Salzer v. SSM Health Care of Okla. Inc.

Decision Date06 August 2014
Docket NumberNo. 13–6099.,13–6099.
Citation762 F.3d 1130
CourtU.S. Court of Appeals — Tenth Circuit
PartiesRichard SALZER, Individually and on behalf of others similarly situated, Plaintiff–Appellant, v. SSM HEALTH CARE OF OKLAHOMA INC., Defendant–Appellee.


Teresa S. Renaker, (Bradley C. West, The West Law Firm, Shawnee, OK, with her on the briefs), Lewis Feinberg Lee Renaker & Jackson, Oakland, CA, for the PlaintiffAppellant.

Jodi W. Dishman (M. Richard Mullins, Mark D. Spencer, and Elizabeth Bowersox with her on the briefs), McAfee & Taft, Oklahoma City, OK, for the DefendantAppellee.

Before LUCERO, MURPHY, and PHILLIPS, Circuit Judges.

LUCERO, Circuit Judge.

Richard Salzer sued SSM Health Care of Oklahoma, Inc. (SSM), alleging breach of contract and other state law claims based on SSM's attempt to collect payment for medical care from Salzer instead of his health insurance company. SSM removed the case to federal district court. Salzer challenges the district court's denial of his motion to remand based on its determination that his claims were completely preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.


Because “the propriety of removal is judged on the complaint as it stands at the time of the removal,” Pfeiffer v. Hartford Fire Ins. Co., 929 F.2d 1484, 1488 (10th Cir.1991), we draw the following facts from Salzer's original complaint. Salzer received medical care at an SSM facility for injuries he sustained in an accident. At the time of his treatment, he possessed a health insurance plan (the “Plan”). Salzer entered into a contract with SSM to receive its services (the “Hospital Services Agreement”), under which he “authorized disclosure of [his] medical information for billing purposes and authorized [his] health insurance company to pay.”

SSM had an existing contract with Salzer's health insurance company (the “Provider Agreement”) 1 which required SSM to submit covered medical charges to Salzer's insurance company and accept discounted payment from the insurer. Although the Provider Agreement prohibited SSM from seeking payment for a covered charge from Salzer, SSM sought the non-discounted amount directly from him.

Salzer filed suit against SSM in Oklahoma state court for breach of contract, violation of the Oklahoma Consumer Protection Act, deceit, and tortious interference with contract. He proposed to represent a putative class of certain Oklahoma residents

who received covered medical care or treatment at the Defendant's Facilities” as the result of injuries for which a third party was potentially responsible, and who were insured through a health insurance company that maintained a Provider or Participation Agreement with the Defendant, but the Defendant collected a payment from, or brought a collection action against, or asserted a lien against a patient for a covered charge, other than a co-payment, deductible, or co-insurance.

In addition to damages, Salzer sought, on behalf of himself and the putative class, “specific performance of a contract to which plaintiff is a third party beneficiary” (referring to the Provider Agreement).

SSM removed the suit to federal district court. In its notice of removal, SSM alleged that Salzer was a beneficiary of his wife's employee welfare benefit plan operated by Aetna Health Inc., and that this plan was governed by ERISA. SSM further alleged that Salzer's claims are preempted because they can be fairly characterized as seeking to recover benefits or enforce rights under an ERISA plan. Following removal, Salzer moved to remand the case back to state court. The district court denied Salzer's motion, holding that his claims were completely preempted by ERISA.2 Salzer filed a motion for relief pursuant to Fed.R.Civ.P. 60(b), which was also denied.

Salzer then filed an amended complaint that largely reasserted his original claims and added other state law claims. SSM responded with a motion to dismiss the suit for failure to state any ERISA claims. The district court granted SSM's motion and dismissed the case with prejudice, concluding that the amended complaint disregarded the court's prior orders by continuing to argue that ERISA did not preempt the lawsuit and failed to allege any ERISA violations. Salzer timely appealed.


The district court denied Salzer's motion to remand to state court based on its determination that his claims were preempted by ERISA. We review de novo the question of whether Plaintiffs' state law claims are completely preempted.” Felix v. Lucent Techs., Inc., 387 F.3d 1146, 1153 (10th Cir.2004). We also review de novo the district court's denial of a motion to remand for lack of removal jurisdiction. Garley v. Sandia Corp., 236 F.3d 1200, 1207 (10th Cir.2001).

A defendant may remove a civil action initially brought in state court if the federal district court could have exercised original jurisdiction. 28 U.S.C. § 1441(a). However, a federal court must remand a removed action back to state court [i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” § 1447(c). The party invoking federal jurisdiction has the burden to establish that it is proper, and “there is a presumption against its existence.” Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir.1974).

“One category of cases over which the district courts have original jurisdiction are ‘federal question’ cases; that is, those cases ‘arising under the Constitution, laws, or treaties of the United States.’ Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (quoting 28 U.S.C. § 1331). In determining the existence of federal question jurisdiction, courts are “guided generally by the ‘well-pleaded complaint’ rule, under which a suit arises under federal law only when the plaintiff's statement of his own cause of action shows that it is based on federal law.” Turgeau v. Admin. Rev. Bd., 446 F.3d 1052, 1060 (10th Cir.2006) (quotation omitted). Thus, as a general matter, the plaintiff “may prevent removal to federal court by choosing not to plead a federal claim even if one is available.” Id. (quotation and alteration omitted). The doctrine of “complete preemption,” however, is “a corollary or an exception to the well pleaded complaint rule,” under which “a state law cause of action may be removed to federal court on the theory that federal preemption makes the state law claim necessarily federal in character.” Id. at 1061 (quotation omitted). [O]nly a few federal statutes [ ] so pervasively regulate their respective areas that they have complete preemptive force; ERISA is one.” Hansen v. Harper Excavating, Inc., 641 F.3d 1216, 1221 (10th Cir.2011).

The dispositive question before us is whether Salzer's claims are completely preempted by ERISA. [C]auses of action within the scope of the civil enforcement provision of [ERISA] § 502(a) [are] removable to federal court.” Taylor, 481 U.S. at 66, 107 S.Ct. 1542. In Aetna Health Inc. v. Davila, 542 U.S. 200, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004), the Supreme Court laid out a two-part test for determining whether a claim falls within the scope of the civil enforcement provision: [I]f an individual, at some point in time, could have brought his claim under ERISA § 502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant's actions, then the individual's cause of action is completely pre-empted by ERISA § 502(a)(1)(B).” Id. at 210, 124 S.Ct. 2488.3 The civil enforcement provision allows a plan participant or beneficiary to bring a civil action “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.” ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B).


We conclude that five of Salzer's six original claims do not fall under ERISA § 502(a)(1)(B) because they do not seek to vindicate rights set forth in the “terms of the plan,” as required by that provision. A claim meets the first prong of the Davila test if it asserts rights to which the plaintiff is entitled only because of the terms of an ERISA-regulated employee benefit plan.” Davila, 542 U.S. at 210, 124 S.Ct. 2488 (emphases added). In his claims for breach of contract, violation of the Oklahoma Consumer Protection Act, deceit, specific performance, and punitive damages, Salzer does not assert claims for benefits under his Plan, nor does he seek to enforce or clarify rights under the Plan. Instead, he complains that SSM did not fulfill its obligation to submit charges for his care to the insurer, but instead billed him directly. The contracts under which these claims arise are the Provider Agreement and the Hospital Services Agreement, not the Plan. SeeAnderson v. Ochsner Health Sys., No. 11–2236, 2012 WL 2116173, at *4 (E.D.La. June 11, 2012) (unpublished) (patient's claim against health care provider as third-party beneficiary to provider agreement was not preempted by ERISA because the claim “does not involve a denial of benefits” and thus could not be brought under § 502(a)).

Because Salzer seeks to enforce contracts other than the Plan in these five claims, the claims also fail the second prong of the Davila preemption test, which requires that no “independent legal duty” other than ERISA be implicated. 542 U.S. at 210, 124 S.Ct. 2488. The district court concluded that Salzer, “as a patient, is not a party to the provider agreement [between SSM and Aetna] and, therefore, does not have independent rights that do not derive from the ERISA benefit plan.” But Salzer alleges that SSM violated duties it owed to him under the Hospital Services Agreement—to which he is a party—and that he is a third-party beneficiary to the Provider Agreement. See Denver Health & Hosp. Auth. v. Beverage Distrib. Co., 546...

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