Court Opinion

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Date Created: 2015-10-13 21:57:04.556658+00
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Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

12-23-2004

Pascack Valley Hosp v. Local 464A UFCW
Precedential or Non-Precedential: Precedential

Docket No. 03-4196

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                       PRECEDENTIAL               WALLACE, Circuit Judges*

   UNITED STATES COURT OF                          (Filed: November 1, 2004)
           APPEALS
    FOR THE THIRD CIRCUIT                   Shea H. Lukacsko
          __________                        Keith R. McMurdy (Argued)
                                            Grotta, Glassman & Hoffman
            No. 03-4196                     75 Livingston Avenue
            __________                      Roseland, NJ 07068

 PASCACK VALLEY HOSPITAL,                   John Sydlar
           INC.;                            Maloof, Lebowitz, Connahan & Oleske
                                            127 Main Street
                                            Chatham, NJ 07928
                  v.
                                            Counsel for Appellant
 LOCAL 464A UFCW WELFARE
   REIMBURSEMENT PLAN                       John M. Agnello
                                            Kerrie R. Heslin
    Pascack Valley Hospital, Inc.,          Carella, Byrne, Bain, Gilfillan,
                                             Cecchi, Stewart & Olstein
                            Appellant       5 Becker Farm Road
                                            Roseland, NJ 07068

 On Appeal From The United States           Michael T. Anderson (Argued)
          District Court                    Davis, Cowell & Bowe
  For The District Of New Jersey            1701 K Street, N.W.
   (D.C. Civil No. 02-cv-05974)             Suite 210
                                            Washington, DC 20006

District Judge: The Honorable Dennis        Counsel for Appellee
            M. Cavanaugh
             __________

       Argued June 16, 2004
           __________
                                              *
                                                 The Honorable J. Clifford Wallace,
                                            Senior Circuit Judge for the United
    Before: ALITO, SMITH, and
                                            States Court of Appeals for the Ninth
                                            Circuit, sitting by designation.

                                        1
               AMENDED
                                                                       I.
                OPINION
                                                           The Plan is an “employee welfare
                                                   benefit plan” as defined by ERISA. 29
                                                   U.S.C. § 1002(1). 1      The Plan is a
SMITH, Circuit Judge.
                                                   reimbursement plan only; it reimburses
         This case presents a question of          participants and beneficiaries for out-of-
jurisdiction under the civil enforcement           pocket medical expenses but does not
provision of the Employee Retirement               itself provide medical care.
Income Security Act (“ERISA”), 29
                                                          MagNet, Inc. is an independent
U.S.C. § 1132(a). Pascack Valley Hospital
                                                   consultant. MagNet has organized a
(the “Hospital”) sued the United Food and
                                                   network of hospitals that have agreed to
Commercial Workers International Union
                                                   accept discounted payment for medical
Local 464A, AFL-CIO Group
                                                   services provided to beneficiaries of group
Reimbursement Welfare Plan (the “Plan”)
                                                   health plans in return for the plans’
in state court for breach of contract. The
                                                   promise to encourage beneficiaries to use
Plan removed the case to federal district
                                                   network hospitals. Network hospitals do
court and moved for summary judgment.
                                                   not contract directly with the plans.
The Hospital moved to remand. The
                                                   Instead, MagNet enters into separate
District Court held that the Hospital’s
                                                   contracts with individual plans, and
breach of contract claims against the Plan
                                                   separate contracts with individual
were completely pre-empted by ERISA
                                                   hospitals.
and therefore raised a federal question
supporting removal under 28 U.S.C. §                      Around 1995, the Plan entered into
1441(a). We hold that, under the well-
pleaded complaint rule, the Hospital’s
complaint does not present a federal                 1
                                                        An ERISA Plan is a legal entity that
question that would support removal. We
                                                   can sue and be sued. 29 U.S.C. §
further hold that the Hospital’s state law
                                                   1132(d)(1). Accordingly, the term
breach of contract claims are not
                                                   “Plan” refers not only to the defendant in
completely pre-empted by ERISA’s civil
                                                   the underlying lawsuit and the appellee
enforcement provision because the
                                                   before this Court, but also to the
Hospital could not have brought its claims
                                                   underlying “[r]ules governing collection
under ERISA. We will therefore vacate
                                                   of premiums, definition of benefits,
the judgment of the District Court and
                                                   submission of claims, and resolution of
remand to that court with instructions that
                                                   disagreements over entitlement to
it, in turn, remand these proceedings to the
                                                   services” that make up an employee
state court whence they came.
                                                   welfare plan. Pegram v. Herdrich, 530
                                                   U.S. 211, 223 (2000).

                                               1
a “Subscriber Agreement” with MagNet.                 reimbursement rate and that
In 1996, the Hospital entered into a                  Network Hospital is then
“Network Hospital Agreement” with                     entitled to bill and collect
MagNet. Section 2.1 of the Subscriber                 f r o m S u b s c r i b e r a nd
Agreement governs “Hospital payment,”                 Eligib le Person its
and provides that the discounted rate                 customary rate for services
offered by the Hospital will be forfeited             rendered. If Subscriber fails
unless claims are timely paid:                        to make the payment, the
                                                      Network Hospital may
      Subscriber . . . shall pay
                                                      pursue any remed ies
      Network Ho spitals for
                                                      available against Subscriber
      Covered Services furnished
                                                      and Eligible Person.
      to Eligible Persons.
                                                        In 1999, the Hospital provided
      Pursuant to a valid
                                                medical services to Kimberly Rovetto and
      assignment from Eligible
                                                Betty Psaras. Both Psaras and Rovetto
      Person, Subscriber . . . shall
                                                were “Eligible Persons” under the
      dir ectly pa y N e t w o rk
                                                Subscriber Agreement, and the medical
      H ospitals for Covered
                                                services provided to Psaras and Rovetto
      S e r v ic e s p r o v i d e d to
                                                were “Covered Services” under the
      Eligible Persons within
                                                Subscriber Agreement.       The Hospital
      thirty (30) days after date of
                                                alleges that the Plan failed to pay the
      receipt of submitted Clean
                                                Hospital for the services rendered to
      Claims. . . .
                                                Psaras and Rovetto according to the terms
      For other non-clean claims,               of the Subscriber Agreement.           The
      payment shall be made                     Hospital contends that claims for those
      within thirty (30) days of                services were properly submitted on April
      receipt of all records and                15, 1999, and October 5, 1999. The
      other information necessary               Hospital further contends that it received
      for proper claims                         payment on these claims at the discounted
      adjudication.                             rate on June 8, 1999, and November 22,
                                                1999, respectively. According to the
      ...
                                                Hospital’s interpretation of § 2.1 of the
      Wh ere     o b l i g a ted, if            Subscriber Agreement, the Plan’s failure
      Subscriber fails to pay                   to pay these claims within thirty days of
      within the appropriate time               receipt effected a forfeiture of the
      f ra m e, the Subscriber                  discounted rate provided in the Network
      acknowledges that it will                 Hospital Agreement.        The Hospital
      lose the benefit of the                   therefore seeks to recover the allegedly
      MagNet discounted                         forfeited discount from the Plan.

                                            2
        On October 23, 2002, the Hospital         question. The District Court heard oral
filed suit in the Superior Court of New           argument on the parties’ motions on
Jersey.                                           September 25, 2003. The next day, on
                                                  September 26, 2003, the District Court
The Complaint alleges that the Hospital is
                                                  issued an Opinion and Order granting the
a third-party beneficiary to the Subscriber
                                                  Plan’s motion for summary judgment,
Agreement between MagNet and the Plan,
                                                  denying the Hospital’s cross-motion to
under which the Plan “became obligated to
                                                  remand, and dismissing the complaint
pay [the Hospital] for eligible medical
                                                  without prejudice. The District Court’s
services provided by [the Hospital],” and
                                                  two-page Opinion and Order states in
“was required to comply with certain terms
                                                  relevant part:
and conditions of [the Hospital’s] contract
with MagNet [i.e., the Network Hospital                          Defendant believing
Agreement], requiring payment in the time               that Plaintiff’s state law
period specified in said contract.” The                 c la im s are completely
two-count complaint alleges that the Plan               preempted by [ERISA] in
breached this contract by improperly                    that Plaintiff now stands in
taking a discount on the services provided              the shoes of the Plan’s
to Psaras and Rovetto despite the Plan’s                beneficiaries as assignee,
failure to make timely payment under the                and therefore Defendant
Subscriber Agreement. 2                                 believes the facts show it is
                                                        entitled to judgment as a
       The Plan removed the case to the
                                                        matter of law; and
District Court. Thereafter, the Plan moved
for summary judgment and the Hospital                           Plaintiff believing the
cross-moved to remand the case to state                 action is not preempted by
court. The parties’ motions focused on                  ERISA since Plaintiff is not
whether, under the doctrine of “complete                a participant or beneficiary
pre-emption,” the Hospital’s state law                  under ERISA and therefore
breach of contract claims raised a federal              there is no federal law
                                                        claim, and therefore the
                                                        matter should be remanded
  2                                                     to the state court; and
     The Plan incorrectly states that
“[t]he Hospital’s complaint only claims                        This Court being in
unjust enrichment.” Appellee’s Br. at 2,                agreement with and adopts
21-22. Although the Complaint does                      the reasoning of counsel for
allege that the Plan “has been unjustly                 Defendant as stated on the
enriched to the detriment of [the                       record, and further rejects
Hospital],” the Complaint explicitly                    the arguments put forth by
alleges that the Plan “breached” its                    counsel for Plaintiff; and
contractual obligations to the Hospital.

                                              3
               This Court agrees                         declined to do so and instead filed this
        with and adopts the analysis                     appeal.
        and holding as set forth in
                                                                 28 U.S.C. § 1291 provides this
        Charter Fairmount Institute,
                                                         Court with jurisdiction over a final order
        Inc. v. Alta H ealth
                                                         dismissing a complaint as completely
        Strategies, 835 F. Supp.
                                                         pre-empted.      DiFelice v. Aetna U.S.
        233; and
                                                         Healthcare, 346 F.3d 442, 445 (3d Cir.
                This Court being                         2003).     “Generally, an order which
        satisfied that [the doctrine of                  dismisses a complaint without prejudice is
        com plete preem ption]                           neither final nor appealable because the
        having been met in this                          deficiency may be corrected by the
        case; and                                        plaintiff without affecting the cause of
                                                         action.” Borelli v. City of Reading, 532
               As this case falls
                                                         F.2d 950, 951 (3d Cir. 1976) (per curiam). 3
        with in t h e “ c o m p l e te
                                                         If the plaintiff elects to stand on the
        preemption” exception to
                                                         dismissed complaint, however, the order of
        the well pleaded complaint
                                                         dismissal is final and appealable. Id. at
        doctrine, removal to federal
                                                         951-52. At oral argument, counsel for the
        court was proper, and
                                                         Hospital declared the Hospital’s intention
        remand to state court would
                                                         to forego any ERISA claim it may have
        be inappropriate . . . .
                                                         and to stand on its complaint. Counsel’s
                                                         declaration is sufficient to render the
                                                         District Court’s order final and appealable.
(Footnote omitted). The Hospital filed a
                                                          Remick v. Manfredy, 238 F.3d 248, 254
timely notice of appeal on October 22,
                                                         (3d Cir. 2001). This Court exercises
2003.
                                                         plenary review over a district court’s
                       II.                               exercise of jurisdiction and order of
                                                         dismissal. DiFelice, 346 F.3d at 445;
         Before turning to the District
Court’s removal jurisdiction, we must first
address our own appellate jurisdiction.                    3
                                                                That the District Court also denied
Although the District Court purported to
                                                         the Hospital’s motion to remand does not
grant summary judgment in favor of the
                                                         make the court’s order appealable.
Plan, the District Court actually dismissed
                                                         Caterpillar Inc. v. Lewis, 519 U.S. 61, 74
the H ospital’s complaint without
                                                         (1996) (“An order denying a motion to
prejudice. That disposition allowed the
                                                         remand, ‘standing alone,’ is ‘[o]bviously
Hospital, which emphatically disavows an
                                                         . . . not final and [immediately]
ERISA claim for benefits, to replead its
                                                         appealable’ as of right.” (quoting
c o m p l a i n t u n d e r E R I S A ’ s c i v il
                                                         Chicago, R.I. & P.R. Co. v. Stude, 346
enforcement provision. The Hospital
                                                         U.S. 574, 578 (1954)).

                                                     4
Pryzbowski v. U.S. Healthcare, Inc., 245           may pre-empt the Hospital’s state law
F.3d 266, 268 (3d Cir. 2001).                      claims is not a sufficient basis for removal.
                                                   Franchise Tax Bd., 463 U.S. at 12.4
                    III.
                                                          The Plan argues that the Hospital’s
       A civil action filed in a state court
                                                   claims arise under “the federal common
may be removed to federal court if the
                                                   law” of ERISA. On several occasions, we
claim is one “arising under” federal law.
                                                   have predicated jurisdiction on a plaintiff’s
28 U.S.C. §§ 1331, 1441(a). Under the
                                                   invocation of the federal common law of
“well-pleaded complaint” rule, the plaintiff
                                                   ERISA. Bollman Hat Co. v. Root, 112
is ordinarily entitled to remain in state
court so long as its complaint does not, on
its face, affirmatively allege a federal             4
                                                        Pre-emption under § 514(a) of
claim. Beneficial Nat’l Bank v. Anderson,
                                                   ERISA, 29 U.S.C. § 1144(a), must be
539 U.S. 1, 6 (2003). To support removal,
                                                   distinguished from complete pre-emption
“‘[a] right or immunity created by the
                                                   under § 502(a) of ERISA, 29 U.S.C. §
Constitution or laws of the United States
                                                   1132(a). Only the latter permits removal
must be an element, and an essential one,
                                                   of what would otherwise be a state law
of the plaintiff’s cause of action.’”
                                                   claim under the well-pleaded complaint
Franchise Tax Bd. of Cal. v. Constr.
                                                   rule. Under § 514(a), ERISA supersedes
Laborers Vacation Trust for S. Cal., 463
                                                   state laws that “relate to” an ERISA plan.
U.S. 1, 10-11 (1983) (quoting Gully v.
                                                   29 U.S.C. § 1144(a). Unlike the scope of
First Nat’l Bank in Meridian, 299 U.S.
                                                   § 502(a), which is jurisdictional and
109, 112 (1936)). Federal pre-emption is
                                                   creates a basis for removal to federal
ordinarily a defense to a plaintiff’s suit
                                                   court, § 514(a) merely governs the law
and, as such, does not appear on the face
                                                   that will apply to state law claims,
of a well-pleaded complaint. Anderson,
                                                   regardless of whether the case is brought
539 U.S. at 6; Franchise Tax Bd., 463 U.S.
                                                   in state or federal court. Lazorko v. Pa.
at 12.
                                                   Hosp., 237 F.3d 242, 248 (3d Cir. 2000).
       On its face, the Hospital’s                 Section 514(a), therefore, does not
complaint does not present a federal               permit removal of an otherwise well-
question. Rather, the complaint asserts            pleaded complaint asserting only state
state common law claims for breach of              law claims. Pryzbowski, 245 F.3d at 275
contract.      The complaint does not              (“[W]hen the doctrine of complete
expressly refer to ERISA and the rights or         preemption does not apply, but the
immunities created under ERISA are not             plaintiff’s state claim is arguably
elements, let alone essential elements, of         preempted under § 514(a), the district
the plaintiff’s claims. The possibility—or         court, being without removal jurisdiction,
even likelihood—that ERISA’s pre-                  cannot resolve the dispute regarding
emption provision, 29 U.S.C. § 1144(a),            preemption.” (internal quotation
                                                   omitted)).

                                               5
F.3d 113, 115 (3d Cir. 1997); Airco Indus.                             IV.
Gases, Inc. Div. of the BOC Group, Inc. v.
                                                           Although the we ll-ple a d ed
Teamsters Health & Welfare Pension
                                                   complaint rule would ordinarily bar the
Fund, 850 F.2d 1028, 1033-34 (3d Cir.
                                                   removal of an action to federal court where
1988); N.E. Dep’t ILGWU Health &
                                                   federal jurisdiction is not presented on the
Welfare Fund v. Teamsters Local Union
                                                   face of the plaintiff’s complaint, the action
No. 229 Welfare Fund, 764 F.2d 147, 154-
                                                   may be removed if it falls within the
55 (3d Cir. 1985) (Becker, J., writing for
                                                   narrow class of cases to which the doctrine
himself). These cases, however, do not
                                                   of “complete pre-emption” applies. Aetna
support the Plan’s argument that removal
                                                   Health Inc. v. Davila, 542 U.S. __, No. 02-
is proper because “suits between plans and
                                                   1845, slip op. at 5 (June 21, 2004); Metro.
third parties imp licating ben efits
                                                   Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64
administration ‘arise under’ ERISA’s
                                                   (1987).      As a “corollary of the
federal common law.” Appellee’s Br. at
                                                   well-pleaded complaint rule,” complete
54. Instead, the plaintiffs in these cases
                                                   pre-emption recognizes “that Congress
deliberately invoked federal ERISA
                                                   may so completely pre-empt a particular
jurisdiction. See Bollman Hat, 112 F.3d at
                                                   area that any civil complaint raising this
115 (lawsu it seeking to enf orce
                                                   select group of claims is necessarily
subrogation provision in ERISA plan);
                                                   federal in character.” Taylor, 481 U.S. at
Airco, 850 F.2d at 1031 (amended
                                                   63-64; accord Anderson, 539 U.S. at 8
complaint asserting cause of action for
                                                   (“When the federal statute completely
unjust enrichment under ERISA); ILGWU,
                                                   pre-empts the state-law cause of action, a
764 F.2d at 150, 154-55 (lawsuit seeking
                                                   claim which comes within the scope of
declaratory relief regarding the meaning of
                                                   that cause of action, even if pleaded in
terms in an ERISA plan). As such, their
                                                   terms of state law, is in reality based on
well-pleaded complaints necessarily arose
                                                   federal law.”).
under federal law. Here, the Hospital’s
complaint asserts a state law claim for                   ER ISA’s civil enforc ement
breach of contract, and the federal                mechanism, § 502(a), “is one of those
common law of ERISA does not provide               provisions with such ‘extraordinary
an element—essential or otherwise—of               pre-emptive power’ that it ‘converts an
such a claim. The Plan may be correct              ordinary state common law complaint into
that, in interpreting the Subscriber               one stating a federal claim for purposes of
Agreement, the federal common law of               the well-pleaded complaint rule.’” Davila,
ERISA displaces state law. Nevertheless,           slip op. at 7 (quoting Taylor, 481 U.S. at
potential defenses, even when anticipated          65-66). As a result, state law causes of
in the complaint, are not relevant under the       action that are “within the scope of . . . §
well-pleaded complaint rule. Franchise             502(a)” are completely pre-empted and
Tax Bd., 463 U.S. at 10-12.                        therefore removable to federal court.
                                                   Taylor, 481 U.S. at 66; DiFelice, 346 F.3d

                                               6
at 446. The Supreme Court has recently              to determine whether a plaintiff has
clarified the inquiry in such cases:                artfully pleaded his suit so as to couch a
                                                    federal claim in terms of state law.”
               It follows that if an
                                                    Pryzbowski, 245 F.3d at 274 (internal
       individual brings suit
                                                    quotation omitted).
       complaining of a denial of
       coverage for medical care,                                        A.
       where the individual is
                                                            We conclude that the Hospital
       entitled to such coverage
                                                    could not have brought its claims under §
       only because of the terms of
                                                    502(a) because the Hospital does not have
       an ERISA-regulated
                                                    standing to sue under that statute. Section
       employee benefit plan, and
                                                    502(a) of ERISA allows “a participant or
       where no legal duty (state or
                                                    beneficiary” to bring a civil action, inter
       federal) independent of
                                                    alia, “to recover benefits due to him under
       ERISA or the plan terms is
                                                    the terms of his plan, to enforce his rights
       violated, then the suit falls
                                                    under the terms of the plan, or to clarify
       within the scope of ERISA §
                                                    his rights to future benefits under the terms
       502(a)(1)(B).       In other
                                                    of the plan.” 29 U.S.C. § 1132(a)(1)(B). 5
       words, if an individual, at
                                                    By its terms, standing under the statute is
       some point in time, could
                                                    limited to participants and
       have brought his claim
       under         ERISA         §                beneficiaries.6   Franchise Tax Bd., 463
       502(a)(1)(B), and where
       there is no other
       independent legal duty that                    5
                                                         Section 502(a) provides other causes
       is im p l i c a te d by a                    of action not relevant on this appeal. The
       defendant’s actions, then the                Plan makes no argument that the
       individual’s cause of action                 Hospital could have brought this action
       is completely pre-empted by                  under any other provision of § 502(a).
       ERISA § 502(a)(1)(B).
                                                      6
                                                          A participant is defined as

Davila, slip op. at 8 (internal quotation and               any employee or former
citation omitted).                                          employee of an employer,
                                                            or any member or former
        Accordingly, this case is removable
                                                            member of an employee
only if (1) the Hospital could have brought
                                                            organization, who is or
its breach of contract claim under § 502(a),
                                                            may become eligible to
and (2) no other legal duty supports the
                                                            receive a benefit of any
Hospital’s claim. Id. “[A] federal court
                                                            type from an employee
may look beyond the face of the complaint
                                                            benefit plan which covers

                                                7
U.S. at 27 (“ERISA carefully enumerates           resolve this dispute, however, because
the parties entitled to seek relief under §       there is nothing in the record indicating
502 . . . .”). The parties agree that the
Hospital is nether a participant nor a
beneficiary, and that the Hospital does not
                                                  ILGWU Court expressed “serious doubts
have standing under ERISA to sue in its
                                                  whether [the claimant] could assign
own right.
                                                  along with her substantive rights her
       The parties dispute whether, under         right to sue in federal court,” id., the
the law of this Circuit, the Hospital can         Court could not so hold.
obtain standing under § 502(a) by virtue of               District courts in this Circuit have
an assignment of a claim from a                   disagreed over the scope of ILGWU.
participant or beneficiary.7 We need not          Compare Allergy Diagnostics Lab. v.
                                                  The Equitable, 785 F. Supp. 523, 526-27
                                                  & n.3 (W.D. Pa. 1991) (citing Footnote 6
              employees of such                   of ILGWU for the proposition that
              employer or                         assignees of beneficiaries do not have
              members of such                     standing to sue under § 502(a)), and
              organization, or                    Health Scan, Ltd. v. Travelers Ins. Co.,
              whose beneficiaries                 725 F. Supp. 268, 269-70 (E.D. Pa.
              may be eligible to                  1989) (same), with Commonwealth of
              receive any such                    Pa. Dep’t of Public Welfare v. Quaker
              benefit.                            Med. Care & Survivors Plan, 836 F.
                                                  Supp. 314, 317 (W.D. Pa. 1993)
29 U.S.C. § 1002(7). A beneficiary is “a          (observing that given the facts of
person designated by a participant, or by         ILGWU, Footnote 6 is non-binding dicta
the terms of an employee benefit plan,            in cases involving an actual assignment),
who is or may become entitled to a                and Charter Fairmount Inst., Inc. v. Alta
benefit thereunder.” Id. § 1002(8).               Health Strategies, 835 F. Supp. 233, 238
                                                  (E.D. Pa. 1993) (same).
  7
     In particular, the parties disagree                  Almost every circuit to have
over whether this Court’s opinion in              considered the question has held that a
ILGWU forecloses derivative standing              health care provider can assert a claim
under § 502(a). Though the ILGWU                  under § 502(a) where a beneficiary or
Court denied the claimant’s plan federal          participant has assigned to the provider
question jurisdiction to sue to recoup            that individual’s right to benefits under
paid medical benefits from a second               the plan, see e..g., Tango Transport v.
plan, 764 F.2d at 153, part of the Court’s        Healthcare Fin. Servs., 322 F.3d 888,
rationale was that the claimant had not,          891 (5th. Cir. 2003) (collecting cases),
in fact, assigned her claim to her plan.          but as the issue is not squarely before us,
Id. at 154 n.6. Therefore, while the              we express no opinion on it.

                                              8
that Psaras and Rovetto did, in fact, assign        contract claims, i.e., that the Plan has no
any claims to the Hospital.                         contractual liability absent a valid
                                                    assignment. The Plan’s argument may
        As the party seeking removal, the
                                                    therefore entitle it to judgment on the
Plan bore the burden of proving that the
                                                    Hospital’s breach of contract claims in a
Hospital’s claim is an ERISA claim.
                                                    court of competent jurisdiction. It does
DiFelice, 346 F.3d at 452. Accordingly,
                                                    not, however, convert those breach of
the Plan bore the burden of establishing
                                                    contract claims into derivative claims for
the existence of an assignment. Hobbs v.
                                                    benefits under § 502(a).8
Blue Cross Blue Shield of Ala., 276 F.3d
1236, 1242 (11th Cir. 2001). The Plan                       Nor can we find an actual
concedes that the record contains no                assignment based on any other documents
evidence of an express assignment,                  in the record.
whether oral or written, from either Psaras
                                                    Section 5 of the Summary Plan
or Rovetto to the Hospital. Instead, the
                                                    Description, entitled “How Benefits Will
Plan argues that “[t]he MagNet contract
                                                    Be Paid,” provides: “If you qualify for
itself establishes the Hospital’s claim as an
                                                    hospital care and are entitled to
assignment from the participant.”
                                                    reimbursement, and the hospital has sent
Appellee’s Br. at 25. Essentially, the Plan
                                                    in an assignment executed by you, we will
argues that (1) under the Subscriber
Agreement, “[the Hospital’s] only right to
demand money from the Plan comes from
                                                      8
the participant’s assignment of her right to             The parties vigorously dispute
reimbursement,” Appellee’s Br. at 16, 24;           whether the Subscriber Agreement
(2) therefore, the Hospital must be suing           requires the Hospital to obtain an
on an assignment from Psaras and Rovetto.           assignment before the Plan is obligated
                                                    to make payment. We express no
                                                    opinion on the merits of this dispute.
       The Plan’s argument is a non
                                                    Nor do we express any opinion on other
sequitur.     Whether the Subscriber
                                                    disputes regarding the interpretation of
Agreement requires the Hospital to obtain
                                                    the Subscriber Agreement. For example,
an assignment in order to demand payment
                                                    the Plan argues that there is no direct
from the Plan says nothing about whether
                                                    contractual relationship between itself
an assignment was in fact made. Because
                                                    and the Hospital. The question on appeal
neither Psaras nor Rovetto are parties to
                                                    is whether the Hospital could have
the Subscriber Agreement, that document
                                                    brought its claim under § 502(a). If it
cannot, in and of itself, establish an
                                                    could not, then removal was improper,
assignment of their claims. At best, the
                                                    and the Plan’s arguments on the merits,
Plan’s interpretation of the Subscriber
                                                    including its argument that no contract
Agreement provides an affirmative
                                                    exists, can only be adjudicated in state,
defense to the Hospital’s breach of
                                                    not federal, court.

                                                9
pay the hospital directly . . . .” Thus, the         could not have been brought under the
Plan itself contemplates an independent act          scope of § 502(a) and are not completely
by which a participant or beneficiary                pre-empted by ERISA. E.g., Hobbs, 276
assigns his or her claim to the Hospital.            F.3d at 1243; Ward v. Alternative Health
The record contains no evidence that                 Delivery Sys., Inc., 261 F.3d 624, 627 (6th
Psaras or Rovetto undertook such an act.             Cir. 2001); Harris v. Provident Life &
                                                     Accident Ins. Co., 26 F.3d 930, 933-34
        The Plan offers the certification of
                                                     (9th Cir. 1994).
Kathy Pridmore, the Plan’s Director of
Medical Benefits, to support a finding of                                B.
an assignment. Pridmore broadly declares
                                                            We further conclude that the
that, in her experience, the Plan has
                                                     Hospital’s state law claims are predicated
“consistently followed the claims and
                                                     on a legal duty that is independent of
claim review procedures” contained in the
                                                     ERISA. See Davila, slip op. at 8. The
Summary Plan Description. The Plan
                                                     Hospital’s claims, to be sure, are derived
argues that Pridmore’s declaration
                                                     from an ERISA plan, and exist “only
constitutes evidence of “routine practice”
                                                     because” of that plan. Id. at 11. The crux
that supports an inference of an
                                                     of the parties’ dispute is the meaning of
assignment. See Fed. R. Evid. 406. We
                                                     Section 2.1 of the Subscriber Agreement,
disagree. Pridmore does not declare that
                                                     which governs payment for “Covered
the Plan routinely receives assignments
                                                     Services furnished to Eligible Persons.”
prior to payment. In her recitation of the
                                                     Were coverage and eligibility disputed in
Plan’s “standard procedure for processing
                                                     this case, interpretation of the Plan might
claims,” she does not even mention the
                                                     form an “essential part” of the Hospital’s
execution of assignments by Plan
                                                     claims. Id.
participants or beneficiaries. As such,
Pridmore’s certification cannot establish a                  Coverage and eligibility, however,
routine practice relevant to this appeal, let        are not in dispute. Instead, the resolution
alone satisfy the Plan’s burden of                   of this lawsuit requires interpretation of
establishing federal s ubjec t-matte r               the Subscriber Agreement, not the Plan.
jurisdiction by a preponderance of the               The Hospital’s right to recovery, if it
evidence.                                            exists, depends entirely on the operation of
                                                     third-party contracts executed by the Plan
        Because the Plan has failed to
                                                     that are independent of the Plan itself. Cf.
demonstrate that the Hospital obtained an
                                                     Caterpillar Inc. v. Williams, 482 U.S. 386
assignment from Psaras and Rovetto, we
                                                     (1987) (suit for breach of individual
do not reach the “standing-by-assignment
                                                     employment contract, even if defendant’s
of claim” issue. Therefore, the Plan
                                                     action also constituted a breach of an
cannot demonstrate that the Hospital has
                                                     entirely separate collective bargaining
standing to sue under § 502(a). As a
                                                     agreement, not pre-empted by § 301 of the
result, the Hospital’s state law claims

                                                10
Labor Management Relations Act).                     not fall within § 502(a)(1)(B).”               Id. at
                                                     1050. The court explained:
       We find instructive the Ninth
Circuit’s opinion in Blue Cross of                          [T] he         Providers        are
California v. Anesthesia Care Associates                    a s s e r ti n g c o n t r a c tu a l
Medical Group, Inc., 187 F.3d 1045 (9th                     breaches . . . that their
Cir. 1999). In that case, the court held that               patient-assignors could not
claims asserted by health care providers                    assert: the patients simply
against a health care plan for breach of                    are not parties to the
their provider agreements were not                          provider agreements
completely pre-empted under ERISA. Id.                      between the Providers and
at 1051-52.      The court reached this                     Blue Cross. The dispute
conclusion notwithstanding “the fact that                   here is not over the right to
these medical providers obtained                            payment, which might be
assignments of benefits from beneficiaries                  said to depend on the
of ERISA-covered health care plans.” Id.                    patients’ assignments to the
at 1047, 1052.                                              Providers, but the amount,
                                                            or level, of payment, which
       The litigation in Anesthesia Care
                                                            depends on the terms of the
arose from a fee dispute between four
                                                            provider agreements.
health care providers and Blue Cross. Id.
at 1048. Blue Cross had entered into
“provider agreements” with physicians in
                                                     Id. at 1051 (first emphasis added).
which Blue Cross agreed to identify the
                                                     Because the Providers asserted “state law
providers in the information it distributed
                                                     claims arising out of separate agreements
to beneficiaries of the plan and to direct
                                                     for the provision of goods and services,”
beneficiaries to those providers. In return,
                                                     the court found “no basis to conclude that
the providers agreed to accept payment for
                                                     the mere fact of assignment converts the
services rendered to ben eficiaries
                                                     Providers’ claims into claims to recover
according to specified fee schedules.
                                                     benefits under the terms of an ERISA
When Blue Cross attempted to change the
                                                     plan.” Id. at 1052.9
fee schedules, the providers filed a class
action in state court alleging a breach of
the provider agreements. Id. at 1049.                  9
                                                          The reasoning in Anesthesia Care
       The Ninth Circuit held that “the              was followed in Orthopaedic Surgery
Providers’ claims, which arise from the              Associates of San Antonio, P.A. v.
terms of their provider agreements and               Prudential Health Care Plan, Inc., 147
could not be asserted by their patient-              F. Supp. 2d 595 (W.D. Tex. 2001). The
assignors, are not claims for benefits under         facts in Orthopaedic Surgery are nearly
the terms of ERISA plans, and hence do               identical to this case. In Orthopaedic
                                                     Surgery, health care providers entered

                                                11
       The facts of this case are similar to        the [Subscriber Agreement].” Id. at 1051.
Anesthesia Care in important respects: (1)
the Hospital’s claims in this case arise
from the terms of a contract—the
Subscriber Agreement— that is allegedly                                 C.
independent of the Plan; (2) the
                                                            We have not overlooked the
participants and beneficiaries of the Plan
                                                    apparent convergence between the
do not appear to be parties to the
                                                    Hospital’s breach of contract claim and a
Subscriber Agreement; and (3) “[t]he
                                                    claim for benefits under § 502(a). Because
dispute here is not over the right to
                                                    the Plan is a reimbursement plan, the
payment, which might be said to depend
                                                    payments made to the Hospital are the
on the patients’ assignments to the
                                                    benefits received by Psaras and Rovetto
[Hospital], but the amount, or level, of
                                                    under the Plan. As a result, it would
payment, which depends on the terms of
                                                    appear that any claims the Hospital could
                                                    have obtained by assignment from Psaras
                                                    and Rovetto would be for the same amount
into contracts with a healthcare plan,              as the breach of contract claims that are
Prudential. Under the contracts,                    the subject of this appeal. Moreover, had
Prudential agreed to pay the providers for          the Hospital successfully sued Psaras and
services rendered to beneficiaries of the           Rovetto for the payments due, it would
plan. When Prudential allegedly paid the            appear that any claims for reimbursement
providers less than the agreed upon                 that Psaras and Rovetto would have
amount, the providers sued for breach of            against the Plan would be claims for
the physician agreements. Orthopaedic               benefits under § 502(a). Indeed, one of the
Surgery, 147 F. Supp. 2d at 597. The                principal reasons why courts have allowed
District Court in Orthopaedic Surgery               participants and beneficiaries to assign
remanded the case to state court,                   their claims under § 502(a) is to avoid the
concluding that § 502(a) did not                    necessity of providers suing patients in the
completely pre-empt the providers’                  first instance. See Cagle, 112 F.3d at
claims. Citing Anesthesia Care, the                 1515.
court characterized the providers’ claims
                                                           Nevertheless, the absence of an
as “claim[s] for the amount or level of
                                                    assignment is dispositive of the complete
payment and not the right to payment.”
                                                    pre-emption question.        Although the
Id. at 601. The court rejected
                                                    Hospital “may not defeat removal by
Prudential’s argument that, since the
                                                    omitting to plead necessary federal
medical services that were allegedly
                                                    questions in a complaint,” Franchise Tax
unpaid were provided to participants or
                                                    Bd., 463 U.S. at 22, it is clear that the
beneficiaries of ERISA plans, the
                                                    Hospital is asserting a claim that could not
providers’ claims sought benefits payable
                                                    be asserted under the civil enforcement
under the terms of those plans.

                                               12
provision of ERISA. It may very well be             Pascack Valley Hospital, Inc. v. Local
that the Hospital’s breach of contract claim        464A
against the Plan will fail under state law,
                                                    No. 03-4196
or that the Hospital’s state law claims are
pre-empted under § 514(a). These matters,           ALITO, Circuit Judge, concurring in the
however, go to the merits of the Hospital’s         judgment.
breach of contract claim, which can only
                                                           I concur in the judgment based on
be adjudicated in state court.
                                                    the decision in N.E. Dept’t ILGWU
                    IV.                             Health & Welfare Fund v. Teamsters
                                                    Local Union No. 229 Welfare Fund, 764
       Under the well-pleaded complaint
                                                    F.2d 147 (3d Cir. 1985). Although there is
rule, the Hospital’s complaint does not
                                                    now substantial contrary authority, we are
present a federal question that would
                                                    bound by prior panel decisions of our
support removal. The complaint does not
                                                    Court until they are overruled.
expressly refer to ERISA or the federal
common law of ERISA, and the rights or                      The Court avoids the question
immunities created under ERISA are not              whether an assignee can assert a claim
elements, let alone essential elements, of          under Section 502(a)(1)(B) of ERISA, 29
the plaintiff’s claims. Moreover, the               U.S.C. § 1132(a)(1)(B), by holding that
Hospital’s state law breach of contract             there is insufficient evidence to support a
claims are not completely pre-empted by             finding that there were assignments in this
ERISA’s civil enforcement provision,                case. I disagree. While the summary
because the Hospital could not have                 judgment record does not contain any
brought its claims under that provision.            express assignments of the claims at issue,
Accordingly, removal in this case was               there is ample evidence to support a
improper, and the order of the District             finding that the claims were assigned to
Court denying remand will be vacated.               the Hospital. What happened here is very
We will remand this case to the District            common. Participants of a health care
Court with instructions that the District           plan received treatment from a provider;
Court, in turn, remand to the Superior              the participants did not pay for those
Court of New Jersey.                                services but instead gave the provider the
                                                    information needed to bill their plan; the
                                                    provider then billed the plan pursuant to a
                                                    contract obligating the plan to pay the
                                                    provider on the assigned claims of
                                                    participants; and the plan paid, albeit at a
                                                    discounted rate. These facts are more than
                                                    sufficient to prove that the claims were
                                                    implicitly assigned to the provider. In
                                                    holding that the summary judgment record

                                               13
is insufficient to prove assignments, the
Court ignores the obvious reality of the
situation.

                                            14