Opinion
CIVIL ACTION NO. 03-544, SECTION "N" (1)
August 28, 2003
ORDER AND REASONS
Before the Court is the Motion to Remand filed by Plaintiff on April 2, 2003 (Rec. Doc. No. 3), and set for hearing on April 30, 2003. For the reasons explained herein, Plaintiffs motion is GRANTED.
Background
Plaintiff, Collection Bureau of South Louisiana, Inc. ("Collection Bureau"), sued Defendant, Tenna Laque Bergeron ("Bergeron"), in Houma City Court, on January 10, 2002, for unpaid costs of medical services rendered by Robert V. Cazayouz, M.D., Garland P. Aycock, Jr., D.D.S., and Houma Radiology Associates, Inc. Bergeron filed a third party demand against her alleged health insurer, Louisiana Health Service and Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana ("Blue Cross"), and Mr. Len J. Fontaine, on January 24, 2003. Purporting to rely on Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C § 1132(a)(1)(B), and 28 U.S.C. § 1331 and 1441(c), Blue Cross removed this action on February 21, 2003. Plaintiff, Collection Bureau, filed the motion to remand presently before the Court on April 24, 2003.Law and Analysis
"Federal courts are courts of limited jurisdiction," Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.), cert. denied, 122 S.Ct. 459 (2001). Courts "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Id. Thus, as the removing party, the third-party defendant, Blue Cross, bears the burden of demonstrating this Court's jurisdiction and that removal was proper. See Manguno v. Prudential Prop, and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
Arguing that Bergeron's third-party demand against it is a claim for health insurance benefits under an ERISA employee welfare benefit plan that is "separate and independent" from the open account claims asserted against Bergeron by Collection Bureau, Blue Cross contends that the entire action was removable under 28 U.S.C. § 1331 and 1441(c). Blue Cross further suggests, however, that this Court has discretion to sever and remand the claim asserted against Bergeron. The plaintiff, Collection Bureau, urges remand of the entire action, contending that the third party claim does not present a federal question, and that Blue Cross has not shown the health insurance in question to be an "ERISA plan." In any event, Collection Bureau seeks remand of its claim against Bergeron. Bergeron has not taken a position on this issue.
The Court finds that Blue Cross has not met its burden of demonstrating the propriety of its removal for two reasons. First, Blue Cross has not adequately demonstrated that ERISA provides the necessary jurisdictional basis for removal. Although Bergeron's allegations against Blue Cross in the third party demand do not reference ERISA, the Court recognizes that a claim for benefits under § 502(a) of ERISA completely preempts any state law claims seeking the same relief, and provides a basis for original and removal federal question jurisdiction. See, e.g., Metropolitan Life Ins. Co., v. CMC, 481 U.S. 58, 62-67, 107 S.Ct. 1542, 1546-1548 (1987); Arana v. Ochsner Health Plan, Inc., 2003 WL 21554491 (5th Cir.). Nevertheless, Blue Cross has not included such allegations in its notice of removal, or provided evidence with its opposition to Collection Bureau's motion to remand, sufficient to demonstrate that the Blue Cross insurance policy in question constitutes, or is part of, an ERISA employee welfare benefit plan.
Because it finds remand to be adequately supported on other grounds, the Court does not decide whether Blue Cross's removal also was defective because it failed to obtain the consent of the other third party defendant, Len J. Fontaine, to the removal. Not only did Blue Cross fail to explain why Mr. Fontaine's consent was not necessary, Blue Cross states that it is the "only defendant in the Third-Party Demand " See February 21, 2003 Notice of Removal at ¶ 11.
Under the Fifth Circuit's jurisprudence, a particular insurance arrangement qualifies as an employee welfare benefit plan under ERISA if: (1) it is a "plan"; (2) it does not fall within the safe-harbor provision established by the Department of Labor; and (3) it was established or, maintained by an employer with the intent to benefit employees. See Lain v. UNUM Life Ins. Co., 27 F. Supp.2d 926, 930 (S.D. Tex. 1998) (citing Meredith v. Time Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993)), aff'd, 279 F.3d 337 (5th Cir. 2002). Although Blue Cross alleges in its notice of removal that Bergeron seeks benefits under a health insurance plan provided to employees of Louis Infant Crisis Center, and contends in its opposition to the motion to remand that Bergeron was such an employee, Blue Cross makes no effort to address whether the plan falls within the Department of Labor's safe harbor provision.
A "plan" exists if "a reasonable person could ascertain the intended benefits, beneficiaries, source of financing, and procedures for receiving benefits." Meredith v. Time Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993).
If the relevant plan satisfies all of the requirements of the safe-harbor provision, it is exempt from ERISA's coverage. See Meredith, 980 F.2d at 355. The safe-harbor provision, 29 C.F.R. § 2510.3-1(j), applies to "a group or group-type insurance program offered by an insurer to employees . . ." that meets the following criteria:
(1) No contributions are made by an employer; (2) Participation in the program is completely voluntary for employees; (3) The sole functions of the employer with respect to the program are, without Bendorsing the program, to permit the insurer to publicize the program to employees, to collect premiums through payroll deduction, and to remit them to the insurer; and (4) The employer receives no consideration in the form of cash or otherwise in connection with the program, other than reasonable compensation, excluding any profit, for administrative services actually rendered with payroll deductions.
Second, even if § 1331 otherwise would render the claim against it removable, Blue Cross has not met its burden of showing that claim to be "separate and independent," as is required by § 1441(c), from Collection Bureau's claim against Bergeron. Indeed, Blue Cross offers little more than the conclusory assertion that the third party claim is "a separate, independent and distinct cause of action from that alleged by [Collection Bureau] against Defendant Bergeron."
See Notice of Removal at ¶¶ 10-11. In Central of Georgia Railway Co. v. Riegal Textile Corp., 426 F.2d 935, 937-38 (5th Cir. 1970), the Fifth Circuit allowed a third party defendant to remove a third party claim after it was severed from the main demand, at the plaintiffs request, such that the two claims were" treat[ed] as two lawsuits," and the third party defendant was "as much a `defendant' as if an original action had been brought against him." Blue Cross has not attempted to demonstrate, much less shown, that the state court's apparent bifurcation, on its own motion, of Collection Bureau's claim against Bergeron from Bergeron's third party demand against Blue Cross, for trial purposes, constituted a "severance" for purposes of Central of Georgia Railway and Rule. 21 of the Federal Rules of Civil Procedure. See Nolan v. Boeing Co., 919 F.2d 1058, 1067 (5th Cir. 1990), cert. denied, 499 U.S. 962, 111 S.Ct. 1587 (1991) (Article 1038 of the Louisiana Code of Civil Procedure authorizes "separate trials" rather than a true "severance" of the lawsuit); Phillips v. Unijax. Inc., 625 F.2d 54, 56 (5th Cir. 1980) (order granting separate trials pursuant to Alabama procedural rules did not sever claims and thereby create two separate lawsuits for removal purposes); Caldwell v. Alfa Ins. Corp., 806 F. Supp. 623, 625 (S.D. Miss. 1992) (use of word "severance" alone not sufficient to demonstrate intent to sever claims, under Mississippi procedural rules, rather than merely to order separate trials).
Two judges of this district have concluded that apparently identical claims were separate and independent, reasoning that the third party claim was an indemnity claim presenting at least one issue crucial to it (how the insurance contract should be interpreted) that was completely irrelevant to the claim asserted by the plaintiff. See Jefferson Parish Hosp. Dist. #2 v. Harvey, 788 F. Supp. 282, 285 (E.D. La. 1992); Ochsner v. Louisiana Health Serv. and Indem. Co., d/b/a Blue Cross and Blue Shield of Louisiana, 1989 WL 6013, *2 (E.D. La.). However, in Reality Therapy Counseling and Recovery Center, Inc. v. Davis, 831 F. Supp. 567, 569-70 (E.D. La. 1993), Judge Feldman concluded that the third party claim there was not separate and independent, because the same legal wrong — failure to pay for health care services rendered — was at issue in both claims, Similarly, resolving the main claim and the third party claims required resolution of the plaintiffs claim for payment against the defendants (the parents of the patient). Id.
Reality differs from this case, however, in that the plaintiff there also had filed an amended complaint naming the third party defendant as an additional defendant. See Reality, 831 F. Supp. at 567-70. Further, it appears that the original defendants in that case also argued that their written contract with the plaintiff had been amended to expressly state that the defendants' liability was dependent upon the treatment provided being covered by their health insurance. Id.
The undersigned believes the Fifth Circuits decision in In re Wilson Industries, Inc., 886 F.2d 93, 96 (5th Cir. 1989), provides the answer here. In that case, the Court explained that third party indemnity claims are not "separate and independent," for purposes of § 144 1(c), when they are premised on an allegation that the third party defendant's conduct caused the plaintiffs injuries. Id. at 96. Here, though not a model of clarity, the gist of Bergeron's third party claim is that Blue Cross caused Collection Bureau's "injury" by failing to pay for the health care services that are the subject of Collection Bureau's claim, and that were provided "on the basis" of that coverage. Indeed, Bergeron suggests that she was assured by Blue Cross's agent that her daughter was covered under the Blue Cross policy, and that by paying a "co-pay," Bergeron fulfilled her obligation to the health care providers. Thus, according to Bergeron, it was Blue Cross's responsibility to pay for the costs of the health care services that Plaintiff now seeks to recover from her. In other words, "[Plaintiff] blames the patient [Bergeron], who in turn blames [the third-party defendant]." See Sunny Acres Skilled Nursing v. Williams, 731 F. Supp. 1323, 1327 (N.D. Ohio 1990) (internal quotations and citations omitted) (finding similar claim was not separate and independent for purposes of § 1441(c).
See January 24, 2003 Third Party Demand.
Given the nature of the third party claim, and that removal statutes are to be strictly construed against removal, see Eastus v. Blue Bell Creameries, 97 F.3d 100, 106 (5th Cir. 1996), the Court finds that Blue Cross has not met its burden of demonstrating that the third party claim asserted against it is "separate and independent" from Collection Bureau's claim for purposes of § 1441(c). Nor does the Court find that the two decisions cited, without explanation, by Blue Cross require a different result. See Benoit v, Grainger, 1998 WL 749444 (E.D.La.); Bernos v. Massachusetts Mut. Life Ins. Co., 1988 WL 106321 (E.D. La.). Accordingly, the Court finds that the entire action should not have been removed and, thus, is to be remanded,
Conclusion
Because the third party defendant Louisiana Health Service and Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana, has failed to demonstrate that it properly removed this action to this Court, IT IS ORDERED that the motion to remand filed by the plaintiff, Collection Bureau of South Louisiana, Inc., is GRANTED.
New Orleans, Louisiana, this