Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-00377/USCOURTS-caed-1_05-cv-00377-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1001 E.R.I.S.A.

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

DOCTORS MEDICAL CENTER OF ) 

MODESTO, INC., )

 )

Plaintiff, )

)

vs. )

)

ZENITH ADMINISTRATORS, INC., )

INTERPLAN CORPORATION, and )

DOES 1-25, inclusive, )

 )

Defendants. )

)

) 

No. CV-F-05-0377 REC LJO

ORDER GRANTING PLAINTIFF’S

MOTION TO REMAND AND

DENYING DEFENDANTS’ MOTION

TO DISMISS. 

(Docs. 12, 13)

On June 6, 2005, the Court heard Defendants’ motions to

dismiss Plaintiff’s Complaint and Plaintiff’s motion to remand

the case to state court. Upon due consideration of the written

and oral arguments of the parties and the record herein, the

Court GRANTS Plaintiff’s motion to remand and denies Defendants’

motions to dismiss on the grounds that the Court lacks subject

matter jurisdiction.

I. Background

On February 5, 2005, Doctors Medical Center of Modesto

(“Plaintiff”) filed its complaint in Stanislaus County Superior

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Court. The Complaint named as Defendants Zenith Administrators,

Inc., Interplan, Corporation, and Does 1–25. 

Plaintiff is a hospital located in Modesto, California. 

Compl. ¶ 1. Interplan is a company that contracts with medical

care providers such as hospitals and physicians to obtain

discounted rates. Compl. ¶ 2. These groups of health care

providers are known as Preferred Provider Networks. Interplan

then contracts with third parties such as employers, insurance

carriers and health care service plans to provide their

healthcare beneficiaries access to the negotiated discounted

rates. Id. Plaintiff alleges that Zenith has a health benefit

plan. Compl. ¶ 3. This health benefit plan is apparently

governed by the provisions of the Employee Retirement Income

Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq..

Plaintiff alleges that “through the efforts of Interplan”

Plaintiff and Zenith have entered into a written agreement that

provides for discounted rates for Zenith beneficiaries (the

“Agreement”). Compl. ¶ 4. The Agreement was signed by Interplan

on behalf of Zenith and requires Zenith to pay for health care

goods and services rendered by Plaintiff. Compl. ¶ 6.

In October of 2002, Plaintiff provided health care services

to a Zenith beneficiary (“Patient”). Plaintiff alleges that

Zenith was obligated to pay a for goods and services pursuant to

the terms of the Agreement and that Zenith failed to pay the full

amounts due to Plaintiff under the terms of the Agreement. 

Compl. ¶¶ 5-7.

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The complaint contains two state law causes of action. The

first is for breach of contract against Zenith. Plaintiff

alleges that Zenith was obligated by the Hospital-Interplan

Agreement to make payments to Plaintiff in accordance with the

Agreement and that Zenith breached this contract when it failed

to make such payments. Compl. ¶¶ 9-4. The second is for

tortious interference with contract against Interplan. Plaintiff

alleges that Interplan arranged for the Agreement and that

Interplan intentionally repriced claims and caused Zenith to

breach its agreement with Plaintiff. Compl. ¶¶ 15-22.

On March 17, 2005, Plaintiff filed in state court an

“Amendment to Complaint (Fictitious/Incorrect Name) and Proposed

Order” which sought to substitute Northern California Bakery

Drivers Security Fund (the “Fund”) for a Doe Defendant. On March

24, 2005, the Stanislaus Superior Court approved the amendment. 

On March 18, 2005, however, Defendants Zenith and Interplan

removed the case to federal court, claiming that Plaintiff’s

state law claims are completely preempted by ERISA. Plaintiff

has moved to remand the case to state court and has requested

attorneys’ fees. Zenith filed a motion to dismiss for failure to

state a claim in which Interplan has joined, and the Fund has

filed a motion to dismiss or, in the alternative, for a more

definite statement as well as a motion to strike. Interplan has

also joined in Zenith’s opposition to the remand, however,

Interplan has made no arguments directly related to Plaintiff’s

claim against it.

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II. Plaintiff’s Motion to Remand

A. Legal Standard

Federal courts are courts of limited jurisdiction. A case

may be removed to federal court if the district court has

original jurisdiction based on diversity or a federal question. 

28 U.S.C. § 1441(a). “Questions of jurisdiction and removal are

generally determined from the face of a ‘well-pleaded’

complaint.” Geweke Ford v. St. Joseph’s Omni Preferred Care,

Inc., 130 F.3d 1355, 1357 (9th Cir. 1997) (citing Franchise Tax

Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-12,

103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983)). The well-pleaded

complaint rule looks to the allegations in the complaint and

ignores potential defenses. Franchise Tax Bd., 463 U.S. at 10. 

Ordinarily, preemption is a federal defense that will not

authorize removal to federal court. Metropolitan Life Ins. Co.

v. Taylor, 481 U.S. 58, 63, 107 S. Ct. 1542, 95 L. Ed. 2d 55

(1987). 

“An independent corollary to the well-pleaded complaint rule

is the ‘complete preemption’ doctrine.” Geweke Ford, 130 F.3d at

1358. Congress may, by law, completely preempt a particular area

such that “any civil complaint raising this select group of

claims is necessarily federal in character.” Metropolitan Life,

481 U.S. at 63-64. ERISA is one such law. Id. at 64; Geweke

Ford, 130 F.3d at 1358. 

The Ninth Circuit has articulated a two-part test to

determine whether a state law claim is completely preempted by

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ERISA and may be removed to federal court. In order to

demonstrate complete preemption, Defendants must show that the

state law claim (1) is expressly preempted by ERISA and (2) falls

within the scope of ERISA’s civil enforcement scheme. Providence

Health Plan v. McDowell, 385 F.3d 1168, 1171, rehearing denied,

rehearing en banc denied, 385 F.3d 1168 (9th Cir. 2004) (citing

Metropolitan Life, 481 U.S. at 62-66; Toumajian v. Frailey, 135

F.3d 648, 654 (9th Cir. 1998)) (emphasis added). In Aetna

Healthcare Inc. v. Davila, 542 U.S. 200, , 124 S. Ct. 2488,

2498 n.4, 159 L. Ed. 2d 312 (2004), however, the Supreme Court

rejected the respondent’s argument that ERISA’s civil enforcement

scheme, section 502(a), completely preempts only if the state

cause of action would be expressly preempted under ERISA section

514(a). It thus appears that Defendants may demonstrate complete

preemption if the state law claim (1) is expressly preempted by

ERISA or (2) falls within the scope of ERISA’s civil enforcement

scheme.

Defendants have the burden of establishing that the Court

has subject matter jurisdiction and that removal was proper. 

Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). In

demonstrating complete preemption by ERISA, Defendants must

overcome a presumption against preemption. New York State

Conference of Blue Cross & Blue Shield v. Travelers Ins. Co., 514

U.S. 645, 655, 115 S. Ct. 1671, 131 L. Ed. 2d 695 (1995)

(hereinafter Travelers).

///

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B. The Fund is Not a Party to This Action

Plaintiff’s complaint, filed in state court, named only

Zenith and Interplan as Defendants and included 25 defendants

sued fictitiously. Prior to this action being removed, Plaintiff

filed a request for leave to amend the complaint to add the Fund

as a defendant. The amendment was not approved until after this

case was removed, and no amended complaint has been submitted. 

“In determining the existence of removal jurisdiction based

upon a federal question, we must look to the complaint as of the

time the removal petition was filed.” Libhart v. Santa Monica

Dairy Co., 592 F.2d 1062, 1065 (9th Cir. 1979) (citing Great

N.Ry. v. Alexander, 246 U.S. 276 (1918)); see also Pullman Co. v.

Jenkins, 305 U.S. 534, 537, 59 S. Ct. 347, 83 L. Ed. 334 (1939)

(stating motion to remand is“determined according to the

plaintiffs’ pleading at the time of the petition for removal”). 

Further, the filing of a notice of removal with the relevant

state court “shall effect the removal and the State court shall

proceed no further unless and until the case is remanded.” 28

U.S.C. § 1446(d). 

Here, the proposed amendment was not approved until after

the case was removed, and thus at the time of removal, the Fund

was not yet a party. Moreover, Plaintiff has not, according to

the record, filed an amended complaint in this Court that

includes the Fund as a party. Accordingly, because it was not a

party to the state court complaint and has not been joined to the

action through proper procedure, the Fund is not a party to this

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 The Fund’s request for $2,992.00 in attorneys’ fees is 1

DENIED; the Fund argued that Plaintiff made “insincere

communications” to it that caused the Fund to believe it was a

party to this action, despite no service of a summons or complaint.

The Fund also argues that it made an appearance because it did not

want to face default, despite citing authority to Plaintiff that it

is not a party. The Fund cites no authority that an award of fees

is proper in the case of a voluntary appearance by a non-party.

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action. The Court will not, therefore, consider further the

filings submitted by the Fund.1

C. Discussion

1. Express Preemption by ERISA 

ERISA contains an express preemption clause which states

that ERISA preempts “any and all State laws insofar as they may

now or hereafter relate to any employee benefit plan,” with

exceptions not relevant here. ERISA § 514(a), 29 U.S.C. §

1144(a). The Supreme Court has devised a two part test for

determining whether challenged state laws “relate to” an ERISA

plan: “A law relates to a covered employee benefit plan for the

purposes of § 514(a) if it [1] has a connection with or [2]

reference to such a plan.” Blue Cross of California v.

Anesthesia Care Associates Medical Group, Inc., 187 F.3d 1045,

1052 (9th Cir. 1999) (quoting California Div. of Labor Standards

Enforcement v. Dillingham Constr., 519 U.S. 316, 324, 117 S. Ct.

832, 136 L. Ed. 2d. 791 (1997) (internal quotations omitted)). 

“There are limits to the unusually broad preemptive sweep”

of ERISA. Arizona State Carpenters Pension Trust Fund v.

Citibank (Arizona), 125 F.3d 715, 723 (9th Cir. 1997). Not every

suit “affecting and involving ERISA plans” is preempted. Mackey

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v. Lanier Collection Agency & Serv., 486 U.S. 825, 833, 108 S.

Ct. 2182, 100 l. Ed. 2d 836 (1988). In addition to a civil

enforcement action under ERISA, “ERISA plans may be sued in a

second type of civil action as well. These cases - lawsuits

against ERISA plans for run-of-the-mill state-law claims such as

unpaid rent, failure to pay creditors, or even torts committed by

an ERISA plan - are relatively commonplace.” Id. at 832-33. 

There is no preemption “if the state law has only a tenuous,

remote, or peripheral connection with covered plans, as is the

case with many laws of general applicability.” Travelers, 514

U.S. at 651. 

A law makes “reference to” an ERISA plan if it “acts

immediately and exclusively upon ERISA plans” or if the

“existence of ERISA plans is essential to the law’s operation.” 

Dillingham, 519 U.S. at 325. The Ninth Circuit has described the

“reference to” prong as “fairly precise.” Abraham v. Norcal

Waste Sys. Inc., 265 F.3d 811, 820-21 (9th Cir. 2001).

Here, Plaintiff’s claims arise under state contract and tort

law. These laws are generally applicable and cannot be said to

act “immediately and exclusively upon ERISA plans.” Nor can it

be said that the existence of ERISA plans is “essential” to their

operation. See Arizona State Carpenters, 125 F.3d at 723-24

(finding no preemption where state law claims arose from state

law doctrines of general application and did not depend on

ERISA).

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Determining whether a state law has a “connection with” an

ERISA plan is not so precise a test. The Supreme Court has

stated that courts must look “both to the objectives of the ERISA

statute as a guide to the scope of the state law that Congress

understood would survive as well as to the nature of the effect

of the state law on ERISA plans.” Dillingham, 519 U.S. at 325. 

The Court in Travelers further stated that “[t]he basic thrust of

the preemption clause [ ] was to avoid a multiplicity of

regulation in order to permit the nationally uniform

administration of employee benefit plans.” 514 U.S. at 657.

In enacting ERISA, Congress aimed to: 

ensure that plans and plan sponsors would be subject to

a uniform body of benefits law; the goal was to

minimize the administrative and financial burden of

complying with conflicting directives among States or

between States and the Federal Government . . . [and to

prevent] the potential for conflict in substantive law

. . . requiring the tailoring of plans and employer

conduct to the peculiarities of the law of each

jurisdiction.

Travelers, 514 U.S. at 658 (quoting Ingersoll-Rand v. McClendon,

498 U.S. 133, 142, 111 S. Ct. 478, 112 L. Ed. 2d. 474 (1990)).

In Blue Cross of California, the Ninth Circuit stated with

respect to this language that “because the Provider’s claims

arise from contracts that a health care provider makes with its

medical providers, the difficulties that Congress sought to avoid

with ERISA’s preemption clause are not implicated here.” 187

F.3d at 1054. The Court in Travelers also stated that:

In sum, cost uniformity was almost certainly not an

object of pre-emption, just as laws with only an

indirect economic effect on the relative costs of

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various health insurance packages in a given State are

a far cry from those “conflicting directives” from

which Congress meant to insulate ERISA plans. Such

state laws leave plan administrators right where they

would be in any case, with the responsibility to choose

the best overall coverage for the money.

514 U.S. at 662. 

Moreover, “preemption of a third-party provider’s

independent state law claims would discourage health care

providers from treating patients without first evaluating the

solvency of each patient or requiring patients to pay in advance

the cost of their medical services.” The Meadows v. Employers

Health Ins., 47 F.3d 1006, 1010 (9th Cir. 1995); Hoag Memorial

Hosp. v. Managed Care Administrators, 820 F. Supp. 1232, 1237

(C.D. Cal. 1993). Such a result conflicts with Congress’ goal of

protecting the interests of employees and beneficiaries. Hoag,

820 F. Supp. at 1237. 

The Ninth Circuit has used a variety of approaches in

determining whether a claim has a connection with an ERISA plan. 

See Rutledge v. Seyfarth, Shaw, Fairweather & Geraldson, 201 F.3d

1212, 1217-19 (9th Cir. 2000) (summarizing various Supreme Court

and Ninth Circuit tests). The primary focus of these tests is

whether the law at issue “encroaches on relationships regulated

by ERISA, such as between plan and plan member, plan and

employer, and plan and trustee.” Blue Cross of California, 187

F.3d at 1053; see also Rutledge, 201 F.3d at 1219; Providence

Health Plan, 385 F.3d at 1172. “ERISA does not preempt

regulation of those relationships where a plan operates just like

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any other commercial entity - for instance the relationship

between the plan and its own employees, or the plan and its

insurers or creditors.” Geweke Ford, 130 F.3d at 1358 (citing

General Am. Life Ins. Co. v. Castonguay, 984 F.2d 1518, 1522 (9th

Cir. 1993)).

In Blue Cross of California, 187 F.3d at 1051, the Ninth

Circuit found that the state law claims of a group of health care

providers were not preempted by ERISA. The health care providers

had an agreement with Blue Cross that included a fee schedule for

services. Id. at 1051. The providers filed suit in state court

when Blue Cross unilaterally adjusted the fee schedule. The

Ninth Circuit held that, as will be discussed infra, the case did

not involve construction of the terms in an ERISA plan because it

was the terms of the provider agreement that were in question. 

The court also held that the state law claims were not

intertwined with the beneficiaries’ ERISA benefits because there

was no claim that the beneficiaries had not received full

benefits under the plans or that the interpretation of the

provider agreement would alter the benefits to which

beneficiaries would be entitled. Id. at 1053-54.

Given this background, Plaintiff’s claims lack the necessary

“connection with” an ERISA plan to establish complete preemption. 

The relationship between providers and ERISA plans or between

providers and the beneficiaries of ERISA plans is not one of the

relationships traditionally governed by ERISA. As the court in

Hoag stated:

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Congress struck a bargain in ERISA. While employees

relinquished many state and federal law rights, they

gained many important protections under ERISA. 

However, third-party health care providers were never

invited to partake in this compact. They should not be

denied the right to seek a remedy to redress their

wrong.

820 F. Supp. at 1238 (discussing Memorial Hospital System v.

Northbrook Life Ins. Co., 904 F.2d 236, 249 (5th Cir. 1990)). 

Plaintiff’s state law claims do not impose “conflicting

directives” or require the “tailoring of plans;” they deal with

the cost of health care as delineated by the Agreement, an

independent contract. ERISA was not intended to create cost

uniformity or a national fee schedule. Plaintiff’s claims do not

impact the administration of an ERISA plan. As alleged in the

complaint, the only issue raised by Plaintiff is the failure to

pay the claims. There is no allegation that benefits were

wrongly denied. As stated more clearly in Plaintiff’s amended

motion to remand, “Hospital is not asserting or claiming the

Patient is entitled to benefits.” Pl.’s Amended Mot. at 8. 

Zenith’s argument in response is largely based on facts

outside the pleadings. Zenith argues that the Fund is the party

responsible for payment and that it, Zenith, only administers

benefits. The question on remand is whether the complaint at the

time of removal stated a claim. The Complaint alleges that

Zenith is required to make payments and that Zenith failed to do

so. Compl. ¶¶ 10-12. That Zenith may eventually successfully

move for summary judgment based on the Fund being the party that

failed to pay is irrelevant to the issue of subject matter

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jurisdiction. Plaintiff’s state law claims require only the

interpretation of the Agreement and the obligations of the

parties thereto. 

As in Blue Cross of California, Plaintiff’s claims are not

preempted because they do not depend on the construction of terms

in ERISA plans, but rather involve the construction and

interpretation of the Agreement. Nor are Plaintiff’s claims

intertwined with beneficiaries’ ERISA benefits; again, Plaintiff

does not allege that benefits have been denied or that

beneficiaries have not received the full benefits due them. 

Plaintiff’s claims are confined to whether the amount paid to the

provider, Plaintiff, for those benefits was proper under the

Agreement.

This outcome is consistent with other cases in this circuit. 

In Hoag, 820 F. Supp. at 1235, for example, the court found no

preemption in what was arguably a closer case. A patient was

admitted to the plaintiff’s facility based on assurances from the

defendant that there was insurance coverage. Id. at 1233. The

defendant subsequently denied coverage pursuant to an exclusion

in the policy regarding coverage for illegal acts. Id. The

provider sued in state court on contract and tort theories. The

district court rejected the defendant’s argument that the claim

would interfere with the administration of the plan because

plaintiff was a “third party health care provider suing to

recover an independent obligation of the Plan to pay for care and

treatment.” Id. at 1235. The same is true in this case. 

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The Court notes, however, that the facts in Davila are 2

dissimilar to the instant case. There, two participants in or

beneficiaries of ERISA plans attempted to sue under a Texas statute

that imposed a duty of care in making health care decisions.

Davila, 124 S. Ct. at 2493. The Court held that the respondents’

claims were preempted in part because it was “clear, then, that

respondents complain only about denials of coverage promised under

the terms of ERISA-regulated employee benefit plans.” Id. at

2497. 

14

Accordingly, the connection between the ERISA plan and

Plaintiff’s claims is too “tenuous, remote or peripheral” to find

complete preemption. There is no federal subject matter

jurisdiction on this basis. 

2. Preemption by ERISA’s Civil Enforcement Scheme

ERISA Section 502(a), 29 U.S.C. § 1132, is the civil

enforcement prong of ERISA. Section 502(a) provides, in relevant

part, that:

A civil action may be brought-

(1) by a participant or beneficiary-

(A) [omitted] 

(B) to recover benefits due to him under the terms of

his plan, to enforce his rights under the terms of the

plan, or to clarify his rights to future benefits under

the terms of the plan; . . . 

29 U.S.C. § 1132(a)(1)(B). Thus an ERISA participant may sue

under this provision to either recover benefits or enforce or

clarify his rights. State law claims that attempt to accomplish

these ends are completely preempted by ERISA, regardless of how

they are pleaded. Davila, 124 S. Ct. at 2496; Metropolitan Life

Ins. Co., 481 U.S. at 66-67. 

Under Davila, a cause of action is “within the scope of 2

ERISA § 502(a)(1)(B)” “if an individual, at some point in time,

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Because the plaintiff in Misic conceded that his state law 3

claims were preempted by ERISA, the Ninth Circuit did not discuss

the preemption issue. 789 F.2d at 1379.

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could have brought his claim under ERISA § 502(a)(1)(B), and

where there is no other independent legal duty that is implicated

by a defendant’s actions.” 124 S. Ct. at 2496. Whether

Plaintiff’s claims are preempted thus depends on whether

Plaintiff could have brought its claims under ERISA. 

Zenith argues that “where, as here, there is no independent

contractual basis for an ERISA claim, but the hospital has

accepted an assignment of benefits, courts hold that the claim is

completely preempted.” Zenith’s Opp’n at 8. As the cases cited

by Zenith demonstrate, this statement is inaccurate.

In Misic v. Building Service Employees Health & Welfare

Trust, 789 F.2d 1374 (9th Cir. 1986), the Ninth Circuit held 3

that a physician who sued derivatively, as an assignee of

beneficiaries under an ERISA plan, had standing under ERISA to

assert the claims of his patient-assignors. The plaintiff health

care provider in Misic had no independent contractual

relationship with the defendant plan, and thus could only sue the

plan as an assignee.

In contrast to Misic, the Ninth Circuit found no preemption

in Blue Cross of California, 187 F.3d at 1051, in which there was

an independent obligation between the health care provider and

the ERISA plan. In Blue Cross of California, a group of health

care providers had an agreement with Blue Cross that included a

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fee schedule for services. Id. at 1051. The providers filed

suit in state court when Blue Cross unilaterally altered the

fees. The Ninth Circuit held that, unlike in Misic, the terms of

the provider agreement were at issue and not the patient’s

benefits, so the providers were properly asserting a state law

breach of contract claim. The court stated that the dispute was

“not over the right to payment, which might be said to depend on

the patients’ assignments to the Providers, but the amount, or

level, of payment which depends on the terms of the provider

agreements.” Id. (emphasis original).

Here, Plaintiff is not seeking recovery as an assignee of

ERISA plan beneficiaries under the terms of an ERISA plan. This

is true despite Zenith’s attempts to construe Plaintiff’s claim

as being one regarding benefit administration. Plaintiff seeks

to enforce the terms of a separate and independent contract

regarding the fees due for services rendered; the complaint

alleges only the failure to pay according to the contract, not a

coverage dispute. Moreover, as Plaintiff pointed out at oral

argument, that Plaintiff is not seeking recovery as an assignee

is illustrated by the fact that a plan beneficiary would not have

standing to seek relief under the Agreement because such persons

are not parties to the Agreement.

The cases cited by Zenith in which a plan participant

brought suit are inapposite. They do not involve a third party

provider or a separate and independent contract, the critical

distinguishing factor. This case, just like Blue Cross of

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California, deals with benefits that were approved and provided

but that were allegedly not paid in full under the Agreement. 

The breach of contract claim seeks only to enforce the terms of

the Agreement, which is governed by state law.

Zenith also cites an unpublished decision from the Northern

District of California, California Pacific Medical Center v.

Concentra Preferred Systems, Inc., No. 04-3083, 2004 WL 2331876

(N.D. Cal. Oct. 15, 2004), in which the court granted the

defendant’s motion to dismiss based on ERISA preemption. The

Court declines to follow this case not only because it is

unpublished and not binding, but also because the court did not

directly address the subject matter jurisdiction issue and did

not discuss or distinguish Blue Cross of California. In

Concentra, the court looked only at the Rule 12(b)(6) issue and 

applied a “but for standard” to determine preemption. The

standard that was applied was from Dishmun v. UNUM Life Ins. Co.

of Am., 269 F.3d 974, 977 (9th Cir. 2001), a factually dissimilar

case involving a suit by an ERISA plan beneficiary rather than a

third party provider, which was the case in Blue Cross of

California. The court also relied on Misic to find preemption

without distinguishing the principles and rule delineated in Blue

Cross of California, which, again, unlike Misic, involved a

separate contract regarding fees. Blue Cross of California is,

of course, a binding decision.

In sum, because Plaintiff is seeking to recover amounts due

under a contract that is independent of the ERISA plan, it could

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not, at any time, have brought an enforcement action under ERISA. 

Plaintiff’s claims are thus not within the scope of ERISA’s civil

enforcement provision and are not completely preempted. Because

the test in Davila is conjunctive, the failure on this prong

obviates the need to discuss the second prong.

III. Motions to Dismiss

A court lacking jurisdiction is without power to rule on the

merits of a case; any such ruling is a legal nullity and has no

effect. Orff v. United States, 358 F.3d 1137, 1149 (9th Cir.

2004). The Court, as explained above, lacks jurisdiction to hear

Plaintiff’s claims. Accordingly, the Court will not address the

merits of Defendants’ motions to dismiss.

IV. Fees

Plaintiff’s motion to remand seeks attorneys’ fees and the

costs associated with the removal action. Plaintiff argues that

it made Zenith aware of prior cases from this Court involving

similar facts in which motions to remand were granted. Zenith

argues that an award of fees to Plaintiff is not warranted and

that it should be awarded fees because Plaintiff failed to

clarify the basis for its suit against Zenith. Zenith objects to

Plaintiff’s “recrafting and rewriting” of the Complaint in its

motion to remand. Zenith also argues that, based on Concentra,

it reasonably believed it had a colorable claim for removal. 

Section 1447 of the removal statute provides that “[a]n

order remanding the case may require payment of just costs and

any actual expenses, including attorney fees, incurred as a cost

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of the removal.” 28 U.S.C. § 1447. An award of fees and costs

on remand is left to the discretion of the district court and

does not require a showing of bad faith. Moore v. Permanente

Medical Group, 981 F.2d 443, 446 (9th Cir. 1992). 

Here, Zenith presents no statutory basis for its suggestion

that fees may appropriately be awarded to the removing party, and

its request is DENIED. Plaintiff’s request is likewise DENIED

because Zenith’s argument based on Concentra, though not 

persuasive, was not wholly unreasonable.

ACCORDINGLY, IT IS ORDERED that Plaintiff’s motion to remand

is hereby GRANTED.

FURTHER ORDERED that Defendants’ motions to dismiss are

hereby DENIED on the grounds that the Court lacks subject matter

jurisdiction.

FURTHER ORDERED that all requests for fees and costs are

hereby DENIED.

IT IS SO ORDERED.

Ia40ijDated: July 5, 2005 /s/ Robert E. Coyle 

UNITED STATES DISTRICT JUDGE

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