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Anti-Assignment Clauses: D.N.J.

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  • Anti-Assignment Clauses: D.N.J.

    In two different cases from the district of New Jersey, the court takes up the validity of anti-assignment clauses. In the first case, University Spine Center v. United Health, the Defendant argues that the Plaintiff's complaint must be dismissed pursuant to the Plain's clear and unequivocal anti-assignment provision.

    In opposition, Plaintiff first argues that it is not barred from bringing this action because the anti-assignment clause limits only the Patient’s right to assign her rights or benefits to Plaintiff, not the Patient’s power to do so. (Pl. Opp. Br. at 4-5, 8-14). According to Plaintiff, the anti-assignment clause’s limit on the Patient’s right to assign her rights or benefits to Plaintiff is essentially “a covenant not to assign” and any violations by the Patient can be remedied by money damages, but a violation of that covenant does not void the purported assignment. (Id. at 9). Plaintiff argues that the only way the Patient could be prevented from assigning her rights or benefits to Plaintiff is if the anti-assignment clause expressly limits the Patient’s power to do so, which the anti-assignment clause here does not do. (Id. at 9-11). Plaintiff emphasizes that the anti-assignment clause is invalid because it does not specify that any attempted assignment would be “‘void’ or ‘invalid’ if performed without Defendant’s consent nor does it state that Defendant will not recognize any such assignment.” (Id. at 11). In support of this argument, Plaintiff relies on a Third Circuit case that does not pertain to ERISA and applies New Jersey law. (See id. at 8-14 (citing Bel-Ray Co. v. Chemrite (PTY) Ltd., 181 F.3d 435, 442 (3d Cir. 1999)). Next, Plaintiff posits that even if the anti-assignment provision limited the Patient’s power to assign, the provision is nevertheless unenforceable because it is “not clear and unambiguous.” (Pl. Opp. Br. at 14-16). Finally, Plaintiff argues that the anti-assignment clause is unenforceable against it as a health care provider, relying on a decision from the U.S. Court of Appeals for the Fifth Circuit. (Id. at 16-18 (citing Hermann Hosp. v. MEBA Med. & Benefits Plan, 959 F.2d 569, 575 (5th Cir. 1992), overruled on other grounds by Access Mediquip, L.L.C. v. UnitedHealthCare Ins. Co., 698 F.3d 229 (5th Cir. 2012)). The Fifth Circuit Hermann decision interpreted anti-assignment clauses, such as the one at issue here, to apply only to third-party assignees who may obtain assignments to cover unrelated debts. See 959 F.2d at 575 (“We interpret the anti-assignment clause as applying only to unrelated, third-party assignees—other than the health care provider of assigned benefits— such as creditors who might attempt to obtain voluntary assignments to cover debts having no nexus with the Plan or its benefits, or even involuntary alienations such as attempting to garnish payments for plan benefits.”).
    However, the court is not persuaded by this argument.

    The Court rejects Plaintiff’s arguments because they are contrary to the recognized law in the Third Circuit and in this District. See Am. Orthopedic & Sports Med., 2018 WL 2224394, at *1 (“conclud[ing] that anti-assignment clauses in ERISA-governed health insurance plans are enforceable” and affirming district court’s dismissal of complaint); Emami v. Quinteles IMS, No. 17- 3069, 2017 WL 4220329, at *2 (D.N.J. Sept. 21, 2017) (finding similar anti-assignment provision “clear and unambiguous” and “valid and enforceable”); Kayal Orthopaedic Ctr., 2017 WL 4179813, at *3 (finding similar anti-assignment provision to be valid and enforceable); Specialty Surgery of
    Middletown v. Aetna, No. 12-4429, 2014 WL 2861311, at *4 (D.N.J. June 24, 2014) (same); Neurological Surgery Assocs. P.A. v. Aetna Life Ins. Co., No. 12-5600, 2014 WL 2510555, at *2-4 (D.N.J. June 4, 2014) (finding that “a provision requiring that coverage may be assigned only with Defendant’s consent” is “valid and enforceable”). In light of the foregoing, the Court has reviewed the anti-assignment provision and finds it to be clear and unambiguous, and thus valid and enforceable. As already noted, the anti-assignment provision does not allow assignment of benefits without Defendant’s consent. (See supra at 4-5). Plaintiff does not allege that Defendant gave such consent. Accordingly, the Patient’s assignment of rights or benefits to Plaintiff is void. In the absence of a valid assignment from the Patient, Plaintiff lacks standing under ERISA to pursue this action. Cf. Neurological Surgery Assocs., 2014 WL 2510555, at *4 (enforcing identical anti-assignment provision and finding that the plaintiff did not have standing to pursue ERISA action against Aetna).
    For the reasons mentioned above, the court granted the Defendant's motion to dismiss. In the second case, University Spine Center v. Aetna, the court reached a similar conclusion. In that case the Plaintiff proffered the same arguments as aforementioned, and achieved the same results.

    The Court rejects Plaintiff’s arguments because they are contrary to the recognized law in the Third Circuit and in this District. See Am. Orthopedic & Sports Med., 2018 WL 2224394, at *1 (“conclud[ing] that anti-assignment clauses in ERISA-governed health insurance plans are enforceable” and affirming district court’s dismissal of complaint); Emami v. Quinteles IMS, No. 17- 3069, 2017 WL 4220329, at *2 (D.N.J. Sept. 21, 2017) (finding nearly identical anti-assignment provision “clear and unambiguous” and “valid and enforceable”); Kayal Orthopaedic Ctr., 2017 WL 4179813, at *3 (finding similar anti-assignment provision to be valid and enforceable); Specialty Surgery of Middletown v. Aetna, No. 12-4429, 2014 WL 2861311, at *4 (D.N.J. June 24, 2014) (enforcing identical anti-assignment provision at issue here); Neurological Surgery Assocs. P.A. v. Aetna Life Ins. Co., No. 12-5600, 2014 WL 2510555, at *2-4 (D.N.J. June 4, 2014) (finding that “a provision requiring that coverage may be assigned only with [Aetna’s] consent” is “valid and enforceable”). In light of the foregoing, the Court has reviewed the anti-assignment provision and finds it to be clear and unambiguous, and thus valid and enforceable. As noted above, the anti-assignment clause states: “All coverage may be assigned only with the written consent of Aetna.” (Def. Mov. Br. at 5; Pl. Opp. Br. at 6). Plaintiff does not allege that Aetna gave such consent. Accordingly, the Patient’s assignment of rights or benefits to Plaintiff is void. In the absence of a valid assignment from the Patient, Plaintiff lacks standing under ERISA to pursue this action. Cf. Neurological Surgery Assocs., 2014 WL 2510555, at *4 (enforcing identical anti-assignment provision and finding that the plaintiff did not have standing to pursue ERISA action against Aetna).
    Both opinions are attached below.
    Attached Files
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