Connecticut General Life Insurance Co. and Cigna Health and Life Insurance Co…

Background

Connecticut General Life Insurance Co. and Cigna Health and Life Insurance Co. (together, “Cigna”) sued East Coast Advanced Plastic Surgery, LLC (“ECAPS”), alleging fraudulent billing by ECAPS, an out-of-network health care provider. Cigna alleged that the billing practices caused it to overpay more than $8 million for certain services. Cigna asserted claims under the Employee Retirement Income Security Act of 1974, a federal employee-benefits law, as well as state-law claims for common-law fraud, negligent misrepresentation, and unjust enrichment.

On August 14, 2025, the court largely denied ECAPS’s motion to dismiss. Among other things, the court rejected ECAPS’s argument that Cigna lacked standing—that is, a sufficient legally recognized injury and connection to the claims—to sue. ECAPS then moved under 28 U.S.C. § 1292(b) for certification of an interlocutory appeal, which is an appeal before the case reaches a final judgment.

Legal standard

To certify an interlocutory appeal, ECAPS had to show that the order involved: (1) a controlling question of law; (2) substantial ground for disagreement about that question; and (3) that an immediate appeal could materially advance the end of the litigation. The court also explained that such certifications are strictly limited and may be denied even when the statutory requirements appear satisfied.

The court’s analysis

The court held that ECAPS satisfied the first and third requirements. Whether the court had subject-matter jurisdiction, including whether Cigna had standing, was a controlling legal question. An appellate ruling that Cigna lacked standing would require dismissal of all of Cigna’s claims and therefore could materially advance the litigation. The court also addressed possible discovery inefficiencies involving ECAPS’s counterclaims and concluded that those concerns could be managed through discovery supervision, including stays if appropriate.

ECAPS failed to satisfy the second requirement. ECAPS argued that the court’s standing analysis conflicted with precedent requiring a plaintiff to show a concrete injury even when a statute authorizes the claim. The court said that argument mischaracterized its earlier decision. The earlier decision had found that Cigna plausibly alleged two largely monetary injuries: more than $8 million in alleged overpayments and the time and resources Cigna spent investigating the alleged billing fraud.

The court found that the Second Circuit cases cited by ECAPS were consistent with the earlier decision and that ECAPS had identified no genuinely conflicting authority. The court also distinguished Supreme Court authority concerning costs incurred for public advocacy and information gathering, explaining that Cigna alleged costs incurred to uncover monetary fraud. ECAPS remained free to challenge Cigna’s claims later in the litigation, but the court had found those claims adequately pleaded at the motion-to-dismiss stage.

The court rejected ECAPS’s additional arguments concerning redressability and third-party standing. It found that Cigna’s request that ECAPS return the alleged overpayments could address Cigna’s alleged monetary injury. It also found that Cigna alleged direct injuries from ECAPS’s statements and therefore did not present a third-party-standing issue. The court noted that ECAPS had not identified a case holding that a claims administrator like Cigna lacked standing to bring similar claims.

The court further noted that a recent decision concerning whether investigation costs could be recovered under the Employee Retirement Income Security Act did not change the jurisdictional analysis because Cigna also sought the return of the alleged overpayments, which the court viewed as an equitable remedy.

Disposition

Judge Engelmayer denied ECAPS’s motion for certification of an interlocutory appeal and directed the Clerk of Court to terminate the motion at docket 64. The order did not resolve the ultimate merits of Cigna’s claims.