Valley Pain Ctrs. v. Aetna Life Ins. Co.

• Decision Date: 31 March 2023
• Docket Number: CV-19-05395-PHX-DJH
• Parties: Valley Pain Centers LLC, et al., Plaintiffs, v. Aetna Life Insurance Company, et al., Defendants.
• Court: U.S. District Court — District of Arizona

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Valley Pain Centers LLC, et al., Plaintiffs, v. Aetna Life Insurance Company, et al., Defendants.

No. CV-19-05395-PHX-DJH

United States District Court, D. Arizona

March 31, 2023

ORDER

Honorable Diane J. Humetewa United States District Judge

Defendant Thomas Moshiri (“Moshiri”) and Defendant Greg Maldonado (“Maldonado”) have filed Motions to Dismiss Aetna's Sealed Third Amended Counterclaims (“TACC”) (631-1; 627 respectively).^[1]

Maldonado seeks to dismiss thirteen counterclaims under Federal Rules of Civil Procedure 12(b)(6) and 9(b). (Doc. 631-1). The counterclaims include: tortious interference with contract fraud; negligent misrepresentation; violations of the federal Racketeer Influenced and Corrupt Organizations (“RICO”), 18 U.S.C. § 1962(c)-(d); violation of Arizona's RICO, A.R.S. § 13-2314.04; conspiracy to violate Arizona's RICO; civil conspiracy; aiding and abetting a tort; recoupment of overpayments under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(3); unjust enrichment; and money had and received. (See Doc 547 at 62-90).

Moshiri seeks to dismiss nine counterclaims under Rules 12(b)(6) and 9(b). (Doc. 627). The counterclaims include: tortious interference with contract; fraud; negligent misrepresentation; violations of RICO, 18 U.S.C. § 1962(c)-(d); violation of Arizona's RICO, A.R.S. § 13-2314.04; conspiracy to violate Arizona's RICO; and civil conspiracy. (See Doc. 547 at 62-90).

The Court must now decide whether Aetna has pled sufficient factual allegations for plausible claims against Maldonado and Moshiri.

I. Background^[2]

After receiving leave to amend, Aetna filed its TACC on April 4, 2022.^[3] The TACC includes the same thirteen separate claims as the Second Amended Complaint but, among other Counterclaim-Defendants,^[4] Aetna added Counterclaim-Defendants Maldonado and Moshiri in their personal capacities. (Doc. 547 at 2, 62-90).

Aetna brings these counterclaims “on its own behalf as the provider of fully-insured health plans” and “as claims administrator for self-funded employer-established health plans.” (Id. at ¶¶ 49-50). Aetna alleges Counter-Defendants, including Maldonado and Moshiri, engaged “in a multi-faceted out-of-network billing scheme” since at least June 2015 that harmed Aetna and its self-funded plan sponsors. (Id. at ¶ 1). This alleged scheme involved outpatient treatment centers (“OTCs”) and several corporations, namely Advanced Reimbursement Solutions, LLC (“ARS”)^[5] and American Surgical Development, LLC (“ASD”). (Id. at ¶¶ 1-8).

Aetna alleges Maldonado directed both ARS and ASD while the “out-of-network billing scheme” was occurring. (Id. at ¶ 4). Specifically, Aetna claims Maldonado “is the President of ARS [and] the Manager of ASD,” (Id. at ¶ 31), and was “aware of, participated in, and directed the relevant activities of ARS and ASD, including their relationships with the OTCs.” (Id. at ¶ 73). Aetna alleges Moshiri created North Valley Pain Center and was “aware of, participated in, and directed the relevant activities of the OTCs [he] held an ownership interest in or were officers of, including AZ Pain Solutions, LLC and the Valley Pain OTCs.” (Id. at ¶ 74).

Aetna alleges Counterclaim-Defendants' “scheme” was an agreement and conspiracy between all Counterclaim-Defendants to overbill Aetna and its sponsors by:

(a) paying providers to recruit other providers and facilities into the scheme;

(b) paying providers in exchange for their referral of Aetna members to the OTCs;

(c) targeting Aetna members with lucrative out-of-network benefits and interfering with their contracts with Aetna;

(d) inflating and misrepresenting the OTCs' rates;

(e) misrepresenting the OTCs as ambulatory surgical centers;

(f) misrepresenting non-covered services as covered services;

(g) billing the facility claims first and with enough procedure codes to bypass the members' out-of-pocket obligations and trigger payment by Aetna;

(h) waiving Aetna members' cost-sharing obligations; (i) splitting the OTCs' facility reimbursement with rendering providers; and

(j) requiring all participants to enter into non-disclosure agreements that would prevent the scheme from being discovered.

(Id. at ¶ 98). The TACC alleges further information and examples regarding these actions. (Id. at ¶¶ 98-242).

As to Maldonado, Aetna alleges he, along with others, “directed” ARS, ASD, and any affiliate companies to “provide[] the OTCs with the business model and processes necessary to execute on the out-of-network billing scheme.” (Id. at ¶ 99). It also alleges Moshiri “entered into multiple Marketing Services Agreements with ASD and Maldonado” and was “responsible for bringing multiple providers and facilities into the scheme.” (Id. at ¶ 105).

The Court previously dismissed Aetna's RICO claims against ARS, ASD, and several of the OTCs because Aetna failed to allege at least two specific instances of mail or wire fraud “per enterprise” and instead lumped the OTCs together without including separate examples for each. (Doc. 544 at 15). As to Aetna's fraud claims, however, the Court found Aetna adequately alleged misrepresentations against ARS and ASD and the Treatment Center OTCs “based on the OTCs' use of grossly inflated rates supplied by ARS” and Aetna plausibly alleged reliance on the billed charges. (Id. at 8-11). As to Aetna's ERISA and state-law claims, the Court also found Aetna provided fair notice of the claims being asserted against ARS, ASD, and the OTCs. (Id. at 16-19).

Maldonado and Moshiri seek to dismiss the counterclaims against them on the basis that neither of them are personally liable for the actions committed by ARS, ASD, or their respective OTCs. They argue that none of Aetna's counterclaims contain sufficient factual allegations as to Maldonado or Moshiri's involvement. (Docs. 627; 631-1).

II. Legal Standards

As mentioned, Maldonado and Moshiri seek to dismiss Aetna's counterclaims under both Federal Rules of Civil Procedure 12(b)(6) and 9(b).

A. Rule 12(b)(6) Standards

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a claim. Cook v. Brewer, 637 F.3d 1002, 1004 (9th Cir. 2011). Complaints must make a short and plain statement showing that the pleader is entitled to relief for its claims. Fed.R.Civ.P. 8(a)(2). This standard does not require “‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. While courts do not generally require “heightened fact pleading of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. A complaint must “state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. In addition, “[determining whether a complaint states a plausible claim for relief will . . . be a contextspecific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

Dismissal of a complaint for failure to state a claim may be based on either the “lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). In reviewing a motion to dismiss, courts will “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But courts are not required “to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

B. Rule 9(b)

The Federal Rules of Civil Procedure apply a heightened pleading standard, however, for allegations of fraud. Fed.R.Civ.P. 9(b) (“In alleging fraud . . . a party must state with particularity the circumstances constituting fraud or mistake.”). “Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quotations and citation omitted). Ordinarily, Rule 9(b)'s heightened pleading standard applies only to averments of fraud: “[t]he rule does not require that allegations supporting a claim be stated with particularity when those allegations describe non-fraudulent conduct.” Id. at 1104. But “[i]n some cases, the plaintiff may allege a unified course of fraudulent conduct and rely entirely on that course of conduct as the basis of a claim. In that event, the claim is said to be ‘grounded in fraud' or to ‘sound in fraud,' and the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b).” Id. at 1103-04.

When multiple defendants sue in connection with an alleged fraudulent scheme, there is no requirement that the pleader identify every instance of fraudulent conduct for every defendant. Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007). Though “Rule 9(b) does not allow a complaint to merely lump multiple defendants together,” it is sufficient in fraud suits involving multiple defendants for a pleader to identify the role each defendant played in the alleged fraudulent scheme. Id. at 764-65. In cases involving hundreds or thousands of alleged fraudulent transactions, specifying every transaction with the...