs., L.P. v. first fid. Bank,
NA., 305 N.J. Super. 510, 524 (App. Div. 1997)). However, Plaintiff fails to acknowledge the
overarching pleading requirements under Supreme Court precedent. See Iqbal, 556 U.S. at 129;
Twombly, 550 U.S. at 570. As this Court has previously held:
Even assuming that a party such as [Defendant] may waive an antiassignment clause, the Complaint is entirely devoid of specific
allegations of fact to support such a claim. Instead, the Complaint
merely alleges in summary fashion that Plaintiffs submitted this claim
to [Defendant] and that [Defendant] has failed to pay despite Plaintiffs
filing an appeal. Again, this type of conclusory pleading is prohibited
under Iqbal and Twombly, and Plaintiffs cannot supplement the
Complaint through their opposition brief.
C’ohen, 2015 U.S. Dist. LEXIS 140344 at *11_12 (citing Pa. cx rd. Zimmerman v. Pepsico, Inc.,
$36 F.2d 173, 181 (3d Cir. 198$)).
The Court remains consistent in its holding.
Similar to Cohen, Plaintiffs Complaint
merely asserts that Plaintiff submitted a claim to Defendant and that Defendant failed to remit a
proper payment despite Plaintiffs appeal. (Compi.
7—I 1). Therefore, the Court finds that it
lacks any allegations of fact sufficient to support a claim of waiver against Defendant. See At!.
Spinal Care v. Shield, No.13-3159 (JLL), 2013 U.S. Dist. LEXIS 93251, at *14 (D.N.J. July 1,
2013) (stating that a single communication between Plaintiff and Defendant did not rise to the
level of establishing a “course of dealing.”) (citing Premier Health Ctr., P. C. v. United Health
Grp., No. 11-425 (ES), 2012 U.S. Dist. LEXIS 44878, at *28 (D.N.J. Mar. 30, 2012)). Based on
this reasoning, the Court concludes that Defendant has not waived the anti-assignment clause and,
therefore, Plaintiff does not have standing to bring this case.
F or the aforementioned reasons, Defendant’s Motion to Dismiss Plaintiffs Complaint is
hereby granted. An appropriate Order accompanies this Opinion.
United States District Court
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