Healthcare Venture Partners, LLC v. Anthem Blue Cross

OPINION AND ORDER

DOUGLAS R. COLE UNITED STATES DISTRICT JUDGE

This cause comes before the Court on Plaintiff Healthcare Venture Partners' (“the Ridge”) Motion to Remand and for Fees and Costs (the “Motion”) (Doc. 10), following Defendants Community Insurance Company^[1] and Blue Cross and Blue Shield of Maine's (collectively “BCBS”^[2]) removal (Doc. 1) of this action from state court on January 14, 2021. For the reasons below, the Court GRANTS the Ridge's Motion (Doc. 10) and accordingly REMANDS the case to Clermont County Court of Common Pleas. However, the Ridge's request for attorneys' fees is DENIED.

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BACKGROUND

The Ridge is a healthcare provider in Milford, Ohio. It has allegedly treated members of healthcare plans issued or administered by BCBS. (Compl., Doc. 2, #414- 15). The Ridge does not have a contract with BCBS and, thus, is an “out-of-network provider.” (Opp. to Mot. (“Opp.”), Doc. 17, #490). Instead of billing BCBS directly when the Ridge treats one of its members, the Ridge alleges that it receives an assignment of the patients' rights to receive benefits (“benefit claims” or “BCs”). (Id.). The Ridge states that, although BCBS has “paid [the Ridge] directly for the [benefit claims] in some instances … [, ] in most other instances, [BCBS has] underpaid the claim, not paid the claim, or directly paid the [insured] the claim payment.” (Compl., Doc. 2, #415).

On September 11, 2020, the Ridge wrote a letter to BCBS “advising [it] regarding the large account receivable due and owing the Ridge by [BCBS].” (Id. at #417). In response, BCBS requested a “listing of [benefit] claims which were not appropriately paid.” (Id.). On September 24, 2020, the Ridge sent BCBS a spreadsheet (“the Spreadsheet”) containing a list of benefit claims that the Ridge alleges had not been paid. (Id.). The Spreadsheet features prominently in the arguments regarding remand.

On December 10, 2020, having not received payment, the Ridge filed a lawsuit in the Court of Common Pleas of Clermont County, Ohio. (Id. at #413). The Ridge's Complaint alleged eight causes of action, including an action on account, an action for an accounting, conspiracy to underpay or not pay claims, declaratory judgment, unjust enrichment, breach of contract, promissory estoppel, and tortious interference

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with contract. (See id.). All of the counts related to BCBS's alleged failure to pay the BCs to the Ridge.

On January 14, 2021, BCBS removed the case to this Court. (Notice, Doc. 1). In its Notice of Removal, BCBS states that the case is removable on two separate grounds. (Id. at #1). First, BCBS argues that some of the BCs on which the Ridge sought recovery from BCBS arose under plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), and thus the case is removable under 28 U.S.C. § 1441(a) pursuant to the doctrine of complete ERISA preemption. (Id.). Second, BCBS asserts that some of the claims as to which payment is sought were assigned to the Ridge by participants under plans governed by the Federal Employees Health Benefits Act (“FEHBA”), and thus the case is removable under 28 U.S.C. § 1442(a)(1), the federal officer removal statute. (Id.). BCBS acknowledges that some of the BCs at issue were assigned by participants under plans governed neither by ERISA, nor by FEHBA. But BCBS nonetheless argues that the entire case is removable, either based on supplemental jurisdiction under 28 U.S.C. § 1367, or because federal officer removal provides for removal of an entire case, not merely the claims directed against the federal officer. (Id. at #4).

The Ridge moved to remand to state court on February 11, 2021, arguing that neither § 1441(a), nor § 1442(a)(1), provides for removal on the facts here. (Doc. 10). The Ridge also requests the attorneys' fees it incurred in connection with seeking remand. (Id. at #469).

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LAW AND ANALYSIS

A. Removal Was Not Proper Under The Doctrine Of Complete ERISA Preemption.

Under 28 U.S.C. § 1441(a), a defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” A district court has original jurisdiction over “all actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.

To determine if a case arises under federal law, ordinarily courts are restricted to the face of the plaintiff's well-pleaded complaint. K.B. v. Methodist Healthcare, 929 F.3d 795, 799 (6th Cir. 2019). An exception to this rule arises, however, when Congress “passes a statute so broad that it ‘wholly displaces … state-law cause[s] of action through complete pre-emption.'” Id. (citing Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 8 (2003)). In cases where complete preemption applies, a defendant may remove a case even if the face of the complaint does not implicate federal law. Id. ERISA is one statute that gives rise to complete preemption. As the Sixth Circuit has explained, “[a] state suit may be completely preempted (and subject to removal) if it asserts a state law cause of action to enforce the terms of an ERISA plan and that suit conflicts with or duplicates the federal cause of action provided in ERISA's enforcement provision….” Id. at 800. Stated alternatively, “any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted.” Hogan v. Jacobson, 823 F.3d 872, 879 (6th Cir. 2016) (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004)). That in

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turn means that any suit asserting such a claim constitutes an action “arising under” federal law, and is thus subject to removal under 28 U.S.C. § 1441.

Here, BCBS argues that complete ERISA preemption applies based on the Spreadsheet the Ridge sent BCBS and later referenced in its Complaint. Specifically, BCBS points to paragraph 33 in the Complaint, in which the Ridge states: “on September 24, 2020, The Ridge sent [BCBS] a spreadsheet containing a listing of claims which have not been paid.” (Doc. 2, #417, ¶ 33). According to BCBS, the “spreadsheet identifies claims related to at least 9 individuals insured by ERISA plans.” (Opp., Doc. 17, #508). And based on that fact, BCBS argues that “[the Ridge's] own document confirms that ERISA … claims are at issue.” (Id.).

The Ridge counters that BCBS takes the reference to the Spreadsheet in its Complaint out of context. The Ridge points out that its Complaint specifically disclaims any unpaid BCs under ERISA-plans at least five separate times. (Reply to Opp. (“Reply”), Doc. 18, #523 (citing Compl., Doc. 2, #418, ¶¶ 38, 39, #425, ¶¶ 92, 93, #430, ¶ 129)). The Ridge states that it merely referenced the Spreadsheet to serve as “an example, for the State Court, of the horrible business practices of [BCBS] in failing to respond to regular and routine inquiries from providers regarding the status of claims.” (Reply, Doc. 18, #524). Thus, inclusion of a BC on the Spreadsheet does not mean that the Ridge is asserting a claim based on that BC. The Ridge argues that it has the right, as plaintiff, “to define what claims it is litigating and what claims it is not litigating.” (Id. at #523). And on that front, “ERISA claims are not involved in the State Complaint.” (Id.).

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To determine whether a cause of action is subject to complete ERISA preemption, thus rendering a case removable, the Court applies a two-part test. The removing party first must show that “the plaintiff [is] complaining about a denial of benefits under the terms of [an] ERISA plan.” K.B., 929 F.3d at 800. Second, the removing party must show that “the plaintiff [alleges only] the violation of a legal duty (federal or state) that is dependent on ERISA or on the ERISA plan's terms. No. other independent legal duty [may be] implicated by a defendant's action.” Id. (internal citations omitted). If a state law claim meets these requirements, then under the doctrine of complete preemption, it is “in essence a claim for the recovery of an ERISA plan benefit. Thus, the claim must be subject to ERISA's enforcement scheme in federal court.” Id. at 801 (internal citations and quotation marks omitted).

Applying this test here, the Court finds that BCBS's effort to remove the claim based on ERISA preemption fails at step one. As the removing party, BCBS bears the burden to show that the Ridge is “complaining about a denial of benefits under the terms of [an] ERISA plan.” Id. at 800. And in assessing whether BCBS has met that burden as to the Ridge's claims here, “the allegations of the Complaint must be read as a whole and harmonized to determine whether a plausible claim has been suggested.” Mac v. Blue Cross Blue Shield of Mich., Case No. 16-cv-13532, 2017 WL 2450290 at *9 (E.D. Mich. June 6, 2017) (citing Pegram v. Herdrich, 530 U.S. 211, 230 (2000)).

The problem for BCBS is that the Ridge's Complaint is clear that the Ridge is not asserting a right to recovery for any insurance benefits arising under ERISA

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plans. Indeed, the Complaint expressly says just that at multiple points. (See, e.g., Doc. 2, #418, ¶ 38 (stating that “[t]his litigation involves Non-ERISA Claim Payments due The Ridge by the Defendants”), #418, ¶ 39 (stating that “this lawsuit seeks to recover benefits due to The Ridge under the terms of those BCBS health plans which were not governed by ERISA”), #430, ¶ 129 (“[t]his cause of action seeks to recover benefits due to The Ridge under the terms of those BCBS plans which were not governed by ERISA, to enforce rights under the terms of the plans, and/or to clarify rights to future benefits...