Star Multi Care Services, Inc. v. Empire Blue Cross Blue Shield
6 F. Supp. 3d 275
E.D.N.Y2014Background
- Star filed a breach-of-contract action in New York state court for home health care services provided to Ms. Sarris, alleging Empire authorized the services.
- Empire removed the case to federal court, asserting ERISA preemption; Sarris and related defendant had not been served at removal.
- Star asserted nail-and-mail service; service on the Sarris defendants became complete on March 7, 2013.
- The Plan at issue is the Verizon Medical Expense Plan for New York and New England, an ERISA health plan with Ms. Sarris as a participant; Star allegedly assigned its rights to claim benefits.
- Star seeks over $70,000 in services rendered March 14, 2012 to November 1, 2012; Star is an out-of-network provider with no independent contract with Empire.
- The court denied remand, granted Empire’s Rule 12(b)(6) dismissal as to ERISA, and remanded remaining state-law claims against the Sarris defendants to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal violated the unanimity rule | Sarris defendants were not served at removal. | Unanimity not required for later-served defendants; service completed after removal. | Remand denied; unanimity satisfied because later-served defendants need not consent. |
| Whether the breach-of-contract claim is preempted by ERISA | Claim independent of ERISA; not within § 502(a)(1)(B). | Claim is within ERISA § 502(a)(1)(B) and preempted. | Preempted; ERISA completely preempts the state-law claim; remand denied on this ground. |
| Whether ERISA preemption is express as well as complete | Only implied preemption; could proceed under state law. | Plan denial of benefits relates to ERISA, so express preemption applies. | Express preemption also applies; claim is barred under ERISA. |
| Whether ERISA claim could proceed against Empire as a defendant | Empire can be liable under ERISA despite not being the plan administrator. | ERISA § 502(a)(1)(B) claims must be against the plan, administrator, or trustees; Empire is not proper. | Empire cannot be sued under ERISA § 502(a)(1)(B); claim dismissed. |
| Whether exhaustion of administrative remedies is satisfied | Exhaustion not required or alleged; remedies exhausted implicitly. | Exhaustion is prerequisite and not pleaded; must dismiss if not shown. | ERISA claim dismissed for failure to plead exhaustion. |
Key Cases Cited
- Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321 (2d Cir.2011) (two-prong test for complete preemption under Davila; preemption if colorable claim and no independent duty)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) (ERISA complete preemption framework and enforcement scheme)
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (U.S. 1987) (ERISA preemption scope; comprehensive enforcement scheme)
- Metro. Life Ins. Co. v. Mass., 471 U.S. 724 (U.S. 1985) (relation to ERISA preemption and uniform regulatory regime)
- Franklin H. Williams Ins. Trust v. Travelers Ins. Co., 50 F.3d 144 (2d Cir.1995) (broad interpretation of ERISA preemption relating to plans)