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Leet v. Hospital Service District No. 1 of East Baton Rouge Parish

United States District Court, M.D. Louisiana

August 31, 2017




          I. Introduction

         This matter comes before the Court on an issue raised sua sponte relating to the Court's subject matter jurisdiction over Plaintiff Victoria Leet's (“Plaintiff”) claims. On March 21, 2017, the Court held a telephone status conference raising the issue of subject matter jurisdiction, at which time it invited simultaneous briefing on the issue of jurisdiction. (Doc. 119.) On April 12, 2017, Defendant Hospital Service District No. 1 of East Baton Rouge Parish, Louisiana d/b/a Lane Regional Medical Center (“Lane”) filed its brief. (Doc. 122.) On April 13, 2017, Plaintiff filed her brief and Defendant Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana (“BCBSLA”) filed its brief. (Docs. 123 and 124, respectively.) On April 27, 2017, Plaintiff filed a reply memorandum. (Doc. 125.) For the reasons set forth below, the Court holds that it lacks subject matter jurisdiction over this case, and remands it to the 19th Judicial District Court for the Parish of East Baton Rouge of the State of Louisiana for further proceedings.

         II. Background

         This Court expounded in great detail upon the factual background of this case in its prior Ruling on Defendant Alegis Revenue Solution, LLC's (“Alegis”) Rule 12(c) Motion for Judgment on the Pleadings (Doc. 45 at 3-5), [1] and this Ruling incorporates by reference the factual allegations set forth therein. See Leet v. Hosp. Serv. Dist. No. 1 of East Baton Rouge Par., La., 15-811, 2016 WL 3554975 at *1-*2 (M.D. La. June 23, 2016) (deGravelles, J.). The Court will briefly summarize the procedural background relevant to this case.

         On December 10, 2014, Plaintiff filed a class action petition for payment of a thing not due, for damages, for declaratory relief, and for injunctive relief in the 20th Judicial District Court for the Parish of West Feliciana (“20th JDC”). (Doc. 1-1 at 1-15.) The original petition named Lane and Alegis as defendants. (See Id. at 1.) The petition alleged, inter alia, that at some point after receiving treatment at Lane for injuries Plaintiff sustained during a motor vehicle accident, Lane “filed a claim with [BCBSLA], which claim was paid by [BCBSLA] in the amount of $1477.74 with no deductible, no co-pay, and no co-insurance required for said treatment.” (Id. at 3.)

         On January 21, 2015, Plaintiff filed her first amending and supplemental class action petition, which once again named only Lane and Alegis as defendants. (See Id. at 16.) In this second iteration of her petition, Plaintiff reiterated in identical language that BCBSLA paid the $1477.74 in full without seeking contribution from Plaintiff or any other source. (Id. at 18.)

         On October 13, 2015-ten months after Plaintiff originally filed suit and one and a half months before removal to this Court-Plaintiff filed for leave of court to file a second amending and supplemental petition.[2] (Id. at 32.) For the first time, Plaintiff added BCBSLA as a defendant. (See Id. at 34.) This iteration of the petition included more detailed factual allegations that related to Plaintiff's status as an enrollee of a BCBSLA-administered plan, BCBSLA's obligations under the plan, and Lane's status as a contracted health care provider, and its obligations to Plaintiff under its agreement with BCBLSA. (See Id. at 35-36.) In addition to the counts previously alleged against Lane and Alegis, Plaintiff added two additional claims against BCBSLA to her class action petition.

         In her first cause of action against BCBSLA (“Count III”), [3] Plaintiff alleged promise of performance for the breach of Lane's obligations arising out of Plaintiff's plan with BCBSLA and Lane's Member Provider Agreement with BCBSLA. (Id. at 46.) In subsequent briefing addressing subject matter jurisdiction, Plaintiff elaborates that this cause of action is based upon the civilian doctrine of promesse de porte-forte, codified at La. Civ. Code art. 1977, [4] which imposes liability as a result of “BCBSLA's role in providing contracted providers, not due to its role as a claim adjudicator.” (Doc. 125 at 3.) In her second claim against BCBSLA (“Count IV”), Plaintiff alleges detrimental reliance, arguing that in relying on BCBSLA's promise that Lane would perform as agreed in the Member Provider Agreements and Plaintiff's plan, such reliance was to her detriment. (Doc. 1-1 at 47.)

         Importantly, Plaintiff retained the factual allegation that Lane “filed a claim with BCBSLA, which claim was paid by BCBSLA in the amount of $1477.74 with no patient deductible, co-pay, or co-insurance required for said treatment.” (Id. at 36.) As in the previous iterations of her petition, Plaintiff further alleged that “On November 5, 2014, BCBSLA notified [Lane] of its obligations of the Member Provider Agreement to accept the funds paid by BCBSLA to [Lane] in the amount of $1, 477.74, which amount represented the contracted reimbursement rate, and to refund any amounts collected over that amount to [Plaintiff] within 30 days of November 5, 2014.” (Id. at 37.) In none of Plaintiff's petitions did she allege that BCBSLA initially denied coverage for the services she received at Lane. (See generally, id. at 1-53.)

         On December 1, 2015, BCBSLA removed the case to this Court pursuant to 28 U.S.C. §§ 1441(a), 1441(c), and 1446. (See Doc. 1.) As the basis for the Court's subject matter jurisdiction, BCBSLA alleged federal question jurisdiction, as “Plaintiff's claims for class benefits arise under Section 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), and are completely preempted by ERISA.” (Id. at 4 (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987)).)

         On February 15, 2016, Alegis moved for judgment on the pleadings pursuant to Rule 12(c), [5] and the Court held a hearing on the issue. (See Docs. 11, 48.) At the close of the hearing, the Court authorized Plaintiff to file a motion to amend her complaint or a motion for reconsideration of the state court ruling sustaining Alegis's peremptory exception of no cause of action. (Doc. 48.) On June 29, 2016-nearly eight months following removal-Plaintiff moved for leave of court to file her third amending and supplemental complaint and motion to reconsider the state court ruling. (Doc. 47.) The motion to amend and supplement the complaint was limited to Plaintiff's attempts “to further clarify the allegations of the liability of [Alegis] for violations of the Anti-Balance Billing Act” and sought reconsideration of the state court ruling that previously granted Alegis's peremptory exception of no cause of action. (Id. at 3.) It made no attempt to expand or expound upon the claims relating to BSBSLA. By way of an Order, the Court held that because “the proposed complaint is predicated upon this Court reconsidering the state court[']s prior ruling, this Court will deny without prejudice that part of the Motion asking for leave to file an amended complaint and construe it entirely as a motion [for] reconsideration” and noted that if the motion for reconsideration was granted, Plaintiff could refile her motion to amend the complaint. (Doc. 48.) On December 19, 2016, the Court denied Plaintiff's motion for reconsideration and denied as moot Plaintiff's motion to amend the complaint. (See Doc. 85.) Plaintiff has made no subsequent attempts to amend her complaint.

         On January 11, 2017, this Court held a class certification hearing. (See Doc. 94.) As the Court was in the process of evaluating the merits of the motion for class certification, a question arose in the Court's mind as to whether ERISA completely preempted any of Plaintiff's claims (and thus whether this Court can exercise subject matter jurisdiction over this case). On March 21, 2017, the Court held a telephone status conference to address the issue of subject matter jurisdiction and invited briefing on the matter. The parties submitted their respective briefs, and Plaintiff filed a reply. (See Docs. 122-125.)

         III. Discussion

         a. Standard

         i. Remand Standard

         Pursuant to 28 U.S.C. § 1331, this court has original jurisdiction “of all civil actions arising under the Constitution, laws, or treaties of the United States.” “It is axiomatic that the federal courts have limited subject matter jurisdiction and cannot entertain cases unless authorized by the Constitution and legislation.” Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996) (internal citation omitted).

         The removing party bears the burden of showing that federal jurisdiction exists and that removal was proper. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). A defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). Subject matter jurisdiction must exist at the time of removal to federal court, based on the facts and allegations contained in the complaint. St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (“jurisdictional facts must be judged as of the time the complaint is filed”). “As ‘the effect of removal is to deprive the state court of an action properly before it, removal raises significant federalism concerns.' ” Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007) (quoting Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 365-66 (5th Cir. 1995)).The removal statute, 28 U.S.C. § 1441, is strictly construed and any doubt as to the propriety of removal should be resolved in favor of remand. Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007); Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (“Any ambiguities are construed against removal because the removal statute should be strictly construed in favor of remand.”)

         28 U.S.C. 1447(c), which governs the motion to remand, provides “[i]f at any time before the final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” A lack of subject matter jurisdiction may be raised at any time, and can be raised by the Court sua sponte. Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 336 (5th Cir. 1999) (citing, e.g., Free v. Abbott Labs, Inc., 164 F.3d 270, 272 (1999); Bank One Tex., N.A. v. United States, 157 F.3d 397, 399 (5th Cir. 1998)).

         ii. Federal Question Jurisdiction Under ERISA

         According to the well-pleaded complaint rule, “a suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that Constitution. It is not enough that the plaintiff alleges some anticipated defense to his cause of action, and asserts that the defense is invalidated by some provision of the Constitution of the United States.” Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908). The plaintiff must directly establish the grounds for federal jurisdiction by expressing the complaint's basis in federal law.

         A “plaintiff is master of his complaint and may generally allege only a state law cause of action even where a federal remedy is also available.” Bernhard v. Whitney Nat'l Bank,523 F.3d 546, 551 (5th Cir. 2008). “Under this ‘well-pleaded complaint' rule, a federal court has original or removal jurisdiction only if a federal question appears on the face of the plaintiff's well-pleaded complaint; ...

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