IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA

CONNECTICUT GENERAL LIFE INSURANCE 

COMPANY, CIGNA HEALTH AND LIFE 

INSURANCE COMPANY

PLAINTIFFS,

V.

NORTHWEST REGIONAL SURGERY CENTER, LLC, 

ADVANCED REGIONAL SURGERY CENTER LLC, 

CARMEL SPECIALTY SURGERY CENTER LLC, 

COLUMBUS SPECIALTY SURGERY CENTER LLC, 

INDIANA SPECIALTY SURGERY CENTER LLC, 

METRO SPECIALTY SURGERY CENTER LLC, 

MIDWEST SPECIALTY SURGERY CENTER LLC, 

MUNSTER SPECIALTY SURGERY CENTER LLC, 

RIVERVIEW SURGERY CENTER LLC, SOUTH 

BEND SPECIALTY SURGERY CENTER LLC, 

SYCAMORE SPRINGS SURGERY CENTER LLC, 

SURGICAL CENTER DEVELOPMENT, INC. D/B/A 

SURGCENTER DEVELOPMENT, SURGICAL 

CENTER DEVELOPMENT #3 LLC

DEFENDANTS.

Civil Action No.: 2:15-cv-253-JD-PRC

CIGNA’S RESPONSE TO DEFENDANTS’ NOTICE OF 

SUPPLEMENTAL AUTHORITY IN SUPPORT OF MOTION TO DISMISS 

Plaintiffs Connecticut General Life Insurance Company and Cigna Health and Life 

Insurance Company (together, “Cigna”) submit this response to Defendants’ Notice of 

Supplemental Authority regarding Connecticut General Life Insurance Company v. Humble 

Surgical Hospital, LLC, No. 4:13-cv-3291, 2016 WL 3077405 (S.D. Tex. June 1, 2016), filed on 

June 7. (Dkt. 53 (“Notice”).)1

 1 Cigna strongly disagrees with the Humble decision but will not detail those disagreements here in order to keep 

this response short. By citing to Humble’s holdings, Cigna does not agree that that court’s legal conclusions or 

findings of fact are correct.

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First, Defendants are wrong that Humble supports dismissal of Cigna’s equitable claim 

for overpayments under ERISA at the pleadings stage. As Cigna already pointed out, many 

courts interpreting the same or substantially similar overpayment recovery provisions in Cigna’s 

plans as the ones at issue here have concluded—contrary to Humble—that those provisions do in 

fact create an equitable lien by agreement. (See Cigna’s Opp. to Defs.’ Mot. to Dismiss (“MTD 

Opp.”), Dkt. 46 at 17-18 & nn.16-17.) And Defendants’ arguments about Cigna’s claim for 

equitable relief based on the “tracing” method, and about what the Humble court had found as to 

that claim after a nine-day bench trial (see Notice at 1-2) only further highlight that this issue 

should not be resolved at the Rule 12(b)(6) stage. See Montanile v. Bd. of Trustees of the Nat’l 

Elev. Indus. Health Benefit Plan, 136 S.Ct. 651, 662 (2016) (recognizing there was a dispute of 

“material fact on how much dissipation there was” and “a lack of evidence as to whether 

Montanile mixed the settlement fund with his general assets,” and remanding for those findings); 

Humble, 2016 WL 3077405, at *11 (finding that “evidence presented at trial established that the 

funds paid by Cigna to Humble have been dissipated”); id. at *13 (“Evidentiary support in the 

record also establishes that the funds were disbursed shortly after they were received.”). This 

Court cannot determine on the pleadings whether all eleven Defendant-ASCs have already 

dissipated all of Cigna’s overpayments on nontraceable assets, and this question should be 

resolved on a full record.

Second, Defendants argue that “the Humble court found that Cigna’s attempt to obtain 

monetary relief through the equitable tools of injunction and declaration . . . was improper” 

(Notice at 2)—but Defendants did not move to dismiss Cigna’s claim for overpayments under 

ERISA that seeks injunctive relief (Dkt. 45 at 1 n.1), and they cannot raise a new argument for 

dismissal for the first time in a notice of supplemental authority. And as Cigna already pointed 

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out, its declaratory judgment claim here is not duplicative of the ERISA injunctive relief claim, 

because the ASCs have submitted disputed claims under both ERISA and non-ERISA plans. 

(See MTD Opp. at 21-22.) To the extent there is any doubt about whether the declaratory 

judgment claim is duplicative of the claim for injunctive relief under ERISA, those questions 

likewise should not be resolved on the pleadings. (Id.)

Third, Humble’s conclusion that certain of Cigna’s state-law claims are preempted by 

ERISA, purportedly because they require analysis of plan terms (Notice at 2-3), is irreconcilable 

with Supreme Court precedent, which makes clear that ERISA preempts state law claims only 

when “there is no other independent legal duty that is implicated by a defendant’s actions.” See

Aetna v. Davila, 542 U.S. 200, 210 (2004). Cigna’s state-law claims here all implicate 

Defendants’ duties not to commit fraud, tortiously interfere with Cigna’s relationships with 

clients and providers, or unjustly enrich themselves (all of which are independent legal duties), 

and thus there is no preemption. (See MTD Opp. at 22-23.) Not surprisingly, every other court

that has considered Cigna’s state-law claims against out-of-network fee-forgiving SurgCenter 

ASCs like the Defendants here has found that those claims are not preempted. (See id.

(collecting cases); Dkt. 52 at 2 (submitting as supplemental authority another decision holding 

that Cigna’s unjust enrichment claim does not require plan interpretation and is not preempted).) 

Humble—which cites Davila but does not even address the independent legal duty issue, see

2016 WL 3077405, at *12-13—stands alone.

Finally, Defendants argue that in Humble, the fraud claim failed because the defendanthospital had no duty to disclose certain information to Cigna (Notice at 3), but this is irrelevant 

for multiple reasons. For one, assuming arguendo the accuracy of the Humble court’s recitation 

of facts and discussion of issues in its opinion, the misrepresentations at issue in Humble (where 

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the hospital failed to disclose to Cigna that it was adding 30% “use” fees to its claims) are 

different from the ASCs’ fraudulent and affirmative misrepresentations at issue here (where in 

submitting claims to Cigna, the ASCs misrepresented that the insureds’ billed amounts were the 

same as the amounts that they had billed to Cigna, among other things). (See First Am. Compl. 

(“FAC”) ¶¶ 82-86, 92-98, 115-16, 118-20 & MTD Opp. at 23-26 (detailing the ASCs’ 

misrepresentations).) 

Next, again assuming arguendo the accuracy of the Humble court’s discussion of facts 

and legal validity of its holdings, Humble’s holding that the defendant-hospital had no duty to 

disclose certain information to Cigna is also irrelevant because that court reached this conclusion 

in the context of discussing certain information contained in physicians’ Use Agreements 

(“UAs”) with the defendant-hospital. Humble held that those UAs were “proprietary and/or 

privileged” information, and it found there was no duty to disclose that information where 

“Cigna has not proffered a written agreement that it or any member/patient has with Humble that 

gives rise to a duty to disclose the UAs as a prerequisite for reimbursement on any claims.” 

2016 WL 3077405, at *14. But UAs are not at issue here, nor is Cigna arguing that the ASCs 

should have disclosed privileged information when they submitted claims. Rather, Cigna’s 

argument is that the ASCs’ claims were fraudulent because they misrepresented their billing 

practices to Cigna—by, among other things, misrepresenting that they had charged Cigna and 

their patients the same price for their services, and by routinely waiving their patients’ 

deductibles, contrary to representations on their claim forms. (See FAC ¶¶ 5-9, 92-96.) Thus, 

the ASCs’ argument that they had no duty to disclose disregards the fact that the ASCs did not 

simply omit relevant information, as the court found in Humble, but made affirmative 

misrepresentations to Cigna. (See, e.g., id. ¶¶ 93-95.) 

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Finally, the ASCs ignore that under Indiana law, having chosen to submit charges to 

Cigna for reimbursement, they assumed a duty to disclose all material facts that are relevant to 

Cigna’s reimbursement decisions, and so the information the ASCs omitted from their bills to 

Cigna is sufficient to support a fraud claim. (See MTD Opp. at 25-26.) The ASCs’ attempt to 

avoid responsibility for making false statements in their claims to Cigna—statements on which 

they knew Cigna would rely for its reimbursement decisions—is unavailing.

DATED this 10th day of June, 2016 Respectfully submitted,

HINSHAW & CULBERTSON LLP

/s/ Daniel K. Ryan

Daniel K. Ryan

Joshua B. Simon

Warren Haskel

Dmitriy Tishyevich

 (All admitted pro hac vice)

KIRKLAND & ELLIS LLP

601 Lexington Avenue

New York, NY 10016

jsimon@kirkland.com

whaskel@kirkland.com

dmitriy.tishyevich@kirkland.com

Tel: 212-446-4800

Fax 212-446-4900

Counsel for Plaintiffs

Daniel K. Ryan

HINSHAW & CULBERTSON LLP

222 North LaSalle Street, Suite 300

Chicago, IL 60601-1081

Telephone: 312-704-3000

Facsimile: 312-704-3001

dryan@hinshawlaw.com

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CERTIFICATE OF SERVICE

I hereby certify that on this 10th day of June, 2016, I electronically filed the foregoing 

document with the Clerk of Court using the CM/ECF system, which shall send notification of 

such filing to all counsel of record.

/s/ Daniel K. Ryan

Daniel K. Ryan

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