Ward D.C. v. Alternative Health Delivery Systems Inc.
Decision Date | 03 May 2000 |
Docket Number | No. 99-5860,99-5860 |
Citation | 261 F.3d 624 |
Parties | (6th Cir. 2001) Carol A. Ward, D.C., Plaintiff-Appellant, v. Alternative Health Delivery Systems, Inc.; Physicians Consultant & Management Corporation, Defendants-Appellees. Argued: |
Court | U.S. Court of Appeals — Sixth Circuit |
Appeal from the United States District Court for the Western District of Kentucky at Louisville, No. 98-00018, Edward H. Johnstone, Senior District Judge.
R. Gregg Hovious, Clay M. Stevens, Dustin E. Meek, TACHAU, MADDOX, HOVIOUS & DICKENS, Louisville, Kentucky, for Appellant.
John A. Bartlett, Joseph L. Hamilton, Brenda J. Runner, Marjorie A. Farris, STITES & HARBISON, Louisville, Kentucky, Alan C. Guild, Jr., Rene R. Savarise, HALL, RENDER, KILLIAN, HEATH & LYMAN, Louisville, Kentucky, for Appellees.
Before: MERRITT, JONES, and CLAY, Circuit Judges.
Plaintiff Dr. Carol Ward, a chiropractor practicing in Kentucky, brings this action against defendants Alternative Health Delivery Systems, an HMO operating in Kentucky, and Physicians Consultant & Management Corp., which manages specialty care for Alternative Health Delivery Systems and other health benefit plans. Plaintiff was a participant in a network of medical care providers managed by Physicians Consultant & Management Corp. on behalf of Alternative Health Delivery Systems. She alleges that the defendants failed to inform her of an administrative fee for participating in their network; that defendants unjustifiably lowered the reimbursement rate for chiropractors in their network; and that defendants discriminated against her and other chiropractors in favor of other health care providers.
On September 9, 1997, plaintiff filed a number of state law claims against defendants in state court in Kentucky. These claims were for breach of contract, violation of a Kentucky statute prohibiting discrimination against chiropractors, unjust enrichment, and breach of covenant of good faith and fair dealing. Defendants moved to dismiss these claims on the ground that they are preempted by ERISA. In response, plaintiff amended her complaint to assert a state law claim for antitrust violations; to include alternative ERISA claims seeking benefits under 29 U.S.C. § 1132(a)(1)(b) and alleging breach of fiduciary duty under 29 U.S.C. § 1132(a)(2), (3); and to style her complaint as a class action on behalf of other chiropractors. Defendants then removed the case to federal court based on federal question jurisdiction. In federal court, defendants filed another motion to dismiss. After allowing limited discovery, the district court found that plaintiff did not have standing to bring her ERISA claims and dismissed these claims. The court also found that plaintiff's state law claims are preempted by ERISA because the state laws giving rise to these claims "relate to" a benefit plan. See 29 U.S.C. §1144(a).
The district court dismissed plaintiff's ERISA claims for lack of standing because plaintiff was not a participant in an ERISA plan, citing Teagardener v. Republic-Franklin Inc. Pension Plan, 909 F.2d 947, 952 (6th Cir. 1990) ( ). Standing is thought of as a "jurisdictional" matter, and a plaintiff's lack of standing is said to deprive a court of jurisdiction. See Hermann Hosp. v. MEBA Med. & Benefit Plan, 845 F.2d 1286, 1288 (9th Cir. 1988) ( ); see also Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89-102 (1998) ( ). Because plaintiff's claims failed for lack of such statutory standing, we find that plaintiff's claims were properly dismissed for lack of subject matter jurisdiction.
As a threshold matter, this court considers sua sponte whether or not the district court had jurisdiction over plaintiff's state law claims after it determined that plaintiff did not have standing to bring her ERISA claims. We find that the district court did not have jurisdiction over these remaining claims.
An action can be removed to a district court if it is one over which the court has original jurisdiction. See 28 U.S.C. §1441. The district court can then exercise supplemental jurisdiction over all other claims "that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy . . . ." 28 U.S.C. §1367(a). A district court generally has the discretion to retain or remand these claims if it subsequently dismisses the claims within its original jurisdiction. See 28 U.S.C. §1367(c). If it dismisses the claims within its original jurisdiction for lack of subject matter jurisdiction, however, it must remand the remaining claims. See Musson Theatrical, Inc. v. Fed. Express Corp., 89 F.3d 1244, 1255 (6th Cir. 1996).
Plaintiff's original complaint did not include a federal claim. After the defendants moved to dismiss for failure to state a claim, based primarily on ERISA preemption, plaintiff amended her complaint to add two alternative ERISA claims. The defendants then removed plaintiff's case to federal court. When the defendants filed their notice of removal, plaintiff's complaint did include two federal claims on its face. Thus, the action was properly removed. It was clear at the time, however, that plaintiff's standing to bring these claims was questionable. In fact, the defendants argued in their notice of removal that plaintiff was not an ERISA plan participant or beneficiary.
After limited discovery, the district court found that plaintiff was not an ERISA plan participant or beneficiary and, therefore, that she did not have standing to bring her ERISA claims. We agree that plaintiff does not have standing to bring her ERISA claims because she is not a plan participant or beneficiary. See Mich. Affiliated Healthcare v. CC Sys. Corp. of Mich., 139 F.3d 546 (6th Cir. 1998). The fact that plaintiff may be entitled to payment from defendants as a result of her clients' participation in an employee plan does not make her a beneficiary for the purpose of ERISA standing.
After concluding that plaintiff did not have standing to bring her ERISA claims, the district court determined that it had jurisdiction over plaintiff's remaining state law claims. The district court cited this court's decision in Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991), as authority for its decision to consider these claims. It is true that in Cromwell this court affirmed a district court's findings that a plaintiff's state law claims were preempted by ERISA and that the plaintiff did not have ERISA standing. See Cromwell, 944 F.2d at 1277-79. In Cromwell, however, the district court had decided the...
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