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Neurospine v. Cigna Health and Life Insurance Co.

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

March 30, 2017

SAN JOSE NEUROSPINE, Plaintiff,
v.
CIGNA HEALTH AND LIFE INSURANCE COMPANY, Defendant.

          ORDER DENYING MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT RE: DKT. NO. 53

          LUCY H. KOH UNITED STATES DISTRICT JUDGE.

         Plaintiff San Jose Neurospine (“Plaintiff”) sues Defendant Cigna Health and Life Insurance Company (“CHLIC”) for several state law causes of action. Before the Court is Plaintiff's motion for leave to file a Second Amended Complaint (“SAC”), which seeks to add Citrix Systems, Inc. (“Citrix”) as a defendant. ECF No. 53. The Court finds this matter suitable for resolution without oral argument and hereby VACATES the motion hearing set for April 13, 2017, at 1:30 p.m. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court hereby DENIES Plaintiff's motion for leave to file a SAC.

         I.BACKGROUND

         A. Factual Background

         Plaintiff is a medical service provider with its principal place of business in Campbell, California. ECF No. 15 (First Amended Complaint, or “FAC”), at ¶ 1. On August 30, 2015, Plaintiff provided medical care to “Patient ‘A.M., '” a patient who is a participant in a self-funded employee health plan whose claims are administered by Defendant CHLIC, an insurance company with its principle place of business in Connecticut. See FAC ¶ 3; ECF No. 19-1. Plaintiff states that it provided $125, 000.00 worth of medical services to Patient A.M., but “Cigna has reimbursed [Plaintiff] for $28, 570.00 of the total amount, leaving an unpaid balance of $96, 430.000.” FAC ¶¶ 15-18, 36-40.

         B. Procedural History

         On July 29, 2016, Plaintiff filed suit against CHLIC in the Superior Court of Santa Clara County. ECF No. 1-2. Plaintiff alleged that Plaintiff “called the Defendant at their designated telephone number to verify covered health benefits” prior to rendering medical care to Patient A.M. Id. ¶ 26. Plaintiff stated that, in providing medical care benefits to Patient A.M., Plaintiff relied on the reimbursement information that CHLIC provided to Plaintiff over the telephone. Id. ¶ 27. Plaintiff alleged that CHLIC's failure to reimburse Plaintiff for the full amount of medical care provided to Patient A.M. violated implied contracts that CHLIC made with Plaintiff. Id. ¶ 33.

         Based on these factual allegations, Plaintiff asserted eight state law causes of action against CHLIC, including breach of California Health and Safety Code § 1371.4; breach of implied contract; breach of implied covenant of good faith and fair dealing; negligent misrepresentation; unjust enrichment; unfair business practices; quantum meruit; and recovery of payment for services rendered. Id. ¶¶ 43-98.

         On August 31, 2016, CHLIC answered Plaintiff's Complaint in state court. See ECF No. 1-3. On September 1, 2016, CHLIC timely removed the case to this Court on the basis of federal subject matter jurisdiction and diversity jurisdiction. ECF No. 1 (“Notice of Removal”), at 1-2. On September 1, 2016, CHLIC answered the removed Complaint. See ECF No. 1.

         On September 29, 2016, Plaintiff filed a First Amended Complaint. See FAC. Plaintiff's FAC added Cigna Health of California (“CHC”), a California corporation, as a defendant. Id. at ¶¶ 1-4. Plaintiff's FAC alleged substantially the same facts as Plaintiff's state court Complaint. See generally Id . The FAC added only that CHC “is a California corporation with its principal place of business in the county of Los Angeles, California”; that CHC “operate[s] as a health care service plan pursuant to the Knox-Keene Health Care Service Plan Act of 1975”; and that “these two Cigna entities coordinate their efforts, utilize the same employees and assets, have actual or ostensible authority to, and do in fact, act through one another and otherwise function as a unified whole.” Id. ¶¶ 2-4. Plaintiff's FAC brought the same eight causes of action as Plaintiff's state court Complaint against CHLIC, but alleged these eight claims against both CHC and CHLIC without adding any facts about CHC's role in the causes of action. See Id . at ¶¶ 44-85.

         Also on September 29, 2016, Plaintiff filed a motion to remand this case to California Superior Court. ECF No. 13. Plaintiff's motion to remand argued that ERISA did not completely preempt Plaintiff's state law claim, and thus federal question jurisdiction did not exist. Id. at 1-8. Plaintiff's motion to remand also asserted that, because CHC was a citizen of California, complete diversity did not exist. Id. at 8.

         On October 13, 2016, Defendants CHC and CHLIC filed a response in opposition to Plaintiff's motion to remand, which argued that CHC was joined as a “sham defendant” in order to defeat diversity jurisdiction. See ECF No. 19. Defendants also argued that federal question jurisdiction existed because Plaintiff's state law causes of action were completely preempted by ERISA. Id. On October 19, 2016, Plaintiff filed a reply in support of its motion to remand. ECF No. 21.

         On October 13, 2016, CHLIC answered the FAC. ECF No. 18.

         On October 20, 2016, CHC moved to dismiss the FAC's claims against CHC. ECF No. 22. On November 2, 2016, Plaintiff filed an opposition. ECF No. 23, at 5. On ...


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