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Regents of The University v. Global Excel Management

United States District Court, N.D. California

March 25, 2015

THE REGENTS OF THE UNIVERSITY, Plaintiff,
v.
GLOBAL EXCEL MANAGEMENT, Defendant.

ORDER RE DEFENDANT'S MOTION TO STRIKE [DOCKET NO. 32]

DONNA M. RYU, Magistrate Judge.

Before the court is Defendant Global Excel Management, Inc.'s motion to strike certain allegations and prayers from Plaintiff Regents of the University of California's amended complaint. [Docket No. 32.] The court conducted a hearing on February 26, 2015. For the reasons set forth below, Defendant's motion is granted in part and denied in part.

I. BACKGROUND

Plaintiff is a public trust corporation authorized to administer medical facilities within the University of California system. This includes the Hospitals Auxiliary of the Medical Center of the University of California, San Francisco, ("UCSF Medical Center"), which is itself a nonprofit public benefit corporation organized under California law. [Docket No. 29 (Am. Compl.) ¶ 1.]

Defendant is a Canadian for-profit corporation with its principal place of business in Quebec, Canada. (Am. Compl. ¶ 2.) Defendant arranges for the provision of health care services to its enrollees and/or pays for or reimburses part or all of the cost for those services. (Am. Compl. ¶ 2.) Plaintiff initially filed this lawsuit in the California Superior Court on July 9, 2014; Defendant removed the case to federal court on the basis of diversity jurisdiction.

Plaintiff alleges the following facts. From February 5, 2013 until February 22, 2013, Plaintiff provided medically necessary emergency services, supplies, and/or equipment to Patient S.K. at UCSF Medical Center. (Am. Compl. ¶ 8.) S.K. was an enrolled beneficiary in a health care service plan sponsored, administered, and/or funded by Defendant. (Am. Compl. ¶ 8.) At all relevant times, Plaintiff and Defendant did not have a written agreement regarding reimbursement rates for medical care which UCSF Medical Center would provide to patients who were members of Defendant's health plan. (Am. Compl. ¶ 9.)

Plaintiff contacted Defendant by telephone to ascertain whether Defendant or its principal was responsible for the costs associated with S.K.'s medical treatment. (Am. Compl. ¶ 10.) In response, Defendant's agent provided Plaintiff with the relevant insurance verification and insurance coverage eligibility information for S.K. under Defendant's health plan. (Am. Compl. ¶ 10.) At all relevant times, Defendant held itself out to be the responsible payor for services provided to S.K.. (Am. Compl. ¶ 11.)

Plaintiff billed $1, 012, 307.93 for the treatment of S.K. (Am. Compl. ¶ 14.) To date, Defendant has paid only $350, 955.26 for the medical services provided to S.K., despite Plaintiff's demands for the remaining $661, 352.67. (Am. Compl. ¶¶ 17-18.)

Plaintiff's original complaint brought two causes of action against Defendant: (1) quantum meruit and (2) violation of California Health and Safety Code section 1371.4(b), which requires health care service plans to reimburse providers for any emergency services and care provided to stabilize their enrollees. See Cal. Health & Safety Code § 1371.4(b).

In the quantum meruit claim, Plaintiff alleged that it provided medically necessary services, supplies, and/or equipment to S.K.; that it reasonably expected full reimbursement of its billed charges; that it billed charges totaling $1, 012, 307.93 for the care of S.K.; that Defendant benefitted from the care provided to S.K.; and that Defendant failed to properly pay Plaintiff by paying only a portion of the billed charges, causing Plaintiff to incur damages. (Compl. ¶¶ 19-26.) In the section 1371.4 claim, Plaintiff asserted that Defendant failed to properly pay for the emergency medical services, supples, and/or equipment that Plaintiff provided to S.K.. (Compl. ¶¶ 27-34.)

On September 25, 2014, Defendant moved to dismiss Plaintiff's second cause of action under Federal Rule of Civil Procedure 12(b)(6), arguing that section 1371.4 does not provide a private right of action. [Docket No. 7 (Def.'s Mot.) 2.] The court dismissed the section 1371.4 claim with leave to amend. [Docket No. 28.]

Plaintiff filed an amended complaint on December 15, 2014. Plaintiff's quantum meruit claim remains unchanged, but its second cause of action now states a claim under California's Unfair Competition Law ("UCL") (Cal. Bus. & Prof. Code § 17200 et seq. ) premised on Defendant's alleged violation of section 1371.4(b). (Am. Compl. ¶¶ 28-29.) Defendant now moves to strike certain allegations and prayers from Plaintiff's amended complaint.

II. LEGAL STANDARDS

Pursuant to Federal Rule of Civil Procedure 12(f), upon motion or sua sponte, a court may strike "from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." The function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial. Fantasy, Inc., 984 F.2d at 1527 (quotation marks and citation omitted). Rule 12(f) motions should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the ...


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