Sidlo v. Kaiser Permanente Ins. Co.

• Decision Date: 31 October 2016
• Docket Number: Civ. No. 15-00269 ACK-KSC
• Parties: Toby SIDLO, on behalf of himself, and all others similarly situated, Plaintiff(s), v. KAISER PERMANENTE INSURANCE COMPANY, a California non-profit corporation, Kaiser Foundation Health Plan, Inc., a foreign non-profit corporation, and Doe Defendants 1-50, Defendants. Kaiser Foundation Health Plan, Inc., a foreign non-profit corporation, Plaintiff, v. Hawaii Life Flight Corporation, a Hawaii corporation, and Air Medical Resource Group, Inc., a Utah Corporation, Defendants. Hawaii Life Flight Corporation, a Hawaii corporation, Counterclaim Plaintiff, v. Kaiser Foundation Health Plan, Inc., a foreign non-profit corporation, Counterclaim Defendant.
• Court: U.S. District Court — District of Hawaii

221 F.Supp.3d 1183

Toby SIDLO, on behalf of himself, and all others similarly situated, Plaintiff(s),

v.KAISER PERMANENTE INSURANCE COMPANY, a California non-profit corporation, Kaiser Foundation Health Plan, Inc., a foreign non-profit corporation, and Doe Defendants 1-50, Defendants.

Kaiser Foundation Health Plan, Inc., a foreign non-profit corporation, Plaintiff,

v.Hawaii Life Flight Corporation, a Hawaii corporation, and Air Medical Resource Group, Inc., a Utah Corporation, Defendants.

Hawaii Life Flight Corporation, a Hawaii corporation, Counterclaim Plaintiff,

v.Kaiser Foundation Health Plan, Inc., a foreign non-profit corporation, Counterclaim Defendant.

Civ. No. 15-00269 ACK-KSC

United States District Court, D. Hawai‘i.

Signed October 31, 2016

Alana Peacott-Ricardos, Gail Y. Cosgrove, Goodsill Anderson Quinn & Stifel, Lisa W. Munger, Goodsill Anderson Quinn & Stifel LLLP, Honolulu, HI, Kathleen Cahill Slaught, Michelle M. Scannell, Seyfarth Shaw LLP, San Francisco, CA, for Plaintiff.

Andrew James Lautenbach, Mark J. Bennett, Orian J. Lee, Starn O'toole Marcus & Fisher, Honolulu, HI, for Defendants.

ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT, GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT, GRANTING IN PART AND DENYING IN PART DEFENDANTS' SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT, AND SUA SPONTE DISMISSING COUNT VI WITHOUT PREJUDICE

Alan C. Kay Sr., United States District Judge

For the reasons set forth below, the Court DENIES Plaintiff Toby Sidlo's Motion for Partial Summary Judgment Against Defendant Kaiser Foundation Health Plan, Inc., ECF No. 284; GRANTS Defendant Kaiser Foundation Health Plan, Inc.'s Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment, ECF No. 324; GRANTS in part and DENIES in part Defendants Kaiser Foundation Health Plan, Inc. and Kaiser Permanente Insurance Company's Supplemental Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment, ECF No. 285; and sua sponte DISMISSES Count VI without prejudice.

PROCEDURAL BACKGROUND

I. Complaint and First Amended Complaint

On July 15, 2015, Plaintiff Toby Sidlo ("Plaintiff" or "Sidlo"), on behalf of himself and all others similarly situated, filed a class action complaint against Kaiser Permanente Insurance Company ("KPIC") and Kaiser Foundation Health Plan, Inc. ("KFHP," and together with KPIC, "Defendants"). Pl. Toby Sidlo's Class Action Compl. ("Complaint"), ECF No. 1. Sidlo alleges claims against Defendants under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq.Id. ¶ 2. The Complaint raises two counts against Defendants: Count I, which arises under 29 U.S.C. § 1132(a)(1)(B), seeks to recover health care benefits, as well as an injunction "clarify[ing] and enforc[ing] [Plaintiff's and the class members'] rights to payment of those amounts still due and owing"; and Count II, arising under 29 U.S.C. § 1132(a)(3), seeks equitable relief to enjoin Defendants "from denying full coverage based on artificially lowered reimbursement rates" and other appropriate relief. Id. ¶¶ 88-107.

On June 9, 2016, Sidlo filed a motion requesting leave to amend his Complaint. ECF No. 201. Nonparties Hawaii Life Flight Corporation ("HLF") and Air Medical Resource Group, Inc. ("AMRG") filed a joinder to Sidlo's motion on June 17, 2016.¹ ECF No. 216. On June 22, 2016, the Court granted Sidlo's motion to file an amended complaint, ECF No. 226, and on June 23, 2016, Sidlo filed a First Amended Class Action Complaint ("FAC"), ECF No. 227.

In addition to Counts I and II,² the FAC alleges four other claims: (1) Count III, arising under 29 U.S.C. § 1022 and § 1132(a), seeks full legal and equitable relief, including injunctive relief, in connection with KFHP's alleged failure to timely issue Plaintiff and the class a summary of material modifications ("SMM") of members' plans' coverage terms; (2) Count IV, arising under 29 U.S.C. § 1132(a), seeks full legal and equitable relief, including injunctive relief, in connection with Defendants' alleged breach of fiduciary duty; (3) Count V, arising under 29 U.S.C. § 1132(a), seeks to equitably estop Defendants "from denying that they are responsible for the copay liability and all sums owed by the Plaintiff and the class to their provider"; and (4) Count VI, arising under 29 U.S.C. § 1132(a), seeks a determination that Defendants "are liable for the full unpaid balances owed by each class member under the doctrine of equitable indemnification as well as all other indemnity requirements imposed by law." FAC ¶¶ 127-149.

II. The KFHP v. HLF Litigation

On February 18, 2016, KFHP filed a complaint in Kaiser Foundation Health Plan, Inc. v. Hawaii Life Flight Corp., et al. , Civ. No. 16–00073 ACK–KSC. D. Haw., Civ. No. 16–00073 ACK–KSC, ECF No. 1 ("KFHP Complaint"). In the KFHP Complaint, KFHP alleges that HLF and AMRG violated an anti-assignment provision in KFHP's ERISA plans within Hawaii. Id. ¶¶ 9, 13, 54. HLF provides medical air transportation services in Hawaii. HLF Answer ¶ 19. AMRG shares certain corporate officers with HLF and holds a FAA Part 135 Certificate, under which certain aircraft operate. Id. ¶¶ 7-8. HLF is one of at least nine medical transportation companies affiliated with AMRG. Ex. Q to KFHP's Motion at 36:5-37:22.

KFHP alleges that HLF and/or AMRG "have repeatedly attempted to procure broad assignments of members of the plans' rights, interest, claims for money due, benefits and/or obligations under the Plans, in violation of the anti-assignment provision." KFHP Complaint ¶ 33. More specifically, KFHP asserts that the Sidlo litigation has been brought by HLF and/or AMRG in Sidlo's name, which constitutes a violation of the anti-assignment provision. Id. ¶ 35. On April 6, 2016, this Court consolidated the Kaiser and Sidlo cases for purposes of discovery. Order Consolidating Cases, ECF No. 85.

On April 14, 2016, HLF and AMRG filed an answer to KFHP's Complaint ("HLF Answer"), ECF No. 102, and HLF further filed a counterclaim against KFHP ("HLF Counterclaim"), ECF No. 103. HLF alleges counts of (1) unfair competition in violation of Hawaii Revised Statutes ("HRS") § 480–2 ; (2) tortious interference with contract; (3) defamation; and (4) trade libel/disparagement. HLF Counterclaim ¶¶ 23-49. HLF asserts that KFHP, "in connection with its health insurance services, has made written and oral demands that hospitals arrange for emergency transportation of patients exclusively through or as designated by KFHP, even where those hospitals have contracts with HLF and contrary to the federal law that exclusively provides that emergency patient transport is arranged by the treating physician." Id. ¶ 24. Further, HLF contends that KFHP has sent letters to patients that received air ambulance services from HLF, which letters contain "numerous falsehoods, misrepresentations, and otherwise disparaging and defamatory statements" regarding HLF. Id. ¶ 25.

III. Motions for Summary Judgment

On May 16, 2016, Sidlo filed a Motion for Partial Summary Judgment Against Defendant KFHP requesting this Court to grant summary judgment to him on Count I of his original Complaint. ECF No. 151. That same day, Defendants filed their Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment, seeking summary judgment on both Counts I and II. ECF No. 149. HLF and AMRG filed a joinder to Sidlo's partial summary judgment motion on May 27, 2016. ECF No. 168.

The Court set a hearing on the motions for June 20, 2016. However, as noted above, Sidlo filed a motion to amend his Complaint on June 9, 2016, alleging four additional counts. Because these additional counts involved issues subject to the summary judgment motions, the Court vacated the June 20, 2016 hearing and permitted the parties to file "supplemental motions for partial summary judgment as to any of the additional claims asserted in the FAC." ECF No. 226 at 3.

On August 11, 2016, Defendants filed a Supplemental Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment; a Memorandum in Support of Motion ("Defendants' Motion"), ECF No. 285-1; and a Concise Statement of Facts in Support of Defendants' Motion ("Defs.' CSF"), ECF No. 287. Defendants' Motion seeks summary judgment on each of the four additional counts Sidlo alleged in the FAC.

That same day, Sidlo withdrew his previous partial summary judgment motion and filed a new Motion for Partial Summary Judgment Against Defendant KFHP; a Memorandum in Support of Motion ("Sidlo's Motion"), ECF No. 284-1; and a Concise Statement of Facts in Support of Sidlo's Motion ("Sidlo's CSF"), ECF No. 286. Sidlo's Motion seeks summary judgment as to Count I. As a result, on August 16, 2016, KFHP filed an ex parte application to strike Sidlo's Motion. ECF No. 293. KFHP argued that by re-filing his motion as to Count I, Sidlo had violated the Court's Order permitting the parties to file supplemental briefs solely as to the additional claims asserted in the FAC. Id. at 2. Among other things, KFHP argued that Sidlo's actions unduly prejudiced KFHP, which could have likewise filed a new summary judgment motion as to the original counts with the benefit of having learned Sidlo's position through prior briefing for the old motions, as well as having obtained a new expert report and additional discovery subsequent to its original summary judgment motion. Id. at 4.

Rather than striking Sidlo's Motion, however, the Court allowed Sidlo to proceed on his new motion and granted leave to Defendants to file a new summary judgment motion as to Counts I and II, which would serve to replace their previous motion as to Counts I and II. ECF No. 302 at 2-3. Accordingly, on August 30, 2016, Defendant KFHP filed a Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment; a Memorandum in Support of Motion ("KFHP's Motion"), ECF No. 324-1; and a ...