Humble Surgical Hosp., LLC v. Aetna Life Ins. Co.
| Decision Date | 30 September 2014 |
| Docket Number | CASE NO. 3:13-cv-01903-VLB |
| Court | U.S. District Court — District of Connecticut |
| Parties | HUMBLE SURGICAL HOSPITAL, LLC, Plaintiff, v. AETNA LIFE INSURANCE COMPANY Defendant. |
The plaintiff, Humble Surgical Hospital LLC ("HSH"), a Texas corporation, brings this defamation and business disparagement case against Aetna Life Insurance Company ("Aetna"), a Connecticut corporation. Aetna has filed a motion to dismiss or, in the alternative, to transfer the case to the Southern District of Texas. [Dkt. No. 15]. HSH in turn has filed a motion to remand the case to state court. [Dkt. No. 22] For the reasons to follow, the court denies HSH's motion to remand, grants Aetna's motion to transfer, and denies Aetna's motion to dismiss.
Aetna is an insurance company organized under the laws of the State of Connecticut that provides health insurance and other employee benefit services in Texas and elsewhere. [Dkt. No. 1-2, at 1]. HSH operates a surgical hospital in Houston, Texas and is not a member of Aetna'shealthcare provider network. [Id.] HSH opened In August of 2010 and informed Aetna of its intent to provide out-of-network facilities and services to Aetna's insureds. [Id.]
In 2012 Aetna initiated a still-pending lawsuit against HSH in the Southern District of Texas, Aetna Life Insurance v. Humble Surgical Center, 4:12-cv-01206 (the "Texas suit"). [Id. at 2-3].1 In the Texas suit, Aetna alleges that HSH perpetrated a scheme in which HSH would entice Aetna Insureds to utilize HSH for medical procedures for which HSH would overcharge Aetna. Complaint at 2-5, Aetna Life Insurance v. Humble Surgical Center, 4:12-cv-01206 (S.D. Tex. Apr. 18, 2012), ECF No. 1. Aetna alleges that HSH's actions violate the medical ethics rules of the American Medical Association and the Texas Medical Association, violate the written representations made by HSH in its bills submitted to Aetna, and are illegal under Texas state law. Id. at 8, 10-12, 13-15.
After filing suit and reviewing the discovery produced in the Texas case Aetna informed its insureds and certain of its network physicians that it would no longer pay claims for healthcare services rendered by HSH because it believed that HSH had filed claims with false and misleading information and had entered into improper agreements with certain ofAetna's network physicians to compensate the physicians for referring patients to HSH. [Dkt. 1-2, Exs. A-B.] Aetna also sent termination letters to in-network providers who it believed had entered into agreements with HSH and performed services at HSH and received referral payments from HSH. [Dkt. 1-2, Ex. C.] As a basis for the termination of those physicians, Aetna's letters and notices cited Texas law, medical association ethics rules and its Physician Services Agreement which governs medical services provided by its in-network physicians to the ERISA plan members. [Dkt. 1-2, Ex. C.]
On November 22, 2013, HSH unsuccessfully challenged Aetna's use of the discovery produced in the Texas case as the basis for declining coverage and terminating Physician Services Agreements. [Dkt. 15-1 at 3]. The Texas court overruled the objection stating that Aetna could use the discovery to administer the plan. Order on Relief, Aetna v. Humble Surgical Hospital, No. 4:12-cv-1206 (S.D. Tex. Nov. 26, 2013), ECF No. 177. The Texas court was not asked to and did not rule on the validity of Aetna's factual predicate for its benefit determinations. Thereafter, on December 17, 2013, HSH filed this action in Connecticut state court and Aetna removed the case to this court and filed the subject motion. HSH responded by filing a motion to remand, and contends, among other things, that it has not withheld information to which Aetna is entitled and that its participant agreements are proper. [Dkt. No. 22].
In support of its defamation and business disparagement claims asserted in this case, HSH alleges Aetna is telling HSH's physicians, patients, and potential patients that HSH's Participation Agreements are illegal, improper and unethical, and that these communications by Aetna are false and misleading. [Dkt. 1-2 at 4.] In addition, HSH complains that Aetna informed Aetna Insureds that it will not cover procedures performed at HSH after October 25, 2013, and is telling Aetna Insureds who have scheduled procedures at HSH to re-schedule their procedures at a different facility. [Dkt. 1-2 at 4-5.] At least 10 patients, all of whom are presumably Aetna insureds, have canceled procedures scheduled at HSH due to Aetna's communications. [Dkt. 1-2 at 5.] HSH further alleges that Aetna is contacting physicians who have Participation Agreements with HSH, telling those physicians that HSH has violated Texas law and has entered into "illegal, improper, and unethical agreements with physicians," and terminating its in-network agreements with those physicians. [Dkt. 1-2 at 6.]
HSH makes this motion pursuant to 28 U.S.C. § 1447(c) to remand this case back to the Connecticut Superior Court for the Judicial District of Hartford. [Dkt. No. 22]. HSH asserts that the case does not satisfy the requirements for either diversity jurisdiction or federal question jurisdiction, and therefore the court lacks subject matter jurisdiction over the case. To support a removal action, the Court "must determine from therecord before us whether the [removing party] can establish a basis for either diversity or federal question jurisdiction." United Food & Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994). The removing party bears the burden of proving jurisdiction. See Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 327 (2d Cir. 2011) (citation omitted). Here, Aetna asserts that it removed the case on the grounds of both diversity jurisdiction and federal question jurisdiction based on preemption under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq.
Aetna's claim for removal based on diversity jurisdiction is without merit. Aetna claims 28 U.S.C. § 1332, diversity of citizenship, in support of its removal. Plaintiff rightly notes § 1441(b)(1)2 bars Aetna's removal based on diversity of citizenship:
(b) Removal based on diversity of citizenship. ... (2) A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
28 U.S.C. § 1441(b). Aetna is incorporated and has its principle place of business in Connecticut. As Aetna is clearly a citizen of Connecticut,removal from the state court to federal court based on diversity of citizenship is not supported.
Aetna also asserts that federal question jurisdiction arises in this case because HSH's state law claims of defamation and business disparagement are preempted by ERISA. Analysis of a claim of ERISA preemption must "start with the presumption that 'Congress does not intend to supplant state law.'" Stevenson v. Bank of N.Y., 609 F.3d 56, 59 (2d Cir. 2010) (quoting Gerosa v. Savasta & Co., 329 F.3d 317, 323 (2d Cir. 2003)).
The Supreme Court has set forth the inquiry for determining whether a party's claim is completely preempted by ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)). "Claims are completely preempted by ERISA if they are brought (i) by 'an individual [who] at some point in time, could have brought his claim under ERISA § 502(a)(1)(B),' and (ii) under circumstances in which 'there is no other independent legal duty that is implicated by a defendant's actions.'" Montefiore Med. Ctr., 642 F.3d at 328 (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004)). Both prongs must be satisfied. Id. Additionally, prong one of the Davila inquiry requires Defendant to make a two-part showing: (1) that the plaintiff "is the type of party that can bring a claim pursuant to § 502(a)(1)(B)"; and (2) "whether the actual claim that the plaintiff asserts can be construed as a colorable claim for benefits pursuant to § 502(a)(1)(B)." Montefiore, 642 F.3d at 328(citations omitted). In determining whether the removal is valid on the grounds of ERISA preemption, the court may "look beyond the mere allegations of the complaint to the claims themselves (including supporting documentation) in conducting its analysis." Montefiore, 642 F.3d at 331.
Step one of prong one requires the court to determine whether HSH has standing to bring a claim under § 502(a)(1)(B). Section 502(a)(1)(B) allows a "participant or beneficiary" to sue to "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." Although the statute explicitly gives standing only to participants and beneficiaries, the Second Circuit has held that "healthcare providers to whom a beneficiary has assigned his claim in exchange for health care" may bring a claim pursuant to § 502(a)(1)(B) and thus satisfy step one of prong one of the Davila inquiry. Montefiore, 642 F.3d at 329 (quotation and citation omitted).
HSH admits in their filings in this action that their patients have assigned HSH the right to bring claims under ERISA § 502(a)(1)(B), [Dkt. 22 at 3.], and also asserts in the Texas suit that HSH is "entitled to enforce the terms of the plans, as assignee of directly insured subscribers/members under." [Dkt. 29, Ex. C, HSH Counterclaims at 7.] However, HSH argues that it "does not attempt to bring its state law claims . . . in the capacity as the assignee of...
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