The opinion
Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 1 of 20 Page ID #:364
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8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
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CV 22-01217-RSWL-MRW x
11 BEVERLY HILLS REGIONAL
SURGERY CENTER, L.P.,
ORDER re: Defendant’s
12
Motion to Dismiss [13] and
Plaintiff,
13 Plaintiff’s Motion to
v. Amend Complaint [15]
14
15 GROUP HOSPITALIZATION AND
MEDICAL SERVICES, INC.;
16 and DOES 1-10,
17 Defendants.
18
19 Plaintiff Beverly Hills Regional Surgery Center,
20 L.P. (“Plaintiff”) brings this Action against Defendant
21 Group Hospitalization and Medical Services, Inc. d/b/a/
22 CareFirst BlueCross BlueShield (“Defendant”), alleging
23 claims for fraud, negligent misrepresentation,
24 promissory estoppel, and violation of the Employee
25 Retirement Income Securities Act of 1974 (“ERISA”).
26 Currently before the Court are Defendant’s Motion to
27 Dismiss [13] and Plaintiff’s Motion for Leave to File a
28 Second Amended Complaint (“Motion for Leave to Amend”)
1
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1 [15]. Having reviewed all papers submitted pertaining
2 to these Motions, the Court NOW FINDS AND RULES AS
3 FOLLOWS: the Court GRANTS Defendant’s Motion to Dismiss
4 and DENIES Plaintiff’s Motion for Leave to Amend.
5 I. BACKGROUND
6 A. Factual Background
7 Defendant is incorporated and has its principal
8 place of business in the District of Columbia. Decl. of
9 Kim Rothman in Supp. of Def.’s Mot. to Dismiss (“Rothman
10 Decl.”) ¶ 5, ECF No. 13-1. Defendant insures businesses
11 that are incorporated in the District of Columbia, as
12 well as portions of Maryland and Virginia. Id. ¶¶ 5, 8.
13 Defendant also functions as a third-party administrator
14 for certain self-funded health plans located in those
15 service areas. Id. ¶ 9. In this role, Defendant does
16 not insure the health plan or retain the insurance risk,
17 but it provides administrative services to the employer
18 from within its home territory in exchange for an
19 administrative fee. Id. Defendant does not receive
20 premiums from the plan or plan participants when acting
21 as a third-party administrator. Id. ¶ 10.
22 Plaintiff is a medical provider organized under the
23 laws of California. First Am. Compl. (“FAC”) ¶ 1, ECF
24 No. 9. On April 20, 2019, Plaintiff provided medical
25 services to Patient KH. Id. ¶ 29. Patient KH was
26 enrolled in a self-funded employee benefit plan (“Plan”)
27 for which Defendant served as a third-party
28 administrator. Rothman Decl. ¶¶ 28, 30. The plan was
2
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1 sponsored by its employer group, Arctic Slope Regional
2 Corporation Federal Holding Company (“ASRC”). Id. ¶ 28.
3 At the time that Plaintiff provided services to Patient
4 KH, Plaintiff was an out-of-network provider. Id. ¶ 25.
5 About two months before the procedure, Plaintiff’s
6 employee called Defendant to inquire about Patient KH’s
7 payment responsibility versus Defendant’s. FAC ¶¶ 30-
8 32. Defendant responded that Patient KH’s deductible
9 was $800, that Patient KH’s maximum out-of-pocket
10 expense was $4,000, and that Patient KH had paid $0 to
11 date for that calendar year. Id. ¶ 33. Defendant
12 represented that payment for certain procedures was
13 typically based on the usual, reasonable, and customary
14 cost for such procedures and not on the Medicare fee
15 schedule. Id. ¶¶ 34-37. Defendant did not reference
16 any term of the Plan that would cause a denial of
17 coverage or a limitation of payment on the services
18 provided to Patient KH. Id. ¶¶ 39-40. However, at the
19 time of this call, Defendant allegedly had access to
20 information that contradicted its representations, and
21 Defendant knew that it would in fact be making payments
22 based on the Medicare fee schedule. Id. ¶¶ 41-43.
23 Plaintiff was not provided with a copy of the Plan and
24 thus relied on Defendant’s representations. Id. ¶ 46.
25 Following the medical procedure, Plaintiff provided
26 Defendant with a bill stating that Patient KH had
27 assigned all rights to reimbursement for medical
28 services to Plaintiff. Id. ¶ 50. Plaintiff provided
3
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1 Defendant with all required billing information,
2 including a bill for $227,541.00. Id. ¶ 60. Plaintiff
3 alleges that Patient KH’s Plan required Defendant to pay
4 the “Max Allowed Amount” based on Plaintiff’s billed
5 charge. Id. ¶ 54. However, Defendant instead made
6 payment in the amount of $1,593.08 based on the Medicare
7 fee schedule. Id. ¶¶ 57, 62. Plaintiff alleges that
8 this payment was well below the payment required under
9 the Plan and the payment that was promised during the
10 phone conversation. Id. ¶ 63. Defendant allegedly
11 continues to refuse to make the appropriate payment.
12 Id. ¶ 64.
13 B. Procedural Background
14 Plaintiff filed its Complaint [1-2] in the Superior
15 Court of California, County of Los Angeles, on December
16 29, 2021. Defendant removed [1] the Action to this
17 Court on February 23, 2022. Plaintiff filed its FAC [9]
18 on March 1, 2022, alleging claims against Defendant for:
19 (1) fraud; (2) negligent misrepresentation; (3)
20 promissory estoppel; and (4) recovery of benefits under
21 29 U.S.C. § 1132(a)(1)(B) (“ERISA claim”).1
22 Defendant filed its Motion to Dismiss [13] on March
23 31, 2022. Plaintiff opposed [18] on April 19, 2022, and
24 Defendant replied [19] on April 26, 2022. Plaintiff
25
1 The FAC labels both the negligent misrepresentation claim
26 and the promissory estoppel claim as the “Second Cause of Action”
and labels the ERISA claim as the “Third Cause of Action.” See
27 generally FAC. For purposes of clarity, this Order will refer to
the promissory estoppel claim as the third cause of action and
28
the ERISA claim as the fourth cause of action.
4
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1 filed its Motion for Leave to Amend [15] on April 12,
2 2022. Defendant opposed [16] on April 19, 2022.
3 Plaintiff did not reply to Defendant’s Opposition.
4 II. DISCUSSION
5 A. Legal Standard
6 1. Rule 12(b)(6)
7 Rule 12(b)(6) of the Federal Rules of Civil
8 Procedure allows a party to move for dismissal of one or
9 more claims if the pleading fails to state a claim upon
10 which relief can be granted. A complaint must “contain
11 sufficient factual matter, accepted as true, to state a
12 claim to relief that is plausible on its face.”
13 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation
14 marks omitted). Dismissal is warranted for a “lack of a
15 cognizable legal theory or the absence of sufficient
16 facts alleged under a cognizable legal theory.”
17 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699
18 (9th Cir. 1988) (citation omitted).
19 In ruling on a 12(b)(6) motion, a court may
20 generally consider only allegations contained in the
21 pleadings, exhibits attached to the complaint, and
22 matters properly subject to judicial notice. Swartz v.
23 KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court
24 must presume all factual allegations of the complaint to
25 be true and draw all reasonable inferences in favor of
26 the non-moving party. Klarfeld v. United States, 944
27 F.2d 583, 585 (9th Cir. 1991). However, the court need
28 not accept as true allegations that contradict matters
5
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1 properly subject to judicial notice. Sprewell v. Golden
2 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
3 While a complaint need not contain detailed factual
4 allegations, a plaintiff must provide more than “labels
5 and conclusions” or “a formulaic recitation of the
6 elements of a cause of action.” Bell Atl. Corp. v.
7 Twombly, 550 U.S. 544, 555 (2007).
8 2. Rule 12(b)(2)
9 Rule 12(b)(2) of the Federal Rules of Civil
10 Procedure authorizes dismissal of an action for lack of
11 personal jurisdiction. Once a defendant moves to
12 dismiss for lack of personal jurisdiction, the plaintiff
13 bears the burden of demonstrating that jurisdiction is
14 appropriate. Schwarzenegger v. Fred Martin Motor Co.,
15 374 F.3d 797, 800 (9th Cir. 2004). Where the motion is
16 “based on written materials rather than an evidentiary
17 hearing, the plaintiff need only make a prima facie
18 showing of jurisdictional facts” to survive dismissal.
19 Id. (internal quotation marks omitted). The court may
20 consider evidence presented in affidavits to assist in
21 its determination of jurisdictional issues. Data Disc,
22 Inc. v. Sys. Tech. Ass’n, Inc., 557 F.2d 1280, 1285 (9th
23 Cir. 1977). The plaintiff cannot rely on the bare
24 allegations of the complaint, but uncontroverted
25 allegations must be taken as true, and conflicts between
26 statements contained in the parties’ affidavits must be
27 resolved in the plaintiff’s favor. Schwarzenegger, 374
28 F.3d at 800.
6
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1 3. Leave to Amend
2 “The court should give leave to amend freely when
3 justice so requires.” Fed. R. Civ. P. 15(a)(2). In the
4 Ninth Circuit, “Rule 15’s policy of favoring amendments
5 to pleadings should be applied with ‘extreme
6 liberality.’” United States v. Webb, 655 F.2d 977, 979
7 (9th Cir. 1981). Against this liberal standard, the
8 Court may consider “the presence of any of four factors:
9 bad faith, undue delay, prejudice to the opposing party,
10 and/or futility.” Owens v. Kaiser Found. Health Plan,
11 Inc., 244 F.3d 708, 712 (9th Cir. 2001).
12 B. Analysis
13 1. Defendant’s Request for Judicial Notice
14 “A court may judicially notice a fact that is not
15 subject to reasonable dispute because it . . . can be
16 accurately and readily determined from sources whose
17 accuracy cannot reasonably be questioned.” Fed. R.
18 Evid. 201. Accordingly, a court may judicially notice
19 matters of public record but not the substance of such
20 records if subject to reasonable dispute. Lee v. City
21 of Los Angeles, 250 F.3d 668, 688-90 (9th Cir. 2001)
22 (stating that a court may take judicial notice of the
23 fact that certain court records were filed but not of
24 the truth of any facts stated therein). In ruling on a
25 motion to dismiss, a court may also consider documents
26 that a plaintiff’s complaint necessarily relies on if
27 the authenticity of the document is uncontested. Id. at
28 688.
7
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1 Defendant requests that the Court take judicial
2 notice of two documents: (1) the ERISA Plan documents
3 provided by Defendant to ASRC; and (2) an order granting
4 a motion to dismiss in another action. See generally
5 Def.’s Req. for Judicial Notice, ECF No. 14. The Court
6 GRANTS Defendant’s first request because Plaintiff’s FAC
7 necessarily relies on the Plan documents, and Plaintiff
8 does not dispute that the documents attached to
9 Defendant’s Motion are in fact the Plan documents. See
10 Korman v. ILWU-PMA Claims Office, No. 2:18-cv-07516-SVW-
11 JPR, 2019 WL 1324021, at *4-5 (C.D. Cal. Mar. 29, 2019).
12 The Court also GRANTS Defendant’s second request because
13 the court order is a public record, and its existence is
14 not subject to reasonable dispute. See Selane Prods.,
15 Inc. v. Cont’l Cas. Co., No. 2:20-cv-07834-MCS-AFM, 2020
16 WL 7253378, at *3 (C.D. Cal. Nov. 24, 2020).
17 2. Defendant’s Motion to Dismiss
18 a. ERISA Claim
19 Participants in an ERISA plan may bring a civil
20 action to recover benefits due to them under the terms
21 of their plan. 29 U.S.C. § 1132(a)(1)(B). To state a
22 claim for benefits under ERISA, a plaintiff must “allege
23 facts that establish the existence of an ERISA plan as
24 well as the provisions of the plan that entitle it to
25 benefits.” Almont Ambulatory Surgery Center, LLC v.
26 UnitedHealth Grp., Inc., 99 F. Supp. 3d 1110, 1155 (C.D.
27 Cal. 2015) (citation omitted). Thus, a plaintiff
28 bringing “a claim for benefits under ERISA must identify
8
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1 a specific plan term that confers the benefit in
2 question.” Id. (citation omitted).
3 The FAC alleges that Patient KH’s Plan obligated
4 Defendant to pay “the ‘Max Allowed Amount’ or ‘Allowed
5 Amount’ and that said amount was determined based on
6 [Plaintiff’s] billed charge.” FAC ¶ 54. Thus, the Plan
7 required Defendant to pay a percentage of all amounts
8 billed by Plaintiff. Id. ¶¶ 60-61. However, Plaintiff
9 fails to identify any term of the Plan that requires
10 Defendant to base the Allowed Amount on the medical
11 provider’s billed charge. On the contrary, the Plan
12 provides that the “Allowed Benefit” for a covered
13 service performed by an out-of-network provider will be
14 “based on the lower of the provider’s actual charge or
15 established fee schedule, which, in some cases, will be
16 a rate specified by applicable law.” Rothman Decl. Ex.
17 1 (“Plan”) at 4, ECF No. 13-2 (emphasis added). This
18 language gives Defendant an alternative to basing
19 payment on the medical provider’s billed amount.
20 Because this language clearly contradicts Plaintiff’s
21 allegation, the Court need not accept the allegation as
22 true. See Sprewell, 266 F.3d at 988.
23 Plaintiff fails to identify a term of the Plan that
24 Defendant violated by paying only $1,593.08 to
25 Plaintiff. Plaintiff alleges that Defendant’s payment
26 was based on the Medicare fee schedule, see FAC ¶ 57,
27 but Plaintiff fails to explain how this violates the
28 terms of the Plan. Plaintiff has therefore failed to
9
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1 meet its pleading burden for its ERISA claim. See
2 Almont, 99 F. Supp. 3d at 1159 (holding that plaintiffs
3 bringing claims under § 1132(a)(1)(B) must allege that
4 the terms of the plan provide a specific reimbursement
5 rate for covered services and that defendant failed to
6 reimburse plaintiff according to that reimbursement
7 rate). Plaintiff argues that its claim should not be
8 dismissed because “it is entirely possible that
9 [Defendant] was obligated to pay based on Plaintiff’s
10 billed charge.” Pl.’s Opp’n to Mot. to Dismiss 13:6-8.
11 But the mere possibility of a Plan violation is too
12 speculative to satisfy the Iqbal and Twombly pleading
13 standards. See Simi Surgical Ctr., Inc. v. Conn. Gen.
14 Life Ins. Co., No. 2:17-cv-02685-SVW-AS, 2018 WL
15 6332285, at *3 (C.D. Cal. Jan. 4, 2018) (finding ERISA
16 claim deficiently pleaded where plaintiff failed to
17 identify the plan terms and conditions purportedly
18 breached).
19 Plaintiff cannot evade its pleading burden based on
20 Defendant’s failure to provide Plaintiff with Plan
21 documents before Plaintiff filed the FAC. As
22 acknowledged in Almont, representations made by
23 Defendant over the phone may be relevant to an estoppel
24 or fraud claim but “are irrelevant as to whether
25 coverage existed under the terms of the Plan[].” 99 F.
26 Supp. 3d at 1159. Because Plaintiff fails to identify a
27 Plan term that Defendant violated, Plaintiff’s ERISA
28 claim must be dismissed. The Court GRANTS Defendant’s
10
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1 Motion as to Plaintiff’s fourth cause of action.
2 b. Personal Jurisdiction
3 Defendant asserts that the Court lacks personal
4 jurisdiction over Defendant with respect to Plaintiff’s
5 first three causes of action. See generally Def.’s Mot.
6 to Dismiss, ECF No. 13. Plaintiff counters that the
7 Court has specific personal jurisdiction over Defendant
8 for all claims. Pl.’s Opp’n to Mot to Dismiss 4:11-12.
9 Alternatively, Plaintiff argues that the Court has
10 pendent personal jurisdiction over Defendant based on
11 the nationwide service of process provided under ERISA.
12 Id. at 11:7-9. Because Plaintiff’s ERISA claim is
13 dismissed, the Court does not address whether that claim
14 warrants the exercise of pendent personal jurisdiction.
15 See United States v. Botefuhr, 309 F.3d 1263, 1274 (10th
16 Cir. 2002). Accordingly, the Court considers whether
17 Plaintiff has established specific personal jurisdiction
18 over Defendant for its state law claims.
19 A court may assert specific jurisdiction over a
20 claim for relief that arises out of a defendant’s forum-
21 related activities. Rano v. Sipa Press, Inc., 987 F.2d
22 580, 588 (9th Cir. 1993). Specific personal
23 jurisdiction is established if a plaintiff can show: (1)
24 the defendant has performed some act or transaction
25 within the forum or purposefully availed himself of the
26 privileges of conducting activities within the forum;
27 (2) the plaintiff's claim arises out of or results from
28 the defendant’s forum-related activities; and (3) the
11
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1 exercise of jurisdiction is reasonable. Axiom Foods,
2 Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1068 (9th
3 Cir. 2017). The plaintiff bears the burden of
4 satisfying the first two elements. Id. “If the
5 plaintiff meets that burden, the burden shifts to
6 the defendant to present a compelling case that the
7 exercise of jurisdiction would not be reasonable.” Id.
8 at 1068–69 (internal quotations marks omitted).
9 As for the first element, a purposeful availment
10 analysis is most often used in suits sounding in
11 contract, while a purposeful direction analysis is most
12 often used in suits sounding in tort. Schwarzenegger v.
13 Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir.
14 2004). However, cases that primarily sound in contract
15 are typically analyzed under only the purposeful
16 availment analysis. Sher v. Johnson, 911 F.2d 1357,
17 1362 (9th Cir. 1990); HK China Grp, Inc. v. Beijing
18 United Auto. & Motorcycle Mfg. Corp., 417 F. App’x 664,
19 665-66 (9th Cir. 2011). Here, Plaintiff’s claims sound
20 primarily in contract because the representation giving
21 rise to the alleged fraud is the same representation
22 that gives rise to Plaintiff’s claim for promissory
23 estoppel. Thus, the Court applies only the purposeful
24 availment analysis here.
25 A court has personal jurisdiction over a defendant
26 only where the defendant has “purposefully availed
27 himself of the privilege of doing business in a forum
28 state . . . such as [by] executing or performing a
12
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1 contract there.” Id. at 802. However, the existence of
2 a contract between plaintiff and defendant does not
3 automatically establish minimum contacts in the
4 plaintiff’s home forum; rather, there must be “actions
5 by the defendant himself that create a substantial
6 connection with the forum State.” Picot, 780 F.3d at
7 1212 (quoting Burger King Corp. v. Rudzewicz, 471 U.S.
8 462, 475 (1985)). In other words, the defendant must
9 have a relationship to the forum state beyond its
10 relationship to the plaintiff who resides there. Id. at
11 1212-13. “A defendant must have performed some type of
12 affirmative conduct which allows or promotes the
13 transaction of business within the forum state.” Id. at
14 1212.
15 The FAC states that Defendant is licensed to do
16 business in California as an insurer or administrator of
17 insurance. FAC ¶ 2. It alleges that Patient KH entered
18 into a valid insurance agreement with Defendant that
19 required Defendant to pay for healthcare expenses
20 incurred by Patient KH. Id. ¶ 7. On February 26, 2019,
21 Plaintiff allegedly called Defendant to confirm the rate
22 Defendant usually pays for certain covered services, and
23 Defendant did not indicate that its payment in this case
24 would be any different from its typical payment
25 percentage. Id. ¶¶ 34-40.
26 Defendant, however, provides evidence that its
27 relationship to Patient KH is more attenuated than the
28 FAC indicates. See Healthcare Ally Mgmt. of Cal., LLC
13
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1 v. Blue Cross Blue Shield of Minn., No. CV 16-7042-DMG
2 (AFMx), 2017 WL 7201870, at *6 (C.D. Cal. July 27, 2017)
3 (stating that jurisdictional allegations were not
4 entitled to a presumption of truth where defendant
5 presented contradictory evidence supported by
6 declaration). Indeed, Defendant is not Patient KH’s
7 insurer and did not enter into an insurance agreement
8 with Patient KH directly. See Plan at 2 (“[Defendant]
9 provides administrative claims payment services only.”);
10 Rothman Decl. ¶¶ 27-30. Rather, Patient KH was enrolled
11 in a self-funded employee benefit plan sponsored by
12 ASRC, and Defendant has never received any payments from
13 or on behalf of Patient KH. Rothman Decl. ¶ 31.
14 Defendant did not direct Patient KH to obtain services
15 from Plaintiff. Id. ¶ 33. Defendant’s only role as the
16 third-party administrator of the Plan is to provide
17 claim administrative services to ASRC in exchange for an
18 administrative fee. Id. ¶ 30. Defendant’s role in
19 overseeing a Plan that a California resident happens to
20 be a member of is insufficient evidence of purposeful
21 availment. See, e.g., Healthcare Ally Mgmt. of Cal.,
22 LLC v. Blue Cross Blue Shield of Minn., 787 F. App’x
23 417, 418 (9th Cir. 2019).
24 The alleged representations made by Defendant over
25 the phone are also insufficient to establish purposeful
26 availment. See Peterson v. Kennedy, 771 F.2d 1244, 1262
27 (9th Cir. 1985) (internal quotation marks and citation
28 omitted) (“Ordinarily use of the mails, telephone, or
14
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1 other international communications simply do not qualify
2 as purposeful activity invoking the benefits and
3 protection of the forum state.”). Plaintiff argues that
4 Defendant subjected itself to jurisdiction in California
5 by affirmatively promising to pay Plaintiff for the
6 services sought by Patient KH, but the FAC does not
7 allege that Defendant specifically promised to pay for
8 services sought by Patient KH. See FAC ¶¶ 30-37. Even
9 if it did, the Court finds that Defendant did not
10 purposefully avail itself of the benefits of California
11 simply by promising to pay for covered services that
12 Plaintiff happened to seek in California. See Hunt v.
13 Erie Ins. Grp., 728 F.2d 1244, 1248 (9th Cir. 1984)
14 (“The mere fact that [defendant] communicated with
15 [plaintiff] in the state, and may have committed a tort
16 in the exchange of correspondence, does not show that
17 [defendant] purposefully availed itself of the privilege
18 of conducting business in California.”); see also
19 Women’s Recovery Ctr., LLC v. Anthem Blue Cross Life &
20 Health Ins. Co., No. 8:20-cv-00102-JWH-ADSx, 2022 WL
21 757315, at *11 (C.D. Cal. Feb. 2, 2022); Aton Ctr., Inc.
22 v. CareFirst Blue Cross BlueShield, 2020 WL 4464482, at
23 *7 (S.D. Cal. Aug. 3, 2020). This is particularly true
24 given Defendant’s lack of control over who becomes a
25 member of the Plan and where those members seek
26 services. The Court cannot base jurisdiction on the
27 unilateral activity of another who decides to seek
28 services in California. See Hunt, 728 F.2d at 1248.
15
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1 In sum, Plaintiff has failed to establish that
2 Defendant has purposefully availed itself of the
3 privilege of conducting business in California. The
4 Court therefore GRANTS Defendant’s Motion to Dismiss for
5 lack of personal jurisdiction.
6 3. Plaintiff’s Motion for Leave to Amend
7 While “leave to amend shall be freely given when
8 justice so requires, it is not to be granted
9 automatically.” In re Western States Wholesale Nat. Gas
10 Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013)
11 (internal quotation marks and citation omitted).
12 “Futility of amendment can, by itself, justify the
13 denial of a motion for leave to amend.” Bonin v.
14 Calderon, 59 F.3d 815, 845 (9th Cir. 1995).
15 Accordingly, leave to amend may be denied on futility
16 grounds where a proposed amendment would be subject to
17 dismissal. Starlight Cinemas v. Regal Ent. Grp., No. CV
18 14–5463–R, 2015 WL 12748633, at *1 (C.D. Cal. Feb. 4,
19 2015) (citing Carrico v. City & Cnty. of S.F., 656 F.3d
20 1002, 1008 (9th Cir. 2011)).
21 Defendant argues that Plaintiff should not be
22 permitted to amend its complaint because the proposed
23 Second Amended Complaint (“SAC”) does not cure the FAC’s
24 deficiencies, and amendment would therefore be futile.
25 See generally Def.’s Opp’n to Mot. to Amend, ECF No. 16.
26 Plaintiff provided no substantive argument in its Motion
27 as to why its proposed amendment cures the deficiencies
28 of the FAC and failed to file a Reply in response to the
16
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1 arguments raised by Defendant. The Court concludes that
2 the proposed SAC fails to cure the deficiencies of both
3 the ERISA claim and the Court’s personal jurisdiction.
4 The Court therefore DENIES Plaintiff’s request for leave
5 to amend its complaint.
6 a. ERISA Claim
7 As relevant to the ERISA claim, Plaintiff’s
8 proposed SAC adds the exact language from the Plan that
9 defines “Allowed Benefit” as the lower of either the
10 medical provider’s actual charge or the established fee
11 schedule. See Stieglitz Decl. in Supp. of Mot. to Amend
12 Ex. A (“Proposed SAC”) at 12-13, ECF No. 15-2. However,
13 the proposed SAC still fails to explain how Defendant’s
14 payment violates this Plan language. For the reasons
15 state above, Plaintiff fails to satisfy its burden for
16 pleading an ERISA violation. Allowing amendment on this
17 basis alone would be futile and would result in
18 dismissal.
19 b. Personal Jurisdiction
20 Plaintiff includes facts in the proposed SAC that
21 presumably attempt to establish personal jurisdiction
22 over Defendant in two new ways, neither of which are
23 persuasive. First, Plaintiff adds ASRC as a defendant
24 and alleges that nearly all of Defendant’s acts were
25 committed on behalf of ASRC, a foreign company
26 registered to do business in California. See Proposed
27 FAC at 2, 9-14. Second, Plaintiff includes facts about
28 a second phone conversation it had with Defendant on
17
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1 April 15, 2019. Id. at 10.
2 Plaintiff seems to include facts establishing an
3 agency relationship between Defendant and ASRC for the
4 purpose of imputing any jurisdiction the Court may have
5 over ASRC to Defendant. The Court has found no
6 authority to support such a theory. While it is well
7 established that the actions of an agent are
8 attributable to the principal for purposes of specific
9 jurisdiction, see Sher, 911 F.2d at 1362, it does not
10 follow that a court’s jurisdiction over a principal
11 should be imputed to the agent based on the mere fact of
12 the agency relationship. Rather, “jurisdiction over
13 each defendant must be established individually.” Id.
14 at 1365 (rejecting the notion that jurisdiction over a
15 partnership established jurisdiction over the partners
16 because “jurisdiction depends only upon each defendant’s
17 relationship with the forum”). Thus, allowing Plaintiff
18 to add ASRC and allege an agency relationship for the
19 purpose of establishing personal jurisdiction over
20 Defendant would be futile.
21 The SAC also seeks to add facts about a second
22 phone call Plaintiff made to Defendant on April 15,
23 2019, during which Defendant confirmed that the
24 procedures sought by Patient KH “were authorized” and
25 that no “pre-certification or pre-determination was
26 needed.” Proposed SAC at 10. These additional facts do
27 not establish Defendant’s purposeful availment because,
28 as stated above, Defendant cannot be subjected to this
18
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1 Court’s jurisdiction simply because of its telephonic
2 confirmation that certain services were covered by a
3 self-funded plan for which it serves only as an
4 administrator. Moreover, Defendant did not initiate
5 these calls and Plaintiff does not allege that Defendant
6 ever affirmatively promised to pay a certain amount for
7 Patient KH’s procedures. See Healthcare Ally, 787 F.
8 App’x at 418 (finding insufficient evidence of
9 purposeful availment where defendant did not initiate
10 phone calls with medical provider and “did not promise
11 to pay for the patients’ medical services . . . but
12 instead merely confirmed that the patients were covered
13 by the policies”). Therefore, allowing Plaintiff to
14 amend its claims to include these facts would also be
15 futile.
16 In sum, the proposed SAC does not include any facts
17 that would cure the FAC of the deficiencies outlined in
18 this Order. Amendment would therefore be futile, and
19 the Court DENIES Plaintiff’s Motion for Leave to Amend
20 on this basis.
21 ///
22 ///
23 ///
24 ///
25 ///
26 ///
27 ///
28 ///
19
Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 20 of 20 Page ID #:383
1 III. CONCLUSION
2 Based on the foregoing, the Court GRANTS
3 Defendant’s Motion to Dismiss. The Court DENIES
4 Plaintiff’s Motion for Leave to Amend because
5 Plaintiff’s proposed SAC fails to cure the deficiencies
6 outlined in this Order.
7 IT IS SO ORDERED.
8
9 DATED: June 3, 2022 ______/s_/ _R_o_n_al_d_ S_._W_. _L_e_w_______
HONORABLE RONALD S.W. LEW
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Senior U.S. District Judge
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