322 F. Supp. 3d 1273
S.D. Fla.2018Background
- Plaintiffs (assignees of FHCP, HFAP, IMCG) sued Liberty Mutual under the Medicare Secondary Payer Act (MSPA), seeking double damages for alleged failure to reimburse conditional payments.
- Plaintiffs rely on boilerplate recovery and assignment documents (substantially identical to documents used in related suits) to establish standing as assignees of those entities.
- Defendant moved to dismiss for lack of subject matter jurisdiction (lack of Article III standing) and failure to state a claim; the court addressed jurisdictional defects only.
- The court found the original plaintiff, MSPA Claims, lacked standing when suit was filed because FHCP’s assignment to La Ley was repudiated by Florida’s receiver and the La Ley agreement required client approval of assignments.
- The court also found Plaintiffs failed to allege that any of the purported assignors (FHCP, HFAP, IMCG) fit within the limited classes the Eleventh Circuit recognizes as having MSPA standing (MAO, Medicare beneficiary, or direct health-care provider).
- Because standing did not exist at filing and could not be cured in light of repeated prior amendments, the action was dismissed with prejudice for lack of subject matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff(s) have Article III standing to sue under §1395y(b)(3)(A) | Plaintiffs claim they acquired enforceable rights via assignments from FHCP, HFAP, IMCG and thus may sue as assignees | Assignments are invalid/unenforceable (no required client approval; some assignments repudiated/terminated); original plaintiff lacked standing at filing and cannot cure after filing | Court: No standing; dismissal for lack of subject-matter jurisdiction (with prejudice) |
| Whether MSPA authorizes any private entity to sue (scope of who may bring §1395y(b)(3)(A) claims) | Plaintiffs argue they may sue as assignees of entities that paid conditional payments | Defendant: MSPA permits suit only by MAOs, beneficiaries, or direct providers as interpreted by Eleventh Circuit | Court: Adopts Eleventh Circuit rule — only MAO, Medicare beneficiary, or direct health-care provider have standing under MSPA |
| Validity of assignment chain (FHCP → La Ley → MSPA Claims) | Plaintiffs contend the chain conveyed rights to MSPA Claims | Defendant points to contract term requiring client approval and to receiver’s repudiation and communications showing no approval | Court: Assignment chain invalid; MSPA Claims lacked standing at filing |
| Whether Plaintiffs can amend to cure standing defects after filing | Plaintiffs added parties and amended complaint to attempt to cure | Defendant: Standing must exist at filing; cannot be created afterward; prior amendments already failed to cure | Court: Standing must exist at filing; amendments do not cure absence of standing; dismissal with prejudice |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing elements and requirement that plaintiff bear burden of proof on jurisdictional facts)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (clarifies injury-in-fact requirement for Article III standing)
- Humana Med. Plan, Inc. v. Western Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016) (recognizing MAOs have MSPA standing)
- MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351 (11th Cir. 2016) (background on MSPA and limits on private suits)
- McElmurray v. Consolidated Government of Augusta–Richmond County, 501 F.3d 1244 (11th Cir. 2007) (distinguishing facial and factual 12(b)(1) attacks on jurisdiction)