Court Opinion

ID: 9838714
Source: CourtListenerOpinion
Date Created: 2023-09-07 17:01:30.614033+00
Date Added: 2024-06-11T09:04:43.437210
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

                                                Nos.
SALOOJAS, INC.,                          22-16034, 22-16035,
                                         22-16036, 22-16037,
             Plaintiff-Appellant,             22-16038

 v.                                           D.C. Nos.
                                          3:22-cv-01696-JSC
AETNA HEALTH OF                           3:22-cv-01702-JSC
CALIFORNIA, INC.,                         3:22-cv-01703-JSC
                                          3:22-cv-01704-JSC
             Defendant-Appellee.          3:22-cv-01706-JSC

                                              OPINION

      Appeal from the United States District Court
         for the Northern District of California
  Jacqueline Scott Corley, Magistrate Judge, Presiding

       Argued and Submitted February 14, 2023
              San Francisco, California

               Filed September 7, 2023

 Before: Kim McLane Wardlaw, Jacqueline H. Nguyen,
           and Lucy H. Koh, Circuit Judges.

               Opinion by Judge Nguyen
2       SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.

                          SUMMARY *

    Coronavirus Aid, Relief, and Economic Security Act

    The panel affirmed the district court’s dismissal of five
actions filed by Saloojas, Inc., against Aetna Health of
California, Inc., seeking under the Coronavirus Aid, Relief,
and Economic Security Act (“CARES” Act) to recover the
difference in cost between Saloojas’s posted cash price for
COVID-19 testing and the amount of reimbursement it
received from Aetna.
    Saloojas argued that § 3202 of the CARES Act required
Aetna to reimburse out-of-network providers like itself for
the cash price of diagnostic tests listed on the providers’
websites.
    Agreeing with the district court, the panel held that the
CARES Act does not provide a private right of action to
enforce violations of § 3202. Saloojas correctly conceded
that the CARES Act did not create an express private right
of action. The panel held that there is not an implied private
right of action for providers to sue insurers. The use of
mandatory language requiring reimbursement at the cash
price does not demonstrate Congress’s intent to create such
a right. The statute does not use “rights-creating language”
that places “an unmistakable focus” on the individuals
protected as opposed to the party regulated.

*
 This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
      SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.    3

                        COUNSEL

Michael L. Gabriel (argued), Law Office of Michael Lynn
Gabriel, Redwood City, California, for Plaintiff-Appellant.
Emily S. Costin (argued), Alston & Bird LLP, Washington,
D.C.; David B. Carpenter, Alston & Bird LLP, Atlanta,
Georgia; for Defendant-Appellee.
Charles C. Gokey, Engstrom Lee, Minneapolis, Minnesota;
Jeffrey S. Gleason, Robins Kaplan LLP, Minneapolis,
Minnesota; for Amicus Curiae Premera Blue Cross.

                         OPINION

NGUYEN, Circuit Judge:

     Saloojas, Inc. (“Saloojas”) filed five actions against
Aetna Health of California, Inc. (“Aetna”), seeking to
recover the difference in cost between its posted cash price
for COVID-19 testing and the amount of reimbursement it
received from Aetna. Saloojas argues that § 3202 of the
CARES Act requires Aetna to reimburse out-of-network
providers like Saloojas for the cash price of diagnostic tests
listed on their websites. The district court dismissed this
action on the ground that the CARES Act does not provide a
private right of action to enforce violations of § 3202. We
agree and therefore affirm the dismissal.
                              I.
    On March 18, 2020, in response to the outbreak of the
COVID-19 pandemic in the United States, Congress enacted
the Families First Coronavirus Response Act (“FFCRA”).
4     SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.

Pub. L. No. 116-127, 134 Stat. 178. Section 6001 of
FFCRA, titled “Coverage of Testing for COVID-19,”
requires health insurers to cover, at no additional expense to
insureds, diagnostic products for detection of COVID-19.
Id. § 6001(a). It contains an enforcement provision: the
statute “shall be applied by the Secretary of Health and
Human Services, Secretary of Labor, and Secretary of the
Treasury” to insurers “as if included in” certain provisions
of the Public Health Service Act, the Employee Retirement
Income Security Act of 1974, and the Internal Revenue Code
of 1986. Id. § 6001(b).
    Soon after, on March 27, 2020, Congress enacted the
Coronavirus Aid, Relief, and Economic Security Act
(“CARES” Act). CARES Act, Pub. L. No. 116-136, 134
Stat. 281, 367. Section 3202 of the CARES Act, titled
“Pricing of Diagnostic Testing,” states that insurers
providing coverage of COVID-19 diagnostic products as
described in § 6001(a) of FFCRA “shall reimburse the
provider of the diagnostic testing” at either a negotiated rate
or “in an amount that equals the cash price for such service
as listed by the provider on a public internet website.” Id.
§ 3202(a). The provision mandates that “each provider of a
diagnostic test” publish its cash price on a public website.
Id. § 3202(b)(1). Finally, the statute provides that the
“Secretary of Health and Human Services may impose a
civil monetary penalty on any provider of a diagnostic test
for COVID-19 that” does not comply with posting a cash
price. Id. § 3202(b)(2).
                              II.
    Saloojas is a provider of COVID-19 diagnostic testing.
Saloojas is outside of Aetna’s provider network and
therefore does not have a negotiated rate for COVID-19
       SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.     5

tests. Saloojas alleges that Aetna paid less than Saloojas’s
posted cash price for COVID-19 tests provided to Aetna’s
insureds between November 20 and 23, 2020. Saloojas filed
five actions against Aetna in Alameda County Superior
Court. In each case, Saloojas alleged identical claims under
§ 3202(a)(2) of the CARES Act, seeking reimbursement for
the cost of COVID-19 testing and services provided to
patients insured by Aetna. Saloojas sought the difference
between what Aetna already paid and Saloojas’s entire bill,
as well as “punitive damages . . . for the intentional violation
of the Federal CARES Act.”
    Aetna removed the cases to federal court and moved to
dismiss for failure to state a claim on the ground that the
CARES Act does not provide a private right of action to
Saloojas. On June 23, 2022, the district court determined
that the CARES Act does not contain any private right of
action for providers to bring claims against insurers for
violations of § 3202, and granted the motions to dismiss.
The district court gave Saloojas leave to amend its
complaints, but Saloojas instead filed notices of appeal. The
district court then entered orders of dismissal and judgment
in favor of Aetna. The parties jointly moved to consolidate
the appeals, which this court granted on September 12, 2022.
                              III.
    We review dismissals for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6) de novo and may
affirm on any ground supported by the record. Hooks v.
Kitsap Tenant Support Servs., Inc., 816 F.3d 550, 554 (9th
Cir. 2016). We review questions of statutory interpretation
de novo. Id. “Dismissal is appropriate when the complaint
lacks a ‘cognizable legal theory’ or sufficient factual
allegations to ‘support a cognizable legal theory.’”
6      SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.

Beckington v. Am. Airlines, Inc., 926 F.3d 595, 604 (9th Cir.
2019) (quoting Depot, Inc. v. Caring for Montanans, Inc.,
915 F.3d 643, 652 (9th Cir. 2019)).
                              IV.
    Saloojas concedes that the CARES Act did not create an
express private right of action for a provider to seek
reimbursement for COVID-19 testing at the provider’s
publicly posted cash price, but argues that there is an implied
private right of action.
    “Like substantive federal law itself, private rights of
action to enforce federal law must be created by Congress.”
Alexander v. Sandoval, 532 U.S. 275, 286 (2001). We must
“interpret the statute Congress has passed to determine
whether it displays an intent to create not just a private right
but also a private remedy. Statutory intent on this latter point
is determinative.” Id. (citation omitted).
    The Supreme Court initially identified four factors for
courts to examine in determining whether Congress intended
to imply a private right of action:

       First, is the plaintiff one of the class for
       whose especial benefit the statute was
       enacted—that is, does the statute create a
       federal right in favor of the plaintiff? Second,
       is there any indication of legislative intent,
       explicit or implicit, either to create such a
       remedy or to deny one? Third, is it consistent
       with the underlying purposes of the
       legislative scheme to imply such a remedy for
       the plaintiff? And finally, is the cause of
       action one traditionally relegated to state law,
       in an area basically the concern of the States,
       SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.         7

        so that it would be inappropriate to infer a
        cause of action based solely on federal law?

Cort v. Ash, 422 U.S. 66, 78 (1975) (internal citations and
quotations omitted). “In later cases, the Supreme Court
essentially collapsed the Cort test into a single focus: ‘[t]he
central inquiry remains whether Congress intended to create,
either expressly or by implication, a private cause of
action.’” Logan v. U.S. Bank Nat’l Ass’n, 722 F.3d 1163,
1170 (9th Cir. 2013) (quoting Touche Ross & Co. v.
Redington, 442 U.S. 560, 575 (1979)); see also Lil’ Man in
the Boat, Inc. v. City & Cnty. of San Francisco (“Lil’ Man”),
5 F.4th 952, 958 (9th Cir. 2021) (“Since announcing this test,
‘the Supreme Court has elevated intent into a supreme
factor,’ and Cort’s other three factors are used to decipher
congressional intent.” (quoting Logan, 722 F.3d at 1171)).
     “Because the Supreme Court has elevated intent into a
supreme factor, we start there and . . . . presume that
Congress expressed its intent through the statutory language
it chose.” Logan, 722 F.3d at 1171. Saloojas argues that the
statute shows Congress’s intent to create an implied private
right of action because it uses mandatory language requiring
reimbursement at the cash price. 1 According to Saloojas, the

1
 Saloojas’s argument is based on the following statutory text of the
CARES Act:
        (a) REIMBURSEMENT RATES.—A group health
        plan or a health insurance issuer providing coverage of
        items and services described in section 6001(a) of
        division F of the Families First Coronavirus Response
        Act (Public Law 116-127) with respect to an enrollee
8      SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.

use of such mandatory language “grant[s] private rights to
the members of an[] identifiable class.” Transamerica
Mortg. Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11, 24
(1979). However, Congress’s use of mandatory language
alone is not enough to create an implied private right of
action. Rather, a statute must use “rights-creating language”
that places “an unmistakable focus” on the individuals
protected instead of the person regulated. UFCW Loc. 1500
Pension Fund v. Mayer, 895 F.3d 695, 699 (9th Cir. 2018)
(internal quotations and citation omitted).
    For example, we held that statutory language in the
Protecting Tenants at Foreclosure Act that “any immediate
successor in interest . . . shall assume such interest subject
to” certain rights of “bona fide tenant[s]” did not provide a
private right of action to the bona fide tenants. Logan, 722
F.3d at 1171. The bona fide tenants had no implied private
right of action because the statutory language was framed in
terms of imposing obligations on the “successor in interest,”
while the “bona fide tenant[s]” were “referenced only as an
object” of the obligation. Id. Similarly, we held that
statutory language in the Rivers and Harbors Act prohibiting
non-federal entities from imposing fees or other charges on

        shall reimburse the provider of the diagnostic testing
        as follows:
            ...
        (2) If the health plan or issuer does not have a
        negotiated rate with such provider, such plan or issuer
        shall reimburse the provider in an amount that equals
        the cash price for such service as listed by the provider
        on a public internet website, or such plan or issuer may
        negotiate a rate with such provider for less than such
        cash price.
CARES Act § 3202(a)(2) (emphasis added).
       SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.     9

vessels, which only referred to vessels as an object of the
obligation not to impose fees, did not provide a private right
of action to the vessels. Lil’ Man, 5 F.4th at 960 (quoting 33
U.S.C. § 5(b) (“No . . . fees . . . shall be levied upon or
collected from any vessel or other water craft, or from its
passengers or crew, by any non-Federal interest . . . .”)).
    Here, Saloojas bases its claim on § 3202(a)(2)’s directive
that an insurer “shall reimburse” the provider at “the cash
price” of testing if the insurer “does not have a negotiated
rate” with the provider. Like in Logan and Lil’ Man, the
focus of the provision is on the regulated party—the “group
health plan or . . . health insurance issuer”—and the
diagnostic test “provider” is only the object of the obligation.
Accordingly, § 3202(a)(2) of the CARES Act does not
contain rights-creating language that would evince
Congress’s intent to create a private right of action for
providers to sue insurers.
    Saloojas relies heavily on a single district court’s
decision from the Southern District of Texas which initially
relied on § 3202(a)’s mandatory reimbursement language to
find an implied private right of action under the CARES Act,
Diagnostic Affiliates of Northeast Hou, LLC v. United
Healthcare Services, Inc., No. 2:21-CV-00131, 2022 WL
214101 (S.D. Tex. Jan. 18, 2022); however, that court
ultimately reversed course. Diagnostic Affiliates of Ne. Hou,
LLC v. Aetna, Inc., No. 2:22-CV-00127, 2023 WL 1772197
(S.D. Tex. Feb. 1, 2023). Although no circuit court has
addressed this question, we note that every district court that
10     SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.

has ruled on this issue has concluded that there is no private
right of action under § 3202 of the CARES Act. 2 We agree.
     Our conclusion is reinforced by other provisions of the
CARES Act and FFRCA that lay out enforcement
mechanisms. See Logan, 722 F.3d at 1172 (“Where a
statutory scheme contains a particular express remedy or
remedies, ‘a court must be chary of reading others into it.’”
(quoting TAMA, 444 U.S. at 19)). Section 3202(b) of the
CARES Act authorizes the Secretary of Health and Human
Services to impose a monetary penalty on any provider that
fails to publicly post its cash price. That Congress chose to
include an enforcement mechanism in the CARES Act that
is limited to actions by the Secretary against a provider of
testing services cuts strongly against a finding of intent to
create a private remedy for those providers. See Sandoval,
532 U.S. at 289 (“Nor do the methods that § 602 goes on to
provide for enforcing its authorized regulations manifest an
intent to create a private remedy; if anything, they suggest
the opposite.”). Moreover, the CARES Act was passed soon
after FFCRA and expands on the requirements in § 6001(a)
of FFCRA. Section 6001 of FFCRA contains enforcement
and implementation provisions for the Secretary of various
agencies—Health and Human Services, Labor, and the
Treasury. FFCRA § 6001(b), (c). Again, the fact that these
provisions provide an enforcement mechanism but only
through the Secretaries suggests a lack of congressional

2
 See, e.g., Murphy Med. Assocs., LLC v. Cigna Health & Life Ins. Co.,
No. 3:20-CV-1675, 2022 WL 743088 (D. Conn. Mar. 11, 2022); GS
Labs, Inc. v. Medica Ins. Co., No. 21-CV-2400, 2022 WL 4357542 (D.
Minn. Sept. 20, 2022); BCBSM, Inc. v. GS Labs, LLC, No. 0:22-CV-
00513, 2023 WL 2044329, at *2–4 (D. Minn. Jan. 30, 2023); Carr v.
Kabbage, Inc., No. 1:22-CV-01249, 2023 WL 3150084, at *4 (N.D. Ga.
Mar. 31, 2023) (collecting cases).
      SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC.    11

intent to create a private right of action for providers. See
Sandoval, 532 U.S. at 289. Saloojas correctly points out that
nothing in the language of the statute shows an intent to deny
a remedy, but that statutory silence is not enough. As we
explained in Lil’ Man, “[a] statute must also display an intent
to create a private remedy in order to create an implied right
of action.” 5 F.4th at 959. We therefore hold that the
CARES Act does not grant a private right of action to a
provider of COVID-19 diagnostic testing to enforce § 3202.
                              V.
    “Without [statutory intent], a cause of action does not
exist and courts may not create one, no matter how desirable
that might be as a policy matter, or how compatible with the
statute.” Sandoval, 532 U.S. at 286–87. Because the district
court properly dismissed Saloojas’s claims, we affirm.
   AFFIRMED.