Ohio Valley Health Servs. & Educ. Corp. Health Plan v. Riley
| Decision Date | 10 December 2015 |
| Docket Number | Civil Action No. 5:15CV65 |
| Citation | 149 F.Supp.3d 701 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | Ohio Valley Health Services & Education Corporation Health Plan, Ohio Valley Health Services & Education Corporation Dental Plan, Ohio Valley Health Services & Education Corporation, Ohio Valley Medical Center and East Ohio Regional Hospital, Plaintiffs, v. Michael D. Riley, West Virginia Insurance Commissioner, West Virginia Offices of the Insurance Commissioner and Health Plan of the Upper Ohio Valley, Inc., Defendants. |
David J. Berardinelli, Walter P. Deforest, Deforest Koscelnik Yokitis & Berardinelli, Pittsburgh, PA, for Plaintiffs.
Julie A. Warren, Office of the Attorney General, Charleston, WV, Allen M. Lopus, Clark Hill Thorp Reed, Wheeling, WV, for Defendants.
Due to the extensive history of litigation between the above-listed parties, a brief discussion of the facts is necessary. Following that discussion, this Court will then turn to defendants Michael D. Riley (“Riley”) and West Virginia Offices of the Insurance Commissioner's (“the Insurance Commissioner”) motion to dismiss, which currently is at issue. ECF No. 20.
Plaintiff Ohio Valley Health Services & Education Corporation (“OVHS&E”) maintains two employee benefit plans, the Ohio Valley Health Services & Education Corporation Health Plan and the Ohio Valley Health Services & Education Corporation Dental Plan (collectively, “OVHS&E Health and Dental Plans”). OVHS&E is the parent corporation of the Ohio Valley Medical Center (“OVMC”) and the East Ohio Regional Hospital (“EORH”). OVHS&E Health and Dental Plans entered into an Administrative Services Contract with defendant Health Plan of the Upper Ohio Valley, Inc. (“Upper Ohio Valley Health Plan”) to provide third-party administrative services. Those services include paying claims approved and paid for by the OVHS&E Health and Dental Plans. The Upper Ohio Valley Health Plan has served as such an administrator since 1999.
Between January 2005 and April 2013, OVHS&E Health and Dental Plans ran short of funding. Because of the lack of funds, the OVHS&E Health and Dental Plans waited to approve claims for payment by the Upper Ohio Valley Health Plan until sufficient funds became available. Although approval for claims remained pending, Wheeling Hospital (and other service providers) nonetheless entered into Hospital Service Agreements with the Upper Ohio Valley Health Plan. Wheeling Hospital then filed an action under Civil Action 5:10CV67, wherein it sued OVHS&E, OVMC, EORH, and the Upper Ohio Valley Health Plan for attorney's fees and prejudgment interest concerning the pending and delayed payments. This Court ultimately dismissed Wheeling Hospital's claims against OVHS&E, OVMC, and EORH. The remaining defendant in Civil Action 5:10CV67, Upper Ohio Valley Health Plan, entered into arbitration with Wheeling Hospital. Ultimately, Wheeling Hospital and Upper Ohio Valley Health Plan reached a settlement.1
The plaintiffs have now filed this civil action, seeking declaratory relief and injunctive relief. In particular, the plaintiffs allege the following three counts. In Count I, the plaintiffs seek a declaratory judgment against the defendants that the Employment Retirement Income Security Act (“ERISA”) preempts the West Virginia Prompt Pay Act (“Prompt Pay Act” or “the Act”) regarding (a) the requirement to pay claims for medical services within 30 days of submitting a clean claim; (b) imposing 10% prejudgment interest on such claims that remain unpaid; (c) automatically awarding attorney's fees in an action enforcing the Prompt Pay Act or seeking payment for such claims; and (d) that the Prompt Pay Act creates a private cause of action for non-processing or non-payment of claims within the time limits stated in that Act. In Count II, the plaintiffs seek a declaratory judgment against defendant Upper Ohio Valley Health Plan that it has no right of indemnification and that the plaintiffs are not liable because ERISA preempts the Prompt Pay Act to the same extent previously stated. In Count III, the plaintiffs seek a declaratory judgment against defendant Upper Ohio Valley Health Plan that would bar its request for indemnification and state that the plaintiffs are not liable for nine reasons listed in the complaint, including estoppel, waiver, and unclean hands. In addition to the above listed declaratory judgments, the plaintiffs seek injunctive relief in Counts I and II. More specifically, in Count, I the plaintiffs seek a permanent injunction enjoining the defendants from enforcing the Prompt Pay Act against the plaintiffs. In Count II, the plaintiffs seek a permanent injunction against the Upper Ohio Valley Health Plan, which would enjoin it from asserting claims for indemnification for attorney's fees and interest regarding the Upper Ohio Valley Health Plan's settlement with Wheeling Hospital.
Defendant-counterclaimant Upper Ohio Valley Health Plan also filed a counterclaim. In that counterclaim, Upper Ohio Valley Health Plan asserts the following: (1) Count I, breach of contract against OVHS&E Health and Dental Plans and OVHS&E; (2) Count II, breach of contract and failure to indemnify against OVHS&E Health and Dental Plans and OVHS&E; (3) Count III, implied indemnification (alternatively) against the OVHS&E Health and Dental Plans and OVHS&E; (4) Count IV, unjust enrichment against the OVMC and the EORH; and (5) Count V, unjust enrichment (alternatively) against OVHS&E.
At issue now is defendants Riley and the Insurance Commissioner's motion to dismiss. ECF No. 20. In that motion, they first argues that the plaintiffs lack standing as to their claim under Count I. Moreover, defendants Riley and the Insurance Commissioner believe that no case or controversy exists between them and the plaintiffs. They also contend that deciding in favor of the plaintiffs will amount to an advisory opinion by this Court. Therefore, defendants Riley and the Insurance Commissioner believe this Court lacks jurisdiction in this case.
The plaintiffs filed a response in opposition. ECF No. 22. In their response, the plaintiffs first point out that defendants Riley and Insurance Commissioner have statutory authority to enforce the Prompt Pay Act. Because this is a preenforcement challenge to the Prompt Pay Act, the plaintiffs believe that the enforcing agency, which are defendants Riley and the Insurance Commissioner, are proper parties. Next, the plaintiffs argue that they do have standing against defendants Riley and the Insurance Commissioner, and that a judgment in favor of the plaintiffs would not amount to an advisory opinion. The plaintiffs also note that because defendants Riley and the Insurance Commissioner failed to commit to not enforcing the Prompt Pay Act, an injury for standing purposes exists.
Riley and the Insurance Commissioner filed a reply in support. ECF No. 28. In that reply, defendants Riley and the Insurance Commissioner contend that the plaintiffs' alleged injury is only theoretical at this stage. Further, they believe that they cannot enforce the Prompt Pay Act against a plan governed by ERISA, which allegedly is the case here. Defendants Riley and the Insurance Commissioner then mention a conversation with counsel for the plaintiffs, wherein the plaintiffs allegedly offered to dismiss Riley and the Insurance Commissioner, but only if they legally committed (by affidavit) to not enforce the Prompt Pay Act against the plaintiffs. Riley and the Insurance Commissioner rejected that offer. Finally, Riley and the Insurance Commissioner argue that the case or controversy requirement is not satisfied by the mere existence of a statutory provision and a state entity that enforces it.
For the reasons set forth below, Riley and the Insurance Commissioner's motion to dismiss is DENIED.
A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure may challenge jurisdiction either facially or factually. Lawrence v. Dunbar , 919 F.2d 1525, 1528–29 (11th Cir.1990) ; seeKerns v. United States , 585 F.3d 187, 192 (4th Cir.2009) (citing Adams v. Bain , 697 F.2d 1213, 1219 (4th Cir.1982) ). “A ‘facial attack’ on the complaint requires the court merely to look and see if plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion.” Menchaca v. Chrysler Credit Corp. , 613 F.2d 507, 511 (5th Cir.1980) (citing Mortensen v. First Federal Savings & Loan Ass'n , 549 F.2d 884, 891 (3d Cir.1977) ). On the other hand, a “factual attack” addresses the “existence of subject matter jurisdiction in fact, irrespective of the pleadings and matters outside the pleadings, such as testimony and affidavits, are considered.” Menchaca , 613 F.2d at 511 ; see alsoThornhill Pub. Co., Inc. v. General Tel. & Electronics Corp. , 594 F.2d 730, 733 (9th Cir.1979).
An important distinction between either a “facial” or a “factual” challenge pertains to how a court considers the allegations under the complaint. “On a facial attack, a plaintiff is afforded safeguards similar to those provided in opposing a Rule 12(b)(6)motion—the court must consider the allegations of the complaint to be true.” Dunbar , 919 F.2d at 1529 (citing Williamson v. Tucker , 645 F.2d 404, 412 (5th Cir.1981) ). However, because a trial court's jurisdiction is at issue under a “factual” challenge, “ ‘there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the...
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