Aetna Life Ins. Co. v. Huntington Valley Surgery Ctr.
| Decision Date | 19 August 2014 |
| Docket Number | 2:13-cv-3101-WY |
| Court | U.S. District Court — Eastern District of Pennsylvania |
| Parties | AETNA LIFE INS. CO. Plaintiff, v. HUNTINGTON VALLEY SURGERY CTR.; FOUND. SURGERY AFFILIATES, LLC; and FOUND. SURGERY MGMT., LLC Defendants. |
Aetna Life Insurance Company ("Aetna") brings this lawsuit against Huntington Valley Surgery Center ("Huntington Valley"); Foundation Surgery Affiliates, LLC ("FSA"); and Foundation Surgery Management, LLC ("FSM") related to Huntington Valley's patient referral and billing practices. Presently before me is the defendants' motion to dismiss portions of Aetna's amended complaint, or, in the alternative, for a more definite statement. For the reasons discussed below, I will dismiss Aetna's claims for unjust enrichment, and otherwise deny the motion.
Huntington Valley is a physician-owned surgical facility located in Huntington Valley, Pennsylvania. FSM and FSA are Oklahoma-based companies alleged to be in the surgical facility management business, through which they manage, operate, and set policy for Huntington Valley.Aetna is a Connecticut-based health insurance provider and plan administrator. Huntington Valley has no formal "in-network" relationship with Aetna, but Huntington Valley's patients include persons who have Aetna-provided or administered insurance. Aetna pays portions of the Huntington Valley bills incurred by those persons pursuant to the terms of the person's health insurance policy.
On June 5, 2013, Aetna filed suit against Huntington Valley relating to Huntington Valley's referral and billing practices. Huntington Valley filed a motion to dismiss the complaint on July 29, 2013, and, on October 31, 2013—after counsel for Aetna indicated at oral argument that it intended to pursue different theories of liability than those stated in the complaint—I dismissed the complaint without prejudice to Aetna's ability to file an amended complaint.
On December 2, 2013, Aetna filed the amended complaint that is the subject of the instant motion. The amended complaint alleges that Huntington Valley's physician-owners also are on the staff of medical facilities that are within Aetna's network, and that these physicians have a practice of identifying high-value patients at in-network facilities and targeting them for referral to Huntington Valley. These physician-owners then promise the high-value patients—as part of an effort to induce them to choose to have procedures performed at Huntington Valley—that Huntington Valley will waive traditional out-of-network patient payment obligations such as co-pays and balance bills. According to the amended complaint, this is all pursuant to a profit-maximizing scheme orchestrated by FSA and FSM whereby the physician-owners receive kickbacks from Huntington Valley for high-value referrals. Aetna also alleges that Huntington Valley sent Aetna unreasonable bills for the beneficiaries' medical care, and that these bills contained no mention of patient or physician referral inducements. Based on these allegations, theamended complaint asserts claims for: (1) violation of 18 Pa. C.S.A § 4117(b)(2),2 against all defendants; (2) conspiracy to act in violation of 18 Pa. C.S.A. § 4117(b)(2), against all defendants; (3) insurance fraud in violation of 18 Pa. C.S.A. § 4117(a)(2), against all defendants; (4) tortious interference with contract, against all defendants; (5) breach of contract, against Huntington Valley; and (6) unjust enrichment, against all defendants.
In their motion, the defendants seek dismissal of myriad portions of the amended complaint based on the following contentions: (1) that FSA is not subject to the personal jurisdiction of the court; (2) that Aetna has no standing to bring claims related to payments on behalf of group plans that are Aetna-administered but self-insured; (3) that there can be no liability for FSA and FSM under 18 Pa. C.S.A. § 4117(b)(2) because they are not "health care providers" within the meaning of the statute; (4) that Aetna's claims under 18 Pa. C.S.A § 4117 may not be brought related to payments on behalf of health plans subject to the requirements of ERISA because those claims are preempted by ERISA; (5) that the amended complaint fails to state an unjust enrichment claim.
The defendants also seek a more definite statement from Aetna based on the contention that the factual and legal bases of the claims in the amended complaint are not sufficiently clear.
The defendants' motion arises under Rule 12(b)(2), Rule 12(b)(6), and Rule 12(e).
A motion under Rule 12(b)(2) challenges the court's exercise of personal jurisdiction over the defendant. A district court may assert personal jurisdiction over a defendant to the extent permitted under the law of the state in which the court sits. See Fed. R. Civ. P. 4(k). Pennsylvania courts exercise personal jurisdiction over nonresident defendants "to the fullest extent allowed under the Constitution of the United States." 42 Pa. C.S.A. § 5322(b). Hence, the court may exercise personal jurisdiction over a defendant as long as it has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted). These "minimum contacts must have a basis in some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 109 (1987). "The nature of these contacts must be such that the defendant should be reasonably able to anticipate being haled into court in the forum state." Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987).
When a defendant makes a motion under Rule 12(b)(2), the plaintiff bears the burden of "prov[ing] . . . facts sufficient to establish personal jurisdiction." Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). Where, as here, the court has not held an evidentiary hearing on the issue, "the plaintiff need only establish a prima facie case of personal jurisdiction" to survive dismissal, and the court must accept the plaintiff's allegation as true and resolve factual disputes in its favor. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). Still, the plaintiff must respond to the motion to dismiss with "actual proofs"—such as "sworn affidavits or other competent evidence"—not "mere allegations." Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984).
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Fed. R. Civ. P. 12(b)(6). In determining whether a complaint is sufficient, a court takes note of the elements the plaintiff must plead to state a claim, and, accepting all factual allegations in the complaint as true, determine whether the plaintiff's well-pleaded factual allegations plausibly give rise to an entitlement for relief. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009)). While a short and simple statement of entitlement to relief is all that is required to state a claim under Rule 8(a), vague or conclusory statements will not suffice: a claim is only plausible where the complaint pleads sufficient factual content to raise the right to relief above the speculative level. Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007). Any reasonable inferences that may be drawn from the complaint must be drawn in the light most favorable to the plaintiff. Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006).
Under Rule 12(e), "a party may move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response." Fed. R. Civ. P. 12(e).
The defendants seek dismissal of FSA from the case on the basis that FSA lacks the minimum contacts necessary to be subject to the personal jurisdiction of the court.
In their motion, the defendants contend that there is no personal jurisdiction over FSA because, allegedly, FSA is a mere holding company with no direct contacts with Pennsylvania, and any connection that its subsidiary FSM may have with Pennsylvania is not attributable to FSA. In response, Aetna offers a series of proofs tending to show that FSA is not merely an owner of companies that participate in the Pennsylvania health care market, but is rather a directand active participant in the Pennsylvania health care market itself. Aetna's proofs include: (1) an investor-targeted document from the website of FSA's parent company—Graymark Healthcare, Inc.—stating that "Foundation Surgery Affiliates, LLC operates a chain of ambulatory surgery center facilities in New Jersey, Ohio, Oklahoma, Pennsylvania, and Texas;" (2) an investor-targeted slide-deck from "Foundation Health Care, Inc." stating that "Foundation Services Affiliates" is an "industry leading [ambulatory surgery center] management and development company" whose functions include "partner[ing] with physicians," taking on "minority ownership investments," and "create[ing] outstanding patient experience[s];" (3) a form 8-K filed by Graymark Healthcare, Inc. stating that "FSA, FSHA, and their subsidiaries employed approximately 1,330 persons . . . approximately 90 [of which] are corporate employees, primarily based at the FSA and FSHA headquarters in Oklahoma City;" (4) a screenshot from the Foundation Health Care website's job postings page advertising for a position with "Foundation Surgery Affiliates (Corporate)" in Oklahoma City, OK; (5) a screenshot from the LinkedIn page of Robert Puglisi stating that from 2003 to 2007 he held the...
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