Salzberg M.D. v. Aetna Insurance Company, et al
OPINION AND ORDER re: 10 MOTION to Remand to State Court Refiled Notice of Motion (Docket #8) - per ECF instructions. filed by C. Andrew Salzberg M.D. Plaintiffs' motion to remand is DENIED. The Court sua sponte grants plaintiff le ave to file an amended complaint to assert an ERISA cause of action. The amended complaint shall be filed by March 26, 2018. The Clerk is instructed to terminate the pending motion. (Doc. #10) So Ordered., (Amended Pleadings due by 3/26/2018.) (Signed by Judge Vincent L. Briccetti on 3/12/18) (yv)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
C. ANDREW SALZBERG, M.D.,
AETNA INSURANCE COMPANY AS
ADMINISTRATOR, BANK OF AMERICA
CORPORATION, JOHN AND JANE DOES
(1-10), and ABC CORPORATIONS (1-10),
OPINION AND ORDER
17 CV 7909 (VB)
Plaintiff C. Andrew Salzberg, M.D., brings this action against defendants Aetna
Insurance Company (“Aetna”), Bank of America Corporation (the “Bank”), and several as yet
unidentified defendants, asserting claims for breach of contract, promissory estoppel, account
stated, and fraudulent inducement.
On October 16, 2017, Aetna removed the case from Supreme Court, Westchester County,
to this Court. (Doc. #1).
Now pending is plaintiff’s motion to remand the case to state court. (Doc. #10).
For the following reasons, the motion is DENIED.
The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1367.
In considering the motion to remand, the Court accepts as true all relevant allegations in
the complaint and construes all factual ambiguities in favor of plaintiff. See Fed. Ins. Co. v.
Tyco Int’l Ltd., 422 F. Supp. 2d 357, 391 (S.D.N.Y. 2006). The Court may consider materials
outside of the complaint, “such as documents attached to a notice of removal or a motion to
remand that convey information essential to the court’s jurisdictional analysis.” Romero v. DHL
Express (U.S.A), Inc., 2016 WL 6584484, at *1 (S.D.N.Y. Nov. 7, 2016) (citing BGC Partners,
Inc. v. Avison Young (Canada), Inc., 919 F. Supp. 2d 310, 312 n.3 (S.D.N.Y. 2013)).
Plaintiff is an out-of-network healthcare provider who performed medically-necessary
surgery on patient “DM.”
DM was previously diagnosed with breast cancer, and sought treatment from plaintiff for
As an employee of the Bank, DM was the beneficiary of a self-insured healthcare plan
administered by Aetna (the “Plan”).
On April 23, 2013, DM assigned her benefits under the Plan to plaintiff’s surgery
practice, giving plaintiff the right “to perform all actions, appeals or otherwise, required for
claim payment.” (Hunt Aff. Ex. A).
Prior to performing DM’s surgery, plaintiff’s office called Aetna for authorization.
On May 9, 2013, plaintiff received an approval letter from Aetna. The letter states Aetna
approved coverage for “Periprosthetic Capsulectomy, Breast 2 Time(s),” “Immediate Insertion of
Breast Prosthesis Following Mastopexy, Mastectomy Or In Reconstruction 2 Time(s),” and
“Breast Reconstruction With Other Technique 2 Time(s).” (Reply Br. Ex. A).
On May 15, 2013, plaintiff performed DM’s surgery.
Plaintiff billed $78,674.00 for the surgery, and defendants paid $12,936.87.
On September 20, 2017, plaintiff commenced an action in Supreme Court, Westchester
County, asserting claims under New York state law for breach of contract, promissory estoppel,
account stated, and fraudulent inducement. Plaintiff alleges defendants’ $12,936.87 payment
“represents a gross underpayment and does not comport in any way with usual, customary or
reasonable payments for the type of service rendered by a provider” with plaintiff’s “skill,
experience and training.” (Compl. ¶ 25). Plaintiff’s complaint seeks $65,737.13, plus interest,
costs, and attorney’s fees.
On October 16, 2017, defendants removed the case to this court, based on federal
question jurisdiction under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C.
Motion to Remand
A defendant may remove to federal court “any civil action brought in a State court of
which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). A
district court has subject matter jurisdiction over removed cases “arising under” federal law for
purposes of 28 U.S.C. § 1331, “when the plaintiff’s ‘well-pleaded complaint’ raises an issue of
federal law.” New York v. Shinnecock Indian Nation, 686 F.3d 133, 138 (2d Cir. 2012) (quoting
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987)).
The rules regarding removal are to be strictly construed. Syngenta Crop Prot., Inc. v.
Henson, 537 U.S. 28, 32 (2002). “[F]ederal courts are courts of limited jurisdiction and lack the
power to disregard such limits as have been imposed by the Constitution or Congress.” Durant,
Nichols, Houston, Hodgson, & Cortese-Costa, P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir. 2009)
(internal quotation omitted). Thus, the party seeking removal and asserting federal jurisdiction
bears the burden of establishing the court has original jurisdiction. McCulloch Orthopaedic
Surgical Servs., PLLC v. Aetna Inc., 857 F.3d 141, 145 (2d Cir. 2017).
“Under the well-pleaded complaint rule, a defendant generally may not remove a case to
federal court unless the plaintiff’s complaint establishes that the case arises under federal law.”
McCulloch Orthopaedic Surgical Servs., PLLC v. Aetna Inc., 857 F.3d at 145 (internal quotation
omitted). There is an exception, however, when “a federal statute wholly displaces the state-law
cause of action, such that the claim, even if pleaded in terms of state law, is in reality based on
federal law.” Id. (internal quotation omitted).
The ERISA civil enforcement scheme allows a plan “participant” or “beneficiary” to
bring an action “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.”
ERISA § 502(a)(1)(B) (codified at 29 U.S.C. § 1132(a)). ERISA “completely preempts any
state-law cause of action that ‘duplicates, supplements, or supplants’ an ERISA remedy.”
Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 327 (2d Cir. 2011) (quoting Aetna
Health Inc. v. Davila, 542 U.S. 200, 210 (2004)). Thus, if plaintiff’s claims “fall within the
scope of § 502(a)(1)(B),” those claims are preempted by ERISA. Id. at 328.
The Supreme Court established a two-part test to determine whether a claim falls “within
the scope” of Section 502(a)(1)(B). Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d at
328 (quoting Aetna Health Inc. v. Davila, 542 U.S. at 210). ERISA completely preempts claims
when (i) they are brought by “an individual [who], at some point in time, could have brought his
claim under ERISA § 502(a)(1)(B),” and (ii) “there is no other independent legal duty that is
implicated by a defendant’s actions.” Aetna Health Inc. v. Davila, 542 U.S. at 210. “The test is
conjunctive; a state-law cause of action is preempted only if both prongs of the test are satisfied.”
Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d at 328.
Plaintiff asserts he lacks standing to bring a claim under ERISA, and therefore does not
satisfy the first prong of the Davila test.
The Court disagrees.
In analyzing the first prong of the Davila test, the Second Circuit considers (i) “whether
the plaintiff is the type of party that can bring a claim pursuant to § 502(a)(1)(B),” and (ii)
“whether the actual claim that the plaintiff asserts can be construed as a colorable claim for
benefits pursuant to § 502(a)(1)(B).” Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d at
First, because DM assigned her benefits to plaintiff, he is the type of party that can bring
a claim pursuant to Section 502(a)(1)(B). See Montefiore Med. Ctr. v. Teamsters Local 272, 642
F.3d at 329 (“[A] narrow exception to the ERISA standing requirements . . . grant[s] standing to
healthcare providers to whom a beneficiary assigned his claim in exchange for health care.”)
(internal quotation omitted).
Second, plaintiff’s claims present a colorable claim for benefits under Section
502(a)(1)(B). In Montefiore, the court distinguished
between claims involving the “right to payment” and claims involving the
“amount of payment”—that is, on the one hand, claims that implicate coverage
and benefits established by the terms of the ERISA benefit plan, and, on the other
hand, claims regarding the computation of contract payments or the correct
execution of such payments. The former are said to constitute claims for benefits
that can be brought pursuant to § 502(a)(1)(B), while the latter are typically
construed as independent contractual obligations between the provider and . . . the
Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d at 331.
Here, Aetna refused at least some of plaintiff’s claims because certain services were not
covered by the plan. For example, under Claim ID E4PA6SM8900, $11,065.50 was deemed
“not payable” because “the charge for the assistant surgeon, co-surgeon, or surgical team [was]
not covered under the member’s plan.” (Hunt. Aff. Ex. B at 1). Thus, plaintiff’s claims
implicate “coverage and benefit determinations as set forth by the terms of the ERISA benefit
plan,” and can be construed as colorable claims for benefits under Section 502(a)(1)(B).
Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d at 325.
Accordingly, plaintiff has standing to bring a claim under ERISA, and the first prong of
the Davila test is satisfied.
“No Other Independent Legal Duty”
Plaintiff argues Aetna’s May 9, 2013, approval letter establishes an independent legal
duty, and therefore his claims do not satisfy the second prong of the Davila test.
The Court disagrees.
The “detailed coverage information” in the Bank’s Health and Insurance Summary Plan
Description states it is the beneficiary’s “responsibility to ensure that precertification has been
obtained prior to receiving” out-of-network medical services. (Hunt Aff. Ex. C at 64).
Beneficiaries are instructed to consult Aetna’s website for “a complete listing of precertification
requirements.” (Id. at 63). According to that listing, two of the three procedures for which
Aetna’s May 9, 2013, letter approved coverage required precertification. Aetna’s precertification
process does not establish an independent legal duty because it “was expressly required by the
terms of the Plan itself and is therefore inextricably intertwined with the interpretation of Plan
coverage and benefits.” Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d at 332.
Plaintiff identifies no other action by defendants implicating an independent legal duty.
Accordingly, defendants have no independent legal duty to plaintiff, and the second
prong of the Davila test is satisfied.
For the foregoing reasons, the Court concludes defendants have established that at least
some of plaintiff’s state law claims are completely preempted by ERISA, and removal was
proper in this case.
Defendants assert the Court has supplemental jurisdiction over plaintiff’s state law claims
that are not preempted by ERISA.
The Court agrees.
Under 28 U.S.C. § 1367(a), “the district courts shall have supplemental jurisdiction over
all other claims that are so related to claims in the action within such original jurisdiction that
they form part of the same case or controversy under Article III of the United States
Constitution.” The court “may decline to exercise supplemental jurisdiction over a [state] claim”
if (i) “the claim raises a novel or complex issue of State law”; (ii) “the claim substantially
predominates” over the federal claim; (iii) the court has dismissed all other federal claims; or (iv)
there are exceptional circumstances. 28 U.S.C. § 1367(c). “In deciding whether to exercise
jurisdiction over supplemental state-law claims, district courts should balance the values of
judicial economy, convenience, fairness, and comity.” Klein & Co. Futures Inc. v. Bd. of
Trade, 464 F.3d 255, 262 (2d Cir. 2006).
Here, the Court has subject matter jurisdiction over plaintiff’s claims arising under
ERISA. The parties do not dispute that all of plaintiff’s claims result from Aetna’s failure to pay
plaintiff for medical services provided to DM. Accordingly, to the extent any state law claims
exist, they arise from the same “common nucleus of operative fact” as plaintiff’s federal claims.
United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). Further, plaintiff’s claims do not
appear to present novel questions of state law or exceptional circumstances. See 28 U.S.C.
Accordingly, the Court will exercise supplemental jurisdiction over plaintiff’s remaining
state law claims.
Plaintiffs’ motion to remand is DENIED.
The Court sua sponte grants plaintiff leave to file an amended complaint to assert an
ERISA cause of action. The amended complaint shall be filed by March 26, 2018.
The Clerk is instructed to terminate the pending motion. (Doc. #10)
Dated: March 12, 2018
White Plains, NY
Vincent L. Briccetti
United States District Judge
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