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Bay Area Surgical Group, Inc v. Anthem Blue Cross Life & Health As Moot Insur. Co.

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION


April 19, 2011

BAY AREA SURGICAL GROUP, INC.,
PLAINTIFF,
v.
ANTHEM BLUE CROSS LIFE & HEALTH AS MOOT INSUR. CO., ET AL.,
DEFENDANTS.

The opinion of the court was delivered by: Lucy H. Koh United States District Judge

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND AND DENYING MOTION TO STRIKE

Plaintiff Bay Area Surgical Group, Inc. ("Plaintiff") brings the instant action against Defendants Anthem Blue Cross Life and Health Insurance Company ("Anthem"), Health Care 19 Service Corporation Illinois State PAC, NFP, and Blue Cross Blue Shield of Illinois (collectively 20 "Defendants"). In brief, Plaintiff alleges that, pursuant to a written assignment agreement, it is 21 entitled to receive full payment from Defendants for a surgical procedure it performed on a patient 22 as the patient's assignee. Defendants move to dismiss the complaint for failure to state a claim 23 upon which relief may be granted. Defendant Anthem also moves to strike portions of the 24 complaint. Although Plaintiff's oppositions were due no later than March 31, 2011, as of the date 25 of this Order, Plaintiff has not filed any oppositions. The Court deems these motions appropriate 26 for resolution without oral argument, and vacates the April 21, 2011 motion hearing and case 27 management conference. See Civ. L. R. 7-1(b). For the reasons explained below, Defendants' motion to dismiss is GRANTED with leave to amend. Defendant Anthem's motion to strike is DENIED as moot.

health care services at its facility in Santa Clara, California. See Compl. ¶ 9. On June 4, 2009, a 6 patient of Plaintiff underwent surgery. Plaintiff alleges that the patient was insured by a "health 7 benefits agreement" with Defendants. Id. at ¶ 11. Under that agreement, Defendants promised to 8 pay for certain costs of health care services incurred by the patient. Id.

claim for payment. Id. at ¶ 13. However, according to Plaintiff, Defendants have not made the full 13 payment of the outstanding charges.

breach of contract; (2) implied covenant of good faith and fair dealing; and (3) common counts.

Presently before the Court are Defendants' motion to dismiss for failure to state a claim and motion 17 to strike portions of the complaint.

I.BACKGROUND

In the Complaint, Plaintiff describes itself as an ambulatory surgery center that provides Plaintiff alleges that, on June 4, 2009, the patient executed an "Assignment of Benefits" to Plaintiff, which authorized Plaintiff, as the patient's assignee, to bill the insurance carrier (Defendants) directly. Pursuant to the assignment agreement, Plaintiff alleges it submitted a timely

Based on these allegations, Plaintiff brings suit for three California state law claims: (1)

II.ANALYSIS

Dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim is

"proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to 21 support a cognizable legal theory." Shroyer v. New Cingular Wireless Services, Inc., 606 F.3d 658, 22 664 (9th Cir. 2010) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). In considering 23 whether the complaint is sufficient to state a claim, the court must accept as true all of the factual 24 allegations contained in the complaint. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). While a 25 complaint need not allege detailed factual allegations, it "must contain sufficient factual matter, 26 accepted as true, to "'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 27 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). If the court concludes that the 28 complaint should be dismissed, it must then decide whether to grant leave to amend. "[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it 2 determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v.

Cir. 1995)).

is preempted by the Employment Retirement Income Security Act of 1974 ("ERISA"), as 7 amended, 29 U.S.C. §§ 1001 et seq. Section 1144(a) of ERISA provides that ERISA provisions

Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (quoting Doe v. United States, 58 F.3d 494, 497 (9th

Defendants move to dismiss on the ground that each of Plaintiff's state law causes of action

"supersede any and all State laws insofar as they may now or hereafter relate to any employee 9 benefit plan . . . ." See 29 U.S.C. § 1144(a). The provisions of ERISA "apply to any employee 10 benefit plan if it is established or maintained--(1) by any employer engaged in commerce or in any

(3) by both." See 29 U.S.C. § 1003(a). 14

covered by a health insurance policy with Defendants. Although Plaintiff did not attach a copy of 16 the health insurance agreement to the Complaint, Defendants submit what they contend is the 17 agreement referenced in the Complaint. See Exh. D to Notice of Removal ("Agreement"). The 18

Court will consider the Agreement as incorporated by reference into the Complaint. See United

States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003) ("The doctrine of incorporation by reference 20 may apply, for example, when a plaintiff's claim about insurance coverage is based on the contents 21 of a coverage plan."). The Court finds that the Agreement is an "employee benefit plan" as defined 22 in Section 1003(a). See, e.g.,Agreement at 94 (referencing participant rights and protection under 23

ERISA). As the Agreement is covered by ERISA, Plaintiff's three state law claims based on 24 violation of the Agreement are preempted. See Cedars-Sinai Med. Ctr. v. Nal League of

Postmasters, 497 F.3d 972, 978 (9th Cir. 2007) (recognizing that "ERISA preempts the state claims 26 of a provider suing as an assignee of the beneficiary's rights to benefits under an ERISA plan"); 27 see also The Meadows v. Employers Health Ins., 47 F.3d 1006, 1008 (9th Cir. 1995) (affirming 28

industry or activity affecting commerce; or (2) by any employee organization or organizations

representing employees engaged in commerce or in any industry or activity affecting commerce; or

Here, Plaintiff seeks to recover payment as the assignee of one of its patients, a patient "the principle that ERISA preempts the state claims of a provider suing as an assignee of a 2 beneficiary's rights to benefits under an ERISA plan").*fn1

III. CONCLUSION

Accordingly, for good cause shown:

(1) the motion to dismiss is GRANTED with leave to amend;

(2) the motion to strike portions of the complaint is DENIED as moot;

(3) any amended pleading must be filed within twenty-one (21) days of the date this Order.

Failure to timely amend the complaint will result in dismissal with prejudice; and

(4) the April 21, 2011 motion hearing and case management conference are VACATED.

IT IS SO ORDERED.


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