Carducci v. Aetna U.S. Healthcare
| Decision Date | 04 March 2003 |
| Docket Number | Civil Action No. 02-1155(JBS).,Civil Action No. 01-4675 (JBS).,Civil Action No. 01-5812(JBS).,Civil Action No. 01-4964(JBS).,Civil Action No. 01-5339(JBS).,Civil Action No. 01-5217(JCL).,Civil Action No. 01-5237(JWB).,Civil Action No. 02-417(JBS). |
| Parties | Caroline CARDUCCI and David Labinski, Plaintiffs, v. AETNA U.S. HEALTHCARE, Defendant. Jean Levine, Plaintiff, v. United Healthcare Corp., Defendant. Carole West, Plaintiff, v. Health Net of the Northeast, Defendant. David Collins, Plaintiff, v. Oxford Health Plans, Defendant. Noreen Bogurski, Plaintiff, v. Horizon Blue Cross Blue Shield of New Jersey, Defendant. Benjamin Edmonson, Plaintiff, v. Horizon Blue Cross Blue Shield of New Jersey, Defendant. Dellece L. Barbour, Plaintiff, v. CIGNA Healthcare of New Jersey, Inc., Defendant. William Bibbs, Plaintiff, v. AmeriHealth, Inc., Defendant. |
| Court | U.S. District Court — District of New Jersey |
Frank P. Solomon, Esquire, Weitz & Luxenberg, P.C., Cherry Hill, NJ, and Donna Siegel Moffa, Esquire, Lisa Rodriguez, Esquire, Nicole M. Miles, Esquire, Trujillo, Rodriguez & Richards, LLC,
Haddonfield, NJ, and Carl D. Poplar, Esquire, Jeffrey Ahren, Esquire, Poplar & Eastlack, Turnersville, NJ, and Roberta D. Liebenberg, Esquire, Fine, Kaplan And Black, R.P.C., Philadelphia, PA, and Marc H. Edelson, Hoffman & Edelson, Doylestown, PA, and Natalie Finkelman Bennett, Esquire, James C. Shah, Esquire, Shepherd, Finkelman, Miller & Shah, LLC, Turnersville, NJ, and Scott R. Shepherd, Esquire, Shepherd, Finkelman, Miller & Shah, LLC, Media, PA, and John W. Trimble, Jr., Esquire, Morrison & Trimble, LLC, Turnersville, NJ, and Mitchell A. Toups, Esquire, Weller, Green, Toups & Terrell, LLP, Beaumont, TX, for Plaintiffs Carducci, Labinski, Levine, West, Collins, Bogurski, Edmonson, and Barbour.
Philip Stephen Fuoco, Esquire, Joseph A. Osefchen, Esquire, Law Firm of Philip Stephen Fuoco, Haddonfield, NJ, for Plaintiff Bibbs.
Burt M. Rublin, Esquire, Raymond A. Quaglia, Esquire, Ballard, Spahr, Andrews & Ingersoll, LLP, Philadelphia, PA, for Defendant Aetna U.S. Healthcare.
Edward S. Wardell, Esquire, Kelley, Wardell & Craig, LLP, Haddonfield, NJ, for Defendant Horizon Healthcare Services, Inc. d/b/a Horizon Blue Cross and Blue Shield of New Jersey and for Defendant Aetna U.S. Healthcare.
Edward A. Scallet, Esquire, William F. Hanrahan, Esquire Jason H. Ehrenberg, Esquire, Groom Law Group, Chartered, Washington, DC, and Theodore D. Aden, Esquire, Leboeuf, Lamb, Greene & Macrae, LLP, Newark, NJ, for Defendant United Healthcare Corporation.
B. John Pendleton, Jr., Esquire, McCarter & English, LLP, Newark, NJ, for Defendant Health Net of the Northeast, Inc.
William J. O'Shaughnessy, Esquire, McCarter & English, LLP, Newark, NJ, for Defendant Oxford Health Plans, Inc. Douglas Arpert, Esquire, Norton, Arpert, Sheehy & Higgins, P.C., West Patterson, NJ, and Brian D. Boyle, Esquire, Dye, Esquire, William J. Stuckwisch, Esquire, O'Melveny & Myers, LLP, Washington, DC, for Defendant CIGNA HealthCare of New Jersey, Inc. Thomas S. Biemer, Esquire, John J. Higson, Esquire, Dilworth Paxson, LLP, Cherry Hill, NJ, for Defendant Ameri-Martha Health, Inc
TABLE OF CONTENTS
I. BACKGROUND.....................................................................604
II. DISCUSSION.....................................................................605
A. Motion to Dismiss Standard of Review...........................................605
B. Motion to Dismiss Analysis......................................................606
1. Complete Preemption Dismissal under Section 502(a)..............................606
(a) Failure to allege ERISA cause of action.................................................606
(b) Failure to plead plan as section 502(a)(1)(B) defendant.................................607
(c) Failure to exhaust administrative remedies..............................................609
2. Conflict Preemption Dismissal under Section 5U(a)...............................611
(a) Whether N.J.S.A. 2A:15-97 "relates to" plaintiffs' employee
benefit plans ..............................................................................612
(b) Whether N.J.S.A. 2A:15-97 is "saved" as a state law that
regulates insurance.........................................................................614
(c) Whether N.J.S.A. 2A:15-97 applies in spite of the deemer clause.........................617
C. Additional Arguments for Motion to Dismiss......................................617
1. Retrospective effect of Perreira v. Rediger, 169 N.J. 399 (2001).......617
2. Voluntary payment doctrine as applied to Levine, Bogurski, and
Edmonson claims ...................................................................619
3. Standing doctrine as applied to Collins and West claims.........................620
D. Bibbs v. AmeriHealth, Inc., Civ. No. 02-1155(JBS) Summary Judgment
Motion ............................................................................622
1. Compensatory Relief Claims..................................................... 622
2. Prospective Relief Claims ..................................................... 624
III. CONCLUSION ................................................................. 625
Under New Jersey law, a health insurer which paid benefits on behalf of an insured may not recoup those funds through a subrogation or reimbursement lien upon the insured's recovery from a third-party tortfeasor, and any such subrogation provision in a New Jersey insurance contract is therefore void. Perreira v. Rediger, 169 N.J. 399, 778 A.2d 429 (2001) ( N.J.S.A. 2A:15-97). The principal issues in the present consolidated cases involve whether this prohibition of subrogation arising at state law applies to the health insurance contracts of New Jersey employee benefit plans governed under federal law through the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq., and thus whether the plaintiff-insureds are entitled to repayment of such subrogated funds, or whether such a claim is preempted by ERISA section 502(a), 29 U.S.C. § 1132(a) (complete preemption) or by ERISA section 514(a), 29 U.S.C. § 1144(a) (conflict preemption).
The present motion to dismiss thus requires the Court to consider the doctrines of complete preemption and conflict preemption under ERISA. Congress passed ERISA to "safeguard the establishment, operation, and administration of employee benefit plans," and included the statute's two preemption provisions to ensure that the federal ERISA statute would set "minimum standards [to] assur[e] the equitable character of such plans and thenfinancial soundness." Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 122 S.Ct. 2151, 153 L.Ed.2d 375 (2002) (quoting 29 U.S.C. § 1001(a)). By preempting many state regulations, ERISA makes clear that the regulation of employee benefit plans is "exclusively a federal concern." Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523, 101 S.Ct. 1895, 68 L.Ed.2d 402 (1981).
Complete preemption arises under ERISA section 502(a)'s civil enforcement provision; it completely preempts state law claims within its scope and converts them into federal ERISA claims. Conflict preemption arises under ERISA section 514(a); it expressly preempts any state law which relates to an ERISA plan unless the law "regulates insurance, banking, or securities."
The matter is presently before the Court on seven motions to dismiss by defendants in each of the seven consolidated actions other than Carducci itself.1 [Docket Items 40-1, 42-1, 48-1, 50-1, 50-2, 52-1, and 54-1 in Carducci et at. v. Aetna U.S. Healthcare, No. 01-4675.] The consolidated defendants assert that plaintiffs' complaints should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted because their state law claims are completely preempted and conflict preempted by ERISA.
The Court has considered the submissions of all of the parties and has decided that defendants' motions to dismiss on the basis of complete and conflict preemption must be denied. The Court will then consider, and deny, three additional arguments presented for dismissal, namely whether the 2001 Perreira case on which the claims are based should apply retrospectively, whether certain claims should be barred by the voluntary payment doctrine, and whether certain plaintiffs have standing to bring suit. Then, the Court will consider, and will grant, the motion for summary judgment brought in Bibbs.
1. BACKGROUND
On January 28, 2002, this Court granted the motion of defendants in six cases to consolidate their actions for the limited purpose of considering motions for remand and motions to dismiss. As a result, the cases of Levine v. United Healthcare Corp., Civ. No. 01^964(JBS); West v. Health Net of the Northeast, Civ. No. 01-5217(JCL); Collins v. Oxford Health Plans, Civ. No. 01-5237(JWB); Borgurski v. Horizon Blue Cross Blue Shield of New Jersey, Civ. No. 01-5339(JBS); and Edmonson v. Horizon Blue Cross Blue Shield of New Jersey, Civ. No. 01-5812(JBS), were consolidated under the caption of the earliest docket, Carducci et al. v. Aetna U.S. Healthcare, No. 01-4675(JBS). Parties in another action, Bibbs v. AmeriHealth, Inc., Civ. No. 02-1155(JBS), agreed to have their case consolidated under the Carducci docket for purposes of the remand motion; they have since joined the present motion to dismiss.2 Parties in another action, Barbour v. CIGNA Corp., Civ. No. 02-117(JBS), agreed to consolidate under the Carducci docket for purposes of the motion to dismiss if defendant's motion to compel arbitration is not granted.3
The present cases were consolidated because their motions to remand and motions to dismiss all dealt with...
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