Montefiore Medical Center v. Teamsters Local 272
642 F.3d 321
| 2d Cir. | 2011Background
- Montefiore Medical Center provided services to Fund beneficiaries from May 2003 to August 2008.
- The Fund is an ERISA-governed health benefit plan funded by employer contributions.
- Montefiore was an in-network provider via PPO contracts with Horizon (2003–2007) and MagnaCare (2007–2009).
- Montefiore and PPOs contracted to reimburse at discounted rates; the Plan describes benefits and claim procedures but not reimbursement rates.
- Montefiore sued in state court for over $1 million; claim defects included state-law breach of contract and unjust enrichment, later removed to federal court as ERISA-preempted.
- The district court held Montefiore had ERISA-assigned standing and some claims were colorable for benefits; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Montefiore had ERISA §502(a)(1)(B) standing. | Montefiore is an assignee of beneficiaries’ ERISA rights. | Only plan participants/beneficiaries may sue under §502(a)(1)(B). | Yes; Montefiore qualifies as an assignee of benefits. |
| Whether the assignments were valid. | Assignments were valid because beneficiaries expressly assigned rights on reimbursement forms. | Sewell dicta suggested possible nullity of assignments for in-network providers. | Valid assignments may be made to provider-assignees; assignments here were effective. |
| Whether Montefiore's claims are colorable claims for benefits under §502(a)(1)(B). | Claims concern the right to payment under the Plan, not merely computation of payment. | Some claims involve only the amount or method of payment, not benefits. | At least some claims are colorable claims for benefits under §502(a)(1)(B). |
| Whether there is an independent legal duty defeats preemption under Davila Prong Two. | Verbal pre-approval calls created independent quasi-contract duties. | Pre-approval was required by the Plan, intertwined with Plan interpretation. | No independent duty; pre-approval was Plan-dependent and not separate. |
| Whether the remaining state-law claims fall within supplemental jurisdiction. | Non-ERISA state claims may accompany federal preempted claims. | If preemption exists, supplemental jurisdiction may apply only to related claims. | Yes; remaining claims share a common nucleus of operative fact and qualify for supplemental jurisdiction. |
Key Cases Cited
- Davila v. Broadspire Services, Inc., 542 U.S. 200 (U.S. 2004) (two-prong test for complete preemption under ERISA §502(a)(1)(B))
- Simon v. General Electric Co., 263 F.3d 176 (2d Cir. 2001) (healthcare providers may sue under §502(a)(1)(B) when beneficiaries assign rights)
- Pascack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393 (3d Cir. 2004) (assignment of ERISA rights to providers; preemption context)
- Lone Star OB/GYN Assocs. v. Aetna Health Inc., 579 F.3d 525 (5th Cir. 2009) (distinguishing 'right to payment' vs. 'amount of payment' claims under ERISA)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (U.S. 1989) (establishes the colorable claim concept under §502(a)(1)(B))