DocketNumber: Civil Action No. H-18-1496
Citation Numbers: 364 F. Supp. 3d 693
Judges: Hittner
Filed Date: 3/11/2019
Status: Precedential
Modified Date: 7/25/2022
Pending before the Court is Plaintiffs' Motion to Remand (Document No. 6). Having considered the motion, submissions, and applicable law, the Court determines the motion should be granted in part and denied in part.
I. BACKGROUND
This is a dispute arising from a contract to provide healthcare services. Plaintiffs Mohamed Shalaby, M.D. and Mohamed Shalaby, M.D.P.A. (collectively, "Shalaby") allegedly operated Plaintiff Clear Lake Cardiovascular Care, P.A. ("CLCC") as a cardiology practice with Defendant Ahmed Ahmed, M.D. ("Ahmed"). Shalaby and CLCC (collectively, "Plaintiffs") allege CLCC had a contract (the "CLCC Contract") with Defendants Universal American Corporation ("Universal") and Universal's wholly-owned subsidiary Heritage Physician Network ("Heritage") (collectively, the "Universal Defendants"). Under the CLCC Contract, Plaintiffs allege Shalaby and Ahmed were to provide healthcare services to patients within the Universal Defendants' network. On May 1, 2017, Plaintiffs allege Ahmed unilaterally effected termination of the CLCC Contract without Plaintiffs' authorization. By August 2017, Plaintiffs allege Ahmed, in a conspiracy with the Universal Defendants, began providing healthcare services to Shalaby's former patients. Plaintiffs further allege the Universal Defendants failed to pay Plaintiffs for all healthcare services provided under the CLCC Contract.
Based on the foregoing, on April 4, 2018, Plaintiffs filed this lawsuit against Ahmed and the Universal Defendants in the 157th District Court of Harris County, Texas. Plaintiffs bring claims for breach of contract, tortious interference with contract, breach of fiduciary duty, ultra vires conduct, and conspiracy. On May 9, 2018, the Universal Defendants removed the case to this Court under the federal officer statute,
II. LAW & ANALYSIS
Plaintiffs contend the Court should remand the case to state court and should further award Plaintiffs attorney fees and costs. The Court addresses each contention in turn.
A. Remand
Plaintiffs contend the Court should remand the case to state court because the Court lacks subject matter jurisdiction. The Universal Defendants contend the Court has subject matter jurisdiction under the federal officer statute. Federal *696courts are of "limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am. ,
To remove a case under the federal officer statute, a defendant must show: (1) the defendant "is a person within the meaning of the statute"; (2) the defendant "acted pursuant to a federal officer's directions"; (3) "a causal nexus exists between its actions under color of federal office and the plaintiff's claims"; and (4) the defendant has "a colorable federal defense." City of Walker v. La. through Dep't of Transp. & Dev. ,
The Universal Defendants contend they acted pursuant to the directions of Centers for Medicare & Medicaid Services ("CMS"). Plaintiffs do not dispute CMS qualifies as a federal officer and instead contend the Universal Defendants fail to show they acted pursuant to the directions of CMS. A defendant acts pursuant to a federal officer's directions when the defendant serves "to assist, or to help carry out, the duties or tasks of the federal superior." Watson ,
The Universal Defendants state they are subject to CMS's regulation as Medicare Advantage Organizations ("MAO")
*697Contract does not require the Universal Defendants to directly provide healthcare services and instead permits the Universal Defendants to negotiate and execute private contracts (the "Private Contracts") with private entities that provide healthcare services on the Universal Defendants' behalf. It is undisputed CMS permits the Universal Defendants to administer healthcare services via the Private Contracts "with limited CMS oversight."
Plaintiffs' allegations as to the acts that form the basis for this suit relate to conduct under one of the Private Contracts-the CLCC Contract-and concern whether the Universal Defendants, inter alia , failed to make proper payments to Plaintiffs under the CLCC Contract and improperly terminated the CLCC Contract. Plaintiffs do not make any allegation as to conduct under the CMS Contract. The Universal Defendants do not identify any direct and detailed control by CMS regarding Plaintiffs' allegations as to the acts that form the basis for this suit. The Universal Defendants do not show they assisted or helped to carry out the duties or tasks of CMS. The Court finds the Universal Defendants fail to show they acted pursuant to a federal officer's directions.
*698B. Attorney Fees
Plaintiffs contend the Court should award Plaintiffs attorney fees and costs under
In support of removal, the Universal Defendants invoked the federal officer statute. The United States Court of Appeals for the Fifth Circuit has not addressed whether the federal officer statute permits removal by a MAO on the basis of the MAO's contractual relationship with CMS, and other jurisdictions have reached differing results.
III. CONCLUSION
Accordingly, the Court hereby
ORDERS that Plaintiffs' Motion to Remand (Document No. 6) is GRANTED IN PART and DENIED IN PART. The motion is granted as to Plaintiffs' request for the case to be remanded to state court. The motion is denied as to Plaintiffs' request for attorney fees and costs. The Court further
ORDERS that this case is hereby REMANDED to the 157th District Court of Harris County, Texas.
MAOs are private insurers who contract with CMS to administer Medicare benefits under Part C of the Medicare Act. 42 U.S.C. § 1395w-27.
Part C of the Medicare Act, unlike Parts A and B, permits individuals to receive Medicare benefits through private health-insurance plans. 42 U.S.C. § 1395w-21.
The United States Court of Appeals for the Fifth Circuit has not addressed whether the federal officer statute permits removal by a MAO on the basis of the MAO's contractual relationship with CMS, and other jurisdictions have reached differing results. Compare Ohio State Chiropractic Ass'n v. Humana Health Plan Inc. ,
Response to Motion to Remand , Document No. 11 at 6 [hereinafter Response ]; see
Response , supra note 4, at 6; see 42 U.S.C. § 1395w-25(b).
The Court notes the Universal Defendants cite to Beaumont Foot Specialists, Inc. v. United Healthcare of Texas, Inc. , No. 1:15-CV-216,
Plaintiffs further contend the federal officer statute is not satisfied because the Universal Defendants cannot demonstrate a causal nexus or a colorable federal defense. However, in light of the Court's holding, the Court need not address these contentions.
The Court notes the Universal Defendants contend "removal was also proper under
See supra note 3.