Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Healthnow New York, Inc. v. State

September 13, 2010

HEALTHNOW NEW YORK, INC., PLAINTIFF,
v.
THE STATE OF NEW YORK AND ANDREW M. CUOMO, IN HIS OFFICIAL CAPACITY AS ATTORNEY GENERAL OF THE STATE OF NEW YORK, DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court

DECISION AND ORDER

I. INTRODUCTION

Plaintiff HealthNow New York Inc. ("HealthNow") brings this action pursuant to Article I of the United States Constitution, 29 U.S.C. § 1001, et seq., and 42 U.S.C. § 1983, seeking declaratory and injunctive relief from the State of New York and Andrew M. Cuomo, in his official capacity as New York State Attorney General.

Presently before this Court is Plaintiff's Motion for a Preliminary and Permanent Injunction and for Summary Judgment.*fn1 Also before this Court are Defendants' Motion to Dismiss Plaintiff's complaint*fn2 and Cross Motion for Summary Judgment.*fn3 For the reasons discussed below, Defendants' Motion to Dismiss is granted and Plaintiff's motion and Defendants' Cross Motion for Summary Judgment are denied as moot.

II. BACKGROUND

A. Facts

In adjudicating Defendants' Motion to Dismiss, this Court assumes the truth of the following factual allegations contained in Plaintiff's complaint. See Hosp. Bldg. Co. v. Trs. of Rex Hosp., 425 U.S. 738, 740, 96 S.Ct. 1848, 1850, 48 L.Ed. 2d 338 (1976); see also Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton Coll., 128 F.3d 59, 62--63 (2d Cir. 1997).

Plaintiff HealthNow is a non-profit health services corporation licensed in New York State. (Complaint, Docket No. 1, ¶ 8.) Nearly all of Plaintiff's business involves Employee Retirement Security Act ("ERISA") benefit plans. (Id. at ¶ 3.) Pursuant to contracts governing the relationship between the employee-benefit plan and its members, Plaintiff pays for covered medical expenses incurred by plan members. (Id.) Plaintiff's contracts include subrogation and reimbursement provisions, through which Plaintiff pursues recovery of medical expenses paid to injured plan members. (Id.)

An addition to Article 5 of the New York State General Obligations Law (the "Anti-Subrogation Law") provides that after a plaintiff and a tortfeasor settle certain tort actions-including personal injury, medical malpractice, and wrongful death actions-a benefit provider, such as HealthNow, that paid for health care services and other losses incurred by the plaintiff no longer has reimbursement or subrogation rights to recovery of those costs from the plaintiff or tortfeasor. (Id. at ¶ 2.)

The New York State legislature enacted the Anti-Subrogation Law on November 12, 2009. (Id. at ¶ 32.) The General Obligations Law was amended by the addition of section 5-335, which establishes the "[l]imitation of non-statutory reimbursement and subrogation claims in personal injury and wrongful death actions" and specifically provides that

[w]hen a plaintiff settles with one or more defendants in an action for personal injuries, medical, dental, or podiatric malpractice, or wrongful death, it shall be conclusively presumed that the settlement does not include any compensation for the cost of health care services, loss of earnings or other economic loss to the extent those losses or expenses have been or are obligated to be paid or reimbursed by a benefit provider, except for those payments as to which there is a statutory right of reimbursement. By entering into any such settlement, a plaintiff shall not be deemed to have taken an action in derogation of any non-statutory right of any benefit provider that paid or is obligated to pay those losses or expenses; nor shall a plaintiff's entry into such settlement constitute a violation of any contract between the plaintiff and such benefit provider. (Id. at ¶ 31 (citing N.Y. GEN. OBLIG. LAW § 5-335(a) (MCKINNEY 2009)).*fn4

Plaintiff asserts that it has subrogation and reimbursement rights in more than 1,300 outstanding claims representing nearly $14,000,000 in potential recovery, which the Anti-Subrogation Law now prevents Plaintiff from enforcing. (Complaint, ¶ 6.)

B. Procedural History

Plaintiff commenced this action on April 26, 2010, by filing a complaint in the United States District Court for the Western District of New York. (Docket No. 1.) Plaintiff alleges that the Anti-Subrogation Law is preempted by ERISA; applies only to contractual subrogation and reimbursement rights and not equitable subrogation rights; and violates the Due Process and Contracts clauses of the United States Constitution.

On June 2, 2010, Plaintiff filed its Motion for Preliminary and Permanent Injunction and for Summary Judgment pursuant to Rules 56 and 65 of the Federal Rules of Civil Procedure. (Docket No. 7.) Plaintiff seeks a declaratory judgment to declare the Anti-Subrogation Law invalid and an injunction to enjoin its enforcement.

Defendants filed a Motion to Dismiss Plaintiff's complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure on June 11, 2010 (Docket No. 11), and a Cross Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure on June 23, 2010 (Docket No. 18). In the Motion to Dismiss, Defendants assert that because the Eleventh Amendment to the United States Constitution bars suit against the State of New York and the Ex parte Young exception to Eleventh Amendment immunity does not apply to the Attorney General, no case or controversy exists involving either of the two defendants, and this Court therefore lacks jurisdiction. In the Cross Motion, Defendants repeat these arguments and further argue that Plaintiff has not satisfied the requirements necessary for injunctive relief and that the Anti-Subrogation Law is neither preempted by ERISA nor violative of the United States Constitution.

The New York State Trial Lawyers Association sought and was granted amicus curiae status and submitted amicus briefing in this case. This Court heard oral argument on these motions on August 31, 2010, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.