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Date: 05-18-2017

Case Style: McCulloch Orthopaedic Surgical Services, LLC, a/k/a Dr. Kenneth E. McCulloch v. Aetna, Inc. d/b/a Aetna Health and Life Insurance Company, et al.

Case Number: 15-2150-CV

Judge: John M. Walker

Court: United States Court of Appeals for the Second Circuit on appeal from the Southern District of New York (New York County)

Plaintiff's Attorney: Kenneth J. McCulloch, pro se

Defendant's Attorney: Edward Wardell and Patricia A. Lee

Description: 19 We consider in this case whether the Employee Retirement
20 Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq.,
21 completely preempts an “out‐of‐network” health care provider’s
22 promissory‐estoppel claim against a health insurer where the
23 provider (1) did not receive a valid assignment for payment under
3 No. 15‐2150‐cv
the health care plan and 1 (2) received an independent promise from
2 the insurer that he would be paid for certain medical services
3 provided to the insured. We hold that ERISA does not completely
4 preempt such a claim.
6 Plaintiff‐appellant McCulloch Orthopaedic Surgical Services,
7 PLLC, a/k/a Dr. Kenneth E. McCulloch (“McCulloch”) filed this
8 action against defendant‐appellee Aetna Inc. and several of its
9 wholly‐owned subsidiaries1 in New York State Supreme Court.
10 McCulloch, an orthopedic surgeon, seeks reimbursement from
11 Aetna for performing two knee surgeries on a patient who is a
12 member of an Aetna‐administered health care plan that is governed
13 by ERISA. McCulloch is an “out‐of‐network” provider under this
14 plan—he does not have a contract with Aetna and is not identified
1 In addition to Aetna Inc., the following subsidiaries were named
as defendants in this action: Aetna Health Inc., Aetna Health and
Life Insurance Company, Aetna Life Insurance Company, and Aetna
Health Insurance Company of New York. We refer to all of the
defendants collectively as “Aetna.”
4 No. 15‐2150‐cv
by Aetna as a participating physician 1 who has agreed to abide by a
2 set fee schedule.
3 Before performing the patient’s surgeries, McCulloch’s office
4 staff called a number listed on the patient’s Aetna insurance card to
5 obtain information about the patient’s coverage. An Aetna
6 representative informed McCulloch’s staff that the patient was
7 covered by a health care plan administered by Aetna, that the plan
8 provided for payment to out‐of‐network physicians, and that the
9 plan covered the surgical procedures that McCulloch would be
10 providing for the patient. The Aetna representative stated that
11 McCulloch would be reimbursed at seventy percent of the usual,
12 customary, and reasonable (“UCR”) rate for the knee surgeries and
13 that this rate would be based on an industry‐standard schedule.2
14 Relying on Aetna’s promise of reimbursement, McCulloch
15 performed the two surgeries and billed Aetna at the UCR rate for a
16 total of $66,048. McCulloch then submitted a health insurance claim
2 McCulloch alleges that he charges UCR rates in accordance with
those established by Ingenix, now known as the
OptumInsight/FAIRPLAN program. Aetna does not dispute that this is
an industry‐standard schedule.
5 No. 15‐2150‐cv
form to Aetna for each 1 surgery (Centers for Medicare and Medicaid
2 Services Form 1500). The claim form has two sections that concern
3 the assignment of payment for medical benefits. First, in Box 13, the
4 insured must authorize the “payment of medical benefits to the
5 undersigned physician . . . for services described below.” The
6 parties do not dispute that the patient signed both of the completed
7 forms submitted by McCulloch. Second, in Box 27, the form asks if
8 the provider will “Accept Assignment?”. The parties also do not
9 dispute that McCulloch checked “yes” in response to this question
10 on the forms.
11 The patient’s health care plan, however, has an anti12
assignment provision, which states that:
13 Coverage may be assigned only with the written consent of
14 Aetna. To the extent allowed by law, Aetna will not accept an
15 assignment to an out‐of‐network provider, including but not
16 limited to, an assignment of:
17  The benefits due under this contract;
18  The right to receive payments due under this
19 contract; or
20  Any claim you make for damages resulting from a
21 breach or alleged breach, of the terms of this
22 contract.
6 No. 15‐2150‐cv
Despite 1 this provision, Aetna reimbursed McCulloch $842.51 for the
2 first surgery and $14,425 for the second surgery, for a total of
3 $15,267.51.
4 On February 17, 2015, McCulloch sued Aetna in New York
5 State court on a single cause of action: promissory estoppel.
6 McCulloch alleged that Aetna had made a clear and unambiguous
7 promise to reimburse him for seventy percent of the UCR rate for
8 both knee surgeries ($46,233.60), that he had reasonably and
9 foreseeably relied on that promise, and that he had been injured as a
10 result. McCulloch sought $30,966.09—the difference between
11 seventy percent of the UCR rate ($46,233.60) and what Aetna had
12 paid him ($15,267.51)—plus interest from August 4, 2011, costs, and
13 other appropriate relief.
14 On March 17, 2015, Aetna timely removed this action to the
15 United States District Court for the Southern District of New York.
16 Aetna invoked federal‐question jurisdiction, asserting that
17 McCulloch’s complaint raised a claim for benefits under an
18 employee welfare‐benefit plan governed by ERISA. McCulloch then
7 No. 15‐2150‐cv
filed a motion to remand 1 the action to state court. On May 11, 2015,
2 the district court (Katherine B. Forrest, J.) issued an opinion and
3 order denying McCulloch’s motion to remand and directing
4 McCulloch to amend his complaint “to assert ERISA cause[s] of
5 action not later than . . . May 25, 2015.” App’x at 233.
6 On May 21, 2015, McCulloch moved for reconsideration of the
7 district court’s order. He requested that the district court either
8 remand this case to state court or enter a final judgment dismissing
9 the action for failure to state a claim under ERISA. McCulloch did
10 not file an amended complaint. On June 8, 2015, the district court
11 denied McCulloch’s motion for reconsideration and, “[i]n light of
12 plaintiff’s refusal to amend,” dismissed this action. McCulloch
13 timely appealed.
15 We review de novo whether a district court has subject matter
16 jurisdiction. Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321,
17 327 (2d Cir. 2011). An action filed in state court may be properly
18 removed by a defendant to federal court in “any civil action . . . of
8 No. 15‐2150‐cv
which the district 1 courts of the United States have original
2 jurisdiction.” 28 U.S.C. § 1441(a). “The district courts shall have
3 original jurisdiction of all civil actions arising under the
4 Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.
5 The defendant, as the party seeking removal and asserting
6 federal jurisdiction, bears the burden of demonstrating that the
7 district court has original jurisdiction. See Montefiore, 642 F.3d at
8 327. Under the “well‐pleaded complaint rule,” a defendant
9 generally may not “remove a case to federal court unless the
10 plaintiffʹs complaint establishes that the case arises under federal
11 law.” Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004) (citation
12 and internal quotation marks omitted). There is, however, an
13 exception to this rule. Id. A defendant may properly remove a state14
law claim when a federal statute “wholly displaces the state‐law
15 cause of action,” such that the claim, “even if pleaded in terms of
16 state law, is in reality based on federal law.” Id. at 207‐08 (citation
17 omitted).
9 No. 15‐2150‐cv
ERISA 1 provides for the wholesale displacement of certain
2 state‐law claims. Pursuant to ERISA § 502(a)(1)(B), a participant or
3 beneficiary may bring an action “to recover benefits due to him
4 under the terms of his plan, to enforce his rights under the terms of
5 the plan, or to clarify his rights to future benefits under the terms of
6 the plan.” ERISA § 502(a)(1)(B), codified at 29 U.S.C. § 1132(a)(1)(B).
7 This civil enforcement scheme “completely preempts any state‐law
8 cause of action that ‘duplicates, supplements, or supplants’ an
9 ERISA remedy.” Montefiore, 642 F.3d at 327 (citation omitted).
10 In Aetna Health Inc. v. Davila, the Supreme Court established a
11 two‐pronged test to determine whether a state‐law claim is
12 completely preempted by ERISA § 502(a)(1)(B) (the “Davila” test).
13 542 U.S. at 209‐10; see Wurtz v. Rawlings Co., 761 F.3d 232, 242 (2d
14 Cir. 2014). The Davila test is conjunctive—a state‐law claim is
15 completely preempted by ERISA only if both prongs of the test are
16 satisfied. Montefiore, 642 F.3d at 328. Under the first prong, the
17 claim must be brought by “an individual [who], at some point in
18 time, could have brought his claim under ERISA § 502(a)(1)(B).”
10 No. 15‐2150‐cv
Davila, 542 at 1 210. In making this determination, we consider: (1)
2 whether the plaintiff is the type of party that can bring a claim
3 pursuant to § 502(a)(1)(B) and also (2) whether the actual claim that
4 the plaintiff asserts can be construed as a colorable claim for benefits
5 pursuant to § 502(a)(1)(B). Montefiore, 642 F. 3d at 328. Under the
6 second prong of the Davila test, the claim must involve “no other
7 independent legal duty that is implicated by a defendant’s actions.”
8 Davila, 542 U.S. at 210.
10 The district court held that McCulloch’s promissory‐estoppel
11 claim was completely preempted by ERISA under the Davila test.
12 The district court found that the first prong of this test was satisfied
13 because McCulloch was assigned the right to receive payment under
14 the plan and because McCullochʹs promissory‐estoppel claim could
15 be construed as a colorable claim for benefits pursuant to §
16 502(a)(1)(B). The district court further found that the second prong
17 of the Davila test was satisfied because the Aetna representative’s
18 oral statements did not give rise to an “independent legal duty” and,
11 No. 15‐2150‐cv
instead, that any duty 1 to reimburse McCulloch “ar[ose] out of the
2 terms and conditions of [the patient’s] plan.” App’x at 243‐44.
3 On appeal, McCulloch argues inter alia that his state‐law claim
4 is not preempted by ERISA because: (1) he did not receive a valid
5 assignment and thus is not the “type of party” that can bring a claim
6 pursuant to § 502(a)(1)(B) and (2) Aetna’s oral statements gave rise
7 to a duty that was distinct and independent from its obligations
8 under the patientʹs health care plan. We agree.
9 I. Davila, Prong 1, Step 1
10 We first must determine whether McCulloch is “the type of
11 party that can bring a claim pursuant to § 502(a)(1)(B).” See
12 Montefiore, 642 F.3d at 328. Aetna argues that, despite the health
13 care plan’s anti‐assignment provision, it has established a “colorable
14 claim” that McCulloch was assigned the patient’s right to payment
15 for medical benefits and that, thus, McCulloch is the type of party
16 that can bring a claim under ERISA. We find this argument
17 unpersuasive. McCulloch—an “out‐of‐network” health care
18 provider who plainly did not have a valid assignment for
12 No. 15‐2150‐cv
payment—is not the type of party 1 who can bring a claim pursuant to
2 § 502(a)(1)(B).
3 Under § 502(a), a civil action may be brought “by a participant
4 or beneficiary” of an ERISA plan to recover benefits due to him
5 under the terms of that plan. See 29 U.S.C. § 1132(a)(1)(B). ERISA
6 defines a beneficiary as “a person designated by a participant, or by
7 the terms of an employee benefit plan, who is or may become
8 entitled to a benefit thereunder.” Id. § 1002(2)(B)(8). Although §
9 502(a) is narrowly construed to permit only the enumerated parties
10 to sue directly for relief, we have “‘carv[ed] out a narrow exception
11 to the ERISA standing requirements’ to grant standing ‘to healthcare
12 providers to whom a beneficiary has assigned his claim in exchange
13 for health care.’” Montefiore, 642 F.3d at 329 (quoting Simon v. Gen.
14 Elec. Co., 263 F.3d 176, 178 (2d Cir. 2001)).
15 In Montefiore Medical Center v. Teamsters Local 272, an “in16
network” hospital brought state‐law claims against a union’s
17 employee benefit plan that was governed by ERISA. 642 F.3d at 324‐
18 25. The hospital sought reimbursement for medical services that it
13 No. 15‐2150‐cv
had provided to beneficiaries 1 of the plan. Id. at 325‐26. We found
2 that the hospital’s state‐law claims were completely preempted by
3 ERISA because, among other things, the hospital had received a
4 valid assignment of the beneficiaries’ right to payment and it was,
5 therefore, the type of party that could bring its claim regarding
6 benefits pursuant to § 502(a)(1)(B). Id. at 328, 333. In making this
7 determination, we noted that the hospital’s reimbursement forms
8 contained a “Y” for “yes” in the space certifying that the beneficiary
9 patients had assigned their claims to the hospital. Id. at 329.
10 Here, McCulloch submitted claim forms to Aetna indicating
11 that the patient had authorized payment of medical benefits to
12 McCulloch and that McCulloch had accepted this assignment from
13 the patient. As we held in Montefiore, this normally would constitute
14 an assignment to the provider of the patient’s right to payment. See
15 Montefiore, 642 F.3d at 329. Unlike in Montefiore, however, the health
16 care plan in this case has an anti‐assignment provision. This
17 provision states that although “[c]overage may be assigned . . . with
14 No. 15‐2150‐cv
the written consent of Aetna[,] 1 . . . Aetna will not accept an
2 assignment to an out‐of‐network provider.” App’x at 280.
3 Based on the plain language of this provision, McCulloch’s
4 acceptance of an assignment was ineffective—a legal nullity. See
5 Allhusen v. Caristo Constr. Corp., 303 N.Y. 446, 452, 103 N.E.2d 891
6 (1952) (holding that a “clear” and “definite” no‐assignment
7 provision “may be construed in no other way but that any
8 attempted assignment of either the contract or any rights created
9 thereunder shall be ‘void’ as against the obligor”); see also Physicians
10 Multispeciality Grp. v. Health Care Plan of Horton Homes, Inc., 371 F.3d
11 1291, 1295 (11th Cir. 2004) (“[W]e are persuaded by the reasoning of
12 the majority of federal courts that have concluded that an
13 assignment is ineffectual if the [ERISA benefit] plan contains an
14 unambiguous anti‐assignment provision.”) (collecting cases).
15 Aetna does not dispute that this provision renders invalid
16 McCulloch’s attempt to enforce the purported assignment. Instead,
17 Aetna argues—and the district court found—that in determining
18 whether preemption applies, we should ignore that the health care
15 No. 15‐2150‐cv
plan prohibits 1 any assignment to McCulloch. The district court
2 noted that “[w]hether the assignment is valid under the terms of the
3 ERISA plan at issue is a question to be decided once an ERISA claim
4 is before the Court” and that the attempted assignment between the
5 patient and McCulloch was “all that [was] required to render
6 [McCulloch] ‘the type of party that can bring a claim pursuant to §
7 502(a)(1)(B)’ for purposes of complete preemption.”3 App’x at 241.
8 The first prong of the Davila test, however, requires that we
9 must assess whether a party has standing to pursue an ERISA claim.
10 See Montefiore, 642 F.3d at 328 n. 7. We have noted that, “[a]bsent a
11 valid assignment of a claim, . . . non‐enumerated parties lack
3 The district court also stated that, “Aetna in fact sent two
payments . . . for [the] surgery directly to [McCulloch] despite the
anti‐assignment provision” which “is sufficient for purposes of the
complete preemption analysis.” App’x at 241. There are several
district court cases in this circuit that have held that where an ERISA
plan either permits assignment with the consent of an insurer or the
plan is ambiguous as to whether assignment is permitted, direct
payment is sufficient to demonstrate a patient’s assignment for
preemption purposes. See, e.g., Neuroaxis Neurosurgical Assocs., PC v.
Cigna Healthcare of N.Y., Inc., No. 11 CIV. 8517 (BSJ) (AJP), 2012 WL
4840807, at *3 (S.D.N.Y. Oct. 4, 2012). Even assuming arguendo that
these cases reach the correct holding, we find that they are not
analogous to the instant case, which involves a benefit plan that
clearly prohibits assignments to out‐of‐network providers.
16 No. 15‐2150‐cv
statutory standing to bring suit under 1 [ERISA] even if they have a
2 direct stake in the outcome of the litigation.” Conn. v. Physicians
3 Health Srvs. of Conn., Inc., 287 F.3d 110, 121 (2d Cir. 2002) (emphasis
4 added); see also Am. Psychiatric Assʹn v. Anthem Health Plans, Inc., 821
5 F.3d 352, 361 (2d Cir. 2016) (“[W]e have allowed physicians to bring
6 claims under § 502(a) based on a valid assignment from a patient.”
7 (emphasis added)).
8 If we were to ignore that the health care plan prohibits an
9 assignment to McCulloch in determining whether his claim is
10 preempted, this would lead to a result that is both unjust and
11 anomalous: McCulloch would be barred from pursuing state‐law
12 claims in state court on preemption grounds and from pursuing an
13 ERISA claim in federal court for lack of standing. McCulloch—and
14 other third‐party providers in similar situations—would be left
15 without a remedy to enforce promises of payment made by an
16 insurer.
17 Such a rule would not further the principal purpose of ERISA
18 to protect plan beneficiaries and participants. As the United States
17 No. 15‐2150‐cv
Department of Labor 1 noted in its amicus brief,4 this risk of non2
payment might lead medical providers to decide not to treat, or to
3 otherwise screen, patients who are participants in certain plans. See
4 Lordmann Enterprises, Inc. v. Equicor, Inc., 32 F.3d 1529, 1533 (11th Cir.
5 1994) (“[H]ealth care providers [must] be able to rely on insurers’
6 representations as to coverage. If ERISA preempts their potential
7 causes of action for misrepresentation, health care providers . . .
8 must either deny care or raise fees to protect themselves against the
9 risk of noncoverage.”); Hospice of Metro Denver, Inc. v. Grp. Health Ins.
10 of Okla., Inc., 944 F.2d 752, 756 (10th Cir. 1991) (“Denying a third11
party provider a state law action based upon misrepresentation by
12 the planʹs insurer in no way furthers the purposes of ERISA.”);
13 Mem’l Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 247‐48 (5th
14 Cir. 1990) (“[D]iscouraging health care providers from becoming
4 This amicus brief was filed in support of McCulloch in a
companion case with identical issues—McCulloch Orthopedic Surgical
Services, PLLC v. United Healthcare Insurance Co. of New York, No. 15‐
2144‐cv. Although the parties ultimately withdrew this case, we
may take judicial notice of the brief. See In re Enter. Mortg.
Acceptance Co., LLC, Securities Litig., 391 F.3d 401, 410 n.8 (2d Cir.
2004) (taking judicial notice of Securities and Exchange Commission
amicus brief in another appeal addressing similar issues).
18 No. 15‐2150‐cv
1 assignees would undermine Congress’ goal of enhancing
2 employees’ health and welfare benefit coverage. . . . This does not
3 serve, but rather directly defeats, the purpose of Congress in
4 enacting ERISA.” (citation and internal quotation marks omitted)).
5 Indeed, as the Fifth Circuit has concluded, “[i]f providers have no
6 recourse under either ERISA or state law[,] . . . providers will be
7 understandably reluctant to accept the risk of non‐payment, and
8 may require up‐front payment by beneficiaries—or impose other
9 inconveniences—before treatment will be offered.” Mem’l Hosp.
10 Sys., 904 F.2d at 247.
11 In sum, while the patient attempted to assign McCulloch the
12 right to payment for the surgeries that McCulloch performed, this
13 assignment was prohibited under the terms of the patient’s health
14 care plan. Aetna—which has not argued on appeal that the anti15
assignment provision does not apply—has failed to establish that
16 McCulloch is the “type of party” who may bring claims pursuant to
17 § 502(a)(1)(B).
18 II. Davila, Prong 1, Step 2
19 No. 15‐2150‐cv
Although Aetna’s failure 1 to meet any part of the Davila test
2 requires that we reverse the district court’s ruling, we briefly
3 address why Aetna has failed to satisfy the remaining requirements
4 as well. Under the Davila test, we next must determine “whether the
5 actual claim that [McCulloch] asserts can be construed as a colorable
6 claim for benefits pursuant to § 502(a)(1)(B).” Montefiore, 642 F.3d at
7 328. A colorable ERISA claim exists when the claim “implicates
8 coverage and benefit determinations as set forth by the terms of the
9 ERISA benefit plan.” Id. at 325. On appeal, Aetna argues that
10 McCulloch’s claim “goes to the heart of administration of the Plan
11 and necessarily implicates the patient’s assigned right to payment
12 under the Plan.” Appellees’ Br. at 26. We disagree and conclude
13 that the actual claim asserted here cannot be construed as a colorable
14 ERISA claim for benefits.
15 In Montefiore, we determined that the “in‐network” hospital
16 provider’s suit against the ERISA plan, seeking reimbursement for
17 medical services that the hospital had provided to beneficiaries of
18 the plan, were “colorable claims for benefits pursuant to §
20 No. 15‐2150‐cv
502(a)(1)(B).” Id. 1 The hospital had entered into agreements with
2 preferred provider organizations that it would offer medical services
3 to the plan’s beneficiaries at certain rates. Id. at 326. The preferred
4 provider organizations, in turn, had contracted with the ERISA plan
5 to set reimbursement rates and terms. Id. We concluded that the
6 hospital’s state‐law claims of breach of contract and quasi‐contract
7 concerned the hospital’s right to be reimbursed as a valid assignee
8 under the ERISA plan and that deciding whether the hospital should
9 be reimbursed would implicate the plan’s coverage and benefits
10 determinations. Id. at 331.
11 The instant case differs from Montefiore for several reasons.
12 First, because McCulloch is not a valid assignee and has no plan13
related relationship with Aetna, the benefits under the health care
14 plan belong to the patient, not to McCulloch. The health care plan
15 simply provides the context for McCulloch’s claim—if no plan had
16 existed, McCulloch’s office would not have called Aetna to inquire
17 about the patient’s coverage and Aetna likely would not have made
18 such representations.
21 No. 15‐2150‐cv
Second, unlike the 1 contract and quasi‐contract claims at issue
2 in Montefiore, McCulloch’s promissory‐estoppel claim does not
3 depend on the specific terms of the relevant health care plan or on
4 Aetna’s determination of coverage or benefits pursuant to those
5 terms. The Aetna representative’s statements to McCulloch may
6 have been a mere summary of the patient’s health care plan and the
7 coverage and benefits that would apply to an “out‐of‐network”
8 provider.5 But McCulloch’s claim rests on whether Aetna promised
9 to reimburse him for seventy percent of the UCR rate, whether he
10 reasonably and foreseeably relied on that promise, and whether he
11 suffered a resulting injury.6 The claim does not implicate the actual
12 coverage terms of the health care plan or require a determination as
13 to whether those terms were properly applied by Aetna. See
14 Stevenson v. Bank of N.Y. Co., 609 F.3d 56, 61 (2d Cir. 2010) (finding
15 promissory‐estoppel claim not preempted by ERISA where, inter
5 The health care plan, for example, covers seventy percent of an
out‐of‐network provider’s surgical procedures after a calendar year
6 We note that Aetna made two payments to McCulloch and it
does not contest that it had a legal duty to make these payments.
22 No. 15‐2150‐cv
alia, the claim’s “resolution 1 does not require a court to review the
2 propriety of an administrator’s or employer’s determination of
3 benefits under such a plan”); see also Wurtz, 761 F.3d at 242 (finding
4 state‐law claim not preempted because “the terms of plaintiffs’
5 ERISA plans are irrelevant to their claims”); Franciscan Skemp
6 Healthcare, Inc. v. Cent. States Joint Bd. Health & Welfare Trust Fund,
7 538 F.3d 594, 598 (7th Cir. 2008) (finding action arising from
8 insurer’s “alleged misrepresentations made . . . in response to
9 [provider’s] inquiry” was not an action “to recover benefits due to [a
10 patient] under the terms of his plan, to enforce [a patient’s] rights
11 under the terms of the plan, or to clarify [a patient’s] rights to future
12 benefits under the terms of the plan”); DaPonte v. Manfredi Motors,
13 Inc., 157 F. App’x 328, 331 (2d Cir. 2005) (summary order) (finding
14 fraudulent‐misrepresentation claim not completely preempted
15 where “neither the existence of an ERISA plan nor the interpretation
16 of any such plan’s terms is material” to the claim).
17 Thus, because McCulloch’s promissory‐estoppel claim does
18 not implicate the terms of the plan—and instead is based on the
23 No. 15‐2150‐cv
Aetna 1 representative’s oral statements (regardless of whether those
2 statements accurately represent the plan’s terms)—McCulloch has
3 not alleged a colorable claim for benefits pursuant to § 502(a)(1)(B).
4 III. Davila, Prong 2
5 Finally, we proceed to the second prong of the Davila test.
6 “Under Davila, a claim is completely preempted only if ‘there is no
7 other independent legal duty that is implicated by [the] defendant’s
8 actions.’ The key words here are ‘other’ and ‘independent.’”
9 Montefiore, 642 F.3d at 332 (quoting Davila, 542 U.S. at 210); see also id.
10 at 328 (noting claim fails to satisfy second prong of Davila test where
11 it “could have been brought under ERISA, but also rests on ‘[an]other
12 independent legal duty that is implicated by [the] defendantʹs
13 actions’” (citation omitted)). Aetna argues that its “only duty arises
14 out of the terms and conditions of” the ERISA plan and that our
15 decision in Montefiore “squarely foreclose[s]” that an independent
16 duty may arise from a provider’s conversation with an insurer to
17 confirm a plan’s coverage. Appellees’ Br. at 31.
24 No. 15‐2150‐cv
We conclude 1 that any legal duty Aetna has to reimburse
2 McCulloch is independent and distinct from its obligations under
3 the patient’s plan. McCulloch’s promissory‐estoppel claim against
4 Aetna arises not from an alleged violation of some right contained in
5 the plan, but rather from a freestanding state‐law duty grounded in
6 conceptions of equity and fairness. See generally 57 N.Y. JUR. 2D
7 Estoppel, Ratification, and Waiver § 51. Aetna is correct that, in
8 Montefiore, we found that an insurer’s statements in response to a
9 provider’s phone inquiry about plan coverage did not create a
10 “sufficiently independent duty.” Montefiore, 642 F.3d at 332. In
11 making this determination, however, we noted that the “pre12
approval process [of calling the insurer] was expressly required by the
13 terms of the Plan itself and is therefore inextricably intertwined with
14 the interpretation of Plan coverage and benefits.” Id. We did not, as
15 Aetna argues and the district court found, establish a per se rule that
16 pre‐approval calls with an insurer could not give rise to an
17 independent legal duty.
25 No. 15‐2150‐cv
Here, 1 unlike in Montefiore, McCulloch’s phone call with Aetna
2 was not in furtherance of an ERISA plan. McCulloch was not a valid
3 assignee of the plan, he had no preexisting relationship with Aetna,
4 and he was not required by the plan to pre‐approve coverage for the
5 surgeries that he performed.7 Instead, McCulloch called Aetna for
6 his own benefit to decide whether he would accept or reject a
7 potential patient who sought his out‐of‐network services.
8 McCulloch’s conversation with Aetna, therefore, is not governed by
9 the plan’s terms or “inextricably intertwined” with an interpretation
10 of the plan’s coverage and benefits. Id. at 332.
11 Franciscan Skemp Healthcare, Inc. v. Central States Joint Board
12 Health & Welfare Trust Fund is illustrative. See 538 F.3d at 594. In
13 that case, the health care provider called the plan administrator “to
14 verify [its] coverage of [a particular patient] and the relevant
15 services” before providing medical services. Id. at 596. A plan
7 Although the plan states that the insured is “responsible for
obtaining the necessary precertification from Aetna prior to
receiving services from an out‐of‐network provider,” it does not
require an out‐of‐network provider to make a pre‐approval call.
App’x at 89.
26 No. 15‐2150‐cv
representative “made oral 1 representations that they were covered,”
2 and the provider treated the patient. Id. The Seventh Circuit found
3 that the provider’s state‐law claims of negligent misrepresentation
4 and estoppel, based on “alleged shortcomings in the
5 communications” between the provider and insurer, did not
6 duplicate, supplement, or supplant the ERISA exclusive remedy. Id.
7 at 598‐601. The court made such a determination in part because
8 these claims were not brought by the plaintiff “as a beneficiary, nor
9 [as a party] standing in the shoes of a beneficiary” and the plaintiff
10 was not “arguing about plan terms” or “seeking to recover plan
11 benefits.” Id. at 601; see also Marin Gen. Hosp. v. Modesto & Empire
12 Traction Co., 581 F.3d 941, 950 (9th Cir. 2009) (finding provider’s
13 state‐law claims based on oral contract not completely preempted
14 where claims “are in no way based on an obligation under an ERISA
15 plan, and . . . would exist whether or not an ERISA plan existed”); cf.
16 Lone Star OB/GYN Assocs. v. Aetna Health Inc., 579 F.3d 525, 532 (5th
17 Cir. 2009) (finding independent obligation existed under a contract
18 between provider and insurer and noting provider’s state‐law
27 No. 15‐2150‐cv
claim’s “mere reference 1 to or consultation of an ERISA plan” does
2 not mean such claims “duplicate, supplement, or supplant ERISA”);
3 cf. Geller v. County Line Auto Sales, Inc., 86 F.3d 18, 23 (2d Cir. 1996)
4 (finding, in context of § 514, state‐law fraud claim not preempted by
5 ERISA where “the essence of the plaintiffs’ . . . claim does not rely on
6 the . . . plan’s operation or management”).
7 For similar reasons, McCulloch’s promissory‐estoppel claim is
8 not completely preempted by ERISA. McCulloch does not seek to
9 enforce the patient’s right to reimbursement. He is suing in his own
10 right pursuant to an independent obligation. In other words, this is
11 simply a suit between a third‐party provider and an insurer based
12 on the insurer’s independent promise. See Stevenson, 609 F.3d at 60
13 (finding promissory‐estoppel claim not preempted by ERISA where
14 defendant’s promise to insured gave rise to legal liability, not
15 defendant’s obligations under ERISA plan).8
8 Aetna relies on Devlin v. Transportation Communication
International Union, 173 F.3d 94, 102 (2d Cir. 1999) in support of its
contention that “state law promissory estoppel claims are not
immune from ERISA preemption.” Appellees’ Br. at 32‐33. This
case is inapposite. There, we affirmed the district court’s
28 No. 15‐2150‐cv
In sum, we conclude that because 1 any legal duty Aetna has to
2 reimburse McCulloch is independent and distinct from its
3 obligations under the patient’s plan, Aetna has failed to satisfy the
4 second prong of the Davila test.

* * *

determination that a promissory‐estoppel claim could not be
pursued by the beneficiaries and participants of a heath care plan—
not a third‐party health care provider—under ERISA § 514. Id. at 97,
101. We did not address whether such an action would be
completely preempted under ERISA § 502, and we affirmed the
district court’s determination in part because we found that
plaintiffs had not presented “extraordinary circumstances” to
pursue both an ERISA claim and a claim for promissory estoppel.
Id. at 102.

Outcome: 6 Because we find that ERISA does not preempt McCulloch’s
7 state‐law promissory‐estoppel claim, we VACATE the district
8 court’s orders denying McCulloch’s motion to remand and
9 dismissing McCulloch’s complaint. We REMAND this action to the
10 district court with instructions to remand the case to New York state
11 court.

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