N. Shore-Long Island Jewish Health Care Sys., Inc. v. Multiplan, Inc.

• Decision Date: 12 July 2013
• Docket Number: No. 12–cv–1633 (JFB)(AKT).,12–cv–1633 (JFB)(AKT).
• Citation: 953 F.Supp.2d 419
• Court: U.S. District Court — Eastern District of New York
• Parties: NORTH SHORE–LONG ISLAND JEWISH HEALTH CARE SYSTEM, INC., Plaintiff, v. MULTIPLAN, INC., Teamsters Local 210 Affiliated Health & Insurance Fund, and Local 812 Health Fund, Defendants.

953 F.Supp.2d 419

NORTH SHORE–LONG ISLAND JEWISH HEALTH CARE SYSTEM, INC., Plaintiff,

v.MULTIPLAN, INC., Teamsters Local 210 Affiliated Health & Insurance Fund, and Local 812 Health Fund, Defendants.

No. 12–cv–1633 (JFB)(AKT).

United States District Court,

E.D. New York.

July 12, 2013.

Timothy F. Butler, Mario D. Cometti, Tibbetts Keating & Butler, New York, NY, for Plaintiff.

Thomas Alpert Thompson, Law Offices of Thomas A. Thompson, Yarmouth, ME, Barry I. Levy, Brian Laurence Bank, Rivkin Radler LLP, Uniondale, NY, for Defendants.

MEMORANDUM AND ORDER

JOSEPH F. BIANCO, District Judge.

Plaintiff North Shore–Long Island Jewish Health Care System, Inc. (“plaintiff” or “North Shore”) brought this action seeking an order of this Court to remand the action to the Supreme Court of the State of New York, County of Nassau (“Nassau Supreme”), where the action originally was initiated. Defendant Local 812 Health Fund (“Local 812”) removed the case (with the consent of defendants MultiPlan, Inc. (“MultiPlan”) and Local 210 Affiliated Health & Insurance Fund (“Local 210”)) ¹ from Nassau Supreme to this Court. North Shore subsequently moved to remand the case back to state court on the grounds that: (1) Local 812 did not have the power to remove the action because it is a third-party defendant; (2) Local 812 did not timely remove the action; and (3) this Court lacks subject matter jurisdiction because the claims asserted against it are not preempted by the Employee RetirementIncome Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.

On November 8, 2012, Magistrate Judge Kathleen A. Tomlinson issued a Report and Recommendation (“R & R”), recommending that plaintiff's motion be granted in its entirety on the ground that this Court lacks subject matter jurisdiction because the underlying claim concerns an “amount of payment” as opposed to a “right to payment,” which does not bring ERISA's preemptive force into play. Both Local 812 and Local 210 submitted objections to Magistrate Judge Tomlinson's R & R, which included additional evidentiary submissions by Local 812 and 210 that were not before Magistrate Judge Tomlinson when she first considered defendants' motions. The Court, in its discretion, has decided to consider that additional evidence, and plaintiff has been given an opportunity to respond to it.

For the reasons that follow, having considered the parties' submissions, as well as having reviewed the entire R & R de novo (with defendants' respective objections and additional evidentiary submission), the Court denies plaintiff's motion to remand.²

I. Procedural History

Plaintiff filed its complaint on May 11, 2011 in the Supreme Court of the State of New York, County of Nassau. On June 24, 2011, MultiPlan answered the complaint. On November 10, 2011, MultiPlan impleaded Local 812 and Local 210 and served the parties with a third-party complaint. On March 1, 2012, Local 210 answered the third-party complaint. That same day, Local 812 moved to dismiss the third-party complaint.

On March 22, 2012, North Shore amended its complaint to assert direct claims against Local 812 and Local 210. On April 3, 2012, Local 812 filed a Notice of Removal to have the action removed to this Court, where it initially proceeded before Judge Arthur D. Spatt and Magistrate Judge Tomlinson. On April 9, 2012, North Shore filed a motion to remand the action to state court. Subsequently, Local 210 answered the amended complaint on April 12, 2012. On April 30, 2012, Local 812 submitted its opposition to North Shore's motion to remand. North Shore filed its reply on May 7, 2012.

On June 18, 2012, Judge Spatt referred the pending motion to remand to Magistrate Judge Tomlinson for a report and recommendation regarding the remand request. As previously set forth, Magistrate Judge Tomlinson issued her recommendation on November 8, 2012, in which she concluded that North Shore's motion to remand should be granted on the grounds that this Court lacks subject matter jurisdiction over the matter.

On November 21, 2012 Local 812 filed an objection to the R & R and requested oral argument on its objections. Local 210 submitted objections, as well, on November 23, 2012. By letter dated November 26, 2012, North Shore challenged defendants' respective submissions on the grounds that they were procedurally improper. The Court declined to consider the procedural propriety of defendants' submissions at that time, instead instructing plaintiff to submit a response to Local 210 and Local 812's objections. Plaintiff did so on December 5, 2012, and defendantssubmitted their reply on December 12, 2012.

Following Magistrate Judge Tomlinson's issuance of the R & R and the parties' submission of their objections, Judge Spatt, the district court judge previously assigned to the case, recused himself from the matter on February 19, 2013. The undersigned was then assigned to the case. On April 15, 2013, North Shore requested oral argument regarding the previously submitted and pending objections to the R & R. This Court granted the request, and oral argument was held on May 14, 2013. On May 15, 2013, plaintiff submitted a supplemental letter addressing an issue that was raised at oral argument. On May 17, 2013, Local 812 submitted a letter in response.

The Court has fully considered the parties' submissions de novo.

II. Standard of Review

A district judge may accept, reject, or modify, in whole or in part, the findings and recommendations of the Magistrate Judge. See DeLuca v. Lord, 858 F.Supp. 1330, 1345 (S.D.N.Y.1994); Walker v. Hood, 679 F.Supp. 372, 374 (S.D.N.Y.1988). As to those portions of a report to which no “specific written objection” is made, the Court may accept the findings contained therein, as long as the factual and legal bases supporting the findings are not clearly erroneous. Santana v. United States, 476 F.Supp.2d 300, 302 (S.D.N.Y.2007); Greene v. WCI Holdings Corp., 956 F.Supp. 509, 513 (S.D.N.Y.1997). When “a party submits a timely objection to a report and recommendation, the district judge will review the parts of the report and recommendation to which the party objected under a de novo standard of review.” Jeffries v. Verizon, 10–CV–2686 (JFB)(AKT), 2012 WL 4344188, at *1 (E.D.N.Y. Sept. 21, 2012); see also28 U.S.C. § 636(b)(1)(C) (“A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.”); Fed.R.Civ.P. 72(b)(3) (“The district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.”).

III. The Parties' Positions³

Defendants object to the R & R with respect to its recommendation that the Court grant plaintiff's motion to remand the case to state court. Local 812 and Local 210 both object on the ground that the R & R erroneously concluded that plaintiff's motion to remand should be granted, even though plaintiff seeks to recover payments falling under an ERISA-governed plan, the interpretation of which will be necessary in order to determine Local 812's payment obligations, if any. ( See Def. Local 812's Objections to Nov. 8, 2012 R & R (“Local 812's Objections”) at 1–11; Def. Local 210's Objections to Nov. 8, 2012 R & R (“Local 210's Objections”) at 1–7.) ⁴ Incorporated into this argument are defendants' contentions that a remand is not appropriate because plaintiff constitutes the type of party that can bring an action under ERISA, the underlying claims are colorable ones for ERISA benefits, and Local 812's actions do not implicate any other independent legal duty. Alternatively, Local 812 argues that, should this Court adopt the R & R, it also should hold that plaintiff is judicially estopped from assuming a contrary position in subsequent litigation. That is, “the Court should make clear that North Shore is judicially estopped from (i) seeking recovery for any claim where a prior partial payment has not already been made, (ii) seeking the reversal of any determination of a denial, and (iii) attempting in the future to rely upon any assignment of rights from a beneficiary with respect to the claims at issue in this case.” (Local 812's Objections at 11–12.)

Plaintiff raises several counterarguments to defendants' objections. ( See generally Pl.'s Mem. of Law in Opp'n to Objections Filed by Defendants to R & R (“Pl.'s Opp'n”).) Plaintiff asserts that (1) Local 812's objections to the R & R do not comply with the Federal Rules of Civil Procedure because they are not stated with the requisite particularity ( id. at 2–3); (2) both Local 812 and Local 210 improperly submitted evidence that was not before Magistrate Judge Tomlinson in their objections ( id. at 4–6); (3) Local 812 and Local 210's arguments that North Shore is an assignee of Plan participant patients is a non-issue that the Court need not address because whether or not there was an assignment to receive payments is a different question from whether the claims at issue should be preempted; ( id. at 6–8); (4) plaintiff's state claims arise from an independent legal duty ( id. at 9–11); (5) the underlying claims concern an “amount of payment,” and not a “right to payment,” and therefore, do not implicate Local 812's health plan ( id. at 11–13); and lastly, (6) Local 812 cannot request relief on the grounds of judicial estoppel because, should this Court adopt the R & R, the case will be remanded to state court, which will then be the appropriate venue in which to address such matters ( id. at 13–14).⁵

The Court has considered the parties' submissions and has conducted a de novo review of the R & R in its entirety. For the following reasons, the Court denies the motion to remand.

IV. Discussion⁶

In essence, the Court's determination of whether...