Cleghorn v. Blue Shield of California

• Decision Date: 23 May 2005
• Docket Number: No. 03-55528.,03-55528.
• Citation: 408 F.3d 1222
• Parties: Douglas D. CLEGHORN, individually, on behalf of other similarly-situated persons and on behalf of the public, Plaintiff-Appellant, v. BLUE SHIELD OF CALIFORNIA, dba CareAmerica, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

408 F.3d 1222 Douglas D. CLEGHORN, individually, on behalf of other similarly-situated persons and on behalf of the public, Plaintiff-Appellant,
v.
BLUE SHIELD OF CALIFORNIA, dba CareAmerica, Defendant-Appellee. No. 03-55528. United States Court of Appeals, Ninth Circuit. Argued and Submitted February 10, 2005. Filed May 23, 2005.

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Sharon J. Arkin, Robinson, Calcagnie & Robinson, Newport Beach, CA, for the plaintiff-appellant.

Gregory N. Pimstone, Terri D. Keville, Manatt, Phelps & Phillips, LLP, Los Angeles, CA, for the defendant-appellee.

Appeal from the United States District Court for the Central District of California; David O. Carter, District Judge, Presiding. D.C. No. CV-02-00852-DOC.

Before: PREGERSON, CANBY, and TALLMAN, Circuit Judges.

CANBY, Circuit Judge:

We are presented once again with a question concerning the degree to which the federal Employee Retirement Income Security Act ("ERISA") preempts state law. Douglas D. Cleghorn is a participant in his employer's ERISA health plan offered by Blue Shield of California (doing business as CareAmerica) ("Blue Shield"). On one occasion he sought and received emergency medical services and Blue Shield denied reimbursement. Cleghorn sued Blue Shield in California state court, asserting state-law causes of action and alleging that Blue Shield had violated an emergency care provision in section 1371.4(c) of the California Health and Safety Code.

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Blue Shield removed the case to federal court and the district court held that Cleghorn's claims were preempted by ERISA. When Cleghorn declined to amend his complaint to allege an ERISA claim, the district court dismissed his complaint for failure to state a claim. We affirm the judgment of the district court.

I. Background

Through his employer, Cleghorn became a member of a Blue Shield health plan.¹ He subsequently sought and received emergency medical care for an episode of dizziness, imminent loss of consciousness, weakness, muscle fatigue, and nausea. Cleghorn submitted a reimbursement claim to Blue Shield for the emergency care he received.

Blue Shield denied Cleghorn's claim on two grounds based on the terms of the plan: (1) Cleghorn's condition did not meet the criteria for emergency care;² and (2) the emergency treatment was not approved by Cleghorn's primary care physician or by the health plan.³ Cleghorn filed state law claims in Orange County Superior Court on behalf of himself, all others similarly situated, and the general public. The claims were brought under the Unfair Competition Law ("UCL"), CAL. BUS. & PROF. CODE § 17200, et seq., and the Consumer Legal Remedies Act ("CLRA"), CAL.CIV. CODE § 1750, et seq. Cleghorn requested general damages, injunctive relief, disgorgement of illegally-gained profits, and punitive damages.

All of the claims were based on Cleghorn's allegation that Blue Shield's emergency care policy violated section 1371.4(c) of the California Health and Safety Code:

[A] health care service plan may deny reimbursement to a provider for a medical screening examination in cases when the plan enrollee did not require emergency services and care and the enrollee reasonably should have known that an emergency did not exist. A health care service plan may require prior authorization as a prerequisite for payment for necessary medical care following stabilization of an emergency medical condition.

Cleghorn asserted that this statute required Blue Shield to cover emergency treatment whenever the insured "reasonably believes that an emergency exists" and that a requirement of pre-authorization in such cases is forbidden.⁴

Blue Shield removed the action to federal court on the ground that Cleghorn's state-law causes of action were completely preempted by ERISA. See Aetna Health Inc. v. Davila, 542 U.S. 200, 124 S.Ct. 2488, 2494-96, 159 L.Ed.2d 312 (2004) (upholding ERISA preemption as a ground for removal). Cleghorn then amended his complaint to delete his individual claims for damages under CLRA and filed a motion to remand. The district court denied Cleghorn's motion to remand, concluding that Cleghorn's claims were preempted. Cleghorn declined the opportunity to

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amend his complaint to include claims under ERISA's civil enforcement scheme. The district court thereupon dismissed the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a cognizable cause of action.

II. Standard of Review

We review de novo a dismissal pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Madison v. Graham, 316 F.3d 867, 869 (9th Cir.2002). We also determine de novo whether ERISA preempts state law causes of action. Winterrowd v. Am. Gen. Annuity Ins. Co., 321 F.3d 933, 937 (9th Cir.2003).

III. Discussion

There are two strands to ERISA's powerful preemptive force. First, ERISA section 514(a) expressly preempts all state laws "insofar as they may now or hereafter relate to any employee benefit plan[,]" 29 U.S.C. § 1144(a), but state "law[s] ... which regulat[e] insurance, banking, or securities" are saved from this preemption. 29 U.S.C. § 1144(b)(2)(A).

Second, ERISA section 502(a) contains a comprehensive scheme of civil remedies to enforce ERISA's provisions. See 29 U.S.C. § 1132(a). A state cause of action that would fall within the scope of this scheme of remedies is preempted as conflicting with the intended exclusivity of the ERISA remedial scheme, even if those causes of action...