NEW JERSEY SPINE AND ORTHOPEDICS, LLC v. BAE SYSTEMS INC.

Filing 20

OPINION AND ORDER granting Deft BAE Systems, PLC's 12 Motion to Dismiss for Lack of Jurisdiction; The Complaint is Dismissed Without Prejudice and the Pltf is granted 30 days from the date of entry of this Order to file an amended complaint that cures the pleading deficiencies. Signed by Judge Claire C. Cecchi on 1/29/2020. (th, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No.: 2:19-cv-10735

NEW JERSEY SPiNE AND ORTHOPEDICS,
LLC, attorney in fact of P.M.,
Plaintiff,

OPINION & ORDER

V.

BAE SYSTEMS, INC.,
Defendant.
CECCHI, District Judge.
I.

INTRODUCTION

This matter comes before the Court on the motion of Defendant Bae Systems, Inc.
(“Defendant”) to dismiss Plaintiff New Jersey Spine and Orthopedics, LCC (“Plaintiff’)
complaint pursuant to Fed. R. Civ. P. 12(b)(6). ECF No. 12. The Court has carefully considered
the submissions from each party. Pursuant to Fed. R. Civ. P. 78(b), no oral argument was heard.
For the reasons set forth below, Defendant’s motion to dismiss is GRANTED.
II.

BACKGROUND

On November 15, 2017, Plaintiff performed “surgical services for lumbar spine surgery”
on P.M., who is insured by Defendant. ECF No. 1-1

¶J 6—7.

services provided to P.M. on November 15, 2017. Id. at

Plaintiff filed for reimbursement for

¶ 8.

From November 30, 2017 until

February 8, 2018 Plaintiff was involved in the administrative appeals process. Id. at
Defendant allowed reimbursement totaling $3,926.80. Id. at

¶ 10.

¶ 9.

On April 2, 2019, Plaintiff

brought the current action to enforce the plan benefit in the amount of $192,525.20 pursuant to
19 U.S.C.

§

1132(a)(1)(b). See ECF No. 1. On April 23, 2019 Defendant removed this action to

Federal Court. Id. On June 19, 2019 Defendant filed a motion to dismiss, which is now before
the Court. ECF No. 12. Plaintiff opposed. ECF No. 15. Defendant replied. ECF No. 19.

III.

LEGAL STANDARD

“Pursuant to Federal Rule of Civil Procedure 12(b)(1), the Court must dismiss a
complaint if it lacks subject matter jurisdiction.” Univ. Spine Ctr. v. Aetna, Inc., No. 17-13654,
201$ WL 1757027, at *1 (D.N.J. Apr. 12, 2018), appeal filed, No. 18-1921 (3d Cir. Apr. 25,
2018). “Ordinarily, Rule 12(b)(1) governs motions to dismiss for lack of standing, as standing is
a jurisdictional matter.” N. Jersey Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 371 n.3 (3d
Cir. 2015). “However, when statutory limitations to sue are non-jurisdictional, as is the case
where a party claims derivative standing to sue under ERISA

§

5 02(a), a motion to dismiss

challenging such standing is ‘properly filed under Rule 12(b)(6).” Univ. Spine Ctr., 2018 WL
1757027, at *1 (quoting N. Jersey Brain, 801 F.3d at 371 n.3). “Regardless, ‘a motion for lack
of statutory standing is effectively the same whether it comes under Rule 12(b)(1) or 12(b)(6).”
Id. (quoting N. Jersey Brain, $01 F.3d at 371 n.3).
“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.” j (quoting FOCUS v.
Allegheny Cty. Court of Common Pleas, 75 F.3d 834, 838 (3d Cir. 1996)). “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
of Point Pleasant Beach, 322 F.3d 293, 296 (3d Cir. 2003).
IV.

DISCUSSION

“Under

§

502(a) of ERISA, ‘a participant or beneficiary’ may bring a civil action to, inter

alia, ‘recover benefits due to him under the terms of his plan, to enforce his rights under the

2

terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” Univ.
Spine Ctr., 2018 WL 1757027, at *2 (quoting 29 U.S.C.

§

1132(a)). “Accordingly, standing to

sue under ERISA is ‘limited to participants and beneficiaries.” j (quoting Pascack Valley
Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 400-01 (3d Cir.
2004)). “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.” j
“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. Jersey Brain, 801
F.3d at 372. In a recent Third Circuit decision, the court held that “anti-assignment clauses in
ERISA-govemed health insurance plans as a general matter are enforceable.” Am. Orthopedic &
Sports Med. v. Independence Blue Cross Blue Shield, 890 F.3d 445, 453 (3d Cir. 201$). In fact,
“a majority of circuits, as well as courts in the Third Circuit, have given effect to anti-assignment
provisions such as the one in this case and denied standing.” Univ. Spine Ctr., 2018 WL
1757027, at *3 (citing cases).
Here, there is an anti-assignment provision and therefore, Plaintiff alleges standing based
on a power of attorney executed by P.M. naming Plaintiff as its true and lawful Attorney in Fact.
ECF No. 1-1

¶ 15.

There is a “general prohibition on a litigant’s raising another person’s legal

rights.” Lexmark Int’l Inc. v. Static Control Components, Inc., 572 U.S. 118, 126 (2014)
(citation omitted). Granting power of attorney is not an assignment and “does not enable the
grantee to bring suit in his own name.” Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106
F.3d 11, 12—18 (2d. Cir. 1997). Granting a power of attorney “does not transfer an ownership

3

interest in the claim.” Am. Orthopedic & Sports Med., 890 F.3d at 455 (quoting W.R. Huff Asset
Mgmt. Co. v. Deloitte & Touche LLP, 549 F.3d 100, 100 (2d Cir. 200$)).
The Complaint identifies New Jersey Spine and Orthopedics, LLC as the Plaintiff, not
PM, the patient and beneficiary of the benefit plan. See ECF No. 1-1. An attorney in fact cannot
litigate on their own behalf and for their own benefit. Further, the Complaint seeks to enforce
Plaintiffs rights, rather than the rights of P.M. and there is no allegation that P.M. has suffered
any harm. Id. Any lawsuit brought under an assignment of benefits, is barred by the antiassignment provision. Therefore, Plaintiff lacks standing upon which to bring its ERISA claims.
V.

CONCLUSION

IT IS THEREFORE on this

day of January 2020,

ORDERED that Defendant’s motion to dismiss (ECF No. 12) is GRANTED; and it is
further;
ORDERED that the Complaint is DISMISSED WITHOUT PREJUDICE; and it is
further;
ORDERED that Plaintiff is hereby granted thirty (30) days from the date of entry of this
Order in which to file an amended complaint that cures the pleading deficiencies as set forth by
the Court.
SO ORDERED.

DATED:

CLAIRE C. CECCHI, U.S.D.J.

,

4