Angelina Emergency Med. Assocs. PA v. Health Care Serv. Corp.

• Decision Date: 10 December 2020
• Docket Number: Civil Action No. 3:18-CV-00425-X
• Citation: 506 F.Supp.3d 425
• Parties: ANGELINA EMERGENCY MEDICINE ASSOCIATES PA, et al., Plaintiffs, v. HEALTH CARE SERVICE CORPORATION, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

506 F.Supp.3d 425

ANGELINA EMERGENCY MEDICINE ASSOCIATES PA, et al., Plaintiffs,

v.HEALTH CARE SERVICE CORPORATION, et al., Defendants.

Civil Action No. 3:18-CV-00425-X

United States District Court, N.D. Texas, Dallas Division.

Signed December 10, 2020

Toby M. Galloway, Winstead PC, Fort Worth, TX, James Walton Boswell, Pro Hac Vice, Jennifer S. Lewin, Pro Hac Vice, King & Spalding LLP, Atlanta, GA, Leslie C. Murphy, Pro Hac Vice, King & Spalding LLP, Sacramento, CA, for Plaintiffs.

Brian P. Kavanaugh, Sidley Austin LLP, Cassandra Elaine Fenton, Stacey Pagonis, Pro Hac Vice, Kirkland & Ellis LLP, Chicago, IL, Joshua L. Hedrick, Hedrick Kring PLLC, Natali R. Wyson, Paige Holden Montgomery, Sidley Austin LLP, Dallas, TX, for Defendant Health Care Service Corporation.

Brian P. Kavanaugh, Sidley Austin LLP, Chicago, IL, Joshua L. Hedrick, Mark Alan Fritsche, Hedrick Kring PLLC, Dallas, TX, for Defendant Blue Cross Blue Shield of Texas.

Jonathan M. Herman, Charles Wilson Hill, Herman Law Firm, Dallas, TX, for Defendants Blue Cross and Blue Shield of Alabama, HealthNow New York Inc.

Covert J. Geary, Michael Christopher Drew, Tyler John Rench, Jones Walker LLP, New Orleans, LA, Amy Kathleen Anderson, Jones Walker LLP, Houston, TX, for Defendants USAble Mutual Insurance Company, Wellmark Inc., Blue Cross & Blue Shield of Mississippi, Excellus Health Plan Inc., Regence BlueCross BlueShield of Oregon, Independence Hospital Indemnity Plan Inc., Highmark Inc., Wellmark of South Dakota Inc., Regence BlueCross BlueShield of Utah, Regence BlueShield, Premera Blue Cross.

Maria Wyckoff Boyce, Russell A. Welch, Pro Hac Vice, Hogan Lovells US LLP, Houston, TX, Allen Paige Pegg, Pro Hac Vice, Craig A. Hoover, Pro Hac Vice, Peter R. Bisio, Pro Hac Vice, Hogan Lovells US LLP, Washington, DC, Mark J. Dyer, Martin Disiere Jefferson & Wisdom, Dallas, TX, for Defendants Anthem Blue Cross Life and Health Insurance, Rocky Mountain Hospital and Medical Services, Blue Cross and Blue Shield of Georgia Inc., Blue Cross Blue Shield Healthcare Plan of Georgia Inc., RightCHOICE Managed Care Inc., Healthy Alliance Life Insurance Company, HMO Missouri Inc., Empire HealthChoice Assurance Inc., Empire HealthChoice HMO Inc., Community Insurance Company, Blue Cross and Blue Shield of South Carolina, Anthem Health Plans of Virginia Inc., Blue Cross Blue Shield of Florida Inc.

Brian Keith Norman, LeDouglas G. Johnson, Shamoun & Norman LLP, Dallas, TX, Kenneth J. Lambert, Shamoun & Norman LLP, Farmers Branch, TX, for Defendants CareFirst Inc., Group Hospitalization and Medical Services Inc.

Michael Christopher Drew, Jones Walker LLP, New Orleans, LA, for Defendant Highmark BCBSD Inc.

Thomas C. Hardy, Abraham J. Souza, Daniel J. Hofmeister, Jr, Reed Smith LLP, Chicago, IL, Clark Anthony Donat, Sarah M. Cummings, Reed Smith LLP, Dallas, TX, for Defendants Blue Cross of Idaho Health Service Inc., Blue Cross and Blue Shield of Kansas City, Blue Cross and Blue Shield of Nebraska Inc., Blue Cross Blue Shield of North Dakota.

Jason Cross, Spencer Fane LLP, Dallas, TX, for Defendant Blue Cross and Blue Shield of Kansas Inc.

John R. Nelson, Dickinson Wright PLLC, Austin, TX, Maria L. Martinez, Pro Hac Vice, Blue Cross Blue Shield of Michigan, Detroit, MI, for Defendant Blue Cross Blue Shield of Michigan Mutual Insurance Company.

Joseph J. Mammone, Jr, Reed Smith LLP, John Clay Sullivan, Winstol D. Carter, Morgan, Lewis & Bockius LLP, Dallas, TX, for Defendant Capital Blue Cross.

Maria Wyckoff Boyce, Russell A. Welch, Pro Hac Vice, Hogan Lovells US LLP, Houston, TX, Craig A. Hoover, Pro Hac Vice, Peter R. Bisio, Pro Hac Vice, Hogan Lovells US LLP, Washington, DC, Mark J. Dyer, Martin Disiere Jefferson & Wisdom, Dallas, TX, for Defendant BlueCross BlueShield of Tennessee Inc.

MEMORANDUM OPINION AND ORDER

BRANTLEY STARR, UNITED STATES DISTRICT JUDGE

This case is in all ways an absolute unit¹ —in the serious nature of its subject matter, in the scope of claims brought, and in the amount of damages sought. The plaintiffs (over fifty physicians associations) brought multiple federal, state statutory, and state common law claims against some forty-odd defendants, a bunch of insurance companies and medical organizations, alleging they'd been underpaid for emergency services they provided to patients.

To facilitate a swifter, cleaner resolution of this mammoth matter, the Court split discovery in half, focusing on "identification and clarification of the [legal] claims" in Phase 1. In accordance with the Court's scheduling order, the defendants filed a joint omnibus motion to dismiss several of the plaintiffs’ claims after Phase 1 had concluded, arguing that these claims could be cast aside solely on legal grounds. That motion to dismiss is now ripe.

Having considered these filings, the Court GRANTS IN PART and DENIES IN PART the defendants’ omnibus motion to dismiss. The Court DISMISSES WITH PREJUDICE: (1) all claims based on quantum meruit (Count III); (2) all claims pursuant to Texas Insurance Code sections 541.060, 1271.155, and 1301.0053 (Count VI); and (3) all claims under the Texas Prompt Pay Act (Count VII). The Court also DISMISSES WITHOUT PREJUDICE all claims based on breach of the duty of good faith and fair dealing (Count IV). And finally, the Court DISMISSES AS MOOT any non-ERISA-based claims involving Capital BlueCross and Care First, Inc. ("CareFirst"). However, the Court DENIES the motion to dismiss with respect to: (1) defendants’ anti-assignment provision defense; (2) jurisdiction over any remaining claims involving Blue Cross and Blue Shield of South Carolina ("South Carolina Blue") and Blue Cross and Blue Shield of Florida, Inc., d/b/a Florida Blue ("Florida Blue"); and (3) any remaining ERISA-based claims involving Capital BlueCross, and CareFirst.

* * *

When delivering its opinions, the Court customarily first recites the facts of the case, then the applicable law, and then its reasoning. Given the complexity of this case, the Court instead organizes this opinion and order by claim, according to the organization the parties followed in their respective motion and response.² When the Court reaches a particular claim, it will then recite the pertinent facts and law that relate specifically to it. The Court believes this method of organization will make its holdings easier to understand and apply. However, the Court must detail at the outset the overall legal standard it follows when confronting any motion to dismiss.

To survive a motion to dismiss, the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face."³ If the Court's analysis requires factual determinations, the Court must accept all well-pleaded facts as true and view them in the light most favorable to the plaintiff.⁴ Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if referred to in the complaint and otherwise central to its claims.⁵

In this specific instance, though, the Court focuses its gaze primarily on the law, not the facts. And when doing so, the Court doesn't accept as true "conclusory allegations, unwarranted factual inferences, or legal conclusions."⁶ The Court's plumb line, as usual, is plausibility, meaning "more than a sheer possibility that a defendant has acted unlawfully."⁷ In that vein, the Court may dismiss claims for a variety of law-related reasons. For instance, dismissal of a claim is proper if it fails to plead all required elements necessary to obtain relief.⁸ Put another way, the Court may find a claim that lacks a required element implausible because we cannot "draw the reasonable inference that the defendant is liable for the misconduct alleged."⁹

In summary, the primary purpose of this motion to dismiss is not to rule on factual matters that require further discovery, but to determine which legal claims—if any—can be dismissed as a matter of law. Accordingly, the Court now turns to the first dispute of law between the parties.

I. Quantum Meruit (Count III)

In their response to the defendants’ motion to dismiss, the plaintiffs helpfully categorized the health insurance claims at issue into four "buckets":

• Insurance claims made in Texas by patients insured in Texas by Blue Cross Blue Shield of Texas ("Texas Blue"). The Court refers to this first bucket as Texas Blue Insured;

• Insurance claims made in Texas by patients insured in Texas by self-funded ERISA-governed plans administered by Texas Blue. The Court refers to this second bucket as Texas Blue Self-Funded;

• Insurance claims made in Texas by patients insured outside of Texas by other Blue Plan providers processed by Texas Blue. The Court refers to this third bucket as BlueCard Insured; and

• Insurance claims made in Texas by patients insured outside of Texas by self-funded ERISA-governed administered by other Blue Plan providers. The Court refers to this fourth bucket as BlueCard Self-Funded.¹⁰

In their complaint, the plaintiffs argue they may recover in quantum meruit as to the Texas Blue Insured and BlueCard Insured insurance claims. Quantum meruit is a state-law equitable remedy founded in unjust enrichment.¹¹ To recover from the defendant, the plaintiff must show that (1) they rendered valuable services or materials (2) to the defendant (3) which the defendant accepted, used, and enjoyed, and (4) the circumstances placed the defendant on reasonable notice that the plaintiff expected compensation for the services or materials.¹² And it isn't enough for a plaintiff to simply show that his actions benefitted the defendant. "[T]he plaintiff must show that his efforts were undertaken for the person sought to be charged"—i.e. , the defendant.¹³

The complaint states that by "providing medically necessary emergency services" to the defendants’ insurance customers, the plaintiffs "conferred a benefit" on them by satisfying their "obligations to arrange and pay for healthcare services" for these members.¹⁴ But saddling someone with a debt to...