Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 1 of 20 Page ID #:364

1 'O' JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 CV 22-01217-RSWL-MRW x 11 BEVERLY HILLS REGIONAL

SURGERY CENTER, L.P.,

ORDER re: Defendant’s 12 Motion to Dismiss [13] and Plaintiff, 13 Plaintiff’s Motion to v. Amend Complaint [15] 14 15 GROUP HOSPITALIZATION AND

MEDICAL SERVICES, INC.;

16 and DOES 1-10, 17 Defendants. 18 19 Plaintiff Beverly Hills Regional Surgery Center, 20 L.P. (“Plaintiff”) brings this Action against Defendant 21 Group Hospitalization and Medical Services, Inc. d/b/a/ 22 CareFirst BlueCross BlueShield (“Defendant”), alleging 23 claims for fraud, negligent misrepresentation, 24 promissory estoppel, and violation of the Employee 25 Retirement Income Securities Act of 1974 (“ERISA”). 26 Currently before the Court are Defendant’s Motion to 27 Dismiss [13] and Plaintiff’s Motion for Leave to File a 28 Second Amended Complaint (“Motion for Leave to Amend”) 1 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 2 of 20 Page ID #:365

1 [15]. Having reviewed all papers submitted pertaining

2 to these Motions, the Court NOW FINDS AND RULES AS

3 FOLLOWS: the Court GRANTS Defendant’s Motion to Dismiss 4 and DENIES Plaintiff’s Motion for Leave to Amend. 5 I. BACKGROUND 6 A. Factual Background 7 Defendant is incorporated and has its principal 8 place of business in the District of Columbia. Decl. of 9 Kim Rothman in Supp. of Def.’s Mot. to Dismiss (“Rothman 10 Decl.”) ¶ 5, ECF No. 13-1. Defendant insures businesses 11 that are incorporated in the District of Columbia, as 12 well as portions of Maryland and Virginia. Id. ¶¶ 5, 8. 13 Defendant also functions as a third-party administrator 14 for certain self-funded health plans located in those 15 service areas. Id. ¶ 9. In this role, Defendant does 16 not insure the health plan or retain the insurance risk, 17 but it provides administrative services to the employer 18 from within its home territory in exchange for an 19 administrative fee. Id. Defendant does not receive 20 premiums from the plan or plan participants when acting 21 as a third-party administrator. Id. ¶ 10. 22 Plaintiff is a medical provider organized under the 23 laws of California. First Am. Compl. (“FAC”) ¶ 1, ECF 24 No. 9. On April 20, 2019, Plaintiff provided medical 25 services to Patient KH. Id. ¶ 29. Patient KH was 26 enrolled in a self-funded employee benefit plan (“Plan”) 27 for which Defendant served as a third-party 28 administrator. Rothman Decl. ¶¶ 28, 30. The plan was 2 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 3 of 20 Page ID #:366

1 sponsored by its employer group, Arctic Slope Regional

2 Corporation Federal Holding Company (“ASRC”). Id. ¶ 28.

3 At the time that Plaintiff provided services to Patient 4 KH, Plaintiff was an out-of-network provider. Id. ¶ 25. 5 About two months before the procedure, Plaintiff’s 6 employee called Defendant to inquire about Patient KH’s 7 payment responsibility versus Defendant’s. FAC ¶¶ 30- 8 32. Defendant responded that Patient KH’s deductible 9 was $800, that Patient KH’s maximum out-of-pocket 10 expense was $4,000, and that Patient KH had paid $0 to 11 date for that calendar year. Id. ¶ 33. Defendant 12 represented that payment for certain procedures was 13 typically based on the usual, reasonable, and customary 14 cost for such procedures and not on the Medicare fee 15 schedule. Id. ¶¶ 34-37. Defendant did not reference 16 any term of the Plan that would cause a denial of 17 coverage or a limitation of payment on the services 18 provided to Patient KH. Id. ¶¶ 39-40. However, at the 19 time of this call, Defendant allegedly had access to 20 information that contradicted its representations, and 21 Defendant knew that it would in fact be making payments 22 based on the Medicare fee schedule. Id. ¶¶ 41-43. 23 Plaintiff was not provided with a copy of the Plan and 24 thus relied on Defendant’s representations. Id. ¶ 46. 25 Following the medical procedure, Plaintiff provided 26 Defendant with a bill stating that Patient KH had 27 assigned all rights to reimbursement for medical 28 services to Plaintiff. Id. ¶ 50. Plaintiff provided 3 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 4 of 20 Page ID #:367

1 Defendant with all required billing information,

2 including a bill for $227,541.00. Id. ¶ 60. Plaintiff

3 alleges that Patient KH’s Plan required Defendant to pay 4 the “Max Allowed Amount” based on Plaintiff’s billed 5 charge. Id. ¶ 54. However, Defendant instead made 6 payment in the amount of $1,593.08 based on the Medicare 7 fee schedule. Id. ¶¶ 57, 62. Plaintiff alleges that 8 this payment was well below the payment required under 9 the Plan and the payment that was promised during the 10 phone conversation. Id. ¶ 63. Defendant allegedly 11 continues to refuse to make the appropriate payment. 12 Id. ¶ 64. 13 B. Procedural Background 14 Plaintiff filed its Complaint [1-2] in the Superior 15 Court of California, County of Los Angeles, on December 16 29, 2021. Defendant removed [1] the Action to this 17 Court on February 23, 2022. Plaintiff filed its FAC [9] 18 on March 1, 2022, alleging claims against Defendant for: 19 (1) fraud; (2) negligent misrepresentation; (3) 20 promissory estoppel; and (4) recovery of benefits under 21 29 U.S.C. § 1132(a)(1)(B) (“ERISA claim”).1 22 Defendant filed its Motion to Dismiss [13] on March 23 31, 2022. Plaintiff opposed [18] on April 19, 2022, and 24 Defendant replied [19] on April 26, 2022. Plaintiff

25 1 The FAC labels both the negligent misrepresentation claim 26 and the promissory estoppel claim as the “Second Cause of Action” and labels the ERISA claim as the “Third Cause of Action.” See 27 generally FAC. For purposes of clarity, this Order will refer to the promissory estoppel claim as the third cause of action and 28 the ERISA claim as the fourth cause of action. 4 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 5 of 20 Page ID #:368

1 filed its Motion for Leave to Amend [15] on April 12,

2 2022. Defendant opposed [16] on April 19, 2022.

3 Plaintiff did not reply to Defendant’s Opposition. 4 II. DISCUSSION 5 A. Legal Standard 6 1. Rule 12(b)(6) 7 Rule 12(b)(6) of the Federal Rules of Civil 8 Procedure allows a party to move for dismissal of one or 9 more claims if the pleading fails to state a claim upon 10 which relief can be granted. A complaint must “contain 11 sufficient factual matter, accepted as true, to state a 12 claim to relief that is plausible on its face.” 13 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation 14 marks omitted). Dismissal is warranted for a “lack of a 15 cognizable legal theory or the absence of sufficient 16 facts alleged under a cognizable legal theory.” 17 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 18 (9th Cir. 1988) (citation omitted). 19 In ruling on a 12(b)(6) motion, a court may 20 generally consider only allegations contained in the 21 pleadings, exhibits attached to the complaint, and 22 matters properly subject to judicial notice. Swartz v. 23 KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court 24 must presume all factual allegations of the complaint to 25 be true and draw all reasonable inferences in favor of 26 the non-moving party. Klarfeld v. United States, 944 27 F.2d 583, 585 (9th Cir. 1991). However, the court need 28 not accept as true allegations that contradict matters 5 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 6 of 20 Page ID #:369

1 properly subject to judicial notice. Sprewell v. Golden

2 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

3 While a complaint need not contain detailed factual 4 allegations, a plaintiff must provide more than “labels 5 and conclusions” or “a formulaic recitation of the 6 elements of a cause of action.” Bell Atl. Corp. v. 7 Twombly, 550 U.S. 544, 555 (2007). 8 2. Rule 12(b)(2) 9 Rule 12(b)(2) of the Federal Rules of Civil 10 Procedure authorizes dismissal of an action for lack of 11 personal jurisdiction. Once a defendant moves to 12 dismiss for lack of personal jurisdiction, the plaintiff 13 bears the burden of demonstrating that jurisdiction is 14 appropriate. Schwarzenegger v. Fred Martin Motor Co., 15 374 F.3d 797, 800 (9th Cir. 2004). Where the motion is 16 “based on written materials rather than an evidentiary 17 hearing, the plaintiff need only make a prima facie 18 showing of jurisdictional facts” to survive dismissal. 19 Id. (internal quotation marks omitted). The court may 20 consider evidence presented in affidavits to assist in 21 its determination of jurisdictional issues. Data Disc, 22 Inc. v. Sys. Tech. Ass’n, Inc., 557 F.2d 1280, 1285 (9th 23 Cir. 1977). The plaintiff cannot rely on the bare 24 allegations of the complaint, but uncontroverted 25 allegations must be taken as true, and conflicts between 26 statements contained in the parties’ affidavits must be 27 resolved in the plaintiff’s favor. Schwarzenegger, 374 28 F.3d at 800. 6 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 7 of 20 Page ID #:370

1 3. Leave to Amend

2 “The court should give leave to amend freely when

3 justice so requires.” Fed. R. Civ. P. 15(a)(2). In the 4 Ninth Circuit, “Rule 15’s policy of favoring amendments 5 to pleadings should be applied with ‘extreme 6 liberality.’” United States v. Webb, 655 F.2d 977, 979 7 (9th Cir. 1981). Against this liberal standard, the 8 Court may consider “the presence of any of four factors: 9 bad faith, undue delay, prejudice to the opposing party, 10 and/or futility.” Owens v. Kaiser Found. Health Plan, 11 Inc., 244 F.3d 708, 712 (9th Cir. 2001). 12 B. Analysis 13 1. Defendant’s Request for Judicial Notice 14 “A court may judicially notice a fact that is not 15 subject to reasonable dispute because it . . . can be 16 accurately and readily determined from sources whose 17 accuracy cannot reasonably be questioned.” Fed. R. 18 Evid. 201. Accordingly, a court may judicially notice 19 matters of public record but not the substance of such 20 records if subject to reasonable dispute. Lee v. City 21 of Los Angeles, 250 F.3d 668, 688-90 (9th Cir. 2001) 22 (stating that a court may take judicial notice of the 23 fact that certain court records were filed but not of 24 the truth of any facts stated therein). In ruling on a 25 motion to dismiss, a court may also consider documents 26 that a plaintiff’s complaint necessarily relies on if 27 the authenticity of the document is uncontested. Id. at 28 688. 7 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 8 of 20 Page ID #:371

1 Defendant requests that the Court take judicial

2 notice of two documents: (1) the ERISA Plan documents

3 provided by Defendant to ASRC; and (2) an order granting 4 a motion to dismiss in another action. See generally 5 Def.’s Req. for Judicial Notice, ECF No. 14. The Court 6 GRANTS Defendant’s first request because Plaintiff’s FAC 7 necessarily relies on the Plan documents, and Plaintiff 8 does not dispute that the documents attached to 9 Defendant’s Motion are in fact the Plan documents. See 10 Korman v. ILWU-PMA Claims Office, No. 2:18-cv-07516-SVW- 11 JPR, 2019 WL 1324021, at *4-5 (C.D. Cal. Mar. 29, 2019). 12 The Court also GRANTS Defendant’s second request because 13 the court order is a public record, and its existence is 14 not subject to reasonable dispute. See Selane Prods., 15 Inc. v. Cont’l Cas. Co., No. 2:20-cv-07834-MCS-AFM, 2020 16 WL 7253378, at *3 (C.D. Cal. Nov. 24, 2020). 17 2. Defendant’s Motion to Dismiss 18 a. ERISA Claim 19 Participants in an ERISA plan may bring a civil 20 action to recover benefits due to them under the terms 21 of their plan. 29 U.S.C. § 1132(a)(1)(B). To state a 22 claim for benefits under ERISA, a plaintiff must “allege 23 facts that establish the existence of an ERISA plan as 24 well as the provisions of the plan that entitle it to 25 benefits.” Almont Ambulatory Surgery Center, LLC v. 26 UnitedHealth Grp., Inc., 99 F. Supp. 3d 1110, 1155 (C.D. 27 Cal. 2015) (citation omitted). Thus, a plaintiff 28 bringing “a claim for benefits under ERISA must identify 8 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 9 of 20 Page ID #:372

1 a specific plan term that confers the benefit in

2 question.” Id. (citation omitted).

3 The FAC alleges that Patient KH’s Plan obligated 4 Defendant to pay “the ‘Max Allowed Amount’ or ‘Allowed 5 Amount’ and that said amount was determined based on 6 [Plaintiff’s] billed charge.” FAC ¶ 54. Thus, the Plan 7 required Defendant to pay a percentage of all amounts 8 billed by Plaintiff. Id. ¶¶ 60-61. However, Plaintiff 9 fails to identify any term of the Plan that requires 10 Defendant to base the Allowed Amount on the medical 11 provider’s billed charge. On the contrary, the Plan 12 provides that the “Allowed Benefit” for a covered 13 service performed by an out-of-network provider will be 14 “based on the lower of the provider’s actual charge or 15 established fee schedule, which, in some cases, will be 16 a rate specified by applicable law.” Rothman Decl. Ex. 17 1 (“Plan”) at 4, ECF No. 13-2 (emphasis added). This 18 language gives Defendant an alternative to basing 19 payment on the medical provider’s billed amount. 20 Because this language clearly contradicts Plaintiff’s 21 allegation, the Court need not accept the allegation as 22 true. See Sprewell, 266 F.3d at 988. 23 Plaintiff fails to identify a term of the Plan that 24 Defendant violated by paying only $1,593.08 to 25 Plaintiff. Plaintiff alleges that Defendant’s payment 26 was based on the Medicare fee schedule, see FAC ¶ 57, 27 but Plaintiff fails to explain how this violates the 28 terms of the Plan. Plaintiff has therefore failed to 9 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 10 of 20 Page ID #:373

1 meet its pleading burden for its ERISA claim. See

2 Almont, 99 F. Supp. 3d at 1159 (holding that plaintiffs

3 bringing claims under § 1132(a)(1)(B) must allege that 4 the terms of the plan provide a specific reimbursement 5 rate for covered services and that defendant failed to 6 reimburse plaintiff according to that reimbursement 7 rate). Plaintiff argues that its claim should not be 8 dismissed because “it is entirely possible that 9 [Defendant] was obligated to pay based on Plaintiff’s 10 billed charge.” Pl.’s Opp’n to Mot. to Dismiss 13:6-8. 11 But the mere possibility of a Plan violation is too 12 speculative to satisfy the Iqbal and Twombly pleading 13 standards. See Simi Surgical Ctr., Inc. v. Conn. Gen. 14 Life Ins. Co., No. 2:17-cv-02685-SVW-AS, 2018 WL 15 6332285, at *3 (C.D. Cal. Jan. 4, 2018) (finding ERISA 16 claim deficiently pleaded where plaintiff failed to 17 identify the plan terms and conditions purportedly 18 breached). 19 Plaintiff cannot evade its pleading burden based on 20 Defendant’s failure to provide Plaintiff with Plan 21 documents before Plaintiff filed the FAC. As 22 acknowledged in Almont, representations made by 23 Defendant over the phone may be relevant to an estoppel 24 or fraud claim but “are irrelevant as to whether 25 coverage existed under the terms of the Plan[].” 99 F. 26 Supp. 3d at 1159. Because Plaintiff fails to identify a 27 Plan term that Defendant violated, Plaintiff’s ERISA 28 claim must be dismissed. The Court GRANTS Defendant’s 10 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 11 of 20 Page ID #:374

1 Motion as to Plaintiff’s fourth cause of action.

2 b. Personal Jurisdiction

3 Defendant asserts that the Court lacks personal 4 jurisdiction over Defendant with respect to Plaintiff’s 5 first three causes of action. See generally Def.’s Mot. 6 to Dismiss, ECF No. 13. Plaintiff counters that the 7 Court has specific personal jurisdiction over Defendant 8 for all claims. Pl.’s Opp’n to Mot to Dismiss 4:11-12. 9 Alternatively, Plaintiff argues that the Court has 10 pendent personal jurisdiction over Defendant based on 11 the nationwide service of process provided under ERISA. 12 Id. at 11:7-9. Because Plaintiff’s ERISA claim is 13 dismissed, the Court does not address whether that claim 14 warrants the exercise of pendent personal jurisdiction. 15 See United States v. Botefuhr, 309 F.3d 1263, 1274 (10th 16 Cir. 2002). Accordingly, the Court considers whether 17 Plaintiff has established specific personal jurisdiction 18 over Defendant for its state law claims. 19 A court may assert specific jurisdiction over a 20 claim for relief that arises out of a defendant’s forum- 21 related activities. Rano v. Sipa Press, Inc., 987 F.2d 22 580, 588 (9th Cir. 1993). Specific personal 23 jurisdiction is established if a plaintiff can show: (1) 24 the defendant has performed some act or transaction 25 within the forum or purposefully availed himself of the 26 privileges of conducting activities within the forum; 27 (2) the plaintiff's claim arises out of or results from 28 the defendant’s forum-related activities; and (3) the 11 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 12 of 20 Page ID #:375

1 exercise of jurisdiction is reasonable. Axiom Foods,

2 Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1068 (9th

3 Cir. 2017). The plaintiff bears the burden of 4 satisfying the first two elements. Id. “If the 5 plaintiff meets that burden, the burden shifts to 6 the defendant to present a compelling case that the 7 exercise of jurisdiction would not be reasonable.” Id. 8 at 1068–69 (internal quotations marks omitted). 9 As for the first element, a purposeful availment 10 analysis is most often used in suits sounding in 11 contract, while a purposeful direction analysis is most 12 often used in suits sounding in tort. Schwarzenegger v. 13 Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 14 2004). However, cases that primarily sound in contract 15 are typically analyzed under only the purposeful 16 availment analysis. Sher v. Johnson, 911 F.2d 1357, 17 1362 (9th Cir. 1990); HK China Grp, Inc. v. Beijing 18 United Auto. & Motorcycle Mfg. Corp., 417 F. App’x 664, 19 665-66 (9th Cir. 2011). Here, Plaintiff’s claims sound 20 primarily in contract because the representation giving 21 rise to the alleged fraud is the same representation 22 that gives rise to Plaintiff’s claim for promissory 23 estoppel. Thus, the Court applies only the purposeful 24 availment analysis here. 25 A court has personal jurisdiction over a defendant 26 only where the defendant has “purposefully availed 27 himself of the privilege of doing business in a forum 28 state . . . such as [by] executing or performing a 12 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 13 of 20 Page ID #:376

1 contract there.” Id. at 802. However, the existence of

2 a contract between plaintiff and defendant does not

3 automatically establish minimum contacts in the 4 plaintiff’s home forum; rather, there must be “actions 5 by the defendant himself that create a substantial 6 connection with the forum State.” Picot, 780 F.3d at 7 1212 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 8 462, 475 (1985)). In other words, the defendant must 9 have a relationship to the forum state beyond its 10 relationship to the plaintiff who resides there. Id. at 11 1212-13. “A defendant must have performed some type of 12 affirmative conduct which allows or promotes the 13 transaction of business within the forum state.” Id. at 14 1212. 15 The FAC states that Defendant is licensed to do 16 business in California as an insurer or administrator of 17 insurance. FAC ¶ 2. It alleges that Patient KH entered 18 into a valid insurance agreement with Defendant that 19 required Defendant to pay for healthcare expenses 20 incurred by Patient KH. Id. ¶ 7. On February 26, 2019, 21 Plaintiff allegedly called Defendant to confirm the rate 22 Defendant usually pays for certain covered services, and 23 Defendant did not indicate that its payment in this case 24 would be any different from its typical payment 25 percentage. Id. ¶¶ 34-40. 26 Defendant, however, provides evidence that its 27 relationship to Patient KH is more attenuated than the 28 FAC indicates. See Healthcare Ally Mgmt. of Cal., LLC 13 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 14 of 20 Page ID #:377

1 v. Blue Cross Blue Shield of Minn., No. CV 16-7042-DMG

2 (AFMx), 2017 WL 7201870, at *6 (C.D. Cal. July 27, 2017)

3 (stating that jurisdictional allegations were not 4 entitled to a presumption of truth where defendant 5 presented contradictory evidence supported by 6 declaration). Indeed, Defendant is not Patient KH’s 7 insurer and did not enter into an insurance agreement 8 with Patient KH directly. See Plan at 2 (“[Defendant] 9 provides administrative claims payment services only.”); 10 Rothman Decl. ¶¶ 27-30. Rather, Patient KH was enrolled 11 in a self-funded employee benefit plan sponsored by 12 ASRC, and Defendant has never received any payments from 13 or on behalf of Patient KH. Rothman Decl. ¶ 31. 14 Defendant did not direct Patient KH to obtain services 15 from Plaintiff. Id. ¶ 33. Defendant’s only role as the 16 third-party administrator of the Plan is to provide 17 claim administrative services to ASRC in exchange for an 18 administrative fee. Id. ¶ 30. Defendant’s role in 19 overseeing a Plan that a California resident happens to 20 be a member of is insufficient evidence of purposeful 21 availment. See, e.g., Healthcare Ally Mgmt. of Cal., 22 LLC v. Blue Cross Blue Shield of Minn., 787 F. App’x 23 417, 418 (9th Cir. 2019). 24 The alleged representations made by Defendant over 25 the phone are also insufficient to establish purposeful 26 availment. See Peterson v. Kennedy, 771 F.2d 1244, 1262 27 (9th Cir. 1985) (internal quotation marks and citation 28 omitted) (“Ordinarily use of the mails, telephone, or 14 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 15 of 20 Page ID #:378

1 other international communications simply do not qualify

2 as purposeful activity invoking the benefits and

3 protection of the forum state.”). Plaintiff argues that 4 Defendant subjected itself to jurisdiction in California 5 by affirmatively promising to pay Plaintiff for the 6 services sought by Patient KH, but the FAC does not 7 allege that Defendant specifically promised to pay for 8 services sought by Patient KH. See FAC ¶¶ 30-37. Even 9 if it did, the Court finds that Defendant did not 10 purposefully avail itself of the benefits of California 11 simply by promising to pay for covered services that 12 Plaintiff happened to seek in California. See Hunt v. 13 Erie Ins. Grp., 728 F.2d 1244, 1248 (9th Cir. 1984) 14 (“The mere fact that [defendant] communicated with 15 [plaintiff] in the state, and may have committed a tort 16 in the exchange of correspondence, does not show that 17 [defendant] purposefully availed itself of the privilege 18 of conducting business in California.”); see also 19 Women’s Recovery Ctr., LLC v. Anthem Blue Cross Life & 20 Health Ins. Co., No. 8:20-cv-00102-JWH-ADSx, 2022 WL 21 757315, at *11 (C.D. Cal. Feb. 2, 2022); Aton Ctr., Inc. 22 v. CareFirst Blue Cross BlueShield, 2020 WL 4464482, at 23 *7 (S.D. Cal. Aug. 3, 2020). This is particularly true 24 given Defendant’s lack of control over who becomes a 25 member of the Plan and where those members seek 26 services. The Court cannot base jurisdiction on the 27 unilateral activity of another who decides to seek 28 services in California. See Hunt, 728 F.2d at 1248. 15 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 16 of 20 Page ID #:379

1 In sum, Plaintiff has failed to establish that

2 Defendant has purposefully availed itself of the

3 privilege of conducting business in California. The 4 Court therefore GRANTS Defendant’s Motion to Dismiss for 5 lack of personal jurisdiction. 6 3. Plaintiff’s Motion for Leave to Amend 7 While “leave to amend shall be freely given when 8 justice so requires, it is not to be granted 9 automatically.” In re Western States Wholesale Nat. Gas 10 Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013) 11 (internal quotation marks and citation omitted). 12 “Futility of amendment can, by itself, justify the 13 denial of a motion for leave to amend.” Bonin v. 14 Calderon, 59 F.3d 815, 845 (9th Cir. 1995). 15 Accordingly, leave to amend may be denied on futility 16 grounds where a proposed amendment would be subject to 17 dismissal. Starlight Cinemas v. Regal Ent. Grp., No. CV 18 14–5463–R, 2015 WL 12748633, at *1 (C.D. Cal. Feb. 4, 19 2015) (citing Carrico v. City & Cnty. of S.F., 656 F.3d 20 1002, 1008 (9th Cir. 2011)). 21 Defendant argues that Plaintiff should not be 22 permitted to amend its complaint because the proposed 23 Second Amended Complaint (“SAC”) does not cure the FAC’s 24 deficiencies, and amendment would therefore be futile. 25 See generally Def.’s Opp’n to Mot. to Amend, ECF No. 16. 26 Plaintiff provided no substantive argument in its Motion 27 as to why its proposed amendment cures the deficiencies 28 of the FAC and failed to file a Reply in response to the 16 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 17 of 20 Page ID #:380

1 arguments raised by Defendant. The Court concludes that

2 the proposed SAC fails to cure the deficiencies of both

3 the ERISA claim and the Court’s personal jurisdiction. 4 The Court therefore DENIES Plaintiff’s request for leave 5 to amend its complaint. 6 a. ERISA Claim 7 As relevant to the ERISA claim, Plaintiff’s 8 proposed SAC adds the exact language from the Plan that 9 defines “Allowed Benefit” as the lower of either the 10 medical provider’s actual charge or the established fee 11 schedule. See Stieglitz Decl. in Supp. of Mot. to Amend 12 Ex. A (“Proposed SAC”) at 12-13, ECF No. 15-2. However, 13 the proposed SAC still fails to explain how Defendant’s 14 payment violates this Plan language. For the reasons 15 state above, Plaintiff fails to satisfy its burden for 16 pleading an ERISA violation. Allowing amendment on this 17 basis alone would be futile and would result in 18 dismissal. 19 b. Personal Jurisdiction 20 Plaintiff includes facts in the proposed SAC that 21 presumably attempt to establish personal jurisdiction 22 over Defendant in two new ways, neither of which are 23 persuasive. First, Plaintiff adds ASRC as a defendant 24 and alleges that nearly all of Defendant’s acts were 25 committed on behalf of ASRC, a foreign company 26 registered to do business in California. See Proposed 27 FAC at 2, 9-14. Second, Plaintiff includes facts about 28 a second phone conversation it had with Defendant on 17 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 18 of 20 Page ID #:381

1 April 15, 2019. Id. at 10. 2 Plaintiff seems to include facts establishing an

3 agency relationship between Defendant and ASRC for the 4 purpose of imputing any jurisdiction the Court may have 5 over ASRC to Defendant. The Court has found no 6 authority to support such a theory. While it is well 7 established that the actions of an agent are 8 attributable to the principal for purposes of specific 9 jurisdiction, see Sher, 911 F.2d at 1362, it does not 10 follow that a court’s jurisdiction over a principal 11 should be imputed to the agent based on the mere fact of 12 the agency relationship. Rather, “jurisdiction over 13 each defendant must be established individually.” Id. 14 at 1365 (rejecting the notion that jurisdiction over a 15 partnership established jurisdiction over the partners 16 because “jurisdiction depends only upon each defendant’s 17 relationship with the forum”). Thus, allowing Plaintiff 18 to add ASRC and allege an agency relationship for the 19 purpose of establishing personal jurisdiction over 20 Defendant would be futile. 21 The SAC also seeks to add facts about a second 22 phone call Plaintiff made to Defendant on April 15, 23 2019, during which Defendant confirmed that the 24 procedures sought by Patient KH “were authorized” and 25 that no “pre-certification or pre-determination was 26 needed.” Proposed SAC at 10. These additional facts do 27 not establish Defendant’s purposeful availment because, 28 as stated above, Defendant cannot be subjected to this 18 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 19 of 20 Page ID #:382

1 Court’s jurisdiction simply because of its telephonic

2 confirmation that certain services were covered by a

3 self-funded plan for which it serves only as an 4 administrator. Moreover, Defendant did not initiate 5 these calls and Plaintiff does not allege that Defendant 6 ever affirmatively promised to pay a certain amount for 7 Patient KH’s procedures. See Healthcare Ally, 787 F. 8 App’x at 418 (finding insufficient evidence of 9 purposeful availment where defendant did not initiate 10 phone calls with medical provider and “did not promise 11 to pay for the patients’ medical services . . . but 12 instead merely confirmed that the patients were covered 13 by the policies”). Therefore, allowing Plaintiff to 14 amend its claims to include these facts would also be 15 futile. 16 In sum, the proposed SAC does not include any facts 17 that would cure the FAC of the deficiencies outlined in 18 this Order. Amendment would therefore be futile, and 19 the Court DENIES Plaintiff’s Motion for Leave to Amend 20 on this basis. 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 19 Case 2:22-cv-01217-RSWL-MRW Document 21 Filed 06/03/22 Page 20 of 20 Page ID #:383

1 III. CONCLUSION 2 Based on the foregoing, the Court GRANTS

3 Defendant’s Motion to Dismiss. The Court DENIES 4 Plaintiff’s Motion for Leave to Amend because 5 Plaintiff’s proposed SAC fails to cure the deficiencies 6 outlined in this Order. 7 IT IS SO ORDERED. 8 9 DATED: June 3, 2022 ______/s_/ _R_o_n_al_d_ S_._W_. _L_e_w_______

HONORABLE RONALD S.W. LEW

10 Senior U.S. District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20