Thomas v. Aetna, Inc., Civil Action No. 98-2552 (D. N.J. 6/8/1999)

Decision Date08 June 1999
Docket NumberCivil Action No. 98-2552
PartiesJENCE LIEUGENYER THOMAS, Plaintiff, v. AETNA, INC., <I>et al.</I> Defendants.
CourtU.S. District Court — District of New Jersey

Jence L. Thomas, Esq., Bridgewater, New Jersey, Laurence B. Orloff, Esq. ORLOFF, LOWENBACH, STIFELMAN & SIEGEL, Roseland, New Jersey.

OPINION

ACKERMAN, District Judge:

This matter is before the court on certain defendants' motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). Alternatively, the defendants move for summary judgment as to Counts One and Two of the Complaint. In short, the defendants contend that Counts One and Two, which allege claims based upon common law fraud and the New Jersey Consumer Fraud Act respectively, are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), codified at 29 U.S.C. § 1001 et seq. With respect to Count Four, which alleges a claim based upon the Racketeer Influenced and Corrupt Organizations Act ("RICO"), the defendants argue that the plaintiff has failed to state a claim upon which relief may be granted.1

I. PARTIES AND BASIS OF JURISDICTION

The present action was instituted on June 1, 1998. The plaintiff, a Pennsylvania resident, has named various defendants, including Aetna Inc. ("Aetna"), formerly known as U.S. Healthcare, Inc. ("USH") and the parent company of Aetna U.S. Healthcare, Inc. ("AUSHC"). The individual defendants joining in this motion are various current and former officers, directors, and employees of one or more of the above-named entities. They include Leonard Abramson, a member of the Board of Directors; Ronald E. Compton, a former director and chairman of Aetna; Richard L. Huber, a director, chief executive officer, and president of Aetna; Arnold W. Cohen, M.D., Principal Medical Director at AUSHC; Liz Holbrook, Team Coordinator, Member Services at AUSHC; Thomas J. Calvocoressi, vice president and general counsel of Aetna; Thomas J. McInerny, executive Vice President of Aetna; Michael J. Cardillo, president of AUSHC; and Joseph Sebastianelli, for president of Aetna.2

Subject matter jurisdiction over this matter is predicated on federal question jurisdiction pursuant to 28 U.S.C. § 1331, presumably on the strength of the RICO claim embodied in Count Four.

II. STANDARD OF REVIEW

The defendants' motion to dismiss was made pursuant to Rule 12(b)(6) for failure to state a claim. With respect to Counts One and Two of the complaint, however, the defendants have moved alternatively under Rule 56 for summary judgment.

The standard of review on a motion to dismiss pursuant to Rule 12(b)(6) is well settled. A "Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted must be denied 'unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" In re Donald J. Trump Casino Sec. Litig., 793 F. Supp. 543, 547 (D.N.J. 1992) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)), aff'd, 7 F.3d 357 (3d Cir. 1993); see also Conley v. Gibson, 355 U.S. 41, 45 (1957); In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997). The focus of the court's analysis on a Rule 12(b)(6) motion is not whether the plaintiff will prevail on the merits, but whether the plaintiff "is entitled to offer evidence to support the claims." Zucker v. Quasha, 891 F. Supp. 1010, 1014 (D.N.J. 1995) (quoting Scheuer, 416 U.S. at 232), aff'd, 82 F.3d 408 (3d Cir. 1996); see also Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993) ("A 12(b)(6) motion tests the sufficiency of the allegations contained in the complaint.").

When reviewing the efficacy of a cause of action under this rule, the court must accept as true all well-pleaded allegations of the complaint and construe them in a light most favorable to the plaintiff. See Bensalem Township v. International Surplus Lines Ins. Co., 38 F.3d 1303, 1308 (3d Cir. 1994); Rogin v. Bensalem Township, 616 F.2d 680, 685 (3d Cir. 1980). However, "[i]t is not . . . proper to assume that the [plaintiff] can prove any facts that it has not alleged." Associated Gen. Contractors of Calif., Inc., v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). Moreover, when reviewing the allegations contained in the complaint, "the court does not consider conclusory recitations of law." Commonwealth of Pa. v. PepsiCo, Inc., 836 F.2d 173, 179 (3d Cir. 1988).

In ruling upon a motion to dismiss, the court must restrict its consideration to only those matters alleged in the complaint, exhibits attached to the complaint, and matters of public record. See Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). If matters outside the pleadings are considered, the court must convert the motion to one for summary judgment under Rule 56(c) and provide the parties with notice of this conversion. See Rule 12(b); see also Renz v. Shreiber, 832 F. Supp. 766, 770 (D.N.J. 1993). The decision to convert a motion to dismiss into a summary judgment motion is entrusted to the district court's discretion. See Kulwicki v. Dawson, 969 F.2d 1454, 1463 (3d Cir. 1992) (citing 5A Wright & Miller, Federal Practice & Procedure, § 1366 at 491 (1990)).

In this case, the defendants submitted the declaration of Gerald Lawrence, an attorney with AUSHC, in support of their motion to dismiss. After reviewing all of the submissions both in support of and in opposition to the defendants' Rule 12(b)(6) motion, as well as the pleading filed in this case, this court determined that a conversion of the Rule 12(b)(6) motion to one for summary judgment may be appropriate in this case. Accordingly, by letter order, dated March 19, 1999, this court provided the parties with an opportunity to supplement the record and to present any material relevant to the issue of ERISA preemption. Having comported with the requirements of Rule 12(b), this court will convert the defendants' motion to dismiss Counts One and Two of the complaint based on ERISA preemption to one for summary judgment.

Pursuant to Federal Rule of Civil Procedure 56(c), a motion for summary judgment will be granted

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.

See also Todaro v. Bowman, 872 F.2d 43, 46 (3d Cir. 1989). In other words, "summary judgment may be granted if the movant shows that there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party." Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir. 1988). All facts and inferences are construed in the light most favorable to the non-moving party. See Peters v. Delaware River Port Auth. of Pa. and N.J., 16 F.3d 1346, 1349 (3d Cir. 1994).

The substantive law will identify which facts are "material." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Therefore, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. An issue is "genuine" if a reasonable jury could possibly hold in the nonmovant's favor with regard to that issue. Id.

The party seeking summary judgment always bears the initial burden of production, i.e., of making a prima facie showing that it is entitled to summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). This may be done either by demonstrating there is no genuine issue of fact and that the moving party must prevail as a matter of law, or by demonstrating that the nonmoving party has not shown facts relating to an essential element of a claim for which it bears the burden of persuasion at trial. Id. at 322-23. Once either showing is made, the burden shifts to the nonmoving party who must demonstrate facts supporting each element for which it bears the burden as well as establish the existence of genuine issues of material fact. Id. at 324.

However, at the summary judgment stage, a court may not weigh the evidence or make credibility determinations; these tasks are left to the fact-finder. See Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1230 (3d Cir. 1993). Therefore, to raise a genuine issue of material fact, "'the [summary judgment] opponent need not match, item for item, each piece of evidence proffered by the movant,' but simply must exceed the 'mere scintilla' standard." Id. (quoting Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1364 (3d Cir. 1992)); see also Anderson, 477 U.S. at 252 ("The mere existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmovant]."). That is to say, if a moving party satisfies its initial burden of proving a prima facie case for summary judgment, the opposing party "must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, "[t]here must be sufficient evidence for a jury to return a verdict in favor of the non-moving party; if the evidence is merely colorable or not significantly probative, summary judgment should be granted." Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994).

III. BACKGROUND

The plaintiff was enrolled in the Group Health Care Plan (the "Plan") provided by USH as of May 1, 1994. The Plan was established and maintained by her then employer for the purpose of providing health care financing benefits to its employees. The plaintiff remained a member/participant of the Plan until approximately September 1, 1996, when she exercised continuation rights under the Plan, and thereafter continued as an individual member/participant of...

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