Frazier v. Humana Wisconsin Health Organization Insurance Corp et al

Filing 17

ORDER granting 6 Plaintiff's Motion to Remand and Remanding this case to the District Court of Oklahoma County, State of Oklahoma (as more fully set out). Signed by Honorable Patrick R Wyrick on 1/7/2021. (ks)

Case 5:19-cv-01121-PRW Document 17 Filed 01/07/21 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA

CAROLYN S. FRAZIER,
Plaintiff,
v.
HUMANA WISCONSIN HEALTH
ORGANIZATION INSURANCE
CORP. d/b/a HUMANA GOLD PLUS
(HMO) and ALAN SALINAS,
Defendants.

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Case No. CIV-19-01121-PRW

ORDER
On January 2, 2020, Plaintiff filed a Motion to Remand (Dkt. 6) pursuant to 28
U.S.C. § 1447(c). For the reasons outlined below, the Court GRANTS the Motion to
Remand (Dkt. 6) and remands the case.
Background
Plaintiff sued Defendants Humana Wisconsin Health Organization Insurance
Corporation and Alan Salinas in state court for “false representations, concealment and
deceit” under state law. 1 Plaintiff alleges that Mr. Salinas tried to sell her a Humana
Medicare Advantage plan and, after failing to do so, asked Plaintiff “to sign a form in order
to verify that he had met with her for a sales presentation” so that his employer could
“verify the number of sales he was attempting each week.” 2 About eight months later,

1

Pl.’s Pet. (Dkt. 1-1) ¶¶ 14–15, at 4–5.

2

Id. ¶ 6, at 2.
1

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Plaintiff learned that her previous Medicare supplemental insurance had been replaced with
Humana Medicare Advantage (MA) plan. 3 Plaintiff thus alleges that Defendants replaced
her insurance coverage without her consent. 4 Plaintiff alleges this caused her “physical
injury, pain and discomfort, emotional distress, anxiety, embarrassment and delays,
improper interference with her proper medical care, the lost premiums paid in 2018 for her
Medicare supplement policy and other consequential damages.” 5 Plaintiff does not seek
recovery of “any retroactive payment of benefits” under the Humana MA plan, as she
asserts that “there are no unpaid benefits involved in these damages that resulted from the
Defendant’s [sic] false representations, concealment and deceit.” 6 In keeping with section
2008(A)(2) of the Oklahoma Pleading Code, 7 Plaintiff prays for “damages, both
compensatory damages and punitive damages,” in an amount that “is in excess of the
amount required for diversity jurisdiction pursuant to § 1332 of Title 28 of the United States
Code. 8

3

Id. ¶ 7, at 3.

4

Id.

5

Id. ¶ 15, at 5.

6

Id. ¶16, at 5.

7

See Okla. Stat. tit. 12, § 2008(A)(2) (Supp. 2019) (“Every pleading demanding relief for
damages in money in excess of the amount required for diversity jurisdiction pursuant to
Section 1332 of Title 28 of the United States Code shall, without demanding any specific
amount of money, set forth only that the amount sought as damages is in excess of the
amount required for diversity jurisdiction pursuant to Section 1332 of Title 28 of the United
States Code, except in actions sounding in contract.”).

8

Pl.’s Pet. (Dkt. 1-1) at 5.
2

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Defendants removed the case to federal court, asserting that “[t]his Court has federal
question jurisdiction over the matter pursuant to 28 U.S.C § 1331” and that “Plaintiff’s
claims are preempted by 42 U.S.C. § 1395w-26(b)(3), which states in part, ‘[t]he standards
established under this part shall supersede any State law or regulation . . . with respect to
MA plans which are offered by MA organizations under this part.’” 9
Plaintiff has now filed a Motion to Remand (Dkt. 6). Defendants responded (Dkt.
8), and Plaintiff replied (Dkt. 12).
Governing Law
A federal district court must remand any removed case over which it lacks subject
matter jurisdiction. 10 The burden rests on the removing party invoking the court’s
jurisdiction to demonstrate that the action was properly removed. 11 Because federal courts
are “limited tribunals,” there is a presumption against jurisdiction over removed cases. 12
Under 28 U.S.C. § 1331, federal district court have subject matter jurisdiction over
“all civil actions arising under the Constitution, laws, or treaties of the United States.” 13
“For a case to arise under federal law within the meaning of § 1331, the plaintiff’s ‘wellpleaded complaint’ must establish one of two things: ‘either that federal law creates the

9

Defs.’ Notice of Removal (Dkt. 1) ¶ 3, at 2 (alteration and ellipses in original).

10

28 U.S.C. § 1447(c) (2012).

11

Dutcher v. Matheson, 733 F.3d 980, 985 (10th Cir. 2013) (citing United States ex rel.
Hafter v. Spectrum Emergency Care, Inc., 190 F.3d 1156, 1160 (10th Cir. 1999)); Town of
Freedom v. Muskogee Bridge Co., 466 F. Supp. 75, 77 (W.D. Okla. 1978).

12

Bd. of Cnty. Comm’rs v. Suncor Energy (U.S.A.) Inc., 965 F.3d 792, 814 (10th Cir. 2020)
(quoting Pritchett v. Off. Depot, Inc., 420 F.3d 1090, 1094–95 (10th Cir. 2005)).
13

28 U.S.C. § 1331 (2012).
3

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cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a
substantial question of federal law.’” 14 The Tenth Circuit has described this “well-pleaded
complaint rule” as follows:
The well-pleaded complaint rule makes the plaintiff the “master” of
his claim. The plaintiff can elect the judicial forum—state or federal—based
on how he drafts his complaint. Although he “may not circumvent federal
jurisdiction by omitted federal issues that are essential to his . . . claim,” he
can nevertheless “avoid federal jurisdiction by exclusive reliance on state
law.” “Neither the plaintiff’s anticipation of a federal defense nor the
defendant’s assertion of a federal defense is sufficient to make the case arise
under federal law.” 15
“The doctrine of ‘complete preemption,’ however, is ‘a corollary or an exception to the
well pleaded complaint rule,’ under which ‘a state law cause of action may be removed to
federal court on the theory that federal preemption makes the state law claim necessarily
federal in character.’” 16 The complete preemption exception is rare, however, as “only a
few federal statutes [] so pervasively regulate their respective areas that they have complete
preemptive force.” 17

14

Firstenberg v. City of Santa Fe, 696 F.3d 1018, 1023 (10th Cir. 2012) (quoting
Nicodemus ex rel. Warren D. Nicodemus Living Trust dated Aug. 5, 1999 v. Union Pac.
Corp. (Nicodemus II), 440 F.3d 1227, 1232 (10th Cir. 2006)).
15

Id. (citations omitted) (quoting Nicodemus II, 440 F.3d at 1232; Turgeau v. Admin. Rev.
Bd., 446 F.3d 1052, 1060 (10th Cir. 2006)).
16

Salzer v. SSM Health Care of Okla. Inc., 762 F.3d 1130, 1134 (10th Cir. 2014) (quoting
Turgeau, 446 F.3d at 1061).
17

Id. (quoting Hansen v. Harper Excavating, Inc., 641 F.3d 1216, 1221 (10th Cir. 2011)).
4

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Analysis
Plaintiff Motion (Dkt. 6) argues that the well-pleaded complaint rule mandates
remand because her Petition (Dkt. 1-1) does not raise a substantial federal issue but only
includes claims—fraud, deceit, nondisclosure, and concealment—derived from Oklahoma
law. 18 Along these lines, she argues that she derives neither her standing nor the substantive
basis for her claims from the Medicare Act, nor are her claims inextricably intertwined
with a claim for Medicare or MA benefits. 19 Plaintiff also argues that, “even if [her] claims
had ‘arisen under’ the Medicare Act, . . . the Court would still lack jurisdiction” because
the Secretary of Health and Human Services has sole jurisdiction over such claims. 20
Lastly, Plaintiff argues that 42 U.S.C. § 1395W-26(b)(3) does not completely preempt her
state law claims, 21 and in any event, complete preemption is an affirmative defense that
cannot serve as the basis for federal question jurisdiction. 22
Defendants Response (Dkt. 8) counters that, while Plaintiff has “couched” her
allegations in terms of state-law causes of action, the claims are actually federal claims
arising under the Medicare Act. 23 Defendants argue that Plaintiff is really “attack[ing] the
sufficiency of the marketing materials and in-person presentation—which were created and
18

See Pl.’s Mot. to Remand (Dkt. 6) at 7–8, 17–20. For citing purposes, the Court
references the ECF page numbers appearing at the top of the document, rather than the
page numbers appearing at the bottom.

19

Id. at 17.

20

Id. at 20–21.

21

Id. at 7, 22.

22

Id. at 22 (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987)).

23

Defs.’ Resp. to Pl.’s Mot. to Remand (Dkt. 8) at 2.
5

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approved pursuant to federal law and statute” 24—which therefore “implicates disputed and
substantial federal questions” arising under the Medicare Act. 25 Defendants point out that
the Medicare Modernization Act (“MMA of 2003”) directs the Centers for Medicare and
Medicaid Services (CMS) to regulate marketing material and that CMS has “created a
detailed framework for approval of advertisements and other marketing material.” 26 Thus,
Defendants contend that states do not have the authority to regulate marketing of Medicare
plans and that a challenge to those materials must arise under federal law. 27 Although the
term “preemption” is occasionally found throughout Defendants’ Response (Dkt. 8), 28
Defendants do not seem to rely on complete preemption as a basis for federal question
jurisdiction. 29

24

Id. at 7; see also id. at 2 (“Plaintiff alleges the sales presentation was deficient because
neither Humana nor Salinas: (1) told Plaintiff was a Medicare Advantage Plan was or how
it would replace Medicare; (2) told Plaintiff he was taking action to disrupt her Medicare
coverage; (3) gave her advice on how to preserve her Medicare coverage; (4) disclosed
anything that was happening; and, (5) disclosed how the supplemental plan would work.
Plaintiff alleges Defendants knew their marketing materials and strategies were
misleading.” (citing Pl.’s Pet. (Dkt. 1-1) ¶¶ 6, 8, at 2–4)).

25

Id. at 1.

26

Id. at 5 (citing 42 U.S.C. § 1395w-101(b)(1)(B)(vi); 42 C.F.R. § 423.50).

27

See id. at 5–6.

28

See, e.g., id. at 2 (“When determining whether federal law preempts state law, a
plaintiff’s characterization of a claim is not conclusive.”); id. at 5 (“Federal law and
regulations completely displace any state laws regarding the marketing or promotion of
Humana’s plan.” (citing Clay v. Permanente Med. Grp., Inc., 540 F. Supp. 2d 1101, 1108–
10 (N.D. Cal. 2007); 73 Fed. Reg. 28556, 28582 (May 16, 2008)).
29

See id. at 3–4 (“Contrary to Plaintiff’s statement, ‘complete preemption’ is not the only
basis for federal jurisdiction. . . . Simply, a state law claim may ‘arise under’ the Medicare
Act, regardless of whether there is complete preemption . . . .”).
6

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In her Reply (Dkt. 12), Plaintiff claims that she is not challenging Mr. Salinas’s
presentation, nor Humana’s marketing materials, but rather a “lie told by Mr. Salinas” that
induced her signature for enrollment without her consent. 30 Plaintiff argues, “Nothing
indicates that Mr. Salinas’ oral misrepresentation was made in conjunction with CMSapproved materials such as ‘marketing materials.’” 31 Plaintiff even characterizes Mr.
Salinas’s misrepresentation as an “ad hoc” communication that is specifically excluded
from the definition of “marketing materials” that appears in 42 C.F.R. § 422.2260. 32
Based on the briefing, the sole issue before the Court is whether Plaintiff’s Petition
(Dkt. 1-1) asserts a claim arising under federal law—specifically, the Medicare Act. Upon
consideration of the facts and the parties’ arguments, the Court finds that Defendants have
failed to carry their burden in establishing federal question jurisdiction and that this case
should be remanded.
First, the face of Plaintiff’s Petition (Dkt. 1-1) makes no mention of a federal cause
of action, nor does it explicitly ask the court to resolve any federal law issue. It also
disclaims recovery of any benefits that would require the Court to interpret either Medicare
coverage or the MA plan.

30

Pl.’s Reply to Defs.’ Resp. to Pl.’s Mot. to Remand (Dkt. 12) at 1.

31

Id. at 7–8.

32

Id. at 7 (“Marketing materials exclude ad hoc enrollee communications materials,
meaning informational materials that— . . . (iii) Do not include information about the plan’s
benefit structure.” (quoting 42 C.F.R. § 422.2260(6))).
7

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Second, Plaintiff’s right to relief does not necessarily depend upon resolution of a
substantial question of federal law. Although an allegation that CMS-regulated marketing
materials are misleading might involve a substantial question of federal law, this case does
not involve a consenting enrollee who, after enrollment, has challenged the marketing
materials. This case is thus distinguishable from cases like Clay v. Permanent Medical
Group, Inc., 540 F. Supp. 2d 1101 (N.D. Cal. 2007), and Uhm v. Humana, Inc., 620 F.3d
1134 (9th Cir. 2010), which involved consenting enrollees directly challenging the
marketing materials. 33 Here, Plaintiff is challenging the allegedly tortious actions that led
to a purportedly fraudulent enrollment. Furthermore, resolution of this dispute does not
depend on the law and regulations derived from the Medicare Act. In Haaland v.
Presbyterian Health Plan, Inc., 292 F. Supp. 3d 1222 (D.N.M. 2018), the district judge
granted summary judgment and held that § 1395w-26(b)(3) did preempt state claims for
wrongful and tortious denial of benefits and wrongful death because, in order to resolve

33

The plaintiffs in the Uhm case challenged the marketing materials as fraudulent after
enrolling in a Humana Medicare Part D plan. Uhm, 620 F.3d at 1139. The Ninth Circuit
held that fraud and inducement-by-fraud claims were preempted, because if the state court
were to determine that the materials were misrepresentations, then they would be “directly
undermin[ing] CMS’s prior determination that those materials were not misleading.” Id. at
1157. The Ninth Circuit went on to explain that “there are other tort or State contract law,
or consumer protection-based claims that would be entirely independent of the issue of
whether services are required under M+C provisions.” Id. at 1155 (quoting 65 Fed. Reg.
40170, 40261 (June 29, 2000)).
The plaintiffs in the Clay case were challenging the adequacy under state law of the
marketing material’s disclosures about an arbitration agreement after their decedent had
enrolled in a MA plan with Kaiser. Clay, 540 F. Supp. 2d at 1104, 1108. The district court
held that the Medicare Act preempted state law governing disclosures about arbitration,
found that all plaintiffs were bound by the arbitration provisions in the MA plan, and
granted the defendants’ motion to compel arbitration.
8

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the denial-of-coverage dispute, the court would be required to evaluate the laws and
regulations of the Medicare Act. 34 That comes as no surprise, given that a challenge to the
timeliness, procedures, and administration of coverage hinges on the authority derived
from the Medicare Act. 35 No such challenge exists in this case. Plaintiff does not assert
claims over coverage, denial of coverage, benefits, or procedures. Plaintiff instead asserts
that state law torts were committed when she was fraudulently enrolled into Defendants’
MA plan without her consent.
Defendants have accordingly failed to meet their burden of showing that subject
matter jurisdiction exists.
IT IS THEREFORE ORDERED that Plaintiff’s Motion to Remand (Dkt. 6) is
GRANTED. Accordingly, the Court REMANDS this case to the District Court of
Oklahoma County, State of Oklahoma.
IT IS SO ORDERED thia 7th day of January, 2021.

34

292 F. Supp. 3d at 1223, 1231 (D.N.M. 2018) (plaintiffs were enrollees challenging
coverage).
35

Alston v. United Healthcare Servs., Inc., 291 F. Supp. 3d 1170 (D. Mont. 2018) (holding
that the state law claims do not survive preemption because the Medicare Act governs the
denial of coverage); N.Y. City Health & Hosps. Corp. v. WellCare of N.Y., Inc., 769 F.
Supp. 2d 250 (S.D.N.Y. 2011) (denying remand because the “case implicates the complex
reimbursement schemes created by Medicare law,” and will “affect the hundreds of MA
Organizations that have contracted with CMS”).
9