Saloojas, Inc. v. United Healthcare Insurance Company
- William Alsup
- 3:22-cv-03536
- U.S. District Court · Northern District of California
- 8
In Saloojas v. United Healthcare, Judge Alsup granted the insurer’s dismissal motion, ending some claims and allowing possible amendments to others.
Saloojas, Inc. was affected by dismissal of its six claims. The complaint also asserted claims for a proposed nationwide class, but the opinion does not separately state a ruling on the motion to strike the class allegations. Saloojas could seek leave to amend four dismissed claims.
What happened
Saloojas, Inc., a healthcare provider, sued United Healthcare Insurance Company after alleging that the insurer failed to pay its posted prices for COVID-19 testing performed for United Healthcare plan members. Saloojas brought six claims, including claims under federal healthcare laws, employee-benefit law, and California law, and sought to represent a nationwide class.
The court dismissed all six claims. It ruled that providers cannot privately enforce the COVID-19 payment provisions at issue, that Saloojas had not adequately alleged rights assigned by patients under employee-benefit plans, and that its fraud, promise, and unfair-business-practice allegations lacked required details. The request for an injunction was dismissed because an injunction is a remedy rather than a separate claim.
Judge Alsup ruled that the federal healthcare-law claim was dismissed with prejudice and that the injunction claim was dismissed without prejudice to seeking an injunction if another claim is established. Saloojas could seek leave to amend the other dismissed claims by motion, and the court granted United Healthcare’s dismissal motion to the extent stated in the order.
The detailed version
- Saloojas, Inc. v. United Healthcare Insurance Company · No. 3:22-cv-03536
- William Alsup
- Nov. 8, 2023
Background
Saloojas, Inc. alleged that it provided COVID-19 testing to patients covered by United Healthcare’s individual and employer-sponsored health plans as an out-of-network provider. It alleged that United Healthcare failed to reimburse it at the cash prices posted on Saloojas’s website, which Saloojas said amounted to roughly $1,000 per test. Saloojas asserted six claims on behalf of itself and a proposed nationwide class: claims under Section 3202(a)(2) of the Coronavirus Aid, Relief, and Economic Security Act and Section 6001 of the Families First Coronavirus Response Act; a claim under Section 502(a)(1)(B) of the Employee Retirement Income Security Act; a Racketeer Influenced and Corrupt Organizations Act claim; promissory estoppel; a claim under California’s Unfair Competition Law; and injunctive relief.
United Healthcare moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. It also moved to strike the class allegations. The opinion’s conclusion addresses the dismissal motion but does not separately state a disposition of the motion to strike.
Rulings on the Claims
CARES Act and FFCRA. The court dismissed this claim with prejudice. It followed a court of appeals decision holding that these provisions do not give healthcare providers a private right of action—that is, a right to sue in court to enforce them against an insurer. The court explained that the statutes instead provide enforcement authority to federal officials.
ERISA. The court dismissed Saloojas’s claim. ERISA generally allows a plan participant or beneficiary to sue for benefits, but a healthcare provider is neither. A provider may have standing if a patient assigned the provider a right to reimbursement and the complaint identifies specific assignment language. The court found that Saloojas did not identify a specific ERISA-governed plan or allege specific assignment language. Saloojas may seek leave to amend this claim.
RICO. The court dismissed the RICO claim because Saloojas did not plead the alleged mail fraud, wire fraud, or embezzlement with the particularity required by Rule 9(b). The complaint did not provide facts supporting a reasonable inference that United Healthcare committed those acts or enough information to give United Healthcare fair notice of the basis for the claim. Saloojas may seek leave to amend this claim.
Promissory estoppel. The court dismissed this claim because Saloojas did not identify a clear and unambiguous promise by United Healthcare to reimburse all of its COVID-19 testing services. The allegations that United Healthcare’s conduct and public statements conveyed that testing would be covered were insufficient. Saloojas may seek leave to amend this claim.
California Unfair Competition Law. The court dismissed this claim because it sounded in fraud and therefore had to identify the alleged misconduct’s who, what, when, where, and how. The court found that Saloojas’s allegations did not meet that heightened pleading requirement. Saloojas may seek leave to amend this claim.
Injunctive relief. The court dismissed this claim without prejudice to seeking an injunction if Saloojas later establishes an underlying claim for relief. The court explained that injunctive relief is a remedy, not an independent cause of action.
Leave to Amend and Disposition
The court found that amendment of the CARES Act and FFCRA claim and the injunctive-relief claim would be futile because the defects were legal ones. It found that additional facts could theoretically cure the defects in the ERISA, RICO, promissory-estoppel, and California Unfair Competition Law claims. Saloojas could seek leave to amend those claims by motion, with a proposed complaint showing the changes. The order granted United Healthcare’s motion to dismiss to the extent stated.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.