United States District Court, C.D. California
ORDER GRANTING PLAINTIFFS MOTION TO REMAND (DKT.
S. Fischer United States District Judge.
Cigna Healthcare of California, Inc. (Cigna California) and
Cigna Health and Life Insurance Company (CHLIC)
(collectively, Defendants) removed this case based on
diversity and federal question jurisdiction. Dkt. 1 (Notice).
Plaintiff Sanjiv Goel M.D., Inc. (Plaintiff) moves for
remand. Dkt. 9 (Mot.). Plaintiffs Motion is GRANTED.
provides emergency medical services. Dkt. 1-1 (Compl.) ¶
1. After rendering such services to four patients insured by
Defendants, Plaintiff submitted claims for reimbursement.
Id. ¶ 10. Defendants reimbursed Plaintiff $32,
089.69 for those services but failed to reimburse the
remaining $387, 412.23 Plaintiff claims it is owed.
Id. ¶ 15.
courts have diversity jurisdiction where the amount in
controversy exceeds $75, 000 and the action is between
citizens of different states. 28 U.S.C. §§ 1332,
1441.Defendants do not contest that Cigna
California and Plaintiff are both citizens of California, but
claim Cigna California was fraudulently joined.
purposes of diversity jurisdiction, the Court "may
disregard the citizenship of a non-diverse defendant who has
been fraudulently joined." Grancare, LLC v.
Thrower, 889 F.3d 543, 548 (9th Cir. 2018). A
non-diverse defendant is fraudulently joined "[i]f the
plaintiff fails to state a cause of action against [the]
resident defendant, and the failure is obvious according to
the settled rules of the state." Morris v. Princess
Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001)
(first alteration in original) (quoting McCabe v. Gen.
Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987)).
"[T]he test for fraudulent joinder and for failure to
state a claim under Rule 12(b)(6) are not equivalent."
Grancare, 889 F.3d at 549. Instead, "the
standard is similar to the 'wholly insubstantial and
frivolous' standard for dismissing claims under Rule
12(b)(1) for lack of federal question jurisdiction."
Id. In evaluating a claim of fraudulent joinder,
"a federal court must find that a defendant was properly
joined and remand the case to state court if there is a
'possibility that a state court would find that the
complaint states a cause of action against any of the
[non-diverse] defendants.'" Id. (alteration
and emphasis in original) (quoting Hunter v. Philip
Morris USA, 582 F.3d 1039, 1046 (9th Cir. 2009)). In
this inquiry, "the district court must consider . . .
whether a deficiency in the complaint can possibly be cured
by granting the plaintiff leave to amend." Id.
Complaint, Plaintiff does not differentiate between CHLIC and
Cigna California. See Compl. ¶¶ 2-3 (defining CHLIC
and Cigna California as "Cigna" and Cigna and the
Doe defendants as "Cigna" or
"Defendants"). Plaintiff alleges that CHLIC and
Cigna California "coordinate their efforts, utilize the
same employees and assets, [and] have actual or ostensible
authority to, and do in fact, act through one another, and
otherwise function as a united whole." Id.
¶ 3. Plaintiff further alleges that CHLIC and Cigna
California market and present themselves to members and
providers as "a single unified entity under the
'Cigna' marketing brand name," Id., and
"are the alter egos of each other," Mot. at 6;
see also Compl. ¶ 8.
argue that Cigna California was fraudulently joined because
CHLIC, and not Cigna California, "administered or
insured medical benefits for the four individuals who
received the treatment for which plaintiff alleges it was
undercompensated" and "Cigna California was [not]
responsible for payment of the contested claims." Dkt.
12 (Opp'n) at 7-8. Defendants also dispute that Cigna
California is the alter ego of CHLIC. Id. at 8-9.
the first point, Defendants submitted a declaration from
Emily Russell, an operations advisor at CHLIC, asserting that
Cigna California "is not the insurer, plan sponsor, plan
administrator, or claims administrator" for any of the
four patients' health plans. Dkt. 12-3 (Russell Decl.) at
¶¶ 1, 6, 11, 16, 20. Defendants also submitted a
declaration from William S. Jameson, Managing Counsel for
CHLIC and Cigna California, stating that Cigna California
"had no responsibility for processing, adjudicating, or
denying the claims for the services as issue in this
action." Dkt. 12-2 (Jameson Decl.) ¶¶ 1, 10.
Although this evidence may cast doubt on the viability of
Plaintiffs claims against Cigna California, "a denial,
even a sworn denial, of allegations does not prove their
falsity." Grancare, 889 F.3d at 551.
the second point, Jameson declares that neither CHLIC nor
Cigna California is "a parent company or subsidiary of
the other," "each independently decide[s] what
products they will offer" and "utilize[s] a
different claims platform and a different claims
process," they "do not employ the same personnel,
" have "independent boards of
directors," and "generate separate financial
statements." Jameson Decl. ¶¶ 6-8. These
assertions cast doubt on the viability of Plaintiffs alter
ego theory, but do not demonstrate that Cigna California
could not possibly be liable. "[I]t is conceivable that
a corporate family could have formal delineations of
responsibilities that are not followed in practice."
Jadali v. Cigna Health & Life Ins. Co.,
3:19-cv-00996-WHO, 2019 WL 1897481, at *3 (N.D. Cal. Apr. 29,
2019). The Court recognizes that the Complaint as it stands
provides minimal factual allegations to support a claim of
alter ego liability, but the Court finds such deficiency
could be cured through amendment.
Cigna California was not fraudulently joined, diversity
jurisdiction did ...