Diagnostic Affiliates of Ne. Hou, LLC v. Aetna, Inc.

Full title: DIAGNOSTIC AFFILIATES OF NORTHEAST HOU, LLC, Plaintiff, v. AETNA, INC., et…

Court: United States District Court, S.D. Texas, Corpus Christi Division

Date published: Feb 1, 2023

654 F. Supp. 3d 595 (S.D. Tex. 2023)

Opinion

CIVIL ACTION NO. 2:22-CV-00127

2023-02-01

DIAGNOSTIC AFFILIATES OF NORTHEAST HOU, LLC, Plaintiff, v. AETNA, INC., et al., Defendants.

Khan Ebad, Kingwood, TX, for Plaintiff. David Baird Carpenter, Alston & Bird LLP, Atlanta, GA, Emily Seymour Costin, Alston & Bird LLP, Washington, DC, Laura B. Hunt, Alston & Bird, LLP, Dallas, TX, for Defendants Aetna, Inc., Aetna Health And Life Insurance Company, Aetna Health Inc., Aetna Health Insurance Company, Aetna Health Management, LLC, Aetna Medicaid Administrators LLC, Meritain Health, Inc., First Health Life & Health Insurance Company, ADP TotalSource, Inc. Health and Welfare Plan, Group Health & Welfare Plan, Exxon Mobil Medical Plan, AstraZeneca Health And Welfare Plan, Catholic Health Initiatives Master Trust, Costco Wholesale Corporation Cafeteria Plan, CVS Health Defined Benefit Plans Master Trust, Fidelity National Financial, Inc. Welfare Plan, Ge Global Health Plan, GT Services LLC Medical Insurance, Huntsman Corporation Employee Benefit Plan, Indorama Ventures Oxides, LLC Welfare Benefits Plan, Linde Comprehensive Welfare Benefit Plan, Lyondell Chemical Co., Equistar Chemicals LP, And Houston Refining, LP Master Trust, Memorial Hermann Health System Flexible Benefit Plan, Oprona, Inc., Group Welfare Plan for Quest Diagnostics Incorporated, The Friedkin Group Welfare Benefits Plan, Torque Tools Inc. Health Plan, UPS Health and Welfare Plan, Walmart Inc. Associates Health and Welfare Plan, Restated Zions Bancorp. Employee and Retiree Welfare Benefit Plan, Accenture United States Group Health Plan, Alight Solutions LLC Health And Welfare Plan, American International Group, Inc. Medical Plan, Aramco U.S. Welfare Benefit Plan, Collabera Inc. 125 Benefit Plan, Educational Testing Service Welfare Benefits Plan, KPMG LLP Health Plans., Mann Eye Center PA Health And Welfare Plan, Paychex Business Solutions LLC Employee Benefit Plan, R & L Carriers Group Benefits Plan, Sap America Health & Welfare Plan, Technology Services Group, LLC Employee Benefits Plan, Tetra Tech, Inc. Fully Insured HMO Benefit Plan, Trinet Group, Inc., United Airlines Consolidated Welfare Benefit Plan, Wyndham Hotels & Resorts Health and Welfare Plan, Aarthun Performance Group LTD Health Plan, Agility Recovery Solutions, Inc. Health and Welfare Plan, American Air Liquide Holdings INC. Health Plan, Arkema INC. Health Plan, C. V. Starr & Co. Health Plan, Cemex, Inc. Welfare Benefit Plan, Citigroup Legal Benefits Plan, Cox Enterprises, Inc. Welfare Benefit Plan, Deloitte & Touche Welfare Benefit Plan, Enercon Services, Inc. Employee Health & Welfare Benefit Plan, Entergy Corporation Companies' Bargaining Employees' Welfare Benefit Trust, First Community Bancshares, Inc. Employee Benefit Plan, HCA Inc. And Welfare Benefits Plan, Hilton Worldwide Health Plan, Infosys BPM Limited Health Plan, Inframark, LLC Welfare Benefit Wrap Plan, International Cellulose Corporation Health Plan, Invesco Health Plan, Iqvia Inc. Health Plan, The Iron Mountain Companies Welfare Plan, Lawler Foods, LTD. Health & Welfare Plan, Defendant Leidos Employee Health and Welfare Benefits Plan, Lockheed Martin Corporation Basic Benefit Plan For Hourly Employees, Magellan Health & Welfare Plan, McCombs Enterprises Health Plan, Mitsubishi Electric U.S. Companies Health And Welfare Plan, Nustar Omnibus Welfare Plan, Occidental Petroleum Corporation Welfare Plan, Opko Health, Inc. Health and Welfare Plan, Repsol USA Holdings Corporation-Welfare Plans, Salesforce.com Health And Welfare Plan, Shi International Corp. Health And Welfare Plan, Snapon incorporated Non-Union Retiree Health and Welfare Benefit Plan, T-Mobile USA, Inc. Employee Benefit Plan, Transwestern Commercial Services Comprehensive Health And Welfare Benefit Plan, Trinity University Welfare Benefit Plan, William Marsh Rice University Health And Welfare Plan, Decypher Technologies Employee Benefits Plan. David Baird Carpenter, Alston & Bird LLP, Atlanta, GA, Emily Seymour Costin, Alston & Bird LLP, Washington, DC, Laura B. Hunt, Alston & Bird, LLP, Dallas, TX, Darrell Lee Barger, Hartline Barger LLP, Corpus Christi, TX, for Defendant Aetna Better Health of Texas Inc.

NELVA GONZALES RAMOS, UNITED STATES DISTRICT JUDGE

Khan Ebad, Kingwood, TX, for Plaintiff. David Baird Carpenter, Alston & Bird LLP, Atlanta, GA, Emily Seymour Costin, Alston & Bird LLP, Washington, DC, Laura B. Hunt, Alston & Bird, LLP, Dallas, TX, for Defendants Aetna, Inc., Aetna Health And Life Insurance Company, Aetna Health Inc., Aetna Health Insurance Company, Aetna Health Management, LLC, Aetna Medicaid Administrators LLC, Meritain Health, Inc., First Health Life & Health Insurance Company, ADP TotalSource, Inc. Health and Welfare Plan, Group Health & Welfare Plan, Exxon Mobil Medical Plan, AstraZeneca Health And Welfare Plan, Catholic Health Initiatives Master Trust, Costco Wholesale Corporation Cafeteria Plan, CVS Health Defined Benefit Plans Master Trust, Fidelity National Financial, Inc. Welfare Plan, Ge Global Health Plan, GT Services LLC Medical Insurance, Huntsman Corporation Employee Benefit Plan, Indorama Ventures Oxides, LLC Welfare Benefits Plan, Linde Comprehensive Welfare Benefit Plan, Lyondell Chemical Co., Equistar Chemicals LP, And Houston Refining, LP Master Trust, Memorial Hermann Health System Flexible Benefit Plan, Oprona, Inc., Group Welfare Plan for Quest Diagnostics Incorporated, The Friedkin Group Welfare Benefits Plan, Torque Tools Inc. Health Plan, UPS Health and Welfare Plan, Walmart Inc. Associates Health and Welfare Plan, Restated Zions Bancorp. Employee and Retiree Welfare Benefit Plan, Accenture United States Group Health Plan, Alight Solutions LLC Health And Welfare Plan, American International Group, Inc. Medical Plan, Aramco U.S. Welfare Benefit Plan, Collabera Inc. 125 Benefit Plan, Educational Testing Service Welfare Benefits Plan, KPMG LLP Health Plans., Mann Eye Center PA Health And Welfare Plan, Paychex Business Solutions LLC Employee Benefit Plan, R & L Carriers Group Benefits Plan, Sap America Health & Welfare Plan, Technology Services Group, LLC Employee Benefits Plan, Tetra Tech, Inc. Fully Insured HMO Benefit Plan, Trinet Group, Inc., United Airlines Consolidated Welfare Benefit Plan, Wyndham Hotels & Resorts Health and Welfare Plan, Aarthun Performance Group LTD Health Plan, Agility Recovery Solutions, Inc. Health and Welfare Plan, American Air Liquide Holdings INC. Health Plan, Arkema INC. Health Plan, C. V. Starr & Co. Health Plan, Cemex, Inc. Welfare Benefit Plan, Citigroup Legal Benefits Plan, Cox Enterprises, Inc. Welfare Benefit Plan, Deloitte & Touche Welfare Benefit Plan, Enercon Services, Inc. Employee Health & Welfare Benefit Plan, Entergy Corporation Companies' Bargaining Employees' Welfare Benefit Trust, First Community Bancshares, Inc. Employee Benefit Plan, HCA Inc. And Welfare Benefits Plan, Hilton Worldwide Health Plan, Infosys BPM Limited Health Plan, Inframark, LLC Welfare Benefit Wrap Plan, International Cellulose Corporation Health Plan, Invesco Health Plan, Iqvia Inc. Health Plan, The Iron Mountain Companies Welfare Plan, Lawler Foods, LTD. Health & Welfare Plan, Defendant Leidos Employee Health and Welfare Benefits Plan, Lockheed Martin Corporation Basic Benefit Plan For Hourly Employees, Magellan Health & Welfare Plan, McCombs Enterprises Health Plan, Mitsubishi Electric U.S. Companies Health And Welfare Plan, Nustar Omnibus Welfare Plan, Occidental Petroleum Corporation Welfare Plan, Opko Health, Inc. Health and Welfare Plan, Repsol USA Holdings Corporation-Welfare Plans, Salesforce.com Health And Welfare Plan, Shi International Corp. Health And Welfare Plan, Snapon incorporated Non-Union Retiree Health and Welfare Benefit Plan, T-Mobile USA, Inc. Employee Benefit Plan, Transwestern Commercial Services Comprehensive Health And Welfare Benefit Plan, Trinity University Welfare Benefit Plan, William Marsh Rice University Health And Welfare Plan, Decypher Technologies Employee Benefits Plan. David Baird Carpenter, Alston & Bird LLP, Atlanta, GA, Emily Seymour Costin, Alston & Bird LLP, Washington, DC, Laura B. Hunt, Alston & Bird, LLP, Dallas, TX, Darrell Lee Barger, Hartline Barger LLP, Corpus Christi, TX, for Defendant Aetna Better Health of Texas Inc. ORDER ON MOTION TO DISMISS NELVA GONZALES RAMOS, UNITED STATES DISTRICT JUDGE

Plaintiff Diagnostic Affiliates of Northeast Hou, LLC d/b/a 24 Hour Covid RTPCR Laboratory (Diagnostic Affiliates) filed this action against Defendants Aetna¹ health insurance administrators and Employer Plans² that are administered by Aetna, complaining of refusals and failures to pay for charges incurred with respect to covered employees' Covid-19 testing. Before the Court is Defendants' Motion to Dismiss (D.E. 29), challenging this Court's personal jurisdiction over Defendants and the viability of each of Diagnostic Affiliates' causes of action. Diagnostic Affiliates has responded (D.E. 40), Defendants have replied (D.E. 43), and both parties filed sur-replies (D.E. 46, 49). For the reasons set out below, the motion (D.E. 29) is GRANTED IN PART and DENIED IN PART.

1 "Aetna" refers to Defendants Aetna, Inc., Aetna Better Health of Texas, Inc., Aetna Health and Life Insurance Company, Aetna Health Inc., Aetna Health Insurance Company, Aetna Health Management, LLC, Aetna Medicaid Administrators LLC, Meritain Health, Inc., and First Health Life & Health Insurance Company.

2 "Employer Plans" refers to Defendants ADP TotalSource, Inc. Health and Welfare Plan; Group Health & Welfare Plan; Exxon Mobil Medical Plan; AstraZeneca Health and Welfare Plan; Catholic Health Initiatives Master Trust; Costco Wholesale Corporation Cafeteria Plan; CVS Health Defined Benefit Plans Master Trust; Fidelity National Financial, Inc. Welfare Plan; GE Global Health Plan; GT Services LLC Medical Insurance; Huntsman Corporation Employee Benefit Plan; Indorama Ventures Oxides, LLC., Welfare Benefits Plan; Linde Comprehensive Welfare Benefit Plan; Lyondell Chemical Co., Equistar Chemicals LP, and Houston Refining, LP Master Trust; Memorial Hermann Health System Flexible Benefit Plan; Oprona, Inc. d/b/a Rosen USA, Inc.; Group Welfare Plan for Quest Diagnostics Incorporated; The Friedkin Group Welfare Benefits Plan; Torque Tools Inc. Health Plan; UPS Health and Welfare Plan; Walmart Inc. Associates Health and Welfare Plan; Restated Zions Bancorp. Employee and Retiree Welfare Benefit Plan; Accenture United States Group Health Plan; Alight Solutions LLC Health and Welfare Plan; American International Group, Inc. Medical Plan; Aramco U. S. Welfare Benefit Plan; Collabera Inc. 125 Benefit Plan; Educational Testing Service Welfare Benefits Plan; KPMG LLP Health Plans; Mann Eye Center PA Health and Welfare Plan; Paychex Business Solutions LLC Employee Benefit Plan; R & L Carriers Group Benefits Plan; SAP America Health & Welfare Plan; Technology Services Group, LLC Employee Benefits Plan; Tetra Tech, Inc. Fully Insured HMO Benefit Plan; Trinet Group, Inc.; United Airlines Consolidated Welfare Benefit Plan; Wyndham Hotels & Resorts Health and Welfare Plan; Aarthun Performance Group LTD Health Plan; Agility Recovery Solutions, Inc. Health and Welfare Plan; American Air Liquide Holdings Inc. Health Plan; Arkema Inc. Health Plan; C.V. Starr & Co. Health Plan; Cemex, Inc. Welfare Benefit Plan; Citigroup Legal Benefits Plan; Cox Enterprises, Inc. Welfare Benefit Plan; Deloitte & Touche Welfare Benefit Plan; Enercon Services, Inc. Employee Health & Welfare Benefit Plan; Entergy Corporation Companies' Bargaining Employees' Welfare Benefit Trust; First Community Bancshares, Inc. Employee Benefit Plan; HCA Inc. and Welfare Benefits Plan; Hilton Worldwide Health Plan; Infosys BPM Limited Health Plan; Inframark, LLC Welfare Benefit Wrap Plan; International Cellulose Corporation Health Plan; Invesco Health Plan; IQVIA Inc. Health Plan; The Iron Mountain Companies Welfare Plan; Lawler Foods, LTD. Health & Welfare Plan; Leidos Employee Health and Welfare Benefits Plan; Lockheed Martin Corporation Basic Benefit Plan for Hourly Employees; Magellan Health & Welfare Plan; Mccombs Enterprises Health Plan; Mitsubishi Electric U.S. Companies Health and Welfare Plan; Nustar Omnibus Welfare Plan; Occidental Petroleum Corporation Welfare Plan; Opko Health, Inc. Health and Welfare Plan; Repsol USA Holdings Corporation-Welfare Plans; Salesforce.com Health and Welfare Plan; SHI International Corp. Health and Welfare Plan; Snap-On Incorporated Non-Union Retiree Health and Welfare Benefit Plan; T-Mobile USA, Inc. Employee Benefit Plan; Transwestern Commercial Services Comprehensive Health and Welfare Benefit Plan; Trinity University Welfare Benefit Plan; William Marsh Rice University Health and Welfare Plan; Decypher Technologies Employee Benefits Plan.

DISCUSSION

A. Personal Jurisdiction

Defendants challenge the Court's personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). They argue that Diagnostic Affiliates has improperly pled jurisdiction against all of the Defendants as a group (rather than with distinction commensurate with their separate corporate existences)³ and has failed to allege sufficient minimum contacts against any of them. "Before ruling on the merits of the case, it is imperative that the court first determine whether it has jurisdiction to hear the suit; if jurisdiction is lacking, then the court has no authority to consider the merits." Cook v. Reno, 74 F.3d 97, 99 (5th Cir. 1996).

3 Personal jurisdiction must be established as against each individual defendant, even when the corporations are related. Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 346 (5th Cir. 2004).

1. Standard of Review

Burden of Proof. The plaintiff, as the party invoking the court's jurisdiction, bears the burden of establishing that personal jurisdiction is proper. Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 431 (5th Cir. 2014). When the defendant challenges personal jurisdiction pursuant to a Rule 12(b)(2) motion, the matter may be determined without an evidentiary hearing. Ham v. La Cienega Music Co., 4 F.3d 413, 415 & n.4 (5th Cir. 1993) ("The district court usually resolves the jurisdictional issue without conducting a hearing."). In that event, the plaintiff need only make a prima facie case. Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008).

If the case proceeds to an evidentiary hearing⁴ or trial, the plaintiff's burden will escalate to preponderance of the evidence in order to support a judgment. Brown v. Slenker, 220 F.3d 411, 419 (5th Cir. 2000). In any event, a dismissal for lack of personal jurisdiction is not a dismissal on the merits and must therefore be without prejudice. See generally, Libersat v. Sundance Energy, Inc., 978 F.3d 315, 317 (5th Cir. 2020).

4 An evidentiary hearing is not necessary. See Ham, 4 F.3d at 415. To conduct an evidentiary hearing, "both parties must be allowed to submit affidavits and to employ all forms of discovery, subject to the district court's discretion and as long as the discovery pertains to the personal-jurisdiction issue." Walk Haydel, 517 F.3d at 242. The distinguishing factor between a mere hearing and an "evidentiary hearing" is the presentation of evidence "beyond the written materials." See Kwik-Kopy Corp. v. Byers, 37 F. App'x 90, *4 (5th Cir. 2002) (quoting Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280 (9th Cir. 1977)). But even if the court receives discovery materials, unless there is a full and fair hearing, it should not act as a factfinder and must construe all disputed facts in the plaintiff's favor and consider them along with the undisputed facts. Walk Haydel, 517 F.3d at 241.

Scope of Review. At the Rule 12(b)(2) stage without an evidentiary hearing, the court accepts the plaintiff's uncontroverted allegations as true and resolves all conflicts in the evidence in the plaintiff's favor. E. Concrete Materials, Inc. v. ACE Am. Ins. Co., 948 F.3d 289, 295 (5th Cir. 2020). In this inquiry, the court applies the pleading standards of Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Factual allegations are required, sufficient to raise the entitlement to relief above the level of mere speculation. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. The court does not accept as true conclusory factual allegations, unwarranted factual inferences, or legal conclusions. Giancarlo v. UBS Fin. Servs., Inc., 725 F. App'x 278, 282 (5th Cir. 2018) (citing Southland Sec. Corp. v. INSpire Ins. Sols., Inc., 365 F.3d 353, 361 (5th Cir. 2004)).

Minimum Contacts. The plaintiff's prima facie burden is to show "that the nonresident defendant has purposefully established 'minimum contacts' with the forum state 'such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' ' " WNS, Inc. v. Farrow, 884 F.2d 200, 202 (5th Cir. 1989) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)) (quoting, in turn, Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)).

Jurisdiction may be general or specific. The former requires "continuous and systematic" forum contacts and allows for jurisdiction over all claims against the defendant, no matter their connection to the forum. In contrast, the latter obtains only where a defendant "purposefully direct[s]" his activities toward the state and the plaintiff's claim "aris[es] out of or [is] related to" the defendant's forum contacts.

In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prod. Liab. Litig., 888 F.3d 753, 777-78 (5th Cir. 2018) (citations omitted).

Unfair and Unreasonable. If minimum contacts are shown, the burden of proof shifts to the defendant to show that the assertion of jurisdiction is unfair. Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999) (citing Akro Corp. v. Luker, 45 F.3d 1541, 1547 (Fed. Cir. 1995)). Several factors relate to traditional notions of fair play and substantial justice: "(1) the burden upon the nonresident defendant; (2) the interests of the forum state; (3) the plaintiff's interest in obtaining relief; (4) the interstate judicial system's interest in the most efficient resolution of controversies; and (5) the shared interests of the several states in furthering fundamental social policies." Felch v. Transportes Lar-Mex SA De CV, 92 F.3d 320, 324 n.9 (5th Cir. 1996) (quotation marks omitted).

To show that the exercise of in personam jurisdiction is unfair and unreasonable, the defendant must make a "compelling case." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). It is very unusual to conclude that the exercise of jurisdiction is unfair after there has been a showing of sufficient minimum contacts. Akro, 45 F.3d at 1549 (describing it as "rare" that the plaintiff's and forum state's interests in adjudicating a case would be so attenuated as to be clearly outweighed by any burden on the defendant).

2. Adequacy of the Jurisdictional Pleadings

Diagnostic Affiliates' jurisdictional pleading states in relevant part, "Aetna systemically [sic] and continuously conducts business in the State of Texas and otherwise has minimum contacts with the State of Texas sufficient to establish personal jurisdiction over it." D.E. 1, ¶ 97. In addressing venue, it alleges that a substantial part of the events or omissions giving rise to the claim—and the statutory violations occurred—within this District of Texas. Id., ¶ 99. These are conclusory statements, insufficient to support personal jurisdiction without more.

a. The Arguments

Diagnostic Affiliates offers seven ways in which it contends that its pleadings demonstrate personal jurisdiction over each of the Defendants. The Court considers each in turn, below. i. Registered Agents. In naming each of the Defendants, Diagnostic Affiliates identifies a registered agent for service at a Texas address. D.E. 1, ¶¶ 11-95.

The Fifth Circuit has held that the appointment of an agent for process and the registration to do business within the state, without more, does not satisfy the criteria for the exercise of general jurisdiction. Wenche Siemer v. Learjet Acquisition Corp., 966 F.2d 179, 182 (5th Cir. 1992); Fiduciary Network, LLC v. Buehler, No. 3:15-CV-0808, 2015 WL 2165953, at *6 (N.D. Tex. May 8, 2015). And the claims made here do not arise out of the registration to do business, negating specific jurisdiction based on such registration. The Court rejects the first claim to personal jurisdiction. ii. Contracts with Texas Entities. "Each Aetna entity intentionally and willfully conducted business in the forum state and created a continuous obligation with themselves and the residents in the State." Response, D.E. 40, p. 8.

This is a conclusory argument. There is no pleading that any particular Employer Plan or any particular insured is a Texas citizen or resident. The complaint does not identify any specific contract that contains obligations to be performed in Texas. 6 / 22 Consequently, the pleading is insufficient under Twombly/Iqbal and the Court rejects the second claim to personal jurisdiction. iii. TDI Registration. "Eight of the nine Aetna defendants have consciously registered their organization with the Texas Department of Insurance ("TDI") as either an authorized Third-Party Administrator, Basic Health Maintenance Organization, or licensed insurer . . . . [B]y registering with TDI, an organization is aware that they will be subject to the rules and regulations of TDI, as well as the benefits, protections and possible burdens if found in violation of TDI's guidelines. It is not unreasonable or unforeseen that the Aetna defendants would be required to resolve disputes in that forum state they purposely requested licensing to do business in." Response, D.E. 40, p. 8.

Diagnostic Affiliates has not alleged any TDI registration in its pleading. Defendants argue that this is fatal to its reliance on additional evidence, citing Hack v. Wright, 396 F. Supp. 3d 720, 737 n.13 (S.D. Tex. 2019). But Hack stands for the proposition that a pleading cannot be amended by virtue of ancillary briefing. It did not involve a Rule 12(b)(2) personal jurisdiction challenge and was not governed by the standard and scope of review described above.

Here, any evidence offered on the jurisdictional issue may be considered and conflicts are to be resolved in favor of jurisdiction. Defendants did not object to the TDI registration exhibit (D.E. 40-1). See D.E. 43, 49. Therefore, the Court takes its contents as true.

The exhibit (D.E. 40-1) shows that the following TDI registrants are listed as Texas domestic entities:

• Aetna Better Health of Texas Inc.;

• Aetna Health Inc.; and

• First Health Life & Health Insurance Company.

Consequently, under the standard and scope of review, the Court may conclude from this uncontroverted evidence that these three entities are Texas corporations. They are thus subject to general personal jurisdiction in Texas. Daimler AG v. Bauman, 571 U.S. 117, 137, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014).

The same exhibit (D.E. 40-1) indicates that the following are foreign entities that have registered to do insurance business with the TDI:⁵

5 There is no registration listed for Defendant Aetna, Inc.

• Aetna Health and Life Insurance Company

• Aetna Health Insurance Company

• Aetna Health Management, LLC

• Aetna Medicaid Administrators LLC

• Meritain Health, Inc.

But, as noted with respect to the first claim of jurisdiction, the courts do not treat registering or qualifying to do business as equivalent to actually doing business in the forum state. See Wenche Siemer, 966 F.2d at 182; Buehler, 2015 WL 2165953, at *6; ADT, LLC v. Capital Connect, Inc., No. CV 3:15-CV-2252-G, 2015 WL 7352199, at *5 (N.D. Tex. Nov. 20, 2015).

Mere registration to do business or appointment of an agent for service of process is not availment, and without availment, there is no bargain—no social compact. If a corporation does not do business in Texas, it derives no benefit from Texas laws. Without a received benefit, there is no bargain, and without a bargain, there is no due process.

Leonard v. USA Petroleum Corp., 829 F. Supp. 882, 889 (S.D. Tex. 1993). The Court rejects the third claim to personal jurisdiction. However, the Court FINDS that the accompanying evidence of Texas incorporation of Defendants Aetna Better Health of Texas Inc., Aetna Health Inc., and First Health Life & Health Insurance Company subjects those three Defendants to general personal jurisdiction. iv. Forum Clients. Each Aetna Defendant "created continuing obligations by entering contractual relationships with the Employer Plans and other self-funded health plans to handle, process, and/or adjudicate medical claims for members in the forum state." Response, D.E. 40, p. 8.

Diagnostic Affiliates has not offered any factual allegation that identifies any particular contract, demonstrates that the Employer Plans are Texas entities, or that the contractual terms specifically required the Aetna Defendants to fulfill obligations in Texas. The Court rejects the fourth claim for personal jurisdiction as conclusory in violation of Twombly/Iqbal. v. Forum Insureds. "The Employer Plans have deliberately engaged in significant activity in the forum state by offering healthcare coverage to members located in the forum state." Response, D.E. 40, p. 9.

Likewise, this argument is conclusory, in violation of Twombly/Iqbal because it does not specifically allege that any particular Employer Plan offered healthcare coverage to any particular member or group of members who reside in Texas or that it is contemplated that the insured members will regularly seek healthcare in Texas, requiring the Employer Plans to avail themselves of the benefits of Texas laws. The Court rejects the fifth claim to personal jurisdiction. vi. Forum Services. "[E]ach Employer Plan had members use 24 Hour Covid's services for Covid-19 diagnostic testing which were provided in the forum state." Response, D.E. 40, p. 9.

Nothing in the factual pleadings supports the conclusion that any Defendant Employer Plan directed members to use any particular healthcare services (much less those offered by Diagnostic Affiliates) or restricted the members' coverage to services rendered in Texas. When a member may obtain services wherever those services may be offered, the member's decision to seek services in Texas is not determinative of jurisdiction over the Employer Plan, itself. That is because the purposeful availment required for the exercise of personal jurisdiction must be attributable to the Defendant rather than to the arbitrary or unilateral act of a third party over which the Defendant has no control. See Choice Healthcare, Inc. v. Kaiser Found. Health Plan, 615 F.3d 364, 369 (5th Cir. 2010) (citing Burger King, 471 U.S. at 475, 105 S.Ct. 2174); Freudensprung, 379 F.3d at 343-47.

Mere payment of benefits by a plan to a provider in Texas does not subject the Employer Plan Defendants to personal jurisdiction in this state. See Choice Healthcare, Inc., 615 F.3d at 369-71. The Court rejects the sixth claim for personal jurisdiction against Defendants. vii. ERISA Deemed Contacts. The Employer Plans are qualified ERISA plans, subject to nationwide service, which qualifies as a national contacts test. Response, D.E. 40, pp. 9-10.

Diagnostic Affiliates has not pled the Employee Retirement Income Security Act (ERISA) qualification of any Employer Plan. Neither has it pled an ERISA claim against them. Thus, there is no factual basis for the application of any ERISA provision. The argument does not satisfy the factual allegation requirements of Twombly/Iqbal. 10 / 22

Moreover, Diagnostic Affiliates' legal argument for using ERISA qualification as a tacitly-acknowledged national minimum contacts test is not supported by any authority. See Diagnostic Affiliates' Sur-Reply, D.E. 46, p. 2. The argument is inconsistent with the requirement of purposeful availment to support personal jurisdiction and the limit of the advantage of nationwide service to those statutory claims that expressly provide for it.

Indeed, a provision for nationwide service does not, itself, satisfy due process minimum contacts concerns. It merely shifts the focus from a particular state to the United States as a whole for that statutory claim. See Soto v. Vanderbilt Mortg. & Fin., Inc., No. CIV.A. C-10-66, 2010 WL 1790177, at *4 (S.D. Tex. May 3, 2010). There is no basis for extrapolating nationwide service for one set of statutory claims as automatically satisfying due process concerns related to any other type of claim. The Court rejects the seventh claim for personal jurisdiction.

b. Personal Jurisdiction Conclusion

For the reasons set out above, the motion to dismiss (D.E. 29) is DENIED IN PART in that Diagnostic Affiliates has adequately demonstrated general personal jurisdiction against Defendants Aetna Better Health of Texas Inc., Aetna Health Inc., and First Health Life & Health Insurance Company. The motion to dismiss is GRANTED IN PART and the claims against Defendants Aetna Inc., Aetna Health and Life Insurance Company, Aetna Health Insurance Company, Aetna Health Management, LLC, Aetna Medicaid Administrators LLC, Meritain Health, Inc., and the Employer Plans⁶ are DISMISSED WITHOUT PREJUDICE.

6 See footnote 2 for listing.

B. Causes of Action

1. Standard of Review

The test of pleadings under Rule 12(b)(6) is devised to balance a party's right to redress against the interests of all parties and the court in minimizing expenditure of time, money, and resources devoted to meritless claims. Twombly, 550 U.S. at 558, 127 S.Ct. 1955. Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Furthermore, "Pleadings must be construed so as to do justice." Fed. R. Civ. P. 8(e). The requirement that the pleader show that he is entitled to relief requires "more than labels and conclusions[;] a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)).

Factual allegations are required, sufficient to raise the entitlement to relief above the level of mere speculation. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Those factual allegations must then be taken as true, even if doubtful. Id. In other words, the pleader must make allegations that take the claim from conclusory to factual and beyond possible to plausible. Id. at 557, 127 S.Ct. 1955. The Court stated, "[W]e do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955.

The Supreme Court, elaborating on Twombly, stated, "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. In dismissing the claim in Iqbal, the Court stated, "It is the conclusory nature of respondent's allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth." Id. at 681, 129 S.Ct. 1937.

We do not accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions. Giancarlo, 725 F. App'x at 282 (citing Southland, 365 F.3d at 361). In reviewing the factual allegations, the court may also consider: (a) documents attached to the complaint or identified as central to the claims made therein; (b) documents attached to the motion to dismiss that are referenced in the complaint; and (c) documents that are subject to judicial notice as public record. Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011); Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000).

2. FFCRA § 6001 and CARES Act § 3202(a)

Aetna argues that there is no express or implied private right of action supplied by the Families First Coronavirus Response Act ("FFCRA")⁷ and the Coronavirus Aid, Relief, and Economic Security ("CARES") Act⁸ to support Diagnostic Affiliates' claim under Count I. Instead, any power of redress created by the legislation was reserved to the United States Secretary of Health and Human Services, Secretary of Labor, and Secretary of the Treasury. FFCRA § 6001(b); CARES Act § 3202(b).

7 Pub. L. No. 116-127 (2020).

8 Pub. L. No. 116-136 (2020).

The present case does not present this Court's first opportunity to rule on this issue. In a previous case filed by Diagnostic Affiliates, the Court ruled, as a matter of first impression, that the FFCRA and CARES Act did create a private right of action for Covid-19 test providers. See Diagnostic Affiliates of Ne. Hou, LLC v. United Healthcare Servs., Inc., No. 2:21-CV-00131, 2022 WL 214101 (S.D. Tex. Jan. 18, 2022). After a partial settlement, that case remains pending in this Court on claims for contribution and indemnity. Thus, that ruling has not yet become final and appealable.

However, since that time three sister courts have addressed the same question and have come to the opposite conclusion. See GS Labs, Inc. v. Medica Ins. Co., No. 21-cv-2400 (SRN/TNL), 2022 WL 4357542 (D. Minn. September 20, 2022); Saloojas, Inc. v. Aetna Health of Cal., Inc., Nos. 22-cv-01702-JSC, 22-cv-01703-JSC, 2022 WL 2267786 (N. D. Cal. June 23, 2022); Murphy Med. Assocs., LLC v. Cigna Health and Life Ins. Co., No. 3:20cvl675(JBA), 2022 WL 743088 (D. Conn. March 11, 2022). And the Saloojas case is currently on appeal to the Ninth Circuit. Saloojas, Inc. v. Aetna Health of Cal., Inc., No. 22-16038 (9th Cir. July 18, 2022). A fourth court, while not directly faced with the same question, offered insights into the manner in which the rights afforded to Covid-19 test suppliers under the FFCRA and CARES Act might, and might not, be enforced. See Open MRI and Imaging of RP Vestibular Diagnostics, P.A. v. Cigna Health and Life Ins. Co., Civ. No. 20-10345 (KM) (ESK), 2022 WL 1567797 (D. N.J. May 18, 2022) (provider enforcing rights under ERISA through patient assignments).

This Court has the authority and obligation to change course regarding its opinions if the law so requires. See generally, Stokes v. Sw. Airlines, 887 F.3d 199, 204 (5th Cir. 2018) (the rule of orderliness does not preclude a court from implementing necessary changes in legal decisions). The decisions of sister courts in other circuits are not binding on this Court. See generally, Walker v. Henderson, 239 F.3d 366 (5th Cir. 2000). But in the absence of a Fifth Circuit opinion on the issue, the Court approaches this issue anew, with the benefit of the reasoning of the intervening opinions.

A survey of recent Fifth Circuit opinions addressing an implied cause of action in other federal legislation reveals a staunch resistance derived from the Supreme Court's opinion in Alexander v. Sandoval, 532 U.S. 275, 290, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). In fact, only about twenty percent of the opinions even cite to Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). And the court has equivocated on the continued relevance of Cort and all of its four factors.⁹ Without fully disavowing Cort, the Fifth Circuit more recently stated that the evolution of the law with respect to recognizing an implied right of action in legislation—culminating in Sandoval—is concentrated on the statutory text and structure, with less concern for legal context, compatibility of the remedy, or policy. Stokes, 887 F.3d at 202. Where "analysis of the first two Cort factors compels the conclusion that Congress did not create a private right of action, it is unnecessary to analyze the other two factors." Casas v. Am. Airlines, Inc., 304 F.3d 517, 523 (5th Cir. 2002).

9 Compare Noe v. Metro. Atlanta Rapid Transit Auth., 644 F.2d 434, 437 (5th Cir. 1981) (stating that the court is no longer required to consider all four Cort factors, but observing that the result would be the same as if only the first two were considered) with Simmons v. Sabine River Auth. La., 732 F.3d 469, 476 n.8 (5th Cir. 2013) (endorsing the four-factor test of Cort).

Under Sandoval, "The judicial task is to interpret the statute Congress has passed to determine whether it displays an intent to create not just a private right but also a private remedy." 532 U.S. at 286, 121 S.Ct. 1511. "[S]ome remedial schemes foreclose a private cause of action to enforce even those statutes that admittedly create substantive private rights." Id. at 290, 121 S.Ct. 1511. What these pronouncements do not clearly illustrate is how courts are to differentiate between a "right," a "remedy," and a "cause of action." Historical usage has not consistently distinguished these concepts.

remedy n. (13c) 1. The means of enforcing a right or preventing or redressing a wrong; legal or equitable relief. — Also termed civil remedy . . . .

"A remedy is anything a court can do for a litigant who has been wronged or is about to be wronged. The two most common remedies are judgments that plaintiffs are entitled to collect sums of money from defendants ( damages ) and orders to defendants to refrain from their wrongful conduct or to undo its consequences ( injunctions ). The court decides whether the litigant has been wronged under the substantive law that governs primary rights and duties ; it conducts its inquiry in accordance with the procedural law. The law of remedies falls somewhere in between procedure and primary substantive rights. Remedies are substantive , but they are distinct from the rest of the substantive law , and sometimes their details blur into procedure. For long periods in our past , remedies were casually equated with procedure ." Douglas Laycock, Modern American Remedies 1 (4th ed. 2010).

REMEDY, Black's Law Dictionary (11th ed. 2019) (emphasis added).

In the context of Diagnostic Affiliates' claim, it would appear that the right is the right to be reimbursed for its services. The remedy is the negotiated or cash price. The cause of action is the procedural means by which the right is enforced so as to obtain the remedy. So while the FFCRA and CARES Act do expressly set out a remedy, they do not specify any procedural cause of action to be implemented. And while Sandoval speaks in terms of legislative language establishing a remedy, it is actually singularly focused on the procedural cause of action, not the substantive remedy. In that context, we shift our focus away from the mandated reimbursement remedy and look, instead, for clues to a procedure by which to obtain it.

The plaintiff in Open MRI did not plead a private cause of action under the FFCRA or CARES Act. Instead, its claim was articulated strictly pursuant to ERISA. In evaluating a motion to dismiss based on the factual sufficiency of the pleading, the court observed that the FFCRA/CARES Act provisions cross-referenced ERISA. So by requiring reimbursement of Covid-19 testing charges, the court reasoned that the FFCRA/CARES Act effectively amended all ERISA plans, consistent with "the general principle of insurance law that applicable laws and mandated coverage are deemed to be incorporated as terms of an insurance plan." 2022 WL 1567797, *4. In this respect, the opinion is aligned with this Court's similar holding in favor of an ERISA claim in United.¹⁰

10 "As United points out in its reply, the import of the FFCRA and CARES Act is to impose upon those health care plans the obligation to include COVID-19 testing as a covered service under their plans. The terms of the plans are effectively modified to prevent the imposition of cost sharing and other charges or administrative procedures on the insureds. The requirement to pay is imposed on Defendants because they have a contractual obligation to pay for the insured's health care—not because of some independent equitable purpose." 2022 WL 214101, *13.

The Open MRI court summed up its ruling as follows:

ERISA already provides an express private cause of action to recover benefits under a plan, as Congress was surely aware when it passed the Families First and CARES Acts. Those two Acts mandate coverage of COVID-19 testing as a benefit under an ERISA plan. ERISA itself is a dual-enforcement statute. See 29 U.S.C. § 1132(a). The Acts' supplementation of the implementing agencies' authority does not undermine plan participants' already existing parallel ability to bring a private lawsuit.

Id., *6 (footnoting that "Another possible view—that many thousands or millions of claims for COVID-19 testing must potentially be litigated by the Secretaries—is anomalous, and would perhaps require the erection of a huge administrative claims apparatus, for which there is no hint of authorization in the statute.").

Under Murphy, the claim was permitted under the provisions of ERISA for ERISA-qualified plans. 2022 WL 743088 at *9.¹¹ The Murphy court later modified its opinion as it pertained to ERISA preemption after the plaintiff clarified that some of its claims pertained to non-ERISA plans. Without addressing the viability of the claims on their merits, the court permitted the assertion of state law claims for unfair trade practices and unjust enrichment for non-ERISA plans. Murphy Med. Assocs., LLC v. Cigna Health & Life Ins. Co., No. 3:20CV1675(JBA), 2022 WL 10560321, at *1 (D. Conn. Oct. 18, 2022).

11 The Murphy court also permitted a claim for tortious interference with a contract to address defamation issues not pled here. 2022 WL 743088 at *14.

After denying the FFCRA/CARES Act claim, the court in Saloojas granted leave to amend to assert an ERISA claim. 2022 WL 2267786, *6. In GS Labs, the plaintiff had not pled an ERISA claim and apparently did not request leave to amend to add one. After holding that there was no cause of action under the FFCRA and CARES Act, the court declined to exercise supplemental jurisdiction over the state law claims of unjust enrichment and negligence per se and the request for punitive damages, dismissing them without prejudice. 2022 WL 4357542, *12. In this Court's prior consideration of this issue, its rulings included retaining one of Diagnostic Affiliates' ERISA claims along with the FFCRA/CARES Act claim. United, 2022 WL 214101, *11.

In this respect, all of the cases that have addressed the issue to date, including this Court's prior decision, have held that there is a right of action under ERISA for the remedy granted in the FFCRA/CARES Act. And there appears to be a consensus that state law causes of action provide redress for non-ERISA plans pursuant to the mandated modification of all insurance plans to include full coverage for Covid-19 testing.

Consequently, in full context, the FFCRA/CARES Act no longer appears to this Court to confer a right without a cause of action to obtain the remedy. This Court thus disavows its decision in United insofar as it allowed the FFCRA/CARES Act claim to survive a Rule 12(b)(6) challenge and, joining its sister courts, HOLDS that the FFCRA/CARES Act does not carry with it an implied private cause of action to enforce its terms. Defendants' motion to dismiss the FFCRA/CARES Act claim is GRANTED.

3. FFCRA § 6003

Diagnostic Affiliates voluntarily consents to dismissal of its Count II against Defendant Aetna on the basis of section 6003 of the FFCRA. D.E. 40, p. 22. It is so ORDERED.

4. FFCRA § 6004

Diagnostic Affiliates voluntarily consents to dismissal of its Count III against Defendant Aetna on the basis of section 6004 of the FFCRA. D.E. 40, p. 22. It is so ORDERED.

5. State Law Claims, Subject Matter Jurisdiction, and Amendment

Diagnostic Affiliates did not plead an ERISA claim or any federal cause of action other than the claim asserted under the FFCRA/CARES Act. While it included a generic request for leave to amend in its response (D.E. 40, p. 25), it did not specify any particular additional facts or claims it would seek to include.

A court need not grant a motion for leave to amend where the movant fails to specify what amendment is desired and how it would cure its pleading defects. United States ex rel. Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 387 (5th Cir. 2003). When seeking to amend, the movant must set forth "with particularity the grounds for the amendment and the relief sought." Id. A "bare request in an opposition in a motion to dismiss" absent any particular grounds is inadequate. Id. The request for leave to amend is DENIED.

After dismissing the claims supporting this Court's original subject matter jurisdiction, this Court is left with only supplemental jurisdiction over the remaining state law claims. 28 U.S.C. § 1367(a). The Court may decline to exercise such supplemental jurisdiction. § 1367(c)(3). Given the early stage of this case and the lack of judicial resources invested in it, the Court declines to exercise supplemental jurisdiction and DISMISSES WITHOUT PREJUDICE the remaining state law claims.

CONCLUSION

For the reasons set out above, Defendants' motion to dismiss (D.E. 29) is GRANTED IN PART and DENIED IN PART as follows:

• The motion is GRANTED IN PART in that all claims against Defendants Aetna Inc., Aetna Health and Life Insurance Company, Aetna Health Insurance Company, Aetna Health Management, LLC, Aetna Medicaid Administrators LLC, Meritain Health, Inc., and the Employer Plans are DISMISSED WITHOUT PREJUDICE for lack of personal jurisdiction.

• The motion is DENIED IN PART with respect to the challenge to personal jurisdiction over Defendants Aetna Better Health of Texas Inc., Aetna Health Inc., and First Health Life & Health Insurance Company.

• The motion is GRANTED IN PART and the claims brought in Counts I, II, and III based on the FFCRA and CARES Act are DISMISSED WITH PREJUDICE for failure to state a claim on which relief may be granted.

• The motion in GRANTED IN PART and the state law claims brought in Counts IV and V are DISMISSED WITHOUT PREJUDICE pursuant to the Court's discretion to decline supplemental jurisdiction.

Recognizing that Diagnostic Affiliates may have limited the federal causes of action pled in reliance on this Court's prior opinion in United, the Court will withhold final judgment for 15 days from the date of this Order to allow Diagnostic Affiliates to file an appropriately detailed motion for leave to amend should it wish to do so to cure the defects identified herein.

ORDERED on February 1, 2023.