Fox-Quamme et al v. Health Net Health Plan of Oregon, Inc. et al

Filing 49

ORDER: Granting Defendants' Motions to Dismiss 41 and 42 , dismissing Plaintiffs' Claim Three with prejudice. Oral Argument set for 5/9/2016 is STRICKEN. Court sets Scheduling Conference for 5/9/2016 at 1:30 p.m. (See attached Order.) Signed on 4/29/2016 by Judge Anna J. Brown. (sm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

EILEEN FOX-QUAMME, individually
and on behalf of all others
similarly situated; LISA HESS,
individually and on behalf of all
others similarly situated; MARY
REDFIELD, individually and on
behalf of all others similarly
situated; O.W., a minor child,
individually and on behalf of all
others similarly situated; JEFF
CLARK, individually and on behalf
of all others similarly situated;
and LEIGH ANN CHAPMAN,
individually and on behalf of all
others similarly situated,

3:15-cv-01248-BR
ORDER

Plaintiffs,
v.
HEALTH NET HEALTH PLAN OF OREGON,
INC., an Oregon corporation, and
AMERICAN SPECIALTY HEALTH GROUP,
INC., a California corporation,
Defendants.

BROWN, Judge.
This matter comes before the Court on the Motion (#41) to
Dismiss First Amended Class Action Allegation Complaint filed by
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Health Net Health Plan of Oregon and the Motion (#42) to Dismiss
First Amended Class Action Complaint filed by American Specialty
Health Group.

In their Motions Defendants contend this Court

must dismiss Claim Three in Plaintiffs’ First Amended Class
Action Complaint (#38) because Claim Three fails to state a claim
on which relief can be granted and Plaintiffs lack standing to
obtain the declaratory relief sought.

After a thorough review of

the pleadings, the Court concludes oral argument is not necessary
to resolve these Motions and, accordingly, STRIKES the oral
argument set for May 9, 2016, at 1:30 p.m.

The Court directs the

parties to be prepared at that time to conduct the scheduling
conference set for that day.
In Claim Three Plaintiffs Jeff Clark and Leigh Ann Chapman
(collectively referred to as the Provider Plaintiffs), two
licensed naturopathic physicians, seek a declaration that certain
terms in contracts between Health Net and American Specialty
violate 42 U.S.C. § 300gg-5 because those terms illegally
discriminate against naturopathic doctors and, therefore, are
void.

The Provider Plaintiffs are only named in Claim Three.

Although the Provider Plaintiffs contend the contracts between
Defendants violate § 300gg-5, which is part of the Employee
Retirement Income Security Act (ERISA), the Provider Plaintiffs
concede they do not have a private right of action under ERISA
and instead contend Plaintiffs’ Claim Three arises pursuant to

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the Declaratory Judgment Act, 28 U.S.C. § 2201.
It is well-settled, however, that the Declaratory Judgment
Act does not create a stand-alone cause of action.

See Franchise

Tax Bd. Of State of Cal. v. Constr. Laborers Vacation trust for
S. California, 463 U.S. 1, 15 (1983)(“‘[T]he operation of the
Declaratory Judgment Act is procedural only.’”)(quoting Skelly
Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 70 S.Ct. 876, 94
L.Ed. 1194 (1950)).

See also Graham v. U.S. Bank, Nat’l Assn.,

No. 3:15-cv-0990-AC, 2015 WL 10322087, at *13 (D. Or. Dec. 2,
2015)(“The Declaratory Judgment Act . . . does not create a cause
of action; instead, it creates a remedy for existing causes of
action.”).

The Provider Plaintiffs, nonetheless, contend they

have a cause of action as to Claim Three because they are thirdparty beneficiaries of the contract between Health Net and
American Specialty.

Even if the Provider Plaintiffs could

establish they were third-party beneficiaries, however, such a
claim could only arise under ERISA, (which, as noted, Provider
Plaintiffs concede does not provide them with a cause of action)
or under some other unpled, state-law cause of action over which
this Court would not have jurisdiction.1

Accordingly, because

the Declaratory Judgment Act does not create a stand-alone cause

1

There does not exist diversity between the parties, and,
in any event, the Court would not exercise supplemental
jurisdiction over Claim Three because it is factually and legally
distinct from Claims One and Two, which are brought by Plaintiffs
who are not similarly situated.
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of action, the Court concludes Claim Three fails to state a
claim.
The Court previously dismissed a materially identical Claim
Three in Plaintiffs’ original Complaint (#1) for the same reason
and, by Order (#32) issued January 7, 2016, provided Plaintiffs
with an opportunity to re-plead for the purpose of specifically
identifying “the cause of action each of the service-provider
Plaintiffs rely on to justify the declaratory relief that they
seek.”

Because Plaintiffs have failed to identify a viable cause

of action as to Claim Three after being provided with the
opportunity to amend their Complaint, the Court concludes any
further opportunity to amend would be futile.
Accordingly, on this record the Court GRANTS the Motion
(#41) to Dismiss First Amended Class Action Allegation Complaint
filed by Health Net Health Plan of Oregon and the Motion (#42) to
Dismiss First Amended Class Action Complaint filed by American
Specialty Health Group and DISMISSES Plaintiffs’ Claim Three with
prejudice.
IT IS SO ORDERED.
DATED this 29th day of April, 2016.

/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge
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