United States District Court, D. South Carolina, Florence Division
OPINION AND ORDER
C. Coggins, Jr. United States District Judge
matter comes before the Court on Defendant's Motion to
Dismiss. ECF No. 7. Plaintiff filed a Response in Opposition,
and Defendant filed a Reply. ECF Nos. 12-13. Additionally,
Plaintiff filed two Notices of Supplemental Authority, to
which Defendant filed Replies. ECF Nos. 14, 15, 19, 20.
Accordingly, the Motion is ripe for review.
Procedural and Factual History
Humana Insurance Company ("Humana") is a Medicare
Advantage Organization ("MAO"). As an MAO, Humana
is a "secondary payer, " which means that
workers' compensation, liability insurance, and no-fault
insurance are the primary payer on any claim for medical
benefits. "When an MAO makes a payment for medical
services that are the responsibility of a primary plan . . .
those payments are conditional, whether the primary
plan's liability was established at the time of the
conditional payment or not." ECF No. 1 at 6.
"Optimally, when items and services are covered by both
a primary plan and by Medicare benefits, the providers submit
their charges to the primary payer, and Medicare
avoids the expense of paying those
charges." Id. "Alternatively, when
Medicare makes a conditional payment for medical services
that have a primary payer, regardless of the reason, Medicare
may seek to recover those
conditional payments." Id. at 6-7 (citations
case arises out of a slip and fall accident at a store
operated by Defendant. On August 29, 2013, a Humana enrollee
("Enrollee") fell at a Bi-Lo grocery store. At the
time of the accident, Enrollee was eligible for Medicare and
elected coverage through Humana. As a result of the fall,
Humana has expended at least $25, 449.88 in conditional
payments for claims submitted on behalf of Enrollee. In May
2016, Defendant entered into a settlement with Enrollee,
agreeing to pay Enrollee $80, 000 in exchange for a release
of all claims. In the summer of 2016, Defendant disbursed the
settlement payment directly to Enrollee. According to Humana,
"[a]lthough Enrollee was primarily responsible for
reimbursing these [conditional payment] funds within 60 days
of Defendant's payment, 42 C.F.R. § 411.24(h), the
Defendant remained responsible to reimburse Humana under
applicable federal regulations, e.g., 42 C.F.R.
§ 411.24(i)(1), and, by failing to make advance
arrangements to see that this occurred, assumed the risk of
being responsible to ensure that Humana was paid in the event
Enrollee breached its obligations." ECF No. 1 at 9.
did not comply with her obligation to repay Humana, leading
Humana to send Defendant's counsel a demand letter for
reimbursement of the conditional payments made on
Enrollee's behalf. Defendant did not respond to
Humana's letter. To date, Humana has not received any
reimbursement for those conditional payments. Accordingly,
Humana filed a Complaint against Defendant alleging two
causes of action. First, Humana seeks a declaratory judgment
as to Defendant's obligation to reimburse the conditional
payments. Second, Humana seeks double damages pursuant to a
private cause of action created by 42 U.S.C. §
1395y(b)(3)(A). In response to Plaintiff's Complaint,
Defendant filed a Motion to Dismiss pursuant to Federal Rule
of Civil Procedure 12(b)(6) and 12(b)(7). ECF No. 7.
Federal Rule of Civil Procedure 12(b)(6)
12(b)(6) of the Federal Rules of Civil Procedure permits the
dismissal of an action if the complaint fails "to state
a claim upon which relief can be granted." Such a motion
tests the legal sufficiency of the complaint and "does
not resolve contests surrounding the facts, the merits of the
claim, or the applicability of defenses .... Our inquiry then
is limited to whether the allegations constitute 'a short
and plain statement of the claim showing that the pleader is
entitled to relief.'" Republican Party of N. C.
v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (internal
quotation marks and citation omitted). In a Rule 12(b)(6)
motion, the Court is obligated to "assume the truth of
all facts alleged in the complaint and the existence of any
fact that can be proved, consistent with the complaint's
allegations." E. Shore Mkts., Inc. v. J.D. Assocs.
Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000).
However, while the Court must accept the facts in a light
most favorable to the nonmoving party, it "need not
accept as true unwarranted inferences, unreasonable
conclusions, or arguments." Id.
survive a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), the complaint must state "enough
facts to state a claim to relief that is plausible on its
face." Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). Although the requirement of plausibility
does not impose a probability requirement at this stage, the
complaint must show more than a "sheer possibility that
a defendant has acted unlawfully." Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). A complaint has
"facial plausibility" where the pleading
"allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged."
Federal Rule of Civil Procedure 12(b)(7)
Rule of Civil Procedure 12(b)(7) provides that courts may
dismiss suits where a plaintiff fails to join a party under
Rule 19. In order to determine whether an action should be
dismissed on this basis, it is necessary to refer to Rule 19,
which sets forth a two-step process for determining whether a
party should be joined. "First, the district court must
determine whether the party is 'necessary' to the
action under Rule 19(a). If the court determines that the
party is 'necessary, ' it must then determine whether
the party is 'indispensable' to the action under Rule
19(b)." Nat'l Union Fire Ins. Co. v. Rite Aid of
South Carolina, Inc., 210 F.3d 246, 249 (4th Cir. 2000).
of a case is a drastic remedy, however, which should be
employed only sparingly." Teamsters Local Union No.
171 v. Keal Driveaway Co., 173 F.3d 915, 918 (4th Cir.
1999). "When an action will affect the interests of a
party not before the court the ultimate question is this:
Were the case to proceed, could a decree be crafted in a way
that protects the interests of the missing party and that
still provides adequate relief to a successful
litigant?" Id. (citation omitted).
"Although framed by the multi-factor tests of Rule 19(a)
& (b), 'a decision whether to dismiss must be made
pragmatically, in the context of the substance of each case,
rather than by procedural formula.'" Id.
(quoting Provident Tradesmens Bank & Trust Co. v.
Patterson, 390 U.S. 102, 119 n. 16 (1968)). "A
court must examine the facts of the particular controversy to
determine the potential for prejudice to all parties,
including those not before it." Id. (citation