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Tenet Health System Philadelphia, Inc., D/B/A Hahnemann University v. Diversified Administration Corporation

May 2, 2012

TENET HEALTH SYSTEM PHILADELPHIA, INC., D/B/A HAHNEMANN UNIVERSITY : HOSPITAL
PLAINTIFF,
v.
DIVERSIFIED ADMINISTRATION CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Tucker, J.

MEMORANDUM AND ORDER

May _____, 2012

Plaintiff Tenet Healthsystem originally brought this action in the Court of Common Pleas of Philadelphia County asserting a breach of contract claim against the Defendants for failure to fully pay for medical services rendered by Plaintiff on behalf of a plan participant. Defendants subsequently removed the action to this Court on the grounds that Plaintiff's claims are preempted by ERISA. Now pending before the Court is Defendants' Motion to Dismiss (Doc. 4, 5, 9) pursuant to Federal Rules of Civil Procedure 12(b)(6) and Plaintiff's Response (Doc. 18), which the Court will construe as a Motion to Remand. Upon reviewing the parties' submissions, the Court finds that it lacks removal jurisdiction. Consistent with the Court's findings that this case was improperly removed, the Court will deny Defendants' motion to dismiss and remand the case to state court.

FACTUAL BACKGROUND

Plaintiff Tenet Healthsystem Philadelphia, Inc. dba Hanhemann University Hospital, owns and operates Hahnemann University Hospital in Philadelphia, PA. Defendant Diversified Administration Corporation is a subsidiary of Defendant Diversified Group Brokerage Corporation; both companies have primary places of business in Connecticut. Defendant Hersha Hospitality Management Corporation is general partner to Defendant Hersha Hospitality Management, LP ("Hersha HM"); both companies have primary places of business in Pennsylvania. Defendant Beech Street Corporation of California ("Beech") has its primary place of business in California and is a subsidiary of Defendant Concentra Network Services, Inc. (now known as Viant, Inc.) which has its primary place of business in Illinois. Defendant Concentra, Inc. is the parent company of Defendant Concentra Network Services, Inc. and has its primary place of business in Texas. Diversified Administration Corporation ("DAC") is a third party administrator responsible for medical claim administration on behalf of all Defendants including Defendant Hersha Hospitality Management, L.P. and its employees. (Compl. ¶¶ 1-9.)

Plaintiff initiated this action in the Court of Common Pleas of Philadelphia County on October 5, 2007. At all relevant times, Plaintiff alleges that an individual named Schofield was an eligible member/subscriber of Hersha HM's health insurance plan. On July 21, 2005, Plaintiff obtained authorization from DAC to provide medical services to Schofield; and, on August 5, 2005, Plaintiff provided inpatient medical services to Schofield totaling $139,192.50.*fn1 Plaintiff claims that on September 28, 2005, Plaintiff timely submitted a claim to Beech for reimbursement of the charges incurred by Schofield. On March 1, 2006, DAC sent to Plaintiff a payment of $23,570.72. Plaintiff seeks reimbursement of the balance due and owing by Schofield in the amount of $115,621.78 plus interest of 6% per annum from September 7, 2007. To support its claim, Plaintiff alleges that the charges for medical services rendered were regular and routine and at no time did Schofield or any of the Defendants ever communicate any displeasure or problem with the medical treatment provided. Plaintiff further claims that it was a "member" of Defendants' health plan and Defendants were obligated to reimburse Plaintiff for the entire amount submitted. (Compl. ¶¶ 1-9.)

On November 26, 2007, Defendants removed the matter to federal court pursuant to 28 U.S.C. §§1441 and 1446. In December 2007, Defendants moved to dismiss the case (Docs. 4, 5, 9) arguing, inter ali, that Plaintiff's breach of contract claims are preempted under section 514(a) of ERISA. Defendants further contend that Plaintiff's ERISA claim arising under section 502(a) must be dismissed for lack of standing. The court granted the Motion as unopposed on August 5, 2008. Plaintiff timely filed a Motion for Reconsideration, which the court granted on September 16, 2008. Plaintiff filed its Response in Opposition to Defendants' Motion (Doc. 18) on September 19, 2008 arguing that the case should be remanded for lack of subject matter jurisdiction.*fn2

STANDARD OF REVIEW

A) 12(B)(6) Motion to Dismiss

In deciding a 12(B)(6) motion to dismiss for failure to state a claim, the court must view the well pleaded facts in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). Because the Federal Rules of Civil Procedure only require notice pleading, the complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief."

Fed.R.Civ.P. 8(a); see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[O]nly a complaint that states a plausible claim for relief [will] survive[] a motion to dismiss." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009). If the court can only infer the mere possibility of misconduct, the complaint must be dismissed because it has alleged -- but failed to show -- that the pleader is entitled to relief. Id.

B) Motion to Remand

The relevant statutory provisions for removal are provided in 28 U.S.C. §§ 1441-1452. Section 1446(b) sets forth the procedure for removing a state case to federal court and reads in part, as follows:

[t]he notice of removal of a civil action or proceedings shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then ...


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