Opinion
CIVIL ACTION NO. 3:00-CV-1559-P
September 7, 2001
MEMORANDUM OPINION AND ORDER
Now before the Court are:
1. Plaintiffs' Motion to Reconsider the Order to Deny Remand to State Court, filed April 27, 2001;
2. Defendants' Response to Plaintiffs' Motion to Reconsider Order Denying Remand, filed May 18, 2001;
3. Plaintiffs' Reply to Defendants' Response to Plaintiffs' Motion to Reconsider, filed May 31, 2001;
4. Defendants' Sur-Reply to Plaintiffs' Motion to Reconsider Order Denying Remand, filed July 5, 2001;
5. Defendants's Motion to Dismiss or in the Alternative Motion to Extend Time, filed June 25, 2001;
6. Plaintiffs' Response to Defendants' Motion to Dismiss and Supplement to Plaintiffs' Reply to Motion to Reconsider, filed August 8, 2001.
No Reply to Defendants' Motion to Dismiss or in the Alternative Motion to Extend Time was submitted. After the close of the pleadings, both sides further submitted several Notices of Preemption Authority for this Court's consideration.
After considering the pleadings, the parties' briefs and supplemental materials, the arguments of counsel, and the relevant authorities, this Court is of the opinion, for the reasons stated below, that Plaintiffs' Motion to Reconsider the Order to Deny Remand to State Court is hereby GRANTED in part and DENIED in part. Defendants's Motion to Dismiss is hereby GRANTED.
BACKGROUND
Minh Tran and his wife Thanh-Thuy T. Nguyen ("Plaintiffs") brought suit on June 15, 2000, in the 134th District Court of Dallas County, Texas, against Defendants Kaiser and Dr. Frank Kromelis alleging claims of medical negligence and vicarious liability. Specifically, Plaintiffs asserted that the quality of medical care delivered to Tran was substandard, resulting in cardiac damage to Tran and damages to his wife Nguyen.
Hereinafter, the use of the term "Kaiser" refers to Defendants Kaiser Foundation Health Plan of Texas, Individually and d/b/a Kaiser Permanente; Permanente Medical Association of Texas, Individually and d/b/a Kaiser Permanente; Kaiser Foundation Health Plan, Inc., Individually and d/b/a Kaiser Permanente, Kaiser Foundation Hospitals, Individually and d/b/a Kaiser Permanente; and Texas Health Choice, L.C., f/k/a Kaiser Foundation Health Plan of Texas.
Defendants' filed a Notice of Removal on July 20, 2000, claiming that this Court had jurisdiction under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B) and (a)(3) because Plaintiffs' claims for negligence were related to and made in connection with an ERISA plan, and as such were also preempted pursuant to 29 U.S.C. § 1144(a). The Court, in its Order dated March 28, 2001, denied Plaintiffs' Motion to Remand, agreeing with Defendants' that at least some of the underlying claims were best re-characterized as claims to recover benefits under the terms of an ERISA plan, and thus fell withing the complete preemption of ERISA to the extent that those claims were actually based upon the denial of benefits or administration of the plan.
Plaintiffs' filed their Motion to Reconsider on April 27, 2001, alleging that in light of the Supreme Court's recent pronouncements in Pegram v. Herdrich and the often cited ERISA trilogy, the Fifth Circuit's recent decision in Corporate Health Ins., Inc. v. Texas Dept. of Ins., as well as the legislative histories of ERISA and the Federal HMO Act, this Court's reliance on Corcoran v. United Healthcare was misplaced since Plaintiffs now believe it is bad law.
530 U.S. 211, 120 S.Ct. 2143 (2000).
New York Conference of Blue Cross Blue Shield Plans, 514 U.S. 645, 115 S.Ct. 1671 (1995); California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 117 S.Ct. 832 (1997); De Buono v. NYSA-ILA Med. and Clinical Serv. Fund, 520 U.S. 806, 117 S.Ct. 1747 (1997).
Corporate Health Ins., Inc. v. Texas Dept. of Ins., 215 F.3d 526 (5th Cir. 2000).
Corcoran v. United Healthcare, Inc., 965 F.3d 1321 (5th Cir. 1992).
DISCUSSION
I. Standard for Reconsideration
Because Plaintiffs' Motion to Reconsider was not filed until 30 days after entry of this Court's Order denying remand, the Court treats it as a motion under Federal Rules of Civil Procedure 60(b). See Pryor v. U.S. Postal Service, 769 F.2d 281, 285 (5th Cir. 1985); see also Easley v. Pace Concerts, Inc., No. CIV.A 98-220, 1999 WL 649632, at *1 (E.D. La. Aug. 25, 1999). Under Rule 60(b), a party may obtain relief from a final judgment or order for "(1) mistake, inadvertence, surprise, or excusable neglect, (2) newly discovered evidence . . . or (6) any other reason justifying relief from the operation of a judgment." Fed.R.Civ.P. 60(b).
Due to the interest in finality, motions for reconsideration are granted only when the moving party shows there was a mistake of law or fact or presents newly discovered evidence that could not have been discovered previously. Lejano v. K.S. Bandak, No. Civ.A. 00-2990, 2000 WL 33416866, at *5 (E.D. La. Nov. 3, 2000). Defendants here assert that Plaintiffs have not offered any new law or any new facts uncovered since the Court's Order bearing on its previous determination of jurisdiction and preemption. See Defs. Resp. Pls. Mot. Recons. at 7. However, in determining whether a moving party has established a sufficient basis for alleging a manifest injustice, the district court enjoys considerable discretion. See Easley, 1999 WL 649632, at *2.
One of the purposes of Rule 60(b)(1) is to permit the trial court to reconsider and correct "obvious errors of law" without forcing the parties to engage in the machinery of appeal. See United States v. 329.73 Acres of Land, 695 F.2d 922, 925 (5th Cir. 1983). Although Plaintiffs' arguments in this motion are substantially the same as the arguments they asserted in their motion to remand, there exists some need for clarification regarding their claims that the Court's Order was based on an incorrect interpretation of the law following the recent pronouncements by the Supreme Court and the Fifth Circuit in the area of ERISA preemption. See also Fu v. Reno, No. CIV.A.3:99-CV-0981, 2000 WL 1644490, at *2 (N.D. Tex. Nov. 1, 2000) (Lindsay, J.) (granting reconsideration after Plaintiff alleged court's error in interpreting statute). Therefore, the Court concludes that there is sufficient basis here to reconsider its prior order.
II. Standard for Removal under ERISA
The party seeking to remove a case to federal court bears the burden of establishing federal jurisdiction. Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988) aff'd, 503 U.S. 131 (1992). Removal is proper in state law actions when the complaint falls within the original jurisdiction of the federal district court. See 28 U.S.C. § 1441(a). Where, as here, there is no diversity of citizenship between the parties, the propriety of removal depends upon the existence of a federal question, i.e., whether any of plaintiffs' claims "arise under" federal law. See 28 U.S.C. § 1331. An action arises under federal law when the face of the "well pleaded complaint" raises a federal issue. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-12 (1983).
The well-pleaded complaint rule, however, is qualified by the doctrine of "complete preemption," which recognizes that "Congress may so completely pre-empt a particular area [of the law] that any civil complaint raising this select group of claims is necessarily federal in character." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1986). In the context of ERISA, the Supreme Court found removal proper whenever a state law cause of action was "related to" an employee benefit plan. Id. at 62. In addition, suits brought by beneficiaries to recover benefits from a covered plan fall directly within the scope of the civil enforcement provisions of the statute, which provides the exclusive federal cause of action for such disputes. See Metropolitan Life, 481 U.S. at 62-63. Therefore, since Congress so clearly manifested an intent to make such ERISA causes of action removable to federal court, such actions are removable whether ERISA preemption is obvious or not at the time the suit is filed. Id. at 66.
ERISA civil enforcement provisions state that "a civil action may be brought . . . by a participant or beneficiary . . . 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).
III. Existence of a Qualified ERISA Plan
In the Order dated March 28, 2001, this Court granted removal after finding the existence of a qualified employee benefits plan under ERISA and determining that the plaintiffs' claims were essentially challenges to the denial of benefits under that plan. Since these claims as plead "related to" an ERISA plan, the Court applied the doctrine of complete preemption and denied plaintiff's motion for remand. See Order Den. Pls. Mot. Remand (3/28/01).
In their Motion to Reconsider, Plaintiffs again challenge the finding that Kaiser is a qualified ERISA plan. See Pls. Mot. Recons. at 17-18. Under ERISA, an "employee benefit plan" means "any plan, fund or program established or maintained by an employer for the purpose of providing for its participants . . . [certain] hospital or medical benefits." 29 U.S.C. § 1002(1) (1999). In determining whether a particular plan qualifies as an "employee benefit plan," the court must ask whether "(1) a plan exists; (2) if it falls within any statutory exceptions; and (3) does it satisfy the primary elements of an ERISA plan." Meredith v. Time Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993). To satisfy the primary elements of an ERISA plan, the court in turn asks (a) whether an employer established or maintained the plan, and (b) whether the employer intended to provide benefits to its employees. Id. This Court previously made findings that since 1998 plaintiff Tran was a participant in a group health plan established or maintained by his employer MCI, and that the group service agreement entered into between Kaiser and MCI providing group medical coverage was established for the benefit of MCI's employees. See Order Den. Pls. Mot. Remand at 4. Plaintiffs in their Motion to Reconsider do not point the Court to any new facts or any new authorities undermining these findings. Therefore, the Court reaffirms that the health plan involved here is indeed an employee benefit plan within ERISA's control.
Plaintiffs main focus in their Motion to Reconsideration deals more directly with this Court's alleged misguided reliance on Corcoran v. United Healthcare, Inc., 965 F.2d 1321 (5th Cir. 1992), in light of the Supreme Court's recent pronouncements in Pegram v. Herdrich and the often cited ERISA trilogy, as well as the Fifth Circuit's recent decision in Corporate Health Ins., Inc. v. Texas Dept. of Ins. These arguments are addressed below.
530 U.S. 211, 120 S.Ct. 2143 (2000).
New York Conference of Blue Cross Blue Shield Plans, 514 U.S. 645, 115 S.Ct. 1671 (1995); California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 117 S.Ct. 832 (1997); De Buono v. NYSA-ILA Med. and Clinical Serv. Fund, 520 U.S. 806, 117 S.Ct. 1747 (1997).
Corporate Health Ins., Inc. v. Texas Dept. of Ins., 215 F.3d 526 (5th Cir. 2000).
IV. ERISA Preemption Principles
ERISA by its terms provides that its provisions "shall supersede any and all [s]tate laws insofar as they may now or hereafter relate to any employee benefit plan. . . ." 29 U.S.C. § 1144(a) (1999). Although the Supreme Court's early pronouncements suggested that ERISA preemption was to be construed as "deliberately expansive," Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987), its boundaries were never considered limitless. See Mackey v. Lanier Collection Agency Serv., Inc., 486 U.S. 825, 841 (1988). Consequently "[s]ome state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law `relates to' the plan." Smith v. Texas Children's Hosp., 84 F.3d 152, 155 (5th Cir. 1996) ( citing Shaw v. Delta Airlines, Inc., 463 U.S. 85, 100 n. 21 (1983)).
A. "Relates to" Analysis
Since the statute's enactment, the Supreme Court has endeavored with regularity in the task of interpreting and applying the "relate to" language of ERISA's preemption provision. See California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 324 (1997). In Shaw, the Court explained that "a law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a `connection with' or `reference to' such a plan." 463 U.S. at 96-97. However, beginning with New York State Conference of Blue Cross Blue Shield Plans v. Travelers Ins. Co., the Court has stressed a more limited scope with regards to the "relate to" provision of ERISA. See 514 U.S. 645, 655 (1995). Thus the Court has emphasized a need to "go beyond the unhelpful text . . . and look instead to the objectives of the ERISA statute," Travelers, 514 U.S. at 656, as well as a need to look at the nature of the effect of the state law on those plans. Id. at 658-59; see also Dillingham, 519 U.S. at 325. Noting that ERISA's main objective was to avoid conflicting state and local regulations that would undermine the national uniform administration of employee benefit plans, Travelers, 514 U.S. at 657, the Supreme Court held that state laws with only "an indirect economic effect" on ERISA plans failed to satisfy the requisite "connection with" the plan necessary for preemption. Id. at 659-660; see also Cigna Healthplan of Louisiana v. State of Louisiana, 82 F.3d 642, 647 (5th Cir. 1996).
In De Buono v. NYSA-ILA Med. and Clinical Serv. Fund, 520 U.S. 806 (1997), the Supreme Court continued to endorse a narrowing approach to ERISA's "relate to" language. There the Court found that normally a presumption against preemption existed whenever state laws attempted to regulate matters traditionally within the states historic police powers, especially in matters of health and safety. De Buono, 520 U.S. at 814. Further, the considerable burden in overcoming this presumption increased whenever the impact of that state law upon ERISA plans was no more than "indirect." Id. at 814-16.
The Fifth Circuit has established a two-part test for determining whether a state law affects an employee plan in "too tenuous, remote, or peripheral a manner" to come within the doctrine of complete preemption. Under this approach a claim based on a state law is more likely to relate to an ERISA plan if (1) it falls within an area of exclusive federal concern; and (2) it directly affects the relationship between the principle entities: the employer, the plan, the fiduciaries, and the participants and beneficiaries. See Hook v. Morrison Milling Co., 38 F.3d 776, 781 (5th Cir. 1994); Sommers Drug Stores v. Corrigan Enter., Inc., 793 F.2d 1456, 1467 (5th Cir. 1986).
1. Exclusive Federal Concern
When applying this test to determine whether a claim falls within an area of exclusive federal concern, the Court's "ultimate touchstone" is what Congress' purpose was in enacting the federal statute. Memorial Hospital Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 245 (5th Cir. 1990). Therefore, the Court must evaluate the congressional intent as well as the relations between the principal ERISA entities. Id. at 245-50. Congress enacted ERISA in order to promote the welfare of employees and their beneficiaries by protecting their contractually defined benefits. Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 112-13 (1989). Furthermore, ERISA's civil enforcement provisions clearly state that a party can only "recover benefits due to him under the terms of the plan, or enforce his rights under the terms of the plan, or the clarification of rights to future benefits under the terms of the plan." See 29 U.S.C. § 1132(a)(1)(B) (1999). Thus, under the first prong of the Hook/Sommers test, "ERISA will more likely preempt claims by participants or their beneficiaries that allege they were denied their contractual benefits as defined by the terms of the plan." Blum v. Harris Methodist Health Plan, Inc., 1997 WL 452750, at *2 (N.D. Tex. July 31, 1997) (Solis, J.).
2. Directly Affects Principle Entities
The Supreme Court identified two types of civil actions that may be brought against ERISA plans and their principal entities that would avoid preemption: enforcement actions brought to secure specified relief, and "lawsuits against ERISA plans for run-of-the-mill state law claims, e.g. unpaid rent, failure to pay creditor, or even torts committed by an ERISA plan." Memorial Hospital, 904 F.2d at 248 (citing Mackey, 486 U.S. at 833 n. 8.). "[A]lthough obviously affecting and involving ERISA plans and their trustees, this second type is not preempted." Id. Therefore, when evaluating the second prong of the Hook/Sommers test, "the question is not whether the state claims nominally affect relations between parties who happen to be principle entities, but whether the state claims affect the duties of principle entities which arose out of the terms of [the] benefit plan." Blum, 1997 WL 452750, at *2.
B. Application of the Law to the Facts
In their Motion to Reconsider, Plaintiffs argue that ERISA does not preempt their claims against Kaiser because their malpractice claims are premised on the substandard level of healthcare actually provided to Tran and not for the denial of plan benefits. See Pls. Mot. Recons. at 4. More specifically, Plaintiffs argue that Defendants should be held liable for their (1) failure to do appropriate diagnostic testing, (2) failure to do appropriate hospitalization, and (3) failure to give the appropriate instruction for the prescription of nitroglycerin to Tran. Id. This Court, relying on the allegations made in Plaintiffs' Original Petition found that their previous assertions that Tran's medical care was influenced and/or controlled by an alleged cost-containment incentive system employed by Kaiser more likely constituted an attack on the administration of the ERISA plan, and as such, was more appropriately characterized as claims for the denial of benefits, completely preempted by ERISA. See Order Den. Pls. Mot. Remand at 9-10. Because of the subtle differences in the case law regarding suits against health plans, the proper characterization of Plaintiffs' Complaint is therefore highly important.
There is often a fine line between those claims based upon the quality of the benefits received under the health plan and those claims based upon the quantity of the benefits provided. See Christantielli v. Kaiser Found. Health Plan of Texas, 113 F. Supp.2d 1055, 1063 (N.D. Tex. 2000) (Solis, J.). In Christantielli, which is factually similar to the instant case, this Court held that ERISA preempted the plaintiffs' claims criticizing an alleged cost-containment incentive system that seemed to discourage doctors from ordering tests. Id. at 1065. The Christantielli plaintiffs there tried to characterize their claims as based solely upon medical malpractice, arguing essentially that defendants failed to provide timely and proper diagnosis of plaintiff's prostate cancer. Id. As this Court suggested both in Christantielli and in its Order of March 28, 2000 in this case, these allegations of cost-containment medical decisions most closely approximate those of Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1332 (5th Cir. 1992), wherein the plan provider made medical decisions as part and parcel of its mandate to decide what benefits were available under the plan. More specifically, the Fifth Circuit found that although the Corcoran's original petition alleged that United wrongfully denied recommended bed rest ordered by plaintiff's Doctor and wrongfully determined that home nursing care was an adequate substitute for plaintiff's pregnant condition, Id. 965 F.2d at 1326, these claims when viewed in light of United's medical part and parcel benefit determination, it was sufficient for the Court to determine that plaintiffs were, plain and simple, attempting to recover for a tort allegedly committed in the course of handling a benefit determination. Id. at 1332.
Plaintiffs' suggest that the Corcoran decision is no longer valid after the Supreme Court's decision in Pegram v. Herdrich, 530 U.S. 211 (2000), and the Fifth Circuit's recent ERISA pronouncements in Corporate Health Ins., Inc. v. Texas Dept. of Ins., 215 F.3d 526 (5th Cir. 2000). This Court does not agree with Plaintiffs' position since the Supreme Court's holding in Pegram involved not a preemption case but a determination of whether "mixed eligibility and treatment decisions" made by an HMO, acting through its physicians, constituted fiduciary decisions under ERISA sufficient for imposing liability for their breach under 20 U.S.C. § 1109(a). Pegram, 530 U.S. at 216-217; see also Calad v. Cigna Healthcare of Texas, Inc., No. CIV. 3:00-CV-2693-H, 2001 WL 75576 at *4 (N.D. Tex. June 21, 2001) (Sanders, S.J.). Moreover, the Fifth Circuit, in its opinion denying panel and en banc rehearing of Corporate Health I, "did not read Pegram to entail that every conceivable state law claim survives preemption so long as it is based on a mixed question of eligibility and treatment and Corcoran held otherwise." Corporate Health Ins., Inc. v. Texas Dept. of Ins. II, 220 F.3d 641, 643-44 n. 6 (5th Cir. 2000); see also Roark v. Humana, Inc., No. CIV.A. 3:00-CV-2368-D, 2001 WL 585874 at *4(N.D. Tex) (Fitzwater, J) (stating Pegram's analysis, though helpful in understanding the reaches of ERISA preemption, is limited to suits for breach of fiduciary duty under ERISA based on a mixed eligibility decisions).
In Corporate Health I, decided post-trilogy and post- Pegram, the Fifth Circuit held that to the extent that a Texas statute would allow suits for claims that a treating physician was negligent in delivering medical services, and imposing vicarious liability on managed care entities for that negligence, it does not "relate to" the managed care provider's role as an ERISA plan administrator or affect the structure of the plans themselves so as to require preemption. Corporate Health I, 215 F.3d at 534. Thus, while an entity's functions as a medical care provider are within the traditional sphere of state regulation, any state's efforts to regulate an entity in its capacity as plan administrator continues to be preempted. Id. at 534-35.
Plaintiffs' case here represents that very fine line between those claims based upon the quality of the benefits received under the health plan and those claims based upon the quantity of the benefits provided. Reading their allegations in their Original Petition in light of their representations made to this Court on Reconsideration, this Court holds that Plaintiffs' claims that Defendant Kaiser strictly controlled its members' access to medical care "through its Medical Advice Nurse system, the primary physician, and its policies and procedures applicable to members such as MINH TRAN.," Pl. Orig. Pet. at 7-8, as well as their claims that Kaiser provided its physicians financial incentives encouraging them "to hold down costs by eliminating or reducing diagnostic testing, referrals to specialists, or providing emergency room visits and hospitalizations," Pl. Orig. Pet. at 8, fall within the class of claims better characterized as denial of benefits. However, Plaintiffs' allegations that "Defendants, acting by and through their agents, servants, nurses, physicians, representatives, and/or health care providers, failed to properly assess, monitor, evaluate, interpret laboratory and/or diagnostic studies, refer to specialists, treat and diagnose MINH TRAN's medical condition, resulting in injury," Pl. Orig. Pet. at 8, fall within those non-preempted causes of action identified in Corporate Health I dealing only with the negligent delivery of medical services. Further, as identified in Corporate Health I, imposing vicarious liability on managed care entities under these negligence theories does not interfere with ERISA's preemption provisions. See also McClelland v. Grownwaldt, 155 F.3d 507, 516 (5th Cir. 1998) (Under doctrine of "Ordinary Preemption" a defense that a cause of action "relates to" an employee benefit plan, without more, does not convert a state claim into an action arising under federal law and will not satisfy ERISA preemption).
Although Plaintiffs are masters of their pleadings, they cannot avoid complete preemption through artful pleading. See Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir. 2000) (stating complete preemption is jurisdictional in nature and cannot be avoided through plaintiff's artful pleading in state law terms). Rather, if their complaint is fundamentally based upon ERISA, then this Court must look beyond the terms of the complaint and find preemption. Thus, if some of Plaintiffs' claims are best re-characterized as a claim to recover benefits under the terms of the plan, the ERISA completely preempts those claims. Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1489 (7th Cir. 1996). Therefore, despite Plaintiffs' efforts not to use the language "denial of benefits," some of their claims here are in their essence denial of benefits claims. In other words, Plaintiffs' claims that Tran's medical care was influenced and/or controlled by the alleged cost-containment incentive system employed by Kaiser is an attack on the administration of the ERISA plan. As such, those portions of Plaintiffs' claims against Kaiser for negligence are appropriately re-characterized as claims for benefits and therefore fall within the complete preemption of ERISA. However, those claims of Plaintiffs dealing only with the Defendants alleged medical mis-treatment decisions, are not subject to the doctrine of complete preemption under ERISA. Corcoran's analysis remains the law in the Fifth Circuit with respect to ERISA preemption of medical decisions made in the context of determining the availability of benefits under a qualified plan. Corcoran, 965 F.2d at 1331. And this Court declines Plaintiffs invitation to overturn this decision, a role more appropriately left for the Court of Appeals to decide.
V. Dismissal of Preempted Claims and Remand of Medical Malpractice Claims
In light of Plaintiffs' indication that they will not be amending their pleadings to add ERISA claims for denied benefits, See Pls. Mot. Recons. at 3; see also Pls. Resp. to Defs. Mot. Dismiss, the Court grants Defendants' Motion to Dismiss with prejudice those Plaintiffs' claims found preempted by this Court. Under 28 U.S.C. § 1367(c)(3), a district court may decline in its discretion to exercise supplemental jurisdiction over supplemental (formerly "pendent") state law claims when the court has dismissed all claims giving rise to original jurisdiction. Heaton v. Monogram Credit Card Bank of Georgia, 231 F.3d 994, 997 (5th Cir. 2000). Since this Court has dismissed all of Plaintiff's state law claims completely preempted under ERISA, it shall remand the remaining medical malpractice claims against Defendants found non-preempted by the Court.
CONCLUSION
Therefore, upon careful consideration of the parties' arguments and the applicable law, the Court finds that an employee benefit plan exists as defined by ERISA and that the claims based on Tran's medical care being influenced and/or controlled by Defendants alleged cost-containment incentive system fall within the complete preemption of ERISA. The Court remands Plaintiffs remaining medical malpractice claims against Defendants Kaiser Foundation Hospitals, Permanente Medical Association of Texas, and Frank Kromelis, M.D., insofar as they are not based upon the denial of benefits under the ERISA plan. Moreover, since Plaintiffs' insist they will not amend their complaint to include ERISA claims the Court grants dismissal with prejudice as to all Defendants to the extent those claims were found preempted. Accordingly, for the foregoing reasons, Plaintiffs' Motion to Reconsider the Order to Deny Remand to State Court is hereby GRANTED in part and DENIED in part. Defendants's Motion to Dismiss the preempted claims is hereby GRANTED.
So Ordered.