Hayden v. Blue Cross and Blue Shield of Alabama

• Citation: 843 F. Supp. 1427
• Decision Date: 07 February 1994
• Docket Number: Civ. A. No. 92-A-1386-N.
• Parties: Lee HAYDEN, et al., Plaintiffs, v. BLUE CROSS AND BLUE SHIELD OF ALABAMA, Defendant.
• Court: U.S. District Court — Middle District of Alabama

843 F. Supp. 1427

Lee HAYDEN, et al., Plaintiffs, v. BLUE CROSS AND BLUE SHIELD OF ALABAMA, Defendant.

Civ. A. No. 92-A-1386-N.

United States District Court, M.D. Alabama, N.D.

February 7, 1994.

Andrew P. Campbell, Birmingham, AL, Russell L. Irby, Eufaula, AL, Eddie Leitman, Birmingham, AL, Kerry Phillip Luke, S. Lynne Stephens, Leitman, Siegal, Payne & Campbell, Birmingham, AL, for plaintiffs.

Charles M. Crook, Balch & Bingham, Montgomery, AL, Cavender C. Kimble, Balch & Bingham, Birmingham, AL, for defendant.

MEMORANDUM OPINION

ALBRITTON, District Judge.

I. Introduction

This cause is now before the court on the cross-motions for partial summary judgment filed by Defendant, Blue Cross and Blue Shield of Alabama ("Blue Cross"), on June 11, 1993 and Plaintiffs, Lee Hayden, Mary Long, and Neil Buettner, on June 15, 1993.¹

Plaintiffs filed this action in October 1992, alleging that Blue Cross had failed to directly pay Certified Registered Nurse Anesthetists ("CRNAs") in violation of Ala.Code § 27-46-1 (1975 & Supp.1993), a statute enacted in 1989.² They sought damages, a declaratory judgment that Blue Cross is subject to §§ 27-46-1 through 27-46-3³, and injunctive relief.

Blue Cross filed a counterclaim on December 14, 1992, seeking a declaration that ERISA preempts this action and a declaration of its rights regarding the coverage of CRNA services pursuant to § 27-46-1 under both ERISA and non-ERISA governed contracts.

In an Order dated May 6, 1993, the court certified this case as a class action pursuant to Fed.R.Civ.P. 23(a) & (b)(2) on behalf of the following described class of plaintiffs/counter-defendants:

All CRNAs who have practiced or will in the future practice anesthesia in the State of Alabama who have submitted subsequent to the effective date of Alabama Code Section 27-46-1, or will be able to in the future to submit, claims for services to patients who receive health benefits through health benefits plans issued or administered by Blue Cross and Blue Shield of Alabama,

with respect to the following claims only:

(a) All claims seeking a declaration whether Blue Cross and Blue Shield of Alabama is subject to Alabama Code Section 27-46-1;

(b) All claims seeking a declaration whether Alabama Code Section 27-46-1 is preempted by ERISA, 29 U.S.C. § 1144(a);

(c) All claims seeking a declaration whether coverage for independently-billed CRNA services is provided under Major Medical or Hospital Services coverage by health benefit plans issued or administered by Blue Cross and Blue Shield of Alabama where the plans do not specifically state that independently billed CRNA services are covered.

On June 18 and July 26 1993, Plaintiffs amended their complaint to include claims under ERISA.

Blue Cross contends (1) that § 27-46-1 is preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001, et seq. ("ERISA") and (2) that under Alabama law, the statute is not applicable to it.

On the other hand, Plaintiffs contend (1) that with respect to their claims against Blue Cross premised on ERISA governed benefit plans, § 27-46-1 is not preempted by ERISA and applies to Blue Cross and (2) that with respect to their claims based on non-ERISA plans, § 27-46-1 applies to Blue Cross.

Blue Cross has moved for summary judgment as to Counts II and III of its counterclaim, and plaintiffs have moved for summary judgment as to the same issues. For the reasons stated below, the court finds that Blue Cross' motion for partial summary judgment is due be granted and Plaintiffs' motion for partial summary judgment is due to be denied.

II. Facts

Plaintiffs are all properly licensed CRNAs who perform anesthesia services. They performed anesthesia services for individuals covered under contracts or plans of health insurance or agreements for health care services with Blue Cross.

In 1989 the Alabama legislature enacted a statute providing for direct payment to CRNAs under certain circumstances. Plaintiffs have sought direct reimbursement for the services provided to Blue Cross's customers to date, approximately $250,000, without success. Plaintiffs' claims for direct reimbursement are based on Ala.Code § 27-46-1. Blue Cross has refused to make payments to the CRNAs because it claims that under Ala.Code §§ 10-4-115 and 27-1-4⁴ it is exempt from § 27-46-1.⁵

Plaintiffs originally filed this suit in the Circuit Court of Barbour County, Alabama, in October 1992. Blue Cross timely removed the action under 28 U.S.C. § 1441 to this court on November 5, 1992, on the ground that the Plaintiffs' claims are preempted by ERISA.

In a Memorandum Opinion dated January 29, 1993, the court held that Plaintiffs' state law claims against the welfare benefit plans in question were preempted by ERISA and denied their motion to remand. Hayden v. Blue Cross and Blue Shield of Alabama, No. 92-A-1386-N, mem. op. at 7-8 (M.D.Ala. January 29, 1993).⁶

Subsequently, both Plaintiffs and Blue Cross filed cross-motions for partial summary judgment.

III. SUMMARY JUDGMENT STANDARD

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment is appropriate where "there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law." This standard can be met by the movant, in a case in which the ultimate burden of persuasion at trial rests on the nonmovant, either by submitting affirmative evidence negating an essential element of the nonmovant's claim, or by demonstrating that the nonmovant's evidence itself is insufficient to establish an essential element of his or her claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The burden then shifts to the nonmovant to make a showing sufficient to establish the existence of an essential element to his claims, and on which he bears the burden of proof at trial. Id. To satisfy this burden, the nonmovant cannot rest on the pleadings, but must by affidavit or other appropriate means, set forth specific facts showing that there is a genuine issue for trial. Fed. R.Civ.P. 56(e).

The court's function in deciding a motion for summary judgment is to determine whether genuine, material issues of fact exist to be tried, and if not, whether the movant is entitled to a judgment as a matter of law. See Dominick v. Dixie National Life Insurance Company, 809 F.2d 1559 (11th Cir. 1987). It is the substantive law that identifies those facts which are material on motions for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 258, 106 S.Ct. 2505, 2515, 91 L.Ed.2d 202 (1986). See also DeLong Equipment Co. v. Washington Mills Abrasive Co., 887 F.2d 1499 (11th Cir. 1989).

When the court considers a motion for summary judgment it must refrain from deciding any material factual issues. All the evidence and the inferences from the underlying facts must be viewed in the light most favorable to the nonmovant. Earley v. Champion International Corp., 907 F.2d 1077, 1080 (11th Cir.1990). See also Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). The movant bears "the exacting burden of demonstrating that there is no dispute as to any material fact in the case." Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir.1983). See also Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970).

With these rules and principles of law in mind, the court will determine whether summary judgment is appropriate or whether genuine issues of material fact exist that should properly proceed to trial for resolution.

IV. Discussion

A. ERISA Preemption

1. General Principles

In determining whether a federal statute preempts a state law, Congress' intent controls. FMC Corp. v. Holliday, 498 U.S. 52, 56, 111 S.Ct. 403, 406, 112 L.Ed.2d 356 (1990); First Nat. Life Ins. Co. v. Sunshine-Jr. Food Stores, Inc., 960 F.2d 1546, 1549 (11th Cir.1992) (citation omitted), cert. denied, ___ U.S. ___, 113 S.Ct. 1045, 122 L.Ed.2d 354 (1993). "If the intent of Congress is clear, that is the end of the matter; for the court ... must give effect to the unambiguously express intent of Congress." Chevron, United States, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). See also Cipollone v. Liggett Group, Inc., ___ U.S. ___, ___, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407 (1992) (congressional intent "`is the ultimate touchstone' of preemption analysis") (quoting Malone v. White Motor Corp., 435 U.S. 497, 502-04, 98 S.Ct. 1185, 1188-90, 55 L.Ed.2d 443 (1978)). At the same time, a court must presume that Congress did not intend to preempt "areas of traditional state regulation." Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 740, 105 S.Ct. 2380, 2389, 85 L.Ed.2d 728 (1985).

ERISA's preemption clause is notably broad. See 29 U.S.C. § 1144(a); FMC Corp., 498 U.S. at 56, 111 S.Ct. at 406 ("The ERISA pre-emption clause is conspicuous for its breadth."); First Nat. Life Ins., 960 F.2d at 1549 (citation omitted) ("The Supreme Court has consistently recognized the expansive sweep of the preemption clause."). The provision states that, except as provided in the savings clause, "the provisions of this subchapter ... shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan ..." 29 U.S.C. § 1144(a). The Supreme Court has interpreted Congress's choice of language in the ERISA statute as being "deliberately expansive," Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987), preempting any state law that has a connection with a covered plan "even if the law is not specifically designed to affect such plans, or the effect is only indirect." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 483, 112 L.Ed.2d 474 (1990).

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