California Surgery Center, Inc. et al v. Unitedhealthcare, Inc. et al, No. 2:2019cv02309 - Document 81 (C.D. Cal. 2021)
Court Description: ORDER GRANTING DEFENDANTS MOTION TO DISMISS FOURTH AMENDED COMPLAINT, 71 by Judge Dean D. Pregerson: Defendants Motion to Dismiss is GRANTED. The Fourth Amended Complaint is DISMISSED, with leave to amend one final time. Any amended complaint shall be filed within fourteen days of the date of this Order. IT IS SO ORDERED. (shb)
Download PDF
<![CDATA[
California Surgery Center, Inc. et al v. Unitedhealthcare, Inc. et al Doc. 81 Case 2:19-cv-02309-DDP-AFM Document 81 Filed 09/15/21 Page 1 of 7 Page ID #:1430 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CALIFORNIA SURGERY CENTER, INC., et al. 12 Plaintiffs, 13 v. 14 UNITEDHEALTHCARE, INC., 15 16 Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) Case No. CV 19-02309 DDP (AFMx) ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOURTH AMENDED COMPLAINT [Dkt. 71] 17 18 19 20 21 22 23 24 25 26 27 28 Dockets.Justia.com Case 2:19-cv-02309-DDP-AFM Document 81 Filed 09/15/21 Page 2 of 7 Page ID #:1431 1 Presently before the Court is Defendant UnitedHealthcare, Inc. 2 and UnitedHealthcare Insurance Company (collectively, “United”)’s 3 Motion to Dismiss Plaintiffs’ Fourth Amended Complaint (“FAC”). 4 Having considered the submissions of the parties, the court grants 5 the motion and adopts the following Order. 6 I. 7 Background Plaintiff California Surgery Center is an ambulatory surgery 8 center. 9 is a medical group comprised of anesthesiologists and other (FAC ¶ 7.) Plaintiff California Spine and Pain Institute 10 doctors. 11 disease and, after other unsuccessful treatments, recommended to 12 KES that she undergo spinal surgery. 13 (Id.) Plaintiffs treated nonparty patient KES for spinal (FAC ¶¶ 9, 15, 37.) KES chose preferred provider organization (“PPO”) insurance 14 coverage through United so she could choose her own doctors, such 15 as Plaintiffs. 16 verified that KES was United’s insured and obtained treatment 17 authorization from United. 18 treatment verification calls, United promised to pay for services 19 rendered to KES “as long as KES was an eligible member on the date 20 of coverage.” 21 $130,000 for treatment provided to KES over sixteen separate 22 visits. 23 (FAC ¶ 39.) On over a dozen occasions, Plaintiffs (FAC ¶ 15.) (FAC ¶¶ 15, 41.) During each of these pre- United paid Plaintiffs over (FAC ¶ 32.) At some point, United began refusing to pay for services 24 rendered to KES, notwithstanding United’s pre-treatment 25 conversations with and promises to Plaintiffs.1 This action 26 1 27 28 The dates on which Defendant allegedly refused to pay are not entirely clear. The FAC alleges, for example, that Defendant refused on February 27, 2017 to pay for services rendered on (continued...) 2 Case 2:19-cv-02309-DDP-AFM Document 81 Filed 09/15/21 Page 3 of 7 Page ID #:1432 1 followed. Plaintiffs’ operative complaint alleges common law 2 causes of action for breach of implied contract, breach of oral 3 contract, negligent misrepresentation, and estoppel. 4 moves to dismiss the FAC. United now 5 II. 6 A complaint will survive a motion to dismiss when it Legal Standard 7 “contain[s] sufficient factual matter, accepted as true, to state a 8 claim to relief that is plausible on its face.” 9 556 U.S. 662, 678 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 Ashcroft v. Iqbal, 10 U.S. 544, 570 (2007)). 11 court must “accept as true all allegations of material fact and 12 must construe those facts in the light most favorable to the 13 plaintiff.” 14 Although a complaint need not include “detailed factual 15 allegations,” it must offer “more than an unadorned, 16 the-defendant-unlawfully-harmed-me accusation.” 17 678. 18 statement of a legal conclusion “are not entitled to the assumption 19 of truth.” Id. at 679. 20 offers “labels and conclusions,” a “formulaic recitation of the 21 elements,” or “naked assertions” will not be sufficient to state a 22 claim upon which relief can be granted. Id. at 678 (citations and 23 internal quotation marks omitted). 24 25 When considering a Rule 12(b)(6) motion, a Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Iqbal,556 U.S. at Conclusory allegations or allegations that are no more than a In other words, a pleading that merely “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they 26 1 27 28 (...continued) November 7 and November 14, 2016. (FAC ¶¶ 33-34.) The FAC also alleges, however, that on November 21, 2017, Defendant refused to pay for services rendered on November 7, 2016. (FAC ¶ 35.) 3 Case 2:19-cv-02309-DDP-AFM Document 81 Filed 09/15/21 Page 4 of 7 Page ID #:1433 1 plausibly give rise to an entitlement of relief.” 2 at 679. 3 their claims rise “above the speculative level.” 4 at 555-56. 5 claim for relief” is “a context-specific task that requires the 6 reviewing court to draw on its judicial experience and common 7 sense.” 8 III. Discussion 9 Iqbal,556 U.S. Plaintiffs must allege “plausible grounds to infer” that Twombly, 550 U.S. “Determining whether a complaint states a plausible Iqbal, 556 U.S. at 679. United contends, as it has with respect to prior iterations of 10 Plaintiffs’ Complaint, that Plaintiffs’ state law claims are 11 preempted by the Employee Retirement Income Security Act (“ERISA”). 12 As this Court has explained, “[c]onflict preemption exists when a 13 state law claim ‘relates to’ an ERISA plan, in which case, the 14 state law claim may not be brought.” 15 Employers Grp. Benefit Plan & Tr., No. CV 17-142-BLG-SPW, 2018 WL 16 453436, at *4 (D. Mont. Jan. 17, 2018). 17 common law claim ‘relates to’ an employee benefit plan governed by 18 ERISA if it has a connection with or reference to such a plan.” 19 Providence Health Plan v. McDowell, 385 F.3d 1168, 1172 (9th Cir. 20 2004) (internal quotation marks and citation omitted). 21 however, adjudication of an independent state law claim does not 22 require interpretation of an ERISA plan, the requisite “connection 23 with or reference to” the plan does not exist. 24 Meadows v. Employers Health Ins., 47 F.3d 1006, 1010 (9th Cir. 25 1995); Schwartz 2018 WL 453436, at *5 (“As the Ninth Circuit and 26 several others have explained, a third-party provider’s claim for 27 damages does not implicate a relationship Congress sought to 28 regulate under ERISA.”); cf. Marin Gen. Hosp. v. Modesto & Empire 4 Schwartz v. Associated “Generally speaking, a Where, Id.; see also The Case 2:19-cv-02309-DDP-AFM Document 81 Filed 09/15/21 Page 5 of 7 Page ID #:1434 1 Traction Co., 581 F.3d 941, 948-50 (9th Cir. 2009) (distinguishing 2 oral contract claim from claims “based on an obligation under an 3 ERISA plan.”). 4 Here, portions of Plaintiffs’ FAC suggest that this is a case 5 much like Marin General Hospital or The Meadows, where insurance 6 coverage questions were irrelevant to the alleged promises made to 7 treatment providers. 8 Meadows, 47 F.3d at 1008-9. 9 Plaintiffs’ claims “are based upon the individual rights of the Marin Gen. Hosp., 581 F.3d at 943-44; The The FAC alleges, for example, that 10 PROVIDERS . . . and are not derivative of the contractual or other 11 rights of the PROVIDERS’ Patients. 12 the interactions of those PROVIDERS with [United] . . . .” 13 5.) 14 United made promises to pay directly to Plaintiffs, much like the 15 circumstances in Marin General Hospital and similar cases. 16 Plaintiffs contend, any references in the FAC to KES’ ERISA 17 coverage or COBRA (Consolidated Budget Reconciliation Act) 18 continuation insurance coverage does no more than “substantiate the 19 claims for breach of an implied contract, negligent 20 misrepresentation and estoppel [, and . . .] do not require 21 interpretation of ERISA or the subject Plan documents.” 22 (Opposition at 14:2-4.) 23 Plaintiffs’ claims arise out of (FAC ¶ And, as described above, the FAC repeatedly alleges that Thus, Unlike Marin General Hospital, The Meadows, and other cases, 24 however, the allegations in Plaintiffs’ FAC are not limited to 25 those described above. 26 first time in this action, extensive allegations about both the 27 existence and role of KES’ insurance coverage. 28 for example, that United promised to pay Plaintiffs “as long as KES Rather, Plaintiffs’ FAC includes, for the 5 The FAC alleges, Case 2:19-cv-02309-DDP-AFM Document 81 Filed 09/15/21 Page 6 of 7 Page ID #:1435 1 was an eligible member on the date of coverage.” 2 Plaintiffs further allege that “information concerning KES’ status 3 and eligibility as a COBRA continuation enrollee . . . was material 4 and pertinent,” and that the parties “understood and agreed . . . 5 that [United] would pay [] claims in accordance with the terms of 6 its policy with KES.” 7 not only that United represented that KES’ coverage “could not or 8 would not be retroactively terminated,” but also that United “was 9 precluded from rescinding coverage” and “prohibited by law and (FAC ¶¶ 41, 54.) (FAC ¶ 39.) The FAC goes on to allege 10 estopped from rescinding . . . KES’ coverage.” 11 82.) 12 treatment . . ., her coverage was in force, in effect and she was 13 on claim with Defendants,” that “KES was actually a covered, 14 insured member of Defendants’ Plan and was entitled to coverage, 15 benefits, insurance, and indemnity,” that, “[i]n fact, KES was a 16 member of the Plan on each of the subject dates of treatment” and 17 that “[b]ecause KES was a covered member . . . [United] had no 18 lawful right to retroactively cancel, terminate, or rescind 19 KES’coverage and their rescission was null, void and unlawful.”2 20 (FAC ¶¶ 83, 85.) 21 (FAC ¶¶ 60, 80, Furthermore, Plaintiffs allege that “at the time KES received These allegations are not merely incidental background 22 references that substantiate Plaintiffs’ independent claims. 23 Rather, Plaintiffs’ coverage allegations would necessarily require 24 interpretation of KES’ ERISA plan to determine whether she had 25 coverage at the time Plaintiffs treated her. Indeed, Plaintiffs 26 2 27 28 These allegations also appear, to some extent, to be inconsistent with allegations that KES was not covered, and that United falsely represented that she was covered. (FAC ¶¶ 66-68, 70.) 6 Case 2:19-cv-02309-DDP-AFM Document 81 Filed 09/15/21 Page 7 of 7 Page ID #:1436 1 can not plausibly contend that their state law claims are 2 independent of KES’ ERISA plan while simultaneously alleging, as 3 the FAC does, that “[b]y effectively rescinding coverage . . . 4 Defendants . . . have violated their promises made to the 5 PROVIDERS.” 6 clear, ERISA-related allegations are central to Plaintiffs’ state 7 law claims. 8 IV. 9 (FAC ¶ 85)(emphasis added.) As this allegation makes Those claims are, therefore, preempted.3 Conclusion For the reasons stated above, Defendants’ Motion to Dismiss is 10 GRANTED. 11 amend one final time. 12 fourteen days of the date of this Order. The Fourth Amended Complaint is DISMISSED, with leave to Any amended complaint shall be filed within 13 14 15 16 17 IT IS SO ORDERED. 18 19 20 Dated: SEPTEMBER 15, 2021 THE HON. DEAN D. PREGERSON United States District Judge 21 22 23 24 25 26 27 3 28 The court therefore need not address United’s remaining arguments. 7
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
