memorandum and order
Plaintiff Star Multi Care Services, Inc. (“plaintiff’ or “Star”) initiated this action in the Supreme Court of the State of New York, County of Suffolk, on February 12, 2013. The state-court .complaint alleges that defendant Empire Blue Cross Blue Shield (“defendant” or “Empire”) breached a contract to pay for home health care services provided by Star to defendant Demetria Sarris (“Ms. Sarris”). Empire was served with the complaint on February 12, 2013, and removed this action to federal court on March 4, 2013. It appears that the parties dispute whether Ms. Sarris and her agent, Van Sarris (“the Sarrises” or “the Sarris defendants”) had been served on that date, but in any event, they did not affirmatively consent to Em
For the reasons set forth below, plaintiffs motion to remand is denied, and Empire’s motion to dismiss is granted. As a threshold matter, in connection with the motion to remand, plaintiff argues that Empire’s notice of removal is defective because the other defendants did not consent to removal and, thus, the rule of unanimity has been violated. The Court disagrees. It is well settled that one of the exceptions to the unanimity rule is where the non joining defendants had not been served at the time the action was removed and, here, it is conceded that service on the Sarris defendants had not been completed at the time Empire had filed its notice of removal on March 4, 2013. To the extent plaintiff argues that, after removal and after the Sarris defendants were served, defendants still had an affirmative obligation to obtain their consent to removal, there is no support in the removal statute or case authority for that position. Instead, the statute places the burden on the later-served defendants to make a motion to remand within 30 days of service if they do not consent., See 28 U.S.C. §§ 1447(c), 1448. Here, because the later-served defendants chose not to make such a remand motion, plaintiffs motion for remand on this ground is without merit.
In addition, plaintiff argues that remand is warranted because its claim does not arise under ERISA and, thus, the Court lacks subject matter jurisdiction. However, as discussed in detail below, the Court
Finally, given the application of ERISA, it is clear that an ERISA claim cannot proceed against Empire, as an insurer, because an ERISA claim under Section 502(a)(1)(B) can only be asserted against the plan itself, the plan administrator, and the plan trustees. In fact, plaintiff concedes this point. See PL Opp. Mem. At 18 (“Star agrees with Empire’s opening statement to its final argument for dismissal that ‘Plaintiffs ERISA benefit claim cannot proceed forward against Blue Cross.’ ”). Moreover, plaintiff does not dispute Empire’s alternative argument that plaintiff has failed to exhaust the administrative remedies under ERISA. Accordingly, the motion to dismiss is granted as to Empire, and the ease is remanded to state court with respect to the remaining state law claims against the Sarris defendants.
I. Background
A. Factual Background
According to the complaint, plaintiff provided home healthcare services to Ms. Sar-ris from March 14, 2012, to November 1, 2012, the value of which exceeds $70,000.00. (Compl. ¶¶8, 11.) Plaintiff contends that Empire is liable for the value of these services because, as Ms. Sar-ris’s health insurer, it “provided authorization” to plaintiff before plaintiff performed the services. (Id. ¶ 13.) Although the complaint does not state the basis for Empire’s authority, other than to allege that Empire was Ms. Sarris’s health insurer, it appears that, during the relevant time period, Empire was the insurer for the “Verizon Medical Expense Plan for New York and New England” (“the Plan”). (Oluwasanmi Deel. ¶4.) The Plan is a health and welfare benefit plan under ERISA, and Ms. Sarris was a Plan participant. Id.
B. Procedural History
Plaintiff filed its breach-of-contract complaint in the Supreme Court of the State of New York, County of Suffolk, on February
On March 4, 2013, Empire filed its Notice of Removal, contending that the complaint raised federal questions under ERISA. At that time, the Sarris defendants had not consented to the removal, and there is no indication in the parties’ motion papers that they have ever consented, although they have not moved to remand this action to state court. See 28 U.S.C. § 1448 (“This section shall not deprive any defendant upon whom process is served after removal of his right to move to remand the case.”).
On March 7, 2013, service of the state-court complaint was complete on the Sar-rises under N.Y. C.P.L.R. § 308(4), because ten days had passed since the filing of proof of service with the clerk of the court.
On March 27, 2013, plaintiff moved to remand this action to state court, and supplemented its motion on April 26, 2013. On May 6, 2013, Empire opposed plaintiffs remand motion, and moved to dismiss the complaint. On June 6, 2013, plaintiff opposed the motion to dismiss and filed a reply supporting its remand motion. On June 20, 2013, Empire replied in support of its motion to dismiss. The Court heard oral argument on both motions on July 2, 2013. Counsel for the Sarrises appeared at oral argument, but the Sarrises have not otherwise participated in the litigation of these motions.
II. Legal StaNdaeds
The Court first discusses the legal standards governing the motions to remand and dismiss.
A. Motion to Remand
Generally, a case may be removed from state court to federal court “only if it could have originally been commenced in federal court on either the basis of federal question jurisdiction or diversity jurisdiction.” Citibank, N.A. v. Swiatkoski, 395, F.Supp.2d 5, 8 (E.D.N.Y.2005) (citing 28 U.S.C. § 1441(a)); see also 28 U.S.C. § 1441. If a federal district court determines that it lacks subject matter jurisdiction over a case removed from state court, the case must be remanded. 28 U.S.C. § 1447(c). “When a party challenges the removal of an action from state court, the burden falls on the removing party ‘to establish its right to a federal forum by competent proof.’ ”
Furthermore, in cases with multiple defendants, the “rule of unanimity” requires that “ ‘all named defendants over whom the state court acquired jurisdiction must join in the removal petition for removal to be proper.’ ” Sleight v. Ford Motor Co., No. 10 Civ. 3629(BMC),
B. Motion to Dismiss
Motions to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure probe the legal, not the factual, sufficiency of a complaint. See, e.g., Sims v. Artuz,
To survive a motion to dismiss, a complaint must set forth “a plausible set of facts sufficient ‘to raise a right to relief above the speculative level.’ ” Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt. LLC,
Where a motion to dismiss presents itself before the court, a court may examine the following: “(1) facts alleged in the complaint and documents attached to it or incorporated in it by reference, (2) documents ‘integral’ to the complaint and relied upon in it, even if not attached or incorporated by reference, (3) documents or information contained in defendant’s motion papers if plaintiff has knowledge or
III. Discussion
A. Rule of Unanimity
As a threshold matter, plaintiff argues that this case should be remanded because the rule of unanimity is not satisfied, since the Sarris defendants did not consent to removal, either before Empire removed this case or within 30 days after. The Court concludes, however, that Empire was not required to obtain the Sams-es’ consent before removal because, at that time, service was not complete upon the Sarrises in the state-court action. See 28 U.S.C. § 1446(b)(2)(A) (“[A]ll defendants who have been properly joined and served must join in or consent to the removal of the action.”); see also Ortiz v. City of New York, No. 13 Civ. 136(JMF),
Here, the state-law rule is N.Y. C.P.L.R. § 308(4), which states that, when parties must resort to so-called “nail and mail” service, as plaintiff did here, service is complete ten days after the serving party files proof of service with the clerk of the court. According to the facts provided in plaintiffs own memorandum, service was not complete on the Sarrises under New York law until March 7, 2013, three days after Empire’s removal of this case on March 4, 2013. (PI. Mem. at 2.) Therefore, Empire was not required to obtain the Sarrises’ consent before removal.
To the extent plaintiff argues that Empire was required to obtain the Sarrises’ consent after removal, once they had been served, the Court disagrees. There is nothing in the removal statute itself, or in the case authority interpreting the removal statute, that requires the removing defendant to obtain, after removal, the consent of defendants who had not been served at the time of removal. In fact, the removal statute itself address this issue by allowing defendants who were first served after the case had already been removed to make a motion to remand within 30 days of effective date of service if they do not wish to have the action remain in federal court. See 28 U.S.C. §§ 1447(c), 1448. Here, the Sarrises made no such motion. Thus, the Court rejects plaintiffs argument that the failure to obtain the consent of defendants whose service became complete after removal renders the removal defective under the unanimity rule.
Other courts have reached the same conclusion under similar circumstances. For example, in Lewis v. Rego Co.,
As noted above, although Bastían had not been served at the time the removal petition was filed, Bastían was served within the 30-day period after service on the other three defendants. Appellants contend that in such circumstances if Bastían did not join in the petition before the expiration of the 30-day period, the action should have been remanded. Any other rule, appellants argue, would encourage a race to the courthouse, enabling the defendants first served in a case to determine whether it would be removed.
Appellants cite no authority for the rule they espouse, and we agree with the district court that the removal statute contemplates that once a case has been properly removed the subsequent service of additional defendants who do not specifically consent to removal does not require or permit remand on a plaintiffs motion. The statute itself contemplates that after removal process or service may be completed on defendants who had not been served in the state proceeding. The right which the statute gives to such a defendant to move to remand the ease confers no rights upon a plaintiff. 28 U.S.C. § 1448.
Id. at 69 (footnote omitted); see also Schmude v. Sheahan,
B. ERISA Preemption
The motions to remand and dismiss both depend on the question of ERISA preemption, of which there are “two parallel and independent” forms. Wurtz v. Rawlings Co., LLC,
1. Complete Preemption
ERISA was enacted to “ ‘protect ... the interests of participants in employee benefit plans and their beneficiaries’ by setting out substantive regulatory requirements for employee benefit plans and to ‘provid[e] for appropriate remedies, sanc
To provide such uniformity, the statute contains broad preemption provisions, which safeguard the exclusive federal domain of employee benefit plan regulation. See Davila,
A civil action may be brought — (1) by a participant or beneficiary — ... (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.
29 U.S.C. § 1132(a)(l)(13).
The Supreme Court has explained that “the detailed provisions of § 502(a) set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans.” Pilot Life Ins. Co. v. Dedeaux,
For this reason, where a plaintiff brings a state law claim that is “within the scope” of ERISA § 502(a)(1)(B), ERISA’s preemption power will take effect. See Davila,
The test for assessing whether a claim is “within the scope of’ ERISA § 502(a)(1)(B), and therefore completely preempted, consists of two parts:
claims are completely preempted by ERISA if they are (i) brought by “an individual [who] at some point in time, could have brought his claim under ERISA § 502(a)(1)(B),” and (ii) under circumstances in which “there is no other independent legal duty that is implicated by a defendant’s actions.”
Montefiore Med. Ctr. v. Teamsters Local 272,
Additionally, “[t]o avoid potential confusion under the first prong of Davila, [the Second Circuit] has further clarified that the plaintiff must show that: (a) he is the type of party who can bring a claim pursuant to § 502(a)(1)(B) of ERISA; and (b) the actual claim asserted can be construed as a colorable claim for benefits pursuant to § 502(a)(1)(B).” Arditi,
i. Davila Prong One
The Court first addresses whether Star is “the type of party that can bring a claim” under § 502(a)(1)(B); it then considers “whether the actual claim ” at issue constitutes a “colorable claim” for benefits under § 502(a)(1)(B). Montefiore,
a. Type of Party
As previously set forth, § 502(a)(1)(B) clearly provides that a civil action may be brought (1) “by a participant or beneficiary” of (2) an ERISA employee benefit plan. 29 U.S.C. § 1132(a)(1)(B). It is not disputed that the Plan is an employee welfare benefit plan under ERISA. See 29 U.S.C. § 1002(1).
The parties’ primary dispute is whether plaintiffs state breach of contract claim is a “colorable claim” under ERISA, ie., a claim “to recover benefits due” under the terms of the Plan. 29 U.S.C. § 1132(a)(1)(B). Empire argues that plaintiffs claim is “colorable” because the Plan’s benefits are the source of payment to which plaintiff believes it is entitled. Plaintiff responds that it seeks damages for breach of contract, not a denial of benefits.
Plaintiffs contention that his state claim is one for damages, not benefits, is unpersuasive. The Second Circuit has noted a distinction between claims concerning a “right to payment” and claims involving an “amount of payment.” See Montefiore,
Here, accepting the allegations in plaintiffs complaint as true, and in a light most favorable to plaintiff, the complaint still does not allege facts to support an independent contractual obligation, but instead states that Empire “provided authorization” for plaintiffs services. (Compl. ¶ 13.) An “authorization” plainly implicates coverage and benefits determinations, and places plaintiffs complaint squarely within the “right to payment” category. See Neuroaxis,
Although the Court need not (and does not) do so at this stage in the litigation, consideration of the merits of plaintiffs claim would require the Court to review the terms of the Plan, particularly the provision concerning home health care and the requirement that it be “precertified.” (Ex. B to Oluwasanmi Decl. at 44.) This weighs in favor of a finding that plaintiffs breach of contract claim is in fact a color-able ERISA claim. See Olchovy v. Michelin N. Am., Inc., No. 11-CV-
The allegation that Empire “provided authorization” — an apparent reference to Plan coverage — stands in contrast to those cases in which a court has held that the plaintiffs claim was better categorized as an “amount of payment” dispute related to an independent contractual obligation. See, e.g., Marin Gen. Hosp. v. Modesto & Empire Traction Co.,
The Court, therefore, concludes that plaintiffs claim is not an “amount of payment” dispute, but instead relates to the “right to payment” under the Plan. Empire has met both facets of the first prong of the Davila test.
ii. Davila Prong Two
The question to be resolved under the second prong of Davila is whether any other independent legal duty is implicated by Empire’s alleged representation to plaintiff that “provided authorization” for Sarris’s home health care. The Second Circuit has made clear that the “key words” in conducting this analysis are “other” and “independent.” See Montefiore,
As discussed above, plaintiff contends that Empire’s representations created an “independent,” or “other” contract under which Empire is obligated to pay plaintiff for Sarris’s care, regardless of whether the Plan covers that care. In other words, plaintiffs theory is that Empire should be bound by its representation of coverage, even if, viewing the allegations in the complaint in a light most favorable to plaintiff, that representation was incorrect or misleading.
Although some courts have concluded that allegations of misrepresentations of coverage are distinct from ERISA claims and should not be preempted, see Vencor Hosps.-Ltd. Partnership v. Aetna U.S. Healthcare, Inc., No. IP00-0695-CB/S,
Specifically, Montefiore argues that pri- or to providing services to each beneficiary, it would call the Fund and verify that the patient was eligible and that the anticipated services were covered. These verbal communications, Montef-iore contends, gave rise to an independent legal duty between Montefiore and the Fund.
We are not persuaded. Whatever legal significance these phone conversations may have had, see Appendix A, they did not create a sufficiently independent duty under Davila — indeed, as Montef-iore concedes, this pre-approval process was expressly required-by the terms of the Plan itself and is therefore inextricably intertwined with the interpretation of Plan coverage and benefits.
Here, as in Montefiore, plaintiff has sued based on representations allegedly made by Empire when plaintiff sought pre-approval for its services, and those calls were “expressly required by the terms of the Plan itself.” Id.; (Ex. B to Oluwasanmi Decl. at 44.) Indeed, the allegations in the complaint describe an “authorization” from Empire to Star.
Plaintiff has not expressly distinguished the facts of Montefiore, even after the Court asked plaintiffs counsel to do so at oral argument.
Here, as discussed above, the most that plaintiff has alleged, viewed in a light most favorable to it,,-is reliance on a promise (the “authorization”), but the promise was based on an interpretation of Plan benefits. Therefore, plaintiffs reliance on Stevenson v. Bank of N.Y., Inc.,
In Stevenson, an agreement separate and independent from the pension plan governed the plaintiffs benefits because the plaintiff was no longer in the bank’s employ and was no longer a participant in the bank’s plan. ... Whatever rights the plaintiff had .arose not from the bank’s plan, but from the independent agreement that gave him benefits even though he had no right to them under the plan. Arditi676 F.3d at 300 . The Second Circuit in Arditi held that a similarly independent agreement did not exist when the alleged contract simply “described the benefits Arditi would receive as a Plan member.” Id. Here, the alleged “authorization” likewise describes the benefits Sarris would have received as a Plan member, and created no new benefits or obligations. Thus, Stevenson does not apply, and the Court must follow Arditi and Montefiore.
Considering plaintiffs arguments on a broader scale, a finding that plaintiffs claims were not preempted by ERISA here would have problematic implications for future cases, and undermine the purposes of ERISA. As previously discussed, Congress enacted ERISA to “ ‘protect ... the interests of participants in employee benefit plans and their beneficiaries’ by setting out substantive regulatory requirements for employee benefit plans and to ‘provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts.’ ” Davila,
For the foregoing reasons, the Court concludes that Empire has carried its burden to justify removal, because plaintiffs state breach-of-contract claim is “within the scope of’ ERISA § 502(a)(1)(B), and completely preempted. On that basis alone, removal was proper and the motion to remand is denied.
In addition to being completely preempted, Empire also argues that plaintiffs state breach-of-contract claim is expressly preempted by ERISA, and the Court agrees.
ERISA’s preemption clause provides that “the provisions of [ERISA] shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. § 1144(a) (emphasis added). It is not disputed that the Plan in this case is an “employee benefit plan,” and thus the question is whether plaintiffs claim is based on a state law relating to it.
“A claim under state law relates to an employee benefit plan if that law ‘has a connection with or reference to such a plan.’ ” Franklin H. Williams Ins. Trust v. Travelers Ins. Co.,
Although plaintiffs state claim is based on a common law theory, such claims may still be expressly preempted if they relate to an employee benefit plan. See Pilot Life,
Plaintiff has not distinguished Pilot Life or explained how his claim could meet the exception to preemption in ERISA’s “savings clause,” which states that “nothing in [ERISA] shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities.” 29 U.S.C. § 1144(b)(2)(A). The Court considered in Pilot Life whether the state common law “bad faith” claim regulated insurance, and held that it did not, based on a common-sense understanding of the phrase “regulates insurance” and on the broad reach of ERISA. Pilot Life,
C. Motion to Dismiss
Empire’s motion to dismiss is granted because, even if plaintiffs
First, plaintiffs claim must be dismissed because the complaint does not allege that Empire is a proper defendant. The Second Circuit has held that a claim for benefits pursuant to ERISA § 502(a)(1)(B) may only be asserted against the plan itself, the plan administrator, and the plan trustees. See Crocco v. Xerox Corp.,
Plaintiff proffers no allegations establishing that Empire qualifies as any of these types of entities. At most, the complaint alleges that Empire was a health insurer. (Compl. ¶¶2, 10.) The Second Circuit, however, has at least twice “rejected a claim that an insurance company— under contract to provide assistance in the management of an employer’s self-funded employee benefits plan — was an unnamed plan administrator.” Crocco,
In the alternative, any claim under ERISA must be dismissed because plaintiff has not satisfied ERISA’s exhaustion requirement. The complaint does not allege exhaustion, even though establishing exhaustion is generally considered a prerequisite to pursuing an ERISA action. See, e.g., Novella v. Westchester Cnty.,
D. Claims Against the Sarrises
As noted above, the Sarrises have not participated in the motions to remand or dismiss. Nonetheless, the Court sua sponte declines to exercise supplemental jurisdiction over the remaining claims against them, see Coyle v. Coyle,
Accordingly, pursuant to 28 U.S.C. § 1367(c)(3), the Court declines to retain jurisdiction over the remaining state law claims against the Sarrises given the absence of any federal claims that survive the motion to dismiss. The claims against the Sarrises are therefore remanded to the Supreme Court of the State of New York, County of Suffolk. See Baylis v. Marriott Corp.,
IV. Conclusion
Plaintiffs claim against Empire under New York law is preempted by ERISA, and plaintiffs motion to remand this action is denied.
SO ORDERED.
Notes
. Competent proof of federal jurisdiction in an ERISA case includes "the various plan documents.” Aetna Health Inc. v. Davila,
. As is discussed in more detail infra, plaintiff's claim is based upon an ERISA plan. Therefore, the plan documents submitted by Empire are integral to plaintiff's complaint. See DeSilva v. North Shore-Long Island Jewish Health Sys. Inc.,
. The cases plaintiff cites concerning the rule of unanimity all involve parties who were served before removal. When asked at oral argument to cite any case where parties served after removal were required to consent within a certain time period, counsel for plaintiff was unable to name such a case.
. Section 3(1) of ERISA defines an employee welfare benefit plan as “any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries ... benefits.” 29 U.S.C. § 1002(1).
. Plaintiff also argues that its claim cannot be colorable because it has sued Empire, who (as is discussed infra) would not be a proper defendant if plaintiff’s claim were brought under ERISA. However, it is clear that the identity of the named defendant is not the touchstone of colorability under ERISA — the question is whether the claim itself "implicate[s] coverage and benefits established by the terms of the ERISA benefit plan.” Mon-tefiore,
. To be clear, the complaint does not explicitly allege that Empire misrepresented coverage, only that it "provided authorization[s],” on which plaintiff relied. Nonetheless, construing the complaint in a light most favorable to plaintiff, the Court has considered whether a misrepresentation claim would allow plaintiff to avoid ERISA preemption, and concludes that it does not, following the Second Circuit’s decision in Montefiore.
. The Court notes that, in its opposition papers to the motion to dismiss, plaintiff submitted a declaration from one of its employees which attempts to describe the authorization in more detail. The declaration recounts a telephone call with an unidentified representative of Empire and asserts that, “[d]uring said telephone conversation, the representative of Empire confirmed what had been asserted by Ms. Sarris and stated that Star would be paid through Ms. Sarris’s healthcare plan.” .(Decl. of Debra Kelly, dated June 5, 2013, at ¶ 13.) Although the Court cannot consider that declaration in connection with a motion to dismiss, it confirms what is clear from the allegations in plaintiff's complaint and ■ the Plan documents — namely, that the claim here is not based upon any independent duty, but rather is inextricably intertwined with the Plan and the terms of the Plan.
.To the extent plaintiff's counsel attempted to distinguish Montefiore at oral argument by arguing that the alleged oral verification there was by a representative of the fund (rather than the insurer), the Court finds that argument unpersuasive. The Second Circuit’s
. Defendants also argued, in the alternative, that the complaint's sparse allegations concerning Empire's "authorization” of plaintiff’s services do not state a claim even for breach of contract. Cf. Caniglia v. Chicago Tribune-N.Y. News Syndicate,
. Plaintiff also moved for an award of fees, under 28 U.S.C. § 1447(c), for improper removal by Empire. As the Court has concluded that the removal was proper, the motion for attorney's fees is denied.