United States District Court, C.D. California
Present:The Honorable James V. Selna, U.S. District Court
CIVIL MINUTES - GENERAL
[IN CHAMBERS] Order Regarding Motion to Remand
Sobertec LLC (“Sobertec”) and Beachside Recovery
LLC (“Beachside”) (together-
“Plaintiffs”) filed a motion to remand. (Mot.,
Dkt. No. 21.) Defendants UnitedHealth Group Incorporated
(“UHGI”), United HealthCare Services, Inc.
(“UHSI”), United Healthcare Insurance Company
(“UHIC”), United Behavioral Health
(“UBH”), UnitedHealthcare Service LLC (together-
“United”), Optuminsight, Inc., and Optum
Services, Inc. (all together- “Defendants”)
opposed the motion. (Opp'n, Dkt. No. 28.) Plaintiffs
replied. (Reply, Dkt. No. 30.)
following reasons, the Court grants the motion to remand.
allege the following. Plaintiffs operate addiction treatment
facilities in Orange County, California that are licensed and
certified to provide detox, residential inpatient, and
intensive outpatient services. (Complaint, Dkt. No. 1-1, Ex.
A ¶¶ 53, 54.) UHIC and UHSLLC provide or manage
health insurance coverage policies at issue with the other
defendants. (Id. ¶ 74.) UBH and Optum are
responsible for reviewing, authorizing, processing, and
paying claims submitted by Plaintiffs for beneficiaries of
UHSI, UHIC, and/or UHSLLC. (Id. ¶ 75.) UBH and
Optum are responsible for reviewing and responding to
provider appeals and performing so-called audits and
investigations of mental health services providers, including
Plaintiffs. (Id.) Plaintiffs have been providing
addiction treatment services to Defendants' insureds as
out-of-network providers since 2012 and 2015, respectively.
(Id. ¶ 76.)
no in-network agreement applied, Defendants' insureds
sought out Plaintiffs as their providers to render care, and
Plaintiffs therefore regularly treated Defendants'
insureds and promptly submitted bills to Defendants for
payment at Plaintiffs' reasonable and customary rates for
those out-of-network services. (Id. ¶ 80.)
Consistent with industry norms and custom, when approached by
United's insureds, Plaintiffs first called Defendants to
verify their members' benefits and confirm those
members' eligibility, and obtain basic information about
their coverage for the purposes of receiving mental
healthcare, such as effective coverage date, deductibles,
copays, out-of-pocket maximums, and the plan's rate
structure for out-of-network services. (Id. ¶
81.) During each of these verification calls, Defendants gave
Plaintiffs a unique reference number that could be used to
identify the specific call. (Id.)
Plaintiffs provided any substantial treatment to a particular
member, Plaintiffs would call Defendants again for an initial
“pre-certification” to provide care to that
member. (Id. ¶ 82.) During this
pre-authorization process, Defendants would typically request
information about Plaintiffs' facilities to confirm that
Plaintiffs are eligible providers. (Id.) Then,
Defendants and Plaintiffs would typically discuss the
particulars of the member's clinical presentation, needs,
and the specific treatments that Plaintiffs identified as
necessary for that member. (Id.) In so doing,
Plaintiffs would ordinarily provide information obtained from
the member, such as the member's mental status, vital
signs, current medications, medical history, and other
relevant details as requested in order to determine whether
the proposed course of treatment was appropriate.
(Id.) Based on this clinical discussion, Defendants
would then “authorize” Plaintiffs to provide the
specific proposed care. (Id.) For any further
authorizations, Plaintiffs and Defendants would engage in
detailed, further clinical discussions about the member's
progress, status, and need for further treatment.
(Id. ¶ 83.) Plaintiffs relied on these benefits
verifications, authorizations and related representations
from Defendants, and this course of dealing generally,
consistent with industry custom and practice, in agreeing to
provide care to Defendants' insureds. (Id.
to 2016, Plaintiffs and Defendants generally conducted
business successfully and efficiently, and without
significant incident. (Id. ¶ 85.) Defendants
would typically process and pay Plaintiffs' claims fairly
and promptly, generally within 30 to 45 business days from
the date of Defendants' receipt of those claims.
(Id.) Defendants generally paid Plaintiffs in a
manner consistent with the information that Defendants
conveyed during the process of verifying the members'
benefits and generally would not request the submission of
medical records with the claims. (Id.)
knew that Plaintiffs were treating, and would continue to
treat, their insureds. (Id. ¶ 114.) Both
Defendants and Plaintiffs knew or had reason to know that the
other party would interpret their ongoing relationship and
performance as creating a contract under which Defendants
agreed to pay Plaintiffs for Plaintiffs' out-of-network
services rendered to Defendants' insureds at
Plaintiffs' reasonable rate for such services.
(Id.) Plaintiffs have performed all duties required
under this implied-in-fact contract. (Id. ¶
115.) Defendants knew that Plaintiffs' services were not
being provided to Defendants' insureds free of charge.
(Id. ¶ 118.) When Defendants' insureds and
enrollees sought addiction treatment from Plaintiffs,
Defendants confirmed to Plaintiffs that the treatment was
authorized and would be covered. (Id. ¶ 119.)
Defendants specifically requested and authorized
Plaintiffs' services or otherwise promised, consented
pledged, agreed, and committed to pay the reasonable cost of
Plaintiffs' services rendered to Defendants'
insureds. (Id.) It was only after Plaintiffs
rendered the treatment that Defendants refused to compensate
Plaintiffs for these services. (Id. ¶ 120.)
Defendants also represented to Plaintiffs that their claims
and their facilities were under a valid “audit”
and that, as a result, Plaintiffs were obligated to submit
paperwork and other information, including extensive medical
records, which Defendants represented would be received,
reviewed, and used to process the claims, satisfy the audit
if an 85% “passing rate” was achieved, and that
Plaintiffs' compliance and diligent response to such
requests would ultimately result in Plaintiffs' removal
from the audit and “pre-payment” review.
(Id. ¶ 131.) As a result of Defendants'
representations concerning coverage and payment and the
validity of Defendants' audit and claim review process,
Plaintiffs continued rendering services to Defendants'
insureds. (Id. ¶ 134.) Plaintiffs provided
services to Defendants' insureds at great cost and have
not received payment from Defendants for those services.
(Id. ¶ 135.)
had a duty to fairly and competently receive, review, and
process Plaintiffs' claims and supporting information
submitted in connection with those claims. (Id.
¶ 146.) Defendants, however, have continually and
grossly mishandled Plaintiffs' claims and supporting
documentation. (Id. ¶ 147.) Defendants have
also failed to timely or accurately respond to
Plaintiffs' requests for information. (Id.
14, 2019, Plaintiffs brought suit in California state court
against Defendants alleging claims for (1) breach of
implied-in-fact contract; (2) quantum meruit; (3) promissory
estoppel; (4) fraud and deceit; (5) negligent
misrepresentation; (6) negligence; and (7) unfair
competition. (Complaint, Dkt. No. 1-1, Ex. A.) On June 17,
2019, Defendants removed the case on the basis of federal
question jurisdiction. (Not., Dkt. No. 1.) Plaintiffs now
seek remand of the case. (Mot., Dkt. No. 21.)
28 U.S.C. § 1441(a), a defendant may remove a civil
action from state court to federal court so long as original
jurisdiction would lie in the court to which the action is
removed. City of Chicago v. Int'l Coll. of
Surgeons, 522 U.S. 156, 163 (1997). According to the
Ninth Circuit, courts should “strictly construe the
removal statute against removal jurisdiction.” Gaus
v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
Doubts as to removability should be resolved in favor of
remanding the case to the state court. Id. This
“‘strong presumption' against removal
jurisdiction means that the ...