West Virginia United Health System, Inc. v. GMS Mine Repair and Maintenance, Inc. Employee Medical Plan et al

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CLARKSBURG
WEST VIRGINIA UNITED HEALTH
SYSTEM, INC. d/b/a WEST VIRGINIA
UNIVERSITY HEALTH SYSTEM,
Plaintiff,
v. 	CIVIL ACTION NO. 1:25-CV-34
(KLEEH)
GMS MINE REPAIR AND MAINTENANCE,
INC. EMPLOYEE MEDICAL PLAN and
THE HEALTH PLAN OF WEST VIRGINIA, INC.,
Defendants.
MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO REMAND [ECF NO. 14]
Pending before the Court is Plaintiff’s Motion to Remand [ECF
No. 14]. For the reasons discussed herein, the Motion is GRANTED,
and 	this 	matter 	is 	hereby 	REMANDED 	to 	the 	Circuit 	Court 	of
Monongalia County, West Virginia, for any further proceedings.
I. 	PROCEDURAL HISTORY
Plaintiff, 	West 	Virginia 	United 	Health 	System, 	Inc.
(“WVUHS”), 	filed 	a 	Complaint 	in 	the 	Circuit 	Court 	of 	Monongalia
County, 	West 	Virginia 	on 	February 	15, 	2024. 	ECF 	No. 	1-2 	in 	Case
No. 1:24-cv-35. Before filing any responsive pleading, Defendant,
The 	Health 	Plan 	of 	West 	Virginia, 	Inc. 	(“THP”), 	removed 	the 	case
to 	this 	Court. 	ECF 	No. 	1 	in 	Case 	No. 	1:24-cv-35. 	On 	May 	2, 	2024,
WVUHS 	filed 	a 	Motion 	to 	Remand. 	ECF 	No. 	16 	in 	Case 	No. 	1:24-cv-
35. The Court convened for a hearing on the that Motion on February
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12, 2025, and granted the motion on February 21, 2025. ECF No. 29
in Case No. 1:24-cv-35. After being remanded, this case was removed
to 	this 	Court 	a 	second 	time 	on 	April 	14, 	2025, 	by 	Defendant, 	GMS
Mine 	Repair 	and 	Maintenance, 	Inc. 	Employee 	Medical 	Plan 	(“GMS”).
ECF 	No. 	1 	in 	Case 	No. 	1:25-cv-34. 	The 	Notice 	of 	Removal 	purports
that 	there 	is 	a 	new 	basis 	for 	removal 	jurisdiction 	because
Plaintiff 	did 	possess 	assignments 	of 	benefits 	and 	because 	GMS
attached 	“an 	explicit 	written 	waiver 	of 	the 	anti-assignment
provision.” Id.
Accordingly, Plaintiff moved for a second time to remand this
matter to state court. ECF No. 14. Defendants filed their response
in opposition to remand on June 20, 2025. ECF No. 23. On July 16,
2025, Plaintiff replied in further support of remand. ECF No. 24.
This matter is thus fully briefed and ripe for review.
II. 	FACTUAL BACKGROUND
WVUHS is a healthcare provider comprised of twenty affiliated
hospitals 	and 	other 	medical 	facilities. 	Compl., 	ECF 	No. 	12, 	at 	¶
1.1 	GMS 	is 	a 	mining 	services 	company 	that 	operates 	a 	self-funded
health 	plan 	for 	its 	employees 	(the 	“Plan”). 	Id. 	at 	¶ 	2. 	THP 	is 	a
West 	Virginia 	insurance 	company 	that 	acts 	as 	a 	third-party
administrator 	for 	the 	GMS 	self-funded 	health 	plan 	but 	also
1 	All 	ECF 	citations 	in 	this 	section 	are 	from 	the 	original 	case,
1:24-cv-35.
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simultaneously 	manages 	claims 	for 	traditional 	commercial 	health
insurance products. Id. at ¶¶ 3, 10.
WVUHS 	and 	THP 	had 	an 	existing 	contract 	for 	a 	negotiated
payment 	rate 	of 	medical 	services 	for 	its 	traditional 	commercial
health insurance. Id. at ¶ 10. However, THP did not “prospectively
negotiate 	any 	contracts 	for 	the 	GMS 	self-funded 	health 	plan 	that
THP 	administered.” 	Id. 	Without 	a 	negotiated 	contract, 	GMS’s
employees are considered “non-participating” and generally do not
have 	access 	to 	WVUHS 	facilities 	for 	medical 	services 	other 	than
certain emergency situations. Id. On July 7, 2022, WVUHS discovered
that THP was processing hospital claims for GMS beneficiaries using
a Reference-Based Pricing payment scheme. Id. at ¶ 11. 2
Despite the lack of a contractual agreement, WVUHS noted that
GMS’s 	employees 	who 	were 	a 	part 	of 	GMS’s 	self-funded 	health 	plan
presented 	to 	WVUHS 	facilities. 	Id. 	at 	¶ 	16. 	WVUHS 	alleges 	in 	the
Complaint 	that 	GMS’s 	employees 	“frequently 	received 	non-emergent
care 	because 	their 	member 	cards 	fraudulently 	imitated 	those 	of
THP’s participating traditional commercial health insurance plan.”
Id. 	WVUHS 	alleges 	that 	GMS’s 	member 	cards 	looked 	like 	THP’s
commercial 	insurance 	member 	cards, 	including 	THP’s 	logo 	and
2 	“RPB 	is 	a 	payment 	methodology 	in 	which 	a 	payor, 	often 	a 	self-
insured 	employer 	via 	a 	third-party 	administrator, 	sets 	its 	own
price for medical services rendered to its participants instead of
prospectively 	negotiating 	prices 	with 	a 	healthcare 	provider 	in
order 	for 	the 	payor’s 	members 	to 	be 	‘participating 	in 	network’
with the healthcare provider.” Compl., ECF No. 12, at ¶ 12.
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address for claims submission. Id. at ¶ 17. WVUHS alleges that the
“fraudulent” 	inclusion 	of 	the 	logo 	and 	address 	induced 	WVUHS’s
registration 	specialists 	to 	reasonably 	believe 	that 	GMS 	member
claims were in network because of the preexisting contract between
WVUHS and THP for their commercial plans. Id.
WVUHS 	alleges 	that 	GMS’s 	cards 	said 	that 	“Assignment 	of
Benefits (AOB) is a waiver of the Provider’s right to balance bill
the 	patient,” 	preventing 	them 	from 	recovering 	the 	unpaid 	balance
of services from GMS members that GMS and THP discounted or refused
to 	reimburse. 	Id. 	at 	¶ 	19. 	WVUHS 	also 	alleges 	that 	GMS’s 	member
cards 	attempt 	to 	establish 	an 	accord 	and 	satisfaction 	by 	stating
that “[d]epositing checks received from the [GMS] Plan represents
accord and satisfaction and will take precedence over any previous
terms.” Id. at ¶ 20.
WVUHS 	alleges 	that 	“GMS’s 	members 	cards 	attempt 	to 	create
implied in fact contracts with accord and satisfaction to allow it
to 	discharge 	its 	duties 	to 	fully 	cover 	its 	members 	and 	prevent
WVUHS 	from 	seeking 	to 	recover 	any 	outstanding 	balance 	from 	GMS’s
members.” 	Id. 	at 	¶ 	21. 	WVUHS 	alleges 	that 	GMS 	and 	THP 	have 	not
been 	reimbursing 	it 	at 	a 	reasonable 	commercial 	rate, 	but 	instead
on 	a 	fraudulent 	“pay-what-they-wish” 	RBP 	scale, 	resulting 	in 	at
least $2,500,000.00 in losses. Id. at ¶¶ 25-26.
As of January 1, 2023, THP contractually agreed to reimburse
WVUHS for the RBP plans at a contracted commercial rate, but WVUHS
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alleges 	that 	neither 	GMS 	or 	THP 	has 	appropriately 	paid 	WVUHS 	for
the 	services 	from 	2020-2022. 	Id. 	at 	¶¶ 	30-31. 	WVUHS 	alleges 	that
instead 	of 	a 	commercially 	reasonable 	rate 	of 	90% 	of 	total 	billed
charges, 	GMS 	and 	THP 	reimbursed 	WVUHS 	at 	a 	rate 	of 	37% 	of 	total
billed charges. Id. at ¶ 32.
In 	its 	Complaint, 	WVUHS 	alleged 	ten 	common 	law 	causes 	of
action:
Count I (GMS): Quantum Meruit
Count II (GMS): Unjust Enrichment
Count III (THP): Unjust Enrichment
Count IV (GMS and THP): Negligent Misrepresentation
Count V (GMS and THP): Intentional Misrepresentation
Count VI (GMS and THP): Concealment
Count VII (GMS and THP): Fraud
Count VIII (GMS and THP): Estoppel
Count IX (GMS and THP): Civil Conspiracy
Count X (GMS and THP): Punitive Damages
III. LEGAL STANDARD
Federal 	courts 	“are 	courts 	of 	limited 	jurisdiction, 	created
by 	Congress 	with 	specified 	jurisdictional 	requirements 	and
limitations. 	Accordingly, a party seeking to adjudicate a matter
in federal court must allege and, when challenged, must demonstrate
the federal court's jurisdiction over the matter. 	If a plaintiff
files 	suit 	in 	state 	court 	and 	the 	defendant 	seeks 	to 	adjudicate
the 	matter 	in 	federal 	court 	through 	removal, 	it 	is 	the 	defendant
who 	carries 	the 	burden 	of 	alleging 	in 	his 	notice 	of 	removal 	and,
if 	challenged, 	demonstrating 	the 	court's 	jurisdiction 	over 	the
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matter.” 	Strawn 	v. 	AT 	& 	T 	Mobility, 	530 	F.3d 	293, 	296 	(4th 	Cir.
2008) (citation omitted).
Federal courts “‘are obliged to construe removal jurisdiction
strictly 	because 	of 	the 	significant 	federalism 	concerns
implicated’ and that ‘if federal jurisdiction is doubtful, a remand
to state court is necessary.’” Palisades Collections LLC v. Shorts,
552 F.3d 327, 333-34 (4th Cir. 2008) (citations omitted).
This Court has previously stated that “[a]ll doubts about the
propriety of removal should be resolved in favor of retaining state
court jurisdiction.” 	Vitatoe v. Mylan Pharmaceuticals, Inc., 2008
WL 	3540462, 	at 	*2 	(N.D. 	W.Va. 	Aug. 	13, 	2008)(Keeley, 	J.). 	When
considering a motion to remand, the Court is limited to considering
the record at the time of removal. 	See Lowrey v. Ala. Power Co.,
483 F.3d 1184, 1213-15 (11th Cir. 2007).
Removal 	is 	appropriate 	when 	a 	“civil 	action 	[is] 	brought 	in
a 	State 	court 	of 	which 	the 	district 	courts 	of 	the 	United 	States
have original jurisdiction.” 28 U.S.C. § 1441. Federal courts have
subject 	matter 	jurisdiction 	over 	cases 	where 	a 	“federal 	statute
creates 	the 	cause 	of 	action” 	so 	that 	the 	case 	“arise[s] 	under”
federal 	law. 	Childers 	v. 	Chesapeake 	& 	Potomac 	Tel. 	Co., 	881 	F.2d
1259, 	1261 	(4th 	Cir. 	1989); 	Merrell 	Dow 	Pharm. 	Inc. 	v. 	Thompson,
478 U.S. 804, 808 (1986).
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IV. 	DISCUSSION
GMS 	removed 	this 	action 	for 	a 	second 	time 	under 	federal
question jurisdiction, again asserting that the GMS plan is a self-
funded 	employee 	welfare 	benefit 	plan 	within 	the 	meaning 	of 	the
Employee Retirement Income Security Act of 1974 (“ERISA”). For the
second 	time, 	GMS 	argues 	that 	ERISA 	expressly 	and 	completely
preempts 	WVUHS’s 	claim 	under 	federal 	question 	subject 	matter
jurisdiction. 	ECF 	No. 	1 	in 	Case 	No. 	1:25-cv-34, 	at 	p. 	2. 	WVUHS
maintains 	that 	this 	action 	was 	improperly 	removed 	and 	that 	this
Court 	still 	lacks 	subject 	matter 	jurisdiction 	over 	the 	claims 	at
issue. ECF No. 14-1 in Case No. 1:25-cv-34, at p. 2. As elaborated
upon 	below, 	ERISA 	preemption 	is 	still 	improper 	in 	this 	case 	and
remand 	is 	necessary. 	Additionally, 	the 	Court 	incorporates 	its
prior 	rulings 	and 	findings 	from 	the 	first 	Memorandum 	Opinion 	and
Order granting remand. ECF No. 2 in Case No. 1:24-cv-35.
Collateral estoppel is a doctrine that precludes relitigation
of 	an 	issue. 	“[O]nce 	an 	issue 	is 	actually 	and 	necessarily
determined 	by 	a 	court 	of 	competent 	jurisdiction, 	that
determination 	is 	conclusive 	in 	subsequent 	suits 	based 	on 	a
different 	cause 	of 	action 	involving 	a 	party 	to 	the 	prior
litigation.” Montana v. United States, 440 U.S. 147, 153 (1979).
A party seeking to rely on collateral estoppel must establish
five elements: (1) that the issue previously decided is identical
to the issue in the current action; (2) that the issue was actually
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determined in the previous proceeding; (3) that the determination
of the issue was “a critical and necessary part of the decision in
the 	prior 	proceeding; 	(4) 	that 	the 	prior 	judgment 	is 	final 	and
valid;” and, “(5) that the party against whom collateral estoppel
is asserted had a full and fair opportunity to litigate the issue”
in the prior case. Collins v. Pond Creek Mining Co., 468 F.3d 213,
217 (4th Cir. 2006) (internal citations omitted).
Collateral 	estoppel 	generally 	applies 	only 	against 	persons
who 	were 	parties 	to 	a 	previous 	suit, 	because 	nonparties 	usually
would 	not 	have 	had 	a 	full 	and 	fair 	opportunity 	to 	litigate 	the
issues. Virginia Hosp. Ass'n v. Baliles, 830 F.2d 1308, 1312 (4th
Cir.1987).
Here, the Court finds that GMS is collaterally estopped from
removing 	this 	case 	for 	a 	second 	time. 	The 	first 	element 	of
collateral 	estoppel 	is 	satisfied 	because 	the 	issue 	of 	ERISA
preemption in the first removal attempt is identical to the issue
of 	ERISA 	preemption 	in 	the 	current 	removal 	attempt. 	In 	both
instances, 	Defendants 	try 	to 	claim 	that 	Plaintiff 	has 	derivative
standing under the governing ERISA plan. Additionally, the second
element of collateral estoppel is met because the issue of standing
was 	actually 	determined 	in 	this 	Court’s 	granting 	of 	the 	previous
motion 	to 	remand. 	ECF 	No. 	29 	in 	Case 	No. 	1:24-cv-35. 	This 	Court
specifically stated that “[u]nder the plain language of the Plan,
the 	anti-assignment 	provision 	appears 	valid 	and 	therefore, 	WVUHS
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could 	not 	bring 	a 	suit 	under 	ERISA 	even 	if 	there 	were 	a 	written
assignment of benefits. Thus, WVUHS does not have standing to sue
THP under ERISA.” Id.
The 	third, 	fourth, 	and 	fifth 	elements 	are 	easily 	satisfied.
The issue of standing was the most critical and necessary part of
the decision in the prior removal attempt, as it was the only issue
addressed 	by 	the 	Court, 	and 	the 	Court’s 	order 	granting 	remand 	is
both 	final 	and 	valid. 	Finally, 	the 	parties 	remained 	the 	same 	in
both 	removal 	attempts. 	Defendants, 	whom 	collateral 	estoppel 	is
asserted against, had a full and fair opportunity to litigate the
issue in the first removal attempt.
The 	Court 	is 	not 	persuaded 	by 	GMS’s 	blatant 	attempt 	to
manufacture 	jurisdiction. 	GMS 	attached 	a 	waiver 	of 	the 	anti-
assignment provision to its Notice of Removal only after the case
had 	already 	been 	remanded 	for 	the 	lack 	of 	federal 	jurisdiction.
GMS 	did 	not 	attempt 	to 	waive 	the 	provision 	at 	any 	point 	in 	the
litigation 	prior 	to 	the 	Court’s 	determination 	that 	the 	anti-
assignment provision was valid. The Court finds that GMS’s removal
attempt 	at 	issue 	showcases 	that 	GMS 	is 	now 	trying 	to 	change 	and
manipulate 	the 	terms 	of 	the 	governing 	plan 	to 	create 	federal
jurisdiction. 	WVUHS 	is 	not 	a 	party 	to 	the 	ERISA 	plan, 	and 	it 	is
not 	seeking 	rights 	available 	under 	the 	plan. 	As 	this 	Court
previously ruled, WVUHS does not have standing to sue under ERISA,
nor 	does 	this 	Court 	have 	jurisdiction 	over 	WVUHS’s 	state 	law
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claims. 	GMS’s 	conduct 	runs 	afoul 	good 	faith 	and 	fair 	dealing 	and
its 	behavior 	cannot 	be 	condoned. 	As 	such, 	GMS’ 	attempts 	remain
unavailing, and the Court GRANTS the Plaintiff’s Motion for Remand
[ECF No. 14].
IV 	CONCLUSION
For 	the 	reasons 	discussed 	above, 	this 	Court 	lacks 	subject
matter 	jurisdiction 	and 	the 	Motion 	to 	Remand 	[ECF 	No. 	14] 	is
GRANTED. 	This 	action 	is 	hereby 	REMANDED 	to 	the 	Circuit 	Court 	of
Monongalia County, West Virginia.
The 	Clerk 	shall 	STRIKE 	this 	action 	from 	the 	Court’s 	active
docket and TERMINATE all pending motions, hearings, or deadlines.
It is so ORDERED.
The 	Clerk 	is 	directed 	to 	transmit 	copies 	of 	this 	Order 	to
counsel of record and the Circuit Clerk of Monongalia County, West
Virginia.
DATED: December 2, 2025
____________________________
THOMAS S. KLEEH, CHIEF JUDGE
NORTHERN DISTRICT OF WEST VIRGINIA
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