McClellan v. Patel

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
ANA MARIA MCCLELLAN, as Civil No. 06-392-AA
Personal Representative of the
OPINION AND ORDER
Estate of IAN MURILLO MCCLELLAN,
a deceased child,

Plaintiff,

vs.

JAYANT MUKUNDRAY PATEL, M.D.;
NORTHWEST PERMANENTE, P.C., an
Oregon corporation; KAISER
FOUNDATION HOSPITALS, a
California corporation; KAISER
HEALTH PLAN OF THE NORTHWEST;
OREGON HEALTH SCIENCES UNIVERSITY;
and THE OREGON BOARD OF MEDICAL
EXAMINERS, by and through the
STATE OF OREGON,

Defendants.

David K. Miller
Robert Beatty-Walters
Miller & Wagner
2210 N.W. Flanders Street
Portland, Oregon 97210-3408
Attorneys for plaintiff

Page 1 – OPINION AND ORDER

John E. Hart
Troy S. Bundy
Hoffman, Hart & Wagner, LLP
1000 S.W. Broadway, 20th Floor
Portland, Oregon 97205
Attorneys for Kaiser defendants
Donald Bowerman
Bowerman & Boutin, LLP
1001 Molalla Avenue, Suite 208
Oregon City, Oregon 97045
Attorney for defendant Oregon Health
Sciences University
AIKEN, Judge:
Pursuant to 28 U.S.C. § 1447, plaintiff moves to remand this
action to state court on the grounds that this court lacks
subject matter jurisdiction. Plaintiff’s motion is granted.
BACKGROUND
This is a medical malpractice case brought in state court
under state common law theories of negligence against defendants
in connection with the provision of surgical care to a 3 ½ year
old boy in February 1999. The surgery at issue was performed by
defendant Jayant M. Patel.
Defendants Kaiser filed a Notice of Removal on March 20,
2006. The defendant that initially filed the Notice of Removal,
Kaiser Foundation Health Plan of the Northwest (KFHP), has since
been dismissed from this lawsuit. Further, consent to removal
has been obtained from all remaining defendants. Defendants
allege that plaintiff’s claims are preempted under the Employee
Retirement Income Security Act (ERISA), 29 U.S.C. § 1144(a).

Page 2 – OPINION AND ORDER

DISCUSSION
Pursuant to 28 U.S.C. § 1441, “any civil action brought in a
State court of which the district courts of the United States
have original jurisdiction, may be removed by the defendant or
other defendants, to the district court of the United States[.]”
Removal is proper only where the federal court would have had
subject matter jurisdiction over the matter if the plaintiff had
originally filed the action in federal court. The existence of
federal jurisdiction ordinarily depends on the facts as they
exist when the complaint is filed. Newman-Green, Inc. v.
Alfonzo-Larrain, 490 U.S. 826, 830 (1989)(internal citation
omitted).
Defendants assert that plaintiff’s claims are not limited to
malpractice claims against defendant Patel. Defendants argue
that plaintiff’s claims fall into “two distinct categories: 1)
claims challenging the medical decisions of Dr. Patel, and 2)
claims challenging the administrative decisions of the Kaiser
defendants.” Defendant Kaiser’s Memo in Response, p. 2.
Defendants assert that it is plaintiff’s “administrative
negligence claims” that trigger ERISA preemption and this court’s
resulting jurisdiction. Id.
Specifically, Kaiser defendants allege that plaintiff makes
the following “administrative negligence” claims: Ian McClellan
died following abdominal surgery performed by defendant Jayant

Page 3 – OPINION AND ORDER

Patel, M.D. Complaint, ¶ 1. The Kaiser defendants were “jointly
engaged in the practice of medicine and the delivery of other
healthcare services. Id. at ¶ 5. The collective defendants
granted Dr. Patel surgical privileges and held Dr. Patel out to
the public and plaintiff as a competent physician, specially
skilled in performing abdominal surgery on children. Id.
Defendant Patel was hired by the Kaiser defendants in 1989, and
the Kaiser defendants were aware of at least eight medical
malpractice lawsuits, some of which involved wrongful death cases
and Dr. Patel’s care. Id. at ¶ 11. In 1997, the Kaiser
defendants began conducting an internal review of approximately
80 potential malpractice incidents involving Dr. Patel. As a
result of that internal review, plaintiff alleges the Kaiser
defendants restricted defendant Patel’s surgical privileges in
the summer of 1998, limiting his ability to perform certain
abdominal procedures as well as placing other requirements on
defendant Patel. Id. at ¶ 14.
Plaintiff further alleges that the Kaiser defendants failed
to inform the Oregon Board of Medical Examiners and defendant
Oregon Health Sciences University (OHSU) about defendant Patel
and his “malpractice history.” Further, plaintiff alleges that:
“Despite Dr. Patel’s malpractice history and the restrictions
defendant Kaiser placed on his surgical privileges, Dr. Patel was
nevertheless elevated to a position of leadership in defendant

Page 4 – OPINION AND ORDER

Kaiser’s pediatric surgical service. Id. at ¶ 17.
Finally, plaintiff has alleged against the Kaiser defendants
in particular, that those defendants were negligent “in allowing
Dr. Patel to operate on children in light of the malpractice
incidents that caused defendant Kaiser to restrict his surgical
privileges and put him on a professional improvement plan
approximately six months earlier;” “in failing to report Dr.
Patel’s malpractice incidents between 1991 and 2005 to the Oregon
Board of Medical Examiners as required by ORS 742.400(2);” and
“in failing to have an adequate system in place between 1991 and
1999 to identify physicians and surgeons with surgical
complication rates outside the expected range.”
To determine whether plaintiff’s claims fall within the
scope of § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), the
court must determine whether those claims are “to recover
benefits due . . . under the terms of [the] plan, to enforce
. . . rights under the terms of the plan, or to clarify . . .
rights to future benefits under the terms of the plan.” Id. I
find nothing in plaintiff’s complaint to indicate that plaintiff
is challenging her ERISA welfare plan’s failure to provide
benefits due under the plan, nor does plaintiff ask the court to
enforce her rights under the terms of her plan or to clarify her
right to future benefits. Instead, plaintiff complains about the
low quality medical treatment her son received and argues that

Page 5 – OPINION AND ORDER

the defendants should be held liable under agency and negligence
principles. As the court stated in Dukes v. U.S. Healthcare,
Inc., 57 F.3d 350 (3rd Cir. 1995), “[w]e are confident that a
claim about the quality of a benefit received is not a claim
under § 502(a)(1)(B) to “recover benefits due . . . under the
terms of [the] plan.” Id. at 356.
It cannot be disputed that anything in the legislative
history, structure, or purpose of ERISA suggests that Congress
viewed § 502(a)(1)(B) as creating a remedy for a participant
injured by medical malpractice. Instead, Congress sought to
assure that promised benefits would be available when plan
participants had need of them and § 502 was intended to provide
each individual participant with a remedy in the event that
promises made by the plan were not kept. The Supreme Court has
noted that while quality standards and work place regulations in
the context of hospital services will indirectly affect the sorts
of benefits an ERISA plan can afford, those have traditionally
been left to the states, and there is no indication in ERISA that
Congress chose to displace general health care regulation by the
states. N.Y. State Conf. of Blue Shield Plans v. Travelers Ins.
Co., 514 U.S. 645, 657-58 (1995).
The inquiry here is whether plaintiff’s claim rests upon the
terms of the plan or requires construction of the plan language;
if so, the claim is preempted by ERISA. Claims challenging the

Page 6 – OPINION AND ORDER

quality of a benefit, as noted above in Dukes, are held not
preempted by ERISA. In order to determine whether ERISA preempts
plaintiff’s medical malpractice claim, the court must determine
whether the alleged negligent medical advice was inextricable
from its actions coordinating benefits and services under the
plan. See Roessert v. Health Net, 929 F.Supp. 343 (N.D. Cal.
1996)(“nothing in [defendant’s] duty to administer benefits to
plaintiff required it to make medical judgments[,]” nor did
plaintiff’s claims require reference to an ERISA plan to resolve
them).
Defendants here assert that plaintiff’s claims allege
“administrative” actions by defendants, therefore ERISA
preemption applies and removal to federal court is proper.
Plaintiff alleges that defendants were negligent for several
actions, including allegations that relate to the oversight and
retention of defendant Dr. Patel. Plaintiff alleges additional
direct negligence claims against these defendants that implicate
the standards of care for providing medical information to
patients, as wells as claims that defendants failed to report Dr.
Patel’s malpractice incidents to the Oregon Board of Medical
Examiners as required by Or. Rev. Stat. 742.400(2), and failed to
thoroughly and adequately investigate Dr. Patel’s prior history
of discipline and fraudulent conduct in the State of New York
prior to granting him surgical privileges. Complaint, ¶ 23.

Page 7 – OPINION AND ORDER

Similar to the court’s analysis in Dukes, however, I find that
plaintiff’s allegations allege common law negligence directly
related to the quality of care ultimately provided to plaintiff’s
son. These claims do not implicate the administration of, or
necessitate the interpretation of, the benefits plan.
Further, defendants fail to point this court to a plan-
created right implicated by plaintiff’s state law medical
malpractice claims. I find no allegation by plaintiff that the
defendants have withheld plan benefits due, and nothing in the
complaint resembles a request that the court clarify a right to a
future benefit. In fact, plaintiff’s complaint centers on past
events.
The Ninth Circuit’s analysis and holding in Bui v. American
Telephone and Telegraph, 310 F.3d 1143 (9th Cir. 2002), relied on
by both parties, is instructive. There, plaintiff Bui sued his
own employer and it was those claims that the court found
preempted by ERISA finding that plaintiff was claiming a denial
of benefits under the ERISA plan. Plaintiff’s malpractice claims
against healthcare providers were not preempted by the court.
The court did, however, preempt plaintiff’s negligence claim in
the plan’s retention of a service provider, holding that the
selection of service providers under the benefits plan is a
necessary part of the administration of an ERISA plan. Here,
plaintiff is not alleging that defendant Kaiser Foundation Health

Page 8 – OPINION AND ORDER

Plan was negligent in contracting with defendants Northwest
Permanente, Kaiser Foundation Hospitals, or OHSU. Instead,
plaintiff’s claim is against the hospital and Dr. Patel’s
employer for negligence in credentialing Dr. Patel and allowing
him to provide surgical services to plaintiff’s decedent. I find
plaintiff’s claims to be similar to those in Dukes which were not
preempted, than plaintiff’s claims in Bui. Plaintiff’s claims
relate to duties outside the proper administration of the benefit
plan. As plaintiff notes, any patient treated at any hospital in
the state of Oregon, regardless of whether their benefits were
provided under an ERISA plan, could bring a claim against their
hospital and the employer of their surgeon for negligence in
allowing that surgeon to practice.
In sum, since the actions alleged by plaintiff do not
require interpretation of the plan, I find no reason to believe
that state resolution of the disputed medical decisions would
affect the important uniformity of federal ERISA law. Rather,
plaintiff’s complaint falls within the familiar purview of state
tort law. Therefore, the causes of action pled against
defendants do not come within the ambit of § 502(a)(1)(B) and
this court lacks jurisdiction to hear them.
CONCLUSION
Plaintiff’s motion to remand this action to state court
(doc. 12) is granted. Further, plaintiff’s request for oral

Page 9 – OPINION AND ORDER

argument is denied as unnecessary.
IT IS SO ORDERED.
Dated this 16 day of July 2006.

/s/ Ann Aiken
Ann Aiken
United States District Judge

Page 10 – OPINION AND ORDER