Davita Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

DAVITA, INC., et al.,

Plaintiffs, : Case No. 2:18-cv-1739

v. Judge Sarah D. Morrison

Magistrate Judge Kimberly A. Jolson

MARIETTA MEMORIAL

HOSPITAL EMPLOYEE

HEALTH BENEFIT PLAN, et al., :

Defendants.

OPINION AND ORDER

This matter is before the Court on Defendants’ Motions to Dismiss. (ECF Nos. 17, 18.)

Plaintiff filed a Memorandum in Opposition in response to each Motion (ECF Nos. 23, 24), and

Defendants each filed a Reply (ECF Nos. 35, 38). Plaintiffs have also filed a Consent Motion for

Leave to File Sur-Reply (ECF No. 39) and a Request for Oral Argument (ECF No. 43).

Defendant Medical Benefits Mutual Life Insurance Company (“MedBen”) filed a Response to

Plaintiffs’ Request for Oral Argument. (ECF No. 45.) These matters are now ripe for

consideration.

I. BACKGROUND

Plaintiff DaVita, and its subsidiary, co-Plaintiff DVA Renal Healthcare, Inc., are dialysis

care providers. (Compl., ECF No. 1, ¶¶ 11–12.) Plaintiffs provide their services to members of

various health benefit plans, including Defendant Marietta Memorial Hospital Employee Health

Benefit Plan (the “Plan”). (Id. at ¶ 1.) Defendants Marietta Memorial Hospital (“Marietta”) and

MedBen are the Plan Administrator and Third Party Administrator for the Plan. (Id. at ¶¶ 8, 14.)

The Plan is a self-funded health benefit plan governed by the Employee Retirement Income

Security Act of 1974 (“ERISA”), and it provides for various reimbursement levels for services

provided by various health care providers. (Id. at ¶¶ 13, 24.) The aspect of the Plan that is

relevant here deals with its treatment of dialysis providers. It classifies all dialysis providers as

“out-of-network” and thereby reimburses them at a lower rate. (Id. at ¶¶ 25–28.)

Most individuals who require dialysis do so because they have End Stage Renal Disease

(“ESRD”), including Patient A, who receives dialysis from Plaintiffs. (Id. at ¶¶ 19–20.) Patient A

was a member of the Plan until August 31, 2018, when Medicare became Patient A’s primary

insurance. (Id. at ¶ 29.)

On December 19, 2018, Plaintiffs filed the Complaint against Defendants, arguing that

the Plan treats dialysis providers differently than other medical providers in violation of federal

law. Plaintiffs have brought suit in their own names, as well as on behalf of Patient A. (See, e.g.,

id. at ¶ 60.) Plaintiffs assert that they have standing to sue on behalf of Patient A based on an

“Assignment of Benefits” form that Patient A signed (the “Assignment”), by which Patient A

assigned particular rights to Plaintiffs. (Id. at ¶ 31.)

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with

sufficient specificity to “give the defendant fair notice of what the . . . claim is and the grounds

upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original)

(internal quotations omitted). A complaint that falls short of the Rule 8(a) standard may be

dismissed if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6).

To survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to state a claim to relief that is plausible on its face. A claim has

facial plausibility when the plaintiff pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct

alleged. The plausibility standard is not akin to a probability requirement, but it

asks for more than a sheer possibility that a defendant has acted unlawfully.

Where a complaint pleads facts that are merely consistent with a defendant’s

liability, it stops short of the line between possibility and plausibility of

entitlement to relief.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotations omitted). The

complaint need not contain detailed factual allegations, but it must include more than labels,

conclusions, and formulaic recitations of the elements of a cause of action. See Directv, Inc. v.

Treesh, 487 F.3d 471, 476 (6th Cir. 2007). “Threadbare recitals of the elements of a cause of

action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (citing

Twombly, 550 U.S. at 555).

III. ANALYSIS

Plaintiffs claim that Defendants are required to treat dialysis care providers more

favorably than they currently do, including that they must reimburse these providers at a higher

rate. Plaintiffs argue that Defendants’ disfavored treatment of dialysis providers violates the

nondiscrimination provisions of the Medicare Secondary Payer Act (“MSPA”), as well as

various provisions of ERISA.

A. Preliminary Matters

Various dialysis providers, including Plaintiffs, have been litigating similar cases across

the country, resulting in four recent district court opinions that the parties have brought to the

Court’s attention. (ECF Nos. 41, 42, 44.) All four of these opinions were issued after Plaintiffs

filed their responses to the motions to dismiss, and three were issued after briefing closed

entirely. As a result, Plaintiffs have filed a Motion for Leave to File Sur-Reply (ECF No. 39) in

order to address the one opinion that had been issued at the time they filed the motion. Plaintiffs

represent that Defendants consent to the Motion.

Pursuant to Local Rule 7.2(a)(2), no additional memoranda may be filed subsequent to a

reply brief, except “upon leave of court for good cause shown.” S.D. Ohio Civ. R. 7.2(a)(2). The

Court finds that Plaintiffs have established good cause. The Motion for Leave to File Sur-Reply

is GRANTED.

In addition, Plaintiffs have filed a Request for Oral Argument (ECF No. 43), also because

of this new authority. After examining the briefs and the record, the Court has determined that

oral argument is unnecessary. The parties have adequately presented their arguments and facts in

their extensive briefing, and oral argument would not aid in the decisional process. See Fed. R.

Civ. P. 78(b); S.D. Ohio Loc. R. 7.1(a). Plaintiffs’ Request for Oral Argument is DENIED.

B. Count 1 – The MSPA Claim

Individuals with ESRD are eligible for Medicare, regardless of age or income, three

months after beginning a regular course of dialysis. 42 U.S.C. §§ 426-1, 1395c (2012). However,

such individuals are not required to transition to Medicare immediately upon becoming eligible.

In fact, Congress, through the MSPA, sought to make Medicare the secondary payer for dialysis

treatments for privately insured individuals with ESRD for the first thirty months of Medicare

eligibility. Bio-Med. Applications of Tenn., Inc. v. Cent. States Se. & Sw. Areas Health &

Welfare Fund, 656 F.3d 277, 281 (6th Cir. 2011); see 42 C.F.R. § 411.162(a) (2019). That is,

Congress decided that Medicare would serve, at least initially, as the backstop to the “primary

payers,” the individuals’ private health plans. Bio-Med., 656 F.3d at 281.

1. Private right of action

As a part of this statutory scheme, the MSPA created a private right of action whereby

private actors can sue a primary plan for damages if that plan fails to provide for primary

payment (or appropriate reimbursement) in accordance with this primary/secondary payer

structure. 42 U.S.C. § 1395y(b)(3)(A); Bio-Med., 656 F.3d at 284–85. However, a primary plan

is only liable when it “causes Medicare to step in and (temporarily) foot the bill.” Bio-Med., 656

F.3d at 286. That means that it must have been the case that Medicare made payments that the

primary payer was responsible for making. DaVita Inc. v. Virginia Mason Mem’l Hosp., No.

2:19-CV-302-BJR, 2019 WL 3205865, at *4 (W.D. Wash. July 16, 2019).

In this case, Medicare never had to step in to make payments that the Plan, Patient A’s

primary plan, failed to make. Medicare only began to make payments once Patient A voluntarily

left the Plan and enrolled in Medicare. DaVita argues that it is sufficient that Patient A left the

Plan prematurely and enrolled in Medicare. (Pls.’ Reply to Def. MedBen Mot. Dismiss, ECF No.

24, at 13 n.7.) It is not. Pursuant to the MSPA, the Plan was only required to make payments (or

to reimburse Medicare) so long as Patient A was enrolled in the Plan. The Plan was never

required to make payments once Patient A voluntarily enrolled in Medicare, even if he/she could

have remained on the Plan for a longer period of time. This does not fall within the limited scope

of the private cause of action. See Virginia Mason, 2019 WL 3205865, at *5 (“[O]nce Patient 1

switched to Medicare, Medicare, not the Plan, became the primary payer.”).

2. Nondiscrimination provisions

There are additional and independent grounds to dismiss the MSPA claim.

In order to prevent private plans from providing inferior benefits to individuals with

ESRD, or from ending their coverage entirely, Congress included two nondiscrimination

provisions in the MSPA, the “take into account” provision and the “nondifferentiation”

provision. See 42 U.S.C. § 1395y(b)(1)(C); Bio-Med., 656 F.3d at 281; 42 C.F.R. § 411.161

(2019). The “take into account” provision prohibits group health plans from “tak[ing] into

account that an individual [with ESRD] is entitled to or eligible for [Medicare] benefits” for the

first thirty months of eligibility. 42 U.S.C. § 1395y(b)(1)(C)(i); Bio-Med., 656 F.3d at 281–82.

That is, a group health plan is prohibited from “consider[ing] the fact that an insured person” is

eligible for Medicare in making coverage decisions. Bio-Med., 656 F.3d at 282 (emphasis

deleted).

The implementing regulations pertaining to this provision provide various “[e]xamples of

actions that constitute ‘taking into account,’” all of which involve treating those eligible for

Medicare differently from those who are not. See, e.g., 42 C.F.R. §§ 411.108(a)(5) (“Imposing

limitations on benefits for a Medicare entitled individual that do not apply to others enrolled in

the plan”), (8) (“Paying providers and suppliers less for services furnished to a Medicare

beneficiary than for the same services furnished to an enrollee who is not entitled to Medicare”).

It follows from the language of the “take into account” provision and from its implementing

regulations that a health plan only violates this provision through disparate treatment based on

Medicare eligibility—that is, when a group health plan treats those eligible for Medicare

differently than those who are not. See Dialysis of Des Moines, LLC v. Smithfield Foods

Healthcare Plan, No. 2:18-CV-653, slip op. at 11–12 (E.D. Va. Aug. 5, 2019) (“[A] limitation

on services is permitted so long as it is uniform, meaning that it applies to all plan enrollees

regardless of Medicare eligibility or ESRD diagnosis.”); DaVita, Inc. v. Amy’s Kitchen, Inc., 379

F. Supp. 3d 960, 973 (N.D. Cal. 2019) (finding that because those receiving dialysis treatment

who are Medicare-eligible and those who are not are subject to the same provisions, the benefit

plan did not violate the “take into account” provision); Nat’l Renal All., LLC v. Blue Cross &

Blue Shield of Ga, Inc., 598 F. Supp. 2d 1344, 1354 (N.D. Ga. 2009) (“Plaintiffs have not

demonstrated that Blue Cross’s decision to lower reimbursement rates on dialysis treatment . . .

constitutes ‘taking into account’ or ‘differentiating’ a level of coverage provided to those

suffering from ESRD and those not.”)

The “nondifferentiation” provision tells group health plans that they “may not

differentiate in the benefits [they] provide[] between individuals having end stage renal disease

and other individuals covered by such plan on the basis of the existence of end stage renal

disease, the need for renal dialysis, or in any other manner” during the first thirty months of

Medicare eligibility. 42 U.S.C. § 1395y(b)(1)(C)(ii); Bio-Med., 656 F.3d at 282. Examples of

such prohibited “differentiation” include “[i]mposing on persons who have ESRD, but not on

others enrolled in the plan, benefit limitations” and “[p]aying providers and suppliers less for

services furnished to individuals who have ESRD than for the same services furnished to those

who do not have ESRD . . . .” 42 C.F.R. §§ 411.161(b)(ii), (iv).

The regulations for the “nondifferentiation” provision specifically say that “[a] plan is not

prohibited from limiting covered utilization of a particular service as long as the limitation

applies uniformly to all plan enrollees.” 42 C.F.R. § 411.161(c). As with the “take into account

provision,” the language of the “nondifferentiation” provision and its implementing regulations

shows that a health plan only violates this provision when it treats those with ESRD differently

than those who do not have ESRD (i.e., disparate treatment). See Dialysis of Des Moines, slip op.

at 11–12; Amy’s Kitchen, 379 F. Supp. 3d at 973 (“[T]he applicable rates in Amy’s Plan are set

based on the fact of dialysis treatment, not the existence of ESRD.”); Nat’l Renal All., 598 F.

Supp. 2d at 1354. (“Significant to the court’s finding is the fact that there is no allegation that

Blue Cross pays a different amount for dialysis treatment of non-ESRD patients than ESRD

patients.”)

Therefore, Defendants have violated these provisions, and thereby the MSPA, only if the

Plan treats those eligible for Medicare differently than those who are not, or it treats those who

have ESRD differently than those who do not. Plaintiffs argue that Defendants’ categorization of

dialysis providers as “out-of-network” and the corresponding reduction in the dialysis

reimbursement rate violates both provisions. Based on the facts that they have alleged, however,

Plaintiffs have failed to state a claim that Defendants have violated either provision.

Plaintiffs acknowledge that the aspects of the Plan about which they complain apply to all

enrollees receiving dialysis. (ECF No. 1, ¶ 25.) That is why Plaintiffs’ claims fail. It cannot be

the case that the Plan has “taken into account” or “considered” an individual’s Medicare status if

all patients receiving dialysis (including those ineligible for Medicare) are governed by the same

standards. Nor can it be the case that Defendants have “differentiate[d]” between individuals

with ESRD and individuals without ESRD when all Plan enrollees receiving dialysis (including

those without ESRD) are subject to the same provisions.

Plaintiffs rely on a disparate impact argument. They argue that because individuals with

ESRD comprise a disproportionately large number of those receiving dialysis, changes in the

Plan’s treatment of dialysis providers has a discriminatory result, even if they are not facially

discriminatory. (Pls.’ Response to Def. Marietta Mot. to Dismiss, ECF No. 23, at 9–11.) To

support their argument, Plaintiffs point to other statutes that the Supreme Court has found to

encompass disparate impact claims. (Id.)

The difference between these statutes and the MSPA is in their language, and it is that

difference why those statutes allow for disparate impact claims but the MSPA does not. For

example, the Supreme Court found that the phrase “otherwise make unavailable” in the Fair

Housing Act “refers to the consequences of an action rather than the actor’s intent,” which is

demonstrative of congressional intent to provide for disparate-impact claims. Tex. Dep’t of Hous.

& Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2518 (2015). But the MSPA

does not contain this type of “results-oriented” language.

The only language that Plaintiffs point to in order to support their disparate impact

argument is the language in the “nondifferentiation” provision prohibiting differentiation in

benefits on account of ESRD, the need for dialysis, or “in any other manner.” (ECF No. 23, at

10.). But Plaintiffs ultimately concede that this language cannot be read as broadly as they claim.

(Pls.’ Response to Def. MedBen Mot. to Dismiss, ECF No. 24, at 13.) This is because the MSPA

regulations specifically say that “[a] plan is not prohibited from limiting covered utilization of a

particular service as long as the limitation applies uniformly to all plan enrollees.” 42 C.F.R. §

411.161(c). Thus, health plan limitations are permissible under the MSPA as long as they apply

to all enrollees equally, as here.

The last argument that Plaintiffs make in support of their disparate impact argument

comes from one of the responses by the Department of Health and Human Services (“HHS”) to a

comment during the notice-and-comment period before the MSPA rules were finalized. In

support of this argument, Plaintiffs selectively, and in misleading fashion, quote a portion of

HHS’s response, arguing: “The ‘taking into account’ provisions expressly bar even facially

neutral ‘[p]lan provisions that have the effect of denying, restricting, or terminating benefits for

[ESRD-based Medicare eligible] individuals.’” (ECF No. 24, at 13 (alterations in original)

(quoting Medicare Program; Medicare Secondary Payer for Individuals Entitled to Medicare and

Also Covered Under Group Health Plans, 60 Fed. Reg. 45344-01, at 45351 (Aug. 31, 1995)).)

The full comment response says: “Plan provisions that have the effect of denying, restricting, or

terminating benefits for disabled beneficiaries who have LGHP[1] coverage by virtue of current

1 Large Group Health Plan.

employment status, but not for similarly situated individuals, are prohibited.” 60 Fed. Reg., at

45351. The full quote not only does not support Plaintiffs’ argument, but it is further evidence

that a disparate impact claim is not cognizable under the MSPA.

In short, there is nothing illegal about the disputed terms in the Plan. Because Plaintiffs’

claim is not cognizable under the MSPA as a matter of law, Count One is DISMISSED with

prejudice for failure to state a claim upon which relief can be granted.

C. Counts Two through Seven – The ERISA Claims

In addition to their MSPA claim, Plaintiffs have brought six ERISA claims—one claim

pursuant to 29 U.S.C. § 1132(a)(1)(B), based on allegedly illegal Plan provisions (Count Two);

four claims alleging breaches of fiduciary obligations by Defendants (Counts Three through Six);

and one claim pursuant to 29 U.S.C. § 1182(a)(1), the nondiscrimination provisions of ERISA

(Count Seven).

1. Counts Two and Seven

Count Two is premised entirely on purported violations of the MSPA. (See ECF No. 1, ¶¶

67–68 (“Because these payment provisions targeting dialysis-related treatment are illegal, they

should be severed from the Plan” and “Defendants’ conduct constitutes a breach of the ERISA

plans at issue . . . .”)) Plaintiffs do not allege that Defendants have not complied with the terms

of the Plan; rather, they allege that the Defendants have violated ERISA by complying with

illegal provisions of the Plan. Because the Court has already determined that the claim that the

Plan’s provisions are illegal fails as a matter of law, Count Two is DISMISSED with prejudice

as well.

Count Seven fails for similar reasons. Plaintiffs argue that the Plan discriminates “against

plan participants and beneficiaries on the basis of health condition and medical status, including

disability,” in violation of 29 U.S.C. § 1182(a)(1). (ECF No. 1 ¶ 92.) Specifically, Plaintiffs

allege that the Plan discriminates against enrollees suffering from ESRD. (Id.) As has already

been explained, this is not the case; those with ESRD are treated the same as those without.

Plaintiffs argue that the Plan’s disparate treatment of dialysis services constitutes an

additional example of discrimination on the basis of disability. (ECF No. 23, at 15.) This

argument ignores one of the statute’s corresponding regulations, which specifically says that “a

group health plan or group health insurance issuer is not required to provide coverage for any

particular benefit to any group of similarly situated individuals.” 29 C.F.R. §

2590.702(b)(2)(i)(A) (2019). The Plan treats all similarly situated individuals equally: all those

requiring dialysis are treated exactly the same. Count Seven is also DISMISSED with prejudice.

2. Counts Three through Six

Counts Three through Six are all fundamentally the same claim. They all allege breach of

alleged fiduciary duties by Defendants. (See ECF No. 1, at 24–29.) Plaintiffs bring each of these

claims as assignees of Patient A, meaning that they rely on a valid assignment.2 As a result, if

Patient A has not assigned to Plaintiffs his/her rights to bring equitable claims under ERISA,

Plaintiffs have no standing to bring these claims. 3

Plaintiffs rely on an Assignment that is part of a form called “Patient Acknowledgment,

2 Plaintiffs have brought Counts Two and Seven as assignees as well. (ECF No. 1 ¶¶ 70, 94.) However, the

validity of the assignment as to these claims is irrelevant because of the fundamental flaws in each claim described

in the previous section.

3 “Non-participant health care providers cannot bring their own ERISA claims—they do so derivatively,

relying on the participants’ contractually defined rights and therefore the participants’ standing at the time of the

assignment.” Springer v. Cleveland Clinic Emp. Health Plan Total Care, 900 F.3d 284, 287–88 (6th Cir. 2018).

Plaintiffs explicitly bring Counts Three and Four only as an assignee. (ECF No. 1, ¶¶ 73, 77.) Counts Five and Six

contain no such explicit provision. However, Plaintiffs have incorporated all of their prior allegations into Counts

Five and Six (including those related to Patient A’s assignment of rights). (See ECF No. 1 ¶¶ 78, 84). Given this

incorporation, and given that Plaintiffs have no standing to bring these claims on behalf of themselves, the Court

construes Counts Five and Six as being brought by Plaintiffs in their role as Patient A’s assignee, as with Counts

Three and Four.

Authorization and Financial Responsibility Form.” (Pls.’ Sur-Reply, Ex. A, ECF No. 39-1, at 1.)

This form has the stated purpose of “confirm[ing the patient’s] choice to receive dialysis services

at the listed facility and that [the patient] will be personally responsible for payments and other

services [the patient] receive[s] through DaVita. Further, [the patient is] assigning rights to

payments from [the patient’s] insurer and authorizing DaVita to obtain the necessary information

to obtain such payments.” (Id.) In a section called “Assignment of Benefits; Lien,” the form

states as follows:

I hereby assign to DaVita all of my right, title and interest in any cause of action

and/or any payment due to me (or my estate) under any employee benefit plan,

insurance plan, union trust fund, or similar plan (“Plan”), under which I am a

participant or beneficiary, for services, drugs or supplies provided by DaVita to

me for purposes of creating an assignment of benefits under ERISA or any other

applicable law. I also hereby designate DaVita as a beneficiary under any such

Plan and instruct that any payment be made solely to and sent directly to DaVita.

If I receive any payment directly from any Plan for services, drugs or supplies

provided to me by DaVita, including insurance checks, I recognize that such

payment sent directly to me was inappropriate and I agree to immediately endorse

and forward such payment to DaVita. I agree that DaVita shall have an automatic

lien and/or security interest against any such payment I receive from any Plan.”

(Id. at 2, ¶ 5.)

The quoted language is broad, and Plaintiffs argue that it is not limited to the payment of

benefits. (ECF No. 23, at 14.) In particular, Plaintiffs highlight the reference to “any cause of

action,” arguing that Patient A has assigned to Plaintiffs his/her right to sue for breach of

fiduciary duty under ERISA. (Id.)

The reference to “cause of action” is arguably ambiguous, and such ambiguity is

construed against the drafter. See Clemons v. Norton Healthcare Inc. Retirement Plan, 890 F.3d

254, 266–67 (6th Cir. 2018) (holding that contra proferentum doctrine “has legitimate force” in

an ERISA case, except where a benefits administrator is entitled to deference). This doctrine

“compels a drafting party to be honest about its offer up front, by threatening to construe terms

‘against the offeror’ if he attempts to hoodwink the other party.” Id. at 267. Plaintiffs, as the

drafter of this Assignment, do not get the benefit of the doubt. Plaintiffs could have explicitly

written an assignment that assigned rights to equitable causes of action, but they did not do so.

The broader context of the form on which the Assignment is located, as well as its precise

location on the form, adds clarity to what the Assignment means. It is located in a subsection

called “Assignment of Benefits” on a form that is almost entirely about insurance payments and

which form’s stated purpose involves “assigning rights to payments,” not lawsuits.

The meaning of “cause of action” must be informed by its context. Cf. Food & Drug

Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000) (“The meaning—or

ambiguity—of certain words or phrases may only become evident when placed in context.”)

Context reveals that “cause of action” is related to benefits under ERISA (e.g., suing for

deprivation of benefits) not fiduciary duty responsibilities under ERISA. The form in no way

indicates that in signing it a patient would be assigning his or her rights to bring a claim for a

breach of fiduciary duty. See Restatement (Second) of Contracts § 324 (1981) (“It is essential to

an assignment of a right that the obligee manifest an intention to transfer the right to another

person without further action or manifestation of intention by the obligee.”); cf. Herr v. U.S.

Forest Serv., 803 F.3d 809, 821 (6th Cir. 2015) (finding that deed did not manifest intention to

transfer particular property right).

At least one other court has reviewed an “Assignment of Benefits” provision that is

identical in all material respects to the Assignment. (Compare ECF No. 39-1, at 1, with (Def.

Mot. Dismiss Ex. B at 2 ¶ 5, Amy’s Kitchen, 379 F. Supp. 3d 960 (No. 4:18-CV-6975, ECF No.

25-3)) (“I hereby assign to DaVita all of my right, title and interest in any cause of action and/or

any payment due to me . . . under ERISA or any other applicable law.”).) That court, too,

concluded that “cause of action” does not include claims for equitable relief. Compare Amy’s

Kitchen, 379 F. Supp. 3d at 970 (“In light of the broader context of the patient form, which

focuses on the responsibility of the patient to pay for treatment, the reference to ‘any cause of

action’ found solely in a provision titled ‘Assignment of Benefits,’ and the relatively generic

language employed by the assignment compared to what courts in the Ninth Circuit have found

sufficient to confirm an explicit assignment of a right to bring ERISA claims beyond benefits,

the Court finds the scope of the assignment here to be limited to the right to claims for payment

of benefits.”); see also Star Dialysis, LLC v. WinCo Foods Employee Benefit Plan, No. 1:18-CV-

482-CWD, 2019 WL 3069849, at*14–*16 (D. Idaho July 12, 2019) (“Both the context of and

language used in the assignment suggests, at most, that Patients 1–6 transferred to DaVita the

right to bring suit for payment of benefits . . . and not for any cause of action under ERISA

whatsoever.”). Although the analysis by the Amy’s Kitchen court relied on Ninth Circuit

precedent by which it was bound, the Court finds its analysis to be persuasive. The Court also

finds the one relevant Ninth Circuit case on which the Amy’s Kitchen court relied—Spinedex

Physical Therapy USA, Inc. v. United Healthcare of Arizona, Inc.—to be persuasive.

In Spinedex, health plan beneficiaries had signed forms that said, in all capital letters,

“This is a direct assignment of my rights and benefits under this policy.” 770 F.3d 1282, 1292

(9th Cir. 2014). The health care provider argued that “rights” included the right to sue for breach

of fiduciary duty. Id. The court found that “[t]he entire focus of the Assignment is payment for

medical services provided” and that “[t]he Assignment nowhere indicates that . . . patients were

assigning to Spinedex rights to bring claims for breach of fiduciary duty.” Id. As a result, the

court concluded that the context of the assignment indicated that the assignment of rights was

limited to claims for payment of benefits. Id.

Plaintiffs argue that this difference in language—“cause of action” in their Assignment

versus “rights” in the Spinedex assignment—is material. (ECF No. 24, at 7.) However, they

provide no explanation as to why this is the case, and the Court sees no reason why “cause of

action” should be read any more broadly than “rights” in this context.

Accordingly, the Court finds that the Assignment, read in context, is limited to rights and

causes of action pertaining to benefits. Plaintiffs have no valid assignment of rights to bring

equitable claims and therefore have no standing to assert these claims on behalf of Patient A.

Counts Three through Seven are DISMISSED with prejudice, for lack of standing.

IV. CONCLUSION

For the reasons set forth above, Plaintiff’s Consent Motion for Leave to File Sur-Reply is

GRANTED. Plaintiff’s Request for Oral Argument is DENIED.

Defendant Marietta and Defendant Plan’s Motion to Dismiss is GRANTED. Defendant

MedBen’s Motion to Dismiss is GRANTED. The Complaint is DISMISSED with prejudice.

IT IS SO ORDERED.

/s/ Sarah D. Morrison

SARAH D. MORRISON

UNITED STATES DISTRICT JUDGE