Stokes v. Bertolini

• Decision Date: 05 October 2011
• Docket Number: Civil Action No. ELH-11-2339
• Parties: JOHN E. STOKES, IV, M.D., Plaintiff, v. MARK T. BERTOLINI, el al., Defendants.
• Court: U.S. District Court — District of Maryland

JOHN E. STOKES, IV, M.D., Plaintiff,

v.MARK T. BERTOLINI, el al., Defendants.

Civil Action No. ELH-11-2339

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

Date: October 5, 2011

MEMORANDUM OPINION

On July 13, 2011, Dr. John E. Stokes, IV, plaintiff, who is a medical doctor, filed a pro se complaint (ECF 2) in Maryland state court against Aetna Health, Inc. ("Aetna") and its president, Mark T. Bertolini,¹ defendants, seeking approximately $700.00 in damages. Plaintiff alleged that defendants "[f]ailed to pay legitimate claim[s] for diagnostic testing" that plaintiff had performed upon a patient who was insured by Aetna.² On August 22, 2011, defendants removed the case to this Court. See Notice of Removal (ECF 1). They asserted that the Court possesses subject matter jurisdiction under 28 U.S.C. § 1331, which grants jurisdiction over claims "arising under" federal law. See also 28 U.S.C. § 1441(a)-(b) (authorizing removal of cases from state court when jurisdiction is founded on a claim "arising under" federal law). Although plaintiff's complaint, on its face, asserted only a state contract law claim, defendants contended thatplaintiff's state law claim was completely preempted by the Federal Employees Health Benefits Act ("FEHBA"), 5 U.S.C. §§ 8901 et seq., thus conferring federal jurisdiction. Subsequently, each defendant filed a motion to dismiss (ECF 8 & 10), to which plaintiff failed to respond.

For the reasons that follow, I conclude that the Court lacks subject matter jurisdiction over this case. Accordingly, the Court has no authority to resolve defendants' motions to dismiss, and the case will be remanded to state court.

Factual & Procedural Background

Plaintiff filed his suit in the District Court of Maryland, which is a state trial court of limited jurisdiction. See Md. Code (2006 Repl. Vol., 2011 Supp.), §§ 1-601 et seq. & §§ 4-101 et seq. of the Courts & Judicial Proceedings Article ("C.J.").³ Civil actions in the state district court are generally initiated by the filing of a form complaint. See Md. Rules 3-303(a) & 3-701(b); see also C.J. § 6-403(a). In his form complaint, plaintiff checked a box asking the clerk to docket the case as an "action of contract." Complaint at 1. In the area of the form labeled "particulars of this case," plaintiff stated that defendants "[f]ailed to pay legitimate claim[s] for diagnostic testing." Id. Dr. Stokes sought $684.24 in damages, plus interest of $41.00. Id.⁴

As exhibits to the complaint, plaintiff submitted two documents on Aetna letterhead. The first (which appears to be the second page of a larger, three-page document) lists Aetna's response to several "claims" related to treatment of plaintiff's patient on August 26, 2010. Id. at2. For two procedures, which were each "Billed" at $342.12, the amount of "$0.00" is listed as "Paid." Id. The second document is a letter, addressed to the patient, which refers to a "[b]illed [a]mount" of $684.24 for services provided by Dr. Stokes on August 26, 2010, and states: "You are not responsible for this charges [sic] unless you accepted responsibility in writing before the service was. performed. Charges for, or in connection with, services or supplies that are, as determined by Aetna, considered to be experimental or investigational are not covered under your plan." Id. at 3. The letter also identifies the federal government as the "Plan Sponsor." Id.

As noted, defendants removed the case to this Court on August 22, 2011,⁵ based on federal question jurisdiction. See 28 U.S.C. §§ 1331 & 1441(a)-(b). They claimed that FEHBA completely preempts plaintiff's state law contract claim. Subsequently, both defendants moved to dismiss the suit.

Aetna's motion to dismiss (ECF 8) is also premised on the assertion that FEHBA preempts plaintiff's claim. In his motion to dismiss (ECF 10), Bertolini adopts that position.

FEHBA governs the administration and supervision of health care benefit plans for many federal government employees. The statute authorizes the federal Office of Personnel Management ("OPM") to enter into contracts with "qualified carriers" to offer "health benefit plans" to eligible federal employees and their covered dependents. See 5 U.S.C. § 8902(a); see also id. § 8901(1) (defining eligible "employees"); § 8901(7) (defining "carrier"). A "healthbenefits plan" is a "group insurance policy or contract . . . provided by a carrier for the purpose of providing, paying for, or reimbursing expenses for health services." Id. § 8901(6). FEHBA establishes certain standards that contracts for health benefits plans offered under the statute must meet, see 5 U.S.C. §§ 8902(c)-(d), (f)-(k), and authorizes OPM to contract for a variety of health benefit plans, containing various benefits. See id. §§ 8903-8904. The statute also authorizes OPM to establish by regulation additional minimum standards for health benefit plans. See id §§ 8902(e), 8913.

In a FEHBA contract, the carrier must agree to "pay for or provide a health service or supply in an individual case," if OPM determines that the covered employee or dependent is entitled to receive the service or supply under the contract. Id. § 89020). To that end, OPM has established, through regulations codified in 5 C.F.R. part 890, subpart A, an administrative review process by which a "covered individual" may obtain OPM review of a carrier's denial of a claim for benefits. 5 C.F.R. § 890.105(a). A "covered individual" is an "enrollee or covered family member" in a health benefit plan." Id. § 890.101(a). The regulations expressly state that a "covered individual must exhaust both the carrier and OPM review processes . . . before seeking judicial review of the denied claim." Id. Further, the regulations provide:

A covered individual may seek judicial review of OPM's final action on the denial of a health benefits claim. A legal action to review final action by OPM involving such denial of health benefits must be brought against OPM and not against the carrier or carrier's subcontractors. The recovery in such a suit shall be limited to a court order directing OPM to require the carrier to pay the amount of benefits in dispute.

5 C.F.R. § 890.107(c); see also 5 U.S.C. § 8912 ("The district courts of the United States have original jurisdiction, concurrent with the United States Court of Federal Claims, of a civil action or claim against the United States founded on this chapter") (Emphasis added).

Defendants argue that FEHBA requires any challenge to a covered benefit plan's determination regarding coverage to be brought in an administrative proceeding before OPM. According to defendants, if a party contests OPM's decision, the party's sole remedy is to file suit against OPM. Thus, defendants maintain that plaintiff's claim is subject to dismissal for failure to state a claim, under Rule 12(b)(6) of the Federal Rules of Civil Procedure, for three reasons. First, it is preempted by FEHBA; second, even if the complaint is considered as a claim under FEHBA, OPM is the only proper defendant in any claim brought under FEHBA; and finally, plaintiff did not allege that he exhausted the administrative remedy provided by OPM.

As noted, Bertolini filed a separate motion to dismiss (ECF 10), adopting by reference Aetna's arguments for dismissal. Bertolini also asserts two additional arguments specific to him. First, Bertolini contends that the complaint does not allege facts to establish his personal liability. Therefore, he insists that, as an officer and employee of Aetna, he is shielded from liability by Aetna's "corporate veil." Second, he argues that the complaint fails to allege facts showing that the Court has personal jurisdiction over him.⁶

As indicated, plaintiff failed to respond to either motion. The time for him to do so has expired. See Local Rule 105.2(a); Fed. R. Civ. P. 6(d).

Discussion

Federal courts are courts of limited jurisdiction and "may not exercise jurisdiction absent a statutory basis." Exxon Mobil Corp. v. Allapattcth Servs., Inc., 545 U.S. 546, 552 (2005). Of import here, courts have "an independent obligation to determine whether subject-matter jurisdiction exists, even when no party challenges it." Hertz Corp. v. Friend, __ U.S. __, 130S. Ct. 1181, 1193 (2010); see also Sucampo Pharmaceuticals, Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 548 (4th Cir. 2006). With regard to removed cases, 28 U.S.C. § 1447(c) requires: "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."

As noted, defendants assert that the Court possesses subject matter jurisdiction based on federal question jurisdiction, also known as "arising under" jurisdiction. See 28 U.S.C. §§ 1331 & 1441(a)-(b). Section 1331 grants federal district courts "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." In turn, § 1441, the general removal statute, permits "any civil action brought in a State court of which the district courts of the United States have original jurisdiction" to be "removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). When jurisdiction is based on a claim "arising under the Constitution, treaties or laws of the United States," the case is "removable without regard to the citizenship or residence of the parties." Id. § 1441(b).⁷

The '"presence or absence of federal-question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.'" Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998) (citation omitted). The "existence of a federal defense normally does not create statutory 'arising under' jurisdiction, and 'a defendant [generally] may not...