United States District Court, D. Hawaii
KAISER FOUNDATION HEALTH PLAN, INC., a foreign non-profit corporation, Plaintiff,
HAWAII LIFE FLIGHT CORPORATION, a Hawaii corporation, and AIR MEDICAL RESOURCE GROUP, INC., a Utah Corporation, Defendants. HAWAII LIFE FLIGHT CORPORATION, a Hawaii corporation, Counterclaim Plaintiff,
KAISER FOUNDATION HEALTH PLAN, INC., a foreign non-profit corporation, Counterclaim Defendant.
ORDER GRANTING IN PART AND DENYING IN PART
COUNTERCLAIM DEFENDANT KAISER FOUNDATION HEALTH PLAN,
INC.'S MOTION TO DISMISS COUNTERCLAIM PLAINTIFF HAWAII
LIFE FLIGHT CORPORATION'S FIRST AMENDED
C. KAY, SR. UNITED STATES DISTRICT JUDGE
BACKGROUND ........................................... 3
Count I: Unfair Competition Claim ....................... 16
Whether a Violation of EMTALA Constitutes Unfair Conduct
Whether HLF Has Failed to Allege Injury to Competition
Count II: Intentional Interference with Contract Claim ..40
Whether KFHP Intentionally Induced Hospitals to Breach Their
FCAs ............................................ 41
Whether KFHP's Actions Were Not Justified .............
Count III: ERISA Claim .................................. 50
Count IV: Breach of Contract Claim ...................... 56
Judicial Notice of Documents .......................... 56
Whether HLF Has Asserted a Ripe Claim Regarding KFHP's
Indemnity Promises .................................... 60
Interpretation of the Indemnity Offer .............. 60
Ripeness ........................................... 63
Whether HLF Validly Received an Assignment of the Indemnity
Rights and Has Standing ..................... 68
Whether ERISA Preempts Count IV ....................... 71
reasons set forth below, the Court GRANTS IN PART and DENIES
IN PART Plaintiff-Counter Defendant Kaiser Foundation Health
Plan Inc.'s Motion to Dismiss Hawaii Life Flight
Corporation's First Amended Counterclaim.
matter involves Defendant-Counter Plaintiff Hawaii Life
Flight Corporation's (“HLF”) efforts to
recover its billed charges for the provision of air ambulance
services in Hawaii. First Am. Counterclaim, ECF No. 92
(“FACC”), ¶ 1. As evidenced by the
parties' briefing, this case has an extensive procedural
background and presents intricate claims which require
resolution of complex factual and legal questions in order to
determine responsibility for the cost of providing air
ambulance transport services among the Hawaiian islands. Both
the parties and the Court are familiar with the history of
this case, and the Court will not repeat it here in
case is related to a lawsuit in which Toby Sidlo filed a
class action complaint on July 15, 2015 against Kaiser
Permanent Insurance Company (“KPIC”) and Kaiser
Foundation Health Plan, Inc. (“KFHP”) alleging
claims under the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et
seq. seeking to recover health care benefits and to
enforce plan benefits. ECF No. 56 at 2-3; Sidlo v. Kaiser
Permanent Insurance Company, CV No. 15-00269 ACK-KSC
(“Sidlo”). Sidlo and HLF also entered
into a Joint Litigation Agreement (“JLA”) on July
15, 2015. ECF No. 56 at 22-23.
on February 18, 2016, KFHP filed a complaint in the instant
case against HLF and its parent company Air Medical Resource
Group, Inc. (“AMRG”) alleging that HLF and AMRG
had violated the anti-assignment provision in KFHP's
ERISA plans in Hawaii by attempting to procure assignment of
members' rights and benefits. Id. at 4-5.
Specifically, KFHP alleged that the Sidlo litigation
was brought by HLF and/or AMRG in Sidlo's name.
Id. at 5. On April 6, 2016, this Court consolidated
the Sidlo and KFHP actions as both cases
“involve[d] a determination as to whether [Sidlo's]
purported assignment of rights to [HLF} was valid.” ECF
No. 29; Sidlo, ECF No. 85. HLF then filed a
counterclaim against KFHP on April 14, 2016 alleging four
claims: (1) unfair competition in violation of Hawaii Revised
Statutes (“HRS”) § 480-2; (2) tortious
interference with contract; (3) defamation; and (4) trade
libel/disparagement. Id. at 5-6.
October 31, 2016 Order, this Court addressed cross-motions
for summary judgment filed by Sidlo and by KFHP and KPIC in
the Sidlo action. ECF No. 56 at 8-9. HLF and AMRG
also filed a joinder to Sidlo's motion. Id. at
9. The Court denied Sidlo's motion and granted KFHP and
KPIC's motion in part and denied it in part. Id.
at 77-78. In so holding, the Court concluded that Sidlo had
standing, that the Inter-Facility Transport Policy applied to
Sidlo's claim, and thus that Sidlo did not suffer an
adverse benefit determination and could not seek review of a
claim denial. See generally id. Additionally, the
Court denied Sidlo's claims regarding notice of material
modifications to the benefits plan arising from KFHP's
offer of indemnification regarding HLF's claims,
KFHP's alleged breach of fiduciary duty, and equitable
estoppel for misrepresentations of rights under the
contracts. See generally id. Finally, the Court
dismissed Sidlo's claims regarding equitable
indemnification as not ripe because HLF had not yet sued
Sidlo, nor had Sidlo made any payment or discharged any legal
obligation to HLF, so KFHP's alleged offer of
indemnification was not yet applicable. See id. at
77. Sidlo filed a notice of appeal regarding this Order on
November 29, 2016. Sidlo, ECF No. 516.
Court issued two orders in the instant case on November 17,
2016. In the first, it determined that the anti- assignment
provision in KFHP's plans did not apply to health care
providers, and thus the plan members could assign their
rights to HLF. See ECF No. 76. In the second, the
Court addressed KFHP's motion to dismiss HLF's
counterclaim. The Court held that to the extent HLF's
counterclaim was based on communications with plan members,
the claims were preempted, ECF No. 77 at 22; but to the
extent they were based on communications with hospitals, the
Court could not definitively determine whether they pertained
to KFHP's ERISA plans for purposes of preemption.
Id. at 23-24. The Court also dismissed without
prejudice HLF's unfair competition counterclaim as it was
unclear what false or misleading statements were made or what
the nature of the competition injured was. Id. at
29. In sum, the Court dismissed HLF's counterclaim with
prejudice to the extent it was based on communications with
members but otherwise granted leave to amend the other
claims. Id. at 32.
Court deconsolidated the cases on November 30, 2016. ECF No.
89. HLF filed its FACC in the instant case on January 4,
2017, again alleging four claims. ECF No. 92. KFHP filed the
instant Motion to Dismiss on February 10, 2017. ECF No. 99
(“Motion”). HLF filed its Opposition on March 2,
2017. ECF No. 103 (“Opp.”). KFHP filed its Reply
on March 9, 2017. ECF No. 104 (“Reply”).
Court held a hearing on KFHP's Motion on March 23, 2017.
provides air ambulance services throughout the State of
Hawaii, transporting patients by helicopter or fixed wing
aircraft to hospitals and medical centers which are equipped
to handle a patient's emergency medical condition, which
may include transport from neighboring islands. Compl. ¶
12. HLF is not a self-dispatching service; its
“emergency flights are only dispatched by attending
physicians and hospitals” when there is a qualified
emergency. Id. ¶ 14. Many hospitals have
entered into contracts with HLF to provide air ambulance
services. Id. ¶ 25. These contracts contain
First Call Agreements (“FCAs”) with HLF in
exchange for HLF placing an aircraft at or near the hospital.
Id. The FCAs provide that when air ambulance
services are necessary, the hospital will call HLF first,
provided that using HLF meets the requirements of the
Emergency Medical Treatment & Active Labor Act
an insurer and administrator for various insured employee
welfare benefit plans providing health insurance coverage.
Id. ¶ 28. KFHP is also a fiduciary under ERISA
and is responsible for determining coverage and eligibility
of participants and beneficiaries for benefits under the
plans. Id. ¶ 29. Until August or September
2013, KFHP and HLF had a contract governing reimbursement
rates, pursuant to which “HLF accepted as payment in
full an average rate from KFHP that was less than the total
billed rate HLF charged for a transport.” ECF No. 56 at
12; see also Sidlo, ECF No. 324-1 at 6 (KFHP
asserted that HLF accepted on average $10, 638 from KFHP in
payment where full billed charges averaged $32, 279 per
transport). However, KFHP grew concerned with HLF's
increasing rates and entered into a contract with American
Medical Response (“AMR”), HLF's only
competitor for air medical services in Hawaii. Id. at
12. HLF then appears to have terminated its contract with
KFHP. Id. at 12-13.
alleged in its FACC that in connection with its health
insurance services, KFHP has improperly made written and oral
demands that hospitals arrange for “emergency
transportation of patients through or as designated by
KFHP” and has implemented procedures requiring
hospitals to use air ambulance services provided by
FACC ¶ 5. In the Sidlo litigation, HLF
submitted to the Court with KFHP's consent correspondence
that KFHP sent to Hawaii Health Systems Corporation
(“HHSC”) concerning the use of HLF's air
ambulance services by Kona Community Hospital
(“KCH”), an HHSC facility. ECF No. 77 at 9. HLF
has an FCA with KCH which is set to expire on October 31,
2017. Id. On March 19, 2015, KFHP sent HHSC a
cease-and-desist letter asserting that KCH's Dr. Richard
McDowell had been preventing hospital staff from using AMR
and had been directing the use of HLF instead. Id.;
see also ECF No. 74-2 (letter). At the hearing held
on April 4, 2017, this Court allowed HLF's request to
refer to the contents of this letter in discussing the oral
and written demands HLF has alleged KFHP made to hospitals.
ECF No. 106 at 28-29 (Tr. of H'ring); see also
id. at 10 (KFHP also referencing the contents of this
letter, KFHP asserted that Dr. McDowell's actions
constituted a breach of contract between KFHP and HHSC, which
contract required HHSC to, among other things: “(i)
notify Kaiser within 48 hours of a Kaiser member presenting
to one of the HHSC facilities”; “(ii) cooperate
with Kaiser in transferring Kaiser members to the Moanaluna
Medical Center”; and “(iii) provide services in
the most cost effective manner.” ECF No. 74-2; ECF No.
77 at 10. In addition, the letter noted that Dr.
McDowell's conduct constituted intentional interference
with KFHP's agreements with AMR and HHSC. ECF No. 74-2.
KFHP also responded to Dr. McDowell's professed EMTALA
concerns on the basis that the patients transported were in
stable condition so EMTALA did not apply; as such, KFHP
disagreed that KCH or HHSC should “dictate the mode of
transportation, especially when Kaiser has medical and
financial responsibility for the patient's post
stabilization care.” ECF No. 74-2.
FACC, HLF additionally alleged that approximately 129 of
KFHP's members were transported by HLF for
“medically necessary air medical transport
services.” Id. ¶ 30. These individuals
have assigned to HLF all rights, title, and interest in the
plan related to the services HLF provided. See id.
¶¶ 6, 31-159 (hereinafter, “Assignors”
or “members”). HLF has asserted that for many of
the transports it provided to KFHP's members, KFHP has
refused to pay HLF's charges. Id. ¶ 6.
Instead, KFHP apparently unilaterally decided to pay 200% of
the allowable Medicare payment per transport, which is less
than HLF's claimed charge. Id. ¶ 172.
G of KFHP's plans governs reimbursement of
“Ambulance Services.” Id. ¶ 161. It
provides that KFHP will pay 80% of “Applicable
Charges” for ambulance services deemed necessary by a
physician. Id. What constitutes the applicable
charge depends on who provides the service. See id.
¶ 162. Member rates are used when a “Medical
Group” or “Health Plan Hospital” provides
the service. Id. For contracted Medical Groups or
Health Plan facilities, the applicable charge is the
negotiated rate. Id. For non-contracted facilities
and providers, the applicable charge is the actual billed
charge. Id. As HLF and KFHP do not currently have a
negotiated rate, HLF asserts that KFHP is obligated to pay no
less than 80% of HLF's actual billed charges.
Id. ¶ 163.
has asserted that Section G does not apply to transports
between facilities; rather, it covers 100% of the costs of
such transports pursuant to its Inter-Facility Transport
Policy regardless of whether the provider has contracted with
KFHP. Id. ¶¶ 165-166. This Court
previously held in the Sidlo litigation that the
Inter-Facility Transport Policy, not Section G, applied to
Sidlo's claims. ECF No. 56 at 41-52.
alleged that it believes KFHP has informed the Assignors that
they “have no obligation to pay any amount to
HLF” and should not do so, that KFHP would protect
Assignors from any claim for payment by HLF, and that KFHP
would reimburse Assignors for any amounts paid to HLF.
Id. ¶ 168. In addition, KFHP has agreed to
indemnify the Assignors for “any amount that might be
deemed due and owing to HLF.” Id. ¶ 169.
HLF has contacted each of the Assignors, except Toby Sidlo,
advising them of the amount KFHP failed to pay and requesting
that payment be made to HLF for the unpaid amounts.
Id. ¶ 175.
on the foregoing, HLF brought four counterclaims in its FACC,
two direct claims and two derivative claims based on the
assignment of rights to HLF. Count I is a direct claim for
unfair competition pursuant to HRS § 480-2, based on
KFHP's requirement that hospitals obtain authorization
from KFHP before arranging emergency transport, in violation
of EMTALA and the Affordable Care Act (“ACA”).
Id. ¶¶ 177-198. KFHP allegedly used its
economic power to cause hospitals to breach the FCAs with HLF
and utilize the inferior air transport services offered by
HLF's competitor. Id. ¶¶ 186-89, 191.
Count II asserts a direct claim for tortious interference
with contract, grounded in the fact that KFHP allegedly knew
about the FCAs between HLF and the hospitals and caused the
hospitals to breach the FCA agreements and utilize AMR
instead. Id. ¶¶ 199-205.
III asserts a derivative claim to recover health care
benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B), because
KFHP has allegedly underpaid the Assignors' claims for
the air medical transportation services HLF provided.
Id. ¶¶ 206-217. In addition, HLF seeks to
“clarify and enforce Assignor's rights to payment
of those amounts still due and owing” through an
injunction. Id. ¶ 219. Finally, Count IV
asserts a derivative claim for breach of KFHP's
indemnification promises to the Assignors, under which HLF
asserts KFHP is obligated to pay 100% of the amounts HLF
claims it is still owed. Id. ¶¶ 222-228.
12(b)(6) authorizes the Court to dismiss a complaint that
fails “to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) is read
in conjunction with Rule 8(a), which requires only “a
short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).
The Court may dismiss a complaint either because it lacks a
cognizable legal theory or because it lacks sufficient
factual allegations to support a cognizable legal theory.
Balistreri v. Pacifica Police Dep't, 901 F.2d
696, 699 (9th Cir. 1988).
resolving a Rule 12(b)(6) motion, the Court must construe the
complaint in the light most favorable to the plaintiff and
accept all well-pleaded factual allegations as true.
Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d
777, 783 (9th Cir. 2012). “[O]nly pleaded facts, as
opposed to legal conclusions, are entitled to assumption of
truth.” United States v. Corinthian Colls.,
655 F.3d 984, 991 (9th Cir. 2011). A “formulaic
recitation of the elements of a cause of action” will
not defeat a motion to dismiss. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). The complaint
“must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Twombly, 550 U.S. at 570).
plausibility standard . . . asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Id. “Where a complaint pleads facts that are
‘merely consistent with' a defendant's
liability, it ‘stops short of the line between
possibility and plausibility of entitlement to
relief.'” Id. (quoting Twombly,
550 U.S. at 557). “In considering a motion to dismiss,
the court is not deciding whether a claimant will ultimately
prevail but rather whether the claimant is entitled to offer
evidence to support the claims asserted.” Tedder v.
Deutsche Bank Nat. Trust Co., 863 F.Supp.2d 1020, 1030
(D. Haw. 2012) (citing Twombly, 550 U.S. at 563
Rule 12(b)(6), review is generally limited to the contents of
the complaint. Sprewell v. Golden State Warriors,
266 F.3d 979, 988 (9th Cir. 2001); Campanelli v.
Bockrath, 100 F.3d 1476, 1479 (9th Cir. 1996). However,
courts may “consider certain materials - documents
attached to the complaint, documents incorporated by
reference in the complaint, or matters of judicial notice -
without converting the motion to dismiss into a motion for
summary judgment.” United States v. Ritchie,
342 F.3d 903, 908 (9th Cir. 2003). The Court may also
consider documents whose contents are alleged in a complaint
and whose authenticity is not questioned by any party.
Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1160
(9th Cir. 2012).
Court dismisses the complaint, it should grant leave to amend
regardless of whether a request has been made, unless it
determines that the pleading cannot be cured by new factual
allegations. OSU Student All. v. Ray, 699 F.3d 1053,
1079 (9th Cir. 2012). Leave to amend “is properly
denied, however, if amendment would be futile.”
Carrico v. City & Cty. of S.F., 656 F.3d 1002,
1008 (9th Cir. 2011).
Count I: Unfair Competition Claim
Revised Statutes § 480-2(a) prohibits “[u]nfair
methods of competition and unfair or deceptive acts or
practices in the conduct of any trade of commerce.” The
statute provides that it should be construed with “due
consideration to the rules, regulations, and decisions of the
Federal Trade Commission and the federal courts interpreting
section 5(a)(1) of the Federal Trade Commission Act.”
HRS § 480-2(b); Davis v. Four Seasons Hotel
Ltd., 122 Haw. 423, 446, 228 P.3d 303, 326 (2010)
(“This court has similarly recognized that Hawaii's
consumer protection laws are also intended to preserve
order to bring a claim for unfair methods of competition
pursuant to HRS § 480-2, the Hawaii Supreme Court has
clarified that plaintiffs must “qualify as persons who
may bring a claim under HRS § 480-2(e)” and that
they “have standing to bring a private claim for unfair
competition under HRS §§ 481B-14 and 480-2 only if
they satisfy the requirements of § 480-13.”
Soule v. Hilton Worldwide, Inc., 1 F.Supp.3d 1084,
1094-95 (D. Haw. 2014) (Kay, J.) (citing Davis, 122
Haw. at 446 (2010)). “The essential elements of a claim
for unfair competition [under § 480-13] are: (1) a
violation of Chapter 480; (2) that causes an injury to
plaintiffs' business or property; and (3) damages.”
Id. at 1095. “To satisfy the second element,
plaintiffs must allege an injury in fact and the nature of
the competition” and “must ultimately show that
their injury necessarily stems from the negative effect on
competition caused by the violation as opposed to some
pro-competitive or neutral effect of the defendant's
antitrust violation.” Id.
Whether a Violation of EMTALA Constitutes Unfair Conduct
first asserts that HLF may not bring an unfair competition
claim predicated on a violation of EMTALA, as HLF has no
actionable claim against KFHP under that statute. Motion at
8-11. HLF responds that its claim is that “Kaiser's
use of its economic power to force hospitals to seek
insurance preauthorization for emergency services, in a
manner that is contrary to the ACA and EMTALA, is unfair and
contrary to public policy.” Opp. at 9 (footnote
Court first turns to the issue of whether HRS § 480-2
requires an independently actionable predicate claim. The
Hawaii Supreme Court does not appear to have spoken directly
on this issue, but it has recognized that
“unfair” means “conduct that (1) threatens
an incipient violation of an antitrust law, or (2) violates
the policy or spirit of one of those laws because its effects
are comparable to or the same as a violation of the law,
(3) otherwise significantly threatens or harms
competition.” Robert's Haw. Sch. Bus, Inc. v.
Laupahoehoe Transp. Co., 91 Haw. 224, 255 n.34, 982 P.2d
853, 884 n.34 (1999) (citing Cel-Tech Commc'ns, Inc.
v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 186,
973 P.2d 527, 544 (1999)). In addition, “competitive
conduct is unfair when it offends established public policy
and when the practice is immoral unethical, oppressive,
unscrupulous or substantially injurious to customers.”
Id. (internal citation and quotation omitted);
see also FTC v. Sperry & Hutchinson Co., 405
U.S. 233, 244 n.5 (1972) (describing the factors the FTC uses
in determining whether a practice is unfair as
“offend[ing] public policy, ” “immoral,
unethical, oppressive, or unscrupulous, ” or
“caus[ing] substantial injury to consumers (or
competitors or other businessmen)”).
Hawaii Supreme Court has also noted that HRS § 480-2
“was constructed in broad language in order to
constitute a flexible tool to stop and prevent unfair
competition and fraudulent, unfair or deceptive business
practices for the protection of both consumers and honest
businessmen and businesswomen.” Robert's Haw.
Sch. Bus, 91 Haw. at 255 n.34, 982 P.2d at 884.
“Whether competition is unfair or not generally depends
on the surrounding circumstances of the particular case. What
is harmful under certain circumstances may be beneficial
under different circumstances.” Haw. Med. Ass'n
v. Haw. Med. Serv. Ass'n, Inc., 113 Haw. 77, 108,
148 P.3d 1179, 1210 (2006) (“HMA”)
(internal quotation marks and citation omitted).
unfair competition law appears to be narrower than, for
example, California's similar law, in terms of what
conduct is rendered actionable as unfair competition.
Hawaii's law appears to target conduct that is either
anticompetitive or that offends public policy. By contrast,
California defines unfair competition to “include any
unlawful, unfair, or fraudulent business act or practice and
unfair, deceptive, untrue or misleading advertising”.
Cal. Bus. & Prof. Code § 17200. “By
proscribing ‘any unlawful' business practice,
section 17200 borrows violations of other laws and treats
them as unlawful practices that the unfair competition law
makes independently actionable.” Cel-Tech
Commc'ns, 20 Cal.4th at 180, 973 P.2d at 539-40
(1999) (internal citation and quotation omitted). California
thus explicitly appears to make actionable via its unfair
competition law a broad swath of illegal acts that a
plaintiff would otherwise be unable to bring. Hawaii's
law, in comparison, does not, on its face, render otherwise
illegal acts independently actionable in an unfair
competition suit except to the extent those illegal acts harm
competition or offend the public policy of
Hawaii Supreme Court's discussion in Whitey's
Boat Cruises, Inc. v. Napali-Kaui Boat Charters, Inc. is
instructive on this point. 110 Haw. 302, 132 P.3d 1213
(2006). In that case, the court addressed whether the
plaintiff could bring a common law unfair competition claim
based on its competitors' failure to obtain the proper
permits for operating boat charters. Id. at 312, 132
P.3d at 1223. The court affirmed summary judgment for the
defendants, finding that there was no private right of action
for damages for the failure to obtain the permits, as the
“regulations were not promulgated with the objective of
protecting business interests or competition but rather with
the objective of protecting and preserving the environment
for the general public.” Id. at 313, 318, 132
P.3d at 1224, 1229.
reasoning in Whitey's Boat Cruises accords with
the Hawaii Supreme Court's discussion in Robert's
Hawaii School Bus noted above that the meaning of the
word “unfair” relates to harm to competition.
See 91 Haw. at 255 n.34, 982 P.2d at 884. Although
neither Whitey's Boat Cruises nor
Robert's Hawaii School Bus go so far as to say
that wrongful conduct sufficient to constitute unfair
competition must be independently actionable by the
plaintiff, both suggest that where an unfair competition
claim is based on illegality, the reason why the conduct is
illegal must relate to competition.
extent that HLF's unfair competition claim is based on
illegality, the Court concludes that EMTALA was not
promulgated “with the objective of protecting business
interests or competition, ” Whitey's Boat
Cruises, 110 Haw. at 312, 132 P.3d at 1223, but rather
because “Congress was concerned that hospitals were
‘dumping' patients who were unable to pay, by
either refusing to provide emergency medical treatment or
transferring patients before their conditions were
stabilized.” Eberhardt v. City of Los Angeles,
62 F.3d 1253, 1255 (9th Cir. 1995) (citing H.R. Rep. No. 241,
99th Cong., 1st Sess. (1985)). “Congress enacted EMTALA
to create a new cause of action, generally unavailable under
state tort law, for what amounts to ‘failure to
treat'....” Bryant v. Adventist Health
Sys./W., 289 F.3d 1162, 1168 (9th Cir. 2002). HLF has
not asserted, nor has the Court found any authority to
suggest, that in enacting EMTALA Congress was at all
concerned with business interests or
competition. To allow HLF to bring an unfair
competition claim based on the purported illegality
of KFHP's conduct would expand Hawaii's unfair
competition law beyond what the Hawaii Supreme Court has
indicated it would allow.
also appears to argue instead, or in addition, that
KFHP's conduct is unfair because it is contrary to the
public policy established in EMTALA “of putting the
patients' medical needs before the insurance
companies' financial goals.” Opp. at 11. However,
it is not apparent from the FACC that there is a plausible
basis to believe that the medical needs of any patients have
been affected by KFHP's conduct. Although HLF alleges
that it has lost revenue and profit from the transport of
patients who would have been placed on HLF aircraft but for
KFHP's conduct, FACC ¶¶ 192-96, nowhere in the
FACC does HLF allege that the use of a different
transportation service harmed the medical needs of those
patients, or even that in making this choice, the physicians
disregarded the medical needs of patients or differential
transport risk from choosing HLF's
HLF has specifically alleged that “KFHP does not know
whether, for example, any patient has suffered adverse
medical consequences as a result of delay engendered by
[KFHP's Hospital Operation's Center]'s
preauthorization process.” Id. ¶ 184.
KFHP's alleged ignorance, however, does not excuse HLF
from its pleading burden. At most, HLF has alleged as a
general matter that patient health can quickly deteriorate in
emergency situations and that by maintaining more aircraft
closer to hospitals, HLF “best serve[s] patients'
medical interests by minimizing the risk to the patient being
transferred.” Id. ¶¶ 183, 186, 187.
These allegations do not provide the Court with a plausible
basis to conclude that any violation of EMTALA that actually
occurred here posed a risk to patient health. And while
reading the FACC to allege a technical violation of EMTALA
where AMR was chosen over HLF, the Court nevertheless still
has difficulty finding that such a violation is contrary to
public policy in the absence of allegations regarding harm to
patient health. Cf. Riopta v. ...