The Plastic Surgery Group, P.C. v. United Healthcare Insurance Company of New York, Inc. et al

Filing 24

ORDER granting 8 Motion to Dismiss for Failure to State a Claim; denying 15 Motion to Remand. Because plaintiff's claims against United under New York law are completely preempted by ERISA, plaintiff's motion to remand this action is denied. United's motion to dismiss is granted because no claim lies against United, which is not named as the plan administrator. Furthermore, ERISA § 502(a)(1)(B) would provide adequate relief to plaintiff if it sued the proper party, and therefore ERISA sections 502(a)(3) and 503 do not provide alternative avenues of relief against United. Plaintiff's motion to amend the complaint to add the proper party is granted, but the Clerk of the Court shall remove United from the caption of the amended complaint. Plaintiff shall file the amended complaint within 30 days of the date of this order. SO ORDERED. Ordered by Judge Joseph F. Bianco on 12/11/2014. (Moe, Alison)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 14-cv-1798 (JFB)(ARL)
_____________________

THE PLASTIC SURGERY GROUP, P.C.,
Plaintiff,
VERSUS

UNITED HEALTHCARE INSURANCE CO. OF NEW YORK, INC., ET AL.,
Defendants.
___________________
MEMORANDUM AND ORDER
December 11, 2014
___________________

Plaintiff, a medical practice specializing
in plastic surgery, filed this lawsuit in state
court, alleging that defendants (“United”)
breached a contract to pay health insurance
benefits assigned to plaintiff by its patients.
The benefits due for one patient, known as
Jane Doe, form the primary dispute in this
lawsuit. When Jane Doe was treated by
plaintiff, she was insured by defendants
through the “Group Life and Health Benefits
Plan” (“the Plan”) sponsored and
administered by her employer, American
Airlines.

Retirement Income Security Act (“ERISA”),
29 U.S.C. § 1001 et seq. This case does not
involve merely the amount of payment
because the complaint and the Plan
documents reveal that any shortfall in
benefits is due to a dispute over the medical
necessity of Jane Doe’s treatment, which
could only be resolved by interpreting the
Plan. Furthermore, plaintiff has identified
no independent legal obligation implicated
by United’s withholding of payments to
plaintiff, which is essential to amount-ofpayment claims.
Therefore, plaintiff’s
claims are completely preempted by ERISA
and plaintiff’s motion to remand is denied.

United removed this action and now
moves to dismiss it, while plaintiff moves to
remand it. Although plaintiff styled its
causes of action under New York law, the
allegations in the complaint make clear that
plaintiff asserts a right to be paid benefits
under the Plan, which raises a colorable
federal claim under the Employee

Furthermore, for the reasons discussed
herein, United’s motion to dismiss is granted
because no claim lies against United, who is
not named as the plan administrator. ERISA
Sections 502(a)(3) and 503 do not provide
alternative avenues of relief against United,
because § 502(a)(1)(B) would provide
adequate relief to plaintiff if it sued the

JOSEPH F. BIANCO, District Judge:

B. The Plan

proper party. Although the Court grants
plaintiff’s request to amend the complaint to
include the proper party, all claims against
United are dismissed.

In 2011, when she received plaintiff’s
services, Jane Doe was enrolled in the
“Group Life and Health Benefits Plan for
Employees
of
Participating
AMR
Corporation Subsidiaries for employees of
American Airlines” (“the Plan”). (Knoblach
Decl. ¶ 3.) Relevant portions of the Plan are
quoted and cited herein. In short, it entitled
Jane Doe to coverage for “medically
necessary” treatment, and authorized United
to recoup overpayments by withholding
future payments to Jane Doe or her provider.

I. BACKGROUND
A. Factual Background
The following facts are taken from the
complaint. The Court assumes these facts to
be true for the purpose of deciding these
motions.
Plaintiff is a medical practice
specializing in plastic surgery. (Compl. ¶
1.) On April 15, 2011, and November 15,
2011, plaintiff provided services to Jane
Doe, who received health care benefits
coverage through United and assigned her
benefits to plaintiff. (Id. at ¶¶ 1, 25-26)
Plaintiff alleges that it received approval
from United before it treated Jane Doe on
both days, and that United paid plaintiff
$27,747.00 for those services. (Id. ¶¶ 2, 4.)

C. Procedural History
Plaintiff filed the complaint in this action
on February 6, 2014, in the Supreme Court
of the State of New York, County of Nassau.
The complaint asserts four causes of action
under New York law: the first for a
declaratory judgment, the second for
injunctive relief, the third for unjust
enrichment, and the fourth for breach of
contract. Defendants removed the entire
action to this Court on March 19, 2014.

Despite having paid plaintiff, United
later determined that it overpaid for the
services provided to Jane Doe, and
demanded that plaintiff return most of the
funds in July 2012. (Id. ¶¶ 32-33.) Plaintiff
alleges that it appealed the repayment
demand, and that United acknowledged it
was an error. (Id. ¶¶ 34-37.) However,
approximately one year later, in August
2013,
United
began
withholding
reimbursements due for plaintiff’s treatment
of other patients, who plaintiff refers to as
Patients A, B, C, and D (“Patients A-D”).
(Id. ¶¶ 6, 39.) According to plaintiff,
United’s sole reason for withholding these
payments was its determination that it had
overpaid for the services plaintiff provided
to Jane Doe. (Id. ¶¶ 39-45.)

On May 16, 2014, defendants filed a
motion to dismiss the complaint in its
entirety, pursuant to Federal Rule of Civil
Procedure 12(b)(6). On June 23, 2014,
plaintiff opposed the motion to dismiss and
filed a cross-motion to remand this action to
state court.
Defendants responded in
opposition to the remand motion and replied
in further support of their motion to dismiss
on July 8, 2014, and plaintiff filed a reply in
further support of its remand motion on July
17, 2014. The Court heard oral argument on
July 29, 2014.

2

II. PLAINTIFF’S MOTION TO REMAND

1358 (SAS), M 21-88, 2006 WL 1004725, at
*2 (S.D.N.Y. Apr. 17, 2006) (quoting R.G.
Barry Corp. v. Mushroom Makers, Inc., 612
F.2d 651, 655 (2d Cir. 1979)). Further, “[i]n
light of the congressional intent to restrict
federal court jurisdiction, as well as the
importance of preserving the independence
of state governments, federal courts construe
the removal statute narrowly, resolving any
doubts against removability.”
Lupo v.
Human Affairs Int’l, Inc., 28 F.3d 269, 274
(2d Cir. 1994) (citing Shamrock Oil & Gas
Corp. v. Sheets, 313 U.S. 100, 108 (1941));
accord Fed. Ins. Co. v. Tyco Int’l Ltd., 422
F. Supp. 2d 357, 367 (S.D.N.Y. 2006).

A. Legal Standard
Generally, a case may be removed from
state court to federal court “only if it could
have originally been commenced in federal
court on either the basis of federal question
jurisdiction or diversity jurisdiction.”
Citibank, N.A. v. Swiatkoski, 395 F. Supp.
2d 5, 8 (E.D.N.Y. 2005) (citing 28 U.S.C. §
1441(a)); see also 28 U.S.C. § 1441. If a
federal district court determines that it lacks
subject matter jurisdiction over a case
removed from state court, the case must be
remanded. 28 U.S.C. § 1447(c). “When a
party challenges the removal of an action
from state court, the burden falls on the
removing party ‘to establish its right to a
federal forum by competent proof.’”1 In re
Methyl Tertiary Butyl Ether (“MTBE”)
Prods. Liab. Litig., No. 1:00-1898, MDL

In short, United carries the burden to
show that removal was proper because
plaintiff’s claims raise a federal question,
which would provide subject-matter
jurisdiction to this Court.
B. ERISA Preemption

1

Competent proof of federal jurisdiction in an
ERISA case includes “the various plan documents.”
Aetna Health Inc. v. Davila, 542 U.S. 200, 211
(2004). Therefore, the Court may consider the text of
the Plan’s “Employee Benefits Guides,” attached as
exhibits by defendants, which “contain[] the legal
plan documents and the summary plan descriptions
(SPDs)” for Jane Doe’s plan. (Knoblach Decl. Exs.
F-1 at 1, F-2 at 5.) Whether SPDs—which convey
the contents of the Plan “in a manner calculated to be
understood by the average plan participant,” 29
U.S.C. § 1022(a)—are themselves legally
enforceable plan documents has been the subject of
some debate, and the Supreme Court recently held
that they are not automatically enforceable. See
CIGNA Corp., et al. v. Amara, -- U.S. --, 131 S.Ct.
1866, 1877-78 (2011). Even after Amara, however,
SPDs may still be incorporated into a plan explicitly.
See Eugene S. v. Horizon Blue Cross Blue Shield of
N.J., 663 F.3d 1124, 1131 (10th Cir. 2011) (“[A]n
insurer is not entitled to deferential review merely
because it claims the SPD is integrated into the Plan.
Rather, the insurer must demonstrate that the SPD is
part of the Plan, for example, by the SPD clearly
stating on its face that it is part of the Plan.”). Here,
neither party disputes that the “Employee Benefits
Guides,” which state that they contain both “plan
documents” and SPDs, are enforceable.

Defendant argues that removal was
proper because ERISA completely preempts
plaintiff’s claims. Although “[f]ederal preemption is ordinarily a federal defense to the
plaintiff’s suit . . . . [which] does not appear
on the face of a well-pleaded complaint,
and, therefore, does not authorize removal to
federal court,” a corollary to this rule “is that
Congress may so completely pre-empt a
particular area that any civil complaint
raising this select group of claims is
necessarily federal in character.” Metro.
Life Ins. Co. v. Taylor, 481 U.S. 58, 63
(1987). In other words, if plaintiff’s statelaw claims are completely preempted, they
are converted into federal claims for the
purpose of the well-pleaded complaint rule.
Aetna Health Inc. v. Davila, 542 U.S. 200,
209 (2004).
The Supreme Court has held that
ERISA’s
civil
enforcement
scheme
completely preempts state law causes of
3

The Supreme Court has explained that
“the detailed provisions of § 502(a) set forth
a comprehensive civil enforcement scheme
that represents a careful balancing of the
need for prompt and fair claims settlement
procedures against the public interest in
encouraging the formation of employee
benefit plans.” Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41, 54 (1987). “[T]he
inclusion of certain remedies and the
exclusion of others under [§ 502’s] federal
scheme . . . ‘provide[s] strong evidence that
Congress did not intend to authorize other
remedies that it simply forgot to incorporate
expressly.’” Id. (quoting Mass. Mut. Life
Ins. Co. v. Russell, 473 U.S. 134, 146
(1985)). Likewise, the Supreme Court has
acknowledged that “the federal scheme
would be completely undermined if ERISAplan participants and beneficiaries were free
to obtain remedies under state law that
Congress rejected in ERISA.” Id.

action within its scope, because Congress’s
purpose in enacting ERISA was “to provide
a uniform regulatory regime over employee
benefit plans,” which would “ensure that
employee benefit plan regulation would be
exclusively a federal concern.” Davila, 542
U.S. at 208 (internal quotation marks and
citations omitted); see also N.Y. State Conf.
of Blue Cross & Blue Shield Plans v.
Travelers Ins. Co., 514 U.S. 645, 656-57
(1995) (“Congress intended ‘to ensure that
plans and plan sponsors would be subject to
a uniform body of benefits law; the goal was
to minimize the administrative and financial
burden of complying with conflicting
directives among States or between States
and the Federal Government . . . , [and to
prevent] the potential for conflict in
substantive law . . . requiring the tailoring of
plans and employer conduct to the
peculiarities of the law of each
jurisdiction.’” (alterations in original)
(quoting Ingersoll-Rand Co. v. McClendon,
498 U.S. 133, 142 (1990))).

For this reason, where a plaintiff brings a
state law claim that is “within the scope” of
ERISA § 502(a)(1)(B), ERISA’s complete
preemption power will take effect, and state
law claims may be properly removed. See
Davila, 542 U.S. at 209. The effect of this
preemptive power cannot be understated: it
“prevents plaintiffs from ‘avoid[ing]
removal’ to federal court ‘by declining to
plead necessary federal questions.’” Arditi v.
Lighthouse Int’l, 676 F.3d 294, 298-99 (2d
Cir. 2012) (quoting Romano v. Kazacos, 609
F.3d 512, 519 (2d Cir. 2010)) (alteration in
original).

To provide such uniformity, the statute
contains broad preemption provisions,
which safeguard the exclusive federal
domain of employee benefit plan regulation.
See Davila, 542 U.S. at 208; see also Alessi
v. Raybestos-Manhattan, Inc., 451 U.S. 504,
523 (1981). One such source of preemption
under ERISA is § 502(a)(1)(B), which
serves as ERISA’s main enforcement tool in
ensuring a uniform federal scheme:
A civil action may be brought—(1)
by a participant or beneficiary—. . .
(B) to 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.

The test for assessing whether a claim is
“within the scope of” ERISA §
502(a)(1)(B), and therefore completely
preempted, consists of two parts:
claims are completely preempted
by ERISA if they are (i) brought by
“an individual [who] at some point

29 U.S.C. § 1132(a)(1)(B).
4

considers “whether the actual claim” at
issue constitutes a “colorable claim” for
benefits under § 502(a)(1)(B). Montefiore,
642 F.3d at 328 (emphasis in original); see
also Josephson v. United Healthcare Corp.,
No. 11–CV–3665 (JS)(ETB), 2012 WL
4511365, at *3 (E.D.N.Y. Sept. 28, 2012)
(acknowledging the Second Circuit’s
interpretation of Davila’s two-pronged test
as consisting of two inquiries under the first
prong).

in time, could have brought his
claim
under
ERISA
§
502(a)(1)(B),” and (ii) under
circumstances in which “there is no
other independent legal duty that is
implicated by a defendant’s
actions.”
Montefiore Med. Ctr. v. Teamsters Local
272, 642 F.3d 321, 328 (2d Cir. 2011)
(quoting Davila, 542 U.S. at 210); see also
Davila, 542 U.S. at 210 (“[I]f an individual
. . . could have brought his claim under
ERISA § 502(a)(1)(B), and where there is
no other independent legal duty that is
implicated by defendant’s actions, then the
individual’s cause of action is completely
pre-empted by ERISA § 502(a)(1)(B).”);
Metro. Life, 481 U.S. at 65-66 (noting that
section 502(a)(1)(B) of ERISA contains
“extraordinary pre-emptive power” that
“converts an ordinary state common law
complaint into one stating a federal claim,”
making “causes of action within the scope of
. . . § 502(a) . . . removable to federal
court”).

a. Type of Party
As previously set forth, § 502(a)(1)(B)
clearly provides that a civil action may be
brought (1) “by a participant or beneficiary”
of (2) an ERISA employee benefit plan. 29
U.S.C. § 1132(a)(1)(B). It is not disputed
that the Plan is an employee welfare benefit
plan under ERISA.
See 29 U.S.C. §
2
1002(1). Although plaintiff is not a direct
participant in or beneficiary of the plan, “[a]
healthcare provider may stand in place of
the beneficiary to pursue an ERISA claim if
the beneficiary has assigned his or her rights
to the provider in exchange for medical
care.” Neuroaxis Neurosurgical Assocs., PC
v. Cigna Healthcare of N.Y., Inc., No. 11
Civ. 8517, 2012 WL 4840807, at *3
(S.D.N.Y. Sept. 24, 2012). Plaintiff has
alleged that each of the patients in question
assigned their benefits to plaintiff (Compl.
¶¶ 26, 41-44), and accordingly, plaintiff is
the type of party who could bring an ERISA
claim.

Additionally, “[t]o avoid potential
confusion under the first prong of Davila,
[the Second Circuit] has further clarified that
the plaintiff must show that: (a) he is the
type of party who can bring a claim pursuant
to § 502(a)(1)(B) of ERISA; and (b) the
actual claim asserted can be construed as a
colorable claim for benefits pursuant to §
502(a)(1)(B).” Arditi, 676 F.3d at 299.
Where both of Davila’s factors are
satisfied—including the two sub-parts to
Davila’s first prong—ERISA will preempt
the state law claim. Id. (citing cases).

2

Section 3(1) of ERISA defines an employee welfare
benefit plan as “any plan, fund, or program which
was heretofore or is hereafter established or
maintained by an employer or by an employee
organization, or by both, to the extent that such plan,
fund, or program was established or is maintained for
the purpose of providing for its participants or their
beneficiaries . . . benefits.” 29 U.S.C. § 1002(1).

1. Davila Prong One
The Court first addresses whether
plaintiff is “the type of party that can bring a
claim” under § 502(a)(1)(B); it then
5

Arditi, 676 F.3d at 299 (quoting Montefiore,
642 F.3d at 328). As one court explained,

b. Colorable claim
The parties’ primary dispute is whether
plaintiff’s state claims are “colorable” under
ERISA, i.e., claims “to recover benefits due”
under the terms of the Plan. 29 U.S.C. §
1132(a)(1)(B). Both parties acknowledge
the distinction between claims concerning a
“right to payment” and claims involving an
“amount of payment”—in fact, plaintiff
suggests that “[t]he outcomes of both
United’s motion to dismiss and [plaintiff’s]
cross-motion to remand turn almost entirely
on whether [plaintiff’s] claims involve the
right to payment or the amount of payment
due.” (Pl. Mem. at 9.) While right-topayment claims “implicate coverage and
benefits established by the terms of the
ERISA benefit plan,” which may be brought
under § 502(a)(1)(B), amount-of-payment
claims are “typically construed as
independent contractual obligations between
the provider and . . . the benefit plan.”
Montefiore, 642 F.3d at 331. Plaintiff
argues that its claims relate to the amount of
payment because, even though United
withheld the payments, it acknowledged
plaintiff’s right to payment for services to
Patients A-D. In response, United argues
that plaintiff’s right to payment for services
to Jane Doe, rather than its right to payment
for Patients A-D, forms the basis of this
lawsuit, making all claims colorable under
ERISA.

“Right to payment” claims involve
challenges
to
benefits
determinations, depend on the
interpretation of plan language, and
often become an issue when
benefits have been denied. . . .
“Amount of payment” claims
involve the calculation and
execution
of
reimbursement
payments, depend on the extrinsic
sources used for the calculation,
and are commonly tied to the rate
schedules
and
arrangements
included in provider agreements.
Neuroaxis, 2012 WL 4840807, at *4.
Even viewing the complaint in a light
most favorable to plaintiff, it is clear that
this case concerns the right to payment
because the complaint alleges that United
withheld payment for Patients A-D based
solely on a dispute over Jane Doe’s
entitlement to benefits (Compl. ¶¶ 6, 39-45),
which could only be resolved by interpreting
the terms of the Plan. For example, the
complaint refers directly to a Plan term in
alleging that plaintiff was entitled to
payment for the services to Jane Doe
because they were “medically necessary”—a
standard imposed by the Plan. (Compl. ¶ 3;
Ex. F-2 to Knoblach Decl. at 59-60); cf.
Neuroaxis, 2012 WL 4840807, at *4 (“To
resolve this claim of underpayment, the
Court must look to the plan to determine (a)
what is ‘medical necessity’. . . . This is a
classic ‘right to payment’—not ‘amount of
payment’—determination.”).
Plaintiff
argues that United already determined the
medical necessity of its services to Jane Doe
by pre-approving them (Compl. ¶ 2), but any
pre-approval further demonstrates how
plaintiff’s claims “implicate coverage and
benefits,” Montefiore, 642 F.3d at 331,

The Court agrees with United. Courts in
this circuit have distinguished between
right-to-payment and amount-of-payment
cases by examining the degree to which “the
actual claims asserted seek enforcement of
specific provisions of the Plan, ‘implicate
coverage and benefits established by the
terms of the ERISA benefit plan,’ and ‘can
be construed as . . . colorable claim[s] for
benefits pursuant to § 502(a)(1)(B).’”

6

Therefore, there is no question that the Court
will need to interpret the language of the
Plan to resolve this dispute. Cf. Enigma
Mgmt. Corp. v. Multiplan, Inc., -- F. Supp.
2d --, No. 13-CV-5524 (ARR)(JO), 2014
WL 297269, at *7 (E.D.N.Y. Jan. 27, 2014)
(“Enigma argues that this case only
implicates the ‘amount of payment,’ . . . .
[because] United did not deny payment on
the disputed claims altogether, but instead
paid the claims in part, thereby
acknowledging that the medical services
were covered under the participants’ benefit
plans and that Enigma had a right to
payment. . . . Yet Enigma’s argument
mischaracterizes the dispute. In a literal
sense the parties disagree on the amount that
United is required to pay on Enigma’s
claims, but they only disagree because
United asserts that Enigma does not have the
right to full payment under the terms of the
ERISA plan. The court will need to interpret
the plan to determine what payments the
participants were required to make, whether
United could properly reduce Enigma’s
payments if it did not collect those
payments, and whether United could require
specific documentation as proof that Enigma
had collected those payments.”).

because the pre-approval process is itself
required by the Plan. (Ex. F-1 to Knoblach
Decl. at 55-56.)
Finally, plaintiff’s claims necessarily
“depend on the interpretation of plan
language,” Neuroaxis, 2012 WL 4840807, at
*4, because the Plan states that “[United] is
entitled to deduct the amount of any
overpayments from any future claims
payable to you or your service providers.”
(Ex. F-1 to Knoblach Decl. at 184.) The
Court would have to interpret this language
in order to determine whether United was
authorized to withhold payment for Patients
A-D based on the dispute over Jane Doe,
which confirms that these claims involve the
right to payment and are therefore colorable
ERISA claims under Davila’s first step. Cf.
Olchovy v. Michelin N. Am., Inc., No. 11CV-1733(ADS)(ETB), 2011 WL 4916891,
at *4 (E.D.N.Y. Sept. 30, 2011) (Report and
Recommendation)
(stating
Montefiore
“teaches that a dispute is a colorable claim
for benefits under ERISA when its
resolution depends on an interpretation of
the terms of an ERISA-governed employee
benefit plan; that is, when, in order to
determine whether the plaintiff is entitled to
relief, the court must look to the terms of the
employee benefit plan, itself”).

Furthermore, plaintiff’s argument that
this is an amount-of-payment case fails
because plaintiff has not identified how its
claims “implicate duties separate from the
ERISA plan.” Enigma, 2014 WL 297269, at
*5. “[P]rior cases . . . show that the ‘amount
of payment’ category is intended to have a
narrow definition.” Id. at *8. In order to fit
within that narrow category, plaintiff would
have to plausibly allege that the dispute over
the amount of payment stems from an
independent contractual obligation—such as
the manner of calculating, or the timeliness
of paying, the reimbursement amount—
which is often found outside of the ERISA
plan. See Montefiore, 642 F.3d 325 & n.2;

Plaintiff’s argument that its claims relate
only to the amount of payment attempts to
narrow the focus of these motions to the
services provided to Patients A-D, which no
one disputes qualified for Plan benefits.
That argument is unavailing, however, in
light of the complaint’s allegations
concerning the dispute over Jane Doe’s
benefits. In other words, even if it is
literally true that the “amount” due for the
Patient A-D services is in question, United’s
position is that the complaint and the Plan
documents establish that any amount due for
Patients A-D is dependent on the right to
payment for the Jane Doe services.
7

plaintiff’s allegations implicate Plan terms,
not an independent obligation.3

cf. Marin Gen. Hosp. v. Modesto & Empire
Traction Co., 581 F.3d 941, 943-44 (9th Cir.
2009) (holding that action against an ERISA
plan administrator based on his alleged oral
promise to pay for the majority of
beneficiary’s medical expenses was not a
“colorable claim” under § 502(a)(1)(B)
because dispute concerned the terms of the
alleged oral promise, not of the ERISA plan
itself); Olchovy, 2011 WL 4916891, at *5
(where plaintiffs alleged they were entitled
to family medical coverage pursuant to a
settlement agreement with defendants’
predecessor, this did not constitute a
“colorable claim” under ERISA because,
“notwithstanding what the Plan states, they
are entitled to . . . coverage . . . pursuant to a
separate court-ordered settlement”); cf.
Zummo v. Zummo, No. 11 CV 6256
(DRH)(WDW), 2012 WL 3113813, at *4
(E.D.N.Y. July 31, 2012) (because
plaintiff’s breach-of-contract claim required
an examination of an employee benefit
plan’s language and essentially sought
enforcement of a right to payment under the
terms of that plan, plaintiff’s “claim [fell]
squarely within the enforcement provision
of ERISA”).

Therefore, the Court concludes that
plaintiff’s claims do not relate solely to the
amount of payment, but instead to the right
to payment under the Plan—specifically,
plaintiff’s right to payment for the services it
provided to Jane Doe. United, as the
removing party, has met both facets of the
first prong of the Davila test.
2. Davila Prong Two
Under the second prong of Davila, “the
only question remaining is whether some
other, completely independent duty forms
another basis for legal action.” Montefiore,
3

The three cases on which plaintiff relies each
clearly involved an independent legal obligation
outside of the ERISA plan, which plaintiff has not
alleged here. See Somerset Orthopedic Assocs., P.A.
v. Aetna Life Ins. Co., No. 06-867 (MLC), 2007 WL
432986, at *1-2 (D.N.J. Feb. 2, 2007) (concluding
that claims involved amount of payment where
defendant insurance company acknowledged that the
case was about its failure to “pay correctly,” not a
failure to pay in accordance with the terms of the
ERISA plan, and defendant did not even seek to
attach the text of the plan as an exhibit); Horizon
Blue Cross Blue Shield of N.J. v. East Brunswick
Surgery Center, 623 F. Supp. 2d 568, 577 (D.N.J.
2009) (“Here, what is critical to Plaintiff’s claims is
not what benefits the plan participants were entitled
to under their ERISA plans but the relationship
between Plaintiff and its out-of-network and innetwork providers.”); UPMC Presby Shadyside v.
Whirley Indus., Inc., 1:05-CV-68, 2005 WL 2335337,
at *6 (W.D. Pa. Sept. 23, 2005) (“[T]he ‘crux’ of the
‘prompt payment discount’ dispute is whether
Defendants breached provisions of the MOU; there is
no contention that Defendants’ rights and obligations
relative to the prompt payment discount derive from
the ERISA plan.”); id. at *7 (“[A]s framed by the
complaint, the dispute is not whether, in fact,
UPMC’s charges were ‘reasonable and customary’
within the meaning of the Plan, but whether
Defendants had the right under the MOU to make
deductions from UPMC’s charges.”) (emphasis in
original).

As in Montefiore, the dispute in this
case—even
accepting
plaintiff’s
characterization of it as a dispute over the
payments for Patients A-D—does not
concern “obligations derived from a source
other than the Plan.” 642 F.3d at 331. The
source of the obligation alleged by plaintiff
is still the Plan, because plaintiff alleges that
United withheld payment due to a dispute
over the medical necessity of the Jane Doe
services, and because the Plan itself reveals
that United has the authority to withhold
payment in certain situations. Thus, unlike
the cases upon which plaintiff relies,

8

642 F.3d at 332. Plaintiff has not attempted
to identify another independent legal duty,
and the Court has not detected one based
upon the allegations in the complaint. In
fact, the complaint alleges that “[plaintiff] is
. . . an ‘out-of-network provider,’ meaning
[plaintiff] has no contractual relationship
with United.” (Compl. ¶ 21.)

the factual allegations set forth in the
complaint as true and draw all reasonable
inferences in favor of the plaintiff.” Volpe v.
Nassau County, 12-CV-2416 (JFB)(AKT),
2013 WL 28561, at *5 (E.D.N.Y. Jan. 3,
2013); see also Erickson v. Pardus, 551 U.S.
89, 93-94 (2007) (per curiam). However,
“the tenet that a court must accept as true all
of the allegations contained in a complaint is
inapplicable to legal conclusions.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009).

Therefore, United has satisfied both
steps under Davila and carried its burden to
justify removal. Plaintiff’s state claims are
completely preempted because they are
“within the scope of” ERISA §
502(a)(1)(B).
Accordingly, plaintiff’s
motion to remand is denied.4

To survive a motion to dismiss, a
complaint must set forth “a plausible set of
facts sufficient ‘to raise a right to relief
above the speculative level.’” Operating
Local 649 Annuity Trust Fund v. Smith
Barney Fund Mgmt. LLC, 595 F.3d 86, 91
(2d Cir. 2010) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)).
Generally, this standard for survival does
not require “heightened fact pleading of
specifics, but only enough facts to state a
claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570.

III. DEFENDANTS’ MOTION TO DISMISS
A. Legal Standard
Motions to dismiss under Rule 12(b)(6)
of the Federal Rules of Civil Procedure
probe the legal, not the factual, sufficiency
of a complaint. See, e.g., Sims v. Artuz, 230
F.3d 14, 20 (2d Cir. 2000). Stated
differently, when assessing the viability of a
complaint’s pleadings at the Rule 12(b)(6)
stage, “the issue is not whether a plaintiff is
likely to prevail ultimately, but whether the
claimant is entitled to offer evidence to
support the claims.” Chance v. Armstrong,
143 F.3d 698, 701 (2d Cir. 1998) (internal
alternation omitted). Thus, when reviewing
a motion to dismiss, “the [c]ourt must accept

Where a motion to dismiss presents itself
before the court, a court may examine the
following: “(1) facts alleged in the
complaint and documents attached to it or
incorporated in it by reference, (2)
documents ‘integral’ to the complaint and
relied upon in it, even if not attached or
incorporated by reference, [and] (3)
documents or information contained in
defendant’s motion papers if plaintiff has
knowledge or possession of the material and
relied on it in framing the complaint.” Nasso
v. Bio Reference Labs., Inc., 892 F. Supp. 2d
439, 446 (E.D.N.Y. 2012) (quoting In re
Merrill Lynch & Co., 273 F. Supp. 2d 351,
356-57 (S.D.N.Y. 2003)) (internal citations
omitted).5

4
Defendants suggested, without directly arguing, that
these claims are also expressly preempted by ERISA,
see Pilot Life v. Dedeaux, 481 U.S. 41 (1987), but the
Court need not decide this issue for two reasons.
First, complete preemption, rather than express
preemption, decides the propriety of removal. See
Taylor, 481 U.S. at 63-64.
Second, having
determined that removal was proper, the Court
concludes infra that plaintiff’s claims may not go
forward as ERISA claims because plaintiff has sued
the wrong party. Therefore, the Court need not
determine whether the defense of express preemption
would apply in this case.

5

The parties do not dispute that the Plan documents
submitted by United are integral to plaintiff’s
complaint, and the Court has considered them on the

9

B. Application

original)). Nonetheless, plaintiff’s argument
appears to assume that United is the plan
administrator, even though the complaint
alleges at most that United provided health
insurance for plaintiff’s patients. (Compl. ¶
18.) The Second Circuit has at least twice
rejected arguments similar to plaintiff’s here
that health insurers were “unnamed plan
administrator[s],” and this Court must
follow those holdings.6 Id. at 107 (citing
Lee v. Burkhart, 991 F.2d 1004, 1010 (2d
Cir. 1993)).

Empire’s motion to dismiss is granted
because, even if plaintiff’s preempted state
claims were restyled as ERISA claims, they
could not proceed under § 502(a)(1)(B)
because plaintiff has sued the wrong party.
Furthermore, §§ 502(a)(3) and 503 do not
provide additional avenues of relief.
1. Section 502(a)(1)(B)
Plaintiff’s claims would fail even if
brought under § 502(a)(1)(B) because the
complaint does not allege that United is a
proper defendant. The Second Circuit has
held that a claim for benefits pursuant to
§ 502(a)(1)(B) may only be asserted against
the plan itself, the plan administrator, and
the plan trustees. See Crocco v. Xerox Corp.,
137 F.3d 105, 107 (2d Cir. 1998) (“[O]nly
the plan and the administrators and trustees
of the plan in their capacity as such may be
held liable.” (quoting Leonelli v. Pennwalt
Corp., 887 F.2d 1195, 1199 (2d Cir. 1989))
(internal quotation marks omitted)); see also
Chapman v. Choicecare Long Island
Disability Plan, 288 F.3d 506, 509-10 (2d
Cir. 2002); Chapro v. SSR Realty Advisors,
Inc. Severance Plan, 351 F. Supp. 2d 152,
155 (S.D.N.Y. 2004).

Plaintiff points to a statement in United’s
memorandum of law that United
“administers the claims under these plans.”
(Def. Mem. at 1), but “claims do not lie
against any and every ‘administrator’
associated with a Plan,” such as a claims
administrator. New York State Psychiatric
Ass’n, Inc. v. UnitedHealth Grp., 980 F.
Supp. 2d 527, 539 (S.D.N.Y. 2013). ERISA
defines the “administrator” who may be
subjected to liability as “the person
specifically so designated by the terms of
the instrument under which the plan is
operated,” 29 U.S.C. § 1002(16)(A), which
is American Airlines, not United. The fact
6
Some courts within this circuit have applied a more
flexible definition of “plan administrator” under other
circumstances, but “the larger number of judges on . .
. Second Circuit courts adhere to a bright-line rule
that only entities that have been formally designated
as ‘plan administrators’ under 29 U.S.C. §
1002(16)(A) are proper ‘administrator’ defendants in
§ 502(a)(1)(B) actions.” New York State Psychiatric
Ass’n, 980 F. Supp. 2d at 538; accord Lee, 991 F.2d
1004, 1010 n.5 (“Some courts have held that under
certain circumstances a party not designated as an
administrator may be liable . . . . We disagree.
Respect for our proper role requires that we decline .
. . to substitute our notions of fairness for the duties
which Congress has specifically articulated by
imposing liability on the ‘administrator’.”) (internal
quotation marks and citations omitted).

United is not the plan itself, and plaintiff
has not alleged that it is either the plan
administrator or a trustee. In fact, American
Airlines is the named plan administrator
(Ex. F-1 to Knoblach Decl. at 180), and “if a
plan specifically designates a plan
administrator, then that individual or entity
is the plan administrator for purposes of
ERISA.” Crocco, 137 F.3d at 107 (quoting
McKinsey v. Sentry Insurance, 986 F.2d
401, 404 (10th Cir. 1993) (emphasis in
motion to dismiss. See DeSilva v. North Shore-Long
Island Jewish Health Sys. Inc., 770 F. Supp. 2d 497,
545 n.22 (E.D.N.Y. 2011).

10

monetary compensation and that, above all
else, dictates the relief available.” Id. The
relief available is provided by §
502(a)(1)(B), and because that relief is
adequate for plaintiff’s claims, which fall
“comfortably” within its scope, there is no
“appropriate” equitable relief under §
502(a)(3). See Varity Corp., 516 U.S. at 515
(“[W]e should expect that where Congress
elsewhere provided adequate relief for a
beneficiary’s injury, there will likely be no
need for further equitable relief, in which
case such relief normally would not be
‘appropriate.’”); see also Johnson v.
Buckley, 356 F.3d 1067, 1077 (9th Cir.
2004) (“[W]hen relief is available under
section 1132(a)(1), courts will not allow
relief under § 1132(a)(3)’s ‘catch-all
provision.’”).

that United “apparently exercised some
discretion and authority in making benefits
determinations . . . is not enough to meet the
statutory definition of an ERISA Plan
‘administrator.’” Schnur v. CTC Commc’ns
Corp. Grp. Disability Plan, 621 F. Supp. 2d
96, 107 (S.D.N.Y. 2008).
In short, plaintiff’s claims may not
proceed under § 502(a)(1)(B) for the same
reason cited by the Second Circuit in
Crocco: “it is clear from the Plan documents
that [United] was neither the designated Plan
administrator nor a Plan trustee, and because
it could not, under the rationale underlying
Lee, be a de facto co-administrator . . . .
[United] is, therefore, entitled to dismissal of
the claims against it.” Id. at 107-08.
2. Section 502(a)(3)

To be clear, the Court concludes that §
502(a)(1)(B) provides adequate relief to
plaintiff even though plaintiff may not sue
United under that section. See New York
State Psychiatric Ass’n, 980 F. Supp. 2d at
541 (“The rule, then, is that claims for
equitable relief under § 502(a)(3) must be
dismissed if the plaintiff has adequate
remedies under § 502(a)(1)(B)—even if
those remedies lie against defendants other
than the named defendant.”); Staten Island
Chiropractic Associates, PLLC v. Aetna,
Inc., 09-CV-2276 CBA VP, 2012 WL
832252, at *11 (E.D.N.Y. Mar. 12, 2012)
(“The fact that the plaintiffs have currently
brought their § 1132(a)(1)(B) claims against
the wrong defendant does not alter the fact
that relief was available to them under that
section.”). In other words, plaintiff cannot
avoid the consequence of suing an improper
party by seeking refuge in § 502(a)(3).
Even if it is a “catchall” provision, §
502(a)(3) catches injuries—rather than
additional parties—not otherwise remedied
in § 502. Frommert, 433 F.3d at 270.
Because plaintiff’s alleged injury is
remediable under § 502(a)(1)(B) if brought

Plaintiff argues, in the alternative, that it
is entitled to relief under ERISA § 502(a)(3),
an equitable provision which allows “a
participant, beneficiary, or fiduciary” to
bring an action “to enjoin any act or practice
which violates any provision of this
subchapter or the terms of the plan, or . . . to
obtain other appropriate equitable relief.”
29 U.S.C. § 1132(a)(3).
Here, despite plaintiff’s request for
declaratory and injunctive relief in the
complaint, the claims are plainly legal
claims for money damages, because “they
seek no more than compensation for loss
resulting from the defendant’s breach of
legal duty.” Frommert v. Conkright, 433
F.3d 254, 270 (2d Cir. 2006) (quoting
Bowen v. Massachusetts, 487 U.S. 879, 91819 (1988) (Scalia, J., dissenting)). Under
similar circumstances, the Second Circuit in
Frommert affirmed the dismissal of an
attempt to “expand the nature of [plaintiffs’]
claim by couching it in equitable terms to
allow relief under § 502(a)(3),” because “the
gravamen of this action remains a claim for
11

against the Plan, the plan administrator, or
the trustees, this is not a situation where
plaintiff “must rely on the third subsection
or . . . have no remedy at all.” Varity Corp.,
516 U.S. at 515 (emphasis removed).
Where, as here, there is an adequate remedy,
the Supreme Court “has consistently
disfavored the expansion of the availability
of equitable relief,” Frommert, 433 F.3d at
270, and courts in this circuit have followed
suit. See Kendall v. Emps. Retirement Plan
of Avon Prods., 561 F.3d 112, 119-20 (2d
Cir. 2009) (affirming dismissal of §
502(a)(3) claims, finding them to be legal in
nature, where “Kendall’s claims for payment
of benefits . . . is effectively a request for a
disgorgement of funds Kendall believes
Avon gained by not paying out benefits
under a plan that conforms with ERISA”);
New York State Psychiatric Ass’n, 980 F.
Supp. 2d at 541 (granting motion to dismiss
§ 502(a)(3) claim because “[a]s was true in
Staten Island, Frommert, and Nechis, the
crux of plaintiffs’ claim is for monetary
relief—the benefits they were denied. Such
a claim lies only against the self-insured
Plans, any Plan trustees, and their respective
29
U.S.C.
§
1002(16)(A)
Plan
Administrators”); Biomed Pharm., Inc. v.
Oxford Health Plans (N.Y.), Inc., 775 F.
Supp. 2d 730, 737 (S.D.N.Y. 2011)
(granting motion to dismiss where “the
Court finds that Biomed’s three ERISA §
502(a)(3) claims are in fact entirely
duplicative of its claim for benefits under
ERISA § 502(a)(1)(B), as the gravamen of
all three Counts is that Oxford improperly
denied the Patient benefits to which he was
entitled under the Plan”).7

3. Section 503
Plaintiff’s argument that the complaint
should be construed to allege a claim under
ERISA § 503 likewise fails, because that
section—which requires adequate notice of
the reason for a benefits denial—“imposes
obligations only upon the ‘employee benefit
plan[s]’ themselves.”
New York State
Psychiatric Ass’n, 980 F. Supp. 2d at 548
(quoting 29 U.S.C. § 1133). “[P]laintiff
here has not alleged that any of the United
Defendants are ‘plans’ (nor can [plaintiff]
plausibly allege that they are plan
administrators),” and accordingly, any
possible § 503 claim is dismissed. Gates v.
United Health Grp. Inc., No. 11 Civ. 3487
(KBF), 2012 WL 2953050, at *10 (S.D.N.Y.
July 16, 2012).
C. Leave to Amend
At oral argument and by letter dated
August 5, 2014, plaintiff sought leave to
amend its complaint to add the proper
defendants under ERISA.
Whether
plaintiff’s motion is considered one to
amend under Federal Rule of Civil
Procedure 15, or one to join parties under
Rule 21, “courts adhere to the same standard
of liberality,” Sly Magazine, LLC v. Weider
Publications L.L.C., 241 F.R.D. 527, 532
(S.D.N.Y. 2007) (internal quotation marks
as in Biomed, equitable relief would not be
appropriate because plaintiff’s claims for both legal
and equitable relief rely on the same allegations. Id.
at n.6. Where the Second Circuit has allowed both
claims to proceed, the § 502(a)(3) claim relied on
distinct allegations that the defendant had fiduciary
obligations to the plaintiff and breached them. See
Frommert, 433 F.3d at 271. Here, however, even if
the Court assumed that United was a fiduciary,
plaintiff has not alleged any distinct breach or injury;
this remains a denial-of-benefits case for which
adequate relief is available under § 502(a)(1)(B).
Therefore, equitable relief is not “appropriate.” N.Y.
State Psych. Ass’n, 980 F. Supp. 2d at 540.

7

In Biomed, the court noted that “Second Circuit
cases have made clear that Varity did not eliminate
the possibility of a plaintiff successfully asserting a
claim under both ERISA § 502(a)(1)(B) and ERISA
§ 502(a)(3), but rather indicated that equitable relief
under § 502(a)(3) would not ‘normally’ be
appropriate.” Biomed, 775 F. Supp. 2d at 737. Here,

12

Plaintiff is represented by Matthew Didora,
Ruskin Moscou Faltischeck, East Tower 15th
Floor, 1425 Rexcorp Plaza, Uniondale, NY
11556. Defendants are represented by John
Thomas Seybert and Ryan C. Chapoteau,
Sedgwick LLP, 225 Liberty Street, 28th
Floor, New York, NY 10281.

and citation omitted), which directs that
leave to amend should be “freely given,”
Aetna Cas. & Sur. Co. v. Aniero Concrete
Co., Inc., 404 F.3d 566, 603 (2d Cir. 2005).
There is no basis to deny plaintiff leave to
amend to add the proper party.
Accordingly, the Court grants plaintiff leave
to amend the complaint to add the plan, the
plan administrators, and/or the trustees. The
case caption will no longer include United,
however, as the claims against it have been
dismissed.
IV. CONCLUSION
Because plaintiff’s claims against United
under New York law are completely
preempted by ERISA, plaintiff’s motion to
remand this action is denied. United’s
motion to dismiss is granted because no
claim lies against United, which is not
named as the plan administrator.
Furthermore, ERISA § 502(a)(1)(B) would
provide adequate relief to plaintiff if it sued
the proper party, and therefore ERISA
sections 502(a)(3) and 503 do not provide
alternative avenues of relief against United.
Plaintiff’s motion to amend the complaint to
add the proper party is granted, but the Clerk
of the Court shall remove United from the
caption of the amended complaint. Plaintiff
shall file the amended complaint within 30
days of the date of this order.

SO ORDERED.

____________________
JOSEPH F. BIANCO
United States District Judge
Dated: December 11, 2014
Central Islip, NY
***
13