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EUGENIA HOSP. v. YOUNG JA KIM

January 25, 1994

EUGENIA HOSPITAL
v.
YOUNG JA KIM, et al.



The opinion of the court was delivered by: ANITA B. BRODY

 Introduction

 On January 18, 1991, Young Ja Kim was admitted to Eugenia Hospital for inpatient treatment. At that time, Mrs. Kim and her husband were employees of WLR Foods, Inc. (WLR), and covered by its employee health plan.

 Eugenia Hospital alleges that at the time of Mrs. Kim's admission, it contacted Family Health Plan (now Ethix Mid Atlantic, here "FHP"), the "medical benefits agent and representative" for the WLR employee benefit plan, to determine the scope of Mrs. Kim's coverage. FHP allegedly provided pre-admission certification to Eugenia Hospital, and represented that Mrs. Kim was entitled to 80% coverage for her inpatient costs after satisfaction of a $ 150.00 deductible, and 100% coverage for her inpatient costs after satisfaction of a $ 750.00 deductible. Eugenia Hospital alleges that it was not informed that a $ 10,000.00 coverage limitation applied.

 On or about March 3, 1993, Eugenia Hospital filed this suit against Mr. and Mrs. Kim, WLR, FHP, and Total Program Administrators (TPA), the administrator of the WLR employee benefit plan, for unpaid medical bills in excess of $ 11,000.00. Eugenia Hospital claims a right to be paid under theories of breach of contract (as to Mr. Kim), promissory estoppel/quasi contract, negligent misrepresentation, and negligence.

 On April 7, 1993, WLR removed this suit to the Eastern District of Pennsylvania, on the ground that Eugenia Hospital's claim against it is properly within the scope of the Employee Retirement Income Security Act of 1974 (ERISA), and therefore falls within this court's federal question jurisdiction.

 Discussion

 In general, removal to federal court is permitted only when the basis for federal jurisdiction appears on the face of the complaint (the "well-pleaded complaint rule"). Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 53 L. Ed. 126, 29 S. Ct. 42 (1908). This test is not satisfied here, as Eugenia Hospital pleads only state law claims, the parties are not totally diverse, and the amount in controversy is less than $ 50,000.00. Federal preemption is ordinarily a defense to the plaintiff's claim and will not, by itself, authorize removal. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987).

 There is an "independent corollary" to the well-pleaded complaint rule where Congress so completely preempts a particular area that any civil complaint raising this select group of claims is deemed "necessarily federal in character". Metropolitan Life, 481 U.S. at 63-64. Once an area of state law has been completely preempted by an act of Congress, any claim based on that preempted state law is considered from its inception a federal claim. Albert Einstein Medical Center v. National Benefit Fund for Hospital and Health Care Employees, 740 F. Supp. 343, 348 (E.D. Pa. 1989).

 Two conditions must be met before the complete preemption doctrine will establish federal jurisdiction over a state law claim: 1) the enforcement provisions of a federal statute must create a federal cause of action vindicating the same interest that the plaintiff's claim seeks to vindicate, and 2) there must be affirmative evidence of a congressional intent to permit removal despite the plaintiff's exclusive reliance on state law. Allstate Ins. Co. v. The 65 Security Plan, 879 F.2d 90, 93 (3d Cir. 1989).

 1. Does the Hospital Have a Federal Cause of Action under ERISA?

 The threshold question is whether ERISA's enforcement provision provides a federal cause of action to vindicate the rights that Eugenia Hospital seeks to vindicate. ERISA's enforcement provision is found at 29 U.S.C. § 1132(a)(1), which provides, that "[a] civil action may be brought ... by a participant or beneficiary ... to recover benefits due 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).

 Initially, the Hospital is neither a "beneficiary" nor a "participant" in the WLR employee benefit plan. Although there is no governing Third Circuit law on this point, most of the district courts of this Circuit have found either that a health care provider never has standing to sue under 29 U.S.C. § 1132(a)(1), or that it can do so only as an assignee of the rights of the plan participant. See Charter Fairmount Institute, Inc. v. Alta Health Strategies, 835 F. Supp. 233, 1993 WL 410829 (E.D. Pa. 1993) (surveying cases and holding that hospital-assignee has standing to sue under § 1132(a)(1)). In this case, there is no allegation that the Hospital is an assignee of the Kims' rights, nor that the ...


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