People of the State of California, et al. v. David Edward Rivera, et al.

 

CROSS-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

 

MOVING PARTY: Cross-Defendant ILWU-PMA Welfare Plan

RESPONDING PARTY(S): Cross-Complainants David Edward Rivera, D.C and David Rivera Chiropractic, Inc.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS

Plaintiffs People of the State of California ex rel. ILWU-PMA WELFARE PLAN and ILWUE PMA WELFARE PLAN (“the Plan”) bring this action against Defendants David Edward Rivera, D.C., and David Rivera Chiropractic, Inc., for alleged insurance fraud. Plaintiffs allege that Defendants continuously engaged in false, fraudulent, and/or misleading billing practices including up-coding, billing for services that did not occur, and/or billing for chiropractic services purportedly performed by Rivera that were actually performed by other individuals.

Defendants have cross-complained against ILWU-PMA WELFARE PLAN, alleging the termination of the Plan without reasonable notice and opportunity to respond violated the fair procedure doctrine.

Cross-Defendant ILWU-PMA Welfare Plan now moves for summary judgment of the Third-Amended Cross-Complaint. Cross-Complainants opposed.

TENTATIVE RULING:

Cross-Defendant’s Motion for Summary Judgment is GRANTED.

Moving party to give notice, unless waived..

DISCUSSION:

Motion for Summary Judgment

I. Judicial Notice

Pursuant to Cross-Defendant’s request, the court takes judicial notice of Exhibits 1 through 6. The court takes judicial notice of the exhibits without assuming the truth of the assertions contained therein. (See Seelig v. Infinity Broad. Corp. (2002) 97 Cal. App. 4th 798, 808.)

II. Objections to Evidence

Cross-Defendant’s objections to the Declaration of David Rivera, D.C., numbered 1 through 3, are OVERRULED.

III. Legal Standard

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843. In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.  Thus, summary judgment is granted when, after the Court’s consideration of the evidence set forth in the papers and all reasonable inferences accordingly, no triable issues of fact exist and the moving party is entitled to judgment as a matter of law.  Code Civ. Proc. § 437c(c); Villa v. McFarren (1995) 35 Cal.App.4th 733, 741. 

As to each claim as framed by the Complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520. Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” Dore v. Arnold Worldwide, Inc.¿(2006) 39 Cal.4th 384, 389. A defendant has met its burden of showing that a cause of action has no merit if it demonstrates the absence of any single essential element of plaintiff’s case or a complete defense to plaintiff’s action.  Code Civ. Proc. § 437c(o)(2); Bacon v. Southern Cal. Edison Co. (1997) 53 Cal.App.4th 854, 858.  Once the defendant moving party has met the burden, the burden shifts to the plaintiff to show via specific facts that a triable issue of material facts exists as to a cause of action or a defense thereto.  § 437c(o)(2). 

IV. Analysis

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

Cross-Complainants assert a single cause of action against ILWU-PMA WELFARE PLAN, alleging the termination of the Plan without reasonable notice and opportunity to respond violated the “fair procedure” doctrine.

“The common law doctrine of fair procedure…prevent[s] the arbitrary expulsion or exclusion of individuals from private organizations that ‘possess substantial power either to thwart an individual's pursuit of a lawful trade or profession, or to control the terms and conditions under which it is practiced.’” [Citation]. For the doctrine to apply, individuals need not show that they would be fully unable to practice their chosen profession absent membership in the organization; they can instead show that “exclusion from membership ... deprives [them of] substantial ... educational, financial, and professional advantages.” (Boermeester v. Carry (2023) 15 Cal. 5th 72, 87–88, citing Pinsker v. Pacific Coast Soc. of Orthodontists (1969) 1 Cal.3d 160, 164–165.)

In support of its motion for summary judgment, Cross-Defendant argues that ERISA section 514(a) preempts Cross-Complainants’ claim because the doctrine of fair procedure impermissibly “relates to” an ERISA plan. (29 U.S.C 1144.)

Section 514(a) of ERISA provides, in relevant part: “Except as provided in subsection (b) of this section, the provisions of [titles I and IV of ERISA] shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan ....” (29 U.S.C. § 1144(a), italics added.) “ERISA is a comprehensive federal law designed to promote the interests of employees and their beneficiaries in employee pension and benefit plans. [Citation.] As a part of this integrated regulatory system, Congress enacted various safeguards to preclude abuse and to secure the rights and expectations that ERISA brought into being. [Citations.] Prominent among these safeguards is an expansive preemption provision, found at section 514 of ERISA.” (Port Med. Wellness, Inc. v. Connecticut Gen. Life Ins. Co. (2018) 24 Cal. App. 5th 153, 171; Aetna Health Inc. v. Davila (2004) 542 U.S. 200, 208 [“The purpose of ERISA is to provide a uniform regulatory regime over employee benefit plans. To this end, ERISA includes expansive pre-emption provisions, [citation], which are intended to ensure that employee benefit plan regulation would be ‘exclusively a federal concern.’ ”].)

The Supreme Court of the United States has interpreted the preemption provision broadly, explaining that a law “relates to” a covered employee benefit plan for purposes of § 514(a) “if it [1] has a connection with or [2] reference to such a plan.” (California Div. of Lab. Standards Enf't v. Dillingham Const., N.A., Inc. (1997) 519 U.S. 316, 324.)

(“ERISA”), which is jointly administered by the International Longshore and Warehouse Union (“ILWU”) and the Pacific Maritime Association (“PMA”). (SSUMF 1.) The Plan provides medical, surgical, hospital, pharmaceutical, and other coverage and benefits to some 50,000 participants and their beneficiaries. (SSUMF 2.) Cross-Complainants do not dispute these facts.

In opposition, Cross-Complainants argue the Plan does not “relate to” ERISA. They contend “[t]he right to fair procedure is a doctrine that makes no mention of the ERISA statute and applies regardless of whether an ERISA plan is involved.” (Opp. 13-15.) This argument fails.

When addressing whether a claim “relates to” ERISA, courts must look to the facts of the claim, not the title of the cause of action. Cross-Complainants are correct that fair procedure is not unique or specific to ERISA. However, it is not about the particular cause of action, but rather, the cause of action as applied to the facts of the case. The Supreme Court has held common law causes of action may be preempted when they relate to a benefit plan. (See Ingersoll–Rand Co. v. McClendon, 498 U.S. 133, 140 (1990).) 

Therefore, on these facts, the Cross-Complaint necessarily “relates to” an employee benefit plan under the expansive scope of that phrase.

Cross-Complainants go on to argue that the cause of action seeks to “regulate insurance,” and thus falls into the insurance exception to ERISA. The Code provides, “[e]xcept as provided in subparagraph (B), nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance…” (29 U.S.C. 1144(b)(2)(A).) 

However, Cross-Complainants conflate an employee health benefit plan with an insurance plan. (See 29 U.S.C. 1144(B) [“Neither an employee benefit plan…nor any trust established under such a plan, shall be deemed to be an insurance…or to be engaged in the business of insurance”].) Cross-Complainants provide no authority interpreting a similar plan as one that “regulates insurance.” Therefore, this argument also fails.

This court therefore concludes that Cross-Complainants’ Third Amended Cross-Complaint fails as a matter of law because the sole cause of action is preempted by ERISA.  [FN 1]

Accordingly, Cross-Defendant’s Motion for Summary Judgement is GRANTED. 

Moving party to give notice.

IT IS SO ORDERED.

Dated:   January 23, 2024 ___________________________________