Bohara v. Backus Hosp. Medical Benefit Plan

• Decision Date: 23 September 2005
• Docket Number: No. CV04-7935 ABC (PLAX).,CV04-7935 ABC (PLAX).
• Citation: 390 F.Supp.2d 957
• Parties: June BOHARA v. BACKUS HOSPITAL MEDICAL BENEFIT PLAN.
• Court: U.S. District Court — Central District of California

390 F.Supp.2d 957

June BOHARA v. BACKUS HOSPITAL MEDICAL BENEFIT PLAN.

No. CV04-7935 ABC (PLAX).

United States District Court, C.D. California.

September 23, 2005.

COPYRIGHT MATERIAL OMITTED

Michael A. McKuin, Lake Arrowhead, CA, for June Bohara, Plaintiff.

Backus Hospital Medical Benefit Plan, Gerard LaFond, Esq.,Lewis, Brisbois, Bisgaard, & Smith, LLP, Los Angeles, CA, for defendant.

Proceedings:

ORDER RE: DEFENDANT'S MOTION TO DISMISS OR TRANSFER (In Chambers)

COLLINS, District Judge.

Pending before the Court is Defendant's motion to dismiss or transfer the above-referenced action. The Court finds the motion appropriate for submission without oral argument. See Fed. R. Civ. Pro. 78; Local Rule 7-15. Accordingly, the Court hereby VACATES the September 26, 2005 hearing date. After review of the materials submitted by the parties and the case file, the Court hereby DENIES Defendant's motion to dismiss or transfer.

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiff June Bohara ("Plaintiff"), a resident of Connecticut, was a plan participant and/or beneficiary of the Backus Hospital Medical Benefit Plan ("Defendant"), an employee welfare benefit plan established pursuant to the Employee Retirement Income Security Act ("ERISA"). (See First Amended Complaint ("FAC") ¶ 4.) Health Net, Inc. ("Health Net") acted as a claims review fiduciary for Defendant. (See id. ¶ 9.) Value Options acted as a "managed care" agent and claims administrator for Health Net and Defendant. (See id. ¶ 11.)

On September 27, 2002, Plaintiff was admitted to Pacific Shores Hospital ("the Hospital"), located in California. (See id. ¶ 19.) Plaintiff received inpatient treatment and then "partial hospitalization" care until November 3, 2002. (See id. ¶ 20.) Prior to Plaintiff's admission, the Hospital had verified on two separate occasions that Plaintiff's treatment would be covered by Defendant for 80% of the "usual reasonable and customary" charges, subject to a $2500 "out-of-pocket" maximum to be paid by the patient. (See id. ¶¶ 16-17.) The total cost for Plaintiff's treatment was $50,210.00 and after allowing for a patient co-payment, the Hospital sought $47,710.00 from Defendant. (See id. ¶¶ 22-23.) Defendant paid only $12,024.00, claiming the bill amount exceeded the fee schedule rate. (See id. ¶ 24.) The Hospital appealed to both Value Options and Health Net. (See id. ¶¶ 28, 34.) On December 8, 2003, Health Net sent a letter to Plaintiff and the Hospital indicating that it was reviewing the appeal. (See id. ¶ 35.) On June 11, 2004, the Hospital sent a letter demanding payment from Health Net, to which it received no response. (See id. ¶¶ 43-44.)

On September 23, 2004, the Hospital, acting as Plaintiff's assignee, filed a complaint in this Court against Defendant for recovery of ERISA plan benefits and attorney fees. However, Plaintiff's benefit plan barred assignment of benefits under the plan. Thus, on May 18, 2005, this Court granted Defendant's motion to dismiss for lack of subject matter jurisdiction, but permitted amendment of the complaint to substitute Bohara, the plan member, as the plaintiff. Plaintiff filed her First Amended Complaint on May 27, 2005.

On July 19, 2005, Defendant filed the instant motion to dismiss or transfer. Plaintiff opposed on September 8, 2005, to which Defendant replied on September 19, 2005.

II. LEGAL STANDARD

A. Motion to Dismiss for Improper Venue

Federal Rule of Civil Procedure 12(b)(3) allows a defendant to bring a motion to dismiss on the basis of improper venue. Once a defendant has raised a timely objection to venue, the plaintiff has the burden of showing that venue is proper. See Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491 (9th Cir.1979). If the Court determines that venue is improper, it must "dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a).

Federal venue is governed entirely by statute. Leroy v. Great Western United Corp., 443 U.S. 173, 181, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979). The venue rules appear in the general venue statute (28 U.S.C. § 1391), in special venue statutes, and in the improper venue and change of venue provisions (28 U.S.C. §§ 1404 and 1406). The special ERISA venue provisions are expansive, providing that an action "may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found." 29 U.S.C. § 1132(e)(2). In these provisions, Congress intended to give ERISA plaintiffs an expansive range of venue locations. See Varsic v. U.S. District Court for the Central District of California, 607 F.2d 245, 248 (9th Cir.1979).

In Varsic, the court ruled that venue was proper in a district, and a defendant could be "found" there for the purposes of § 1132(e)(2), if a defendant had "minimum contacts" with that district, under the standard enunciated in International Shoe and progeny. Id. at 248-49. Therefore, a defendant may be found in this district if he has "certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The defendant's conduct must make it reasonable that the defendant would anticipate being haled into court here. World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). This test is met where a defendant "purposefully directs" its activities toward the forum district, even without a physical presence. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Where the defendant's activities connected to the forum are not "continuous and systematic," the court must evaluate the nature and quality of the defendant's contacts in relation to the cause of action. Varsic, 607 F.2d at 249 (citing Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1287 (9th Cir.1977)). The Ninth Circuit has articulated a clear three-part test for determining whether personal jurisdiction may be exercised: (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable. See Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir.1995) (quoting Data Disc, 557 F.2d at 1287). The first two of these criteria "are closely related because they focus on the relationship of the defendant and the claim to the forum state." Paccar Int'l., Inc. v. Commercial Bank of Kuwait, S.A.K, 757 F.2d 1058, 1062 (9th Cir.1985).

The plaintiff bears the burden of establishing jurisdiction. Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir.1995). Absent formal discovery or an evidentiary hearing, the plaintiff need establish only a prima facie showing that personal jurisdiction exists to survive a motion to dismiss for lack of jurisdiction. Fields v. Sedgwick Associated Risks, Ltd., 796 F.2d 299, 301 (9th Cir.1986); Ziegler, 64 F.3d at 473. "Prima facie" showing means that the plaintiff has demonstrated facts that if true would support a finding of jurisdiction. Data Disc, 557 F.2d at 1285; Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995). In determining whether a plaintiff has met this burden, uncontroverted allegations in the complaint "must be taken as true, and `conflicts between the facts contained in the parties' affidavits must be resolved in [the plaintiff's] favor...." AT & T Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir.1996)(citing WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir.1989)). Once plaintiff has made a showing that "the defendant purposefully directed his activities at forum residents," a rebuttable presumption arises that exercise of jurisdiction is reasonable. See Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 1392, 1397 (9th Cir.1986). At that point, defendant bears the burden to "present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Ballard, 65 F.3d at 1500 (quoting Burger King, 471 U.S. at 477-78, 105 S.Ct. 2174).

B. Motion to Transfer

Even where venue is proper in a particular district, a court has discretion to transfer a case "to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). A decision "to transfer requires an individualized, case-by-case consideration of convenience and fairness." Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir.2000) (citing Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988)). The defendant must make a strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum. Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir.1986) (citations omitted); see also Scheidt v. Klein, 956 F.2d 963, 965 (10th Cir.1992) ("unless the balance is strongly in favor of the movant, plaintiff's choice of forum should rarely be disturbed").

Relevant factors to consider in determining whether to transfer a case pursuant to § 1404(a) include: (1) the plaintiff's choice of forum; (2) the extent to which there is a connection between the plaintiff's causes of action and this forum; (3) the parties' contacts with this forum; (4) the convenience of witnesses, (5) the availability of compulsory process to compel attendance of unwilling non-party witnesses; (6) the ease of access to sources of proof; (7) the existence of administrative difficulties resulting from court congestion; (8) whether there is a "local interest in having localized...