Doe v. Anthem Health Plans of Va., Inc.
| Decision Date | 22 December 2020 |
| Docket Number | Civil Action No. 2:20CV408 (RCY) |
| Citation | 508 F.Supp.3d 18 |
| Parties | John DOE, a Minor BY his NEXT FRIEND, James M. BOYD, et al., Plaintiffs, v. ANTHEM HEALTH PLANS OF VIRGINIA, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Virginia |
James Matheson Boyd, Boyd & Boyd PC, Virginia Beach, VA, Richard F. Hawkins, III, The Hawkins Law Firm PC, Richmond, VA, for Plaintiffs.
Massie Payne Cooper, Virginia Bell Flynn, Troutman Pepper Hamilton Sanders LLP, Richmond, VA, for Defendant.
This matter is before the Court on Plaintiffs’ Motion to Remand (ECF No. 10). John Doe, a minor, by his next friend James M. Boyd, and James M. Boyd ("Plaintiffs") bring this action against Anthem Health Plans of Virginia, Inc. ("Anthem" or "Defendant") alleging breach of an insurance contract, negligent infliction of emotional distress, and insurer bad faith under Virginia Code § 38.2-209. Defendant removed this case to federal court, and Plaintiffs move to remand the action to Virginia Beach Circuit Court. The motions have been fully briefed, and the Court dispenses with oral argument because the facts and legal contentions are adequately presented in the materials before the Court, and oral argument would not aid in the decisional process. E.D. Va. Loc. Civ. R. 7 (J). For the reasons stated below, the Motion to Remand will be GRANTED.
The Court's jurisdiction over this action turns on whether a small business's health insurance plan, through which only the business owner, his spouse, and his dependents receives coverage, is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. John Doe, a minor, and his father, James Boyd ("Boyd"), filed suit in state court against their health insurer, Anthem, after Anthem declined to cover John Doe's inpatient mental health treatment at Capstone Treatment Center ("Capstone") in Judsonia, Arkansas, in early 2020. (Compl., ECF No. 1-1 ¶¶ 18-24.) John Doe was covered as a dependent on Boyd's health insurance policy with Anthem. (Id. ¶ 8; Boyd Decl., ECF No. 11-1 ¶¶ 3-5, 7, 11.) On January 9, 2020, Anthem denied coverage for John Doe's treatment at Capstone, determining that inpatient treatment was "not medically necessary" and therefore not covered by the insurance policy. (Compl. ¶ 24.) Anthem denied Plaintiffs’ subsequent appeal in May 2020. (Id. ¶¶ 25-26, 28.) John Doe completed his treatment at Capstone in April 2020, and after being referred to a halfway house, he "is presently living in a self sufficient manner, has a positive vision for his future and is looking forward to completing high school and continuing on to College." (Id. ¶ 27.)
Plaintiffs filed the instant Complaint in state court on July 6, 2020, seeking damages under Virginia law for breach of contract, negligent infliction of emotional distress, and insurer bad faith as a result of Anthem's denial of coverage. (Id. ¶¶ 29-47.) Within thirty days of Plaintiffs’ filing, Anthem removed the action to this Court, claiming that Plaintiffs’ insurance policy is covered by ERISA and therefore Plaintiffs’ state law claims are pre-empted by ERISA, giving this Court federal question jurisdiction over the action. (Notice of Removal, ECF No. 1 ¶ 2.) All parties are domiciled in Virginia. (Id. ¶¶ 3-5.) Plaintiffs seek to remand the action to state court, pursuant to 28 U.S.C. § 1447(c), on the basis that ERISA does not apply, and therefore this Court does not have subject matter jurisdiction over the action. (Mem. Supp. Mot. to Remand, ECF No. 11 at 1.) The key question, then, is whether the Anthem policy is governed by ERISA.
On January 23, 2018, James Boyd applied for group health insurance on behalf of his law firm, Boyd & Boyd, P.C., by submitting an "Employer Enrollment Application for 1-50 Employee Small Groups - Virginia" (the "Application") to Anthem Health Plans of Virginia, Inc. (Ex. E to Mem. Supp. Mot. to Remand, ECF No. 11-5.) On the Application, Boyd represented to Anthem that the firm had three "eligible full-time employees," two of whom declined coverage. (Id. at 5.) In the Application, James Boyd checked a box that represented, (Id. ) Following Boyd's request for coverage for the firm, and in reliance on the information provided, Anthem approved the Application and issued the plan documents for the Anthem Bronze PPO 6550/0%/6550 w/HAS Plan (the "Plan" or "Anthem Health Plan"). (Id. ; Boyd Decl., ECF No. 11-1 ¶ 7.) Under the terms of the Application, coverage was to become effective March 1, 2018. (Ex. E to Mem. Supp. Mot. to Remand at 1.)
Plaintiffs allege, and Defendant does not contest, that since the Plan was established, James Boyd is the only person to have enrolled for coverage under the Plan as an insured subscriber. (Boyd Decl. ¶ 12.) Boyd's wife and two children, including John Doe, allegedly receive coverage as Boyd's spouse and dependents, respectively. (Id. ¶ 11.) At the time of the Application, the firm had two employees in addition to Boyd: paralegal Linda Peterson and Boyd's father, Robert. (Id. ¶¶ 3, 14.) The Application asserted that the firm had three "eligible full-time employees," but that two of those employees were "DECLINING" coverage. (Ex. E to Mem. Supp. Mot. to Remand at 5.) Boyd asserted that Peterson and Robert Boyd had health insurance coverage through independent means, and that neither was employed by the firm after April 7, 2018. (Boyd Decl. ¶ 14.) Boyd further asserts, and Anthem does not contest, that the firm has not had any other employees besides his wife, who "provides administrative and paralegal services" and receives coverage under the insurance policy as Boyd's spouse. (Id. ¶¶ 11-13; Mem. Law Opp'n, ECF No. 14 at 3.)
In late 2019, Plaintiff, John Doe, after a long battle with depression and suicidal thoughts, became so isolated and severely depressed that his parents sought inpatient mental health treatment for him. (Compl. ¶ 16.) John Doe was taken to Capstone in Judsonia, Arkansas, for residential treatment, one of only a few facilities with promising treatment options according to the Plaintiffs. (Id. ¶¶ 16, 18.) Prior to John Doe's treatment at Capstone, Plaintiff James M. Boyd sought Anthem's preauthorization of John Doe's treatment and was told that preauthorization could not be handled until John Doe's admission. (Id. ¶ 17.) On December 31, 2019, John Doe traveled from Virginia to Capstone for admission and treatment. (Id. ¶ 18.) Due to the New Year's holiday, James Boyd filed for preauthorization of coverage from Anthem on January 2, 2020, which was denied on the basis that it was "not medically necessary." (Id. ¶¶ 20, 24.) James Boyd pursued the appeals process for the denial, arguing that John Doe met the requirements for coverage. (Id. ¶¶ 25, 26.) Anthem made a final determination denying coverage on appeal by a letter dated May 21, 2020, which reiterated Anthem's conclusion that inpatient treatment was not medically necessary. (Id. ¶ 28.) Plaintiffs thereafter filed this lawsuit.
A case filed in state court may be removed to federal court if the district court has subject matter jurisdiction based on the existence of a federal question or diversity of citizenship. 28 U.S.C. §§ 1331, 1332, 1441(a). Federal question jurisdiction requires that the cause of action in a civil matter arise under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331. Diversity jurisdiction requires complete diversity of citizenship and an amount in controversy in excess of $75,000. 28 U.S.C. § 1332. The district court must remand the case if, at any point prior to final judgment, the court appears to lack subject matter jurisdiction. 28 U.S.C. § 1447(c).
Once removed, the plaintiff may challenge removal by moving to remand the case back to state court. Id. The party seeking removal bears the burden of establishing federal jurisdiction. See Mulcahey v. Columbia Organic Chemicals Co. , 29 F.3d 148, 151 (4th Cir. 1994) (citing Wilson v. Republic Iron & Steel Co. , 257 U.S. 92, 42 S.Ct. 35, 66 L.Ed. 144 (1921) ). Furthermore, removal jurisdiction must be strictly construed, and any doubts as to the propriety of removal must be resolved in favor of remanding the case to state court. Id. (citations omitted).
As a general matter, the issue of whether a federal question has been presented is determined by looking at the face of the Plaintiff's well-pleaded complaint, which is to say, whether the Plaintiff has explicitly raised a federal claim. Aetna Health Inc. v. Davila , 542 U.S. 200, 207, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (citations omitted). An exception to the well-pleaded complaint rule is triggered when Congress has "so pre-empt[ed] a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Metro. Life Ins. Co. v. Taylor , 481 U.S. 58, 63-64, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). ERISA's provision for civil enforcement of employee welfare benefit plans, 29 U.S.C. § 1132(a), is one such area where Congress has pre-empted state jurisdiction. Davila , 542 U.S. at 209, 124 S.Ct. 2488 (citations omitted) ; s...
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