557 F. App'x 659
9th Cir.2014Background
- Dr. Hooman Melamed (and his practice) sued Blue Cross/Anthem (WellPoint defendants) in California state court alleging systematic underpayment as an out-of-network provider.
- Melamed had voluntarily dismissed two prior lawsuits raising substantially similar claims against the same defendants.
- WellPoint removed the third-filed state action to federal court after showing some patients were covered by ERISA plans and at least one claim was completely preempted by ERISA.
- The district court found removal proper under ERISA complete-preemption and dismissed Melamed’s complaint with prejudice under Rule 41(a)(1)(B)’s two-dismissal rule.
- Melamed appealed both the propriety of removal and the dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Melamed’s breach-of-implied-contract claim is completely preempted by ERISA | Melamed contends his claims are state-law and not federal; relies on Marin to argue non-preemption | WellPoint argues Melamed seeks reimbursement that depends on ERISA plan terms and thus is completely preempted | Court: Claim is completely preempted under Cleghorn because Melamed seeks benefits owed under ERISA plans; removal proper |
| Whether presence of some non-ERISA claims prevents federal removal | Melamed argues not all underlying medical claims are ERISA-governed, so removal is improper | WellPoint argues if any claim is completely preempted, the case may be removed despite other non-preempted claims | Court: Removal proper; individual preempted claim suffices (Fossen) |
| Whether Marin controls to avoid preemption | Melamed relies on Marin (hospital oral contract) to distinguish his claim | WellPoint distinguishes Marin: here Melamed expressly alleges entitlement as third-party beneficiary of ERISA plans | Court: Marin inapplicable; Cleghorn governs, so preemption applies |
| Whether dismissal with prejudice under Rule 41(a)(1)(B) was proper (two-dismissal rule) | Melamed argues prior dismissals and inclusion of some post-dismissal claims avoid preclusion; claims postdating second dismissal may not have been barred | WellPoint argues current claims are substantially the same as previously dismissed claims; second dismissal operates as adjudication on the merits | Court: Dismissal with prejudice proper; second voluntary dismissals operated as adjudication; post-dated treatment claims were within scope or arose before dismissal |
Key Cases Cited
- Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941 (9th Cir. 2009) (oral-contract hospital claim not preempted where recovery was not based on ERISA plan benefits)
- Cleghorn v. Blue Shield of Cal., 408 F.3d 1222 (9th Cir. 2005) (state claim completely preempted where recovery depends on ERISA-regulated plan benefits)
- Fossen v. Blue Cross & Blue Shield of Mont., Inc., 660 F.3d 1102 (9th Cir. 2011) (if an individual claim is completely preempted, existence of other nonpreempted claims does not defeat removal)
- Costantini v. Trans World Airlines, 681 F.2d 1199 (9th Cir. 1982) (Rule 41 two-dismissal rule bars relitigation where successive voluntary dismissals involve the same claims)