Diagnostic Affiliates of Ne. Hou, LLC v. Aetna, Inc.

654 F.Supp.3d 595

DIAGNOSTIC AFFILIATES OF NORTHEAST HOU, LLC, Plaintiff, v. AETNA, INC., et al., Defendants.

CIVIL ACTION NO. 2:22-CV-00127

United States District Court, S.D. Texas, Corpus Christi Division

Signed February 1, 2023

Khan Ebad, Kingwood, TX, for Plaintiff.

David Baird Carpenter, Alston & Bird LLP, Atlanta, GA, Emily Seymour Costin, Alston & Bird LLP, Washington, DC, Laura B. Hunt, Alston & Bird, LLP, Dallas, TX, for Defendants Aetna, Inc., Aetna Health And Life Insurance Company, Aetna Health Inc., Aetna Health Insurance Company, Aetna Health Management, LLC, Aetna Medicaid Administrators LLC, Meritain Health, Inc., First Health Life & Health Insurance Company, ADP TotalSource, Inc. Health and Welfare Plan, Group Health & Welfare Plan, Exxon Mobil Medical Plan, AstraZeneca Health And Welfare Plan, Catholic Health Initiatives Master Trust, Costco Wholesale Corporation Cafeteria Plan, CVS Health Defined Benefit Plans Master Trust, Fidelity National Financial, Inc. Welfare Plan, Ge Global Health Plan, GT Services LLC Medical Insurance, Huntsman Corporation Employee Benefit Plan, Indorama Ventures Oxides, LLC Welfare Benefits Plan, Linde Comprehensive Welfare Benefit Plan, Lyondell Chemical Co., Equistar Chemicals LP, And Houston Refining, LP Master Trust, Memorial Hermann Health System Flexible Benefit Plan, Oprona, Inc., Group Welfare Plan for Quest Diagnostics Incorporated, The Friedkin Group Welfare Benefits Plan, Torque Tools Inc. Health Plan, UPS Health and Welfare Plan, Walmart Inc. Associates Health and Welfare Plan, Restated Zions Bancorp. Employee and Retiree Welfare Benefit Plan, Accenture United States Group Health Plan, Alight Solutions LLC Health And Welfare Plan, American International Group, Inc. Medical Plan, Aramco U.S. Welfare Benefit Plan, Collabera Inc. 125 Benefit Plan, Educational Testing Service Welfare Benefits Plan, KPMG LLP Health Plans., Mann Eye Center PA Health And Welfare Plan, Paychex Business Solutions LLC Employee Benefit Plan, R & L Carriers Group Benefits Plan, Sap America Health & Welfare Plan, Technology Services Group, LLC Employee Benefits Plan, Tetra Tech, Inc. Fully Insured HMO Benefit Plan, Trinet Group, Inc., United Airlines Consolidated Welfare Benefit Plan, Wyndham Hotels & Resorts Health and Welfare Plan, Aarthun Performance Group LTD Health Plan, Agility Recovery Solutions, Inc. Health and Welfare Plan, American Air Liquide Holdings INC. Health Plan, Arkema INC. Health Plan, C. V. Starr & Co. Health Plan, Cemex, Inc. Welfare Benefit Plan, Citigroup Legal Benefits Plan, Cox Enterprises, Inc. Welfare Benefit Plan, Deloitte & Touche Welfare Benefit Plan, Enercon Services, Inc. Employee Health & Welfare Benefit Plan, Entergy Corporation Companies' Bargaining Employees' Welfare Benefit Trust, First Community Bancshares, Inc. Employee Benefit Plan, HCA Inc. And Welfare Benefits Plan, Hilton Worldwide Health Plan, Infosys BPM Limited Health Plan, Inframark, LLC Welfare Benefit Wrap Plan, International Cellulose Corporation Health Plan, Invesco Health Plan, Iqvia Inc. Health Plan, The Iron Mountain Companies Welfare Plan, Lawler Foods, LTD. Health & Welfare Plan, Defendant Leidos Employee Health and Welfare Benefits Plan, Lockheed Martin Corporation Basic Benefit Plan For Hourly Employees, Magellan Health & Welfare Plan, McCombs Enterprises Health Plan, Mitsubishi Electric U.S. Companies Health And Welfare Plan, Nustar Omnibus Welfare Plan, Occidental Petroleum Corporation Welfare Plan, Opko Health, Inc. Health and Welfare Plan, Repsol USA Holdings Corporation-Welfare Plans, Salesforce.com Health And Welfare Plan, Shi International Corp. Health And Welfare Plan, Snapon incorporated Non-Union Retiree Health and Welfare Benefit Plan, T-Mobile USA, Inc. Employee Benefit Plan, Transwestern Commercial Services Comprehensive Health And Welfare Benefit Plan, Trinity University Welfare Benefit Plan, William Marsh Rice University Health And Welfare Plan, Decypher Technologies Employee Benefits Plan.

David Baird Carpenter, Alston & Bird LLP, Atlanta, GA, Emily Seymour Costin, Alston & Bird LLP, Washington, DC, Laura B. Hunt, Alston & Bird, LLP, Dallas, TX, Darrell Lee Barger, Hartline Barger LLP, Corpus Christi, TX, for Defendant Aetna Better Health of Texas Inc.

ORDER ON MOTION TO DISMISS

NELVA GONZALES RAMOS, UNITED STATES DISTRICT JUDGE

Plaintiff Diagnostic Affiliates of Northeast Hou, LLC d/b/a 24 Hour Covid RTPCR Laboratory (Diagnostic Affiliates) filed this action against Defendants Aetna¹ health insurance administrators and Employer Plans² that are administered by Aetna, complaining of refusals and failures to pay for charges incurred with respect to covered employees' Covid-19 testing. Before the Court is Defendants' Motion to Dismiss (D.E. 29), challenging this Court's personal jurisdiction over Defendants and the viability of each of Diagnostic Affiliates' causes of action. Diagnostic Affiliates has responded (D.E. 40), Defendants have replied (D.E. 43), and both parties filed sur-replies (D.E. 46, 49). For the reasons set out below, the motion (D.E. 29) is GRANTED IN PART and DENIED IN PART.

DISCUSSION

A. Personal Jurisdiction

Defendants challenge the Court's personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). They argue that Diagnostic Affiliates has improperly pled jurisdiction against all of the Defendants as a group (rather than with distinction commensurate with their separate corporate existences)³ and has failed to allege sufficient minimum contacts against any of them. "Before ruling on the merits of the case, it is imperative that the court first determine whether it has jurisdiction to hear the suit; if jurisdiction is lacking, then the court has no authority to consider the merits." Cook v. Reno, 74 F.3d 97, 99 (5th Cir. 1996).

1. Standard of Review

Burden of Proof. The plaintiff, as the party invoking the court's jurisdiction, bears the burden of establishing that personal jurisdiction is proper. Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 431 (5th Cir. 2014). When the defendant challenges personal jurisdiction pursuant to a Rule 12(b)(2) motion, the matter may be determined without an evidentiary hearing. Ham v. La Cienega Music Co., 4 F.3d 413, 415 & n.4 (5th Cir. 1993) ("The district court usually resolves the jurisdictional issue without conducting a hearing."). In that event, the plaintiff need only make a prima facie case. Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008).

If the case proceeds to an evidentiary hearing⁴ or trial, the plaintiff's burden will escalate to preponderance of the evidence in order to support a judgment. Brown v. Slenker, 220 F.3d 411, 419 (5th Cir. 2000). In any event, a dismissal for lack of personal jurisdiction is not a dismissal on the merits and must therefore be without prejudice. See generally, Libersat v. Sundance Energy, Inc., 978 F.3d 315, 317 (5th Cir. 2020).

Scope of Review. At the Rule 12(b)(2) stage without an evidentiary hearing, the court accepts the plaintiff's uncontroverted allegations as true and resolves all conflicts in the evidence in the plaintiff's favor. E. Concrete Materials, Inc. v. ACE Am. Ins. Co., 948 F.3d 289, 295 (5th Cir. 2020). In this inquiry, the court applies the pleading standards of Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Factual allegations are required, sufficient to raise the entitlement to relief above the level of mere speculation. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. The court does not accept as true conclusory factual allegations, unwarranted factual inferences, or legal conclusions. Giancarlo v. UBS Fin. Servs., Inc., 725 F. App'x 278, 282 (5th Cir. 2018) (citing Southland Sec. Corp. v. INSpire Ins. Sols., Inc., 365 F.3d 353, 361 (5th Cir. 2004)).

Minimum Contacts. The plaintiff's prima facie burden is to show "that the nonresident defendant has purposefully established 'minimum contacts' with the forum state 'such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' ' " WNS, Inc. v. Farrow, 884 F.2d 200, 202 (5th Cir. 1989) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)) (quoting, in turn, Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)).

Jurisdiction may be general or specific. The former requires "continuous and systematic" forum contacts and allows for jurisdiction over all claims against the defendant, no matter their connection to the forum. In contrast, the latter obtains only where a defendant "purposefully direct[s]" his activities toward the state and the plaintiff's claim "aris[es] out of or [is] related to" the defendant's forum contacts.

In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prod. Liab. Litig., 888 F.3d 753, 777-78 (5th Cir. 2018) (citations omitted).

Unfair and Unreasonable. If minimum contacts are shown, the burden of proof shifts to the defendant to show that the assertion of jurisdiction is unfair. Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999) (citing Akro Corp. v. Luker, 45 F.3d 1541, 1547 (Fed. Cir. 1995)). Several factors relate to traditional notions of fair play and substantial justice: "(1) the burden upon the nonresident defendant; (2) the interests of the forum state; (3) the plaintiff's interest in obtaining relief; (4) the interstate judicial system's interest in the most efficient resolution of controversies; and (5) the shared interests of the several states in furthering fundamental social policies." Felch v. Transportes Lar-Mex SA De CV, 92 F.3d 320, 324 n.9 (5th Cir. 1996) (quotation marks omitted).

To show that the exercise of in personam jurisdiction is unfair and unreasonable, the defendant must make a "compelling case." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85...