United States District Court, M.D. Florida, Fort Myers Division
OPINION AND ORDER 
POLSTER CHAPPELL, UNITED STATES DISTRICT JUDGE
matter comes before the Court on United States Magistrate
Judge Mac R. McCoy's Report and Recommendation (Doc. 33)
dated February 22, 2017. Judge McCoy recommends denying
Plaintiff Lee Memorial Health System's (“Lee
Memorial”) Motion for Remand (Doc. 13), granting
Defendants Blue Cross and Blue Shield of Florida, Inc.
(“BCBSF”), and Horizon Healthcare Services, Inc.
d/b/a Blue Cross Blue Shield of New Jersey, Horizon Blue
Cross and Blue Shield of New Jersey (“BCBSNJ”)
and Horizon BCBSNJ's Motion to Dismiss (Doc. 9), and
allowing Lee Memorial leave to file an amended complaint.
(Doc. 33 at 37). The parties have filed timely objections to
the Report and Recommendation. (Doc. 37; Doc. 38). Defendants
BCBSF and BCBSNJ have responded to Lee Memorial's
objections. (Doc. 40). Thus, the Report and
Recommendation is ripe for review.
Report and Recommendation extensively covers the background
of this case. For the sake of brevity, the Court will only
recount the necessary facts. This case is premised upon
insurance coverage. Lee Memorial operates a healthcare system
that includes a hospital providing medical services and
treatments to admitted patients. Defendants BCBSF and BCBSNJ
are underwriters and administrators of healthcare plans that
provide policyholders with healthcare benefits and coverage.
1985, Lee Memorial and BCBSF entered into a Preferred Patient
Care Hospital Agreement (“Agreement”) in which
Lee Memorial agreed to provide healthcare services in
exchange for payment by BCBSF. There are two relevant
amendments to the Agreement that bear mentioning. The first
is the Tenth Amendment, which provides in pertinent part,
“that no person, entity, or organization other than
BLUE CROSS AND BLUE SHIELD shall be held accountable or
liable to HOSPITAL for any of BLUE CROSS AND BLUE
SHIELD'S obligations to HOSPITAL created under this
Agreement.” (Doc. 2 at ¶ 10). The second relevant
amendment is the Twentieth Amendment, which provides, in
It is further agreed that BLUE CROSS AND BLUE SHIELD is
entitled to treat individuals covered through sister Blue
Cross and/or Blue Shield Plans (i.e. each Plan an independent
corporation operating under a license or sub-license with the
Blue Cross and Blue Shield Association) as Policyholders
under this Agreement. Such individuals being treated as being
covered under a PREFERRED PATIENT CARE Benefit Agreement or
other benefit agreement which provides access to
participating providers in either the PREFERRED PATIENT CARE
network or NetworkBlue network . . . whichever is applicable.
. . . Payment for covered services provided to such
Policyholders shall be in accordance with Exhibit D PREFERRED
PATIENT CARE if the Policyholder is entitled to access the
PREFERRED PATIENT CARE network or in accordance with Exhibit
D NETWORK BLUE if the Policyholder is entitled to access the
(Doc. 2 at ¶ 10).
to this case is Heather Picardi and her son, N.P., who was
born at Lee Memorial. Picardi is a policyholder of BCBSNJ and
sought treatment at Lee Memorial for complications relating
to her pregnancy. There, Picardi prematurely gave birth to
N.P., a covered dependent under Picardi's BCBSNJ plan.
Later, BCBSNJ argued that N.P. was covered under a separate
group policy agreement held by N.P.'s father. Per the
Agreement's Twentieth Amendment, Lee Memorial submitted
claims to BCBSF for treatment provided to Picardi and N.P.
BCBSF denied and delayed payment of the claims.
Lee Memorial filed this suit in state court. It alleges the
following seven claims:
• Count I, Declaratory Relief Under Florida Statutes,
• Count II, Breach of Contract;
• Count III, Promissory/Equitable Estoppel;
• Count IV, Negligent Misrepresentation;
• Count V, Breach of Fiduciary Duty;
• Count VI, Unjust Enrichment; and
• Count VII, Breach of Implied Covenants of Good Faith
and Fair Dealing Against BCBSF.
(Doc. 2). Subsequent to Lee Memorial's filing, Defendants
removed this case to federal court on grounds that Lee
Memorial's state law claims are preempted by the Employee
Retirement Income Security Act of 1974 (“ERISA”).
(Doc. 1). The Motions before the Court are Lee Memorial's
Motion for Remand and Defendants' Motion to Dismiss.
(Doc. 9; Doc. 13). The undersigned referred both Motions to
Judge McCoy for a Report and Recommendation. As stated, Judge
McCoy recommends denying Lee Memorial's Motion for
Remand, granting Defendants' Motion to Dismiss, but
allowing Lee Memorial leave to amend. (Doc. 33). The parties
object to the recommendations. (Doc. 37; Doc. 38; Doc. 40).
conducting a careful and complete review of the findings and
recommendations, a district judge may accept, reject, or
modify the magistrate judge's report and recommendation.
See28 U.S.C. § 636(b)(1); see also
Williams v. Wainwright, 681 F.2d 732 (11th Cir.
1982). In the absence of specific objections, there is no
requirement that a district judge review factual findings
de novo, Garvey v. Vaughn, 993 F.2d 776,
779 n.9 (11th Cir. 1993), and the court may accept, reject,
or modify, in whole or in part, the findings and
recommendations, 28 U.S.C. § 636(b)(1)(C). The district
judge reviews legal conclusions de novo, even in the
absence of an objection. See Cooper-Houston v.
Southern Ry. Co., 37 F.3d 603, 604 (11th Cir. 1994).
Motion for Remand
Memorial moves to remand this case to state court, arguing
its state law claims are not preempted by ERISA, and that
this Court lacks federal question jurisdiction. (Doc. 13).
And, Lee Memorial raises several objections to the Report and
Recommendation's finding to deny its Motion. (Doc. 37).
First, it avers it lacks standing to assert an ERISA claim.
(Doc. 37 at 12). In support, Lee Memorial insists that it is
a third party healthcare provider and not as an assignee of a
health plan beneficiary. (Doc. 37 at 12). Next, Lee Memorial
asserts its claims are independent of any ERISA healthcare
plan. (Doc. 37 at 19-20). As a final measure, Lee Memorial
argues lack of jurisdiction and renews its request for
remand. (Doc. 37 at 24).
burden of establishing subject matter jurisdiction falls on
the party attempting to invoke the jurisdiction of the
federal court. McNutt v. Gen. Motors Acceptance Corp. of
Ind., 298 U.S. 178, 189 (1936); see also
Rocky Mountain Holdings, LLC v. Blue Cross & Blue
Shield of Fla., Inc., No. 608-CV-686- ORL-19KRS, 2008 WL
3833236, at *1 (M.D. Fla. Aug. 13, 2008). The party seeking
removal has “the burden of producing facts supporting
the existence of federal subject matter jurisdiction by a
preponderance of the evidence.” Hobbs v. Blue Cross
Blue Shield of Ala., 276 F.3d 1236, 1242 (11th Cir.
2001). District courts should strictly construe the removal
requirements of 28 U.S.C. § 1441 and remand all cases in
which jurisdiction falls outside of the parameters of the
statute. See Shamrock Oil & Gas Corp. v. Sheets,
313 U.S. 100, 109 (1941); Rocky Mountain Holdings,
2008 WL 3833236, at *1. Removal to federal court is proper in
“any civil action brought in a State court of which the
district courts of the United States have original
jurisdiction.” 28 U.S.C. § 1441(a). To establish
original jurisdiction, an action must satisfy the
requirements of federal question jurisdiction under 28 U.S.C.
the test to determine if federal question jurisdiction exists
is whether a federal question appears on the face of the
well-pleaded complaint. See Gables, Inc. v. Blue
Cross & Blue Shield of Fla., Inc., 813 F.3d 1333,
1337 (11th Cir. 2015), cert. denied, 137 S.Ct. 296 (2016);
Ervast v. Flexible Prods. Co., 346 F.3d 1007, 1012
(11th Cir. 2003). But, there is a relevant exception to the
well-pleaded rule. The Eleventh Circuit has “recognized
that ‘[c]omplete preemption is a narrow exception to
the well-pleaded complaint rule and exists where the
preemptive force of a federal statute is so extraordinary
that it converts an ordinary state law claim into a statutory
federal claim.'” Gables, 813 F.3d at 1337
(quoting Conn. State Dental Ass'n v. Anthem Health
Plans, Inc., 591 F.3d 1337, 1343 (11th Cir. 2009)).
considering a motion to remand, the court may consider the
evidence in and outside the petition for removal and motion
to remand. See May v. Lakeland Reg'l Med.
Ctr., No. 809-CV-406-T-33AEP, 2010 WL 376088, at *3
(M.D. Fla. Jan. 25, 2010) (citing Sierminski v. Transouth
Fin. Corp., 216 F.3d 945, 949 (11th Cir. 2000)). The
evidence considered must be judged at the time of removal and
must support the grounds for removal found in the Notice of
Removal. Id. It bears noting that “[t]he
removing party bears the burden of demonstrating complete
preemption and, where jurisdiction is not absolutely clear,
the Eleventh Circuit favors remand.” Sheridan
Healthcorp, Inc. v. Aetna Health Inc., 161 F.Supp.3d
1238, 1244 (S.D. Fla. 2016).
this backdrop, the Court will address Lee Memorial's
objections to the Report and Recommendation's finding to
deny its Motion for Remand.
Memorial's first objection is that it lacks standing to
bring any ERISA claim because it is a third party healthcare
provider and not an assignee of a health plan beneficiary.
(Doc. 37 at 12). Lee Memorial makes this argument per the
test set forth in Aetna Health Inc. v. Davila, 542
U.S. 200 (2004).In response to Lee Memorial's
objection, Defendants assert that Lee Memorial has standing
to present a colorable claim under ERISA. (Doc. 40 at
participant or a beneficiary under a health plan has a
private right of action to recover benefits under a health
insurance plan pursuant to § 502(a) of ERISA.
Gables, 813 F.3d at 1337. That section provides:
A civil action may be brought-(1) by a participant or
beneficiary- . . . (B) to recover benefits due to him under
the terms of his plan, to enforce his rights under the terms
of the plan, or to clarify his rights to future benefits
under the terms of the plan.
29 U.S.C. § 1132(a)(1)(B); Davila, 542 U.S. at
210. “This provision is straightforward. If a
participant or beneficiary believes that benefits promised to
him under the terms of the plan are not provided, he can
bring suit seeking provision of those benefits. A participant
or beneficiary can also bring suit generically to
‘enforce his rights' under the plan, or to clarify
any of his rights to future benefits.” Davila,
542 U.S. at 210. Section 502(a) “has such extraordinary
preemptive power that it converts an ordinary state common
law complaint into one stating a federal claim for purposes
of the well-pleaded complaint rule.” Gables,
813 F.3d at 1337 (internal quotes omitted).
determine whether causes of action fall under § 502(a),
courts apply the two-part test established in
Davila. See Gables, 813 F.3d at
1337. Under this test, a court must ask: “‘(1)
whether the plaintiff could have brought its claim under
§ 502(a); and (2) whether no other legal duty supports
the plaintiff's claim.'” Id.(quoting
Conn. State Dental, 591 F.3d at 1345). If the answer
to both questions is yes, the claim is preempted.
bring a claim under ERISA, a plaintiff must have statutory
standing, “meaning the plaintiff has the right to make
a claim under section 502(a).” See
Gables, 813 F.3d at 1338. Only two categories of
individuals may bring suit under ERISA- plan participants and
beneficiaries. Id. (citing 29 U.S.C. §
1132(a)(1)(B)). Healthcare providers generally are neither
plan participants nor beneficiaries. Consequently, they lack
independent standing to sue under ERISA. Id.But,
there is an exception:
a healthcare provider may acquire derivative
standing to sue under ERISA by obtaining a written
assignment from a participant or beneficiary of his right to
payment of medical benefits ..... [N]othing in ERISA
prohibits a healthcare provider from acquiring derivative
standing based upon an assignment of rights from a
participant or beneficiary ..... We recognized that the
interests of ERISA plan participants and beneficiaries are
better served by allowing provider-assignees to sue ...