Walker v. Regence Blue Cross Blue Shield of Or., Blue Cross Blue Shield of Tex., of Health Care Serv. Corp.

• Decision Date: 23 December 2015
• Docket Number: CIVIL ACTION NO. G-15-064
• Parties: KIRSTIN WALKER, Individually and as Next Friend for LW, a Minor Plaintiffs, v. REGENCE BLUE CROSS BLUE SHIELD OF OREGON, BLUE CROSS BLUE SHIELD OF TEXAS, a Division of Health Care Service Corp., and HEALTH CARE SERVICE CORP., Defendants.
• Court: U.S. District Court — Southern District of Texas

KIRSTIN WALKER, Individually and as Next Friend for LW, a Minor Plaintiffs, v. REGENCE BLUE CROSS BLUE SHIELD OF OREGON, BLUE CROSS BLUE SHIELD OF TEXAS,a Division of Health Care Service Corp., and HEALTH CARE SERVICE CORP., Defendants.

CIVIL ACTION NO. G-15-064

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS GALVESTON DIVISION

December 23, 2015

OPINION AND ORDER

Before the Court, with the consent of the parties, is Defendants' Second Motion to Dismiss. (Dkt. No. 21). Defendant Regence Blue Cross Blue Shield of Oregon (RBCBSO) seeks dismissal of the action against it based on lack of personal jurisdiction and all the Defendants seek dismissal under Rule 12(b)(6).

I. BACKGROUND

This lawsuit arises out of a dispute over the payment of claims for medical expenses submitted under a health care plan. Plaintiffs Kirstin Walker (Walker) and her minor son, LW., are insured under a health care plan that Walker obtained through her employer, Banfield Pet Hospital (Banfield).¹ Plaintiffs allege that Defendants refused, in whole or in part, to pay formedical expenses for LW's air ambulance transportation and for mental health care. (Dkt. No. 13). Walker responded by contacting the media which she alleges prompted Defendants to assure Walker that they would dedicate an employee to oversee her claims so that future difficulties in the claims handling process could be avoided. Despite the assurances, Walker asserts that no such action was ever taken by Defendants.

Plaintiffs brought suit in state court against the named Defendants and sought to recover the payment of the unpaid medical expenses, along with other damages. Plaintiffs initially allege that Defendants, acting as a principal and/or agents, committed numerous violations of the Texas Insurance Code and the Texas Deceptive Trade Practice Act. (Dkt. No. 13 at 7-13, 14-15). Plaintiffs also assert other state law claims against Defendants which include breach of contract, breach of the duty of good faith and fair dealing, civil conspiracy and fraud. (Id. at 6, 13-14). However, acknowledging that their health care plan might be governed by ERISA, Plaintiffs allege in the alternative that they are entitled to payment of benefits under the ERISA statute because Defendants have knowingly and intentionally delayed and/or refused to pay their medical bills (Dkt. No. 13 at 19-24). In addition, Plaintiffs allege that Defendants, who acted in a non-fiduciary capacity, are also liable for intentional infliction of emotional distress. (Id. at 24-25).

Defendants removed the action to federal court² and then pursued dismissal. In their Second Motion to Dismiss, which is accompanied by a declaration from an in-house counsel,³ Defendants maintain that RBCBSO should be dismissed for lack of personal jurisdiction. (Dkt.No. 21). Defendants also maintain that the entire action should be dismissed because Plaintiffs have failed to state a claim upon which relief can be granted. (Id.). The parties filed their respective responses and the Defendants' Motion is now ripe for adjudication.⁴

II. DISCUSSION

A. Defendant RBCBSO's Rule 12(b)(2) Motion to Dismiss

Defendant RBCBSO seeks dismissal for lack of personal jurisdiction. (Dkt. No. 21). Absent a federal statute that provides more expansive personal jurisdiction, a federal court sitting in diversity may only exercise personal jurisdiction over a nonresident defendant if the long-arm statute of the forum state confers personal jurisdiction over that defendant and the exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5^th Cir.2006). The Texas long-arm statute confers jurisdiction to the limits of due process. TEX. CIV. PRAC. & REM. CODE ANN. § 17.041-.045; Stroman Realty, Inc. v. Antt, 528 F.3d 382, 385 (5^th Cir.2008); Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 373 (5^th Cir.2003). Due process permits the exercise of personal jurisdiction over a nonresident defendant when the defendant has "minimum contacts" with the forum state and the exercise of jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987); Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5^th Cir.2008).

"There are two types of 'minimum contacts': those that give rise to specific personal jurisdiction and those that give rise to general personal jurisdiction." Johnston, 523 F.3d at 609(quoting Lewis v. Fresne, 252 F.3d 352, 358 (5^th Cir.2001). General jurisdiction applies when the nonresident defendant's contacts with the forum state are "continuous and systematic," but unrelated to the cause of action. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-415 (1984); Stroman Realty, 528 F.3d at 385. In contrast, specific jurisdiction applies when a nonresident defendant "has purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities." Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 867 (5^th Cir.2001) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)); see also, Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 343 (5^th Cir.2004) (quoting Burger King, 471 U.S. at 474) (explaining that "[t]he focus [of this inquiry] is on the relationship between the defendant, the forum, and the litigation").

The party asserting jurisdiction⁵ bears the burden to establish a basis for the court's exercise of personal jurisdiction over a nonresident defendant. D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 545-46 (5^th Cir.1985); see generally, Wright & Miller, 5B FED. PRAC. & PROC. CIV. § 1351. That burden is met by a prima facie showing of personal jurisdiction. D.J. Investments, 754 F.2d at 545-46. Proof by a preponderance of the evidence is not required. Id. The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery. Revell v. Lidov, 317 F.3d 467, 469 (5^th Cir. 2002). "[O]n a motion to dismiss for lack of jurisdiction, uncontro verted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolvedin the plaintiff's favor." Johnston, 523 F.3d at 609; see also, Ainsworth v. Moffett Engineering, Ltd., 716 F.3d 174, 176 (5^th Cir.2013).

1. General Jurisdiction

Having reviewed the record, RBCBSO does not appear to have the kind of substantial, continuous and systematic contacts with Texas sufficient to support an exercise of general jurisdiction in this case. See Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 755-58, 187 L.Ed.2d 624 (2014); Helicopteros, 466 U.S. at 416; Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 217-218 (5^th Cir.2000). There is no dispute that RBCBSO is located in Oregon; that RBCBSO does not maintain any registered agents, employees, or offices in Texas; that RBCBSO does not solicit business in Texas or from Texas-based employers; and that RBCBSO does not own any property in Texas.⁶ See Submersible Sys., Inc. v. Perforadora Cent., S.A. de C.V., 249 F.3d 413, 419 (5^th Cir.2001) (citing 16 James Wm. Moore Et Al., MOORE'S FEDERAL PRACTICE ¶ 108.41 [3] (3d ed.1999)) (recognizing that general jurisdiction's "continuous and systematic contacts test is a difficult one to meet, requiring extensive contacts between a defendant and a forum"). While Plaintiffs allege that RBCBSO received some input on their claims from Blue Cross Blue Shield of Texas (BCBST) and Health Care Service Corporation (HCSC),⁷ this fact, standing alone, is insufficient to establish general personal jurisdiction. Cf. Wilson v. Belin, 20 F.3d 644, 649-51 (5^th Cir. 1994) (detennining that the court lacked general personal jurisdiction over the defendant despite the fact that defendant had a relationship with a Texas law firm and engaged in various professional and pro bono projects in the State over a period of several years).The Court, therefore, concludes that RBCBSO's contacts or activities in Texas are clearly not substantial enough to justify subjecting it to suit in the Southern District of Texas based on a theory of general personal jurisdiction.

2. Specific Jurisdiction

Specific jurisdiction, however, appears to be another matter. Taking the uncontroverted allegations in Plaintiffs' complaint as true and resolving any conflicts between the facts contained in the parties' affidavits in Plaintiffs' favor, Plaintiffs have made a prima facie showing that RBCBSO has contacts with Texas related to the transaction and events giving rise to the causes of action that are sufficient to support specific jurisdiction. See Johnston, 523 F.3d at 609. In particular, the record reflects the following: (1) RBCBSO, while located in Oregon, is a large company that provides health insurance plans to employers; (2) Banfield operates veterinary clinics nationwide, including Texas;⁸ (3) RBCBSO entered into an arrangement with Banfield to make health insurance coverage available to its employees;⁹ (4) Walker is employed by Banfield in Texas; (5) Walker elected to obtain health insurance coverage for herself and her minor child, L.W.; (6) Walker and her minor child L.W. are "beneficiaries under the health insurance policyissued by [RBCBSO]"; (7) Walker and her minor child, who both reside in Texas, received medical care in Texas; (8) while insured under the plan, claims for their medical care were submitted to RBCBSO for review and payment under the plan;¹⁰ (9) RBCBSO, with input from BCBST and HCSC, reviewed the health insurance claims submitted; (10) following its review, RBCBSO "paid some, but not all," of the medical bills for their treatment/care; (11) the...