Healthspring Life & Health Ins. Co. v. Tex. Health Mgmt. LLC

HEALTHSPRING LIFE & HEALTH INSURANCE COMPANY, INC. v. TEXAS HEALTH MANAGEMENT LLC

Civil Action No. 4:18-CV-242

United States District Court EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

June 25, 2018

Judge Mazzant

MEMORANDUM OPINION AND ORDER

Pending before the Court is Plaintiff HealthSpring Life & Health Insurance Company, Inc.'s ("HealthSpring") Emergency Motion to Remand (Dkt. #6). After reviewing the relevant pleadings and motion, the Court finds the motion should be granted.

BACKGROUND

HealthSpring is a Texas corporation that offers "Medicare Advantage Plans."¹ In May 2013, HealthSpring and Defendant Texas Health Management, LLC ("THM") entered into an agreement for THM to provide in-home medical services to HealthSpring's Medicare Advantage Members in Texas. In pertinent part, the agreement required THM to provide HealthSpring with completed 360 Comprehensive Assessments Forms ("360 Forms"), which contained important medical information regarding HealthSpring's Medicare Advantage Members.

On January 30, 2017, THM submitted a demand for arbitration ("Arbitration Demand"), which, among other things, sought fees allegedly owed to them for services THM provided to HealthSpring. Additionally, THM submitted an application for emergency measures of protection, which sought an equitable decree ordering HealthSpring to pay the invoices. The emergency arbitrator declined to award THM such emergency relief and referred the matter to a panel of three arbitrators (the "Tribunal") for further proceedings. On February 21, 2017, THM amended its original Arbitration Demand to include, in pertinent part, a claim under Section 2 of the Sherman Act.

During discovery, in connection with its Sherman Act claim, THM sought copies of certain contracts between HealthSpring and THM's competitors. On June 16, 2017, the Discovery Master and Chair of the Tribunal ordered HealthSpring to produce such contracts, but allowed HealthSpring the ability to redact "commercially sensitive terms." As such, HealthSpring produced such contracts in redacted form. On August 7, 2017, HealthSpring requested leave to file a motion for summary disposition on THM's Sherman Act claim. In response to HealthSpring's request, THM implored the Tribunal to reconsider its ruling that allowed HealthSpring to produce the subject contracts in redacted form. The Tribunal, declining to compel HealthSpring to produce the contacts in unredacted form, set an evidentiary hearing for THM to produce evidence in support of its Sherman Act claim. Prior to the hearing, THM withdrew its Sherman Act claim because it did not believe, with the evidence available, it could satisfy its burden of proof.

Between October and November 2017, the Tribunal held several evidentiary hearings on the remaining claims. Throughout this time, HealthSpring requested the Tribunal to enter an interim order requiring THM to turn over unreturned 360 Forms in THM's possession. On December 14, 2017, the Tribunal issued an order ("Order No. 6") requiring THM to return all undelivered 360 Forms to HealthSpring. Due to THM's failure to comply with the order, on January 9, 2018, HealthSpring filed a Petition to Confirm Arbitration Order and for Injunctive Relief, in addition to, an Application for Temporary Restraining Order and Temporary Injunction to Enforce Arbitration Order in the 219th Judicial District Court of Collin County, Texas.

On January 12, 2018, the state district court granted a temporary restraining order ("TRO") against THM and ordered THM to comply with the Tribunal's Order No. 6. On January 26, 2018, the state district court converted the TRO into a temporary injunction and confirmed Order No. 6. THM ultimately failed to comply with the order. On March 14, 2018, the Tribunal rendered its Final Award, which denied all of THM's claims against HealthSpring. On March 20, 2018, HealthSpring filed an Motion to File Under Seal requesting that the state district court file the Tribunal's Final Award under seal.

On April 6, 2018, THM filed its Notice of Removal on the basis of federal question jurisdiction (Dkt. #1). On April 11, 2018, HealthSpring filed an Emergency Motion to Remand² (Dkt. #6). On April 24, 2018, THM filed its response (Dkt. #9). On May 1, 2018, HealthSpring filed its reply (Dkt. #10).

LEGAL STANDARD

"Federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute." Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). "Only state court actions that originally could have been filed in federal court may be removed to federal court by the defendant." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (citing 28 U.S.C. § 1441(a)). "In an action that has been removed to federal court, a district court is required to remand the case to state court if, at any time before final judgment, it determines that it lacks subject matter jurisdiction." Humphrey v. Tex. Gas Serv., No. 1:14-CV-485, 2014 WL 12687831, at *2 (E.D. Tex. Dec. 11, 2014) (citations omitted). The Court "must presume that a suit lies outside [its] limited jurisdiction," Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001), and "[a]ny ambiguities are construed against removal and in favor of remand to state court." Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013) (citing Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)). "When considering a motion to remand, the removing party bears the burden of showing that federal jurisdiction exists and that removal was proper." Humphrey, 2014 WL 12687831, at *2 (quoting Manguno, 276 F.3d at 723).

ANALYSIS

HealthSpring contends that remand is warranted for two reasons. First, THM untimely filed it notice of removal, and second, the Court lacks subject matter jurisdiction. THM responds that it timely filed its notice of removal and that subject matter jurisdiction exists. The Court addresses each argument in turn.

I. Timeliness

HealthSpring argues that THM's Notice of Removal, filed on April 6, 2018, is untimely. Specifically, HealthSpring avers that its Petition to Confirm Arbitration Order and for Injunctive Relief, filed on January 9, 2018, triggered the thirty-day period for removal. As such, HealthSpring contends that February 8, 2018, constituted the deadline for THM to file its notice of removal. Conversely, THM asserts that it timely filed its Notice of Removal because the thirty-day time period did not start until March 20, 2018, when HealthSpring filed its Motion to File Under Seal. Accordingly, THM claims that because it filed its notice of removal on April 6, 2018, within thirty days of HealthSpring's Motion to File Under Seal, it timely removed the case.

The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

...

if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

28 U.S.C. § 1446(b). In other words,

[I]f the initial pleading sets forth a claim that triggers the removal clock, the defendant must file notice of removal within thirty days of receiving it. If the initial pleading did not trigger the thirty-day removal clock, a notice of removal must be filed within thirty days of the defendant's receipt of a document from which it may ascertain that the case is, or has become, removable.

Mumfrey, 719 F.3d at 397-98.

HealthSpring contends that its initial pleading—Petition to Confirm Arbitration Order and for Injunctive Relief—triggered the thirty-day removal clock. THM responds that a subsequent document—HealthSpring's Motion to File Under Seal—initiated the thirty-day deadline. A case may be removed from state court to federal court when a plaintiff's petition alleges a claim "arising under" federal law. See 28 U.S.C. § 1441; Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6 (2003). Generally, "[t]he presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, 482 U.S. at 392. Here, HealthSpring's initial pleading—Petition to Confirm Arbitration Order and for Injunctive Relief—does not assert any federal claims or even reference federal law. As such, HealthSpring's initial pleading did not activate the thirty-day removal period.

Under 28 U.S.C. § 1446(b), where the original complaint does not present grounds for removal, a defendant may later remove the case to federal court after receipt of "an amended pleading, motion order or other paper from which it may first be ascertained that the case is one which is or has become removable." As explained above, removal based on federal question jurisdiction is determined by reference to the well-pleaded complaint. "Under limited circumstances, courts have looked to 'other paper' to establish federal question jurisdiction, such as to clarify that a plaintiff's state law claim is one that would be preempted by federal law." Eggert v. Britton, 223 F. App'x 394, 397 (5th Cir. 2007). Thus, to establish federal question jurisdiction, the "other paper" "must clarify the federal nature of an existing claim, and not relate to a putative claim that has not yet been [pleaded]." O'Keefe v. State Farm...