Jay Kripalani M.D. P.C. v. United HealthCare Group et al

Filing 20

ORDER re 19 Motion to Stay: Defendant's Motion to Stay (ECF No. 19 ) is GRANTED. In the event the underlying motion to dismiss is denied in any respect, the parties shall file a proposed discovery schedule within 10 days of Judge Choudhury's decision on the motion. So Ordered by Magistrate Judge James M. Wicks on 1/3/2025. (DF) (Main Document 20 replaced on 1/3/2025) (DF).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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JAY KRIPALANI M.D., P.C.,
Plaintiff,

ORDER

-against-

2:24-cv-05671 (NJC) (JMW)

UNITED HEALTHCARE CROUP doing business
as UNITED HEALTHCARE, et al.,
Defendants.
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A P P E A R A N C E S:
Amish R. Doshi, Esq.
Doshi Legal Group, P.C.
1979 Marcus Avenue
Suite 210E
Lake Success, NY 11042
Attorneys for Plaintiff
Matthew Paul Mazzola, Esq.
Robinson & Cole LLP
666 Third Ave
Ste 20th Floor
New York, NY 10017
Attorney for Defendant Debbie Sorg
WICKS, Magistrate Judge:
Presently before the Court is Defendant United Healthcare Service LLC s/h/a United
Healthcare Group d/b/a United Healthcare’s (“Defendant”) motion for a stay of discovery (ECF
No. 19) pending resolution of its motion to dismiss the Complaint (ECF No. 18), which is sub
judice before the Hon. Nusrat J. Choudhury. Plaintiff consents to the motion for a stay (see ECF
No. 19 at 1), but of course vehemently opposes the motion to dismiss (see ECF No. 18-4).

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Although the motion to stay is unopposed, the Court nonetheless undertakes a review to
determine whether a stay is warranted, mainly because a request to stay litigation is seemingly at
odds with Rule 1’s mandate that the Rules “be construed, administered, and employed by the
court and the parties to secure the just, speedy, and inexpensive determination of every action
and proceeding.” Fed. R. Civ. P. 1. For the reasons set forth below, the Court concludes a stay of
discovery is warranted, and thus Defendants’ motion (ECF No. 19) is GRANTED.
I.

BACKGROUND

The allegations of the Complaint (ECF No. 1) are assumed true for purposes of both this
and the motion to dismiss.
Plaintiff is a professional corporation that employs surgeons, including Jay Kripalani,
M.D. (a non-party) that provided emergency medical and continuing care services to its patient,
identified in the Complaint as “K.R” (“Patient”). Plaintiff alleges that K.R. participated in the
employer American Express Company’s employee welfare benefit plan (i.e., the American
Express Welfare Benefits Plan (the “Plan”)), which is governed by the Employee Retirement
Income Security Act of 1974 (as amended), 29 U.S.C. §1001, et. seq. (“ERISA”). Benefits under
the Plan are self-funded by the Plan Sponsor, American Express Company, and claims under the
Plan, including the claims at issue in this case, are administered by Defendant – the Plan’s claim
administrator. Plaintiff alleges that it submitted a claim to Defendant on behalf of K.R. for
benefits under the Plan related to emergency medical and continuing care services provided to
K.R. at an unidentified hospital from August 17, 2021 through October 13, 2021. Plaintiff
alleges that it billed Defendant for the medical services rendered to K.R. in the amount of
$1,536,884, and that Defendant paid these claims in the amount of only $15,910.70. Plaintiff is
claiming entitlement to the full billed charges from Defendant and is therefore seeking the delta

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or shortfall of $1,520,973.30. Plaintiff’s Complaint asserts two causes of actioounts for: (1)
violation of ERISA; and (2) unjust enrichment.

II.

THE LEGAL FRAMEWORK

“‘[T]he power to stay proceedings is incidental to the power inherent in every court to
control the disposition of the cases on its docket with economy of time and effort for itself, for
counsel, and for litigants.’” Thomas v. N.Y. City Dep’t of Educ., No. 09-CV-5167, 2010 WL
3709923, at *2 (E.D.N.Y. Sept. 14, 2010) (quoting Landis v. N. Am. Co., 299 U.S. 248, 254
(1936)). The mere filing of a dispositive motion, in and of itself, does not halt discovery
obligations in federal court. That is, a stay of discovery is not warranted, without more, by the
mere pendency of a dispositive motion. Weitzner v. Sciton, Inc., No. CV 2005-2533, 2006 WL
3827422, at *1 (E.D.N.Y. Dec. 27, 2006). Rather, the moving party must make a showing of
“good cause” to warrant a stay of discovery. Chesney v. Valley Stream Union Free Sch. Dist.
No. 24, 236 F.R.D. 113, 115 (E.D.N.Y. 2006). In evaluating whether a stay of discovery pending
resolution of a motion to dismiss is appropriate, courts consider: “(1) whether the defendant has
made a strong showing that the plaintiff’s claim is unmeritorious; (2) the breadth of discovery
and the burden of responding to it; and (3) the risk of unfair prejudice to the party opposing the
stay.” Id. (citation omitted). In addition, consideration of the nature and complexity of the
action, whether some or all defendants joined in the request for a stay, as well as the posture or
stage of the litigation. Id. (citation omitted). The fact that Plaintiff consents to a stay is only a
factor to be considered.
It is against this backdrop that the Court considers the present application.

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III.

DISCUSSION

A. Whether Defendant Has Made a Strong
Showing That Plaintiff’s Claims Are Unmeritorious
Perhaps this prong is the most important consideration in determining whether a stay
should be granted. Defendant asserts that the stay ought to be granted because the entirety of
Plaintiff’s Complaint is subject to dismissal with prejudice on various grounds. Plaintiff disputes
the likely outcome of the motion to dismiss, but nevertheless consents to a stay of discovery.
First and foremost, Defendant claims Plaintiff lacks standing to assert claims under
ERISA. That is, only an ERISA plan participant or beneficiary can assert claims for benefits
allegedly owed under an ERISA controlled plan like the one at issue here. Plaintiff is neither a
“Plan participant” nor beneficiary, and therefore has no right to pursue the claim. Furthermore,
nowhere is it alleged that Plaintiff has derivative standing to bring a claim under ERISA through
a valid assignment. (ECF No. 18-3). This defense, if successful, would result in a dismissal with
prejudice.
Plaintiff counters that there was an assignment of benefits from Patient to Plaintiff, which
it claims is an exception to the ERISA standing requirement. (ECF No. 18-4, at 6-7).
Furthermore, to the extent Defendant relies on an anti-assignment provision, that was waived due
to the de minimus partial payments made to date. Id. Significantly, however, these allegations of
a valid assignment appear nowhere in the complaint, but rather only in Plaintiff’s memorandum
of law in opposition to the motion to dismiss (ECF No. 18-5, at 1). Also, according to
Defendant, a direct payment to a provider does not constitute a waiver of the Plan’s antiassignment provision, which states “The Claims Administrators may issue payments directly to
your providers for covered services you receive (whether or not pursuant to an authorization).
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The Claims Administrators’ payment to your provider, however, does not create an assignment
of benefits and it will not constitute a waiver of the application of this anti-assignment
provision.” (See ECF No. 18-5, at 3.)
Having reviewed the arguments advanced on the motion to dismiss, it appears that
Defendant has on its face made a strong showing that the Complaint may be unmeritorious at this
juncture. 1 This conclusion, however, in no way prejudges the ultimate disposition of the motion
or the merits of the case, but only for purposes of deciding whether a stay is appropirate.
Defendant also relies on preemption. That is, Defendant argues that the health benefit
plan at issue is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1001, et seq., and as such, the state law unjust enrichment cause of action is
preempted by ERISA as to each of the claims governed by ERISA. Even if, however, the
ERISA claims survives dismissal, then discovery would be far more limited since the state law
claims are expressly preempted by ERISA. Discovery, it posits, would be limited to the
administrative record for the parties whose claims are at issue.
B. Breadth of Discovery and the Corresponding Burdens
The breadth and burden of discovery do not appear to be “substantial” here. However,
the path of discovery could be vastly different depending upon which, if any claims survive the
motion to dismiss. Whether discovery is ultimately limited to what might constitute and
administrative record or broader, depends upon the ultimate viability of the unjust enrichment
claim.

This does not take into account whether leave to amend under Fed. R. Civ. P. 15 would be granted in
light of the allegations in the motion that Plaintiff relies on matters outside the pleading to establish
standing.

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C. Risk of Unfair Prejudice if Stay is Granted to the Party Opposing the Stay
It appears at this nascent stage that there would be little or no prejudice if discovery were
stayed pending the decision on the motion to dismiss. Even if the motion is denied, discovery is
likely to be somewhat limited, and focused on the records used to determine payments to the
Patient. A relatively focused, concise discovery schedule could then be imposed.
IV.

CONCLUSION

For the foregoing reasons, Defendant’s Motion to Stay (ECF No. 19) is GRANTED. In
the event the underlying motion to dismiss is denied in any respect, the parties shall file a
proposed discovery schedule within 10 days of Judge Choudhury’s decision on the motion.
Dated: Central Islip, New York
January 3, 2025

SO

O R D E R E D:

/s/ James M. Wicks
JAMES M. WICKS
United States Magistrate Judge

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