NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

_____________ No. 14

- 1832

_____________ AMER ICAN CHIROPRACTIC ASSOCIATION, o n i ts o wn b ehalf a nd i n a

r epresentational c apacity on b ehalf o f i ts m embers; STEVEN G. CLARKE, D. C., i ndividually, a nd o n b ehalf o f a ll o ther s imilarly s ituated D octors o f Chiropractic; CAROL A

. LIETZ, i ndividually, a nd o n b ehalf o f a ll o ther s imilarly s ituated h ealth i nsurance s ubscribers , A ppellants

v. AMERICAN SPECIALTY HEALTH INCORPORATED; AMERICAN SPECIALTY HEALTH NETWORKS, INC; CONNECTICUT GENERAL LIFE INSURANCE COMPANY;

CIGNA CORPORATION

______________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civ. Action No. 2

- 12

- cv
- 07243) District Judge: Honorable Nitza I. Quinones Alejandro

_______________________ Argued : November 19, 2014

_______________________ Before CHAGARES, HARDIMAN, and SHWARTZ, Circuit Judges

(Filed: Septembe r 11, 2015 ) D. Brian Hufford, Esq. [ARGUED] Jason S. Cowart, Esq. Zuckerman Spaeder2

1185 Avenue of the Americas 31st Floor New York, NY 10036 Anthony F. Maul, Esq. Suite 201 68 Jay Street Brooklyn, NY 11201 Catherine Pratsinakis, Esq. Steven A. Schwar tz, Esq. Chimicles & Tikellis 361 West Lancaster Avenue One Haverford Centre Haverford, PA 19041 Joe R. Whatley, Jr. Esq. Whatley, Drake & Kallas 1540 Broadway 37th Floor New York, NY 10036 Counsel for the Appellant s Joshua B. Simon, Esq. [ARGUED] War ren Haskel, Esq. Frank M. Holozubiec, Esq. William H. Pratt, Esq. Kirkland & Ellis 601 Lexington Avenue New York, NY 10022 Michael P. Daly, Esq. Richard M. Haggerty, Jr., Esq. Drinker, Biddle & Reath 18th & Cherry Streets One Logan Square, Suite 2000 Phil adelphia, PA 19103 Andrew Z. Edelstein, Esq. Elizabeth D. Mann, Esq. Mayer Brown3

355 South Grand Avenue Suite 3800 Los Angeles, CA 90071 Charles A. Rothfeld, Esq. Mayer Brown 1999 K. Street, N. W

. Washington, D C 20006 Francine F. Griesing, Esq. Kathryn G. Legge, Esq. Griesing Law 1717 Arch Street Suite 360 Philadelphia, PA 19103 Counsel for the Appellee s

_____________________________

OPINION *

_____________________________ SHWARTZ, Circuit Judge

. T he District Court dismissed this putative class acti on against American Specialty Health, Inc. and American Specialty Health Networks , Inc. (collectively, “ASHN ”) and Cigna Corporation and Connecticut General Life Insurance Company (collectively , “CIGNA”) , for alleged violations of the Employee Retirement I ncome Security Act of
1974 (“ ERISA ”) related to claims processing and benefit determinations. For the reasons set forth herein, we affirm in part, vacate in part, and remand for further proceedings.
I 1

* This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not constitute binding pre cedent.4

CIGNA issues ERISA

- governed health insurance plans , oversees coverage decisions , and provides for payment or reimbursement of benefits to its subscribers. CIGNA “delegate [ s ] ” to ASHN , a network of more than 21,000 chiropractors that contracts with health plans, the responsibility for administering its chir opractic

- related
insurance claims. JA 54

. Carol A. Lietz is a subscriber to a CIGNA plan, 2 who received chiropractic
services from a ch iropractor with in the CIGNA network

. Lietz’s chiropractor submitted
a claim to ASHN for reimbursement for these servic es. Although Lietz’s chiropractor
received $88.00, the “E xplanation of B enefit s” form ( “EOB ”) Lietz received from
CIGNA stated that the amount billed to her account, and hence applied to her deductible, was $127.28. Lietz alleges that nothing in the EOB stated that her account would be
billed for more than the $88.00 her provider received. Lietz complained to her chiropractor about the charge

. W hen he asked ASHN to explain why he received less
than th e $127.28 reported to Lietz , ASHN simply told him tha t he was reimbursed in
accordance with the fee schedule set forth in his contract with ASHN and that any other agreements concerning the transaction were confidential.

1 Because we are reviewing orders dismissing claims based upon Fed. R. Civ. P. 12(b)(1) for lack of standing and 12(b)(6) for failure to state a claim and no other evidence was provided, we draw these facts from the complaint and assume they are t rue. In re Schering Plough Corp. Intron/Temodar Consumer Class Action , 678 F.3d 235, 243 (3d Cir. 2012 ).

2 The Court granted CIGNA’s motion to supplement the record with an affidavit asserting that Lietz was not a participant in her ERISA

- governed CIGNA plan after the Complaint was filed.5

Steven G. Clarke is a chiropractor with High Street Rehabilitation, LLC, whose patien ts includ e those covered by CIGNA health plans

. He accepts assignments from CIGNA insureds that authorize him to receive payment from CIGNA for the services he provide s . The “A ssignment of B enefits ” (“AOB”) form s state:

I authorize payment of medical ben efits to High Street Rehabilitation, LLC for all services rendered. I understand that I am financially responsible for all charges whether or not they are paid by insurance (commercial, worker’s compensation, auto, etc.). In the event of an unpaid balance , I am aware that my bill will be sent to the collection agency and that I will be held responsible for any and all charges incurred, including attorney fees. JA 78. He contends that th is AOB grants him “standing to pursue the ERISA claims

. ”
JA 48. He a lleges that ASHN and CIGNA did not pay him the amounts to which he was entitled and seeks, among other things, reimbursement for his services. 3 The American Chiropractic Association (“ACA”) is a national association of chiropractors that seeks to “promote the chiropractic profession and the services of Doctors of Chiropractic for the bene fit of patients they serve. ” JA 50. ACA does this by, among other things, assisting chiropractors and patients who “have been negatively impacted by improper insurance c ompany policies and procedures.” JA 50.

3 Clarke also alleged that the AOB entitled him t o obtain other equitable relief but he withdrew that claim during oral argument. See Oral Argument at 3:42, N. Jersey Brain & Spine Ctr. v. Aetna, Inc. (No. 14

- 2101), available at http://www2.ca3.uscourts.gov/oralargument/audio/14

- 2101NJBrainSpineCenterv.Aetna.mp3 . As a result, the summary of the Complaint omits references to the equitable relief he sought.6

Lietz, Clarke, and ACA filed a three

- count putative class action complaint alleging
that ASHN and CIGNA violated ERISA. Count I is an ERISA benefits claim under 29 U.S.C. § 1132(a)(1)(B). It targets , among othe r things, CIGNA and ASHN’s allegedly false and misleading EOBs that “ reported a billed amount that was different from the amount actually billed by the provider[] and where the allowed amount was different from the allowed amount reported to the provider.” JA 114

- 15. Lietz seeks to enjoin CIGNA and ASHN from “pursuing the[se] policies , ” and Clarke and Lietz seek “reimburse[ment of] benefits which were denied or reduced as a result of such policies.” JA 116. Lietz and ACA also seek “declaratory and injun ctive relief” to enforce the plan terms and to “clarify their rights to future benefits

. ” JA 116.
Count II is an ERISA breach of fiduciary duty claim under 29 U.S.C. § 1132(a)(3). It alleges that CIGNA and ASHN breached their fiduciary duties under ERIS A through “falsification of EOBs” and “various ASHN policies which are designed to discourage the provision of chiropractic care.” JA 116. Lietz and ACA seek “appropriate equitable relief,” including the removal of CIGNA and ASHN as fiduciaries of their ERISA plans.
JA 117.
Count III alleges that CIGNA and AS H N have violated various state anti

discrimination, prompt pay, and “utilization management” statutes for which ACA alone seeks “appropriate declaratory and injunctive relief.” JA 117.
The Distr ict Court dismissed the c omplaint pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) for lack of statutory standing and for failure to state a claim. As to Lietz, the7

District Court held that she failed to show that she exhausted the administrative remedie s set forth in CIGNA ’s plan or that doing so would be futile. As to Clarke, the District
Court held that he lacked standing because the AOB assigned him only the right to
receive reimbursement from his patient ’ s insurance carrier , not the right to “pursue litigation under ERISA. ” Am. Chiropractic Ass’n v. Am. Specialty Health Inc. , 14 F. Supp. 3d 619, 628 (E.D. Pa. 2014)

. Finally, a s to ACA, the District Court held that it
lacked associational standing because it failed to show that any of its members ha d standing in their own right and that its claims would not require their individualized participation.
II 4
We conduct plenary review of an order dismiss ing a complaint under Rule 12(b)(1) for lack of standing and 12(b)(6) for failure to state a claim. In re Schering Plough Corp. Intron/Temodar Consumer Class Action , 678 F.3d 235, 243 (3d Cir. 2012)

. When reviewing both types of dismissals, we “ must accept as true all material allegations set forth in the complaint, and must construe those facts in fav or of the nonmoving party .” Id. We will address Lietz’s, Clarke’s, and ACA’s claims in turn.

III
A

4 The District Court had jurisdiction under 28 U.S.C. § 1331 . We have jurisdiction under 28 U.S.C. § 1291.8

The District Court dismissed Lietz’s claims for fail ing to exhaust her
administrative remedies or to show that she should be excused from having to exhaus t them . Except in limited circumstances, we “will not entertain an ERISA claim unless the plaintiff has exhausted the remedies available under the plan.” Harrow v. Prudential Ins.
Co. of Am. , 279 F.3d 244, 249 (3d Cir. 2002) (quotation marks omitted). E xhaustion is a judicially created “nonjurisdictional prudential” requirement, Metro. Life Ins. Co. v.
Price , 501 F.3d 271, 279 (3d Cir. 2007) , that plaintiffs must satisfy for ERISA benefits
claims but not for claims arising from violations of ERISA’s subs tantive provisions, such as breach of fiduciary duty claims , Zipf v. A m. T el. & T el. Co. , 799 F. 2d 889, 891

- 93 (3d Cir. 1986)

. The ERISA exhau stion requirement is a n affirmative defense , so the defendant bears the burden of proving failure to exhaust. Pr ice , 501 F.3d at 280; Paese v.
Hartford Life & Accident Ins. Co. , 449 F.3d 435, 446 (2d Cir. 2006). 5 Here, the District Court erred by shift ing the burden onto Lietz to establish that
she had exhausted her administrative remedies instead of requiring C IGNA and ASHN to
demonstrate that she had not. See, e.g. , Price , 501 F.3d at 280 (citing Paese , 449 F.3d at 446)

. It cannot be conclusively established from the complaint whether Lietz failed to adequately pursue her administrative remedies or whether it would have been futile for her to have done so given the allegations that the defendants misled her about the benefits

5 Because the exhaustion defense often requires consideration of materials outside the pleadings and is thus typically resolved on summary judgment, se e, e.g. , Harrow , 279 F.3d at 249

- 52 , it is not general ly the basis for dismissal under Rule 12(b)(6). Whether failure to exhaust “may be the basis for dismissal for failure to state a claim depends on whether the allegations in the complaint suffice to establish that ground, not on the nature of the ground i n the abstract.” Jones v. Bock , 549 U.S. 199, 215 (2007)

.9

she was receiving and employed a uniform policy of denying similar benefits requests

. We will therefore vacate t he District Court ’s dis miss al of Lietz’s claim s in Count I

. 6 The District Court also erred in dismissing Count II on exhaustion grounds . Count
II purports to assert a claim for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3). As stated above, we generally apply the exhaustion requirement only to a claim “for a denial of ERISA benefits,” not to one “arising from violations of [ERISA’s] substantive statutory provisions.” Harrow , 279 F.3d at 252. While it is true that the exhaustion requirement may still apply where a n ERISA benefits claim is merely “recast” or “artfully plead[ed]” as one for breach of fiduciary duty, id. at 252

- 53, the District Court did not conduct this analysis. 7 Thus, we are left to conclude that the District Court simply applied its exhaustion ru ling to a cause of action for which exhaustion may not have be en required. For th ese reason s , we will vacate the dismissal of Count II

. This, however, does not end our discussion concerning Lietz’s claims . After th is appeal was filed, CIGNA supplemented the record asserting that Lietz is no longer a

6 Nothing herein bars the parties from addressing exhaustion via summary judgment motions.

7 An ERISA fiduciary duty claim is “actually” one for benefits “where the resolution of the claim rests upon an interpretation and application of an ERISA

regulated plan rather than upon an interpretation and application of ERISA.” Harrow , 279 F.3d at 254 (quotation marks omitted); compare id. at 254

- 55 (classifying plaintiff’s challenge to denial of covera ge for Viagra prescriptions a benefits claim rather than a breach of fiduciary duty claim ), with In r e Unisys Corp. Retiree Med. Benefit ERISA Litig. , 57 F.3d 1255, 1264 (3d Cir. 1995) (“[W]hen a plan administrator affirmatively misrepresents the terms of a plan or fails to provide information when it knows that its failure to do so might cause harm, [it] has breach ed its fiduciary duty . . . .”)

. We leave for the District Court to decide whether Count II states a breach of fiduciary claim, is actually one for benefits, or neither.10

participant in a CIGNA plan. As a result, there is a question as to whether she is entitled to pursue her requests for declaratory or injunctive relief. We will therefore remand to
the District Court to dec id e whether she remains a CIGNA participant or beneficiary and, if not, whether that renders moot her claims seeking declaratory or injunctive relief. See
Harrow , 279 F.3d at 249.
B
We next review the dismissal of Clark e ’s reimbursement claim for lack of standing. A plaintiff must have “constitutional, prudential, and statutory standing” to bring a civil action under ERISA. Leuthner v. Blue Cross & Blue Shield of Ne. Pa. , 454 F.3d 120, 125 (3d Cir. 2006). ERISA allows a “participant [in] or beneficiary ” of an ERISA plan to bring a civil action 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). A medical provide r may also “obtain standing to sue by assignment from a plan participant.” CardioNet, Inc. v. CIGNA Health Corp. , 751 F.3d 165, 176 n.10 (3d Cir. 2014). Here, Clarke received an assignment from his patients “authoriz[ing ] payment of medical benefits to High Street Rehabilitation, LLC for all services rendered.” 8 JA 78. We recently held that an assignment of the right to payment also assign s the right to

8 For the reasons set forth in note 3, supra , Clarke is deemed to have withdrawn his requests for declaratory and i njunctive relief under Count I and for any relief under Count II.11

enforce that right by bring ing suit under ERISA to collect money owed. 9 N

. Jers ey Brain & Spine Ctr

. v. Aetna , Inc. , No. 14

- 2101 , --- F.3d

--- (3d Cir. Sept. 11 , 201 5 ). Such an assignment “serves the interest of patients by increasing their access to care” and reduces the likelihood of medical providers “billing the beneficiary dire ctly and upsetting his
finances. ” CardioNet , 751 F.3d at 179 (quotation marks omitted). Moreover, the right to
enforce recognizes that, as compared to patients, most providers “are better situated and financed to pursue an action for benefi ts owed for th eir services

. ” Conn. State Dental Ass’n v. Anthem Health Plans, Inc. , 591 F.3d 1337, 1352

- 53 (11th Cir. 2009) (quotation marks omitted)

. While Clarke’s assignment made clear that the patient remained “financially responsible for all charges whether or not they are paid by insurance , ” JA 78, this does not mean that the assignment did not give him the right to take steps to collect payment

9 Our ruling is consistent with thos e reache d by our sister circuit courts

. Montefiore Med. Ctr. v. Teamsters Local 272 , 642 F.3d 321, 330

- 32 (2d Cir. 2011) ( holding that the medical provider’s having been assigned the “right to reimbursement” from its patients “ forms the ERISA

- related basis for le gal action regarding those claims for reimbursement” (quotation marks omitted)); Conn. State Dental Ass’n v. Anthem Health Plans, Inc. , 591 F.3d 1337, 1352 (11th Cir. 2009) (“Our own cases confirm that assignment of the right to payment is enough to create standing.”); Tango Transp. v. Healthcare Fin. Servs. LLC , 322 F.3d 888, 894 (5th Cir. 2003) (“denying derivative standing to health care providers would harm participants or beneficiaries because it would discourage providers from becoming assignees and p ossibly from helping beneficiaries who were unable to pay them up

- front” (quotation marks omitted)); I.V. Servs. of Am., Inc. v. Inn Dev. & Mgmt., Inc. , 182 F.3d 51, 54 n.3 (1st Cir. 1999) (“Benefits Assignment Form” at issue “easily clears th[e] low hurdl e” of ERI S A standing notwithstanding that form allegedly “only assigned” plan participant’s right to “receive payments, not her other rights, including the right to file suit”); Misic v. Bldg. Serv. Emps. Health & Welfare Trust , 789 F.2d 1374, 1376, 1379 ( 9th Cir. 1986) (finding derivative standing for dentist who “provided dental services to beneficiaries of the trust, who in return assigned Dr. Misic their rights of reimbursement from the trust”).12

from the patient’s insur er
. 10 As o ther courts have held , a patient’s continued responsibility to pay her provider amo unts not covered by the insurance carrier is not a basis to vitiate the assignment. See, e.g. , T ango Transp. v. Healthcare Fin. Servs. LLC , 322 F.3d 888, 889, 892

- 93 (5th Cir. 2003)

. It is fair “to expect that a patient who
receives medical care will be required to pay for it,” Montefiore Med. Ctr. v. Teamsters
Local 272 , 642 F.3d 321, 330 (2d Cir. 2011) , and that “[i]f provider

- assignees cannot [obtain an assignment to] sue the ERISA plan for payment, they will bill the participant or beneficiary directl y for the insured medical bills

. ” Cagle v. Bruner , 112 F.3d 1510, 1515 (11th Cir. 1997) (per curiam) . Thus, the AOB affords Clarke standing to sue his

10 We note that Clarke’s AOB assign s him the right to su e his patient’s insurance company

— presumably depriving the patient of this right

— and the right to seek payment f rom his patient . It does not, however, require Clarke to first seek payment from the insurance company. Thus, the AOB could place the patient in the position of being sued for payment by the doctor but being precluded from obtaining reimbursement from the insurance company because she gave that right to the doctor. Because this appeal concerns Clarke ’s invocation o f the AOB only to sue CIGNA an d ASHN , we need not address whether this scenario vitiates the assignment

.13

patients’ insurers for reimbursement for services he provided , 11 and w e will therefore

vacate the order dismissing Clarke’s claims for reimbursement under Count I

. 12

C
F inally , we examine the District Court’s dismissal of ACA’s claim s for lack of associational standing. Generally, an association or organization “may” have standing to sue “where (1) the orga nization itself has suffered injury to the rights and/or immunities it enjoys; or (2) where it is asserting claims on behalf of its members and those individual members have standing to bring those claims themselves.” Blunt v. Lower Merion Sch.
Dist. , 767 F.3d 247, 279 (3d Cir. 2014). When an association or organization sues on behalf of its members

— as here

— “it is claiming that it has representational standing.” Id.
An entity has associational or representational standing when:

(a) its members would oth erwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

11 Clarke also has Article III standing to pursue this relief, as he alleges that he sustained an injury in fact by the defendants’ failure to fully pay for the services he rend ered that he contends were covered by the CIGNA plan. See Spinedex Physical Therapy USA Inc. v. United Healthcare of Ariz., Inc. , 770 F.3d 1282 , 1287

- 91 (9th Cir. 2014) (holding that medical provider ha d Article III standing under form assign ing it s patie nts ’ “rights and benefits” even though medical provider “ha[d] not sought payment from its assigning patients for any shortfall” prior to bringing suit ); N. Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare , 781 F.3d 182, 193

- 94 (5th Cir. 2015) (fo llowing Spinedex and noting that “[t]he fact that the patient assigned her rights elsewhere does not cause them to disappear” so as to deprive provider

– assignee Article III standing).

12 Because Clarke’s assignment places him in the shoes of his CIGNA

- ins ured patients, Clarke must satisfy any applicable pre

- suit conditions before suing for reimbursement, such as exhaustion. We leave for the District Court to determine whether Clarke has done so or should be excused from doing so.14

A ddiction Specialists, Inc. v. Twp. of Hampton , 411 F.3d 399, 405 (3d Cir. 2005) (quoting Hunt v. Wa sh . State Apple Adver. Comm’n , 432 U.S. 333, 343 (1977) ). To meet the first prong, the association must allege facts demonstrating that its members “would have standing in their own right.” Goode v. City of Phila. , 539 F.3d 311, 325 (3d Cir. 2008). In practice, this means that the association “must ‘make specific allegations establishing that at least one identified member had suffered or would suffer
har m.’” Blunt , 767 F.3d at 280 (quoting Summers v. Earth Island Inst. , 555 U.S. 488, 498 (2009))

. Under the second prong, the interests that the association seeks to protect must be germane to its purpose. Under the third prong, the association must demons trate that neither its claims nor its requested relief “requires the participation of individual members in the lawsuit.” Hunt , 432 U.S. at 343. While the need for “some” level of individual participation “does not necessarily bar associational standing, ” Pa. Psychiatric Soc’y v. Green Spring Health Servs., Inc. , 280 F.3d 278, 283 (3d Cir. 2002 ) , such standing is permitted only where the claims do not require “a fact

- intensive

- individual inquiry , ” i d. at 286 . Because claims for monetary relief often requ ire such an individual inquiry, associations “generally” cannot sue for monetary damages. Id. at 284; United
Food & Commercial Workers Union Local 751 v. Brown Grp., Inc. , 517 U.S. 544, 546 (1996) . Where associations seek injunctive or declaratory relief , however, participation of the individual members “may be unnecessary.” Pa. Psychiatric Soc’y , 280 F.3d at 284
n.3.15

Applying these considerations, we conclude that ACA lacks associational standing. Although Clarke, an individual member, has standing, h e only seek s monetary reimbursement for services he provided to CIGNA

- insured patients . The scope of his standing thus permits him to seek a type of relief that associations generally are not permitted t o pursue on their members’ behalf

. Blunt , 767 F.3d at 289 (finding no associational standing where “individual student plaintiffs are seeking monetary reimbursement” such that “organizational representation of th[em would be] insufficient without their personal participation in this litigation”). Because ACA has not shown that any of its members possess standing to seek non
- monetary relief, ACA lacks representational standing and the District Court correctly dismissed its ERISA and state
law claims. Goode , 539 F.3d at 325

. 13
IV
For the foregoing reasons, we will: (1) w ith respect to Count I , vacate the order dismissing Lietz ’s claims and Clarke’s claims for reimbursement and remand , but affirm
the order dismissing ACA’s claims; (2) w ith respect to Count II , vacate the order dismissing Lietz’s claims and re mand , but affirm the order dism issing Clarke ’s and ACA’s claims; and (3) w ith respect to Count III , affirm the order dismissing ACA’s
claims.

13 The District Court dec lined to exercise supplemental jurisdiction over the state law claims ACA alleged in Count III, 28 U.S.C. § 1367(c). We may affirm this dismissal “on any ground supported by the record,” Tourscher v. McCullough , 184 F.3d 236, 240 (3d Cir. 1999) , and do so here

.