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Rocky Mountain Holdings, LLC v. Blue Cross and Blue Shield of Florida

August 13, 2008

ROCKY MOUNTAIN HOLDINGS, LLC, LC, C.J. CRITICAL CARE TRANSPORTATION SYSTEMS OF FLORIDA, INC., PLAINTIFFS,
v.
BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC., HEALTH OPTIONS, INC., DEFENDANTS.



ORDER

This case comes before the Court on the Motion to Remand by Plaintiffs (Doc. No. 14, filed May 27, 2008) and the Memorandum of Law in Opposition by Defendants (Doc. No. 18, filed June 13, 2008).

A Florida statute requires HMOs to pay emergency healthcare providers that are not affiliated with the plan a certain rate for their services.*fn1 This case presents the question of whether state law claims under the statute are deemed issues of federal law, for purposes of removal to federal court, because the majority of claims at issue involved participants in plans covered by the Employment Retirement Income Security Act ("ERISA").

Background

Plaintiffs Rocky Mountain Holdings, LLC, LC and C.J. Critical Care Transportation Systems of Florida provide emergency air services by transporting patients to healthcare facilities. (Doc. No. 30 ¶¶ 2-3, filed Aug. 7, 2008.) Defendant Health Options, Inc. ("HOI") operates the HMO plan that is the subject of this case, and Defendant Blue Cross and Blue Shield of Florida ("Blue Cross") is its parent company. (Id. ¶¶ 4-5.) Plaintiffs are not affiliated with HOI's health plan in any manner. (Id. ¶ 8.) Nevertheless, section 641.513 of the Florida Statutes requires healthcare providers to render emergency medical services to HMO participants, even when the provider has no contractual relationship with the HMO. In such cases, the statute requires the HMO to reimburse providers with the "usual and customary provider charges for similar services in the community where the services were provided . . . ." Fla. Stat. § 641.513(5)(b). Plaintiffs contend that they have provided ambulance services for Defendants' subscribers on numerous occasions, but Defendants reimbursed them at a rate below the usual and customary charges. (Id. ¶ 11.)

Plaintiffs originally filed this lawsuit in state court. Soon after, Defendants removed to this Court, contending that federal subject matter jurisdiction exists under 28 U.S.C. § 1331, for issues of federal law, and 29 U.S.C. § 1132(e), for issues relating to ERISA specifically.*fn2 (Doc. No. 1, filed Apr. 28, 2008.)

Analysis

The burden of establishing federal subject matter jurisdiction rests on the party attempting to invoke it. McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936). Because federal courts are of limited jurisdiction, district courts should strictly construe the requirements of 28 U.S.C. § 1441 (removal jurisdiction) and remand all cases in which jurisdiction is doubtful. Shamrock Oil & Gas Corp. v. Sheetz, 313 U.S. 100, 109 (1941); Russell Corp. v. Am. Home Assurance Co., 264 F.3d 1040, 1050 (11th Cir. 2001).

One type of federal jurisdiction exists when a federal question is presented. 28 U.S.C. § 1331 (2006). The general test for determining the existence of a federal question is whether the question appears on the face of a well-pleaded complaint. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). A federal defense, such as preemption by federal law, does not independently allow for removal. Id at 392-93. However, there exists an "independent corollary to the well-pleaded complaint rule known as 'complete preemption' or 'super preemption,' which creates federal-question jurisdiction when the pre-emptive force of a statute is so extraordinary that it converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule."*fn3 Sheridan Healthcorp., Inc. v. Neighborhood Health, 459 F. Supp. 2d 1269, 1272 (S.D. Fla. 2006) (quoting Caterpillar, Inc., 482 U.S. at 393) (internal quotation marks omitted). Courts consider ERISA to be a statute with such an "extraordinary" force. Id. When super-preemption applies, the plaintiff's state law claims are "re-characterized" as federal claims under ERISA, and the case is removed to federal court. Speciale v. Seybold, 147 F.3d 612, 615 (7th Cir. 1998).

According to the Eleventh Circuit, a state law claim is super-preempted if it meets the following four conditions: (1) the plaintiff's complaint involves a relevant ERISA plan; (2) the plaintiff has standing to sue under the ERISA plan; (3) the defendant is an ERISA entity; and (4) the complaint seeks compensatory relief akin to what is available under 29 U.S.C. § 1102(a). Butero, 174 F.3d at 1212.

Several important, relevant points do not appear to be in dispute. First, the parties do not dispute that Plaintiffs' claims are state law causes of action asserted by healthcare providers, and they do not dispute that at least some of the patients that Plaintiffs airlifted were subscribers to HMO plans covered by ERISA.*fn4 The parties also agree that the concept of super-preemption is determinative of whether federal jurisdiction exists in this case. Their dispute concerns: (1) whether healthcare provider claims in this case are generally subject to preemption (Doc. No. 14 at 4-5); (2) the application of the four-factor test for super-preemption, particularly the issue of whether Plaintiffs have standing to sue under an ERISA plan (id. at 6-8; Doc. No. 18 at 7-12); and (3) whether ERISA's "savings clause," which provides that the Act should not be "construed to exempt or relieve any person from any law of any state which regulates insurance," saves Plaintiffs' claims from super-preemption (Doc. No. 14 at 8-9; Doc. No. 18 at 13-15). The first two matters are determinative of the issue presented and will be addressed below.

I. Preemption and State Law Claims by Providers

Plaintiffs first argue that state law claims brought by healthcare providers against insurers affect ERISA plans too tenuously to be preempted. (Doc. No. 14 at 4 (citing Lordmann Enter., Inc. v. Equicor, 32 F.3d 1529, 1533 (11th Cir. 1994)).) They are correct. "Courts have, with near unanimity, found that independent state law claims of third party healthcare providers are not preempted by ERISA." Med. & Chirurgical Facility of the State of Md. v. Aetna U.S. Healthcare, Inc., 221 F. Supp. 2d 618, 619-20 (D. Md. 2002) (citing In Home Health, Inc. v. Prudential Ins. Co. of Am., 101 F.3d 600, 606 (8th Cir. 1996); Meadows v. Employers Health Ins., 47 F.3d 1006 (9th Cir.1995); Lordmann Enters., 32 F.3d at ...


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