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MSP Recovery Claims, Series LLC v. Grange Insurance Co.

United States District Court, N.D. Ohio

December 12, 2019

MSP Recovery Claims, Series LLC, et al., Plaintiffs,
v.
Grange Insurance Company, Defendant

          MEMORANDUM OPINION AND ORDER

          PAMELA A. BARKER, U.S. DISTRICT JUDGE

         Currently pending is Defendant Grange Insurance Company's Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6). (Doc. No. 12.) Plaintiffs MSP Recovery Claims, Series, LLC and Series 16-11-509 filed a Brief in Opposition, to which Defendant replied. For the following reasons, Defendant's Motion to Dismiss is GRANTED IN PART and DENIED IN PART.

         I. Procedural Background

         On January 28, 2019, Plaintiffs MSP Recovery Claims, Series LLC and Series 16-11-509, LLC (hereinafter referred to collectively as “Plaintiffs”) filed a Class Complaint[1] against Defendant Grange Insurance Company asserting a private cause of action for double damages under the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b)(3)(A). (Doc. No. 1.) Therein, Plaintiffs allege that Defendant “has repeatedly failed to reimburse payments by Plaintiff's assignors and the Class Members on behalf of Medicare beneficiaries enrolled in Part C of the Medicare Act . . .for medical expenses resulting from injuries sustained in an accident.” (Id. at ¶ 2.)

         Grange filed a Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and (6) on April 4, 2019. (Doc. No. 12.) Plaintiffs filed a Brief in Opposition on May 6, 2019 (Doc. No. 17), to which Grange replied on June 3, 2019 (Doc. No. 21.) The parties each subsequently filed Notices of Supplemental Authority. (Doc. Nos. 24, 25.)

         This matter was re-assigned to the undersigned on June 28, 2019 pursuant to General Order 2019-13.

         II. Factual Allegations

         The Class Complaint contains the following factual allegations. On December 26, 2014, E.C. was injured in an accident, as a result of which he/she sustained a variety of injuries and required medical treatment and services. (Doc. No. 1 at ¶¶ 8, 9.) At this time, E.C. was enrolled in a Medicare Advantage Plan[2] issued and administered by SummaCare, Inc. (Id. at ¶ 7.) E.C.'s medical providers issued a bill for payment of the accident-related medical expenses to SummaCare in the amount of $8, 864.78. (Id. at ¶ 10.) SummaCare paid $786.46. (Id.)

         The tortfeasor responsible for the accident was insured by Defendant Grange under a liability insurance policy. (Id. at ¶ 8.) E.C. subsequently made a claim against the tortfeasor, which Defendant settled for the total amount of $13, 800. (Id. at ¶ 11.) Plaintiffs allege that, as a result of this settlement, “Defendant became a primary payer and subject to liability for E.C.'s accident-related medical expenses.” (Id.)

         Plaintiffs allege a similar set of facts with respect to claims relating to medical services provided to D.W. and M.K, both of whom were also enrolled in Medicare Advantage Plans issued and administered by SummaCare. Specifically, Plaintiffs allege that, on May 6, 2012 and October 25, 2015, respectively, D.W. and M.K. were injured in accidents caused by tortfeasors insured by Defendant under liability insurance policies. (Id. at ¶¶ 20, 27.) D.W. and M.K. sustained injuries that necessitated medical services and treatment. (Id. at ¶¶ 20-21, 27-28.) D.W.'s medical providers issued a bill for payment of the accident-related medical expenses to SummaCare in the amount of $7, 601.13, of which SummaCare paid $2, 114.50. (Id. at ¶ 29.) M.K.'s medical providers issued a bill for payment of the accident-related medical expenses to SummaCare in the amount of $218, 486.01, of which SummaCare paid $51, 393.27. (Id. at ¶ 22.) D.W. and M.K. asserted claims against Defendant's insureds, which Defendant subsequently settled for unspecified amounts. (Id. at ¶¶ 23, 30.) Plaintiffs allege that, as a result of these settlements, Defendant became a primary payer and subject to liability for D.W.'s and M.K.'s accident-related medical expenses. (Id.)

         Plaintiffs MSP Recovery Claims, Series, LLC and Series 16-11-509, LLC claim that, as a primary payer, Defendant is legally obligated to reimburse for Medicare payments made by SummaCare with respect to E.C., D.W., and M.K. (Id. at ¶ 3.) Plaintiffs allege that they have the legal right to pursue these claims for reimbursement pursuant to a series of assignment agreements, copies of which are attached to the Complaint. (Id. at ¶ 13.) See also Doc. Nos. 1-5, 1-6. Specifically, Plaintiffs allege that, on May 12, 2017, SummaCare and MSP Recovery, LLC entered into a “Recovery Agreement, ” in which SummaCare irrevocably assigned all rights to recover conditional payments made on behalf of its enrollees to MSP Recovery, LLC.[3] (Doc. No. 1-5 at § 4.1) (hereinafter the “Recovery Agreement”). Thereafter, on June 12, 2017, MSP Recovery, LLC assigned all rights under the Recovery Agreement to “Series 16-11-509, LLC, a series of MSP Recovery Claims, Series LLC.” (Id. at ¶ 15.) See Doc. No. 1-6. On September 5, 2018, SummaCare sent a letter to MSP Recovery, LLC in which it confirmed that it “has consented to, approved, and ratified the assignment of Recovery Agreement executed on June 12, 2017 by MSP Recovery, LLC, and all rights contained therein, including all claims and reimbursement rights, to and in favor of MSP Recovery Claim Series, LLC or any of its designated series, including but not limited to, Series 16-11-509.” (Doc. No. 1-7.)

         Meanwhile, on May 10, 2017, MSP Recovery, LLC sent a letter to Defendant regarding SummaCare's payment of E.C.'s medical expenses, in which it placed Defendant “on notice that pursuant to our client's rights as an MAO or a contracted risk provider, to the extent that payment for Medicare health benefits and costs for medical services and/or supplies were made by the Medicare Secondary Payer or at risk provider for which your Company is the primary payer and/or plan, we hereby assert our rights as a Medicare secondary payer, and request that you provide us the information requested below in order to confirm our rights and comply with our coordination of benefits obligations.” (Doc. No. 1-4.) The information requested by MSP Recovery, LLC included the insured's contact information, a copy of the policy, the limits of liability, a statement of any policy or coverage defenses, and any copies of documents or checks evidencing any settlements made on behalf of the Medicare beneficiary. (Id.)

         After Defendant failed to submit reimbursement for E.C., D.W. or M.K.'s medical expenses, Plaintiffs MSP Recovery Claims, Series LLC and Series 16-11-509, LLC filed the instant action against Defendant Grange on January 28, 2019. (Doc. No. 1.)

         III. Standards of Review

         Defendant moves for dismissal on the basis of both lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1), and failure to state a claim under Fed.R.Civ.P. 12(b)(6). The standard of review of a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction depends on whether the defendant makes a facial or factual challenge to subject matter jurisdiction. Wayside Church v. Van Buren County, 847 F.3d 812, 816-17 (6th Cir. 2017). A facial attack “questions merely the sufficiency of the pleading” and requires the district court to “take[ ] the allegations in the complaint as true.” Gentek Bldg Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). To survive a facial attack, the complaint must contain a short and plain statement of the grounds for jurisdiction. See Rote v. Zel Custom Mfg. LLC, 816 F.3d 383, 387 (6th Cir. 2016); Ogle v. Ohio Civil Service Employees Ass'n, AFSCME, Local 11, 397 F.Supp.3d 1076, 1081-1082 (S.D. Ohio 2019).

         A factual attack, on the other hand, “raises a factual controversy requiring the district court ‘to weigh the conflicting evidence to arrive at the factual predicate that subject-matter does or does not exist.'” Wayside Church, 847 F.3d at 817 (quoting Gentek Bldg. Prods., Inc., 491 F.3d at 330). The plaintiff has the burden of proving jurisdiction when subject matter jurisdiction is challenged. Rogers v. Stratton Indus., 798 F.2d 913, 915 (6th Cir. 1986). The court may allow “affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts.” Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990).

         Under Fed.R.Civ.P. 12(b)(6), the Court accepts the plaintiff's factual allegations as true and construes the Complaint in the light most favorable to the plaintiff. See Gunasekara v. Irwin, 551 F.3d 461, 466 (6th Cir. 2009). In order to survive a motion to dismiss under this Rule, “a complaint must contain (1) ‘enough facts to state a claim to relief that is plausible,' (2) more than ‘formulaic recitation of a cause of action's elements,' and (3) allegations that suggest a ‘right to relief above a speculative level.'” Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (quoting in part Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-556, (2007)).

         The measure of a Rule 12(b)(6) challenge - whether the Complaint raises a right to relief above the speculative level - “does not ‘require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.'” Bassett v. National Collegiate Athletic Ass'n., 528 F.3d 426, 430 (6th Cir.2008) (quoting in part Twombly, 550 U.S. at 555-556). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Deciding whether a complaint states a claim for relief that is plausible is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

         Consequently, examination of a complaint for a plausible claim for relief is undertaken in conjunction with the “well-established principle that ‘Federal Rule of Civil Procedure 8(a)(2) requires only a short and plain statement of the claim showing that the pleader is entitled to relief.' Specific facts are not necessary; the statement need only ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'” Gunasekera, 551 F.3d at 466 (quoting in part Erickson v. Pardus, 551 U.S. 89 (2007). Nonetheless, while “Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era ... it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 556 U.S. at 679.

         IV. Analysis

         Defendant argues Plaintiffs' claim should be dismissed for several reasons. First, Defendant argues that Plaintiffs lack standing to pursue claims under the Medicare Secondary Payer Act (“MSPA”), 42 U.S.C. §§ 1395y(b)(3)(A) because Plaintiffs have failed to either (1) demonstrate that there is a valid assignment of claims by an MAO to Plaintiffs; or (2) plausibly allege an injury causally related to MSPA claims because the Complaint does not allege facts establishing that the statutory requirements for conditional payments were met by Plaintiffs' assignor. (Doc. No. 12.) Second, Defendant argues that the Complaint should be dismissed because Medicare Advantage Organizations (“MAOs”) do not have a private right of action under the MSPA. (Id.) Third, Defendant argues that Plaintiffs' claims are barred because they failed to adhere to the MSPA's three-year presentment deadline and/or did not provide proper notice to Defendant of conditional payments. (Id.) Fourth, and finally, Defendant argues dismissal is warranted because Plaintiffs fail to allege facts showing that Grange had a responsibility to pay, which Defendant argues is required to pursue reimbursement claims under the MSPA. (Id.)

         Prior to reaching the merits of the parties' arguments, the Court will briefly set forth the statutory and regulatory background relevant to Plaintiffs' claims.

         A. Statutory and Regulatory Background

         “Medicare is a federal health insurance program that provides health insurance benefits to people sixty-five years of age or older, disabled people, and people with end-stage renal disease.” Stalley v. Methodist Healthcare, 517 F.3d 911, 915 (6th Cir. 2008). Parts A and B of the Medicare Act create, describe, and regulate traditional fee-for-service Medicare provisions, which are administered by the Centers for Medicare & Medicaid Services (“CMS”). See In re Avandia Marketing, Sales Practices and Products Liability Litigation, 685 F.3d 353, 357 (3rd Cir. 2012). Part C creates the program now known as Medicare Advantage, under which Medicare-eligible persons may elect to obtain their Medicare benefits through private insurers (also known as Medicare Advantage Organizations or MAOs) instead of receiving direct benefits from the government under Parts A and B. Id. See also Humana Medical Plan, Inc v. Western Heritage Insurance Co., 832 F.3d 1229, 1233 (11th Cir. 2016).

         Initially, “Medicare paid for all medical treatment within its scope and left private insurers merely to pick up whatever expenses remained.” Bio-Med. Applications of Tenn., Inc. v. Cent. States Se. & Sw. Areas Health & Welfare Fund, 656 F.3d 277, 278 (6th Cir. 2011). In 1980, in an effort to curb the rising costs of Medicare, Congress enacted the Medicare Secondary Payer Act (“MSP”), which is located in Part E of the Medicare Act. See 42 U.S.C. § 1395y(b). Under this Act, when both Medicare and a private plan would cover a Medicare beneficiary's expenses, Medicare is the “secondary payer” and the private plan is the “primary payer.” Bio-Med. Applications, 656 F.3d at 281. As the Sixth Circuit explained, “[t]he primary payer is responsible for paying for the patient's medical treatment; however, if Medicare expects that the primary payer will not pay promptly, then Medicare can make a ‘conditional payment' on its behalf and later seek reimbursement.” Id. See 42 U.S.C. § 1395y(b)(2)(B)(i). If Medicare makes a conditional payment, the primary plan must reimburse the Medicare Trust Fund. 42 U.S.C. § 1395y(b)(2)(B)(ii). If the primary plan fails to reimburse the Fund, “the United States may bring an action against any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan.” 42 U.S.C. § 1395yb(2)(B)(iii). The United States may then, “in accordance with paragraph (3)(A) collect double damages against any such entity.” Id.

         Paragraph (3)(A) of the MSP Act, entitled “Private cause of action, ” provides as follows:

There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).

42 U.S.C. § 1395y(b)(3)(A). Subparagraph (1) relates to group health plans and is not relevant to the issues presented herein. Subparagraph (2)(A) provides that Medicare may not pay when a primary plan is expected to pay, “except as provided in subparagraph [2](B), ” which in turn provides that when the primary plan “has not or cannot reasonably be expected” to pay “promptly, ” “the Secretary” may make a conditional payment. See 42 U.S.C. §§ 1395y(b)(2)(A) and (B). See also Michigan Spine & Brain Surgeons, PLLC v. State Farm Mutual Automobile Ins. Co., 758 F.3d 787, 792 (6th Cir. 2014).

         Interpreting the above, courts have found that “[t]he Medicare Statute thus creates two separate causes of action allowing for recovery of double damages where a primary payer fails to cover the costs of medical treatment.” In re Avandia, 685 F.3d at 359. When Medicare makes a conditional payment and the primary payer does not reimburse it, the United States may bring suit pursuant to § 1395y(b)(2)(B)(iii). In addition, a private cause of action exists pursuant to § 1395y(b)(3)(A) when a primary payer fails to make required payments.

         The Medicare Advantage Act, commonly known as Part C, was enacted in 1997, seventeen years after the enactment of the MSP Act. Humana Medical Plan, Inc., 832 F.3d at 1235. “Congress's goal in creating the Medicare Advantage program was to harness the power of private sector competition to stimulate experimentation and innovation that would ultimately create a more efficient and less expensive Medicare system.” In re Avandia, 685 F.3d at 363 (citing H.R. Rep. No. 105-217, at 585 (1997), 1997 U.S.C.C.A.N. 176, 205-06 (Conf. Rep.)). Under the Medicare Advantage program, a private insurance company, operating as an MAO, administers the provision of Medicare benefits pursuant to a contract with CMS.[4] Part C includes a reference to the MSP, entitled “Organization as secondary payer, ” which states as follows:

Notwithstanding any other provision of law, [an MAO][5] may (in the case of the provision of items and services to an individual under [an MA] plan under circumstances in which payment under this subchapter is made secondary pursuant to section 1395y(b)(2) of this title) charge or authorize the provider of such services to charge, in accordance with the charges allowed under a law, plan, or policy described in such section-
(A) the insurance carrier, employer, or other entity which under such law, plan, or policy is to pay for the provision of such services, or
(B) such individual to the extent that the individual has been paid under such law, plan, or policy for such services.

42 U.S.C. § 1395w-22(a)(4). In several cases, a MAO has contended that § 1395w-22(a)(4) (sometimes called the MAO “right-to-charge” provision) creates an implied federal cause of action for an MAO to recover secondary payments. However, several courts have rejected this argument. See, e.g., Parra v. PacifiCare of Ariz., Inc., 715 F.3d 1146, 1153, 1154 (9th Cir. 2013) (explaining that the MAO right-to-charge provision “does not create a federal cause of action in favor of a[n] MAO”); Care Choices HMO v. Engstrom, 330 F.3d 786, 790 (6th Cir. 2003) (reaching a similar conclusion as to 42 U.S.C. § 1395mm(e)(4), which addresses secondary payment by Medicare-substitute HMOs).

         B. Subject Matter Jurisdiction

         Defendant first argues that this Court lacks subject matter jurisdiction because Plaintiffs do not have standing. (Doc. No. 12-1.) “Article III of the Constitution limits the judicial power of the United States to the resolution of ‘Cases' and ‘Controversies.'” Hein v. Freedom From Religion Found., Inc., 551 U.S. 587, 597-98 (2007) (alteration in original) (quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342, (2006)). The case-or-controversy requirement is satisfied only where a plaintiff has standing. See Sprint Communications Co. v. APCC Services, Inc., 554 U.S. 269, 273 (2008).

         “[T]he irreducible constitutional minimum of standing contains three elements.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). “First, the plaintiff must have suffered an ‘injury in fact'-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Id. (internal quotation marks and citations omitted). “Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be ‘fairly ... trace[able] to the challenged action of the defendant, and not ... th[e] result [of] the independent action of some third party not before the court.'” Id. at 560-61 (quoting Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976)). “Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Id. at 561(internal quotation marks and citation omitted).

         Here, Defendant argues that Plaintiffs lack standing because they have failed to either (1) demonstrate that there is a valid assignment of claims by a MAO to Plaintiffs; or (2) plausibly allege an injury causally related to MSPA claims. (Doc. No. 12-1.) The Court will address each of these arguments in turn.

         1.Validity of Assignment

         Defendant first asserts that this Court lacks subject matter jurisdiction because Plaintiffs fail to allege a valid assignment of claims from SummaCare sufficient to confer standing to assert a claim under §1395y(b)(3)(A). (Doc. No.12-1 at p. 6.) Defendant advances numerous arguments in support of this assertion. Defendant argues that Plaintiffs do not have standing because “the Recovery Agreement does not describe SummaCare as a MAO.” (Id. at p. 8.) Defendant also asserts that Plaintiff MSP Recovery Claims, Series LLC does not have standing to assert a claim because it is not in the chain of assignments from SummaCare; i.e. Plaintiff MSP Recovery Claims, Series LLC is not a party to either the May 2017 Recovery Agreement or the June 2017 Agreement with Plaintiff Series 16-11-509, LLC. (Id.) Defendant then argues that the May 2017 Recovery Agreement is not a true assignment of claims because it does not identify any specific claims or beneficiaries, prohibits assignment without the consent of the other party, is effective for only one year with automatic annual renewal unless terminated, and is “clearly prospective in nature.” (Id. at p. 7.) Finally, Defendant argues that the Recovery Agreement is not a valid assignment under Ohio law because “contingent fee arrangements, in which a party agrees to share recovery with a second party who will pursue the recovery, do not give the second party standing to assert the claim.” (Id. at p. 8.)

         Prior to reaching the merits of Defendant's arguments, the Court first addresses the proper standard of review. As noted above, the standard of review of a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction depends on whether the defendant makes a facial or factual challenge to subject matter jurisdiction. Wayside Church, 847 F.3d at 816-17. Here, Defendant does not clearly indicate whether it is asserting a facial or factual challenge with respect to its argument regarding the validity of the assignments at issue.

         For the following reasons, the Court construes Defendant's Motion as raising a facial attack on the Court's subject matter jurisdiction. Throughout Section III.A.1 of its Motion and Section II.A.1 of its Reply Brief, Defendant bases its arguments on Plaintiffs' alleged failure to plausibly allege the existence of a valid assignment. See, e.g., Doc. No. 12-1 at p. 6; Doc. No. 21 at p. 2. Moreover, Defendant does not cite any affidavits or documents outside those attached to the Complaint in support of its legal arguments. See, e.g., MSP Recovery Claims, Series LLC v. USAA General Indemnity, 2018 WL 5112998 at * 7 (S.D. Fla. Oct. 19, 2018) (“Because USAA does not ask the Court to consider any extrinsic evidence outside the [complaint] or its attachments, the Motion ‘constitutes a ‘facial attack on [Plaintiff's] standing.'”) Thus, and in the absence of any meaningful discussion of this issue in its Motion or Reply Brief, [6] the Court treats Defendant's arguments regarding the validity of the assignments as raising a facial attack. Accordingly, in considering the parties' arguments on this issue, the Court “must take the material allegations of the [complaint] as true and construe[ ] [them] in the light most favorable to the nonmoving party.” United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). See also Gentek Bldg. Prods., 491 F.3d at 330.

         a. Failure to allege that SummaCare is a MAO

         Defendant asserts that dismissal is warranted because “the Recovery Agreement does not describe SummaCare as a MAO, but rather as a Health Maintenance Organization, Maintenance Service Organization, Independent Practice Association, Medical Center, and/or other health care organization and/or provider.” (Doc. No. 12-1 at p. 8.) Defendant argues this language is insufficient to confer standing to assert a cause of action under 42 U.S.C. § 1395y(b)(3)(A). (Id. at p. 9.)

         In response, Plaintiffs note that the Complaint specifically alleges that SummaCare is a MAO. (Doc. No. 17 at p. 1, fn 1). See Doc. No. 1 at ¶ 7. Plaintiffs argue that “Defendant's attempt to call that fact into question strains reason, as SummaCare's status as a MAO is readily confirmed by reference to the MA Plan directory published by the Centers for Medicare and Medicaid Services (‘CMS').” (Id.) Defendant does not address this issue in its Reply Brief.

         The Court finds Plaintiffs have sufficiently alleged that SummaCare is a MAO. In the Complaint, Plaintiffs specifically allege that SummaCare is a MAO and that E.C., D.W. and M.K. were enrolled in Medicare Advantage Plans issued and administered by SummaCare in that capacity. (Doc. No. 1 at ¶¶ 7, 10, 19, 22, 26, 29.) Moreover, while the May 2017 Recovery Agreement does not specifically describe SummaCare as a MAO, it does describe SummaCare as a healthcare organization that provides, or provides for the provision of, medical and health care services to persons, “including but not limited to those who are covered under government healthcare programs such as . . . Medicare Advantage.” (Doc. No. 1-5 at PageID# 47) (emphasis added). In addition, the Agreement provides that MSP Recovery will analyze certain data in order to “identify claims that should be paid by a primary payer, including those that should have been paid . . . as required by state and/or federal laws as it pertains to the processing of claims by a Medicare Advantage Organization.” (Id.) (emphasis added). Taken as a whole, the Court finds that Plaintiffs have sufficiently alleged that SummaCare is a MAO.[7] Defendant's argument to the contrary is without merit.

         b. Chain of Assignments

         Defendant next argues that Plaintiff MSP Recovery Claims, Series LLC does not have standing to assert any claims in this action because it is not in the chain of assignments from SummaCare. (Doc. No. 12-1.) Plaintiffs disagree, arguing that SummaCare assigned its rights to MSP Recovery, LLC, which in turn assigned its rights to Plaintiff Series 16-11-509, LLC, which then entered into an agreement with Plaintiff MSP Recovery Claims, Series LLC allowing it to pursue the action in its own name or in the name of its designated series. (Doc. No. 17 at p. 2.) In response, Defendant argues that Plaintiffs have “failed to plausibly allege the source of” Plaintiff MSP Recovery Claims, Series LLC's alleged contractual right to pursue claims assigned to Series 16-11-509 LLC. (Doc. No. 21 at p. 2.)

         The documents attached to the Complaint reveal the following. On May 12, 2017, SummaCare Inc. executed a “Recovery Agreement, ” pursuant to which it assigned its legal rights to recover certain payments for the provision of health care services to “MSP Recovery, LLC.” (Doc. No. 1-5.) As Defendant correctly notes, “MSP Recovery, LLC” is not a party to the instant action. On June 12, 2017, however, “MSP Recovery, LLC” entered into an Assignment Agreement with “Series 16-11-509, LLC, a series of MSP Recovery Claims, Series LLC.” (Doc. No. 1-6.) This Assignment Agreement provides, in relevant part, as follows:

KNOW ALL MEN BY THESE PRESENTS, that each undersigned Assignor, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, irrevocably assigns, sells, transfers, conveys, sets over and delivers to Assignee and its successors and assigns, any and all of Assignor's right, title, ownership and interest in and to the “Assigned Claims”, “Claims”, Assigned Assets” and “Assigned Documents” (and all proceeds and products thereof) as such terms are defined in the Recovery Agreement dated May 12, 2017, by and among SummaCare, Inc., an Ohio corporation (the “Client”), and MSP Recovery, LLC, a Florida limited liability company (the “Agreement”); irrespective of when the claims were vested in Client, inclusive of any and all claim(s), causes of actions, proceeds, products and distributions of any kind, and proceeds of proceeds, in respect thereof, whether based in contract, tort, statutory right, and any and all rights (including, but not limited to, subrogation) to pursue and/or recover monies that Assignor had, may have had, or has asserted against any party pursuant to the Agreement, including claims under consumer protection statutes and laws, any and all rights and claims against primary payers and/or third parties that may be liable to Client arising from or relating to the Claims and all information relating thereto. *** The intent of the parties is to transfer any and all rights title and interest that MSP Recovery LLC obtained as an assignee from the assignor.

(Doc. No. 1-6.)

         Subsequently, on September 5, 2018, SummaCare sent a letter to MSP Recovery, LLC in which it “confirm[ed], pursuant to the Recovery Agreement, that SummaCare, Inc, has consented to, approved, and ratified the assignment of the Recovery Agreement executed on June 12, 2017 by MSP Recovery, LLC, and all rights contained therein, including all claims and reimbursement rights, to and in favor of MSP Recovery Claims Series, LLC or any of its designated series, including but not limited to, Series 16-11-509.” (Doc. No. 1-7.)

         In the Complaint, Plaintiffs further allege that Plaintiff MSP Recovery Claims, Series LLC has a “limited liability company agreement” that provides for the establishment of one or more designated Series. (Doc. No. 1 at ¶ 55.) Specifically, Plaintiffs allege as follows:

56. MSP Recovery Claims, Series LLC has established various designated series pursuant to Delaware law in order to maintain various claims recovery assignments separate from other Company assets, and in order to account for and associate certain assets with certain particular series. All designated series form a part of MSP Recovery Claims, Series LLC and pursuant to MSP Recovery Claims, Series LLC's limited liability agreement and applicable amendment(s), each designated series will be owned and controlled by the MSP Recovery Claims, Series LLC. MSP Recovery Claims, Series LLC may receive assignments in the name of MSP Recovery Claims, Series LLC and further associate such assignments with a particular series, or may have claims assigned directly to a particular series. In either event, the MSP Recovery Claims, Series LLC will maintain the right to sue on behalf of each series and pursue any and all rights, benefits, and causes of action arising from assignments to a series. Any claim or suit may be brought by the MSP Recovery Claims, Series LLC in its own name or it may elect to bring suit in the name of its designated series.
57. MSP Recovery Claims, Series LLC's limited liability agreement provides that any rights and benefits arising from assignments to its series shall belong to MSP Recovery Claims, Series LLC.

(Doc. No. 1 at ¶¶ 56, 57.) Plaintiffs do not attach a copy of the “limited liability company agreement” referenced above to either the Complaint or their Brief in Opposition to Defendant's Motion to Dismiss. Nor do Plaintiffs identify the signatories to this alleged limited liability company agreement or state the date upon which it was executed.

         Applying Delaware law, courts have held that “[a] ‘series' entity is similar to a corporation with subsidiaries, see CML V, LLC v. Bax, 6 A.3d 238, 251 (Del. Ch. 2010), and parent corporations lack standing to sue on behalf of their subsidiaries, see Elandia Int'l, Inc. v. Koy, 09-20588-Civ, 2010 WL 2179770, at *5 (S.D. Fla. Feb. 22, 2010).” MSP Recovery Claims, Series LLC v. USAA General Indemnity Company, 2018 WL 5112998 at * 12 (S.D. Fla. Oct. 19, 2018). See also MSP Recovery Claims, Series LLC v. New York Central Mutual Fire Insurance Company, 2019 WL 4222654 at * 6 (N.D. N.Y. Sept. 5, 2019).[8] As Defendants correctly note, several courts have reviewed assignments nearly identical to the ones at issue herein, and rejected arguments that such assignments confer standing on MSP Recovery Claims, Series LLC to sue on behalf of a Series entity. See USAA General Indemnity Company, 2018 WL 5112998 at * 12; New York Central Mutual Fire Insurance Company, 2019 WL 4222654 at * 6.

         In those cases, however, there is no indication from the courts' decisions that MSP Recovery Claims, Series LLC had entered into limited liability company agreements pursuant to which “any rights and benefits arising from assignments to its series shall belong to MSP Recovery Claims, Series LLC.” (Doc. No. 1 at ¶ 57.) Here, Plaintiffs do make this specific allegation in the Complaint. Plaintiffs further allege that, under this alleged limited liability company agreement, “MSP Recovery Claims, Series LLC will maintain the right to sue on behalf of each series and pursue any and all rights, benefits, and causes of action arising from assignments to a series.” (Id. at ¶ 56.) While the Court is concerned that the actual limited liability company agreement at issue was not attached to the Complaint or otherwise provided to the Court for its consideration, at this stage of the proceedings the Court “must take the material allegations of the [complaint] as true and construe[ ] [them] in the light most favorable to the nonmoving party.” Ritchie, 15 F.3d at 598. Thus, for purposes of the ...


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