Hansen v. Group Health Cooperative, No. 16-35684 (9th Cir. 2018)
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Providers filed a class action in state court alleging that GHC violated the Washington Consumer Protection Act by using the Milliman Care Guidelines for mental healthcare coverage. After GHC removed to federal court, the district court denied Providers' motion to remand and granted a motion to dismiss in part. The district court then declined to exercise supplemental jurisdiction over Providers' claims as to GHC's administration of non-Employee Retirement Income Security Act (ERISA) plans, and remanded that part of the case back to Washington state court.
The Ninth Circuit reversed, holding that Providers' claims did not fall within the scope of, and so were not completely preempted by, section 502(a)(1)(B) of ERISA. The panel reversed the district court's exercise of subject matter jurisdiction in dismissing these claims, and remanded with instructions for the district court to return the entirety of this action to the Washington superior court.
Court Description: ERISA Preemption The panel reversed the district court’s exercise of subject matter jurisdiction in dismissing state law claims brought by mental health providers against an insurance company, and remanded for the entirety of the dispute to be returned to the state court from which it had been removed. The mental health providers filed a class action complaint in state court, alleging violation of the Washington Consumer Protection Act in defendant’s use of certain screening criteria for mental healthcare coverage. Defendant removed the case to federal court on the ground that the providers had been assigned benefits by patients who were insured under health plans governed by the Employee Retirement Income Security Act, which, defendant asserted, therefore completely preempted the providers’ claims. The district court dismissed in part, concluding that the providers’ claims were subject to conflict and express preemption to the extent that they concerned defendant’s business practices in administering ERISA plans. The district court declined to exercise supplemental jurisdiction over the providers’ claims as to defendant’s administration of non-ERISA plans, and it remanded that part of the case to Washington state court. The panel held that the providers’ claims did not fall within the scope of, and so were not completely preempted
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