Garrett v. EagleMed, LLC

Filing 25

OPINION AND ORDER by Judge Claire V Eagan that plaintiff's Motion to Remand (Dkt. # 11) is denied. A scheduling order will be entered forthwith. The stay entered on July 29, 2016 of the briefing deadlines on defendant's motion t o dismiss is lifted. Plaintiff's response to the motion to dismiss (Dkt. # 16) is due no later than September 29, 2016, and defendant's reply is due no later than October 13, 2016. ; lifting the stay; setting/resetting deadline(s) /hearing(s): ( Responses due by 9/29/2016, Replies due by 10/13/2016); denying 11 Motion to Remand (Re: 18 Minute Order,,,,,, Striking/Terminating Deadline(s)/Hearing(s),,, Ruling on Motion to Strike Hearing(s)/Deadline(s),, 16 MOTION to Dismiss for Lack of Jurisdiction MOTION to Dismiss for Failure to State a Claim , State Court Petition/Complaint ) (RGG, Chambers)

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA

BRENDA GARRETT,

)
)
)
)
)
)
)
)
)

Plaintiff,
v.
EAGLEMED, LLC,
Defendant.

Case No. 16-CV-0377-CVE-FHM

OPINION AND ORDER
Now before the Court is plaintiff’s Motion to Remand (Dkt. # 11). Defendant EagleMed,
LLC (EagleMed) removed this case to federal court on the basis of federal question jurisdiction, and
it argues that plaintiff’s state law claim seeking declaratory relief is completely preempted by the
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1101 et seq. (ERISA). Plaintiff
asks the Court to remand the case, because her claim against EagleMed is based solely on state law
and she is not seeking benefits under an employee benefits plan. Dkt. # 11, at 2.
I.
On February 15, 2014, Brenda Garrett was hospitalized in Joplin, Missouri, and physicians
at the hospital determined that Garrett should be transferred to the Cox Medical Center in
Springfield, Missouri for treatment. Dkt. # 2-1. EagleMed transported Garrett to the Cox Medical
Center by helicopter, and EagleMed billed plaintiff’s health insurer $35,009.75 for providing the
transportation. Id. at 2. EagleMed later sent a bill to plaintiff directly after plaintiff’s “agents and/or
counsel” disputed that the amount billed by EagleMed was excessive. Plaintiff has not alleged in
her petition that her insurer formally denied coverage for EagleMed’s bill or made a partial payment
to EagleMed. Plaintiff filed this case in Ottawa County District Court seeking a declaratory

judgment that she is not obligated to pay EagleMed the full amount of the bill, and she also requests
a declaratory judgment as to the “reasonable value of the services rendered” by EagleMed. Id. at
3.
EagleMed removed the case to federal court on the basis of federal question jurisdiction,
even though plaintiff had alleged a claim arising under state law. EagleMed assumes that the facts
alleged in Garrett’s petition are true for the purpose of filing a notice of removal, but EagleMed has
also attached to the notice of removal a letter from the law firm of Conner & Winters, LLP. The
letter was sent to EagleMed by Conner & Winters in its capacity as general counsel for Newell
Coach Corporation (Newell Coach). Newell Coach is Garrett’s employer and Newell Coach
operates a self-funded health and welfare plan for its employees. Dkt. # 2-6, at 1. Newell Coach
disputed that the amount charged by EagleMed was “reasonable and customary,” and it claimed that
it would be violating its fiduciary duty to plan participants by paying the full amount of the bill. Id.
at 2. Newell Coach offered to pay EagleMed $7,500 to fully resolve EagleMed’s claim or it offered
to “stand in the shoes of the beneficiary and defend any collection action that EagleMed must file
in Oklahoma.” Id. at 3. EagleMed states it that has attempted to continue negotiating with Newell
Coach, but Newell Coach has not paid anything to EagleMed and there is no pending litigation
between the parties. Dkt. # 2, at 3.
EagleMed filed a motion to dismiss (Dkt. # 16) asserting that the Court lacks personal
jurisdiction over EagleMed and that plaintiff’s claim is preempted by the Airline Deregulation Act
of 1978. Plaintiff requested that the Court stay the briefing deadlines as to defendant’s motion to
dismiss until her motion to remand was resolved. Dkt. # 17. The Court granted plaintiff’s motion
and stayed the briefing deadlines as to defendant’s motion to dismiss. Dkt. # 18. The Court also

2

found good cause to stay the entry of a scheduling order, and no scheduling order has been entered.
Dkt. # 21.
II.
Plaintiff asks the Court to remand this case to state court, because she has alleged a state law
claim only and her claim does not implicate any action by Newell Coach in its capacity as plaintiff’s
self-funded health insurer. Defendant responds that plaintiff cannot avoid ERISA by artful pleading
and plaintiff’s claim necessarily requires the resolution of issues arising under an employee benefits
plan.
ERISA provides a civil claim for enforcement of a beneficiary’s rights under an employee
benefits plan governed by ERISA. 29 U.S.C. § 1132(a). ERISA preempts all state laws “insofar
as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this
title.” 29 U.S.C. § 1144. The Supreme Court has noted that ERISA’s preemption provision is
“conspicuous for its breadth” and has interpreted the term “relate to” broadly:
“A law ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it
has a connection with or reference to such a plan.” Under this “broad common-sense
meaning,” a state law may “relate to” a benefit plan, and thereby be pre-empted, even
if the law is not specifically designed to affect such plans, or the effect is only
indirect. Pre-emption is also not precluded simply because a state law is consistent
with ERISA’s substantive scheme.
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990). The Supreme Court has clearly held
that ERISA preempts common law claims, as well as claims arising under state statutory schemes
governing employee benefit plans. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987). Even
if ERISA provides fewer remedies than state law, this has no bearing on the preemption analysis
because § 1144 “evidences Congress’s policy choices and intent to provide only the remedies it
specified.” David P. Coldesina, D.D.S. v. Estate of Simper, 407 F.3d 1126, 1139 (10th Cir. 2005).
3

However, these principles relate to conflict preemption under ERISA, and § 1144 does not
automatically convert every state law claim preempted by ERISA into a federal claim. Felix v.
Lucent Technologies, Inc., 387 F.3d 1146, 1156 (10th Cir. 2004).
The scope of ERISA preemption is sufficiently broad that it completely preempts any state
law claims falling within its civil enforcement provision. Metropolitan Life Ins. v. Taylor, 481 U.S.
58 (1987). Complete preemption is an exception to the well-pleaded complaint rule, and permits
removal of a complaint alleging state law claims if “federal preemption makes the state law claim
‘necessarily federal in character . . . .” Turgeau v. Administrative Review Bd., 446 F.3d 1052, 1061
(10th Cir. 2006). Thus, even if a complaint alleges state law claims, a state law claim may be
converted into an ERISA claim for purposes of federal question jurisdiction and the well-pleaded
complaint rule if the claim is completely preempted by ERISA. Felix, 387 F.3d at 1156. The
Supreme Court has stated:
[I]f an individual brings suit complaining of a denial of coverage . . . , where the
individual is entitled to such coverage only because of the terms of an ERISAregulated employee benefit plan, and where no legal duty (state or federal)
independent of ERISA or the plan terms is violated, then the suit falls “within the
scope of” ERISA § 502(a)(1)(B). In other words, if an individual, at some point in
time, could have brought his claim under ERISA § 502(a)(1)(B), and where there is
no independent legal duty that is implicated by a defendant’s actions, then the
individual’s cause of action is completely preempted by ERISA § 502(a)(1)(B).
Davila, 542 U.S. at 210.
Under the first prong of Davila, the Court must consider whether “at some time, [plaintiff]
could have brought [her] claim under ERISA . . . .” The Tenth Circuit has stated that the first prong
is satisfied when the plaintiff’s claim “asserts rights to which the plaintiff is entitled ‘only because
of the terms of an ERISA-regulated employee benefit plan.’” Salzer v. SSM Health Care of
Oklahoma Inc., 762 F.3d 1130, 1135 (10th Cir. 2014). ERISA provides that “[a] civil action may
4

be brought--(1) by a participant or beneficiary-- (B) to recover benefits due to [her] under the terms
of [her] plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future
benefits under the terms of the plan . . . .” 29 U.S.C. § 1132(a). Plaintiff argues that she is not
seeking to enforce any right under an employee benefits plan and the relief she seeks is entirely
independent of any dispute between Newell Coach and EagleMed. She further argues that the Court
can consider only the allegations of her petition and “Newell Coach’s actions [are not] a proper
consideration for the court in determining removeability.” Dkt. # 11, at 5. While plaintiff has
attempted to frame the suit in a manner that does not involve Newell Coach, the Court cannot
disregard that the case has reached this point because plaintiff’s health insurer has refused to pay
EagleMed’s claim. The manner in which plaintiff has pled her claim attempts to minimize this fact,
but plaintiff’s petition makes it clear that her health insurer was billed and that “plaintiff, either
herself or through her agents and/or counsel” has disputed EagleMed’s bill. Dkt. # 2-1, at 2.
Plaintiff certainly has a right to submit EagleMed’s bill for payment to her health insurer because,
under § 1132(a), she may seek to recover benefits or at least clarify whether EagleMed’s bill is
covered by Newell Coach’s self-funded health plan. In Salzer, the Tenth Circuit explained that a
state law claim falls within the first prong of Davila if a court will be required to interpret an ERISA
plan, and this includes whether plaintiff is entitled to pay a discounted bill because of the terms of
an ERISA plan. Salzer, 762 F.3d at 1138. Regardless of how plaintiff’s claim is characterized, the
essential purpose of plaintiff’s claim is to pay a reduced bill to EagleMed and this will necessarily
require consideration of whether plaintiff is entitled to pay a reduced bill because of her participation
in an employee benefits plan. Thus, plaintiff’s claim against EagleMed asserts a right arising only
because plaintiff is a participant in an employee benefits plan.

5

The Court must next consider whether “there is no other independent legal duty that is
implicated by [the] defendant’s actions.” Davila, 542 U.S. at 210. This prong of Davila is met if
“interpretation of the Plan is a necessary component” of plaintiff’s state law claim. Salzer, 762 F.3d.
at 1138. Plaintiff argues that her claim arises under “state quasi-contract law,” because there was
no contract between her and EagleMed and the only remedy available to her is equitable relief under
state law. Dkt. # 11, at 6. It is unclear if plaintiff is reluctant or unwilling to press her health
insurer for a decision on EagleMed’s bill, but plaintiff clearly has an independent right under ERISA
to make a claim with her health insurer for payment of the bill.1 EagleMed initially submitted a bill
to Newell Coach in its capacity as the administrator of a self funded health plan and, based on the
allegations of plaintiff’s amended complaint, it appears that the plan administrator has not taken any
final action on that bill. In Salzer, the Tenth Circuit found that a plaintiff’s claim for tortious
interference with contract under Oklahoma law required the interpretation of an employee benefits
plan, because the plaintiff could be entitled to recover some amount of benefits under the plan that
would reduce his liability to the defendant. Salzer, 762 F.3d at 1138. In this case, plaintiff has a
right to present her claim for payment of EagleMed’s bill to Newell Coach, but the amended
complaint contains no allegation that plaintiff has exercised her rights under the plan and that her
claim for benefits has been denied. The Court cannot resolve plaintiff’s claim for equitable relief
against defendant without referring to Newell Coach’s self-funded health plan, because the Court

1

The Court notes that both Newell Coach and plaintiff are represented by Conner & Winters
and plaintiff could be referring to the self-funded health plan operated by Newell Coach as
her “agent,” and it appears that plaintiff and Newell Coach are currently acting as mutually
interested parties. Of course, both plaintiff and Newell Coach have a shared interest in
negotiating a reduction in EagleMed’s bill, but as the litigation proceeds plaintiff and Newell
Coach may become adverse if Newell Coach refuses to fully resolve EagleMed’s bill for the
transportation of plaintiff.
6

will need to know if the plan will cover some or all of the disputed bill in order to determine the
amount of the outstanding liability allegedly owed to defendant. This is an issue that requires
interpretation of the plan and the second prong of Davila is satisfied.
The Court finds that plaintiff’s state law claim is completely preempted by ERISA and the
case was properly removed to federal court. Plaintiff has attempted to plead her claim in a manner
that does not implicate ERISA, but plaintiff certainly could have brought this case as a claim against
her insurer and the Court will necessarily need to consider the terms of the plan to determine the
amount of plaintiff’s outstanding obligation to EagleMed. The Court has subject matter jurisdiction
over plaintiff’s claim and her motion to remand should be denied.2
IT IS THEREFORE ORDERED that plaintiff’s Motion to Remand (Dkt. # 11) is denied.
A scheduling order will be entered forthwith.
IT IS FURTHER ORDERED that the stay entered on July 29, 2016 of the briefing
deadlines on defendant’s motion to dismiss is lifted. Plaintiff’s response to the motion to dismiss
(Dkt. # 16) is due no later than September 29, 2016, and defendant’s reply is due no later than
October 13, 2016.
DATED this 8th day of September, 2016.

2

The Court has subject matter jurisdiction to the extent that the case was properly removed
to federal court, but the Court will rule on the issues personal jurisdiction and preemption
under the Airline Deregulation Act when defendant’s motion to dismiss is fully briefed. The
Court also notes that there could be an issue as to the exhaustion of administrative remedies
if EagleMed has demanded payment from plaintiff’s insurer and that claim has not been fully
resolved by the plan administrator. See Whitehead v. Oklahoma Gas & Elec. Co., 187 F.3d
1185 (1999); McGraw v. Prudential Ins. Co. of America, 137 F.3d 1253 (10th Cir. 1998).
7