UNIVERSITY SPINE CENTER v. ANTHEM BLUE CROSS LIFE AND HEALTH INSURANCE CO.

Filing 11

LETTER OPINION. Signed by Judge Susan D. Wigenton on 2/2/18. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

CHAMBERS OF

MARTIN LUTHER KING COURTHOUSE
50 WALNUT ST.
NEWARK, NJ 07101
973-645-5903

SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE

February 2, 2018

Daniel C. Nowak, Esq.
Callagy Law, P.C.
650 From Road
Suite 565
Paramus, NJ 07652
Counsel for Plaintiff
Amanda L. Genovese, Esq.
Troutman Sanders LLP
875 Third Avenue
New York, NY 10022
Counsel for Defendant

LETTER OPINION FILED WITH THE CLERK OF THE COURT
Re:

University Spine Ctr. v. Anthem Blue Cross Life & Health Ins. Co.
Civil Action No. 17-8711 (SDW) (LDW)

Counsel:
Before this Court is Defendant Anthem Blue Cross Life and Health Insurance Company’s
(“Defendant”) Motion to Dismiss Plaintiff University Spine Center’s (“Plaintiff”) Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(1) and (6). This Court having considered the
parties’ submissions, and having reached its decision without oral argument pursuant to Federal
Rule of Civil Procedure 78, for the reasons discussed below, GRANTS Defendant’s motion in
part and DENIES Defendant’s motion in part.
BACKGROUND & PROCEDURAL HISTORY
On or about August 31, 2015, Plaintiff, a healthcare provider located in Passaic County,
New Jersey, provided medical services to Clinton L. (“Patient”). (Compl. ¶¶ 4-5.) Plaintiff alleges
it obtained an assignment of benefits from Patient in order to bring a claim under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002, et seq. (Id. ¶ 6.) Plaintiff
then demanded reimbursement from Defendant in the amount of $301,568.00, of which Defendant
paid $9,771.48. (Id. ¶¶ 7-8.) Plaintiff alleges that it “engaged in the applicable administrative

appeals process maintained by Defendant” but Defendant denied the appeal and refused to make
additional payment. (Id. ¶¶ 9-11.) On August 31, 2017, Plaintiff filed a three-count Complaint in
the Superior Court of New Jersey, Law Division, Passaic County, alleging breach of contract,
failure to make payments pursuant to Patient’s Plan, and breach of fiduciary duty. 1 (Dkt. No. 11.) Defendant removed to this Court on October 19, 2017 and filed the instant motion to dismiss
on December 4, 2017, alleging Plaintiff lacks standing to bring suit and has failed to state claims
upon which relief can be granted. (Dkt. Nos. 1, 7.) Plaintiff filed its opposition on January 22,
2018 and Defendant replied on January 29, 2018. (Dkt. Nos. 9, 10.) 2

DISCUSSION
A.

The Federal Rules of Civil Procedure provide that a complaint must be dismissed if the
district court lacks subject matter jurisdiction. FED. R. CIV. P. 12(b)(1). “Ordinarily, Rule
12(b)(1) governs motions to dismiss for lack of standing, as standing is a jurisdictional matter.”
N.J. Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 372 n.3 (3d Cir. 2015). However, in a case
where a party claims derivative standing to sue under ERISA § 502(a), a motion to dismiss for
lack of standing is “properly filed under Rule 12(b)(6).” Id. Therefore, the standard of review
for both of Plaintiff’s Rule 12(b) motions is the same.
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint
must include “a short and plain statement of the claim showing that the pleader is entitled to relief.”
FED. R. CIV. P. 8(a)(2). This Rule “requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do. Factual allegations must be enough to
raise a right to relief above the speculative level[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007) (internal citations omitted); see also Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d
Cir. 2008) (stating that Rule 8 “requires a ‘showing,’ rather than a blanket assertion, of an
entitlement to relief”). In considering a Motion to Dismiss under Rule 12(b)(6), the Court must
“accept all factual allegations as true, construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may
be entitled to relief.” Phillips, 515 F.3d at 231 (external citation omitted). However, “the tenet
that a court must accept as true all of the allegations contained in a complaint is inapplicable to
legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also
Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (discussing the Iqbal standard).
B.
Defendant first argues that Plaintiff lacks standing to bring a claim. ERISA Section 502(a)
permits claims brought by a “participant” or “beneficiary.” 29 U.S.C. § 1132(a) (1)-(4). A
“participant” is defined as “any employee or former employee of an employer, or any member or
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Plaintiff has voluntarily dismissed Count One, therefore, only Counts Two and Three remain in dispute.
In its moving papers, Defendant asks that, to the extent Plaintiff’s designation of trial counsel is “deemed a demand
for a jury trial,” such a demand be stricken. See Def.’s Br. at 18. This Court does not equate the designation of trial
counsel with a demand for a jury. In addition, the docket clearly indicates that no jury demand has been made.
Defendant should refrain from making such requests in the future unless warranted by the pleadings.

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former member of an employee organization, who is or may become eligible to receive a benefit
of any type from an employee benefit plan which covers employees of such employer or members
of such organization, or whose beneficiaries may be eligible to receive any such benefit.” 29 U.S.C.
§ 1002(7). A “beneficiary” is defined as “a person designated by a participant, or by the terms of
an employee benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. §
1002(8). Here, it is uncontested that Plaintiff is neither a participant nor a beneficiary as defined
by ERISA. Rather, Plaintiff asserts it has derivative standing by virtue of an assignment of
Patient’s benefits to Plaintiff. (Compl. ¶ 6.)
“Healthcare providers that are neither participants nor beneficiaries in their own right may
obtain derivative standing by assignment from a plan participant or beneficiary.” N.J. Brain &
Spine, 801 F.3d at 372. Here, Defendant challenges the validity of Plaintiff’s alleged assignment
as “suspect” because it is dated four days prior to the date of Patient’s medical services and “only
vaguely alleges that Plaintiff received ‘an assignment of benefits.’” (Dkt. No. 1-1 Ex. B; Def.’s
Br. at 7-8.) However, the assignment was dated within days of the medical procedure at issue, it
identifies “Blue Cross” as Patient’s insurance provider, and is signed by Patient. (Dkt. No. 1-1
Ex. B.) Although the alleged assignment does not specify the precise benefits assigned, it is
sufficient to grant Plaintiff standing to assert claims under ERISA 502(a) at this stage in the
proceedings.
C.
Turning to the substance of Counts Two and Three, Defendant first argues that Plaintiff
has failed to show “any particular provision within any health benefits plan that was allegedly
violated by” Defendant. (Def.’s Br. at 14.) Plaintiff, however, has pled that it is “entitled to
payment of health benefits from Defendant pursuant to a health plan administered by Defendant”
and that the dispute at issue arose from a failure to fully reimburse Plaintiff for services rendered
to Patient on August 31, 2015. (Compl. ¶¶ 16, 21, 26-27.) These facts provide Defendant enough
information to understand the claims against it and to defend against them at this time. As a result,
Defendant’s Motion to Dismiss Count Two will be denied.
Defendant next asserts that Plaintiff may not simultaneously bring a claim pursuant to 29
U.S.C. § 1132(a)(3) for breach of fiduciary duty (Count Three) and a claim to enforce benefits
pursuant to 29 U.S.C. § 1132(a)(1)(B) (Count Two). Defendant seeks dismissal of Count Three
as duplicative, because Count Three “does not state a claim for equitable relief separate and apart
from the monetary relief requested in Count Two.” (Def.’s Br. at 16-18.) This Court disagrees.
Not only does Plaintiff request “such other and further relief as the Court may deem just and
equitable” in Count Three, this Court finds that “[i]t is too early in these proceedings to decide
whether Plaintiff is contractually entitled to benefits under the Plan. If Plaintiff is not entitled to
benefits under the Plan, Plaintiff might still be entitled to ‘other appropriate equitable relief’ to
remedy any breaches of fiduciary duty by Defendants.” Tannenbaum v. UNUM Life Ins. Co. of
Am., Civ. No. A. 03-1410, 2004 WL 1084658, at *4 (E.D. Pa. Feb. 27, 2004); see also Lipstein v.
UnitedHealth Grp., 296 F.R.D. 279, 298 (D.N.J. 2013); DeVito v. Aetna, Inc., 536 F. Supp. 2d
523, 533-34 (D.N.J. 2008). Therefore, this Court will deny Defendant’s Motion to Dismiss
Count Three. If applicable, Defendant may raise this issue again on summary judgment after
factual discovery regarding available relief is concluded.

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CONCLUSION
Defendant’s Motion to Dismiss Count One of the Complaint is GRANTED.
Defendant’s Motion to Dismiss Counts Two and Three of the Complaint is DENIED. An
appropriate order follows.
___/s/ Susan D. Wigenton_____
SUSAN D. WIGENTON, U.S.D.J.

Orig: Clerk
cc:
Parties
Leda D. Wettre, U.S.M.J.

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