Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_13-cv-02378/USCOURTS-caed-2_13-cv-02378-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

NUTRISHARE, INC., a California 

corporation,

Plaintiff,

v.

CONNECTICUT GENERAL LIFE INSURANCE 

COMPANY, a Connecticut Corporation, 

CIGNA HEALTH AND LIFE INSURANCE 

COMPANY, a Connecticut Corporation, 

and DOES 1 THROUGH 10, inclusive,

Defendants.

No. 2:13-cv-02378-JAM-AC

ORDER GRANTING

NUTRISHARE’S MOTION FOR 

CERTIFICATION OF 

INTERLOCUTORY APPEAL

CONNECTICUT GENERAL LIFE INSURANCE 

COMPANY and CIGNA HEALTH AND LIFE 

INSURANCE COMPANY,

 

 Counter-Claimants,

 v.

NUTRISHARE, INC.,

 Counter-Defendant. 

This matter is before the Court on Plaintiff and CounterDefendant Nutrishare, Inc.’s (“Nutrishare”) Motion for 

Certificate of Appealability (Doc. #29).1 Defendants and 

 

1 This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L.R. 230(g). The hearing was 

scheduled for May 21, 2014.

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Counter-Claimants Connecticut General Life Insurance Company and 

CIGNA Health and Life Insurance Company (collectively “CIGNA”) 

opposed the motion (Doc. #37) and Nutrishare replied (Doc. #40).

I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

The Counterclaim states four causes of action against 

Nutrishare: the first two are brought pursuant to § 502(a)(3) of 

the Employment Retirement Income Security Act (“ERISA”), 29 

U.S.C. § 1132, in order to redress alleged violations of ERISA 

plans; the third claim is for violations of California Business 

and Professions Code § 17200, et seq., California’s unfair 

competition law (“UCL”); and the fourth is for fraud. 

The allegations of the Counterclaim are well known at this 

point and will not be repeated here. The current motion comes in 

response to the Court’s order (Doc. #25) denying Nutrishare’s 

Motion to Strike (Doc. #12) and Motion to Dismiss (Doc. #13). In 

that order, which Nutrishare now seeks to have certified for 

immediate appeal, the Court found the allegations in the 

Counterclaim established CIGNA had standing to bring the 

counterclaims as a fiduciary of the underlying ERISA plans. 

Order at p. 7. 

The Court further found that CIGNA’s claims did not involve 

“adverse benefits determinations” and therefore did not trigger 

any exhaustion requirements as Nutrishare contended. Order at 

pp. 7-8. Nutrishare’s Motion to Dismiss also contended that 

CIGNA’s state law claims were preempted under ERISA sections 

502(a) and 514(a). The Court found the claims did not require 

“significant interpretation of the ERISA plans” and therefore 

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were not subject to conflict preemption under section 514(a). 

Id. at pp. 11-14. It further found that the state law claims did 

not “conflict with the enforcement scheme laid out by ERISA or 

with Congress’ intent in passing it into law” and therefore were 

not preempted under section 502(a). Id. at pp. 14-16. Finally, 

the Court rejected Nutrishare’s contention that the actions 

alleged by CIGNA to be unfair and fraudulent were actually lawful 

under California law. Id. at pp. 17-18.

II. OPINION

Nutrishare requests that the Court grant certification for 

immediate interlocutory appeal of its Order regarding the 

viability of CIGNA's counterclaims. After having made an order 

not otherwise appealable in a civil action, if a district court 

finds “that such order involves a controlling question of law as 

to which there is substantial ground for difference of opinion 

and that an immediate appeal from the order may materially 

advance the ultimate termination of the litigation, he shall so 

state in writing in such order.” 28 U.S.C. § 1292(b). 

Thus, a district court may certify an appeal of an 

interlocutory order only if three factors are present. First,

the issue to be certified must be a “controlling question of 

law.” 28 U.S.C. § 1292(b). Establishing that a question of law 

is controlling requires a showing that the “resolution of the 

issue on appeal could materially affect the outcome of the 

litigation in the district court.” In re Cement Antitrust 

Litig., 673 F.2d 1020, 1026 (9th Cir. 1982).

Second, there must be “substantial ground for difference of 

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opinion” on the issue. 28 U.S.C. § 1292(b). “This is not 

established by a party's strong disagreement with the court's 

ruling; the party seeking an appeal must make a greater showing.” 

Zone Sports Ctr., LLC v. Rodriguez, 1:11-CV-00622-SKO, 2013 WL 

3766749, at *4 (E.D. Cal. 2013) (citing Mateo v. M/S Kiso, 805 F. 

Supp. 792, 800 (N.D. Cal. 1992)). 

To determine if a “substantial ground for difference 

of opinion” exists under § 1292(b), courts must 

examine to what extent the controlling law is unclear. 

Courts traditionally will find that a substantial 

ground for difference of opinion exists where “the 

circuits are in dispute on the question and the court 

of appeals of the circuit has not spoken on the point, 

if complicated questions arise under foreign law, or 

if novel and difficult questions of first impression 

are presented.” 3 Federal Procedure, Lawyers Edition 

§ 3:212 (2010) (footnotes omitted). However, “just 

because a court is the first to rule on a particular 

question or just because counsel contends that one 

precedent rather than another is controlling does not 

mean there is such a substantial difference of opinion 

as will support an interlocutory appeal.” Id.

(footnotes omitted).

Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010).

Third, an interlocutory appeal must be likely to “materially 

advance the ultimate termination of the litigation.” 28 U.S.C. 

§ 1292(b). Whether such a likelihood exists is linked to whether 

an issue of law is “controlling” in that the court should 

consider the effect of a reversal on the management of the case. 

Zone Sports Ctr., LLC, 2013 WL 3766749, at *4. 

“The standard to certify a question of law is high and a 

district court generally should not permit such an appeal where 

it ‘would prolong the litigation rather than advance its 

resolution.’” Davis Moreno Constr., Inc. v. Frontier Steel 

Bldgs. Corp., 1:08–cv–00854–OWW–SMS, 2011 WL 347127, at *1 (E.D.

Cal. 2011) (quoting Syufy Enter. v. Am. Multi–Cinema, Inc., 694 

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F. Supp. 725, 729 (N.D. Cal. 1988)).

Nutrishare identifies four “controlling issues” upon which 

it bases its motion:

(1) Whether CIGNA has standing under ERISA and California 

law to bring the Counterclaim;

(2) Whether CIGNA was required to exhaust the 

administrative process prior to filing the Counterclaim;

(3) Whether CIGNA's state law counterclaims are preempted 

by ERISA; and

(4) Whether not collecting patient co-payments is lawful 

under California law.

A. Standing

Nutrishare first contends the issue of whether CIGNA lacks 

standing to bring its claims is a controlling question of law 

and the Court’s order finding standing should be certified for 

immediate appeal. MCA at pp. 5-6. Nutrishare’s claim in its 

Motion to Dismiss was that CIGNA lacks standing because it has 

not suffered an injury-in-fact and has failed to sufficiently 

allege it is authorized to bring these claims as a fiduciary of 

the relevant ERISA plans. 

Based on the allegations in the Counterclaim, the Court 

found CIGNA is the claims administrator for the ERISA plans at 

issue and has discretionary authority and control regarding 

claims made under the plan. Order at p. 7; CC ¶¶ 2, 9, 16. 

Therefore, the Court found CIGNA has a fiduciary duty to enforce 

the terms of the ERISA plans and thus standing to bring the 

federal claims at issue. 

Although other courts have found that similar pleadings did 

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not suffice to adequately identify the ERISA plans at issue, 

certifying the issue for immediate interlocutory appeal will not 

“materially advance the ultimate termination of the litigation”; 

in fact, it would do quite the opposite. See Connecticut Gen. 

Life Ins. Co. v. La Peer Surgery Ctr. LLC, 2:13-CV-03726-CAS, 

2014 WL 961806, at *3-4 (C.D. Cal. 2014). 

Once the case is allowed to proceed to discovery, CIGNA 

would be required to specifically identify the plans at issue. 

At that point, the specific language of the plans at issue could 

be interpreted to determine whether CIGNA is in fact a fiduciary 

of the plans as a matter of law and can therefore establish 

standing to bring the claims. Because certifying the Court’s 

holding regarding this issue “‘would prolong the litigation 

rather than advance its resolution’” the Court finds 

certification based on this issue is not warranted. Davis 

Moreno Constr., Inc., 2011 WL 347127, at *1. 

B. Failure to Exhaust Administrative Remedies

Nutrishare contends that there is a controlling question of 

law as to whether CIGNA’s ERISA claims are deficient because 

CIGNA has failed to exhaust its administrative remedies. In its 

Motion to Dismiss, Nutrishare argued that CIGNA’s claims for 

recoupment of ill-gotten gains constitute “adverse benefits 

determinations,” triggering ERISA notice requirements. MTD at 

pp. 8-10. However, the Court found that Nutrishare failed to 

provide persuasive authority for such a contention. In its 

Motion for Certification, Nutrishare simply reintroduces the same 

authority presented to the Court in connection with the previous 

motion. Although recoupments sought by insurers may constitute 

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adverse benefits determinations triggering ERISA notice 

requirements, Nutrishare has again failed to present persuasive 

authority that such requirements should apply to the specific 

equitable claims brought by CIGNA here, which are based on 

alleged false misrepresentations. 

Accordingly, the Court does not find substantial ground for 

a difference of opinion on the matter and declines to certify the 

Order based on the failure to exhaust issue. 

C. Preemption of State Law Claims

Nutrishare contends there is a controlling question of law 

regarding whether CIGNA’s state law claims are preempted. 

Whether CIGNA can even bring its state law claims is 

certainly a controlling question of law. If the Ninth Circuit 

finds the claims preempted, the decision would “materially 

affect the outcome of the litigation.” See In re Cement 

Antitrust Litig., 673 F.2d at 1026. Such a finding would also 

materially advance the ultimate resolution of the litigation, as 

it could eliminate the causes of action and obviate any need for 

the Court to address them. Therefore, the Court turns to 

whether there is substantial ground for difference of opinion on 

the issue. 

As in its previous Order, the Court notes that ERISA’s 

preemption clause is “one of the broadest preemption clauses 

ever enacted by Congress.” Spain v. Aetna Life Ins. Co., 11 

F.3d 129, 131 (9th Cir. 1993) (citations omitted), cert. denied, 

511 U.S. 1052 (1994). The Court is also mindful that Congress’ 

aim in passing the ERISA preemption provision was “to ensure 

that plans and plan sponsors would be subject to a uniform body 

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of benefits law and to minimize the administrative and financial 

burden of complying with conflicting directives among States or 

between States and the Federal Government.” Ingersoll–Rand Co. 

v. McClendon, 498 U.S. 133, 142 (1990).

The United States Supreme Court has made clear that “any 

state-law cause of action that duplicates, supplements, or 

supplants the ERISA civil enforcement remedy conflicts with the 

clear congressional intent to make the ERISA remedy exclusive and 

is therefore pre-empted.” Aetna Health Inc. v. Davila, 542 U.S. 

200, 209 (2004). 

The Court finds there exists a substantial ground for 

difference of opinion on the issue of preemption. The Ninth 

Circuit has frequently been called upon to navigate the waters of 

ERISA preemption and often the issue turns on the precise 

application of the phrase “relate to” from ERISA § 514(a), or

determining whether the legal duty implicated is independent of 

any duty imposed by ERISA. In addressing ERISA preemption 

issues, courts have noted the difficulty in interpreting the 

specific language of ERISA’s preemption provisions, specifically 

recognizing the issues with applying the phrase “relate to” from 

§ 514(a). N.Y. State Conf. of Blue Cross & Blue Shield Plans v. 

Travelers Ins. Co., 514 U.S. 645, 656 (1995); Waks v. Empire Blue 

Cross/Blue Shield, 263 F.3d 872, 875 (9th Cir. 2001). Based on 

analogous factual circumstances to those presently before the 

Court, other courts have split on whether the claims at issue 

were preempted. See Cleghorn v. Blue Shield of California, 408 

F.3d 1222, 1225 (9th Cir. 2005); Trustees ex rel. N. California 

Gen. Teamsters Sec. Fund v. Fresno French Bread Bakery, Inc., CV 

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F 12-0187 LJO BAM, 2012 WL 3062174 (E.D. Cal. 2012). 

Although this Court concluded that the specific claims 

brought by CIGNA are not preempted, it finds there exists 

substantial ground for a difference of opinion on the matter. 

Accordingly, the Court GRANTS Nutrishare’s Motion to Certify the 

Order for immediate appeal based on the issue of ERISA 

preemption. 

D. Lawfulness of Nutrishare’s Actions

Nutrishare contends that the conduct underlying CIGNA’s 

state law claims is entirely lawful and does not constitute 

fraud or a violation of the UCL. Therefore, it moves to certify 

the Order based on this issue. 

Nutrishare relies on the same arguments and authorities as 

in the Motion to Dismiss. It specifically refutes the Court’s 

interpretation of an opinion from the California Attorney 

General, arguing the opinion constitutes clear, persuasive 

authority for Nutrishare’s proposition that its actions were 

entirely lawful. While the Court acknowledges Nutrishare’s 

disagreement, as CIGNA points out, substantial ground is not 

established by “a party's strong disagreement with the [C]ourt's 

ruling; the party seeking an appeal must make a greater showing.” 

Zone Sports Ctr., LLC, 2013 WL 3766749, at *4; see also Hansen v. 

Schubert, 459 F. Supp. 2d 973, 1000 (E.D. Cal. 2006); Couch, 611 

F.3d at 633-34 (finding “the presence of a single, non-binding, 

advisory opinion by a division of the California Attorney 

General's office is not a ‘substantial’ ground for disagreement 

as to the controlling law”). In addition, the Court finds that 

the issue of whether the conduct was lawful is extremely fact 

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dependent and certifying the Order at the pleadings stage is 

inappropriate. Accordingly, the Court declines to certify the 

Order based on this issue.

E. Effect on the Litigation

The Court’s granting of the motion for certification as to 

ERISA preemption subjects the entire Order to immediate appellate 

jurisdiction. 28 U.S.C. § 1292(b); Yamaha Motor Corp., U.S.A. v. 

Calhoun, 516 U.S. 199, 204-05 (1996). As such, the appellate 

court may address any issue included within the certified order, 

not solely the question the Court finds controlling. Yamaha 

Motor Corp., at 204-05. For the sake of judicial economy, the 

Court hereby stays the current litigation in its entirety pending 

a decision by the Ninth Circuit regarding the matter.

III. ORDER

For the reasons set forth above, the Court, in its 

discretion, GRANTS Defendants' motion for certification pursuant 

to 28 U.S.C. § 1292(b), AMENDS the Order dated March 13, 2014 to 

certify it for interlocutory appeal, and STAYS this matter 

pending a decision by the Ninth Circuit as to whether it will 

hear an interlocutory appeal and, if it accepts the appeal, 

pending resolution of that appeal. The parties shall update the 

Court by joint submission within five court days of resolution of 

the appeal, or every 120 days, whichever is sooner.

IT IS SO ORDERED.

Dated: June 11, 2014

 

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