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Schoonmaker v. Highmark Blue Cross Blue Shield

October 30, 2009

STEVEN LAWRENCE SCHOONMAKER, ET AL
v.
HIGHMARK BLUE CROSS BLUE SHIELD, ET AL



The opinion of the court was delivered by: O'neill, J.

MEMORANDUM

Defendants Highmark Blue Cross Blue Shield and Highmark, Inc. filed a motion to dismiss and a motion to transfer venue to the United States District Court for the Western District of Pennsylvania on February 25, 2009. Plaintiffs filed their response on March 3, 2009. On March 4, 2009, I ordered that defendants' motions be deferred while the parties considered whether they could resolve the dispute through mediation or otherwise. I denied defendants' motions without prejudice on August 11, 2009 pending the parties' attempts at resolution and allowed defendants to renew their motion by letter application if necessary. On October 14, 2009, defendants requested to renew their motions and I ordered the motions renewed. Presently before me are defendants' motions to dismiss and to transfer venue, plaintiffs' response and defendants' reply.

Defendants have moved to transfer venue to the United States District Court for the Western District of Pennsylvania. Section 1404(a) provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The burden of establishing the need for transfer rests with the movant. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-880 (3d Cir. 1995). The Court of Appeals' decision in Jumara identified public and private interests that courts should consider when determining whether to transfer venue. Private interests include: plaintiff's forum preference as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).

Id. at 879, internal citations omitted. Public interests include: the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases.

Id. at 879-80. I will address each of the relevant factors.*fn1

A. Plaintiffs' Forum Preference As Manifested In The Original Choice

Plaintiffs originally filed their complaint in the Court of Common Pleas of Philadelphia County, Pennsylvania. Defendants then removed the action to federal court. The plaintiffs' choice of venue is generally accorded great weight, but other factors such as where the underlying events occurred and where the plaintiffs reside can override this concern. This Court stated in Connors v. UUU Productions, Inc., 2004 WL 834726, at *6 (E.D. Pa. Mar. 15, 2004), "Although plaintiff's choice of venue 'generally receives substantial weight,' his choice in this case receives 'diminished weight' because he chose a forum in which he does not reside and in which none of the conduct giving rise to his claims occurred," quoting Lamusta v. Lawson Mardon Wheaton Inc., 2000 U.S. Dist. LEXIS 2708, at * 6 (E.D. Pa. Mar. 10, 2000), and Gallant v. Trustees of Columbia Univ., 111 F. Supp. 2d 638, 647 (E.D. Pa.2000).

Here, the uncontradicted allegation in the briefs is that plaintiffs live in and will be traveling from Michigan. At the time defendants denied coverage plaintiff was undergoing treatment in Utah. Furthermore, all of the underlying events giving rise to plaintiffs' cause of action occurred outside this District. The decisions to deny plaintiff coverage occurred in defendants' principal places of business--Fifth Avenue Place, Pittsburgh, PA and 1800 Center Street, Camp Hill, PA. The specific unit that reviews and authorizes the types of claims submitted by plaintiffs is located in the Pittsburgh, PA office. Defendants have no offices in Philadelphia, PA and transact very little business in this District.

Plaintiffs argue repeatedly that the operative facts occurred in Plymouth Meeting, Montgomery County, PA where Health Advocate, Inc. is located. Health Advocate, Inc. is not a party to this litigation. Plaintiffs do not contend that Health Advocate, Inc. actually made any of the decisions which resulted in the denial of claims. Rather, Health Advocate, Inc. is a third party which apparently was retained by plaintiffs to assist them in communicating with defendants about their claims. In other words, Health Advocate, Inc. merely served as a conduit to pass along information from defendants to plaintiffs.

Because plaintiffs do not reside in this District and the underlying operative facts did not occur in this District, plaintiffs decision to file its original complaint in the Philadelphia County Court of Common Pleas will not be given great weight.

B. Defendants' Preference

Defendants prefer that the litigation be transferred to the Western District which comprises Pittsburgh, one of defendants' principal places of business. All of defendants' employees who were involved in the underlying decisions and all relevant documents and records are located in Pittsburgh.

C. Whether the Claim Arose Elsewhere

As discussed above, all of the relevant decisions occurred outside of this district. There is no evidence that any part of plaintiffs' claims arose in this District. Other than plaintiffs' bald assertions that "almost all of the operative facts giving rise to this case occurred in the Eastern District of Pennsylvania," including that Highmark made its initial decision to authorize treatment and then rescinded that decision in this District. Those assertions seem to be based on the assumption that by communicating its decisions through Health Advocates, Inc., defendants made those decisions in Plymouth Meeting, PA. However, the letters from defendants concerning plaintiffs' complaint, which plaintiffs attach to their response, indicate on the letterhead "Highmark Blue Shield . . . Camp Hill, PA 17089. " Those letters also direct any correspondence to be sent to the Camp Hill address. Similarly, defendants have presented copies of two letters which were sent to the attention of plaintiff Michael ...


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