Valley Health System, LLC v. Aetna Health, Inc., 2:15-cv-01457

Background

Valley Health, a Nevada hospital system, had an in-network provider contract with Aetna from April 15, 2013 to April 14, 2014; Aetna could use discounted contract rates for up to 60 days after termination.
After contract termination, Valley Health continued treating patients covered by Aetna or whose claims Aetna processed; Valley Health alleges Aetna authorized treatment but paid only amounts based on plan coverage or Aetna’s pricing.
Valley Health sued raising multiple state-law contract and tort claims (including breach of implied-in-law contract for emergency and post-stabilization services, recovery for services rendered, intentional and negligent interference) and ERISA claims.
Aetna moved to dismiss five state-law counts (counts 3, 4, 7, 8, 9) on grounds including ERISA preemption and failure to plead required elements for quasi-contract/tort claims.
The court dismissed all five counts without prejudice: count 9 (negligent interference) as not recognized under Nevada law; counts 3 and 4 (implied-in-law contract/unjust enrichment) and count 7 (quantum meruit) for failing to allege Aetna received an independent benefit beyond what members received; and count 8 (intentional interference) for failing to plead a prospective third-party relationship Aetna could have interfered with.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Nevada recognizes negligent interference with prospective economic advantage	Valley Health alleged negligent interference (count 9).	Aetna: Nevada does not recognize the claim.	Dismissed — Nevada does not recognize the cause of action.
Whether state-law claims are preempted by ERISA §514(a)	Valley Health: claims do not "relate to" ERISA plans and seek amounts above plan coverage; thus not preempted.	Aetna: claims "relate to" ERISA plans and are preempted.	Not preempted — court found claims did not alter plan structure/administration and sought recovery beyond plan benefits.
Whether unjust enrichment / implied-in-law contract for emergency/post-stabilization services is pleaded	Valley Health: Aetna implicitly or explicitly authorized services and was unjustly enriched by receiving services without paying fair value.	Aetna: any benefit flowed to patients, not Aetna; Valley Health alleges no enrichment beyond plan-covered amounts.	Dismissed — Valley Health failed to allege Aetna received a benefit independent of members or unpaid amounts beyond member coverage.
Whether quantum meruit (recovery for services rendered) is pleaded	Valley Health: Aetna requested services and then reimbursed at rates below billed charges; Valley Health seeks reasonable value.	Aetna: it is only obliged to pay up to members' coverage; no allegation Aetna agreed to pay above that.	Dismissed — no allegation Aetna expected to pay amounts beyond members’ coverage or that its rates were less than reasonable value.
Whether intentional interference with prospective economic advantage is pleaded	Valley Health: Aetna misrepresented rates to other payors or otherwise interfered with Valley Health’s prospective recovery.	Aetna: either it acted as agent for other payors (cannot interfere with its own contract) or there was no prospective third-party contract; Valley Health suffered no cognizable harm.	Dismissed — Valley Health failed to allege a prospective third-party contractual relationship that Aetna could have intentionally interfered with.

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (standards for pleading plausibility)
Ashcroft v. Iqbal, 556 U.S. 662 (two-step Iqbal/Twombly pleading framework)
Starr v. Baca, 652 F.3d 1202 (9th Cir.) (Ninth Circuit post-Iqbal pleading guidance)
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (ERISA preemption principle)
Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316 (consider ERISA objectives/effect for §514 preemption)
Arizona State Carpenters Pension Trust Fund v. Citibank, 125 F.3d 715 (9th Cir.) (three-category framework for ERISA §514 preemption)
Meadows v. Employers Health Ins., 47 F.3d 1006 (9th Cir.) (provider claims independent from beneficiary assignments not necessarily preempted)
Kennedy v. Carriage Cemetery Servs., 727 F. Supp. 2d 925 (Nev. 2010) (elements for unjust enrichment and intentional interference under Nevada law)
Klein v. Freedom Strategic Partners, LLC, 595 F. Supp. 2d 1152 (D. Nev. 2009) (a party cannot interfere with its own contractual relationship)
In re Estate of Mumford, 173 Cal. 511 (Cal.) (quantum meruit requires mutual expectation of compensation)