Saloojas, Inc. v. Blue Shield of California Life and Health Insurance Company

Background

Saloojas brought six claims against Blue Shield concerning reimbursement for COVID-19 testing. Blue Shield moved to dismiss each claim under Federal Rule of Civil Procedure 12(b)(6), which addresses whether a complaint alleges enough facts to state a legally recognized claim.

Claims I and II

Claim I alleged violations of the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act. The court held that neither statute creates a private right of action, meaning those statutes do not authorize a private lawsuit of this type. The claim was therefore subject to dismissal.

Claim II alleged a violation of section 501(a)(1)(B) of the Employee Retirement Income Security Act. The court held that Saloojas lacked standing, meaning it was not among the persons authorized to bring the claim in federal court. Although a healthcare provider may sometimes obtain derivative standing through an assignment from an employee-benefit-plan beneficiary, the court found Saloojas’s allegations about assignments conclusory. It also found that the document submitted with Saloojas’s opposition did not constitute an adequate assignment.

Claims III through VI

Claim III alleged a violation of the federal Racketeer Influenced and Corrupt Organizations Act. The court found that Saloojas did not allege facts sufficient to show racketeering activity. To the extent the claim relied on mail or wire fraud, the allegations did not identify the circumstances of the alleged fraud with the required particularity. To the extent it relied on embezzlement, Saloojas did not explain how failure to pay a plan benefit could constitute embezzlement.

Claim IV alleged non-Employee Retirement Income Security Act promissory estoppel. The court found that Saloojas did not identify any promise by Blue Shield, much less a clear and unambiguous promise to reimburse the full amount of the COVID-19 testing prices. The court also noted that Saloojas cited no authority showing that past payment could be treated as a promise of future payment.

Claim V sought non-Employee Retirement Income Security Act injunctive relief. The court found that this claim was derivative of Claims I through IV and was subject to dismissal for the reasons given for those claims. It also held that injunctive relief is a remedy, not an independent cause of action.

Claim VI alleged unlawful, unfair, and fraudulent business acts and practices under section 17200 of the California Business and Professions Code. The court found that this claim, as pleaded, was derivative of Claims I through IV and was subject to dismissal for the reasons stated above.

Disposition

The court granted Blue Shield’s motion to dismiss, with leave to amend Claims III, IV, and VI if Saloojas could cure the identified deficiencies. Saloojas had to file any amended complaint by October 25, 2022, and could not add new claims or defendants without the court’s permission. The order denied Blue Shield’s motion to strike without prejudice.