Chiron Recovery Ctr. v. United Healthcare Servs.

• Decision Date: 30 June 2020
• Docket Number: CASE NO. 9:18-CV-81761-ROSENBERG/REINHART
• Court: U.S. District Court — Southern District of Florida
• Parties: CHIRON RECOVERY CENTER, LLC, et al., Plaintiffs, v. UNITED HEALTHCARE SERVICES,INC. & UNITED HEALTHCARE INSURANCE COMPANY, Defendants.

CHIRON RECOVERY CENTER, LLC, et al., Plaintiffs, v. UNITED HEALTHCARE SERVICES,INC. & UNITED HEALTHCARE INSURANCE COMPANY, Defendants.

CASE NO. 9:18-CV-81761-ROSENBERG/REINHART

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

June 30, 2020

ORDER GRANTING IN PART AND DENYING IN PART UNITED'S MOTION TO DISMISS

This cause is before the Court on the Defendant United¹ Companies' Motion to Dismiss[DE 109].The Motion has been fully briefed.For the reasons set forth below, the Motion is granted in part and denied in part.

I.FACTUAL ALLEGATIONS & BACKGROUND

This is a case about health insurance benefits.PlaintiffChiron Recovery Center, LLC is a medical services provider.The Defendants in this case, United Healthcare Services, Inc. and United Healthcare Insurance Company are, as their names suggest, insurance companies.Ten individuals are co-Plaintiffs in this case(the "Individual Plaintiffs").Those Individual Plaintiffs obtained medical treatment from Chiron.When the Individual Plaintiffs sought treatment from Chiron, Chiron called Defendant to verify that the Individual Plaintiffs had insurance coverage.The Defendant so verified, and Chiron provided treatment.

At some point in time, a dispute arose between Chiron and Defendant.Defendant took the position that in the past it had overpaid Chiron for certain treatments pertaining to urine analysis, and Defendant essentially demanded that it be repaid.Chiron refused.Defendant then took the position that Chiron owed it a debt in the amount of the alleged overpayment.To collect upon this debt, when Defendant would otherwise transmit funds to Chiron for current patients, Defendant would also deduct a certain amount of funds from the amount it remitted to Chiron, and credit that amount towards Chiron's debt.The deductions were applied to patients that Chiron was treating in the present, even though the alleged overpayment had occurred in the past.The patients possibly affected by this deduction are the Individual Plaintiffs.Chiron filed this suit as a result of Defendant's practice in "offsetting" Chiron's alleged overpayment in the past with payments otherwise remitted in the present.

Early in this case, Chiron demanded that Defendant provide the governing insurance plan documents for the Individual Plaintiffs.Defendant refused.After Chiron received an adverse discovery ruling pertaining to Defendant's obligation to provide the plan documents, Chiron filed another case, case 19-CV-80766("Chiron II").In Chiron II, Chiron sought to compel Defendant to produce the plan documents of the Individual Plaintiffs.After extensive motion practice, the Court dismissed Chiron II with prejudice.

Although it is not entirely clear to the Court how Chiron (or the Defendant) obtained the plan documents for the Individual Plaintiffs, at some point in time around the conclusion of Chiron II, Chiron did obtain those documents.Chiron then filed its Second Amended Complaint.Defendant responded with the Motion to Dismiss before the Court.

II.STANDARD OF REVIEW

When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), this Court must accept all factual allegations in a complaint as true and take them in the light most favorable to the plaintiff; however, a plaintiff is still obligated to provide grounds of his or her entitlement to relief which requires more than labels, conclusions and a formulaic recitation of the elements of a cause of action.Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 561-563(2007).Unwarranted deductions of fact in a complaint cannot be admitted as true for the purposes of testing the sufficiency of the allegations.Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248(11th Cir.2005).The facts as pled must state a claim for relief that is plausible on the face of the pleading.Ashcroft v. Iqbal, 556 U.S. 662, 678-69(2009).

III.ANALYSIS

In both the instant case and Chiron II, Chiron has attempted to utilize a power of attorney to bring claims on behalf of the other Plaintiffs in this case, the Individual Plaintiffs.This Court ruled previously that the power of attorney will only permit Chiron to bring a claim on behalf of an Individual Plaintiff if, by doing so, Chiron will benefit the Individual Plaintiff.E.g., Chiron II, DE 30at 14 ("An attorney-in-fact may not act for its own benefit; it must only act for the benefit of its principal."(citingIn re Estate of Bell, 573 So. 2d 57, 59(Fla. Dist. Ct. App.1990)).²Stated another way, Chiron may not use the power of attorney solely to benefit itself.

In prior rulings, this Court held that Chiron had not pled any injury (and therefore could not utilize the power of attorney) on behalf of the Individual Plaintiffs.For example, in dismissing a prior Complaint in the instant case, Chiron I, the Court noted: "If, as the [Amended Complaint] alleges, the . . . Plaintiffs had their claims paid in full, there is a significant question whether they suffered an injury-in-fact sufficient for Article III standing to seek relief for alleged harm arising from . . . insurance claims."DE 86at 12-13.The Court addressed this issue in greater detail in Chiron II:

As Judge Reinhart explained, Chiron can only maintain this action on behalf of an individual Plaintiff when the individual Plaintiff"is still owed payment or reimbursement."DE 30at 15.Plaintiffs contend that the Amended Complaint now alleges a benefit to the individual Plaintiffs because some of the individuals owe a debt (or may owe a debt) to Chiron and, if Chiron can obtain a payment from Defendants that that will "reduce their debt."On this point, the case of Williams v. Blue Cross & Blue Shield is instructive.2010 WL 4025857(N.D. Fla.Oct. 12, 2010).

In Williams, plaintiffs received diagnostic scans.Id. at *1-2.An insurer initially made full payments for the scans but later, after an audit, the insurer "recouped" payment for the scans, concluding that it had paid too much in its original payment (a scenario greatly resembling the instant case).Id.The plaintiffs in Williams sued the insurer for the amount of the "recouped" payment.Id.The trial court concluded, however, that the plaintiffs lacked standing to pursue such a claim.Id. at *3.The plaintiffs lacked standing because they had no financial responsibility to pay the provider for the recouped payment and the provider had no intention of collecting the balance from the plaintiffs.Id.Thus, the plaintiffs had no injury for which they could sue.Id.(citingLanfear v. Home Depot, Inc., 536 F.3d 1217, 1222(11th Cir.2008);Weaver v. BCBSF Life Ins. Co., 370 F. App'x 822, 823(9th Cir.2010));see alsoBorg v. Phelan, No. 16-CV-2070, 2017 WL 2226649, at *4(M.D. Fla.May 22, 2017)(risk of being charged additional fees was too speculative to support standing);Loftin v. KPMG LLP, No. 02-CV-81166, 2003 WL 22225621, at *7(S.D. Fla.Sept. 10, 2003)(speculation regarding the nature and amount of impending tax payment did not support standing).

Here, Plaintiffs have not adequately alleged an injury.Were any individual Plaintiffs required to make out-of-pocket payments for treatment?Plaintiffs do not say.Is Chiron enforcing its debt against the individual Plaintiffs?Plaintiffs do not say.If the individual Plaintiffs have paid no fees out-of-pocket, and no provider intends to collect upon a debt in connection with rendered services, how can those Plaintiffs be owed anything under their respective plans?Plaintiffs do not explain.None of these issues are addressed in the Amended Complaint, and these are precisely the issues which Plaintiffs were required to explain by virtue of the Court's order of dismissal because only a full explanation of these issues will permit the Court to plausibly infer that Chiron has instituted this action for the benefit of the individual Plaintiffs.

DE 73at 7-8.In both Chiron I and Chiron II, it was apparent to the Court and to Chiron that if Chiron were to seek payment from the Individual Plaintiffs, that would certainly be an injury that would give those Individual Plaintiffs the necessary standing to litigate in federal court.But if the entity seeking payment from the Individual Plaintiffs was Chiron, the Court cautioned Chiron that it had serious concerns about Chiron's counsel's conflict of interest in simultaneously representing both Chiron and the Individual Plaintiffs:

COUNSEL: But I can tell you that it really logically would turn on the outcome of this case.If Chiron was not able, in asserting these claims, to make the recovery, then, in fact, those patients who previously had, and if you will, paid in full, no longer the case, and Chiron would, if necessary, seek recovery from them.

THE COURT: I understand that.But be careful with the road you're [h]eading down, because you're heading right down the road to a conflict of interest in that you represent Chiron and you represent the [other Plaintiffs], and you're telling me that each one of them could have claims against the other, and you're going to represent all of them?

DE 88-3 at 20:12-21:13.The Court further cautioned Chiron of this potential conflict in its order dismissing Chiron II with prejudice:

The Court cannot discern how Chiron's counsel could collect upon Chiron's debt as to the individual Plaintiffs while simultaneously filing lawsuits in their name, given Florida conflict-of-interest rules.SeeRule 4-1.7(a)(1) of the Rules Regulating the Florida Bar ("A lawyer must not represent a client if the representation of one client will be directly adverse to another client.").

DE 73at 7 n.3.

After the Court's dismissal of Chiron II with prejudice, Chiron reinstated the instant case, Chiron I, by filing the operative Second Amended Complaint.Chiron has attempted to plead an injury to the Individual Plaintiffs by now alleging that it will seek to enforce its claims as a creditor against the Individual Plaintiffs, that it has so...