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Melichar v. Blue Cross and Blue Shield of Kansas, Inc.

United States District Court, D. Nebraska

April 13, 2018

STACY MELICHAR, Plaintiff,
v.
BLUE CROSS AND BLUE SHIELD OF KANSAS, INC., and THE HEALTH BENEFIT PLAN FOR MEMBERS OF THE KANSAS BANKERS ASSOCIATION, Defendants.

          MEMORANDUM AND ORDER

          Richard G. Kopf Senior United States District Judge

         Plaintiff seeks more than $88, 000 from Defendants, who allegedly denied payment for medical services provided to Plaintiff under a health insurance policy issued through Plaintiff's employer. (Filing No. 11, Amended Complaint.) Defendants seek dismissal of this case pursuant to Fed. R. Civ. P. 12(b)(3) for improper venue. Alternatively, Defendants ask the Court to transfer this case to the United States District Court for the District of Kansas pursuant to 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses and in the interest of justice. (Filing No. 12.)

         I. FACTUAL BACKGROUND

         On August 17, 2017, Plaintiff filed her Complaint, and Defendants timely removed the case to this court under 28 U.S.C. § 1446(b). (Filing No. 1, Notice of Removal.) In its Notice of Removal, Defendants established that Plaintiff's Complaint was based on an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461. See 29 U.S.C. §§ 1002(1), 1003(a). (Filing No. 1, Notice of Removal ¶¶ 6-8.)

         Plaintiff alleges that she is a resident of Lincoln, Nebraska, and that she was enrolled in a Health Benefit Plan (“Plan”) through her employer, Community First National Bank (“Bank”), which is a Kansas bank and a member of the Kansas Bankers Association (“Association”). (Filing No. 11, Amended Complaint ¶ 2; Filing No. 14-1, Stones Decl. ¶ 6.[1])

         Plaintiff alleges she required certain health care services and treatment beginning in December 2015, and such services were provided in Lancaster and Saunders County, Nebraska. (Filing No. 11, Amended Complaint ¶ 3.) Plaintiff contends Defendants paid for some of these medical treatments, but then later demanded that certain health care providers refund certain payments. Plaintiff further asserts that Defendants denied payment entirely to two other Lincoln, Nebraska, health care providers that treated Plaintiff. Plaintiff claims that Defendants' denial of payment “breach[ed] their contract of insurance” with Plaintiff, and Defendants are estopped from disputing their liability for the payments because they “did previously authorize the treatments and previously made payments to the plaintiff's healthcare providers, and knew or should have known that the plaintiff would rely to her detriment upon the actions of the defendants in making said payments.” (Filing No. 11, Amended Complaint ¶¶ 7-8.)

         The Plan is an ERISA plan established by the Association for the exclusive purpose of providing certain welfare benefits to employees of Association-member employers, all of which are Kansas banks and trust companies and the Association itself. (Filing No. 14-1, Stones Decl. ¶ 4, Ex. A.) Defendant Blue Cross Blue Shield of Kansas (“BCBSKS”) and the Association entered into an Administrative Services Agreement under which the Association delegated authority to BCBSKS to administer claims made by enrollees under the Plan. (Filing No. 14-3, Graves Decl. ¶ 4, Ex. A; Filing No. 14-1, Stones Decl. ¶ 8.)

         BCBSKS is a Kansas corporation with its principal place of business in Topeka, Kansas. (Filing No. 14-3, Graves Decl. ¶ 3.) BCBSKS administered claims filed under the Plan from its headquarters in Topeka, Kansas. Accordingly, any benefit claims at issue in this lawsuit were reviewed and administered by BCBSKS in Kansas. (Filing No. 14-3, Graves Decl. ¶ 5.) Kansas is the sole situs of the Plan's administration, all of the Plan's assets are located in Kansas, and all decisions concerning the Plan's administration are made in Kansas. Moreover, all material records and witnesses related to the Plan, its policies and procedures, and the Plan's administration are located in Kansas. (Filing No. 14-1, Stones Decl. ¶ 5; Filing No. 14-3, Graves Decl. ¶¶ 5, 7.)

         Plaintiff claims that BCBSKS used BCBS Network Blue in Omaha, Nebraska, in initially paying, and then denying payment for, medical services provided to Plaintiff at Bryan Medical Center in Lincoln, Nebraska. (Filing No. 16, Pl.'s Br. Opp'n Defs.' Mtn. Dsm. at CM/ECF p. 2.)[2]

         II. MOTION TO DISMISS FOR IMPROPER VENUE

         A defendant moving to dismiss under Fed. R. Civ. P. 12(b)(3) bears the burden of demonstrating that the plaintiff's choice of venue is improper. United States v. Orshek, 164 F.2d 741, 742 (8th Cir. 1947); Luebbert v. Employers & Operating Engineers Local 520 Pension Fund, No. 4:06CV01140, 2007 WL 1100455, at *2 (E.D. Mo. Apr. 10, 2007) (considering 12(b)(3) motion in ERISA case). Venue for an ERISA action is proper “in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2) (Westlaw 2018).

         A. Where Plan is Administered

         As noted above, one of the three ways to establish proper venue in an ERISA case is by filing the action where the plan is “administered.” Here, neither party disputes that the relevant Plan is administered in Kansas because Defendants have established that the Plan is managed in Kansas, and Plaintiff has not shown to the contrary. (Filing No. 14-1, Stones Decl. ¶ 5.) All claims made under the Plan are reviewed and administered by BCBSKS in Kansas, and the day-to-day management of the Plan is conducted in Kansas. (Filing No. 14-1, Stones Decl. ¶¶ 5, 8; Filing No. 14-3, Graves Decl. ¶¶ 4-5.) All of Plaintiff's claims and requests for benefits, including those that were denied and which are at issue in this lawsuit, were reviewed and analyzed by BCBSKS's employees and representatives in Kansas. (Filing No. 14-3, Graves Decl. ¶ 5.) Because it is undisputed that the Plan is administered in Kansas, venue in this court is not proper under the “plan-administration” portion of 29 U.S.C. § 1132(e)(2).

         B. Where ...


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