GVB MD v. Aetna Health Inc.

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF FLORIDA

Miami Division

Case Number: 19-22357-CIV-MORENO

GVB MD d/b/a MIAMI BACK

AND NECK SPECIALISTS,

Plaintiff,

vs.

AETNA HEALTH INC.,

Defendant.

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ORDER GRANTING IN PART AND DENYING IN PART

AETNA’S MOTIONS TO STRIKE AND MOTION TO DISMISS

Earlier in this insurance benefit dispute, the Court granted Defendant Aetna Health Inc.’s

motion to dismiss the initial complaint and then granted leave to Plaintiff GVB MD d/b/a

Miami Back to amend its allegations. Miami Back subsequently filed its Amended Complaint and

Aetna responded with the underlying Motions to Strike and Motion to Dismiss Count II (D.E. 24).

In its Motions, Aetna asks the Court for four forms of relief: (1) to strike Miami Back’s

Amended Complaint in full for violating the parties’ Stipulated Confidentiality Order and HIPAA-

Qualified Protective Order, or alternatively sealing or redacting certain confidential business and

non-party patient health information; (2) to strike Miami Back’s demand for a jury trial;

(3) to dismiss, again for lack of particularity, Miami Back’s claim for declaratory judgment; and

(4) to award Aetna costs and attorneys’ fees incurred for bringing its Motions.

THE COURT has considered the Motions, the Opposition, the Reply, the pertinent portions

of the record, and being otherwise fully advised in the premises, it is

ADJUDGED that the Motions are GRANTED IN PART AND DENIED IN PART.

I. DISCUSSION

The Court will first resolve Aetna’s Motions to Strike, then address Aetna’s Motion to

Dismiss, and finally, deal with Aetna’s request for costs and attorneys’ fees.

A. MOTIONS TO STRIKE

1. Public Disclosure of Confidential Information

The power to strike a pleading is “inherent in a trial court’s authority to enforce its orders

and ensure prompt disposition of legal actions.” State Exch. Bank v. Hartline, 693 F.2d 1350,

1352 (11th Cir. 1982) (citing Link v. Wabash Railroad Co., 370 U.S. 626, 630–31 (1962)).

Aetna asks the Court to strike the Amended Complaint in full because it makes publicly available

several pieces of “Confidential Information” or “Confidential Health Information,” as those terms

are defined in the Stipulated Confidentiality Order and the HIPAA-Qualified Protective Order.1

Aetna’s first argument is that Exhibit A to the Amended Complaint violates the parties’

HIPAA-Qualified Protective Order because Exhibit A includes confidential and protected health

information of multiple non-party patients, such as those patients’ initials, their employer, their

dates of service, and their health plan beneficiary numbers (i.e. “Member ID”). Aetna contends

1 The parties’ Stipulated Confidentiality Order defines “Confidential Information” as

information “produced or furnished by a Party . . . in response to any Party’s discovery

request . . . [that] the producing Party reasonably believes in good faith to constitute or contain

confidential or proprietary technical, scientific, financial, business, health, or medication

information.” (D.E. 21 at ¶ 2(a).) The parties’ Stipulated Confidentiality Order then defines

“Confidential Health Information” as a “subset” of Confidential Information that includes, among

other categories, information that “identifies an individual or subscriber in any manner, or with

respect to which there is a reasonable basis to believe the information can be used to identify the

individual.” Id. at ¶ 2(b). This includes “any patient health information required to be kept

confidential under any state or federal law, including but not limited to regulations promulgated

pursuant to HIPAA.” Id. Relevant here, this can include: “health plan beneficiary numbers”;

“account numbers”; and “any other unique identifying number, characteristic, or code.” See id. at

¶ 2(b)(ix)–(x), (xviii). The parties’ HIPAA-Qualified Protective Order defines “Protected Health

Information” similarly. (See D.E. 22 at ¶ 2(d).)

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that publicly disclosing this information violates Section 6 of both stipulated orders, which provide

that protected health information “shall not be contained, referenced within, or attached to a

pleading, motion, exhibit, or other paper submitted to the Court, unless the paper is redacted to

exclude any personally identifying information or the Court enters an Order authorizing the filing

of the entire document under seal.” (See D.E. 21 ¶ 6; D.E. 22 at ¶ 6.)

Aetna’s second argument is that Paragraph 29 of the Amended Complaint includes several

images spanning four pages that show the terms of Aetna benefit plans issued to the employers of

the non-party patients. Aetna asserts that it designated this information confidential and maintains

that by publicly disclosing this information, Miami Back violates Section 6 of the Stipulated

Confidentiality Order, which provides that documents and papers “filed with the Court that contain

any other Party’s Confidential Information shall be filed under seal” in accordance with the

Local Rules. (See D.E. 21 at ¶ 6.) For these violations, Aetna asks the Court to either strike the

Amended Complaint in full and allow Miami Back to file an amended complaint that complies

with the Stipulated Confidentiality Order and the HIPAA-Qualified Protective Order, or

alternatively to order the Clerk of Court to seal or redact the confidential information.

Miami Back’s Opposition does not appear to dispute that the non-party patients’ health

information or the terms of Aetna’s benefit plans are “confidential” as defined by the Stipulated

Confidentiality Order or the HIPAA-Qualified Protective Order. Instead, Miami Back maintains

that the unredacted health information disclosed in Exhibit A complies with HIPAA regulations,

and then Miami Back argues that it is under the “belief” that the Court determined it “necessary”

for Miami Back to “show the portion of the ERISA plans that pertained to the intended benefits

and who the beneficiaries under the plans were.” (D.E. 25 at 4–5.)

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The Court appreciates Miami Back’s effort to comply with HIPAA regulations and the

Court’s previous order. But this effort has resulted in two errors.

First, Miami Back reads requirements that do not exist into the Court’s previous order. The

problem with Miami Back’s initial complaint was that its breach of contract allegations failed to

make clear whether the health insurance plans at issue were ERISA or non-ERISA plans, and thus

the Court could not determine whether the breach of contract claim under Florida law was

preempted by ERISA. See GVB MD v. Aetna Health Inc., Case No. 19-22357, 2019 WL 6130825,

at *2–5 (S.D. Fla. Nov. 19, 2019). The Court explained that, as alleged, it was “possible that all

of Miami Back’s insurance claims ‘relate[d] to’ ERISA plans, thus defensively preempting the

breach of contract claim; but it [was] equally possible that all of Miami Back’s insurance claims

concern[ed] non-ERISA plans, paving the way for state law claims to proceed.” Id. at *4. The

Court readily understood that the pleading deficiencies likely “stem[med] from Aetna being ‘in

sole possession of’ the applicable health insurance plans.” Id. at *5. And so the Court instructed

Miami Back to use “initial discovery” to determine whether or not the applicable insurance plans

were ERISA based. Id.

“Looking forward,” the Court explained, “simply stat[ing] that all insurance plans subject

to this litigation are ‘group health insurance policies [that] constitute employee welfare plans as

defined by The Employee Retirement Security Act’” would not survive dismissal because “[s]uch

conclusive allegations are not sufficient to pass the pleading notice requirements under Twombly.”

Id. at *5 (quoting In re Managed Care Litig., Master File No. 00-1334-MD, Tag-Along Case No.

08–20005-CIV, 2009 WL 742678, at *3 (S.D. Fla. Mar. 20, 2009)). Then came the critical part of

the Court’s order:

Without describing an ERISA plan, Defendants cannot reasonably ascertain what

the intended benefits were or who [were] the proper beneficiaries under a given

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plan. Although the allegations in the Complaint do not need to describe a given

plan in detail, such as to identify each plan’s policy number, the allegations must

be sufficient to raise the existence of an ERISA plan above speculative level.

As such, failure to identify the controlling ERISA plans makes the Complaint

unclear and ambiguous.”

Id. (emphases added) (quoting In re Managed Care Litig., 2009 WL 742678, at *3); see also id. at

n.5 (collecting similar rulings). Because the initial complaint did not identify any ERISA or non-

ERISA plans, the Court concluded that Miami Back failed to plausibly allege breach of contract

under Florida law. Id.

In short, all the Court ruled was that Miami Back would have to sufficiently describe the

applicable health insurance plans and who the intended beneficiaries were; the Court did not,

however, find it “necessary” to “show the portion of the ERISA plans that pertained to the intended

benefits and who the beneficiaries under the plans were.” (D.E. 25 at 4.)

The second error is that Miami Back failed to comply with the terms of the parties’

Stipulated Confidentiality Order and the HIPAA-Qualified Protective Order. See supra at 2–3 &

n.1. Miami Back must honor the terms of these agreements with Aetna2—regardless of whether

Miami Back believes that the plan documents are not actually confidential (see D.E. 25 at 4), as

Aetna designated them as such and Miami Back never challenged the designation; and even though

Miami Back believes that the unredacted information of the non-party patients in Exhibit A is

“necessary” to put Aetna on notice of each claim, id. at 5.

In bringing this dispute to resolution, the Court finds it important that Miami Back is

open to “fashioning some remedy which preserves the confidentiality of the information at issue.”

Id. Equipped with flexibility and clarification on the Court’s previous order, the Court is confident

2 Although the Court granted the parties’ Joint Motions for entry of these orders, the terms

were chosen by the parties.

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that Miami Back can reach an amicable agreement with Aetna on the information that can be

publicly disclosed in the First Amended Complaint,3 while also satisfying Rule 8.4

The Court agrees with Miami Back that it is not appropriate to grant Aetna’s proposed

alternative relief—to leave the sealing or redaction of confidential information to the Clerk of

Court. The correct resolution is to strike the Amended Complaint and allow Miami Back to file a

First Amended Complaint. Accordingly, Aetna’s Motion to Strike the Amended Complaint in full

is GRANTED; the Amended Complaint is thus STRICKEN. Miami Back is, however, granted

leave to file a First Amended Complaint, which it must do no later than Monday, May 4, 2020.

Before addressing the remaining issues, the Court notes that this ruling is not “draconian,”

as Miami Back suggests. This ruling does not come with the negative stigma that sometimes

clouds over stricken pleadings. Rather, striking the Amended Complaint in full is the most

effective and efficient way to steer this litigation in the right direction so that Miami Back can

satisfy its pleading requirements under Rule 8, and also comply with the terms of the Stipulated

Confidentiality Order and the HIPAA-Qualified Protective Order.

3 The Court is also confident that Miami Back will not interpret this Order as an invitation

to avoid the hard work and careful thought required to amend allegations to meet Rule 8 pleading

requirements, in favor of seeking leave from the Court to file under seal its First Amended

Complaint or its exhibit(s).

To be clear, this Court does not rubber-stamp motions for leave to file under seal. It holds

in high regard the “[t]he common-law right of access to judicial proceedings, [which is] an

essential component of our system of justice, [and] is instrumental in securing the integrity of the

process.” Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304, 1311 (11th Cir.

2001) (citing Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 564–74 (1980)).

4 It is clear to the Court that Aetna is on notice of the claims against it—so much so that

Aetna now wants Miami Back to limit public disclosure of information that “identif[ies] the

Plans . . . [and] specif[ies] the terms” pursuant to which Miami Back seeks payment. (See D.E. 7

at 6 n.4.) It is safe to say, then, that Miami Back resolved Aetna’s previous objection.

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2. Jury Demand

Next, Aetna asks the Court to strike Miami Back’s jury demand because a claim for breach

of contract under an ERISA plan must be tried by the Court. In view of the Amended Complaint

being stricken and Miami Back agreeing to withdraw its jury demand (see D.E. 25 at 6), the Motion

to Strike the jury demand is DENIED AS MOOT.

B. MOTION TO DISMISS COUNT II (DECLARATORY JUDGMENT)

Although Miami Back will file a First Amended Complaint to comply with the parties’

agreed-to Confidentiality Order and HIPAA-Qualified Protective Order, the Court will briefly

address Aetna’s argument, raised for the second time in this case, that Miami Back’s claim for

declaratory judgment should be dismissed as seeking a declaration of rights that lacks particularity.

Previously, the Court dismissed with leave to amend Miami Back’s claim for declaratory

judgment because, as alleged, the claim did not “request any specific declarations as to any specific

rights or obligations implicated by the ‘actual, live controversy.’” GVB MD, 2019 WL 6130825,

at *11. Rather, the initial complaint left the Court “to infer what declarations [were] sought by

Miami Back.” Id. The Court explained that, as alleged, Miami Back asked for a declaration to

resolve its doubt “as to its rights to receive benefits under numerous insurance plans, each of which

likely ha[d] different terms and conditions of coverage, concerning services provided to different

patients with different diagnoses.” Id. The Court explained that “[t]o account for these variations,

a declaration of rights would require a case-by-case assessment.” Id. Accordingly, the Court

dismissed the claim for declaratory judgment for lack of particularity.

In its Motion here, Aetna argues over several pages that the declaratory judgment claim

alleged in Count II of the Amended Complaint fails again because, as alleged, the claim still:

(1) is not sufficiently particular as to what declarations the Court is being asked to make; (2) that

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fact-intensive determinations as to medical necessity and reasonable pricing are not appropriate

for “across the board” declarations; and (3) that Miami Back cannot seek declarations as to past

medical claims. (See D.E. 24 at 6–11.)

Here, Miami Back’s response (totaling less than one page) fails to adequately respond to

Aetna’s arguments5; Miami Back also fails entirely to address this Court’s prior ruling. (See D.E.

25 at 6.) In filing its First Amended Complaint, Miami Back should consider Aetna’s arguments

and is reminded that “[t]o survive dismissal, the Complaint must at minimum seek declarations

with some level of specificity.” GVB MD, 2019 WL 6130825, at *11. Because the Amended

Complaint is already stricken, Aetna’s Motion to Dismiss is DENIED AS MOOT.

C. REQUEST FOR COSTS AND ATTORNEYS’ FEES

Finally, Aetna asks the Court to award it costs and attorneys’ fees incurred in bringing the

underlying Motions. To assess fees under its inherent authority, the Court must find that a party

has acted in “bad faith, vexatiously, wantonly, or for oppressive reasons.” Eisenberg Dev. Corp.

v. City of Miami Beach, 95 F. Supp. 3d 1376, 1380 (S.D. Fla. 2015) (quoting Chambers v. NASCO,

Inc., 501 U.S. 32, 45–46 (1991)). “The key to unlocking a court’s inherent power is a finding of

bad faith,” which is shown where an attorney “knowingly or recklessly raises a frivolous argument,

or argues a meritorious claim for the purpose of harassing an opponent.” Barnes v. Dalton, 158

F.3d 1212, 1214 (11th Cir. 1998) (citations omitted).

Here, although Miami Back may have read too far into the Court’s previous order, the

5 A party who aspires to oppose a motion “must spell out his arguments squarely and

distinctly, or else forever hold his peace.” Haasbroek v. Princess Cruise Lines, Ltd., 286 F. Supp.

3d 1352, 1358 n.4 (S.D. Fla. 2017) (quoting Siegmund v. Xuelian, Case No. 12-62539, 2016 WL

3186004, at *3 (S.D. Fla. June 8, 2016)). And failing to respond to an argument in a motion to

dismiss is equal to conceding that argument. See GolTV, Inc. v. Fox Sports Latin Am. Ltd., 277 F.

Supp. 3d 1301, 1311 n.7 (S.D. Fla. 2017).

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Court believes Miami Back made a good-faith effort to meet its pleading requirements and to

comply with the Stipulated Confidentiality Order and HIPAA-Qualified Protective Order.

Therefore, the Court does not find that Miami Back acted in bad faith. Aetna’s request for costs

and attorneys’ fees is accordingly DENIED.

Il. CONCLUSION

For these reasons, it is

ADJUDGED that Aetna’s Motions to Strike and Motion to Dismiss Count II (D.E. 24) is

GRANTED IN PART AND DENIED IN PART as follows:

(1) The Motion to Strike the Amended Complaint in full is GRANTED. The Amended

Complaint is STRICKEN, but Miami Back is granted leave to file a First Amended

Complaint, which it must do no later than Monday, May 4, 2020;

(2) The Motion to Strike the Jury Demand is DENIED AS MOOT as Miami Back agrees

to withdraw its jury demand;

(3) The Motion to Dismiss Count IT is DENIED AS MOOT as Miami Back’s

Amended Complaint is stricken; and

(4) The request for costs and attorneys’ fees is DENIED.

DONE AND ORDERED in Chambers at Miami, Florida this 7" day of April 2020.

eis ia

FEDERICO A.MORENO)

UNITED STATES DISTRICT JUDGE

Copies furnished to:

Counsel of Record

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