Aetna Health, Inc. v. Kirshner, No. CV 04-0835406 (Conn. Super. 10/2/2006)

• Decision Date: 02 October 2006
• Docket Number: No. CV 04-0835406,CV 04-0835406
• Court: Connecticut Superior Court
• Parties: Aetna Health, Inc. et al. v. Marc Kirshner, D.C. et al. Opinion No.: 95317

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Unpublished Opinion

Aetna Health, Inc. et al. v. Marc Kirshner, D.C. et al. Opinion No.: 95317

No. CV 04-0835406

Superior Court of Connecticut

Judicial District of Hartford at Hartford

October 2, 2006

MEMORANDUM OF DECISION ON MOTION TO DISMISS (# 176)

MARY R. HENNESSEY, JUDGE TRIAL REFEREE.

The plaintiff, Aetna Health, Inc. (Aetna), filed suit against the defendants¹ in June 2004, alleging that the defendants, in conjunction, engaged in billing for services that were not covered by Aetna's policy. Aetna alleges that the defendants' improper acts consisted of the following: claiming for chiropractic services that were not supervised by medical professionals, misrepresenting services as being performed by miscoding the services, misrepresenting that procedures were performed when they were not performed, and reducing member payments to inflate billing. In May 2005, some of the defendants² filed their answer, which included counterclaims alleging (1) tortious interference with business relationships, (2) tortious interference with business expectancy, (3) breach of contract, (4) breach of covenant of good faith and fair dealing, and (5) violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes §42-110a et seq., and the Connecticut Unfair Insurance Practices Act (CUIPA), General Statutes §38a-815 et seq. These counterclaims allegedly arose from Aetna's refusal to make payments for services provided by the defendants and requests by Aetna to view patient records.

On March 3, 2006, Aetna filed a motion to dismiss all of the defendants' counterclaims.³ The grounds for Aetna's motion are that the defendants' counterclaims are preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001 et seq. (ERISA), and, thus, the court lacks jurisdiction over the subject matter of the counterclaims. The defendants filed a memorandum in opposition in April 2006.

"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that [a party] cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Louis Gherlone Excavating, Inc. v. McLean Construction Co., 88 Conn.App. 775, 780, 871 A.2d 1057 (2005). "It is a fundamental rule that a court may raise and review the issue of subject matter jurisdiction at any time . . . [W]henever a court discovers that it has no jurisdiction, it is bound to dismiss the case . . ." (Citation omitted; internal quotation marks omitted.) Cardi Materials Corp. v. Connecticut Landscaping Bruzzi Corp., 77 Conn.App. 578, 580, 823 A.2d 1271 (2003).

"When a . . . court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . [A] court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Filippi v. Sullivan, 273 Conn. 1, 8, 866 A.2d 599 (2005); see also Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 432-33, 829 A.2d 801 (2003); Dyous v. Psychiatric Security Review Board, 264 Conn. 766, 773, 826 A.2d 138 (2003). "The motion to dismiss . . . admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone . . ." Ferreira v. Pringle, 255 Conn. 330, 346, 766 A.2d 400 (2001). "[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute." (Internal quotation marks omitted.) St. George v. Gordon, 264 Conn. 538, 544-45, 825 A.2d 90 (2003).

In its memorandum of law, Aetna argues that the defendants' state law counterclaims are an attempt to enforce benefit rights under an ERISA plan. Aetna notes that the defendants are seeking to enforce provisions of the provider agreement regarding payment using state law counterclaims, claims that would be available to the defendants under the civil enforcement provisions of ERISA. Further, Aetna contends that the defendants' allegations that Aetna has refused to pay under the administered plan hinge on the interpretation of the term "covered services." Aetna argues that requiring a court to interpret a portion of an employee benefit plan indicates that the claim may "relate to" an employee benefit plan. Finally, Aetna contends that the defendants' claims "relate to" ERISA plans because in order to prove their claims, the defendants must make evident the relationship between themselves, their patients, and Aetna. Aetna argues that this relationship can only be explained in light of the ERISA plan. Based on the foregoing arguments, Aetna argues that the defendants' counterclaims are preempted by operation of ERISA.

In their opposition to the motion, the defendants first state that Aetna bears the burden of proving that the challenged state statute refers to an ERISA plan. The defendants then reason that they are not either participants or beneficiaries in the employee benefit plan, and, therefore, the defendants' claims do not fall within the civil enforcement provisions of ERISA. Further, the defendants' claims only seek to enforce the provider agreement between Aetna and the defendants, not any aspect of the employee benefit plan. Finally, defendants argue that a state law of general application will not be preempted by ERISA if its effect on the employee benefit plan is too remote to warrant a finding that the law "relates to" the plan.

An overview of the law of ERISA and ERISA preemption is well warranted. "ERISA is a comprehensive regulation of employee welfare and pension benefit plans [that] extends to those that provide medical, surgical, or hospital care or benefits for plan participants or their beneficiaries through the purchase of insurance or otherwise . . . The federal statute does not go about protecting plan participants and their beneficiaries by requiring employers to provide any given set of minimum benefits, but instead controls the administration of benefit plans . . . as by imposing reporting and disclosure mandates . . . participation and vesting requirements . . . funding standards . . . and fiduciary responsibilities for plan administrators . . . It envisions administrative oversight, imposes criminal sanctions, and establishes a comprehensive civil enforcement scheme . . . It also preempts some state law." (Citations omitted; emphasis added; internal quotations marks omitted.) Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 233, 680 A.2d 127 (1996), cert. denied, 520 U.S. 1103, 117 S.Ct 1106, 137 L.Ed.2d 308 (1997). "The preemption provision of ERISA, 29 U.S.C. §1144(a) (1994), preempts any state law that may now or hereafter relate to any employee benefit plan." (Emphasis in original; internal quotation marks omitted.) Id.

The first inquiry for ERISA preemption is to determine whether the state law relied upon directly conflicts with a provision of ERISA. In Boggs v. Boggs, 520 U.S. 833, 841, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997), the Court found that "if state law conflicts with the provisions of ERISA or operates to frustrate its objects . . . there is a conflict, which suffices to resolve the case. We need not inquire whether the statutory phrase `relate to' provides further and additional support for the [preemption] claim. Nor need we consider the applicability of field [pre-emption]." Using the Supreme Court's reasoning, if no such direct conflict is found, further inquiry is needed. Id. There is no indication that the state law that the defendants rely on is anything but generally applicable state law, not law that directly impacts the law of pensions. Since this is the case, further inquiry is needed to determine whether the generally applicable law upon which the defendants rely for their counterclaims has an impact on the ERISA plan.

"In a 1983 case dealing with ERISA preemption, the [United States Supreme Court], viewing ERISA's preemption language to be clear and relying on a dictionary definition of the term `relate,' stated that [a] law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan . . . In fact . . . Congress used the words `relate to' in §514(a)⁴ [29 U.S.C. §1144(a)] in their broad sense. To interpret §514(a) to [preempt] only state laws specifically designed to affect employee benefits would be to ignore the remainder of §514. It would have been unnecessary to exempt generally applicable state criminal statutes from [preemption] in §514(b) [29 U.S.C. §1144(b)], for example, if §514(a) applied only to state laws dealing specifically with ERISA plans. Nor, given the legislative history, can §514(a) be interpreted to [preempt] only state laws dealing with the subject matters covered by ERISA—reporting, disclosure, fiduciary responsibility, and the like. The bill that became ERISA originally contained a limited [preemption] clause, applicable only to state laws relating to the specific subjects covered by ERISA. The Conference Committee rejected these provisions in favor of the present language, and indicated that the section's [preemptive] scope was as broad as its language." (Emphasis in original; internal quotation marks omitted.) Napoletano v. CIGNA Healthcare of Connecticut, Inc., supra, 238 Conn. 235-36, citing Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-99, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). See Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (the court noted that a state law may be preempted even when the state law is not designed to affect covered...