Montefiore Medical Center v. Local 272 Welfare Fund, 1:14-cv-10229

Background

Montefiore Medical Center provided pre-certified urgent care to members of Local 272 Welfare Fund after leaving the Fund’s in‑network panel; patients assigned Montefiore the right to reimbursement for services.
Montefiore alleges the Fund underpaid or failed to pay urgent care claims, reimbursing only small fractions or not at all, and failed to provide adequate ERISA denial notices and timely adjudication.
Montefiore sued as assignee under ERISA § 502(a)(1)(B) for benefits and under § 502(a)(3) for injunctive and other equitable relief.
The Fund moved to dismiss the § 502(a)(3) claim for lack of jurisdiction (Rule 12(b)(1)), arguing Montefiore lacks statutory standing to seek equitable relief; alternatively it argued equitable relief is unavailable because damages suffice (Rule 12(b)(6)).
The assignment signed by patients conveyed rights to “monies and/or benefits … to cover the costs of care,” but did not expressly assign the right to seek injunctive or other equitable relief.
The Magistrate Judge recommended dismissal of the second cause of action for lack of jurisdiction because the assignments did not transfer rights to equitable relief and Montefiore otherwise lacks § 502(a)(3) standing.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Montefiore has standing under ERISA § 502(a)(3) to seek injunctive relief as assignee of beneficiaries	Montefiore is the assignee of beneficiaries’ ERISA claims and thus can pursue equitable relief on their behalf	Assignments only transferred rights to payment (monies/benefits); assignee is not a participant, beneficiary, or fiduciary entitled to § 502(a)(3) relief	Dismissed for lack of jurisdiction: assignments conveyed only rights to payment, not to seek equitable relief under § 502(a)(3)
Whether Montefiore can seek an injunction to alter Fund’s future conduct with respect to Montefiore’s own claims	Montefiore sought an injunction to prevent future underpayment and delays, reducing need for future litigation	Injunction would try to enforce rights unique to Montefiore (not derivative of beneficiaries) and cannot bind rights of hypothetical future beneficiaries until those beneficiaries receive care and assign rights	Denied: Montefiore cannot obtain prospective injunctions enforcing non‑derivative rights or rights of hypothetical future patients
Whether court needed to resolve alternative Rule 12(b)(6) argument that damages preclude equitable relief	Montefiore contends injunctive relief is necessary to avoid repeated litigation	Fund argued monetary damages under § 502(a)(1)(B) preclude equitable relief under § 502(a)(3)	Court did not reach merits of 12(b)(6) claim as lack of § 502(a)(3) standing was dispositive; noted § 502(a)(1)(B) vs § 502(a)(3) analysis would be premature
Whether the court may consider assignment language outside the complaint on a Rule 12(b)(1) motion	Montefiore argued jurisdictional facts in the complaint must be accepted as true	Defendants submitted the assignment relied upon by plaintiff; court may consider extrinsic materials on jurisdictional challenge	Court considered the assignment and construed it under contract principles in deciding standing

Key Cases Cited

Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321 (2d Cir.) (assignee providers may sue for benefits in narrow circumstances)
Rojas v. Cigna Health & Life Ins. Co., 793 F.3d 253 (2d Cir.) (assignment of only payment rights does not transfer right to equitable relief)
Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1 (ERISA’s § 502 remedial provisions are exclusive and limit who may sue)
N.Y. State Psychiatric Assoc., Inc. v. UnitedHealth Grp., 798 F.3d 125 (2d Cir.) (district courts must analyze both § 502(a)(1)(B) and § 502(a)(3) before deciding availability of equitable relief)
Makarova v. United States, 201 F.3d 110 (2d Cir.) (standard for Rule 12(b)(1) dismissal)
Banque Arabe et Internationale D’Investissement v. Maryland Nat. Bank, 57 F.3d 146 (2d Cir.) (questions of assignment construed as contract interpretation)