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Community Hospital of Monterey Peninsula v. Blue Cross of California

United States District Court, N.D. California, San Jose Division

January 26, 2015

COMMUNITY HOSPITAL OF THE MONTEREY PENINSULA, Plaintiff,
v.
BLUE CROSS OF CALIFORNIA, a California corporation; LABORERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; and DOES 1 through 10, inclusive, Defendants.

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND, AND DENYING AS MOOT DEFENDANTS' MOTION TO DISMISS

LUCY H. KOH, District Judge.

Before the Court are the Motion to Remand filed by plaintiff Community Hospital of the Monterey Peninsula ("Plaintiff" or the "Hospital"), ECF No. 13 ("Mot."), and the Motion to Dismiss filed by defendants Laborers Health and Welfare Trust Fund of Northern California (the "Trust Fund") and Anthem Blue Cross ("Anthem, " sued here as Blue Cross of California) (collectively, "Defendants"), ECF No. 9. The Court finds these motions suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b) and hereby VACATES the motion hearing and the initial case management conference set for January 29, 2015, at 1:30 p.m. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS Plaintiff's Motion to Remand, and DENIES as moot Defendants' Motion to Dismiss.

I. BACKGROUND

A. Factual Background

According to the Complaint, on December 16, 2012, a patient ("Patient") sought and received emergency medical treatment at the Hospital. Ex. A to ECF No. 1-1 ("Compl.") ¶ 7. Patient provided proof to the Hospital that he was a member of the Trust Fund's health plan, which is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). Id. ¶ 8. Anthem, pursuant to a contract with the Trust Fund, authorized the Hospital to provide treatment to Patient from December 16, 2012, to December 26, 2012. Id. ¶ 12.

On December 26, 2012, Patient's physician determined that Patient could be discharged to a skilled nursing facility ("SNF"). Compl. ¶ 14. Because no SNF could accommodate Patient until December 31, 2012, Patient stayed at the Hospital until he was discharged on that date. Id. ¶ 15. Despite the Hospital's attempts to obtain authorization from Defendants to continue treating Patient, the Hospital alleges that Defendants failed to take any action to procure an alternate level of care for Patient or to assume responsibility for Patient's care while he was hospitalized from December 26, 2012, to December 31, 2012. Id. ¶¶ 16, 18. It was not until December 28, 2012, the Hospital alleges, that Defendants notified the Hospital that Defendants disputed the level of care being provided. Id. ¶ 17.

On or about January 9, 2013, the Hospital sought $110, 125.00 in reimbursement from Defendants for Patient's care from December 16, 2012, through December 31, 2012. Compl. ¶ 19. Defendants partially paid, denying the Hospital reimbursement in the amount of $19, 282.00 for the treatment provided to Patient from December 26, 2012, until December 31, 2012. Id. ¶ 20. It is that amount that the Hospital now seeks to recover. Id. ¶ 22.

B. Procedural History

After exhausting Defendants' internal appeal processes, Compl. ¶ 21, Plaintiff filed its Complaint in Monterey County Superior Court on July 22, 2014. The Complaint asserts four causes of action against Defendants, all of which arise under California law[1]: one cause of action for violation of the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., and three causes of action alleging that Defendants owe Plaintiff monies for services rendered. Compl. ¶¶ 36-58. The alleged acts giving rise to Plaintiff's UCL cause of action are: (1) Defendants' rescission of the verification of benefits for Patient's treatment subsequent to the Hospital's good faith provision of health care service, in violation of section 796.04 of the California Insurance Code and section 1371.8 of the California Health and Safety Code; and (2) Defendants' failure to take legally required action to the extent Defendants disputed the medical necessity of the treatment provided to Patient, in violation of section 1371.4 of the California Health and Safety Code. Id. ¶¶ 37-38.

On October 10, 2014, Defendants removed the case to federal court on the basis that Plaintiff's state law claims are completely preempted by ERISA, 29 U.S.C. § 1001 et seq., which governs Patient's benefit plan. ECF No. 1 ¶ 4. Defendants moved to dismiss this case on October 17, 2014. ECF No. 9. Plaintiff opposed the motion on October 31, 2014, ECF No. 12, and Defendants replied on November 7, 2014, ECF No. 15.

On October 31, 2014, Plaintiff also filed the instant Motion to Remand. Mot. at 10. Defendants opposed this motion on November 14, 2014, ECF No. 18 ("Opp."), and Plaintiff replied on November 21, 2014, ECF No. 21.

II. LEGAL STANDARD

A suit may be removed from state court to federal court only if the federal court would have had subject matter jurisdiction over the case. 28 U.S.C. § 1441(a); see Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) ("Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant."). If it appears at any time before final judgment that the federal court lacks subject matter jurisdiction, the federal court must remand the action to state court. 28 U.S.C. § 1447(c).

The party seeking removal bears the burden of establishing federal jurisdiction. Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). "The removal statute is strictly construed, and any doubt about the right of removal requires resolution in favor of remand." Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d ...


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