1 10-4094-cv HealthNow New York Inc. v. State of New York

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT 

## SUMMARY ORDER
Rulings by summary order do not have precedential effect. Ci tation to a summary order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court = s Local Rule 32.1.1. When citing a summary order in a docu ment filed with this court, a party must cite either the Federal Appendix or an electron ic database (with the notation A summary order @ ). A party citing a summary order must serve a copy of it on any party not represented by counsel. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Daniel Patrick Moynihan United St ates Courthouse, 500 Pearl Street, in the City of New York, on the 12 th day of September, two thousand eleven.
PRESENT: JON O. NEWMAN, PETER W. HALL, Circuit Judges , LORETTA A. PRESKA,1 Chief District Judge

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_____________________________________________ H EALTH N OW N EW Y ORK I NC ., Plaintiff-Appellant , v. No. 10-4094-cv
T HE S TATE OF N EW Y ORK and E RIC T. S CHNEIDERMAN , in his official capacity as Attorney General of the State of New York, Defendants-Appellees .**

______________________________________________ FOR PLAINTIFF-APPELLANT: M ICHAEL P. M C CL AREN , Webster Szanyi LLP, (Nelson Perel, on the brief ) Buffalo, New York. 1 The Honorable Loretta A. Preska, Chief Judge of the United States District Court for the Southern District of New York, sitting by designation. ** The Clerk of Court is directed to am end the official caption as set forth above.2 FOR DEFENDANTS-APPELLEES: V ICTOR P ALADINO , Assistant Solicitor General, (Barbara D. Underwood, Solicitor General, and Andrew D. Bing, Deputy Solicitor General) for Eric T. Schneiderman, Attorney General for the State of New York, Albany, New York.
N ICHOLAS I. T IMKO , New York State Trial Lawyers Association, New Yo rk, New York, and R OBERT S. P ECK , Center for Constitutional Litigation, P.C. for amicus curiae New York State Trial Lawyers Association. Appeal from a judgment of the United States Di strict Court for the We stern District of New York (Skretny, C.J. ). UPON DUE CONSIDERATION , IT IS HEREBY ORDERED, ADJUDGED, AND DECREED , that the judgment of the district court is AFFIRMED

. HealthNow New York Inc. (“HealthNow”) brought suit against defendants the State of New York and Eric T. Schneiderman, in his official capacity as Attorney Ge neral of the State of New York, seeking to declare invalid and enjoin enforcement of the state’s Anti-Subrogation Law, codified at New York Genera l Obligations Law § 5-335. The Anti-Subrogation Law permits insureds to avoid having to reim burse their benefit provider, out of settlement proceeds, for medical expenses arising from personal injuries caused by third-party tortfeasors. HealthNow subsequently agreed to drop its cl aims against the State of New Yo rk. The district court granted the defendants’ motion to dismiss the complaint for lack of subject matter ju risdiction, holding that the Attorney General was not a proper defendant under the Ex Parte Young exception to the state’s Eleventh Amendment immunity because he not only lacked the requisite connection with the enforcement of the Anti-Subrogation Law but he al so had not expressed su fficient willingness to exercise any putative authority to enforce the law. HealthNow New York, Inc. v. State of New3 York , 739 F. Supp. 2d 286, 297-98 (W.D.N.Y. 2010). We a ssume the parties’ familiarity with the underlying facts and procedur al history of the case. I. Discussion We review de novo a district court’s grant of a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Triestman v. Fed. Bureau of Prisons , 470 F.3d 471, 474 (2d Cir. 2006). We “may affirm an appealed decision on any ground which finds support in the record, regardless of the ground upon whic h the trial court relied.” Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc. , 448 F.3d 573, 580 (2d Cir. 2006) (internal quotation marks omitted). “Article III, § 2 of the United States Constitu tion restricts federal courts to deciding ‘Cases’ and ‘Controversies’ and thus imposes what the Supreme Court has descri bed as the ‘irreducible constitutional minimum of standing,’

― injury-in-fact, causation, and redressibility.” Baur v.
Veneman , 352 F.3d 625, 631-32 (2d Cir. 2003) (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560 (1992)). “ Lujan holds that a litigant must demonstrat e that it has suffered a concrete and particularized injury that is eith er actual or imminent, that the in jury is fairly traceable to the defendant, and that it is likely that a favor able decision will redress that injury.” Massachusetts v.
EPA , 549 U.S. 497, 517 (2007). In the absence of st anding, a court lacks the requisite subject matter jurisdiction over the case. S. Jackson & Son, Inc. v. Coff ee, Sugar & Cocoa Exch, Inc. , 24 F.3d 427, 431 (1994). HealthNow asserts it has two injuries-in-fac t: (1) that it will lose $14 million if it cannot enforce contractual subrogation provis ions against insureds who settle with tortfeasors and (2) that it fears enforcement from the Attorney Gene ral under New York Executive Law § 63(12).4 Having examined these two purported injuries separately, we hold that HealthNow has not demonstrated that it has standing to pursu e the cause of action at issue here. We begin with the $14 million in potential lo sses that HealthNow claims it will lose as a result of the Anti-Subrogation La w being in effect. Although the Attorney General concedes this is a legitimate injury-in-fact for purposes of standing, HealthNow cannot demonstrate that this injury is caused by any action on the part of the Attorney General, the only party HealthNow is suing. Nothing the Attorney General is doing or could threaten to do under section 63(12) is effecting that $14 million loss. Rather, that injury is caused solely by HealthNow’s insureds having been provided a defense to Health Now’s subrogation claims by the statute. The second injury-in-fact HealthNow asserts is the threat that the Attorney General will invoke his authority under se ction 63(12) against Health Now in connection with the Anti-Subrogation Law. Although th e Attorney General would be th e “cause” of such an injury and an injunction would fully redress such injury, there is nothing to indicate the Attorney General has used or is about to use sec tion 63(12) to investigate HealthNo w’s practices in connection with the Anti-Subrogation Law. Because this is a prospective injury, the aggrieved party must demonstrate “the threatened injury is real, immediate, and direct.” Davis v. Fed. Election
Comm’n , 554 U.S. 724, 734 (2008). HealthNow cannot es tablish that the A ttorney General is threatening to use his section 63(12 ) authority against it. First, the Attorney General has denied his office intends to use section 63(12) against HealthNow. Second, HealthNow is not alleging it would engage in any actions that would r easonably prompt the use of section 63(12), notwithstanding the Attorney General’s insistence he has no plans to employ that authority against it. HealthNow is not now mislead ing, nor asserting that it intends to mislead, its insureds in any5 way that could be considered i llegal or fraudulent in connection with the Anti-Subrogation Law. The only course of conduct HealthNow has threatened to take is either (a) not to seek to enforce its contractual subrogation provisions based on the existence of the Anti-Subrogation Law, or (b) to sue its insureds to enforce those provisions. Neither proposed course of conduct is illegal or fraudulent. Indeed, the Attorney General has made clear that his office would not consider it to be illegal or fraudulent conduct that would warrant the use of section 63(12) if HealthNow exercised its right to challenge the legality of the Anti-S ubrogation Law in a suit against an insured. Only by mixing a stated injury

― loss of $14 million

― with the cause and redressibility of an entirely different injury

― threatened enforcement of section 63(12)

― can HealthNow pretend to meet the three-part standing test under Lujan . Simply put, however, HealthNow has failed to allege a requisite “case” or “controversy” agains t the Attorney General, and because HealthNow therefore lacks standing, this suit must be dismis sed for lack of subject matter jurisdiction. II. Conclusion We have considered all of HealthNow’s remaining arguments and conclude they are without merit. For the foregoing reasons, the ju dgment of the district court is AFFIRMED.
FOR THE COURT: Catherine O = Hagan Wolfe, Clerk