United States District Court, M.D. Pennsylvania
PATRICK C. JARMAN, Plaintiff,
CAPITAL BLUE CROSS and CAPITAL ADVANTAGE INSURANCE COMPANY, Defendant.
CHRISTOPHER C. CONNER, Chief District Judge.
Presently before the court in the above-captioned matter is a motion (Doc. 9) to dismiss or to stay filed by Capital Blue Cross and Capital Advantage Insurance Company (collectively, "Capital" or "defendants") pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The parties have fully briefed the issues and the motion is ripe for disposition. For the reasons that follow, the court will grant the motion in part, deny the motion in part, and defer the motion in part pending the results of jurisdictional discovery.
I. Factual and Procedural History
The instant matter involves an insurance coverage dispute between plaintiff Patrick Jarman ("Jarman"), a covered dependent under a group preferred provider ("PPO") health insurance plan (the "Health Plan") issued by Capital to McNees Wallace & Nurick LLC, a law firm employing Jarman's father. (Doc. 1 at ¶ 1). The Health Plan is a fully-insured, employer-provided group health plan operating on a calendar year schedule and renewing effective January 1 of each year. ( Id. at ¶ 12). Jarman was a covered dependent under the PPO by virtue of his father's "family coverage" election. ( Id. at ¶ 6). The dispute sub judice relates to certain maximum coverage limits imposed by Capital as required by state law, and Capital's denial of coverage beyond those limits, a decision which Jarman contends is a violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq.
Jarman is diagnosed with autism spectrum disorder ("ASD"). ( Id. at ¶ 2). As part of his ASD treatment, Jarman receives applied behavior analysis ("ABA") services exclusively from The Vista Foundation, a Pennsylvania nonprofit entity licensed by Pennsylvania's Department of Public Welfare ("DPW"). ( Id. at ¶ 19). As a partial hospitalization program, the foundation is considered an "autism service provider" as that term is defined under Pennsylvania law. 40 PA. STAT. § 764(h)(2) (defining term). The foundation is a Capital preferred provider, performing reimbursable ABA services to Health Plan members. (See Doc. 1 at ¶ 20).
Prior to January 1, 2010, Jarman's ABA services were unreimbursed by the Health Plan. ( Id. at ¶ 45). Effective January 1, 2010, the Health Plan contractually agreed to reimburse The Vista Foundation for ABA services up to the $36, 000 annual dollar limit established by the Pennsylvania Autism Insurance Act, 40 P.S. § 764h(b) ("Act 62"); the Health Plan denied claims for services beyond the annual limit. ( Id. at ¶ 46). In 2011 and 2012, the plan reimbursed all of Jarman's claims for ABA services up to the annual limit but denied claims in excess of that amount. ( Id. at ¶¶ 47-48). The Health Plan does not impose annual or lifetime dollar limits with respect to medical or surgical benefits. ( Id. at ¶ 44).
Jarman appealed "certain of those 2012 denials" under an expedited internal review process provided for by Act 62. ( Id. at ¶ 49). Capital failed to meet Act 62's expedited internal review deadlines and thus approved those claims appealed under the internal review process. ( Id. at ¶ 50). Jarman then appealed all denied claims for services on or after September 11, 2012 (the "2012 Claims"), (id. at ¶ 51), this time waiving his Act 62 rights to expedited internal review, (id. at ¶ 52). On December 13, 2012, Capital issued a Notice of Final Adverse Determination and finalized its denial of the 2012 Claims. ( Id. at ¶ 53). Therein, Capital indicated that it was aware of "federal law enacted both prior to and subsequent to Act 62 on the subject of health care benefits, " but that, in its view, the law did not supersede the application of Act 62's limit to the 2012 Claims. ( Id. at ¶ 54).
Jarman commenced this action by filing a complaint (Doc. 1) on April 12, 2013. Therein, Jarman asserts a claim for violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., (Count I), and for breach of contract (Count II). Jarman's claims, at their core, involve a singular question: whether the Health Plan violated ERISA by imposing an annual cap on autism services and treatment when no commensurate limitation is imposed on medical or surgical benefits. (Id.). On June 24, 2013, Capital filed the instant motion to dismiss or to stay (Doc. 9) asserting that Jarman lacks standing because he has suffered no injury-in-fact, that the court should abstain from exercising jurisdiction pursuant to Burford v. Sun Oil Co. , 319 U.S. 315 (1943) or the primary jurisdiction doctrine, and that, at minimum, Jarman's breach of contract claim is preempted by ERISA and subject to dismissal. The motion has been fully briefed (Docs. 10, 18, 19) and is ripe for disposition.
II. Standard of Review
Capital moves the court to dismiss for lack of subject matter jurisdiction, see FED. R. CIV. P. 12(b)(1), and for failure to state a claim upon which relief can be granted, see FED. R. CIV. P. 12(b)(6).
A. Rule 12(b)(1): Subject Matter Jurisdiction
In considering a motion to dismiss under Federal Rule of Civil Procedure Rule 12(b)(1), a court must distinguish between facial and factual challenges to its subject matter jurisdiction. See Mortensen v. First Fed. Sav. & Loan Ass'n , 549 F.2d 884, 891 (3d Cir. 1977). A facial attack challenges whether the plaintiff has properly pled jurisdiction. Id. In evaluating the merits of a facial attach, the court is limited to considering the allegations in the complaint and any documents referred to therein or attached thereto in the light most favorable to the non-moving party. Gould Elecs., Inc. v. United States , 220 F.3d 169, 176 (3d Cir. 2000) (citing Mortensen , 549 F.2d at 891). A factual attack, in contrast, challenges jurisdiction based on facts apart from the pleadings. Mortensen , 549 F.2d at 891. When a defendant challenges the fact of a court's subject matter jurisdiction, the court is "free to weigh the evidence and satisfy itself whether it has power to hear the case." Carpet Group Int'l v. Oriental Rug Importers Ass'n , 227 F.3d 62, 69 (3d Cir. 2000). When reviewing a factual challenge, the court does not apply a presumption of truthfulness to the plaintiff's allegations and instead must weigh the allegations of the complaint, in addition to any "affidavits, documents, and even limited evidentiary hearings, " to satisfy itself that it has jurisdiction to hear a case. Turicentro, S.A. v. American Airlines, Inc. , 303 F.3d 293, 300 n.4 (3d Cir. 2002).
B. Rule 12(b)(6): Failure to State a Claim
In addition to establishing jurisdiction, federal notice and pleading rules require the complaint to provide "the defendant notice of what the... claim is and the grounds upon which it rests." Phillips v. Cnty. of Allegheny , 515 F.3d 224, 232 (3d Cir. 2008) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007)). To test the sufficiency of the complaint in the face of a motion pursuant to Rule 12(b)(6), the court conducts a three-step inquiry. Santiago v. Warminster Twp. , 629 F.3d 121, 130-31 (3d Cir. 2010). In the first step, "the court must tak[e] note of the elements a plaintiff must plead to state a claim.'" Id . (quoting Ashcroft v. Iqbal , 556 U.S. 662, 675 (2009)). Second, the factual and legal elements of a claim are separated; well-pleaded facts must be accepted as true, while legal conclusions may be disregarded. Id .; see also Fowler v. UPMC Shadyside , 578 F.3d 203, 210-11 (3d Cir. 2009). Once the well-pleaded factual allegations have been isolated, the court must determine whether they are sufficient to show a "plausible claim for relief." Iqbal , 556 U.S. at 679 (citing Twombly , 550 U.S. at 556); Twombly , 550 U.S. at 555 (requiring plaintiffs to allege facts sufficient to "raise a right to relief above the speculative level"). A claim "has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that ...