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July 12, 1994


The opinion of the court was delivered by: MILTON POLLACK

 MILTON POLLACK, Senior District Judge:


 Plaintiffs bring suit against numerous defendants for damages deriving from an alleged health insurance fraud perpetrated by a fraudulent union which purported to offer health insurance that was placed with unlicensed offshore insurance carriers. Two moving defendants whose sole function was to "precertify" insureds for proposed medical treatments move for summary judgment pursuant to Fed. R. Civ. P. 56, dismissing plaintiffs' claims which seek to draw them into the circle of liability by charges of negligence, negligence per se, and aiding and abetting fraud and breach of fiduciary duty. Plaintiffs allege that the two precertifier defendants (i) were negligent in failing to investigate the status of the insurers, with whom the Union placed the insurance; (ii) were negligent per se for transacting business with unlicensed insurers, a violation of the California Insurance Code; and (iii) aided and abetted the perpetrators of the fraud, lending legitimacy to the scam by precertifying insureds. Movants contend that (i) given their limited function, they do not bear a duty to plaintiffs to investigate or evaluate insurers; (ii) the California statute barring "transacting insurance" with unlicensed insurers is inapplicable to defendants; and (iii) defendants cannot be liable as aiders and abettors because plaintiffs concede defendants lacked actual knowledge of any underlying fraud. As a matter of law, the moving parties' motions for summary judgment will be granted.

 I. Background

 This case concerns an alleged pyramid-scheme health insurance fraud perpetrated upon vulnerable individuals who were "uninsurable" due to pre-existing medical conditions.

 The scheme complained of, as explained by plaintiffs' counsel, is as follows. In 1989, one William Loeb, founded a sham union, Consolidated Union Local 867 (the "Union"). The Union was created and existed solely to market health insurance in part to individuals with pre-existing medical conditions. All those who sought to purchase health insurance through the Union's Welfare Fund were enrolled as members" of the Union. These "members" generally paid their premiums to so-called "labor relations consultants" (at least one of whom was a Union Plan fiduciary), who deducted a percentage of the premiums as commissions and remitted the remainder to the Union. Originally, the Union insured its members through a group plan with Empire Blue Cross/Blue Shield ("Empire"). Empire, through statutory discounts, was able to insure New York state residents who had pre-existing illnesses. Loeb, however, sold the insurance to such people nationwide, and in short order reached some 10,000 people. For this reason among others, Empire terminated its agreement with the Union in 1990. At this point, many Union members terminated their insurance. The individuals who remained (many of whom were from California) were largely those who would have great difficulty obtaining health insurance anywhere due to their pre-existing medical conditions. These people were accustomed to paying their insurance premiums monthly upon receipt of an invoice, and continued to do so.

 Plaintiffs have brought suit against hundreds of defendants, including the unlicensed offshore insurance carriers and their principals and many of the insurance brokers through whom the plaintiffs had purchased the purported insurance. Plaintiffs' complaint alleges claims under RICO, ERISA and/or common law breach of fiduciary duty, fraud, negligence per se, negligence, and aiding and abetting. *fn1"

 II. The Precertifiers

 The defendants now moving for summary judgment, Preferred Health Network, Inc. ("PHN") and CareAmerica, Inc. ("CareAmerica"), are neither brokers nor agents. They neither sold nor placed insurance, nor did they have any connection with the premiums paid to buy insurance. Their sole connection to those involved in the instant litigation is that they both provided "precertification" services, whereby the appropriateness of proposed medical treatments of purported "insureds" was verified.

 PHN is a managed care firm that operates "managed care services" programs to assist insurance companies and health care providers in making available cost-efficient health care services. The primary service provided by PHN is a provider network arrangement, whereby PHN essentially acts as a "middleman" to facilitate direct contracting between insurance companies (or "third-party administrators" on their behalf) on the one hand and the health care providers in the PHN network on the other. Use of the health care provider network reduces the costs of the health care services provided.

 PHN also offers various administrative services to insurers and to health care providers, including so called "precertification" services used prior to hospital admissions to determine the appropriate location and estimates of the length of confinement and care prior to these services being rendered. Precertification, a common feature of many health insurance plans, is often a prerequisite to receiving medical treatment through a network of affiliated medical service providers. Medical necessity and appropriateness of treatment are determined by reference to a series of proprietary standards and other information developed by PHN, and by reference to widely-recognized protocols. A typical example of a precertification issue would be whether a recommended surgical procedure should be done in a hospital or on an out-patient basis, and if hospitalization is appropriate, what is the appropriate length of the hospital stay required. Mannheim Aff. at P 10. In essence, precertification is a cost-reduction and fraud-prevention measure utilized by health insurance companies.

 On September 1, 1990, PHN entered into a Payor Participation Agreement with defendant Benefit Data Administrators ("BDA"). At that time, BDA informed PHN that it was a third-party administrator and that it would like to make available PHN's network to insurance companies on whose behalf it provided administrative services. Pursuant to the BDA Agreement, PHN agreed to provide "precertification services" for the insurers. In consideration for performing this service, PHN was paid a fee of several dollars per insured processed. The BDA Agreement made clear that PHN was not responsible for determining whether an insured would be eligible for payment of any insurance claim. Unger Aff. at Ex. A, §§ 2.6, 3.6. PHN contends, and plaintiffs concede, that at the time it entered the contract, and throughout its duration, PHN was unaware of any fraudulent or illegal conduct on the part of BDA or the insurers.

 CareAmerica, a moving defendant herein, also provides precertification services to determine whether proposed medical services are necessary. CareAmerica is generally engaged by employers or third-party administrators to assist in identifying and reducing unnecessary medical services and thus contain health insurance costs. Through its staff of registered nurses and physicians, CareAmerica reviews the treatments proposed by a provider to determine whether said treatments are medically necessary, and advises the individual accordingly.

 CareAmerica was engaged to perform its services on behalf of American Benefit Trust and American Business Benefit Trust (the "Trust"). CareAmerica entered into a contract, dated October 1, 1990, with the Trust to provide pre-surgical and pre-hospitalization admission review services for the Trust and its enrolled employers and their employees. CareAmerica was paid based upon the number of employees per month as well as an initial set-up fee of 25 cents per individual. As part of the agreement between CareAmerica and the Trust, CareAmerica would review proposed surgery and hospital admissions. Based upon the information presented, if those services were considered necessary and appropriate, CareAmerica so advised the individual. CareAmerica also advised each individual that the Trust retained ...

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