Desai et al v. CareSource, Inc.
Filing
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ENTRY AND ORDER GRANTING IN PART PLAINTIFFS' JURISDICTIONAL MOTION FOR REMAND AND REQUEST FOR COSTS AND EXPENSES PURSUANT TO 28 U.S.C. §1447. 5 . THE CLERK IS ORDERED TO REMAND THIS CASE TO THE MONTGOMERY COUNTY COURT OF COMMON PLEAS. PLAINTIFFS' REQUEST FOR COSTS AND EXPENSES IS DENIED. Signed by Judge Thomas M. Rose on 3-11-2019. (de)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
Neha Desai, et al.,
Plaintiffs,
v.
Case No. 3:18-cv-118
Judge Thomas M. Rose
CareSource, Inc.,
Defendant.
______________________________________________________________________________
ENTRY AND ORDER GRANTING IN PART PLAINTIFFS’
JURISDICTIONAL MOTION FOR REMAND AND
REQUEST FOR COSTS AND EXPENSES PURSUANT TO 28
U.S.C. §1447. (ECF 5). THE CLERK IS ORDERED TO
REMAND THIS CASE TO THE MONTGOMERY COUNTY
COURT OF COMMON PLEAS. PLAINTIFFS’ REQUEST
FOR COSTS AND EXPENSES IS DENIED.
______________________________________________________________________________
Pending before the Court is Plaintiffs’ Motion to Remand (ECF 5) this putative class action
to the Montgomery County, Ohio Court of Common Pleas and to order appropriate costs and
expenses in favor of Plaintiffs in connection with removal. Plaintiffs assert that none of their
claims raise a federal question.
I.
Background
Plaintiffs assert that they purchased health insurance from Defendant CareSource through
the Federal Health Insurance Marketplace exchange under the Patient Protection and Affordable
Health Care Act or ACA. Compl. at ¶ 35.
Plaintiffs claim they researched available plans offered through the exchange, and that they
were attracted to CareSource’s allegedly broad network of providers and large marketplace
directory. Id. at ¶ 36. Plaintiffs allege they were damaged by CareSource misrepresenting its
Network of Providers and Marketplace Directory by way of paying increased premiums. Id. at ¶
37.
To support their claims, Plaintiffs rely on the “Network Adequacy Standards” established
by the ACA. The Complaint asserts that “CareSource’s provider directory is wholly inadequate,
inaccurate, incomplete, and misleads current and prospective enrollees.” Id. at ¶ 14.
Plaintiffs’ Complaint asserts state-law claims, including one for injunctive relief “requiring
CareSource to develop and implement an adequate system for ensuring the accuracy of its online
provider directory....” Id. at ¶ 153. There is a description of an adequate system in 45 CFR §
156.230. At the same time, CareSource is alleged to have publicized how it would maintain its
provider directory in ways it is alleged to have failed. According to Plaintiffs, CareSource made
the following representation through its website at the “Find a Doctor/Provider” link:
Find a Doctor/Provider is an online Provider Directory. It lists the
providers you can go to. Your Primary Care Provider (PCP) is the
doctor you see for your regular health care. You may need to see
your PCP first before you go to other doctors.
We update Find a Doctor /Provider every day. You can find the date
of the most recent update at the bottom of each page. We ask our
providers to let us know:
• When they have a new address or phone number
• If they are accepting new patients
• If they have age limits for the patients they’ll see
• Which hospitals they can admit patients to
• What languages they speak
ECF 2, PageID 231, ¶ 118.
Count One alleges “Violations of Ohio Statutory Health Insuring Corporation Law —
Deceptive Practices (ORC §1751.20; 1751.31).” According to Plaintiffs, CareSource engages in
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an ongoing pattern and practice of publishing fraudulent and negligent misrepresentations
regarding the accuracy and size of its Network of Providers and Marketplace Directories.
Count Two alleges “Breach of Contract.” According to Plaintiffs, the identity of Network
Providers is a material term of the contract. Because there are allegedly significantly fewer
providers in CareSource’s network than what is represented in its directory, members of
CareSource’s Plans do not receive the full benefit of what they bargained for when they selected
the Plan.
Count Three alleges “Insurance Bad Faith.” According to Plaintiffs, CareSource regularly
and repeatedly fails to accurately update its list of providers and continues to identify doctors who
are not in their network, and in many cases, lists doctors that have specifically asked to be removed
from CareSource’s network, contrary to CareSource’s representation on Ohio’s Marketplace
website that it updates the online provider directory daily.
Count Four alleges “Negligent Misrepresentation.” According to Plaintiffs, CareSource
has not used reasonable care or competence in communicating an accurate list of its Network of
Providers and Marketplace Directories.
Count Five alleges “Constructive Fraud.” Plaintiffs allege CareSource failed to live up to
its claims made on its website at the “Find a Doctor/Provider” link.
Count Six alleges as an alternative pleading “Unjust Enrichment.”
According to
Plaintiffs, by paying premiums to CareSource for health insurance coverage, Plaintiffs and class
members conferred a benefit upon CareSource. According to Plaintiffs, CareSource’s retention
of premiums paid by Plaintiffs and Class members is unjust and engaged in with bad faith and/or
ill will under the circumstances presented.
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Count Seven seeks “Declaratory Relief.” Count Eight seeks injunctive relief. Plaintiffs
seek an Order requiring CareSource to develop and implement an adequate system for ensuring
the accuracy of its online provider directory on at least a monthly basis within 90 days of said
Order.
II.
Standard of Review
A motion to remand is determined in light of the law surrounding removal. The procedure
for removal of an action to federal court is found in 28 U.S.C. § 1441(a), which provides:
[A]ny civil action brought in a State court of which the district courts
of the United States have original jurisdiction, may be removed by
defendant or defendants, to the district court of the United States for
the districts and division embracing the place where such action is
pending....
28 U.S.C. § 1441(a). It is well settled that the party seeking removal bears the burden of
establishing its right thereto. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97-98 (1921). The
removal petition is to be strictly construed, with all doubts resolved against removal. Her Majesty
The Queen v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989).
On a motion for remand, the question is whether the district court lacks subject matter
jurisdiction. 28 U.S.C. 1447(c). In other words, the issue is whether the case was properly
removed in the first instance. Provident Bank v. Beck, 952 F. Supp. 539, 540 (S.D. Ohio 1996).
In matters concerning the existence of a federal law question or diversity of citizenship, the right
of removal is determined by pleadings, viewed as of the time when petition for removal is filed.
Albright v. R.J. Reynolds Tobacco Co., 531 F.2d 132 (3d Cir. 1976).
Any doubts resolving federal jurisdiction should be resolved in favor of remand. Hechten
v. Nationwide Fire Ins. Co., 2015 U.S. Dist. LEXIS 5103 (S.D. Ohio, 2015); Nat’l City Bank v.
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Aronson, 474 F. Supp. 2d 925, 2007 U.S. Dist. 11880 (S.D. Ohio, 2007) (removal petitions are to
be strictly construed, with all doubts resolved in favor of remand); Safe Workers’ Org. v. Ballinger,
389 F. Supp. 903, 1974 U.S. Dist. Lexis 5696, (S.D. Ohio 1974); See also, Diamed, LLC. V.
Diamed United States, LLC, 2011 U.S. Dist., LEXIS 47280 (N.D. Ohio 2011) (all doubts regarding
removal must be resolved in favor of remand); Hardy v. Square D. Co., 199 F. Supp. 2d 676, 2002
U.S. Dist. LEXIS 7629, (N.D. Ohio 2002).
III.
Analysis
Defendant would essentially have the Court rule that the ACA has completely preempted
state insurance law, or, at the very least, the causes of action presented in the Complaint. No court
has yet so ruled. Two Courts have persuasively ruled to the contrary. The Court notes a decision
from the Eastern District of Virginia:
In the instant case, federal law does not create the cause of
action asserted. In essence, the Complaint states a breach of
contract claim and seeks a declaration that the Defendant has not
complied with the terms of the parties’ contract, which incorporated
compliance with both federal and state laws as a condition of the
contract. See Compl. ¶¶ 64-68. Generally, the rights and
obligations under the parties’ contract are governed by state law. See
Volt Info. Scis., Inc. v. Bd. Of Trs., 489 U.S. 468, 474 (1989). The
parties, and the court, agree that §2706 of the ACA does not create
a private right of action. See Def’s Mem. Opp’n at 15; Pl.’s Mem.
Supp. Mot. Remand at 6. However, although a private right of
action is a sufficient condition, federal question jurisdiction will
exist in this case only if the Plaintiff’s state law claims necessarily
depend on resolution of a substantial question of federal law.
***
… The Plaintiff’s suit does not “necessarily raise’ an issue
of federal law. As the Court of Appeals for the Fourth Circuit has
recognized, “a plaintiff’s right to relief for a given claim necessarily
depends on a question of federal law only when every legal theory
supporting the claim requires the resolution of a federal issue.”
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Flying Pigs, LLC v. RRAJ Franchising, LLC, 757 F.3d 177, 182 (4th
Cir. 2014) (quoting Dixon, 369 F/3d at 816). Therefore, “if the
plaintiff can support his claim with even one theory that does not
call for an interpretation of federal law, his claim does not ‘arise
under’ federal law for purpose of § 1331.” Dixon, 369 F.3d at 817.
Dominion Pathology Labs., P.C. v. Anthem Health Plans of Virginia, Inc., 111 F. Supp. 3d 731
(E.D. Va. 2015). Such is also the case here. Plaintiff can assert that Defendant failed to uphold
the promises made irrespective of whether they were made to comply with federal law.
The Court also notes a case from the Northern District of Texas:
Plaintiffs seek to remand this civil action on the basis that:
(1) their state law claims are not completely preempted by the
Affordable Care Act; and (2) their state law claims do not
necessarily depend on the resolution of a substantial question of
federal law because (i) there is no federal issue necessary to resolve
their state law claims, (ii) there is no federal issue that is actually
disputed, (iii) there is not a substantial federal interest, and (iv) the
balance of federal and state judicial responsibilities favors state
court.
A. Preemption
The doctrine of complete preemption recognizes that
“federal law can so completely preempt a field of state law that the
plaintiff’s complaint must be recharacterized as stating a federal
cause of action.” Aaron v. Nat’l Union Fire Ins. Co. of Pittsburg,
Pa., 876 F.2d 1157, 1161 (5th Cir. 1989). This exception to the
well-pleaded complaint rule “applies only in extraordinary
circumstances when Congress intends not only to preempt certain
state law, but to replace it with federal law.” Cyr v. Kaiser Found.
Health Plan of Texas, 12 F.Supp.2d 556, 566 (N.D. Tex. 1998)
(citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987)).
Accordingly, the exception “requires a clearly manifested
congressional intent to make causes of action removable to federal
court.” Id. (citing Aaron, 876 F.2d at 1163).
The Supreme Court has explained that “once an area of state
law has been completely pre-empted, any claim purportedly based
on that pre-empted state law is considered, from its inception, a
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federal claim, and therefore arises under federal law.” Caterpillar,
482 U.S. at 393. However, the Supreme Court emphasized that:
[T]he presence of a federal question...in a defensive
argument does not overcome the paramount policies
embodied in the well-pleaded complaint rule—that the
plaintiff is the master of the complaint, that a federal
question must appear on the face of the complaint, and that
the plaintiff may, by eschewing claims based on federal law,
choose to have the cause heard in state court...a defendant
cannot, merely by injecting a federal question into an action
that asserts what is plainly a state-law claim, transform the
action into one arising under federal law, thereby selecting
the forum in which the claim shall be litigated. If a
defendant could do so, the plaintiff would be master of
nothing. Congress has long since decided that federal
defenses do not provide a basis for removal.
Id. at 398-99.
To the extent Defendant argues that federal question
jurisdiction is supported by the doctrine of complete preemption, the
Court is not persuaded. As set forth in Plaintiff’s Motion to
Remand, Congress clearly indicated that the Affordable Care Act
does not preempt state law. Pl.’s Mot. to Remand p.5. Specifically,
42 U.S.C. § 18041 provides “[n]othing in this title shall be construed
to preempt any State law that does not prevent the application of the
provisions of this title.”
****
As such, the Court finds further support for its determination
that the Affordable Care Act was not enacted to preempt state law.
Therefore, the Court finds that the doctrine of complete preemption
is not applicable to the matter now before the Court. In the Court’s
view, Defendant has attempted to assert a federal preemption
defense, therein attempting to form the basis of federal question
jurisdiction.
Accordingly, Plaintiff’s Motion to Remand is
GRANTED as it relates to issue of preemption.
B. The Doctrine of Substantial Federal Question Jurisdiction
Under the substantial federal question doctrine, “the
question is, does a state-law claim necessarily raise a stated federal
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issue, actually disputed and substantial, which a federal forum may
entertain without disturbing any congressionally approved balance
of federal and state judicial responsibilities.” Grable & Sons Metal
Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 314 (2005).
Fifth Circuit precedent holds that “federal question
jurisdiction exists where (1) resolving a federal issue is necessary to
resolution of the state-law claim; (2) the federal issue is actually
disputed; (3) the federal issue is substantial; and (4) federal
jurisdiction will not disturb the balance of federal and state judicial
responsibilities.” Singh v. Duane Morris LLP, 538 F.3d 334, 338
(5th Cir. 2008).1
Having reviewed the parties’ briefings, the Court is of the
opinion that there are no federal issues necessary to the resolution
of Plaintiffs’ state law claims.
****
At any rate, 42 U.S.C. § 18041 provides that “[n]othing in
this title shall be construed to preempt any State law that does not
prevent the application of the provisions of this title.”
Texas Med. Res., LLP v. Molina Healthcare of Texas, Inc., No. 3:18-CV-2784-C, 2019 WL
363178, at *2-4 (N.D. Tex. Jan. 2, 2019).
IV.
Conclusion
Because Plaintiffs’ claims are not preempted by ACA, the Court GRANTS Motion to
Remand by Plaintiffs. ECF 5. Plaintiffs’ request for costs, expenses and attorney’s fees incurred
as a result of the removal pursuant to 28 U.S.C. §1447 on the basis that CareSource’s Notice of
Removal has no legitimate legal support is DENIED.
The CLERK is ORDERED to REMAND the instant action to Montgomery County Court
of Common Pleas.
1 Sixth Circuit precedent is similar. See Mikulski v. Centerior, 501 F.3d 555, 568 (6th Cir. 2007)
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DONE and ORDERED in Dayton, Ohio, this Monday, March 11, 2019.
/s/ Thomas M. Rose
________________________________
THOMAS M. ROSE
UNITED STATES DISTRICT JUDGE
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