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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-10459
________________________
D.C. Docket No. 1:14-cv-24098-UU
GABLES INSURANCE RECOVERY, INC.,
as assignee of South Miami Chiropractic LLC,
Plaintiff - Appellant,
versus
BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC.,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(December 1, 2015)
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Before MARCUS and JILL PRYOR, Circuit Judges and RESTANI, * Judge.
PER CURIAM:
Gables Insurance Recovery, Inc. (“Gables”) appeals the district court’s
omnibus order denying its motion to remand and granting Blue Cross and Blue
Shield of Florida, Inc.’s (“Florida Blue”) motion to dismiss. The district court held
that because the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1132(a)(1)(B), completely preempts Gables’s claims, the court had
subject matter jurisdiction. The district court then dismissed Gables’s claims
without prejudice for failure to exhaust ERISA administrative remedies. Gables
argues on appeal that the district court erred in determining there was complete
preemption. After careful consideration and with the benefit of oral argument, we
conclude that the district court had subject matter jurisdiction, and we affirm the
district court’s judgment.
I.
This case arises out of a dispute between a healthcare provider, South Miami
Chiropractic, LLC, and an insurer, Florida Blue. South Miami Chiropractic
provided services to an insured under a Florida Blue health insurance plan. The
terms of Florida Blue’s insurance contract with its insured govern its payment to
medical providers for services they provide to its insureds. When South Miami
*
Honorable Jane A. Restani, Judge for the United States Court of International Trade,
sitting by designation.
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Chiropractic sought payment from Florida Blue, the insurer failed to pay. South
Miami Chiropractic then assigned its right to payment to Gables, which sought to
collect from Florida Blue.
Gables sued Florida Blue in state court, alleging six causes of action. The
complaint began by reciting the “facts common to all causes of action.” Compl.
¶¶ 1-13 (Doc. 1-2).1 As pled, the case arose out of Florida Blue’s breach of its
common law duties under the health insurance contract with its insured, as well as
other express and implied agreements between South Miami Chiropractic and
Florida Blue. Gables maintained that it could pursue its claims both as the
“successor in interest to the rights of the medical provider as an intended third
party beneficiary of the pertinent health insurance contract” and also based on
agreements directly between South Miami Chiropractic and Florida Blue. Id. ¶ 4.
Gables expressly disclaimed that it was seeking relief under ERISA, asserting that
it was “bring[ing] this action based on state claims only.” Id. ¶ 6.
Counts I and III of the complaint were essentially the same; they alleged a
breach of contract based on Florida Blue’s failure to pay South Miami Chiropractic
under the health insurance plan. Gables alleged that Florida Blue had issued a
health insurance policy to its insured and agreed to pay providers, like South
Miami Chiropractic, for services rendered to the insured. Based on this obligation,
1
Citations to “Doc.” refer to docket entries in the district court record in this case.
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Gables alleged, South Miami Chiropractic was an “intended third party beneficiary
of the health insurance contract between [Florida Blue] and the patient/insured.”
Id. ¶ 17; see also id. ¶¶ 41, 47. Gables also alleged that at the time South Miami
Chiropractic provided the services, the insured was covered by “the insurance
contract between the insured[] and [Florida Blue]” and that South Miami
Chiropractic obtained all necessary authorizations from Florida Blue before
treating the insured. Id. ¶¶ 19-20; see also id. ¶¶ 41-43. After Florida Blue
allegedly failed to pay according to the insurance policy, Gables sought in Counts I
and III to recover as assignee of South Miami Chiropractic’s third party
beneficiary rights.
In Count II, Gables alleged that Florida Blue breached an oral contract with
South Miami Chiropractic. This count, pled in the alternative, incorporated by
reference the facts common to all causes of action and several facts alleged in
Count I. The allegations incorporated by reference included that South Miami
Chiropractic was a third party beneficiary of the health insurance contract between
Florida Blue and the insured and also that the insured was eligible for benefits
under the insurance contract. Gables further alleged that South Miami
Chiropractic contacted Florida Blue to confirm coverage “under the subject health
care plan” and that Florida Blue agreed to pay South Miami Chiropractic for
services provided to the insured because the insured “was covered under the health
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care plan.” Id. ¶¶ 31-32. Gables claimed that Florida Blue’s failure to pay
breached the oral contract created during that communication.
Gables’s remaining claims for quantum meruit, open account, and account
stated incorporated by reference its allegations in Counts I, II, and III that Florida
Blue failed to pay amounts owed pursuant to its health insurance contract with the
insured and that, during communications confirming coverage, Florida Blue orally
agreed that there was coverage under the health insurance policy and thus it would
pay for service.
Florida Blue removed this action to federal court based on federal question
jurisdiction, claiming that ERISA governed the claims and completely preempted
Gables’s complaint. After removal, Florida Blue moved to dismiss the complaint,
contending that South Miami Chiropractic had failed to exhaust its administrative
remedies as mandated under ERISA. Gables opposed the motion to dismiss and
moved to remand the case to state court. The district court granted Florida Blue’s
motion to dismiss, denied Gables’s motion to remand, and dismissed the action
without prejudice. Although Gables brought only state law claims, the district
court held that ERISA complete preemption applied and therefore federal question
jurisdiction existed. The court also found that Gables had failed to exhaust
administrative remedies. This appeal followed.
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II.
On appeal, Gables argues that the district court erred in determining that
there was complete preemption and thus federal question jurisdiction. Gables does
not challenge the district court’s finding that it failed to exhaust administrative
remedies. Thus, we consider only whether Gables’s causes of action were
completely preempted. “We review de novo denials of motions to remand as well
as preemption determinations.” Conn. State Dental Ass’n v. Anthem Health Plans,
Inc., 591 F.3d 1337, 1343 (11th Cir. 2009).
Generally, a complaint alleging only state law claims is not removable to
federal court based on federal subject matter jurisdiction. Id. “The test ordinarily
applied for determining whether a claim arises under federal law is whether a
federal question appears on the face of the plaintiff’s well-pleaded complaint.” Id.
We have recognized that “[c]omplete preemption is a narrow exception to the well-
pleaded complaint rule and exists where the preemptive force of a federal statute is
so extraordinary that it converts an ordinary state law claim into a statutory federal
claim.” Id.
There is no dispute in this case that Gables pled only state law causes of
action. 2 The question before us is whether these state law claims are completely
2
We are not bound by the labels used in the complaint or Gables’s disclaimer that ERISA
does not govern its claims. “[M]erely referring to labels affixed to claims to distinguish between
preempted and non-preempted claims is not helpful because doing so would elevate form over
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preempted by section 502(a) of ERISA. Section 502(a) creates a private right of
action for a plan participant or beneficiary to recover benefits due under the terms
of a health insurance plan. 29 U.S.C. § 1132(a). This section “has such
‘extraordinary’ preemptive power that it ‘converts an ordinary state common law
complaint into one stating a federal claim for purposes of the well-pleaded
complaint rule.’ ” Conn. State, 591 F.3d at 1344 (quoting Metro. Life Ins. Co. v.
Taylor, 481 U.S. 58, 65 (1987)). Thus, even though pled as state common law
claims, if Gables’s “causes of action [are] within the scope of the civil enforcement
provisions of § 502(a)[,] [they are] removable to federal court.” Taylor, 481 U.S.
at 66.
To determine whether a cause of action is within the scope of section 502(a),
we apply the two-part test established in Aetna Health Inc. v. Davila, 542 U.S. 200,
210 (2004). We ask “(1) whether the plaintiff could have brought its claim under
§ 502(a); and (2) whether no other legal duty supports the plaintiff’s claim.” Conn.
State, 591 F.3d at 1345. If we answer these two questions in the affirmative, the
claim is completely preempted. In this case, we consider the two parts of the
Davila test in reverse order.
substance and allow parties to evade the pre-emptive scope of ERISA.” Conn. State, 591 F.3d at
1350 (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 214 (2004)) (internal quotation marks
omitted).
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A.
Gables argues that its claims arise out of a separate duty independent of the
ERISA plan; in other words, they do not depend on whether Florida Blue has a
duty to pay for services under the ERISA plan. We disagree.
Gables essentially brought two types of claims. In Counts I and III, Gables
asserted third party beneficiary claims based on a breach of the underlying ERISA
plan. In Counts II, IV, V, and VI, Gables alleged contractual or quasi-contractual
claims that purportedly are based on Florida Blue’s oral agreements to cover the
services rendered. Neither set of claims arises out of a separate duty independent
of the ERISA plan.
Because Gables’s third party beneficiary claims necessarily depend upon a
breach of the ERISA plan, they do not arise out of a separate duty independent of
the plan. Under Florida law, to succeed as a third party beneficiary on a breach of
contract claim, the plaintiff must prove “(1) existence of a contract; (2) the clear or
manifest intent of the contracting parties that the contract primarily and directly
benefit the third party; (3) breach of the contract by a contracting party; and
(4) damages to the third party resulting from the breach.” Found. Health v.
Westside EKG Assocs., 944 So. 2d 188, 195 (Fla. 2006) (internal quotation marks
omitted). Thus, a necessary element of a third party beneficiary claim is a breach
of the underlying contract. Absent a wrongful denial of benefits under the ERISA
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plan—the contract—Gables cannot succeed on a third party beneficiary breach of
contract claim. Counts I and III do not arise out of a duty independent of the
ERISA plan.
Gables’s claims based on the alleged oral agreement confirming coverage
also are not based upon a legal duty independent of the ERISA plan. In Counts II,
IV, V, and VI, Gables incorporated its general allegations that the insured was
eligible for benefits under the health insurance contract and that Florida Blue
breached its common law duties under that contract. Gables then specifically
alleged that its remaining claims arose when South Miami Chiropractic contacted
Florida Blue “to confirm coverage of the patient and for the subject services under
the subject health care plan,” and Florida Blue agreed “that the patient was covered
under the health care plan.” Compl. ¶¶ 31-32; see also id. ¶¶ 49, 58, 65
(incorporating ¶¶ 31-32). Thus, the complaint expressly tethers Florida Blue’s
preauthorization to its obligations under the ERISA insurance plan. Aside from the
allegation that Florida Blue confirmed coverage under the plan, Gables pled no
specific facts to support a contractual or quasi-contractual duty owed to South
Miami Chiropractic. As pled, Counts II, IV, V, and VI are supported by no other
legal duty; therefore, the second part of the Davila test is satisfied.
B.
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Returning to the first part of the Davila test, whether Gables could have
brought its claim under section 502(a) of ERISA, we must consider whether
Gables’s claims fall within the scope of ERISA and also whether Gables has
standing to sue under ERISA. Conn. State, 591 F.3d at 1350. First, we readily
conclude that Gables’s claims fall within ERISA’s scope. In Davila, the Supreme
Court held that a claim alleging a wrongful denial of coverage under the terms of
an ERISA-regulated employee benefits plan falls within the scope of ERISA. 542
U.S. at 214. And, as explained above, despite Gables’s efforts to distance its
claims from the ERISA plan, each count is based expressly on Florida Blue’s
alleged breach of the ERISA-regulated employee health benefits plan—that is, an
alleged wrongful denial of coverage under the plan.
Second, Gables has standing to sue under ERISA. To maintain an action
under ERISA, a plaintiff must have statutory standing, meaning the plaintiff has
the right to make a claim under section 502(a). See Physicians Multispecialty Grp.
v. Health Care Plan of Horton Homes, Inc., 371 F.3d 1291, 1294 (11th Cir. 2004).
Aside from the Secretary of Labor, ERISA permits only two categories of persons
to sue for benefits: plan beneficiaries and plan participants. 29 U.S.C.
§ 1132(a)(1)(B). “Healthcare providers . . . are generally not ‘participants’ or
‘beneficiaries’ under ERISA and thus lack independent standing to sue under
ERISA.” Physicians Multispecialty Grp., 371 F.3d at 1294.
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There is, however, an exception to this general rule. “[A] healthcare
provider may acquire derivative standing to sue under ERISA by obtaining a
written assignment from a ‘participant’ or ‘beneficiary’ of his right to payment of
medical benefits.” Conn. State, 591 F.3d at 1347. We announced this rule in
Cagle v. Bruner, explaining that nothing in ERISA prohibits a healthcare provider
from acquiring “derivative standing based upon an assignment of rights” from a
participant or beneficiary. 112 F.3d 1510, 1515 (11th Cir. 1997). We recognized
that “the interests of ERISA plan participants and beneficiaries are better served by
allowing provider-assignees to sue ERISA plans” because the providers “are better
situated and financed to pursue an action for benefits owed for their services.” Id.
(internal quotation marks omitted).
Gables readily admits that a provider-assignee would have standing to sue
under the ERISA plan for purposes of complete preemption, but it argues that it
lacks standing under ERISA because it is a sub-assignee and not the healthcare
provider. We have never drawn the line Gables urges us to draw and decline to do
so now. Limiting derivative standing to assignee healthcare providers is
inconsistent with the reasoning underlying our decision in Cagle. Just as nothing
in ERISA’s statutory language prohibits healthcare providers from obtaining
derivative standing through assignment, nothing in the statutory language prohibits
non-healthcare providers from obtaining derivative standing through a sub-
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assignment. See Cagle, 112 F.3d at 1515; see also Tango Transp. v. Healthcare
Fin. Servs. LLC, 322 F.3d 888, 891 (5th Cir. 2003) (explaining that no language in
ERISA “even remotely suggests that such assignments are proscribed or ought in
any way to be limited” (internal quotation marks omitted)). Moreover, “allowing
the health care provider to use an assignee to recover ERISA benefits does nothing
to frustrate the goals or purposes of ERISA.” Tango Transp., 322 F.3d at 893. To
the contrary, allowing a provider to assign the right to bring suit may protect plan
participants by transferring the burden of bringing suit from healthcare providers
who may be unable to collect on denied claims unless they outsource the collection
effort to a third party. Accordingly, consistent with decisions of some of our sister
circuits, we conclude that Gables has derivative standing as an assignee. See id.;
see also Mut. Life Ins. Co. of N.Y. v. Yampol, 840 F.2d 421, 427 (7th Cir. 1988)
(holding that an insurance company assignee of a fiduciary of an ERISA trust has
standing to sue under 29 U.S.C. § 1132(a)(2)); Brown v. Sikora & Assocs., Inc.,
311 F. App’x 568, 571 (4th Cir. 2008) (“[I]t may be that in the proper case
assignees other than health care providers have derivative standing under
ERISA.”).
We acknowledge that, in a series of cases involving one litigious plaintiff,
other circuits have held that derivative standing is limited to “healthcare providers
to whom a beneficiary has assigned his claim in exchange for health care.” Simon
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v. Gen. Elec. Co., 263 F.3d 176, 178 (2d Cir. 2001); accord Simon v. Cyprus Amax
Minerals Health Care Plan, 12 F. App’x 839, 841 (10th Cir. 2001); Simon v.
Belwith Int’l, Inc., 3 F. App’x 363, 364-65 (6th Cir. 2001); Simon v. Value Behav.
Health, Inc., 208 F.3d 1073, 1081-82 (9th Cir. 2000), overruled in part on other
grounds by Odom v. Microsoft Corp., 486 F.3d 541 (9th Cir. 2007); see also Simon
v. Allstate Emp. Grp. Med. Plan, 263 F.3d 656, 658-59 (7th Cir. 2001) (affirming
dismissal on res judicata grounds but noting that other circuits have rejected the
plaintiff’s assertion of derivative standing because he was not a health care
provider). In each of these cases, Stephen Simon alleged that an insured assigned
benefits claims to the healthcare provider, which in turn reassigned the benefits
claims to Mr. Simon. Mr. Simon then repeatedly filed claims against the insurer
that suffered from a variety of legal defects. See Allstate, 263 F.3d at 659
The Ninth Circuit explained in Simon v. Value Behavioral Health, Inc. that it
limited derivative standing to health care providers to avoid “transforming health
benefit claims into a freely tradable commodity.” 208 F.3d at 1081. The Ninth
Circuit expressed concern that recognizing derivative standing beyond the health
care provider “could lead to endless reassignment of claims[] and . . . would allow
third parties with no relationship to the beneficiary to acquire claims solely for the
purpose of litigating them.” Id. We do not share this concern in this case. As we
recognized in Cagle, allowing assignments for the purposes of bringing suit
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generally “facilitates rather than hampers the employee’s receipt of health
benefits” because the assignee likely is better positioned to pursue an action for
benefits. Cagle, 112 F.3d at 1515 (quoting Hermann Hosp. v. MEBA Med. &
Benefits Plan, 845 F.2d 1286, 1289 (5th Cir. 1988), overruled in part on other
grounds by Access Mediquip, L.L.C. v. UnitedHealthcare Ins. Co., 698 F.3d 229,
230 (5th Cir. 2012)(en banc)). And, like the Fifth Circuit in Tango Tranport,
“[w]e need not reach whether all assignees or sub-assignees of plan participants
have standing to sue.” Tango Tranpsort, 322 F.3d at 894. Today, we decide only
that Gables has standing to sue under the ERISA plan as a sub-assignee of the plan
participant.3
III.
Because both parts of the Davila test are satisfied, we hold that Gables’s
claims are completely preempted. Accordingly, the district court properly
exercised jurisdiction over Gables’s complaint on removal from state court and
denied Gables’s motion to remand.
AFFIRMED.
3
Gables also argues that the scope of the assignment from South Miami Chiropractic to
Gables is limited, excluding claims for payment under the ERISA plan, and thus it lacks standing
as an assignee. Gables’s own allegations belie this argument. Gables pled that South Miami
Chiropractic assigned to Gables its “rights and all available causes of action associated with
those rights, to collect benefits under [the health insurance] claim.” Compl. ¶ 25. The alleged
assignment plainly includes South Miami Chiropractic’s right to payment under the ERISA plan,
and the “assignment of the right to payment is enough to create standing.” Conn. State, 591 F.3d
at 1352.
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