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Berry v. MVP Health Plan

September 30, 2006


The opinion of the court was delivered by: Hon. Norman A. Mordue, Chief Judge



Plaintiff initially commenced this action for recovery of payments defendants MVP Health Plan, Inc., MVP Health Services Corp., MVP Health Insurance Company, and MVP Select Care Inc., MVP Affiliates, (collectively "MVP"), Taconic IPA, and Joseph Lia allegedly owe her for medical services she provided for defendants' "insureds and enrollees" in the New York State Supreme Court in the County of Ulster. Defendants removed the case to this District in accordance with 28 U.S.C. § 1441(b) citing original federal question jurisdiction pursuant to 28 U.S.C. § 1331. Specifically, defendants assert that although not asserted in plaintiff's complaint, which alleges that defendants violated New York State Insurance Law and defamed her, this case is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq.

There are three motions presently before the Court: (1) MVP and Lia move to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the basis that ERISA preempts plaintiff's state law claims (Dkt. no. 8); (2) Taconic IPA moves to dismiss the complaint pursuant to Rule 12(b)(6) on the basis that ERISA preempts plaintiff's state law claims (Dkt. no. 5); and (3) plaintiffs cross-move to remand this action to Ulster County Supreme Court for lack of federal question subject matter jurisdiction (Dkt. no. 12).


Plaintiff Gabrielle Berry is a licensed registered nurse. The Association of Operating Room Nurses ("AORN") and the Certification Board of Perioperative Nursing have certified Berry as an operating room nurse. Berry is also a certified registered nurse first assistant with privileges to act as a surgical first assistant at surgical operations in several Hudson Valley hospitals. Since 1999, Berry has assisted at more than 3,000 surgical operations in New York at attending surgeons' request.

When performing surgical first assistant services, Berry acts as an independent contractor and bills for those services through plaintiff GSB Surgical Services, Inc. Approximately 60 insurance companies, health maintenance organizations, union benefit plans, and other health service indemnity providers pay plaintiffs for Berry's services, even though Berry does not participate with these plans. When physicians, surgeons, or physician assistants act as surgical first assistants, defendants pay for their services regardless of whether they are participating providers in defendants' insurance and Health Maintenance Organization plans.

Between February 1999 and May 2004, although plaintiffs billed MVP directly, defendants failed to pay for Berry's surgical first assisting services in 440 cases. In each of these 440 instances, Berry provided first assistant services for defendants' insureds and enrollees at the request of surgeons who participated in defendants' plans and in hospitals that participate in defendants' plans. In July 2005, as a result of defendants' failure to pay, plaintiffs began billing patients directly.

The complaint further alleges that although plaintiffs had a contract with defendants between May 2004 and May 2005, defendants have refused to renew the contract and have sent defamatory letters to the medical community. For example, according to the complaint, defendant Lia, Executive Director of Taconic IPA and Vice President of MVP Health Care, "Mid- Hudson Region", sent letters to hospital chief financial officers asserting that plaintiffs have been unreasonable in calculating Berry's fees, and threatening adverse consequences to hospital medical staff members if they allowed Berry to provide surgical first assistant services to MVP's insureds in non-emergency cases. Defendant Lia sent a similar letter to a number of surgeons in the Mid-Hudson region.

As a result of these events, plaintiffs filed the instant complaint which contains seven causes of action: (1) violation of N.Y. Ins. Law § 4301(b)(2); (2) violation of N.Y. Ins. Law § 3224-a; (3) violation of N.Y. Gen. Bus. Law § 349(a); (4) violation of N.Y. Gen. Bus. Law § 340 (Donnelly Act); (5) request for injunctive relief; (6) defamation; and (7) unjust enrichment. Plaintiffs seek $543,842.37, plus interest, as well as other compensatory damages and attorney's fees and costs.


A. Motion to Remand

28 U.S.C. § 1441(a) provides:

[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

Further, Congress provides that "[i]f at anytime before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). Subsection 1447(c) authorizes remand of an action on the basis of any defect in removal procedure or because the district court lacks subject matter jurisdiction. See LaFarge Coppee v. Venezolana De Cementos, S.A.C.A., 31 F.3d 70, 72 (2nd Cir. 1994).*fn1 On a motion to remand, a court must construe all factual allegations in favor of the party seeking the remand, see R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 655 (2d Cir. 1979), and the removing party has the "burden of establishing that a case falls within the [c]court's removal jurisdiction[.]" NASDAQ Mkt Makers Antitrust Litig., 929 F.Supp. 174, 178 (S.D.N.Y. 1996) (citation omitted). When a "party seeking remand challenges the jurisdictional predicate for removal, the burden falls squarely upon the removing party to establish its right to a federal forum by 'competent proof.'" R.G. Barry Corp., 612 F.2d at 655.

Defendants removed the present case on the basis of original "federal question" jurisdiction asserting that plaintiff's claims, although couched entirely in state law, "arise under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. To wit, defendants assert that this action involves claims to recover benefits and to enforce rights under certain employee welfare benefit plans that are governed by ERISA.*fn2

The "well-pleaded complaint rule" is the basic principle marking the boundaries of the federal question jurisdiction of the federal district courts. Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 9-12 (1983). Federal preemption of a state law cause of action by a statute such as ERISA is ordinarily a federal defense to the plaintiff's suit. As a defense, it does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court. Gully v. First Nat'l Bank, 299 U.S. at 113. A plaintiff may avoid federal jurisdiction by pleading only state law claims, even where federal claims are also available, and even if there is a federal defense. See Marcus v. AT&T Corp., 138 F.3d 46, 52 (2d Cir. 1998); Hernandez v. Conriv Realty Assoc., 116 F.3d 35, 38 (2d Cir. 1997). "However, in the case of state-law claims falling within the scope of the civil enforcement provisions of ยง 502 of ERISA, [29 U.S.C. ...

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