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Progressive Healthcare Solutions LLC v. United Healthcare Services Inc.

United States District Court, W.D. Louisiana, Lafayette Division

January 4, 2018

Progressive Healthcare Solutions LLC
United Healthcare Services Inc et al



         Before the undersigned on referral from the district judge is a Motion To Remand filed by Plaintiff, Progressive Healthcare Solutions LLC (“Progressive”), [Rec. Doc. 5], a Response in Opposition filed by Defendant, United Healthcare Services, Inc. (“United”) [Rec. Doc. 10], and Progressive's Reply thereto [Rec. Doc. 11]. For the reasons that follow, the undersigned recommends that the Motion be granted.

         I. Background

         Progressive is a vendor of medical hardware which is surgically implanted to address a patient's spinal instability and pain. Plaintiff's state court Petition alleges that Dr. Illyas Munshi, a neurosurgeon, determined in December 2016, that his patient, Brian Esley, required a spinal discectomy procedure which included implanting medical hardware provided by Progressive. R. 1-3, p. 4. Prior to Easley's surgery, Dr. Munshi's office contacted United and described the planned surgery and implantation of the Progressive medical hardware. Dr. Munshi's office received written confirmation that Easley had coverage under his United policy and that United approved the recommended surgery as well as the implantation of Progressive's hardware. Id., R. 5-2. Dr. Munshi performed the recommended surgery on Easly on December 12, 2016, and Progressive submitted invoices to United in the amount of $49, 425.00 for the medical hardware surgically implanted in Easley. R. 1-3, p. 4, ¶¶ 4-6; R. 10-1, Declaration of Fairley .

         United initially denied payment to Progressive for a variety of reasons claiming: (1) an authorization number United had given Progressive had been “cancelled;” (2) Progressive's claim was “under review;” (3) the “code” under which Progressive's claims was submitted had changed; and (4) Progressive was the wrong, “place of service.” Id. at pp. 4-5. After additional months of “review” of Progressive's invoice for the medical hardware United had authorized prior to surgery, United approved payment of Progressive's invoice in July 2017. Id. at p. 5.

         Progressive requested that United send the payment for its medical hardware directly to Progressive. United, however, refused to do so, instead indicating that it would send the payment to Easley. Id. Thereafter, Progressive contacted Easley and informed him that United would send the payment for Progressive's medical plate and screws used in Easley's surgery to him rather than in payment to Progressive. Id. Easley agreed to sign an assignment of the United payment for Progressive's medical hardware and Progressive informed United of same. Id. Despite Easley's assignment of the $49, 425.00 payment to Progressive, Easley did not give Progressive the funds. Instead, he cashed the United check in June 2017, and converted such funds for his own use. Id.

         Progressive filed this action against United and Easley in the Fifteenth Judicial District Court for the Parish of Lafayette, State of Louisiana, on September 25, 2017. R. 1-3. Progressive alleged that Defendants were jointly and severally liable to it for the sum of $49, 425.00, plus interest, costs and attorney's fees. Defendants were served with the Petition and removed the action to this Court on November 7, 2017. R. 1. United filed an answer with affirmative defenses on November 14, 2017. R. 8. Easley has not filed responsive pleadings in the case. Progressive filed this motion to remand on November 9, 2017. R. 5.

         II. The Contentions of the Parties

         In support of its motion to remand, Progressive contends that it has asserted only state-law claims and there is no diversity jurisdiction; therefore, this Court lacks federal question subject matter and removal jurisdiction. United maintains that section 502(a) of ERISA, 29 U.S.C. § 1132(a), is applicable and completely preempts Progressive's claims.

         III. Law and Analysis

         A. Legal Standard-Motion to Remand

         “Federal courts are courts of limited jurisdiction.” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.2001). Furthermore, courts “must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum.” Id. In deciding whether subject matter jurisdiction exists, a court must look to the claims in the state court pleadings as they existed at the time of removal. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.2002). Thus, in the context of actions removed from state court, the removing party bears the burden of demonstrating the federal court's jurisdiction and that removal was proper. See Id. Because the removal statute should be strictly construed in favor of remand, any ambiguities in the state court petition are construed against removal. Id. (citing Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir.2000)).

         B. ERISA Preemption

         Federal district courts have original subject matter jurisdiction over cases “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. “It is long settled law that a cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law.” Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). Congress, however, may choose to completely pre-empt a particular claim in that any civil complaint raising this particular claim shall be considered “federal” in nature. Id. at 63-64. Specific to ERISA, ...

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