Wagoner v. First Fleet Inc.
| Decision Date | 08 August 2022 |
| Docket Number | CV-22-00990-PHX-JAT |
| Parties | Gary L. Wagoner, Plaintiff, v. First Fleet Incorporated, Defendant. |
| Court | U.S. District Court — District of Arizona |
Pending before the Court is Defendant First Fleet, Inc.'s (“First Fleet”) Motion to Dismiss (Doc. 6), and Plaintiff Dr. Gary Wagoner's (“Plaintiff”) Response to Motion to Dismiss and Motion for Default (Doc 9). Also pending before the Court is Defendant's Reply in Support of Its Motion to Dismiss and in Opposition to Plaintiff's Motion for Default (Doc. 11), and Defendant's Motion to Strike (Doc. 13). The Court now rules on the motions.
Plaintiff is a chiropractor based in Scottsdale, Arizona, and is the designated representative for patient Jeffrey Cagle. (Doc 1-3 at 5-6). Plaintiff provided medical care to Mr. Cagle on October 10, 2019. (Id. at 6). Mr. Cagle signed an assignment of benefits contract to allow Plaintiff to collect payment from Mr. Cagle's employee health benefits plan through First Fleet, Inc., an insurance company affiliated with Blue Cross Blue Shield of Tennessee (BCBST). (Id. at 6, 18). Both parties agree that Mr. Cagle's plan is regulated by the Employee Retirement Income Security Act (ERISA). (Doc. 9 at 1; Doc. 6 at 2).
After he provided anesthesiology services to Mr. Cagle, Plaintiff alleges he submitted “a total of 2 demands for payment ... to First Fleet without response or payment tendered.” (Doc. 1-3 at 6). On May 3, 2022, Plaintiff filed his Complaint against First Fleet in the Dreamy Draw Justice Court in Phoenix, Arizona, alleging First Fleet had not properly paid him for the services he provided Mr. Cagle and seeking $10,000 in damages, including benefits, court costs, interest, and document preparation expenses. (Doc. 1-3 at 5; Doc. 6 at 3).
On June 7, 2022, First Fleet removed Plaintiff's action to the U.S. District Court for the District of Arizona and filed a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) claiming ERISA preemption. (Doc. 1-4 at 2; Doc. 6). Consequently, Plaintiff filed a Response and Motion for Default on June 28, 2022. (Doc. 9). First Fleet opposed Plaintiff's Motion for Default on July 5, 2022, and nine days later, First Fleet moved to strike Plaintiff's Response and Motion for Default (Doc. 9) from the Court record. (Doc. 11; Doc. 13).
Dismissal of a complaint, or any claim within it, for failure to state a claim under Rule 12(b)(6) may be based on either “‘a lack of a cognizable legal theory' or ‘the absence of sufficient facts alleged under a cognizable legal theory.'” Johnson v. Riverside Heatlhcare Sys., LP, 534 F.3d 1116, 1121-22 (9th Cir. 2008) (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990)). In determining whether a complaint states a claim under this standard, the Court regards the allegations in the complaint as true and construes the pleadings in the light most favorable to the nonmovant. Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 900 (9th Cir. 2007). A pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This statement “need only give the defendant fair notice of what ... the claim is and the grounds upon which it rests,” and “[s]pecific facts are not necessary.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal quotation marks omitted). To survive a motion to dismiss, a complaint must state a claim that is “plausible on its face,” which occurs “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) ().
Although courts will not generally look beyond the pleadings in a Rule 12(b)(6) motion, a “court may consider material that the plaintiff properly submitted as part of the complaint, or even if not physically attached to the complaint, material that is not contended to be inauthentic and that is necessarily relied upon by the plaintiff's complaint.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). The Court may also consider matters of public record, including pleadings, orders, and other papers filed with the Court. Mack v. S. Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir. 1986), abrogated on other grounds by Astoria Fed. Savings & Loan Ass'n v. Solimino, 501 U.S. 104 (1991).
1. ERISA
ERISA derives its preemptive power from two components. Blue Cross of Cal. v. Insys Therapeutics, 390 F.Supp.3d 996, 1003 (D. Ariz. 2019). The first component, ERISA section 514(a), preempts all state laws “as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. § 1444 (a). The second component, ERISA section 502(a), outlines the scope of civil remedies available to enforce any part of ERISA's provisions. Insys Therapeutics, 390 F.Supp.3d at 1003 (citing Cleghorn v. Blue Shield of Cal., 408 F.3d 1222, 1225 (9th Cir. 2005)). If a state cause of action falls within this scope, the Court deems the cause of action preempted as conflicting with the intended exclusivity of ERISA's civil remedies. Id. This is the case even if the state cause of action is not preempted by section 514(a), as discussed below. Id.
Section 514(a) requires that ERISA “supersede any and all State laws insofar as they may . . . relate to any employee benefit plan.” § 1144(a). The Court considers a law to “relate to” an employee benefit plan if it has “a connection with or reference to such a plan.” Insys Therapeutics, 390 F.Supp.3d at 1003 (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97 (1983) (internal quotations omitted)). The Court considers a state law to “refer to” an ERISA plan when it “acts immediately and exclusively upon ERISA plans or where the existence of ERISA plans is essential to the law's operation.” Id. (quoting Cal. Div. of Labor Standards Enforcement v. Dillingham Const., N.A., Inc., 519 U.S. 316, 325 (1997) (internal quotations omitted)).
Additionally, Ninth Circuit courts use a separate “relationship test” to determine whether a state law has a “connection with” an ERISA plan. Id. Specifically, when “a state law claim bears on an ERISA-regulated relationship, e.g., the relationship between plan and plan member, between plan and employer, between employer and employee,” then the claim is preempted. Id. at 1004 (internal quotations and citation omitted).
Next, the Court considers whether a state law cause of action is preempted under ERISA Section 502(a), using a two-prong test. Id. (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 208-10 (2004)). The Court considers a state law cause of action completely preempted if: (1) an individual could have brought the claim under section 502(a), and (2) where a defendant's actions do not implicate another independent legal duty. Id. (citing Marin Gen. Hosp. v. Modesto & Empire & Traction Co., 581 F.3d 941, 946 (9th Cir. 2009)). For the Court to consider the state law claim preempted under Section 502(a), the claim must satisfy both prongs. Id. (citing Marin Gen. Hosp., 581 F.3d at 947).
In its Motion to Dismiss, First Fleet argues that all of Plaintiff's claims must be dismissed under 12(b)(6) for failure to state a claim because “no cognizable legal theory exists for any of [Plaintiff's] claims” as pleaded. (Doc. 11 at 2). Plaintiff makes four “claims” in his Complaint. (Doc. 1-3 at 5; Doc 9 at 3). The Court will consider each of Plaintiff's “claims” in turn.
First, the Court considers Claim One in Plaintiff's Complaint, which states, “This is a case of breach of contract with unjust enrichment committed by First Fleet, Inc.” (Doc. 1-3 at 5). Plaintiff indicates that prior to filing his Complaint, he had two telephone conversations with BCBST provider service representatives on August 22, 2018, and November 11, 2019. (Doc. 9 at 3). In these conversations, Plaintiff claims that the representatives reported that BCBST was, respectively, “correcting all claims” and “researching all claims” Plaintiff submitted to them. (Id.) Further, Plaintiff maintains that in these two phone conversations “[First Fleet]/BCBST ... intended to and verbally promised, to pay [Plaintiff].” (Id. at 4). Because Plaintiff “had two conversations with [First Fleet]/BCBST regarding the out of network anesthesia claim payments promised by [First Fleet]/BCBST,” Plaintiff argues that “ERISA preemption does not exist.” (Id. at 7).
First Fleet contends that Plaintiff's breach of contract and unjust enrichment claims are based in Arizona common law and therefore, “are preempted by ERISA.” (Doc. 6 at 4). First Fleet additionally argues that because Plaintiff's breach of contract and unjust enrichment claims “seek benefits due and allegedly owed under the Plan or ‘damages' paid based on the Plan's coverage,” the claims are preempted. (Doc. 6 at 5). The Court agrees with First Fleet's arguments.
The Supreme Court has determined that state common law causes of action, including breach of contract and unjust enrichment “relate to” an employee benefit plan and therefore fall under ERISA's express preemption clause, section 514(a). See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 43, 53 (1987) (...
To continue reading
Request your trial