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Sharp Surgery Center v. Shps

February 10, 2011

SHARP SURGERY CENTER
v.
SHPS, INC. ET AL



JS-6

CIVIL MINUTES - GENERAL

Present: The Honorable JACQUELINE H. NGUYEN

Alicia Mamer Not Reported N/A

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

Not present Not present

Proceedings: ORDER GRANTING PLAINTIFF'S MOTION TO REMAND [18] (In Chambers)

The matter is before the Court on Plaintiff Sharp Surgery Center's ("Sharp") Motion to Remand pursuant to 28 U.S.C. § 1447(c). (Docket No. 18.) The Court previously deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. For the reasons discussed below, the Court GRANTS Sharp's motion and REMANDS the action to the Los Angeles County Superior Court.

I. FACTUAL BACKGROUND

This litigation stems from a contract dispute between a medical provider and a third party administrator of an ERISA plan. (See Joint Rule 26(f) Report at 2.)The issue presented is whether Sharp's state-law claims are completely preempted by the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., such that the Court may properly exercise federal question jurisdiction over this suit.*fn1 The operative complaint, the First Amended Complaint ("FAC"), makes the allegations set forth below.

On or about May 13, 2009, Sharp, a medical provider, and Defendant SHPS Health Management Solutions, Inc. ("SHPS"), agent for the International Longshore & Warehouse Union ("ILWU"), entered into a written agreement ("2009 Agreement") wherein Sharp promised to provide medical treatment facilities for ILWU's members. (FAC ¶ 11; see also, Joint Rule 26(f) Report at 2; Notice of Removal,¶¶ *fn2 The contract stated that in return for a 5% discount on the total charges billed by Sharp, ILWU would pay Sharp within seven to ten business days of receipt of a claim and SHPS would not have audit rights. (Joint Rule 26(f) Report at 2; Compl., Attachment 1 [2009 Agreement].) Sharp performed all conditions set forth in the 2009 Agreement. However, SHPS refused to make any payments as provided in the contract.

Thereafter, on January 26, 2010, Sharp and Defendant SHPS again entered into another agreement ("2010 Agreement"). The terms of 2009 and 2010 contracts are identical. (FAC ¶ 17; see also, Joint Rule 26(f) Report at 2.) Again, Sharp performed its obligations under the second agreement, and SHPS again failed to make any of the required payments. (FAC ¶¶ 19-20.) As a result of SHPS's omission, Plaintiff has been allegedly damaged in the amount of over $8 million.

Based on these allegations, Plaintiff filed a lawsuit against SHPS in the Los Angeles County Superior Court. (Notice of Removal, Exh. A.) Sharp's form complaint alleged two counts of breach of contract and one count of "common count." (Id.) Thereafter, SHPS removed the action to this Court based on federal question and diversity jurisdiction. (Notice of Removal, ¶ 1.)

On October 29, 2010, Plaintiff filed the FAC alleging breach of contract, quantum meruit, and quantum valebant. The FAC also named as defendants several trustees of the ILWU-PMA Welfare Plan ("the Plan"), some of which are ...


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