Gov't Emps. Ins. Co. v. Caring Pain Mgmt. PC

• Docket Number: 2:22-cv-05017(BRM)(JSA)
• Decision Date: 31 May 2023
• Parties: GOVERNMENT EMPLOYEES INSURANCE COMPANY, GEICO INDEMNITY COMPANY, GEICO GENERAL INSURANCE COMPANY, and GEICO CASUALTY COMPANY, Plaintiff, v. CARING PAIN MANAGEMENT PC a/k/a CAREON PAIN MANAGEMENT, JINGHUI XIE, M.D., FIRST CARE CHIROPRACTICE CENTER, L.L.C., and KONSTANTINE FOTIOU, D.C., Defendants.
• Court: U.S. District Court — District of New Jersey

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GOVERNMENT EMPLOYEES INSURANCE COMPANY, GEICO INDEMNITY COMPANY, GEICO GENERAL INSURANCE COMPANY, and GEICO CASUALTY COMPANY, Plaintiff,
v.
CARING PAIN MANAGEMENT PC a/k/a CAREON PAIN MANAGEMENT, JINGHUI XIE, M.D., FIRST CARE CHIROPRACTICE CENTER, L.L.C., and KONSTANTINE FOTIOU, D.C., Defendants.

No. 2:22-cv-05017(BRM)(JSA)

United States District Court, D. New Jersey

May 31, 2023

NOT FOR PUBLICATION

OPINION

BRIAN R. MARTINOTTI UNITED STATES DISTRICT JUDGE

Before this Court is Defendants Caring Pain Management PC, a/k/a Careon Pain Management and Jinghui Xie, M.D.'s (“Caring Pain Defendants”) Motion to Dismiss and Motion to Compel Arbitration pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6) (ECF No. 16.) Plaintiffs Government Employees Insurance Co., GEICO Indemnity Co., GEICO General Insurance Company, and GEICO Casualty Co., (“Plaintiffs” or “GEICO”) filed an opposition to Defendants' motion (ECF No. 17), Defendants filed a reply (ECF No. 20), and Plaintiffs filed a sur-reply (ECF No. 24). Having reviewed the parties' submissions filed in connection with Defendants' Motion, and for good causing having been shown, Defendants' Motion (ECF No. 16) is GRANTED IN PART and DENIED IN PART.

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I. Background

This case is about the relationship between New Jersey healthcare providers and the insurance companies that pay those providers for treating patients for injuries arising from automobile accidents. Plaintiffs allege a series of fraudulent schemes, including unlawful compensation in exchange for patient referrals, misrepresentation of the nature, extent, and results of patient examinations, and false representation regarding compliance with pertinent healthcare laws. (See ECF No. 17 at 1-5.) Defendants claim this case is about Plaintiffs' attempts to accumulate settlement payments through specific litigation that accuses healthcare professionals of fraud. (See, e.g., ECF No. 16-1 at 1.)

On August 11, 2022, Plaintiffs filed a Complaint against the Caring Pain Defendants, First Care Chiropractic Center, L.L.C., and Konstantine Fotiou, D.C. (ECF No. 1 at 1.) On October 21, 2022, Plaintiffs amended their Complaint. (ECF No. 12.) On October 28, 2022, the Caring Pain Defendants filed with this Court a Motion to Dismiss and Motion to Compel Arbitration. (ECF No. 16.) On November 7, 2022, Plaintiffs filed an opposition to the Caring Pain Defendants' motion. (ECF No. 17.) On November 14, 2022, Caring Pain Defendants filed a reply. (ECF No. 20.) On November 18, 2022, Plaintiffs, with leave from this Court, filed a sur-reply. (ECF Nos. 21, 22, 24.)

II. Legal standard

A. Motion to Dismiss

Defendants move to dismiss Plaintiffs' Complaint for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6). (ECF No. 16 at 3.) “When a motion under Rule 12 is based on more than one ground, the court should consider the 12(b)(1) challenge first, because if it must dismiss the complaint for lack of

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subject matter jurisdiction, all other defenses and objections become moot.” Elkholy, 2022 WL 2373917 at *3 (citing Dickerson v. Bank of Am., N.A., 2013 WL 1163483, at *1 (D.N.J. Mar. 19, 2013)).

1. Rule 12(b)(1)

“When a motion under Rule 12 is based on more than one ground, the court should consider the 12(b)(1) challenge first because if it must dismiss the complaint for lack of subject matter jurisdiction, all other defenses and objections become moot.” Dickerson v. Bank of Am., N.A., Civ. A. No. 12-03922, 2013 U.S. Dist. LEXIS 37639, at *2, 2013 WL 1163483 (D.N.J. Mar. 19, 2013) (quoting In re Corestates Trust Fee Litig., 837 F.Supp. 104, 105 (E.D. Pa. 1993), aff'd 39 F.3d 61 (3d Cir. 1994)). In considering dismissal for lack of subject matter jurisdiction, a district court's focus is not on whether the factual allegations entitle a plaintiff to relief but rather on whether the court has jurisdiction to hear the claim and grant relief. Maertin v. Armstrong World Indus., Inc., 241 F.Supp.2d 434, 445 (D.N.J. 2002) (citing New Hope Books, Inc. v. Farmer, 82 F.Supp.2d 321, 324 (D.N.J. 2000)).

“A challenge to subject matter jurisdiction under Rule 12(b)(1) may be either a facial or a factual attack.” Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016). A facial attack “challenges subject matter jurisdiction without disputing the facts alleged in the complaint, and it requires the court to ‘consider the allegations of the complaint as true.'” Id. (quoting Petruskav. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006)). A factual attack, on the other hand, “attacks the factual allegations underlying the complaint's assertion of jurisdiction, either through the filing of an answer or ‘otherwise presenting] competing facts.'” Id. (alteration in original) (quoting Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014)). A “factual challenge allows ‘a court [to] weigh and consider evidence outside the pleadings'” and “no presumptive truthfulness attaches to [the] plaintiffs allegations.” Id. (alterations in original) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n,

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549 F.2d 884, 891 (3d Cir. 1977)). Rather, “‘the plaintiff will have the burden of proof that jurisdiction does in fact exist,' and the court ‘is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.'” Id. (quoting Mortensen, 549 F.2d at 891).

The Third Circuit has “repeatedly cautioned against allowing a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction to be turned into an attack on the merits.” Id. at 34849 (collecting cases). “[Dismissal for lack of jurisdiction is not appropriate merely because the legal theory alleged is probably false, but only because the right claimed is ‘so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy.'” Id. at 350 (quoting Kulick v. Pocono Downs Racing Ass'n, 816 F.2d 895, 899 (3d Cir. 1987)). “In this vein, when a case raises a disputed factual issue that goes both to the merits and jurisdiction, district courts must ‘demand less in the way of jurisdictional proof than would be appropriate at a trial stage.'” Id. (quoting Mortensen, 549 F.2d at 892 (holding dismissal under Rule 12(b)(1) would be “unusual” when the facts necessary to succeed on the merits are at least in part the same as must be alleged or proven to withstand jurisdictional attacks)). These cases make clear “dismissal via a Rule 12(b)(1) factual challenge to standing should be granted sparingly.” Id.

2. Rule 12(b)(6)

In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court is “required to accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to [the non-moving party].” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). “[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations omitted). However, “a plaintiff's

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obligation to provide the ‘grounds' of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555, 127 S.Ct. 1955 (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). A court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan, 478 U.S. at 286, 106 S.Ct. 2932. Instead, assuming the factual allegations in the complaint are true, those “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). This “plausibility standard” requires the complaint to allege “more than a sheer possibility that a defendant has acted unlawfully,” but it “is not akin to a ‘probability requirement.'” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). “Detailed factual allegations” are not required, but “more than an unadorned, the-defendant-unlawfully-harmed-me accusation” must be pleaded; it must include “factual enhancement” and not just conclusory statements or a recitation of the elements of a cause of action. Id. (citations omitted). In assessing plausibility, the court may not consider any “[f]actual claims and assertions raised by a defendant.” Doe v. Princeton Univ., 30 F.4th 335, 345 (3d Cir. 2022).

“Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial experience and common

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sense.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. (quoting Fed.R.Civ.P. 8(a)(2)). Indeed, after Iqbal, conclusory or “bare-bones” allegations will no longer survive a motion to dismiss: “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678, 129 S.Ct. 1937. To prevent dismissal, all civil complaints...