Walker v. Regence BlueCross BlueShield of Oregon et al

Filing 24

OPINION AND ORDER denying #21 Second Motion to Dismiss for Failure to State a Claim under Rule 12(b)(2) based on lack of personal jurisdiction; and that Defendants BCBST and HCSCs Rule 12(b)(6) Motion to Dismiss is DENIED. (Signed by Magistrate Judge John R Froeschner) Parties notified.(sanderson, 3)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT

December 23, 2015
David J. Bradley, Clerk

FOR THE SOUTHERN DISTRICT OF TEXAS

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GALVESTON DIVISION

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KIRSTIN WALKER, Individually and as
Next Friend for LW, a Minor
Plaintiffs,
vs.
REGENCE BLUE CROSS BLUE
SHIELD OF OREGON, BLUE CROSS
BLUE SHIELD OF TEXAS, a Division
of Health Care Service Corp., and
HEALTH CARE SERVICE CORP.,
Defendants.

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CIVIL ACTION NO. G-15-064

OPINION AND ORDER
Before the Court, with the consent of the parties, is Defendants' Second Motion to
Dismiss. (Dkt. No. 21). Defendant Regence Blue Cross Blue Shield of Oregon (RBCBSO) seeks
dismissal of the action against it based on lack of personal jurisdiction and all the Defendants seek
dismissal under Rule 12(b)(6).
I. BACKGROUND

This lawsuit arises out of a dispute over the payment of claims for medical expenses
submitted under a health care plan. Plaintiffs Kirstin Walker (Walker) and her minor son, LW.,
are insured under a health care plan that Walker obtained through her employer, Banfield Pet

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Hospital (Banfield). 1 Plaintiffs allege that Defendants refused, in whole or in part, to pay for
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Banfield Pet Hospital, an Oregon-based company, operates veterinary clinics throughout the
country that are typically located inside PetSmart stores. (See Dkt. No. 19, Ex 1).

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medical expenses for LW's air ambulance transportation and for mental health care. (Dkt. No.
13). Walker responded by contacting the media which she alleges prompted Defendants to assure
Walker that they would dedicate an employee to oversee her claims so that future difficulties in
the claims handling process could be avoided. Despite the assurances, Walker asserts that no such
action was ever taken by Defendants.
Plaintiffs brought suit in state court against the named Defendants and sought to recover
the payment of the unpaid medical expenses, along with other damages. Plaintiffs initially allege
that Defendants, acting as a principal and/or agents, committed numerous violations of the Texas
Insurance Code and the Texas Deceptive Trade Practice Act. (Dkt. No. 13 at 7-13, 14-15).
Plaintiffs also assert other state law claims against Defendants which include breach of contract,
breach of the duty of good faith and fair dealing, civil conspiracy and fraud. (/d. at 6, 13-14).
However, acknowledging that their health care plan might be governed by ERISA, Plaintiffs allege
in the alternative that they are entitled to payment of benefits under the ERISA statute because
Defendants have knowingly and intentionally delayed and/or refused to pay their medical bills
(Dkt. No. 13 at 19-24). In addition, Plaintiffs allege that Defendants, who acted in a non-fiduciary
capacity, are also liable for intentional infliction of emotional distress. (/d. at 24-25).
Defendants removed the action to federal courf and then pursued dismissal. In their
Second Motion to Dismiss, which is accompanied by a declaration from an in-house counseV
Defendants maintain that RBCBSO should be dismissed for lack of personal jurisdiction. (Dkt.

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The action was removed by Defendants based on two grounds - federal question and diversity
jurisdiction. Plaintiffs initially filed a motion seeking remand, however, a review of the docket reflects
that the parties came to some sort of an agreement that rendered any such motion moot.
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See Dkt. No. 21, Ex. 2 (Second Declaration of Dana S. Scheele).

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No. 21). Defendants also maintain that the entire action should be dismissed because Plaintiffs
have failed to state a claim upon which relief can be granted. (/d.). The parties filed their
respective responses and the Defendants' Motion is now ripe for adjudication. 4
II. DISCUSSION
A. Defendant RBCBSO's Rule 12(b)(2) Motion to Dismiss
Defendant RBCBSO seeks dismissal for lack of personal jurisdiction. (Dkt. No. 21).
Absent a federal statute that provides more expansive personal jurisdiction, a federal court sitting
in diversity may only exercise personal jurisdiction over a nonresident defendant if the long-arm
statute of the forum state confers personal jurisdiction over that defendant and the exercise of such
jurisdiction by the forum state is consistent with due process under the United States Constitution.

Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (51h Cir.2006). The Texas long-arm
statute confers jurisdiction to the limits of due process. TEX. CIV. PRAc. & REM.CODE ANN.

§ 17.041-.045; Stroman Realty, Inc. v. Antt, 528 F.3d 382, 385 (5th Cir.2008); Religious Tech.

Ctr. v. Liebreich, 339 F.3d 369, 373 (5th Cir.2003). Due process permits the exercise of personal
jurisdiction over a nonresident defendant when the defendant has "minimum contacts" with the
forum state and the exercise of jurisdiction over the defendant does not offend "traditional notions
of fair play and substantial justice." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102
(1987); Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir.2008).
"There are two types of 'minimum contacts': those that give rise to specific personal
jurisdiction and those that give rise to general personal jurisdiction. " Johnston, 523 F. 3d at 609

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It appears that Defendants have brought their Second Motion to Dismiss under Rule 12(b)(6) of
the Federal Rules of Civil Procedure. (Dkt. No. 21 at 3). Notably, a motion to dismiss based on lack of
personal jurisdiction is brought under Rule 12(b)(2) and is analyzed under different standards than a Rule
12(b)(6) motion. Wright & Miller, 5B FED. PRAc. & PRoc. CIV., § 1351 (3d ed. 2015).

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(quoting Lewis v. Fresne, 252 F.3d 352, 358 (5th Cir.2001). General jurisdiction applies when
the nonresident defendant's contacts with the forum state are "continuous and systematic," but
unrelated to the cause of action. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 414-415 (1984); Stroman Realty, 528 F.3d at 385. In contrast, specific jurisdiction applies
when a nonresident defendant "has purposefully directed its activities at the forum state and the
litigation results from alleged injuries that arise out of or relate to those activities. " Panda

Brandywine Corp. v. Potomac Elec. Power Co., 253 F. 3d 865, 867 (5th Cir .2001) (quoting Burger
King Corp. v. Rudzewicz, 471 U.S. 462,472 (1985)); see also, Freudensprung v. Offshore Tech.
Servs., Inc., 379 F.3d 327, 343 (5th Cir.2004) (quoting Burger King, 471 U.S. at 474) (explaining
that "[t]he focus [of this inquiry] is on the relationship between the defendant, the forum, and the
litigation").
The party asserting jurisdiction5 bears the burden to establish a basis for the court's
exercise of personal jurisdiction over a nonresident defendant. D.J. Investments, Inc. v. Metzeler

Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542,545-46 (5th Cir.1985); see generally, Wright
& Miller, 5B FED. PRAc. & PRoc. CIV. § 1351. That burden is met by a prima facie showing of
personal jurisdiction. D.J. Investments, 754 F.2d at 545-46. Proof by a preponderance of the
evidence is not required. Id. The court may determine the jurisdictional issue by receiving
affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized
methods of discovery. Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002). "[O]n a motion to
dismiss for lack of jurisdiction, uncontroverted allegations in the plaintiffs complaint must be
taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved

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Plaintiffs assert that the Court has personal jurisdiction over RBCBSO based on both general and
specific personal jurisdiction.

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in the plaintiffs favor." Johnston, 523 F. 3d at 609; see also, Ainsworth v. Moffett Engineering,

Ltd., 716 F.3d 174, 176 (5th Cir.2013).
1. General Jurisdiction
Having reviewed the record, RBCBSO does not appear to have the kind of substantial,
continuous and systematic contacts with Texas sufficient to support an exercise of general
jurisdiction in this case. See Daimler AG v. Bauman, _U.S._, 134 S.Ct. 746, 755-58, 187
L.Ed.2d 624 (2014); Helicopteros, 466 U.S. at 416; Alpine View Co. Ltd. v. Adas CopcoAB,
205 F.3d 208, 217-218 (51h Cir.2000). There is no dispute that RBCBSO is located in Oregon;
that RBCBSO does not maintain any registered agents, employees, or offices in Texas; that
RBCBSO does not solicit business in Texas or from Texas-based employers; and that RBCBSO
does not own any property in Texas. 6 See Submersible Sys., Inc. v. Perforadora Cent., S.A. de
C. V., 249 F.3d 413,419 (5th Cir.2001) (citing 16 James Wm. Moore Et AI., MOORE'S FEDERAL

PRACTICE , 108.41[3] (3d ed.1999)) (recognizing that general jurisdiction's "continuous and
systematic contacts test is a difficult one to meet, requiring extensive contacts between a defendant
and a forum"). While Plaintiffs allege that RBCBSO received some input on their claims from
Blue Cross Blue Shield of Texas (BCBST) and Health Care Service Corporation (HCSC), 7 this
fact, standing alone, is insufficient to establish general personal jurisdiction. Cf. Wilson v. Belin,
20 F.3d 644, 649-51 (5th Cir.1994) (determining that the court lacked general personal jurisdiction
over the defendant despite the fact that defendant had a relationship with a Texas law firm and
engaged in various professional and pro bono projects in the State over a period of several years).

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Supra note 3.

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BCBST is a division of HCSC.
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The Court, therefore, concludes that RBCBSO's contacts or activities in Texas are clearly not
substantial enough to justify subjecting it to suit in the Southern District of Texas based on a
theory of general personal jurisdiction.
2. Specific Jurisdiction
Specific jurisdiction, however, appears to be another matter. Taking the uncontroverted
allegations in Plaintiffs' complaint as true and resolving any conflicts between the facts contained
in the parties' affidavits in Plaintiffs' favor, Plaintiffs have made a prima facie showing that
RBCBSO has contacts with Texas related to the transaction and events giving rise to the causes
of action that are sufficient to support specific jurisdiction. See Johnston, 523 F.3d at 609. In
particular, the record reflects the following: (1) RBCBSO, while located in Oregon, is a large
company that provides health insurance plans to employers; (2) Banfield operates veterinary clinics
nationwide, including Texas; 8 (3) RBCBSO entered into an arrangement with Banfield to make
health insurance coverage available to its employees; 9 (4) Walker is employed by Banfield in
Texas; (5) Walker elected to obtain health insurance coverage for herself and her minor child,
L.W.; (6) Walker and her minor child L.W. are "beneficiaries under the health insurance policy

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Supra note 1.

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Although RBCBSO has self-described its agreement with Banfield as a multiple employer
arrangement (MEWA), it is unclear if falls within the defmition. A "multiple employer welfare
arrangement" is defmed as "an employee welfare benefit plan, or any other arrangement(other than an
employee welfare benefit plan) which is established or maintained for the purpose of offering or providing
any benefit described in paragraph (1) [welfare plan benefits] to the employees of two or more employers
(including one or more self-employed individuals), or to their beneficiaries ... " [Emphasis added]. 29
U .S.C. §1002(40)(A); seegenerally, http://www .dol.gov/ebsa/Publications/mewas.html (noting that prior
to 1983, it was widely accepted that MEWAs constituted an employee benefit plan covered by ERISA and,
thus, exempt from State insurance regulation under ERISA's broad preemption provisions. Recognizing,
however, that it was both appropriate and necessary for States to be able to establish, apply and enforce
State insurance laws with respect to MEWAs, Congress amended ERISA in 1983 to provide an exception
to ERISA' s broad preemption provisions for the regulation of MEW As under State insurance laws).

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issued by [RBCBSO]"; (7) Walker and her minor child, who both reside in Texas, received
medical care in Texas; (8) while insured under the plan, claims for their medical care were
submitted to RBCBSO for review and payment under the plan; 10 (9) RBCBSO, with input from
BCBST and HCSC, reviewed the health insurance claims submitted; (10) following its review,
RBCBSO "paid some, but not all," of the medical bills for their treatment/care; (11) the medical
bills were left either underpaid or unpaid including air ambulance charges for L. W. and her mental
health treatment; (12) Walker contacted RBCBSO by both telephone and mail regarding the
underpaid or unpaid medical expenses, but to no avail; and, (13) after Walker contacted the local
(Texas) media, RBCBSO represented that it would provide dedicated assistance to her so as to
avoid similar issues in the handling of the Walkers' health insurance claims in the future, but no
action was taken. (Dkt. No. 19, Ex. 1; Dkt. No. 22 at 4-6). Against this backdrop, RBCBSO's
contacts with the forum state can hardly be considered to be the product of random, fortuitous
contacts that might occur, for example, when an insured travels to another state and receives
medical careY Instead, based on the Plaintiffs' allegations, it would appear foreseeable that

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According to Defendants, approximately 178 claims for benefits have been submitted during
the time period that Plaintiffs have been insureds under the plan.
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RBCBSO attempts to convince the Court that personal jurisdiction is lacking because this case
is "remarkably similar" to Memorial Hosp. Sys. v. Blue Cross Blue Shield ofArkansas, 830 F .Supp. 968
(S.D. Tex. 1993), however, the Court is simply not persuaded of the alleged similarity. Significantly,
unlike the present case, the only contact that the out-of-state insurer had with the forum state in Memorial
Hospital was an unsolicited telephone call that was initiated by a Texas hospital to confirm coverage for
an insured who required medical attention while in the state. See, e.g., Perez v. Pan Am. Life Ins. Co.,
96 F.3d 1442, 1996 WL 511748, at *2 (5th Cir. Aug.20, 1996) (a Guatemalan insurance company's
authorization of the insured's treatment in Texas was insufficient to establish personal jurisdiction in
Texas); Michiana Easy Livin' Country, Inc. v. Holten, 168 S. W. 3d 777, 791-92 (Tex. 2005) (out-of-state
defendant's commission of a tort in response to a telephone call initiated from Texas did not establish the
Texas court's personal jurisdiction); Omega Hosp., L.L.C. v. Bd. of Trustees of the State of N.C.
Teachers' and State Employees' Comprehensive Major Med. Plan, No. 08-1575, 2008 WL 4286757, at
*3-4 (E.D.La. Sept.16, 2008) (two telephone conversations initiated by a Louisiana hospital to confirm
coverage were insufficient to establish personal jurisdiction over North Carolina insurers).

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RBCBSO knew or should have known that a dispute over benefits could arise in Texas. See

Nieves v. Houston Industries, Inc., 771 F.Supp. 159, 160 (M.D.La.1991)Y
Because the Court finds that Plaintiffs have satisfied their prima facie burden, "the burden
shifts to the [RBCBSO] to defeat jurisdiction by showing that its exercise would be unfair or
unreasonable." Seiferth, 472 F.3d at 271. RBCBSO makes no such showing.
3. National Contacts Standard
Although not discussed by the parties, the Court has personal jurisdiction over RBCBSO
for another reason. For claims arising under federal laws that authorize nationwide service of
process, e.g., ERISA, courts apply a national contacts standard. Bellaire General Hosp. v. Blue

CrossBlueShieldofMichigan, 97 F.3d 822,825-26 (1996), reh'gdeniedenbanc, 121 F.3d 706
(5th Cir. 1997). Under the national contacts standard a federal court may exercise personal
jurisdiction over a properly served defendant provided the defendant has minimum contacts with
the United States. Id. 13 In this case, it is evident that RBCBSO is a resident of the United States,
thus, the Court concludes that the exercise of personal jurisdiction is proper. Bellaire General

Hosp., 97 F.3d at 825-26; Memorial Hermann Hosp. System v. Southern Nat'l Life Ins. Co.,
Inc., No. H:10-0121, 2010 WL 1268064 (S.D. Tex. 2010) (J. Lake); St. Luke's EpiscopalHosp.

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To the extent that RBCBSO complains that Plaintiffs have not identified with specificity each
claim involved and the contacts related to each for purposes of determining whether specific personal
jurisdiction exists (Dkt. No. 21 at 5), the Court rejects any such argument. It is clear from their pleadings
that the claims Plaintiffs are challenging include those involving the air ambulance charges for L. W. and
claims related to mental health care.
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As discussed by the Court in Bellaire, lower courts are bound to follow established Fifth Circuit
authority. Bellaire General Hospital, 97 F .3d at 825-26 (recognizing that it was bound by the holding in
Busch v. Buchrn1m, Buchrn1m& O'Brien, 11 F.3d 1255, 1258 (5th Cir. 1994)); see also, Luallen v. Higgs,
277 Fed. Appx. 402, 404-05 (5th Cir.2008) (recognizing that it was bound to follow established authority);
Frost v. ReliOn, Inc., No. 3:06-CV-0822, 2007 WL 670550, at *2 (N.D.Tex. Mar.2, 2007) (same);
CenterforReconstructiveBreastSurgery, LLCv. BlueCrossBlueShieldofLouisiana, No. 11-806, 2014
WL 4930443 at n.7 (E.D. La. Sept. 30, 2014) (same).

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v. LousianaHealthService&Index. Co., No. H-08-1870, 2009WL47125, at *IO(S.D.Tex. Jan.
6, 2009) (J. Rosenthal); see generally, Wright & Miller, 4 FED. PRAc. & PROC. CIV., § 1068.1
(4th ed. 2015). 14
For all of the reasons discussed, the Court concludes that Defendant RBCBSO's Motion
to Dismiss for lack of personal jurisdiction must be DENIED.
B. Defendants' Rule 12(b)(6) Motion to Dismiss
Defendants have moved for the dismissal of Plaintiffs' action under Rule 12(b)(6). Federal
Rule of Civil Procedure 12(b)(6) provides for dismissal of a claim if the claimant fails to set forth
factual allegations in support of its claim that would entitle it to relief. See Bell Ad. Corp. v.

Twombly, 550 U.S. 544, 555 (2007); see also Cuvillier v. Taylor, 503 F.3d 397, 401 (5th
Cir.2007). Those "'[t]actual allegations must be enough to raise a right to relief above the
speculative level.'" Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir.2009) (quoting Twombly, 550
U.S. at 555). "To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556
U.S. 662,678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged." /d. A court must accept all well-pleaded facts as
true and draw all reasonable inferences in favor of the non-moving party. Lormand v. U.S.

Unwired, Inc., 565 F.3d 228, 232 (5th Cir.2009). The court need not accept as true legal

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Notably, when the plaintiff has stated colorable claims under both federal and state law against
a defendant that "derive from a common nucleus of operative fact," United Mine Workers v. Gibbs, 383
U.S. 715, 725 (1966), as is the case here, judicial economy suggests that the court hear the federal and
state claims together. /d. at 1139.

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conclusions couched as factual allegations. Iqbal, 556 U.S. at 678. "[O]nly a complaint that
states a plausible claim for relief survives a motion to dismiss. " /d. at 679.
1. ERISA Preemption
Defendants contend that Plaintiffs' health care plan is governed by ERISA and, as such,
Plaintiffs' state law claims are preempted by ERISA. (Dkt. No. 21 at 7-10). The Employment
Retirement Income Security Act of 1974 (ERISA) subjects "employee benefit plans" to federal
regulation. 29 U .S.C.S. § 1002, et seq.; see generally, Memorial Hosp. Sys. v. Northbrook Life
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Ins. Co., 904 F.2d 236, 240 (5th Cir.1990) (briefly discussing history and goals of federal statute).
When an "employee benefit plan" is determined to be governed by ERISA, 15 which is normally
a question of fact, 16 then state law, including all laws, decisions, rules, regulations, or other action
having the effect oflaw, is preempted by ERISA if it "relates to" an ERISA plan. 29 U.S.C. §
1144(a); see generally, Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004) (recognizing that
because the ERISA statute was enacted to provide a uniform regulatory regime, the statute
included an expansive preemption provision that is intended to create an exclusive federal
remedy); FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990) (recognizing that ERISA's preemption
clause is "conspicuous for its breadth"); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46-48
(1987) (interpreting the words "relate to" expansively). Problematically, it is only after it is
determined that an employee benefit plan is covered by ERISA that the broad preemptive power
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A three-pronged test is used to determine whether an employee benefit plan qualifies as an
ERISA plan. See Peace v. Am. Gen. Life Ins. Co., 462 F .3d 437 439 (5th Cir. 2006) (the court considers
whether: (1) a plan exists; (2) the plan falls within the safe-harbor provision established by the Department
of Labor; and (3) the employer established or maintained the plan with the intent to benefit employees.
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See House v. Am. United Life Ins. Co., 499 F.3d 443, 448 (5tb Cir. 2007) (recognizing that
only where the factual circumstances are undisputed can the court decide the issue as a matter of law);
Meredith v. Time Ins. Co., 980 F .2d 352, 353 (5th Cir. 1993) (recognizing that "whether a particular plan
falls within the statutory definition is a question of fact").

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of the Act take effect.

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In the present case, Defendants insist that Plaintiffs' health care plan is governed by ERISA

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and, thus, Plaintiffs' state law claims are preempted. In support of their contentions, Defendants

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refer the Court to a declaration from Scheele that is attached, not to the pleadings or to this

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Motion, but to their Response to Plaintiffs' Motion to Remand. In deciding a Rule 12(b)(6)

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motion, a court is directed to consider only what is attached to the pleadings or to documents
referred to in the pleadings. Colle v. Brazos County, Texas, 981 F.2d 237, 241 (5th Cir. 1993).
The declaration upon which Defendants rely fits neither category. Although the "Booklet For:
Banfield Pet Hospital Group Number: 10005735" (Dkt. No. 19, Appendix A), which is attached
to Scheele's declaration, might properly be considered, Defendants do not ask the Court to rely
upon the Booklet. Instead, it is the content of Scheele's declaration 17 that Defendants attempt to
rely upon to establish that the plan is governed by ERISA. Insofar as this evidence is outside of
the pleadings and in dispute, the Court declines to consider it. Nevertheless, even to the extent
the Court could properly consider the evidence collectively contained in the declarations of Ms.
Dana Scheele, the mere fact that a plan exists does not mean the plan is an ERISA plan

(MDPhysicians & Assoc., Inc. v. State Bd. ofIns., 957 F.2d 178, 183 (5th Cir. 1992)), or that it
was not subject to state laws. 29 U .S.C.S. § 1144(b)(6). 18

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Scheele explains the relationships between Walker, her employer and RBCBSO.

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As discussed (supra note 9), Defendants have indicated that Plaintiffs' health care plan is a
MEWA. A MEWA is covered by ERISA jfit is also an employee welfare benefit plan (29 U.S.C.
§1002(3)), which is normally a question of fact. MDPhysicians & Assoc., Inc. v. State Bd ofIns., 957
F .2d 178, 182-83 (5th Cir. 1992). Additionally, determining whether the preemption provisions of ERISA
precludes application of state law to an ERISA-covered MEWA is typically governed by the interplay of
four clauses within ERISA: (i) the Preemption Clause; (ii) the Savings Clause; (iii) the Deemer Clause;
and (iv) the MEWA Clause. See 29 U .S.C. §§ 1144(a), 1144(b)(2)(A)-(B), 1144(b)(6)(A).

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Defendants insist, however, that Plaintiffs have admitted that their health care plan is

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subject to ERISA. Despite their insistence, Plaintiffs have made no judicial admission in their

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pleadings 19 that their health care coverage is an employee welfare benefit plan under ERISA. 29

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U.S.C. §1002(1). Instead, the Plaintiffs have merely pled, in the alternative, that jftheir health
care coverage constitutes an employee welfare benefit plan under ERISA, then they seek recovery
under the ERISA statute. Ci Meyers v. Tex. Health Res., 3:09-CV1402-D, 2009 WL 3756323,
at *3 (N.D. Tex. Nov. 9, 2009) (a court can recognize that ERISA applies to the relevant plan
without performing an in-depth analysis only when there is no genuine dispute regarding the
applicability of the statute).
Not dissuaded, Defendants request the Court take judicial notice of the events surrounding
Plaintiffs' Motion to Remand. In particular, Defendants explain that in response to Plaintiffs'
Motion, they submitted undisputed evidence that an ERISA plan existed and Plaintiffs, rather than
controverting the evidence, agreed to withdraw their motion. Defendants argue that Plaintiffs'
actions constitute an acknowledgment that the plan is governed by ERISA. The Court cannot
agree. There is no evidence before the Court as to the reason(s) that Plaintiffs withdrew their
Motion to Remand. Nor is the Court prepared to leap to this conclusion given the fact that this
case was removed from state court based on two independent grounds - diversity jurisdiction and
federal question jurisdiction- and, as previously observed by Defendants, Plaintiffs did not even
attempt to refute that the action was properly before the Court based on diversity jurisdiction.
(See Dkt. No. 14; Dkt. No. 19 at 2-4). The Court, therefore, concludes that Defendants' motion

to dismiss the state law claims based on preemption should be DENIED.

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See Houston First Am. Sav. v. Musick, 650 S.W.2d 764, 767 (Tex. 1983) (assertions of fact
in live, sworn pleadings, when not pled in the alternative, are considered judicial admissions).

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2. Failure to State a Claim
Next, Defendants make a blanket argument that, even if not preempted, the Plaintiffs' state
law claims against them are so "vaguely worded that Defendants are unable to determine exactly
what relief is being sought." (Dkt. No. 21 at 10). The Court simply cannot agree. A plaintiff
must only plead "a short and plain statement of the claim showing that the pleader is entitled to
relief" FED. R. Clv. P. 8(a)(2). A review of the pleadings reveals that Plaintiffs are contesting
the manner and/or amount (unpaid and/or underpaid) concerning their medical bills/claims. While
it is true that Plaintiffs do not identify by date or claim number each of the health insurance claim
they have contested, it is evident that the air ambulance charges for Plaintiff L W and charges for
mental health care are, at least in part, the ones that Plaintiffs are disputing together with the
representations they allege Defendants made concerning these charges. Accordingly, Defendants'
motion to dismiss on this ground must be DENIED.
3. Failure to State Claim Under ERISA
Defendants also contend that Plaintiffs have failed to state a claim under their alternative
claim for relief under ERISA. (Dkt. No. 21 at 11). Similar to their prior argument, Defendants
insist that they have" absolutely no idea what Plaintiff alleges they did or failed to do, and how
such action or inaction was in violation of the plan." (Dkt. No. 21 at 12-13).
The ERISA statute provides that "[a] civil action may be brought (1) by a participant or
beneficiary ... (B) 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. "
29 U .S.C. § 1132(a)(1)(B). As explained by the Supreme Court, "[t]his provision is relatively
straightforward. If a participant or beneficiary believes that benefits promised to him under the
terms of the plan are not provided, [s]he can bring suit seeking provision of those benefits." Aetna
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Health Inc. v. Davila, 542 U.S. 200, 210 (2004). In order to state a claim under ERISA for
allegedly underpaid on unpaid benefits, a plaintiff must show reimbursement for services provided

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to an ERISA beneficiary that were lower than those guaranteed under the provision of the
governing plan. See id.

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Having reviewed the pleading in this case, the Court is satisfied that Plaintiffs have pled
sufficient facts, which if proven true, could plausibly demonstrate a § 502(a)(1)(B) claim.
Plaintiffs have alleged facts that show they are participants or beneficiaries under the plan; that
Defendants sufficiently controlled plan administration by making the claims determinations; and
that Defendants either failed to pay or underpaid benefits for the air ambulance charges and mental
health treatment in amounts lower than required under the governing plan. The Court, therefore,
determines that Defendants' motion to dismiss Plaintiffs' ERISA claim, which is brought in the
alternative, should be DENIED.
CONCLUSION
Accordingly, for all the foregoing reasons, it is the ORDER of the Court that Defendant
RBCBSO's Second Motion to Dismiss (Dkt. No. 21) under Rule 12(b)(2) based on lack of
personal jurisdiction is DENIED; 20 and that Defendants BCBST and HCSC's Rule 12(b)(6) Motion
to Dismiss is DENIED.
DONE at Galveston, Texas, this

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day of December, 2015.

Plaintiffs' request for jurisdictional discovery, which is contained in their Response, is moot.

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