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Mesoraco v. Capital Blue Cross/Blue Shield

June 18, 2009


The opinion of the court was delivered by: Ambrose, Chief District Judge.


Defendant Capital Blue Cross ("Capital") is an insurance company which provided health insurance coverage to Plaintiff, ("Mesoraco"). See Complaint, ¶¶5, 7. According to her complaint, Mesoraco underwent breast reduction surgery to alleviate back, neck and shoulder pain as recommended by her doctors, but Capital denied coverage allegedly in violation of insurance plan documents and in breach of its fiduciary duty. See Complaint, ¶¶14, 16-18. Capital filed a motion to dismiss the complaint suggesting: (1) that neither of Mesoraco's claims are covered by ERISA since her health plan was created and maintained by a government entity; (2) Capital cannot be held liable since it is only a third party administrator for the Pennsylvania Employees Benefit Trust Fund ("PEBTF") health plan; and (3) Mesoraco failed to join PEBTF, a necessary and indispensable party. Mesoraco filed a responsive brief and Capital filed a reply brief. After careful consideration, and for the reasons set forth below, the Motion to Dismiss is denied without prejudice.

A. Applicable Standards

Defendant filed its motion to dismiss under under Fed.R.Civ.P. 12(b)(1), 12(b)(6) and 12(h)(3). In deciding a motion to dismiss under Fed R. Civ. P. 12(b)(6), all factual allegations, and all reasonable inferences therefrom, must be accepted as true and viewed in a light most favorable to the plaintiff. Worldcom Inc. v. Graphnet, Inc., 343 F.3d 651, 653 (3d Cir. 2003). Pursuant to Fed.R.Civ.P. 12(b)(6), a motion to dismiss may be granted by the court if it is satisfied "that no relief could be granted under any set of facts that could be proved consistent with the allegation." Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Conley v. Gibson, 355 U.S. 41 (1957). The issue is not whether the plaintiff will prevail at the end but only whether he should be entitled to offer evidence to support his claim. Neitzke v. Williams, 490 U.S. 319 (1989). A plaintiff's factual allegations "must be enough to raise a right to relief above the speculative level." Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). F.R.Civ.P. 12(b)(1) allows a party to challenge the court's subject matter jurisdiction based on the face of the complaint or raise a factual challenge to the jurisdiction alleged in the complaint. The Third Circuit has explained that a 12(b)(1) factual challenge motion differs from a 12 (b)(1) facial challenge motion and a 12 (b)(6) motion in the following respects:

At the outset we must emphasize a crucial distinction, often overlooked, between 12(b)(1) motions that attack the complaint on its face and 12(b)(1) motions that attack the existence of subject matter jurisdiction in fact, quite apart from any pleadings. The facial attack does offer similar safeguards to the plaintiff: the court must consider the allegations of the complaint as true. The factual attack, however, differs greatly for here the trial court may proceed as it never could under 12(b)(6) or Fed.R.Civ.P. 56. Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction -- its very power to hear the case -- there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.

Mortensen v. First Federal Savings and Loan Association, 549 F.2d 884, 891 (3d Cir.1977). In such a situation, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Carpet Group Intern. v. Oriental Rug Importers Association, Inc., 227 F.3d 62 (3d Cir. 2000), citing Mortensen, supra. In addition, the burden of proving the existence of subject matter jurisdiction lies with the plaintiff. Ibid.

B. Defendant's Arguments

1. Dismissal Under 12(b)(1) for Lack of Subject Matter Jurisdiction

Plaintiff alleged in her Complaint that this Court has jurisdiction under 28 U.S.C.S. §1331 (federal question jurisdiction) and 29 U.S.C.S. §1132 (ERISA). Capital's primary argument suggests that Mesoraco's health insurance plan qualifies as a "government plan" as defined by 29 U.S.C.A. § 1002(32).*fn1 Under 29 U.S.C.A. §1003(b)(1) there is no coverage under ERISA for government plans. If there is no coverage under ERISA, Capital suggests this Court lacks subject matter jurisdiction.

In support of its argument, Capital attached an affidavit of Amy Montgomery, a senior account executive at Capital Blue who attested that Mesoraco was a participant in the Pennsylvania Employees Benefit Trust Fund ("PEBTF") and that this was a health plan "sponsored by the Commonwealth of Pennsylvania" for its employees.

First, Mesoraco did not sue PEBTF. Mesoraco sued Capital, the third party administrator, which falls outside the definition of a "government plan" as defined by 29 U.S.C.A. §1002(32).

In addition, in response to Capital's primary argument Mesoraco attached a letter from Anthony Molinaro, M.D., the Associate Medical Director for Capital. In this letter, Dr. Molinaro, states that Mesoraco's health plan may be subject to ERISA and informs Mesoraco that she has the right to bring a civil action under ERISA Section 502(a). Given these statements, it appears as though Capital itself has admitted that Mesoraco's plan possibly falls within ERISA's scope.

In sum, Mesoraco sued only Capital -- and not PEBTF -- an entity which would not necessarily preclude this lawsuit from going forward at this point in time. Given that Mesoraco did not sue PEBTF (an entity which, per Capital, could not be sued under ERISA), and given the statement made by Capital's associate medical director suggesting the plan may be subject to ...

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