Plastic Surgery Group, P.C. v. United Healthcare Insurance Co.
64 F. Supp. 3d 459
E.D.N.Y2014Background
- Plaintiff medical practice provided services to Jane Doe on two dates and assigned benefits to Plaintiff.
- Jane Doe was insured through United under the Plan administered by American Airlines.
- United initially paid but later claimed overpayment and began withholding payments for other patients.
- The Plan governs medical necessity and permits withholding overpayments; Plaintiff alleges entitlement to payment.
- Plaintiff filed state-court action asserting NY law claims; Defendant removed to federal court.
- Court addresses removal, ERISA preemption, and Defendant United's status and potential amendments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ERISA preemption and removability of claims | Plaintiff argues NY-law claims fall under ERISA §502(a)(1)(B) | United argues claims are completely preempted by ERISA | Yes; claims completely preempted, remand denied |
| Proper defendant under ERISA §502(a)(1)(B) | Plaintiff argues could sue plan, administrator, or trustees | United is not the designated administrator or trustee | No; United not proper under §502(a)(1)(B) |
| Availability of §502(a)(3) or §503 relief | Seeks equitable relief for denial of benefits | Relief available under §502(a)(1)(B) against proper party | Not applicable; §502(a)(1)(B) provides adequate relief; equitable relief denied against United |
| Leave to amend to add proper party | Amendment should add plan/administrators/trustees | Amendment appropriate to cure improper party | Leave to amend granted to add proper party; United removed from caption |
Key Cases Cited
- Davila v. Active Care Corp., 542 U.S. 200 (U.S. 2004) (complete preemption creates federal question where ERISA §502(a)(1)(B) applies)
- Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321 (2d Cir. 2011) (two-prong Davila test for ERISA preemption)
- Arditi v. Lighthouse Int’l, 676 F.3d 294 (2d Cir. 2012) (requires Davila prongs to assess preemption scope)
- Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006) (equitable relief not appropriate where §502(a)(1)(B) remedy exists)
- Crocco v. Xerox Corp., 137 F.3d 105 (2d Cir. 1998) (proper defendant under §502(a)(1)(B) is plan/administrator/trustees)
- New York State Psychiatric Ass’n, Inc. v. UnitedHealth Grp., 980 F.Supp.2d 527 (S.D.N.Y. 2013) (treatment of plan administrator vs. insurer as proper ERISA defendant)