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

[3] 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA [6] 7 SALOOJAS INC., Case No. 22-cv-03267-MMC 8 Plaintiff, ORDER GRANTING DEFENDANT’S 9 v. MOTION TO DISMISS AND STRIKE 10 BLUE SHIELD OF CALIFORNIA LIFE AND HEALTH INSURANCE 11 COMPANY, 12 Defendant. [13] Before the Court is defendant Blue Shield of California Life and Health Insurance [14] Company’s (“Blue Shield”) motion, filed November 21, 2022, “to Dismiss Plaintiff’s [15] Amended Class Action Complaint,” by which Blue Shield seeks an order dismissing all [16] claims in plaintiff Saloojas, Inc.’s (“Saloojas”) Amended Complaint (“AC”), pursuant to [17] Rules 12(b)(6) and 12(b)(1) of the Federal Rules of Civil Procedure, and, in the [18] alternative, striking portions of said complaint, pursuant to Rule 12(f). Saloojas has filed [19] opposition, to which Blue Shield has replied. The Court having read and considered the [20] parties’ respective written submissions, the motion, as set forth below, will be granted.1 [21] Saloojas filed its original complaint on July 12, 2022, which pleading contained six [22] claims for relief. By order filed October 3, 2022, the Court dismissed without leave to [23] amend Claim I, titled “Violation of the FFCRA and the CARES Act,” Claim II, titled [24] “Violation of Section 501(a)(1)(B) of ERISA,” and Claim V, titled “Injunctive Relief (Non25 ERISA),” and dismissed with leave to amend Claim III, titled “Violation of 18 U.S.C. [27] 1 Section 1962(c) (RICO),” Claim IV, titled “Promissory Estoppel (Non-ERISA),” and Claim 2 VI, titled “Unlawful, Unfair, and Fraudulent Business Acts and Practices.” (See Order 3 Granting Defendant’s Motion to Dismiss (hereinafter, “October 3 Order”).) The Court 4 further ordered Saloojas to “not . . . add any new claims . . . without obtaining leave of 5 court.” (See October 3 Order at 4:22-23.) 6 In the AC, Saloojas brings four claims for relief, each again identified by a Roman 7 numeral.2 8 A. Claim I 9 Claim I, titled “Violation of Section 501(a)(1)(B) of ERISA,” is hereby stricken, for 10 the reason that the Court previously dismissed said claim without leave to amend. (See 11 October 3 Order at 2:17-3:13; 4:17); see also Stiles v. Wal-Mart Stores, Inc., 2018 WL 12 3093501, at *5 (E.D. Cal. June 20, 2018) (noting “the great weight of authority in this 13 circuit indicates that it is both proper and desirable to strike realleged claims that were 14 previously dismissed with prejudice”; further noting “allowing [p]laintiff to replead 15 dismissed claims does nothing but waste the time and resources of both [d]efendants 16 and the Court, who must continuously parse out viable claims from dismissed-but-replead 17 claims”). Moreover, the claim, as now pleaded in the AC, remains deficient for the 18 reasons stated in the Court’s prior order. 19 B. Claim II 20 Claim II, titled “Insurance Bad Faith and Fraud,” is hereby stricken, for the reason 21 that said new claim exceeds the scope of the leave granted by the Court in its October 3 22 Order. (See October 3 Order at 4:22-23 (holding “Saloojas may not . . . add any new 23 claims . . . without obtaining leave of court”)); see also Benton v. Baker Hughes, 2013 WL 24 3353636, at *3 (C.D. Cal. June 30, 2013), aff’d, 623 Fed. App’x 888 (9th Cir. 2015) [26] 2 Saloojas filed an amended complaint on October 24, 2022 (see Dkt. No. 28), and 27 thereafter filed two “corrected” versions of said pleading on October 26, 2022 (see Dkt. 1 (holding, where amended pleading “exceeds the scope of the leave to amend granted, 2 . . . it is appropriate to strike the newly added claims on [such] basis”) (collecting cases); 3 Fed. R. Civ. P. 15(a)(2) (providing “a party may amend its pleading only with the 4 opposing party’s written consent or the court’s leave”). 5 The Court notes, moreover, that even if the claim did not exceed the scope of the 6 leave previously granted, it nonetheless would be subject to dismissal, on the ground that 7 it fails to state a claim. In particular, to the extent the claim is based on insurance bad 8 faith liability, Saloojas has failed to identify any policy under which it is an insured, or that it has been assigned the rights of an insured under any policy. See Major v. W. Home [9] Ins. Co., 169 Cal. App. 4th 1197, 1209 (2009) (noting “to establish . . . insurer’s bad faith [10] liability, the insured must show that the insurer has . . . withheld benefits due under the [11] policy” (internal quotation and citation omitted)); see also Gulf Ins. Co. v. TIG Ins. Co., 86 12 Cal. App. 4th 422, 430 (2001) (holding “[c]laims for bad faith violation of an insurance [13] contract are strictly tied to an implied covenant of good faith and fair dealing, which arises [14] out of an underlying contractual relationship” (internal quotation and citation omitted)).3 [15] To the extent the claim is based on fraud, Saloojas fails to identify any “false [16] representation,” see Engalla v. Permanente Med. Group, Inc., 15 Cal.4th 951 , 974 [17] (1997), let alone “state with particularity the circumstances constituting fraud[,]” see Fed. [18] R. Civ. P. 9(b); Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (holding Rule [19] 9(b) “requires . . . an account of the time, place, and specific content of the false [20] representations as well as the identities of the parties to the misrepresentations” (internal [21] quotation and citation omitted)). [22] C. Claim III [23] Claim III, titled “Unlawful, Unfair and Fraudulent Business Acts and Practices” and [25] 3 Although Saloojas alleges the “Covid 19 Consent” form attached to the AC “acts [26] as an assignment giving [Saloojas] the right to submit the claims to Blue Shield for payment on [insureds’] behalf for the Covid testing services rendered to them” (see AC [27] ¶ 42), the Court, in its prior order, has found said document “does not suffice to constitute 1 brought under § 17200 of the California Business & Professions Code (“UCL”), is, as 2 discussed below, subject to dismissal for the reason that Saloojas fails to allege facts 3 sufficient to state a claim under any prong of the UCL. 4 As to the “unlawful” prong, to the extent the claim is predicated on Blue Shield’s 5 alleged violation of § 3202 of the Coronavirus Aid, Relief, and Economic Security Act 6 (“CARES Act”), Pub. L. 116-136, 134 Stat. 281 (2020) (see FAC ¶ 80), Saloojas fails to 7 plead facts establishing that it listed a cash price for Covid-19 testing on a public website, 8 see § 3202(a)(2), 134 Stat. at 367 (providing plans “shall reimburse the provider [of 9 Covid-19 diagnostic testing] in an amount that equals the cash price for such service as 10 listed by the provider on a public internet website”), and to the extent the claim is 11 predicated on California Health & Safety Code § 1342.2, Saloojas has not pleaded any 12 facts to support its conclusory allegation that Blue Shield “failed to reasonably reimburse 13 [Saloojas] in accordance with Section 1342” (see AC ¶¶ 13, 80); see Cal. Health & Safety 14 Code § 1342.2(a)(4) (providing plans “shall reimburse [out-of-network providers] for all 15 testing items or services in an amount that is reasonable, as determined in comparison to 16 prevailing market rates”); see also Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 17 1544, 1554 (2007) (dismissing UCL claim brought under “unlawful” prong; finding 18 complaint “fail[ed] to plead facts to support its allegations that [defendant] ha[d] violated . 19 . . [predicate] statutes”). 20 To the extent the claim is predicated on the “unfair” prong, Saloojas essentially 21 reiterates the standard for unfairness under the UCL, without further elaboration beyond 22 a general reference to the preceding paragraphs of the AC, i.e., the allegations on which 23 he bases Claims I through III. (See FAC ¶ 84); see also McDonald v. Coldwell Banker, [24] 543 F.3d 498, 506 (9th Cir. 2008) (defining unfair business practice). Those allegations, 25 however, provide no better support at this juncture. 26 Lastly, to the extent the claim is predicated on the “fraudulent” prong, it fails for the 27 reasons discussed in Section B, namely, Saloojas’s failure to identify a fraudulent 1 9(b). See Saloojas, Inc. v. Cigna Healthcare of Cal., Inc., 2022 WL 5265141 , at *9 (N.D. 2 || Cal. Oct. 6, 2022) (holding “claims under the UCL are . . . subject to Federal Rule of Civil 3 || Procedure 9(b)’s pleading requirements’). 4 D. Claim IV 5 Claim IV, titled “Violation of 18 U.S.C. Section 1962 (c) (RICO),” is subject to 6 dismissal for the reasons stated in the Court’s October 3 Order, namely, that Saloojas 7 || fails to allege facts sufficient to support a finding that Blue Shield engaged in racketeering 8 || activity. In that regard, to the extent the claim is again predicated on mail and/or wire 9 || fraud (see AC If] 93, 94), Saloojas fails to add facts sufficient to support a finding that 10 Blue Shield has engaged in such conduct, and to the extent the claim is predicated on 11 “embezzlement, theft, and conversion of self-funded health plan assets” (see AC {| 94), 12 Saloojas fails to plead facts demonstrating how, nor has he cited to any authority holding, 5 13 || a failure to pay a plan benefit can give rise to any such claim, see United States v. 14 || Andreen, 628 F.2d 1236, 1241 (9" Cir. 1980) (noting “the essence of the crime [of 8 15 || embezzlement] is theft”); Haas v. Travelex Ins. Servs. Inc., 555 F. Supp. 3d 970 , 982 é 16 |} (C.D. Cal. 2021) (noting “courts in the Ninth Circuit have not hesitated to dismiss claims G 17 || for conversion when the claim amounted to no more than a demand for reimbursement of 5 18 || □ payment”). 19 CONCLUSION 20 For the reasons stated, Claims | and II are hereby STRICKEN, and Claims III and 21 IV are hereby DISMISSED without further leave to amend. [22] 23 IT IS SO ORDERED. [24] 25 Dated: January 6, 2023 LY. MAXINE M. CHESNEY 26 United States District Judge