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South Gate Ambulatory Surgery Center LLC et al. v. the Int'l Longshore & Warehouse Union--Pacific Maritime Ass'n

February 11, 2011

SOUTH GATE AMBULATORY SURGERY CENTER LLC ET AL.
v.
THE INT'L LONGSHORE & WAREHOUSE UNION--PACIFIC MARITIME ASS'N COASTWISE ET AL.



The opinion of the court was delivered by: Present: The Honorable Jacqueline H. Nguyen

CIVIL MINUTES - GENERAL

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 PLAINTIFFS' MOTION TO REMAND [16 & 17]

(In Chambers)

The matter is before the Court on Plaintiffs South Gate Ambulatory Surgery Center, LLC ("South Gate") and Jeffrey T. Ho, M.D.'s ("Dr. Ho") (collectively, "Plaintiffs") Motion to Remand pursuant to 28 U.S.C. § 1447(c). (Docket Nos. 16 & 17.) The Court previously deemed the matter appropriate for decision without oral argument and took it under submission. Fed. R. Civ. P. 78; L.R. 7-15. For the reasons discussed below, the Court GRANTS Plaintiffs' motion and REMANDS the action to the Los Angeles County Superior Court.

I. FACTUAL BACKGROUND*fn1

This litigation stems from the alleged failure of Defendants International Longshore & Warehouse Union--Pacific Maritime Association Coastwise ("ILWU") and SHPS (collectively, "Defendants") to pay Plaintiffs for healthcare services provided to multiple patients. The parties entered into three agreements wherein Plaintiffs would reduce their respective bills charged to SHPS and in return, SHPS would not audit the charges and the claims would be paid in an expedited manner. (Compl., Exhs. A-C.) The issue before the Court is whether Plaintiffs' 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. The Complaint makes the allegations set forth below.

Surgery Center Agreements

On or about May 15, 2009, South Gate, an ambulatory surgery center, and SHPS, acting as an agent of ILWU, entered into a written agreement ("2009 Surgery Center Agreement"), whereby South Gate promised to provide medical services for ILWU's members. (Compl. ¶ 12; see also, Compl., Exh. B [2009 Surgery Center Agreement].) The agreement stated that in return for a 10% discount on the total charges billed by South Gate, ILWU would pay South Gate within seven to ten business days of receipt of a claim and SHPS would not have audit rights. (Id.) Thereafter, on or about January 22, 2010, South Gate and SHPS executed a second contract ("2010 Surgery Center Agreement"). (Compl. ¶ 15; see , Compl., Exh. A [2010 Surgery Center Agreement].) The terms of the two contracts are identical. Beginning January 1, 2010, SHPS stopped reimbursing South Gate at the agreed upon rate. Instead, SHPS paid South Gate at a much lower rate. Defendants also denied many of the claims for services, alleging lack of medical necessity.

Physician Agreement

On or about February 12, 2010, Dr. Ho and SHPS entered into a written agreement ("Physician Agreement"), wherein Dr. Ho promised to provide medical services for ILWU's members. (Compl. ΒΆ see also, Compl., Exh. C [Physician Agreement].) The agreement stated that in return for a 50% discount on the total charges billed by Dr. Ho, ILWU would pay Dr. Ho within seven to ten business days of receipt of a claim and SHPS would not have audit rights. (Compl., Exh. C.) Notwithstanding the terms of the contract, SHPS and ILWU failed to pay Dr. Ho ...


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