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Surgicore of Jersey City v. Anthem Life & Disability Insurance, Co.

United States District Court, E.D. New York

December 30, 2019



          BRIAN M. COGAN, U.S.D.J.

         Plaintiff initially brought this action in state court. The claims in the complaint are entirely based on state law. Defendant, however, contended that plaintiff's state law claims are completely preempted by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132, and removed this case to this court. Defendant has moved to dismiss the complaint, and plaintiff has moved to remand this case back to state court. For the reasons stated below, plaintiff's motion to remand is granted, and defendant's motion to dismiss is denied as moot.


         Plaintiff brought a complaint against defendant in the Supreme Court of New York, Queens County. Plaintiff is a health care provider that provided medical treatment to Jose Tineo, who participates in a health benefits plan that defendant issued. According to the complaint, the plan prohibits the assignment of benefits “and/or” the transfer of rights. Nonetheless, Tineo authorized defendant to pay benefits directly to plaintiff.

         Plaintiff then filed a claim for reimbursement to defendant. Plaintiff's personnel filled out a form to submit the claim and answered “Yes” to “Accept Assignment?” Plaintiff claims that defendant knew or should have known that, by answering “Yes” on this form, plaintiff was instructing defendant to directly pay plaintiff. Nonetheless, defendant never told plaintiff that plaintiff failed to properly submit this claim.

         Defendant then underpaid plaintiff. Plaintiff brought claims for equitable estoppel, breach of an implied contract, “promissory contract, ” and under the Prompt Pay Law. Defendant removed this action to federal court and claimed that ERISA completely preempts plaintiff's claims.

         Once in federal court, defendant moved to dismiss this action and plaintiff moved to remand this case back to state court. In connection with its briefing in support of its motion to dismiss, defendant provided the plan at issue here. The plan includes the following anti-assignment provision:

Assignment. You cannot assign any benefits under this Certificate or legal claims based on a denial of benefits to any person, corporation, or other organization. You cannot assign any monies due under this Certificate to any person, corporation or other organization unless it is an assignment to Your Provider for a surprise bill. See the How Your Coverage Works section of this Certificate for more information about surprise bills. Any assignment of benefits or legal claims based on a denial of benefits by You other than for monies due for a surprise bill will be void. Assignment means the transfer to another person or to an organization of Your right to the services provided under this Certificate or Your right to collect money from Us for those services. Nothing is this paragraph shall affect Your right to appoint a designee or representative as otherwise permitted by applicable law.


         “[T]he party asserting jurisdiction bears the burden of proving that the case is properly in federal court … .” United Food & Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994). “All doubts about jurisdiction should be resolved in favor of remand to state court.” Macro v. Indep. Health Ass'n, Inc., 180 F.Supp.2d 427, 431 (W.D.N.Y. 2001). “On a motion to remand for lack of subject matter jurisdiction, courts assume the truth of non-jurisdictional facts alleged in the complaint, but may consider materials outside of the complaint, such as documents attached to a notice of removal or a motion to remand … .” Romero v. DHL Express (U.S.A), Inc., 15-cv-4844, 2016 WL 6584484, at *1 (S.D.N.Y. Nov. 7, 2016).

         An action that is completely preempted by ERISA is removable to federal court as an action arising under federal law. See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987); Wurtz v. Rawlings Co., LLC, 761 F.3d 232, 238 (2d Cir. 2014). “Specifically, claims are completely preempted by ERISA if they are brought (i) by ‘an individual [who] at some point in time, could have brought his claim under ERISA § 502(a)(1)(B),' and (ii) under circumstances in which ‘there is no other independent legal duty that is implicated by a defendant's actions.'” Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 328 (2d Cir. 2011) (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 214 (2004)).

         “The test is conjunctive; a state-law cause of action is preempted only if both prongs of the test are satisfied.” Montefiore Med. Ctr., 642 F.3d at 328. A plaintiff without standing fails the first prong of this test. Id. at 329.

         Further, “absent a valid assignment of a claim, non-enumerated parties lack statutory standing to bring suit under ERISA even if they have a direct stake in the outcome of the litigation.” McCulloch Orthopaedic Surgical Servs., PLLC v. Aetna Inc., 857 F.3d 141, 148 (2d Cir. 2017) (internal quotation marks and alterations omitted). An “assignment is ineffectual if the ERISA benefit plan contains an unambiguous anti-assignment provision.” Id. (internal quotation mark and alterations omitted). Thus, a plaintiff lacks standing under ERISA if the plaintiff's claims arise from the assignment of benefits under a plan that prohibits the assignment of benefits. See id.

         Defendant's basis for removing this case to federal court is that ERISA preempts plaintiff's claims. But to the extent plaintiff has any ERISA claims, they would arise from an assignment of benefits under a plan that contains an anti-assignment provision that prohibits this assignment. Thus, plaintiff lacks standing to bring ERISA claims, and ERISA does not preempt plaintiff's ...

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