The matters before the Court are the Motion to Remand filed by Plaintiff (ECF No. 7) and the Motion to Dismiss filed by Defendant California Physicians’ Services
I. Background
On June 4, 2015, Plaintiff Yrijesh S. Tantuwaya MD, Inc. (“Plaintiff’) commenced this action by filing a complaint in the San Diego Superior Court alleging violation of California’s Unfair Competition Law (“UCL”) (Bus. & Prof. Code, § .17200 et seq.) and reimbursement for the reasonable value of services rendered (“quantum meruit”). On July 28, 2015, Defendants filed a notice of removal of civil action in this court pursuant to 28 U.S.C. § 1442(a)(1), which permits removal where a person acting under the direction of a federal agency and its officers is sued for actions taken under color of federal office. (ECF No. 1).
On August 4, 2015, Defendants Anthem Blue Cross Life and Health Insurance Company (“Anthem Blue”) and Blue Cross of California dba Anthem Blue Cross (“Blue Cross”) filed a motion to dismiss. (ECF No. 3). On August 4, 2015, Defendant California Physicians’ Services dba Blue Shield of California (“Blue Shield”) also filed a motion to dismiss. (ECF No. 4). On August 28, 2015, Plaintiff filed a motion to remand. (ECF No. 7). On September 14, 2015, Plaintiff filed oppositions to both motions to dismiss. (ECF Nos. 8 and 9). On September 14, 2015, Blue Shield filed an opposition to Plaintiffs motion to remand. (ECF No. 10). On September 18, 2015, Anthem Blue and Blue Cross filed a reply to Plaintiffs opposition to the motion to dismiss. (ECF No. 11). On September 21, 2015, Blue Shield filed a reply to Plaintiffs opposition to the motion to dismiss. (ECF No. 12). On September 21, 2015, Plaintiff filed a reply to Blue Shield’s opposition to the motion to remand. (ECF No. 13).
On January 28, 2016, Plaintiff filed a notice of supplemental authority regarding Plaintiffs motion to remand. (ECF No. 20). On February 1, 2016, Blue Shield filed a response to Plaintiffs supplеmental authority. (ECF No. 21).
On February 4, 2016, Plaintiff filed a Notice of Settlement and Motion to Dismiss the Complaint With Prejudice as to Defendants Anthem Blue Cross Life and Health Insurance Company and Blue Cross of California Only. (ECF No. 22). On February 5, 2016, the Court issued an Order dismissing Defendants Anthem Blue and Blue Cross with prejudice and denying the Motion to Dismiss filed by Anthem Blue and Blue Cross (ECF No. 3) as moot. (ECF No. 24).
On February 5, 2016, the Court held oral argument on the Motion to Remand filed by Plaintiff (ECF No. 7) and the Motion to Dismiss filed by Blue Shield (ECF No. 4).
II. Allegations of the Complaint
Plaintiff is a physician who provides emergency medical services. (ECF No. 1 -2 at ¶ 4). “Defendants are corporations which are in the business of arranging for or providing health care services to [their] enrollees in California, including emergency health care services, or are in the business of administering health care services ... for patients located in California that are members of certain ... medical health insurers or groups ... where the duty to reimburse non-contracted emergency physicians has been delegated to them.” Id. at ¶ 6. Plaintiff has no contractual relationship with any of the Defendants. Id. at 5.
“Plaintiff performed the emergency medical services at issue on multiple patients insured by, administered by, or assigned to, one (or more) of the Defendants.” Id. at ¶ 23. No personal information is listed in the complaint “regarding any individual patient in order to protect the patient’s privacy rights
Pursuant to the Knox-Keene Health Care Service Plan Act of 1975 (“Knox-Keene Act”), Cal. Health & Safety Code section 1340 et seq
Blue Shield committed an unlawful business practice in violation of California law by issuing payments directly to its insured and/or customers. Id. at ¶ 33. “[0]n August 4, 2006, Blue Shield entered into a consent agreement with the Department of Managed Health Care, agreeing that it would cease and desist this practice.” Id. Blue Shield “was fined an administrative penalty for paying patients directly instead of the physician the amount due for non-contracted emergency medical services.” Id. Blue Shield’s “insured/patients who are paid directly, in many cases, as are the cases at issue here, fail to reimburse Plaintiff the amounts due to him.” Id. Plaintiff seeks damages “equal to the value of the emergency services rendered as determined pursuant to [California] law,” restitution, disgorgement of profits, interest, injunctive, and other relief. (ECF No. 1-2 at 12).
III. Request for Judicial Notice
Plaintiff requests that the Court take judicial notice of two documents. (ECF No. 7-2 at 2). The first document is a copy of a consent agreement, entitled “Consent Agreement Re Payment of Claims For Emergency Services and Care,” filеd August 4, 2006 by the Department of Managed Health Care of the State of California. The second document is a copy of a Brief for the United States as Amicus Curiae Supporting Respondents, filed in the Supreme Court of the United
Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it ... is generally known within the trial court’s territorial jurisdiction; or ... can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed R. Evid. 210(b). “[U]nder Fed. R. Evid. 201, a court may take judicial notice of ‘matters of public record.’ ” Lee v. City of Los Angeles,
IV. Motion to Remand
Defendants Anthem Blue, Blue Cross, and Blue Shield removed this case pursuant to the federal officer removal statute, 28 U.S.C. § 1442(a)(1), on the grounds that “at least one of the enrollees at issue in this case is enrolled in a health plan governed by the Federal Employees Health Benefits Act (‘FEHBA’), 5 U.S.C. §§ 8901-14.” (Notice of Removal ECF No. 1 at 9). In the Notice of Removal, Defendants assert that one of the enrollees at issue, B.G., “was enrolled in the Blue Cross and Blue Shield Service Benefit Plan (or ‘the Service Benefit Plan’), one of the federal government’s health benefits plans for federal employees and their dependents.” Id.
A civil or criminal action originally filed in state court may be removed to federal court if, among other things, the action is against “any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office.” 28 U.S.C. § 1442(a)(1). “[Defendants enjoy much broader removal rights under the federal officer removal statute than they do under the general removal statute .... Leite v. Crane Co.,
Defendant asserts, and Plaintiff does not dispute, that they are “persons” within the meaning of § 1442. However, Plaintiff contends that removal is not proper under 28 U.S.C. § 1442(a)(1) becausе Defendants were not acting under a federal agency’s direction and do not have a colorable federal defense. (ECF No. 7-1 at 6).
A. Causal Nexus
Plaintiff brings this action to recover fees directly for emergency serviced perform on a federally insured patient, B.G. (ECF No. 7-1 at 1). Plaintiff has submitted the declaration of Ken Lobo, the President and owner of Lobo Solutions, Inc., a medical billing company who states, “The Explanation of Benefits for this patient that we received from Defendant Blue Shield stated that the payments were drafted to pay to the order of the patient.” (ECF No. 7-3 at 2). Lobo states, “My office, on behalf of Plaintiff, attempted to contact and reach, but was unable to contact or reach, the patient.” Id. Lobo statеs that Blue Shield informed an employee at Lobo Solutions that “Blue Shield had issued three checks directly to the patient, in the amounts of $57,120.00, $406.95, and $1,250.59.” Id. at 2-3. Lobo states that Blue Shield informed the same employee “that the patient had not cashed or deposited the checks.”
Plaintiff contends that removal was improper because Blue Shield did not “act[ ] under the direction of a federal officer” and “did not assist or help carry out the duties of a federal official by refusing to pay the physician an undisputed amount Blue Shield determined it owed.” (ECF No. 7-1 at 6-7). Plaintiff contends that Blue Shield “merely ‘reserve[ed] the right’ to pay the insured directly” and “[n]o facts show that the federal government directed Blue Shield not to pay an undisputed amount to a mediсal provider.” Id. at 13.
Blue Shield contends that removal is proper because Blue Shield was administrating the Service Benefit Plan under “the direct and detailed supervision of a federal agency.” (ECF No. 1 at 14). Blue Shield contends that there is a causal nexus between Plaintiff s claims and the actions Blue Shield took pursuant to a federal officer’s direction because Plaintiff is suing Blue Shield “expressly because of actions taken in the course of administering the Plan — specifically, in paying benefits.” Id. Blue Shield contends that “OPM gave Blue Shield, as part of its administrative duties, the obligation to make payment of Plan benefits; federal officer removal does not require that OPM have expressly directed Blue Shield to do so in some specific way.” (ECF No. 10 at 20).
Thе causal nexus inquiry requires a removing party show that the acts complained of were taken within the scope and course of its conduct “under the color of [federal] office.” 28 U.S.C. § 1442(a)(1). The Supreme Court of the United States explained,
The relevant relationship is that of a private person “acting unded’ a federal “officer” or “agency.” In this context, the word “under” must refer to what has been described as a relationship that involves “acting in a certain capacity, considered in relation to one holding a superior position or office.” That relationship typically involves “subjection, guidance, or control.” In addition, precedent and statutory purpose make clear that the private person’s “acting under” must involve an effort to assist, or to help carry out, the duties or tasks of the federal superior.
Watson v. Philip Morris Companies, Inc.,
In Jacks v. Meridian Resource Co., LLC,
The Federal Employees Health Benefits Act of 1951 (“FEHBA”), 5 U.S.C. § 8901 et seq., “establishes a comprehensive program of health insurance for federal employees.” Empire Healthchoice Assur., Inc. v. McVeigh,
In this case, OPM contracted with the Blue Cross and Blue- Shield Association to create the Service Benefit Plan. See ECF No. 1-6 (“Master Contract”); ECF No. 1-10 (“Statement of Benefits”). The Blue Cross and Blue Shield Association acts on behalf of local Blue Cross and Blue Shield companies that administer the Plan in their respective localities. (Master Contract 1-6 at 51, § 4.3). The Master Contract states that “[b]enefits are payable to the Enrollee in the Plan or his or her assignees.” (Master Contract 1-6 at 29, § 2.3(f)). Blue Shield administers the Plan in California. (Statement of Benefits at 6). Contributions of enrollees and the Government are paid into the Employees Health Benefits Fund, in the Treasury of the United States, which is administered by OPM. 5 U.S.C. § 8909. The Statement of Benefits, which is “authorized for distribution by” OPM, in the Blue Shield Plan provides that Blue Shield “reserve[s] the right to pay you, the enrollee, directly for all covered services.” (Statement of Benefits at 2,140).
As carriers of insurance to federal employees, Defendants assist the government in fulfilling the task of managing a health insurance program for federal employees. See Jacks,
B. Colorable Federal Defenses
To invoke the federal officer removal act, a party must have a “colorable [federal] defense,” but the party “need not win [the] case before [the party] can have it removed.” Willingham v. Morgan,
The Court concludes that Blue Shield has shown by a preponderance of the evidence that Blue Shield has a colorable defense that Plaintiffs claims are preempted by FEHBA’s express preemption provision, 5 U.S.C. § 8902(m)(l), which provides that the terms of FEHBA contracts concerning benefits and benefits payments “shall supersede and preempt any State or local law....” See Empire Healthchoice Assur., Inc. v. McVeigh,
V. Motion to Dismiss
A. Standards of Review
Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep’t,
To sufficiently state a claim for relief and survive a Rule 12(b)(6) motion, a complaint “does not neеd detailed factual allegations” but the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,
Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a defendant to move for dismissal on grounds that the court lacks jurisdiction over the subject matter. Fed. R. Civ. P. 12(b)(1). The burden is on the plaintiff to establish that the court has subject matter jurisdiction over an action. Assoc. of Med. Colleges v. United States,
B. Preemption under FEHBA
Blue Shield contends that Plaintiffs state law claims must be dismissed because they are preempted by § 8902(m)(l). (ECF No. 4-1 at 12). Blue Shield contends that Plaintiffs state law claims relate to the Service Benefit Plan and that “FEHBA’s preemptive reach extends to state law claims brought by medical providers” just as it does “to suits brought by enrollees.” Id. at 17.
Citing to Cedars-Sinai Medical Center. v. National League of Postmasters of U.S.,
In Marin General Hospital v. Modesto & Empire Traction Co.,
Complete preemption under § 502(a) is “really a jurisdictional rather than a preemption doctrine, [as it] confers exclusive federal jurisdiction in certain instances where Congress intended the scope of a federal law to be so broad as to entirely replace any state-law claim.” Complete preemption removal is an exception to the otherwise applicable rule that a “plaintiff is ordinarily entitled to remain in state court so long as its complaint does not, on its face, affirmatively allege a federal claim.” The general rule is that a defense of federal preemption of a state-law claim, even conflict preemption under § 514(a) оf ERISA, is an insufficient basis for original federal question jurisdiction under § 1331(a) and removal jurisdiction under § 1441(a). A provision of state law may “relate to” an ERISA benefit plan, and may therefore be preempted under § 514(a). But a defense of conflict preemption under § 514(a) does not confer federal question jurisdiction on a federal district court.
We may have been partially responsible for the parties’ confusion between complete preemption under § 502(a), which provides a basis for federal question removal jurisdiction, and conflict preemption under § 514(a), which does not. Some of our prior opinions dealing with complete preemption under § 502(a) have used the terminology “relate to” even though that terminology is relevаnt to conflict preemption under § 514(a) rather than complete preemption under § 502(a).
Id. at 945-46 (internal citations omitted). Unlike § 502(a), ERISA’s complete preemption provision, FEHBA’s preemption provision, § 8902(m)(l), cannot be read as a “jurisdiction-conferring provision.” See Empire Healthchoice Assur., Inc. v. McVeigh,
In this case, neither party asserts jurisdiction based on complete preemption and the Court has concluded that it has jurisdiction pursuant to the federal officer removal statute, 28 U.S.C. § 1442(a)(1). The issue before the Court is whether Plaintiffs state law claims, brought under the UCL and for quantum meruit, for failure “to pay the reasonable and customary value of the non-contracted emergency services rendered” are preempted by § 8902(m)(l), FEHBA’s preemption provision. See ECF No. 1-2 at ¶ 29; 40.
The FEHBA express preemption provision provides,
The terms of any сontract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, or any regulation issued thereunder, which relates to health insurance or plans.
5 U.S.C. § 8902(m)(l). “The policy underlying section 8902(m)(l) is to ensure uniformity in the administration of FEHBA benefits.” Hayes v. Prudential Ins. Co. of Am.,
Under the statutory language, two conditions must be met to trigger preemption: (1) the FEHBA contract terms at issue “relate to the nature, provision, or extent of coverage or benefits (including payment with respect to benefits)” and (2) the state or local law “relates to health insurance or plans.” See 5 U.S.C. § 8902(m)(l); see also Empire Health-Choice Assur., Inc. v. McVeigh,
In Hayes, an enrollee in a FEHBA plan filed suit against an insurance carrier for various state law claims based on the carrier’s alleged refusal to pay benefits.
In this ease, Plaintiffs state law claims for failure “to pay the reasonable and customary value of the non-contracted emergency services rendered” stem from the Knox-Keene Health Care Service Act. See ECF No. 1-2 at ¶29; 40. The Knox-Keene Health Care Service Act relates to health insurance. The remaining issue under FEHBA’s preemption statute is whether the FEHBA contract terms at issue “relate to the nature, provision, or extent of coverage or benefits (including payment with respect to benefits).” See 5
C. Sovereign Immunity
Blue Shield contends that Plaintiffs claims are barred under the doctrine of sovereign immunity because the federal government is the “real party in interest” in FEHBA disputes and therefore would bear the judgment in this case. (ECF No. 4-1 at 19). Blue Shield contends that it is not relevant whether the money owed would be in the form of “restitution” or “damages” because either way the “recovery would come from the federal treasury.” (ECF No. 12 at 10). Blue Shield contends that Plaintiff s claims must be dismissed under Federal Rules of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Id. at 19.
Plaintiff contends that “neither the United States government, nor the United States Treasury, has any interest in the amount claimed ... because Blue Shield already determined that this amount is owed under the FEHBA plan.” (ECF No. 9 at 3). Plaintiff contends that the United States Treasury will not be liable for damages in this case because Plaintiff is not seeking damages. Id. at 7.
The United States, as a sovereign, is immune from suit. United States v. Mitchell,
In this case, Plaintiff has filed state-law claims against Blue Shield, an insurance carrier administering the Service Benefit Plan under FEHBA pursuant to the Master Contract with OPM. Blue Shield issued three checks to the enrollee; however, those checks were not cashed. The Master Contract states that “[p]ayment of checks issue pursuant to this contract shall
D. ERISA.
Blue Shield contends that another pаtient that allegedly received emergency treatment from Plaintiff in 2011, was enrolled in an ERISA plan self-funded by Starbucks. (ECF No. 4-1 at 11). Blue Shield contends that ERISA preempts Plaintiffs state-law claims. Id. Blue Shield contends that Plaintiffs claims “relate to” the ERISA governed plan. Id. at 24. Blue Shield contends that Plaintiff s state-law claims cannot be saved from preemption by ERISA’s “saving clause” because ERISA’s “deemer clause” provides that self-funded ERISA plans may not be deemed to be insurers or insurance companies for purposes of the savings clause. Id. at 26.
Plaintiff contends that state law claims brought by non-contracted third parties are not preempted by ERISA. (ECF No. 9 at 7). At the hearing, Plaintiff contended that there was not enough evidence before the Court on the motion to dismiss to determine whether or not, for purposes of the deemer clause, that the Starbucks ERISA plan was self-funded.
Section 514(a) of ERISA 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). The Supreme Court held that a state law “ ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.” Shaw v. Delta Air Lines, Inc.,
ERISA’s “saving clause,” provides an exception to ERISA preemption. That clause states, “noting in this title 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). However, ERISA’s “deemer clause” provides that self-funded ERISA plans may not be deemed to be insurers or insurance companies for purposes of the savings clause. 29 U.S.C. § 1144(b)(2)(B); see FMC Corp. v. Holliday,
In this case, Plaintiffs state-law claims are based on the allegation that Blue Shield wrongfully denied Plaintiff adequate reimbursement for emergency services that Plaintiff provided to an enrollee in the Starbucks ERISA plan. “FEHBA and ERISA are different federal statutes, but their preemption provisions are analytically similar.” Marin Gen.
Having concluded that Plaintiffs state-law ■ claims “relate to” the Starbucks ERISA Plan, the Court turns to ERISA’s savings clause and the deemer clause. See .29 U.S.C. § 1144(b)(2)(A)-(B). The Starbucks Benefits Plan Description states, “You and Starbucks share the cost of medical benefits for you and your enrolled dependents.” (ECF No. 4-7 at 46). The U.S. Benefits Plan Description for Starbucks explains, “The Plan is funded through contributions by participants who designate a part of their eligible pay to be contributed on their behalf and by Starbucks through matching and discretionary profit sharing contributions.” (ECF No. 4-5 at 171). In her declaration, Megan Smith, a Research Analyst at Premera Blue Cross, states, “The Starbucks plan Descriptions for 2009 through 2011 demonstrate that the Starbucks health plan is self-funded and subject to ERISA.” (ECF No. 4-3 at 3). The Court concludes that Blue Shield has presented sufficient evidence to establish that the Starbucks ERISA plan was self-funded. Under ERISA’s “deemer clause,” the ERISA self-funded plan may not be deemed to be insurers or insurance comрanies for purposes of the savings clause. See FMC Corp.,
VI. Conclusion
IT IS HEREBY ORDERED that Plaintiffs Motion to Remand (ECF No. 7) is denied.
IT IS FURTHER ORDERED that the Motion to Dismiss filed by Defendant California Physicians’ Services dba Blue Shield of California (ECF No. 4) is granted with prejudice.
Notes
. "Emergency services and care shall be provided to any person requesting the services or care, or for whom services or care is requested, for any condition in which the person is in danger-of loss of life, or serious injury or illness ... Cal. Health & Safety Code § 1317(a). "In no event shall the provision of emergency services and care be based upon, or affected by, the person’s ... insurance status, economic status, [or] ability to pay for medical services. Cal. Health & Safety Code § 1317(b).
. "A health care service plan, or its contracting medical providers, shall reimburse providers for emergency services‘and care provided to its enrollees.... ” Cal. Health & Safety Code§ 1371.4(b).
. Defendant Blue Shield states that Plaintiff's counsel sent Blue Shield’s counsel a letter dated July 8, 2015, enclosing the list of patients referenced in the Complaint. See ECF No. 4-2 at 2. Because it was referenced in and integral to the Complaint, the Court considers this redacted list of patients. See Knievel v. ESPN,
. To the extent that Plaintiff seeks an order in this case determining what a "reasonable and customary value for the services rendered” would be, the Court finds that there is insufficient evidence to make this determination. See ECF No. 1-2 at ¶ 18, 19,20.
. In Hayes, the Court of Appeals for the Ninth Circuit analyzed the former version of the FEHBA preemption statute. This statute included the term "inconsistent” and read as follows:
The provisions of any contract under this chapter which relate to the nature or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, or any regulation issued thereunder, which relates to health insurance or plans to the extent that such law or regulation is inconsistent with such contractual provisions.
“In 1998, Congress amended § 8902(m)(l) by deleting the words ‘to the extent that such law or regulation is inconsistent with such contractual provisions.’ ” Empire Healthchoice Assur., Inc. v. McVeigh,
. OPM created a mandatory administrative remedy for those who assert that an insurance carrier had wrongfully denied benefits. 5 C.F.R. § 890.15. The administrative process is available to "covered individuals and to other individuals or entities who are acting on the behalf of a covered individual and who have the covered individual’s specific written consent to pursue payment of the dispute claim.” 5 C.F.R. § 890.105(a)(2). Plaintiff can seek relief in this case by receiving B.G.’s “specific written consent to pursue payment.”