Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 1 of 25 PageID #: 3911
`
`
`
`
`
`MEMORANDUM AND ORDER
`2:14-cv-5823 (DRH) (SIL)
`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`-------------------------------------------------------------------X
`RAYMOND A. SEMENTE, D.C., P.C.,
`
`
`
`
`Plaintiff,
` - against -
`EMPIRE HEALTHCHOICE ASSURANCE, INC.,
`d/b/a EMPIRE BLUE CROSS BLUE SHIELD,
`VERIZON
`COMMUNICATIONS,
`INC.,
`VERIZON ADVANCED DATA INC., VERIZON
`AVENUE CORP., VERIZON CORPORATE
`SERVICES CORP., VERIZON NEW YORK INC.,
`VERIZON NEW ENGLAND INC., VERIZON
`SERVICES CORP., EMPIRE CITY SUBWAY
`COMPANY (LIMITED), COUNTY OF SUFFOLK,
`SUFFOLK COUNTY LABOR/MANAGEMENT
`COMMITTEE and THE EMPLOYEE MEDICAL
`HEALTH PLAN OF SUFFOLK COUNTY,
`
`
`
`
`Defendants.
`-------------------------------------------------------------------X
`
`APPEARANCES
`
`For Plaintiff:
`THE LAW OFFICES OF HAROLD J. LEVY, P.C.
`823 Anderson Avenue
`Fort Lee, New Jersey 07024
`By: Harold J. Levy, Esq.
`
`For Defendants / Cross Claimants:
`SUFFOLK COUNTY ATTORNEY
`100 Veterans Memorial Highway
`P.O. Box 6100
`Hauppauge, New York 11788-0099
`By: Hope Senzer Gabor, Esq.
`
`For Cross Defendant:
`FOLEY & LARDNER
`90 Park Avenue
`New York, New York 10016
`By: Robert A. Scher, Esq.
`
`Rachel E. Kramer, Esq.
`
`
`
`
`
`Page 1 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 2 of 25 PageID #: 3912
`
`HURLEY, Senior District Judge:
`
`
`INTRODUCTION
`
`In an Order dated March 16, 2020, (the “Order” or “SJ Order” [DE 120]1), the
`
`Court denied Plaintiff Raymond A. Semente, D.C., P.C.’s motion for summary
`
`judgment and dismissed the case for lack of standing.2 Presently before the Court is
`
`Plaintiff’s motion for reconsideration and reargument pursuant to Federal Rule of
`
`Civil Procedure 54(b) and Local Civil Rule 6.3 for the United States District Courts
`
`for the Southern and Eastern Districts of New York. [DE 122].
`
`Plaintiff is not asking the Court to examine any new legal issues or arguments.
`
`Rather, it is requesting that the Court reconsider its decision because the Court
`
`misconstrued relevant authority in light of the evidence. Accordingly, the motion is
`
`procedurally sound and reconsideration is GRANTED. For the reasons set forth
`
`below, however, the Court adheres to its earlier determination which DISMISSED
`
`the case for lack of standing.
`
`BACKGROUND
`
`The Court assumes familiarity with its full recitation of relevant facts as set
`
`forth in the Order. (See SJ Order at 3–4). Below are the facts pertinent to
`
`reconsideration, an overview of the Order to be reconsidered, and the interim filings
`
`between the Order and this reconsideration decision.
`
`
`1
`The Order was published at Robert A. Semente, D.C., P.C. v. Empire
`Healthchoice Assurance, Inc., 444 F. Supp. 3d 451 (E.D.N.Y. 2020).
`
`Unless otherwise noted, capitalized terms used but not defined herein shall
`2
`have the respective meanings set forth in the SJ Order.
`
`Page 2 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 3 of 25 PageID #: 3913
`
`I.
`
`Factual Background
`
`Plaintiff is a chiropractic practice that services patients with healthcare
`
`insurance plans sponsored by Suffolk or the Verizon, both of which Empire
`
`administers. (SJ Order at 3; Pl. 56.1 Stmt. ¶¶ 4–7 [DE 115-32]). Plaintiff is an out-
`
`of-network provider under the plans. (SJ Order at 3). The plans each contain an
`
`anti-assignment provision which reads:
`
`Note: Assignment of benefits to a non-network provider is not
`permitted.
`
`(SJ Order at 3; Pl. Reply 56.1 Stmt. ¶ 84 [DE 118-1]). Nevertheless, Plaintiff has its
`
`patients make two contractual assignments of rights under their plans.
`
`One assignment, titled “Assignment of Health Plan Benefits and Rights and
`
`ERISA Representative Designation,” grants Plaintiff its patients’ benefits:
`
`I hereby assign directly to Raymond A. Semente D.C.3 all rights to
`payment and benefits and all legal and other health plan, ERISA plan,
`or insurance contract rights that I (or my child, spouse, or minor
`dependent) may have or had under my/our applicable health plan(s) or
`health insurance policy(ies) for past, current, or future services
`rendered. This assignment includes, but is not limited to, a
`designation . . . to pursue any and all remedies to which I/we may be
`entitled, including the use of legal action against the health plan or
`insurer or in response to legal action by any such health plan or insurer.
`This assignment and designation remains in effect unless revoked in
`writing, and a photocopy is to be considered as valid and enforceable as
`the original.
`
`I understand and agree that (regardless of whatever health insurance
`or medical benefits I have), I am ultimately responsible to pay Raymond
`A. Semente D.C. the balance on my account for any professional services
`rendered and for any supplies, tests, or any Chiropractic services
`provided.
`
`
`3
`Dr. Raymond A. Semente, D.C. “is the owner and sole shareholder of Plaintiff.”
`(Pl. 56.1 Stmt. ¶ 2).
`
`Page 3 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 4 of 25 PageID #: 3914
`
`(Ex. I at Suffolk-831 [DE 117-9] to Decl. of Rachel Kramer (“Kramer Decl.”) [DE 117];
`
`Ex. 1 at Suffolk-2131 to Empire Letter in Resp. to Order to Show Cause (“Empire
`
`OTSC Resp.”) [DE 130]; see Tr. of Dep. of Raymond Semente, D.C. at 137:8–
`
`138:11(“Semente Dep.”), Ex. 3 [DE 115-6] to Decl. of Harold J. Levy (“Levy Decl.”)
`
`[DE 115-2]). In this decision, the Court refers to these as the “benefits assignments.”
`
`The other assignment, titled “Assignment of Causes of Action and Right to
`
`Pursue Litigation on Behalf Health Plan Employee Members and Dependents,”
`
`grants Plaintiff the right to prosecute lawsuits “on [its patients] behalf” should
`
`Defendants deny, either in full or in part, reimbursement for the chiropractic and
`
`related medical services provided:
`
`I hereby assign to Dr. Raymond A. Semente, D.C., P.C. any and all legal
`causes of action and the right to commence and pursue a lawsuit on my
`behalf and/or on behalf of the employee member and/or all covered
`persons or dependents under the group health plan issued by the County
`of Suffolk, New York to pursue payment to me or the employee member
`for health plan claims that have been denied or partially unpaid by the
`health plan and/or its administrator, Empire Blue Cross Blue Shield, for
`services rendered to me and/or my dependents or the covered employee
`under the health plan. I hereby authorize such lawsuit to be commenced
`and pursued against the County of Suffolk and/or any of its subdivisions
`and/or the Employee Medical Health Plan of Suffolk County and Empire
`Blue Cross Blue Shield.
`
`(Ex. K [DE 116-12] to Decl. of Hope Senzer Gabor (“Gabor Decl.”) [DE 116-1]; Pl.’s
`
`Mem. of Law in Supp. of its Mot. for Recons. and Reargument at 1–2 (“Pl. Recons.”)
`
`[DE 122-1] (quoting Compl. ¶ 84 [DE 115-4]); see SJ Order at 3–4). In this decision,
`
`the Court refers to these as the “litigation assignments.”
`
`Since October 2013, Defendants have allegedly refused to render payment for
`
`treatments from Plaintiff. (Pl.’s Opening Mem. in Supp. of its Mot. of Summ. J. at 1–
`
`Page 4 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 5 of 25 PageID #: 3915
`
`2 (“Pl. Mem.”) [DE 115-33]; see also Order Granting in Part and Denying in Part Defs.’
`
`Mot. to Dismiss at 2–4 (“MTD Order”) [DE 48]).4 Plaintiff purports to sue “on behalf
`
`of his patients to recover money (benefits) due to its patients but wrongfully withheld
`
`by Empire and Suffolk.” (Pl. Recons. at 1 (emphasis removed)).
`
`II.
`
`The Summary Judgment Order
`
`Plaintiff moved for summary judgment on January 28, 2019. [DE 115]. Before
`
`it could decide the motion, the Court was asked “to issue an order indicating that [the
`
`Court] will handle this case to its conclusion should [a] settlement [between Plaintiff,
`
`Empire, and Verizon] come about, rather than dismiss what would then be a solely
`
`state-based action, without prejudice to it being pursued in a state court.” (Id.; see
`
`also [DE 103, 106, 107, 108]). On May 31, 2019, the Court declined this request for
`
`“an advisory opinion on hypothetical facts.” [DE 110 at 4].
`
`Even so, Plaintiff, Empire, and Verizon settled their dispute. (SJ Order at 2).
`
`With the federal claims dismissed, the sole basis for the Court’s subject-matter
`
`jurisdiction was (and remains) its exercise of supplemental jurisdiction over the New
`
`York state contract law claims against Suffolk.5
`
`The Summary Judgment Order began by re-examining Plaintiff’s standing.
`
`(SJ Order at 8–9). Previously, the Court had held that the plans’ anti-assignment
`
`
`4
`The Order on the Motion to Dismiss was published at Robert A. Semente, D.C.,
`P.C. v. Empire Healthchoice Assurance, Inc., 147 F. Supp. 3d 117 (E.D.N.Y. 2015).
`
`Plaintiff’s surviving breach of contract claim against Suffolk implicates
`5
`Suffolk’s crossclaim against Empire; Empire remains in the case as a third-party
`defendant. (SJ Order at 2 n.1).
`
`Page 5 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 6 of 25 PageID #: 3916
`
`provisions were unenforceable under New York law because they “did not explicitly
`
`state that any assignments would be void.” (SJ Order at 6; MTD Order at 6–9). In
`
`their briefing, Empire and Suffolk re-raised the issue and presented the Court with
`
`several cases, including Angstadt v. Empire Healthcare HMO, Inc., 2017 WL
`
`10844692 (E.D.N.Y. Mar. 16, 2017), applying New York law to the same anti-
`
`assignment provision at issue here. (SJ Order at 6–7). The case law reflected a
`
`consensus in holding the provision enforceable and depriving the assignee of
`
`standing. (Id. at 8–9). Accordingly, the Court then denied summary judgment in
`
`Plaintiff’s favor and dismissed Plaintiff’s claims against Suffolk for lack of standing.
`
`(Id.). Eleven days later, Plaintiff moved for reconsideration of the Order.6
`
`III.
`
`Interim Filings
`
`Plaintiff’s arguments for reconsideration prompted the Court to issue an Order
`
`to Show Cause (“OTSC”) on January 8, 2021. [DE 128]. Plaintiff contends the anti-
`
`assignment provisions are inapplicable as Plaintiff was assigned solely a “cause of
`
`action” without any interest in the proceeds thereof, such that “[a]ny recovery from
`
`this litigation will go directly to the” non-party patient assignors and not initially to
`
`the Plaintiff assignee. (Pl. Recons. at 5–6, 13 (emphasis added)). With the recovery
`
`in hand, a patient would then voluntarily repay Plaintiff (because he or she is
`
`
`6
`Plaintiff has filed a Notice of Appeal regarding the Order. [DE 124]. The
`appeal is stayed pending a decision on this reconsideration motion. Initial Notice of
`Stay of Appeal, Raymond A. Semente D.C., P.C. v. Empire Healthchoice Assurance,
`No. 20-1201 (2d. Cir. Apr. 13, 2020) [DE 11].
`
`Page 6 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 7 of 25 PageID #: 3917
`
`“extremely loyal”)—but if “a patient refuses to pay [Plaintiff], [Plaintiff] may have to
`
`sue that patient.” (Pl.’s Mem. of Law in Reply (“Pl. Recons. Reply”) at 3–4 [DE 127]).
`
`The Court noted “tension” between this position and positions previously
`
`asserted by Plaintiff. (OTSC at 4). For example, the Complaint states “Plaintiff is
`
`entitled to recover the benefits due under the terms of the [healthcare] plan,” “Empire
`
`and [Suffolk] are liable to Plaintiff in an amount to be determined by the trier of fact”
`
`and “Wherefore, Plaintiff Raymond A. Semente, D.C., P.C., prays that it may have
`
`judgment . . . [t]o recover the benefits due under the terms of [healthcare] plans.”
`
`(E.g., Compl. ¶¶ 113, 124; id. Wherefore Clauses ¶¶ A(1), B(1) (capitalization
`
`omitted)). Plaintiff also stated in its opening summary judgment brief, “Semente is
`
`now owed millions of dollars from Verizon and Suffolk County.” (Pl. Mem. at 3.).
`
`The Court also questioned whether New York law permits the litigation
`
`assignments. (OTSC at 3–7 (citing inter alia N.Y. Jud. Law § 489(1)). The Court
`
`then re-raised the issue of its subject-matter jurisdiction, mindful that the exercise of
`
`supplemental jurisdiction may not be prudent in light of this issue’s complexity and
`
`the earlier dismissal of all claims over which the Court had original jurisdiction. (Id.
`
`at 1–3). The parties’ letters in response to the OTSC addressed (i) the Court’s
`
`subject-matter jurisdiction through its exercise of supplemental jurisdiction, and
`
`(ii) Plaintiff’s standing under New York law, as an assignee of a cause of action
`
`without an interest in any recovery. [DE 129, 130, 131].
`
`Page 7 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 8 of 25 PageID #: 3918
`
`LEGAL STANDARD
`
`Under Federal Rule of Civil Procedure 54(b), as well as its inherent power, a
`
`court may “reconsider a prior decision at any time before entry of final judgment.”
`
`Smith v. Town of Hempstead Dept. of Sanitation Sanitary Dist. No. 2, 982 F. Supp.
`
`2d 225, 230 (E.D.N.Y. 2013) (internal quotation marks omitted). In this District,
`
`motions for reconsideration or reargument are governed by Local Civil Rule 6.3.
`
`The standard for a motion for reconsideration “is strict, and reconsideration
`
`will generally be denied unless the moving party can point to controlling decisions or
`
`[factual] data that the court overlooked – matters, in other words, that might
`
`reasonably be expected to alter the conclusion reached by the court.” Shrader v. CSX
`
`Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995) (finding district court properly exercised
`
`its discretion to reconsider earlier ruling in light of the introduction of additional
`
`relevant case law and substantial legislative history); see also Arum v. Miller, 304 F.
`
`Supp. 2d 344, 347 (E.D.N.Y. 2003) (“To grant such a motion the Court must find that
`
`it overlooked matters or controlling decisions which, if considered by the Court, would
`
`have mandated a different result.” (citation and internal quotation marks omitted)).
`
`“The major grounds justifying reconsideration are ‘an intervening change of
`
`controlling law, the availability of new evidence, or the need to correct a clear error
`
`or prevent manifest injustice.’” Virgin Atl. Airways, Ltd. v. Nat’l Mediation Bd., 956
`
`F.2d 1245, 1255 (2d Cir. 1992) (quoting 18 C. Wright, A. Miller & E. Cooper, Federal
`
`Practice & Procedure § 4478). Thus, a “‘party may not advance new facts, issues, or
`
`arguments not previously presented to the Court.’” Nat’l Union Fire Ins. Co. v. Stroh
`
`Page 8 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 9 of 25 PageID #: 3919
`
`Cos., 265 F.3d 97, 115 (2d Cir. 2001) (quoting Polsby v. St. Martin’s Press, 2000 WL
`
`98057, at *1 (S.D.N.Y. Jan. 18, 2000)). A party may, however, introduce relevant
`
`authority that was not before the district court when it initially ruled on the matter.
`
`See Vaughn v. Consumer Home Mortg. Co., 2007 WL 140956, at *6 (E.D.N.Y. Jan. 22,
`
`2007). In the alternative, reconsideration is appropriate if a court “misinterpreted or
`
`misapplied” relevant case law in its original decision. O’Brien v. Bd. of Educ. of Deer
`
`Park Union Free School Dist., 127 F. Supp. 2d 342, 346 (E.D.N.Y. 2001).
`
`DISCUSSION
`
`
`
`Upon considering the parties’ arguments in response to the OTSC, the state of
`
`the litigation undertaken thus far, and the fairness to the litigants, the Court
`
`continues to exercise supplemental jurisdiction over the matter. See Ametex Fabrics,
`
`Inc. v. Just in Materials, Inc., 140 F.3d 101, 105–06 (2d Cir. 1998).
`
`Plaintiff premises its reconsideration motion on a distinction between one
`
`assigned right—“the right to commence litigation”—and the right contractually
`
`prohibited from assignment—the right to “benefits.” Pl. Recons. at 2–3. Plaintiff
`
`contends the litigation assignments transfer only the “right to bring a legal action
`
`and sue Suffolk to recover [patients’] benefits on their behalf for them.” Pl. Recons.
`
`at 11–12 (emphasis in original). In other words, the patients gave Plaintiff “a cause
`
`of action” in isolation, separate from and without any interest in the proceeds thereof,
`
`such that “[a]ny recovery from th[e] litigation will go directly to the” non-party
`
`assignors (patients) and not initially to the Plaintiff assignee. Pl. Recons. at 5–6, 13
`
`(emphasis added). As the anti-assignment provisions forbid assigning “benefits,”
`
`Page 9 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 10 of 25 PageID #: 3920
`
`Plaintiff asserts, they do not thereby prohibit assigning “rights, duties or causes of
`
`action.” Id. at 11–12, 17 (emphasis in original). The thrust of Plaintiff’s distinction
`
`is that the “anti-assignment clause is simply not implicated in the instant action” and
`
`thus cannot deprive Plaintiff of standing. Id. at 13.
`
`
`
`This distinction, Plaintiff contends, separates the case at hand from Angstadt
`
`v. Empire Healthcare HMO, Inc., 2017 WL 10844692 (E.D.N.Y. Mar. 16, 2017),
`
`adopting as modified report and recommendation, 2017 WL 10844693 (E.D.N.Y. Jan.
`
`6, 2017)—so much so that the Court’s reliance thereon was erroneous. Pl. Recons. at
`
`4–7; see SJ Order at 6–7.
`
`Like here, Angstadt involved allegations that a healthcare plan administrator
`
`failed to fully reimburse out-of-network healthcare providers for medical services
`
`provided to members covered by the plan. 2017 WL 10844693, at *1–2. In the course
`
`of treatment, the Angstadt patients assigned the providers “all rights, title and
`
`interest in benefits payable for services rendered by the [providers].” Id. But their
`
`plan contained an anti-assignment provision: “Note: Assignment of benefits to a non-
`
`network provider is not permitted” – fundamentally the same as the provisions here.
`
`2017 WL 10844692, at *7. On a motion to dismiss, the Honorable Sandra J.
`
`Feuerstein analyzed New York law and held that this provision was sufficiently clear
`
`and definite to nullify the patients’ assignments. Id. at *7–8. Without valid
`
`assignments, the providers had no standing and their case was dismissed. Id.
`
`
`
`Plaintiff juxtaposes the breadth of the Angstadt patients’ assignments (“all
`
`rights, title and interest in benefits”) with the narrower litigation assignments at
`
`Page 10 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 11 of 25 PageID #: 3921
`
`hand (“only a right to sue”). Pl. Recons. at 4–5, 17. Unlike in Angstadt, Plaintiff
`
`argues, “[n]o benefits were ever assigned” here. Id. (emphasis partially removed).
`
`The documentary evidence belies this assertion.
`
`I.
`
`
`
`The Benefits Assignments
`
`Despite Plaintiff’s insistence to the contrary, the evidence proffered by
`
`Defendants shows that Plaintiff was, in fact, assigned benefits. Compare Ex. I at
`
`Suffolk-831 to Kramer Decl. (assigning “all rights to payment and benefits”), and Ex.
`
`1 at Suffolk-2131 to Empire OTSC Resp. (same), with Pl. Recons. at 1–2 (“In the case
`
`at bar, however, no benefits were ever assigned.” (emphasis in original)), and id. at
`
`4–5, 7, 10, 11, 13, 17, and Pl. Recons. Reply at 1, 2, 4–9. Plaintiff obtained an
`
`“assignment of health plan benefits,” whose unambiguous terms reveal patients
`
`“assign[ed] directly to Raymond A. Semente D.C. all rights to payment and benefits
`
`and all legal and other health plan, ERISA plan, or insurance contract rights.” Ex. I
`
`at Suffolk-831 to Kramer Decl.; Ex. 1 at Suffolk-2131 to Empire OTSC Resp. Nothing
`
`suggests the benefits assignments were ever revoked, and the litigation assignments
`
`do not purport to do so. See Ex. K to Gabor Decl.
`
`Dr. Semente testified that the litigation assignments supplemented the
`
`benefits assignment as a precautionary measure prior to the commencement of
`
`formal litigation:
`
`Q.
`
`A.
`
`You testified earlier that you would receive assignments
`from all your patients. Do you recall that?
`Yes.
`
`Page 11 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 12 of 25 PageID #: 3922
`
`Q.
`
`A.
`Q.
`
`A.
`
`. . .
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`. . .
`
`Q.
`
`A.
`
`And that’s done typically on the first day or the first visit
`that they come to, right?
`Not always.
`Okay. Often if they’re not done on the first day – well, the
`assignments, even if they’re done later on, are retroactive,
`right?
`Yes.
`
`And I think are -- am I correct that there are really at least
`two different kinds of assignments? One is -- which I think
`this first page is a good example, 145 -- an assignment
`authorizing you to seek the payment of benefits on behalf
`of the patient, right?
`I had level one appeal advice that, yes, that was so by this
`form.7
`And then there’s another assignment that has to do with
`assigning to you the right to pursue litigation on behalf of
`the patient, right?
`Yes.
`
`So I thought since this is not an assignment to pursue
`claims, this is an assignment to pursue litigation, so I
`thought maybe, you know, the lawsuit was about to be filed
`and you were making sure that everyone was going to be
`subject of the lawsuit had actually signed one of these
`forms.
`I had level one appeal counsel before any lawsuit was filed.
`And one of the recommendations was I had to have a proper
`assignment, so I had to turn around and contact patients
`that had been to the office, as best as I can recollect, and I
`
`
`7
` To the extent Dr. Semente’s testimony suggests the benefits assignment are
`limited to administrative “level one appeals,” their plain text provides otherwise.
`E.g., Ex. I at Suffolk-831 to Kramer Decl. (“I hereby assign directly to Raymond A.
`Semente, D.C. all rights to payment and benefits . . . . This assignment includes, but
`is not limited to, a designation . . . to pursue any and all remedies to which I/we may
`be entitled, including the use of legal action against the health plan or insurer . . . .”
`(emphasis added)).
`
`Page 12 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 13 of 25 PageID #: 3923
`
`had to send them the assignment so they could sign it and
`send it back to us.
`So I think the retroactive assignment is what this
`means, but I'm not an attorney, so they had to be signed by
`patients under care at that time and preceded counsel.
`That all makes sense. Before you start a lawsuit on behalf
`of patients, you wanted to make sure you had [the] right to
`do that on behalf of all the patients, right?
`Yes.
`
`Q.
`
`A.
`
`Semente Dep. at 137:8–18, 137:24–138:11, 142:24–143:21. Plaintiff’s litigation
`
`assignments merely reaffirmed the rights already obtained through the benefits
`
`assignments as a prophylactic measure in anticipation of filing suit. Indeed, the
`
`rights transferred through benefits assignments subsume those transferred through
`
`the litigation assignments; the benefits assignments transfer the same rights and
`
`more. Compare Ex. K to Gabor Decl. (assigning “any and all legal causes of action
`
`and the right to commence and pursue a lawsuit on [the patient’s] behalf”), with Ex.
`
`I at Suffolk-831 to Kramer Decl. (assigning the right “to pursue any and all remedies
`
`to which [the patient] may be entitled, including the use of legal action against the
`
`health plan or insurer”).
`
`
`
`Plaintiff’s contentions on reconsideration ignore the benefits assignments.
`
`Plaintiff may be correct that the litigation assignments’ “plain language” transfers
`
`“no benefits,” e.g., Pl. Recons. Reply at 4, but the point is hollow because the benefits
`
`assignments’ does. E.g., Ex. I at Suffolk-831 to Kramer Decl. Plaintiff’s position
`
`relies on “[t]he benefits at issue in this litigation [remaining] the property of the
`
`patients, in whose behalf Plaintiff sues.” Pl. Recons. Reply at 4. Already precarious
`
`Page 13 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 14 of 25 PageID #: 3924
`
`in theory,8 this position fully capsizes upon discovery of evidence showing Plaintiff
`
`was assigned those benefits.
`
`To the extent Plaintiff asserts that Suffolk waived argument on this issue by
`
`“previously admit[ting]” that the assignments involve only “the rights to commence
`
`an action, and not an assignment of benefits,” the Court is not persuaded. Pl. Recons.
`
`at 13 (citing Suffolk’s Opening Mem. in Supp. of Mot. to Dismiss [DE 41-3]). Suffolk’s
`
`argument came in support of its Motion to Dismiss and was therefore limited to the
`
`allegations in the Complaint. See Fed. R. Civ. P. 12(d); Nakahata v. N.Y.-Presbyterian
`
`Healthcare Sys., Inc., 723 F.3d 192, 202 (2d Cir. 2013) (“We do not consider matters
`
`outside the pleadings in deciding a motion to dismiss for failure to state a claim.”).
`
`The Complaint alleged that Plaintiff obtained litigation assignments from patients
`
`with healthcare plans administered by Suffolk – different from the allegations that
`
`Plaintiff obtained benefits assignments from patients with plans administered by
`
`Verizon. Compl. ¶¶ 28, 84. The evidence nevertheless shows Plaintiff did obtain
`
`benefits assignments from patients with healthcare plans administered by Suffolk.
`
`For example, the patient whose materials comprise Exhibit I to the Kramer
`
`Declaration (1) assigned benefits, Ex. I at Suffolk-831 to Kramer Decl., (2) from a
`
`healthcare plan administered by Suffolk, Ex. I at Suffolk-826 to id. (denying, on
`
`Suffolk County EMHP letterhead, a reimbursement appeal for chiropractic services
`
`
`8
`See Discussion Section III infra. In the OTSC, the Court raised a concern that
`the litigation assignments may violate New York Judiciary Law § 489(1), the
`statutory codification of the common law prohibition against champerty. It is
`unnecessary to reach this issue because Plaintiff has no standing regardless.
`
`Page 14 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 15 of 25 PageID #: 3925
`
`provided by Dr. Raymond Semente, D.C. to a patient belonging to the “Employee
`
`Medical Health Plan of Suffolk County”).
`
`As such, the Court adheres to its Order in holding that the anti-assignment
`
`provisions—prohibiting assignments of benefits—operate with full force here to
`
`deprive Plaintiff of standing.
`
`II.
`
`Enforceability of the Anti-Assignment Provisions
`
`New York law construes anti-assignment clauses narrowly. Music Royalty
`
`Consulting, Inc. v. Reservoir Media Mgmt., Inc., 2019 WL 1950137, at *10 (S.D.N.Y.
`
`Apr. 17, 2019). The Second Circuit has held that, “[u]nder New York law, only express
`
`limitations on assignability are enforceable.” Pravin Banker Assocs., Ltd. v. Banco
`
`Popular Del Peru, 109 F.3d 850 (2d Cir. 1997) (emphasis in original). The Angstadt
`
`Court held an anti-assignment provision, identical to the one here, “sufficiently clear
`
`to ‘void’ any assignment, even an assignment of benefits.” 2017 WL 10844692, at *7–
`
`8. Plaintiff challenges the holding’s accuracy and this Court’s adoption thereof. Pl.
`
`Recons. at 5 & n.2, 7, 15.
`
`The New York state case Cole v. Metropolitan Life Insurance particularly
`
`impels a finding of enforceability. 708 N.Y.S.2d 789, 273 A.D.3d 832 (N.Y. App. Div.,
`
`4th Dep’t 2000)). There, the New York Appellate Division, Fourth Department
`
`enforced an identical anti-assignment provision—“Assignment of benefits to a
`
`Non-Participating Provider is not permitted”—relying on, and citing to, the legal
`
`principle that Plaintiff contends supports the provision’s non-enforceability. 708
`
`N.Y.S.2d at 790 (holding the provision satisfied New York law’s requirement “clear,
`
`Page 15 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 16 of 25 PageID #: 3926
`
`definite and appropriate language declaring the invalidity of such assignments”); see
`
`Pl. Recons. at 5 & n.2, 10, 13–15; Pl. Recons. Reply at 8–9.
`
`The American Medical Association v. United Healthcare Corporation Court
`
`invoked Cole to reject the same argument Plaintiff presents: that the anti-assignment
`
`provision fails “to use the term ‘void’” and thus does “not operate as an anti-
`
`assignment clause.” 2001 WL 863561, at *12 (S.D.N.Y. July 31, 2001). Considering
`
`New York law, the Southern District of New York agreed the provision contained
`
`sufficiently clear language to invalidate assignments in contravention thereof. Id.
`
`The Angstadt Court agreed with the reasoning in these two cases to find a
`
`“virtually identical” anti-assignment provision enforceable under New York law.
`
`2017 WL 10844692, at *8 (analyzing American Med. Ass’n, 2001 WL 863561 and Cole,
`
`708 N.Y.S.2d 789). In surveying the legal landscape, the Angstadt Court noted this
`
`Court’s MTD Order stood alone in finding the provision unenforceable under New
`
`York law, against three cases (Angstadt included) reaching the opposite result. Id.
`
`This Court’s Order on Summary Judgment thus restores unanimity to the judicial
`
`consensus on this question, and, consensus notwithstanding, properly applies New
`
`York law.
`
`Plaintiff also assert, “as a matter of law,” the anti-assignment provisions must
`
`“explicitly include a preclusion against assigning causes of action,” and not benefits
`
`generally, in order to apply here. Pl. Recons. at 13 (citing Pravin Banker, 109 F.3d
`
`at 856). The Second Circuit did not consider New York law so demanding. The Pravin
`
`Banker defendants contended a letter agreement’s express permission to “assign all
`
`Page 16 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 17 of 25 PageID #: 3927
`
`or any part of [a party’s] interest . . . to any financial institution” worked
`
`simultaneously to prohibit all other assignments. Id. at 856. The court rejected this
`
`argument, noting the “language fails to restrict the assignment expressly in any way”
`
`and does not “limit assignments only to [financial institutions].” Id. When the Second
`
`Circuit reiterated New York law as requiring “clear and definite” anti-assignment
`
`language, it called for such clauses to be overt and not to be negatively implied from
`
`a positive right of assignability. See id. (citing Allhusen v. Caristo Constr. Corp., 303
`
`N.Y. 446, 103 N.E.2d 891 (1952)).
`
`
`
`Therefore, the Court respectfully disagrees that Angstadt is “incorrectly
`
`decided under New York law” and that relying on Angstadt’s “holding and
`
`rationale . . . was erroneous as a matter of fact and as a matter of law.” Pl. Recons.
`
`at 13. The anti-assignment provisions deprive Plaintiff of standing.
`
`III. The Litigation Assignments are Powers of Attorney
`
`
`
`Ultimately, the benefits assignments and the anti-assignment provisions’
`
`enforceability matter little. Even if there were only litigation assignments and the
`
`anti-assignment provisions did not apply, Plaintiff still does not have standing. The
`
`litigation assignments are naked powers of attorney, which New York law has long
`
`held insufficient to confer standing upon an assignee.
`
`New York law generally considers causes of action “freely assignable.” Titus
`
`v. Wallick, 306 U.S. 282, 288–89, 59 S.Ct. 557, 561, 83 L.Ed. 653 (1939). A proper
`
`assignment of a cause of action requires “a completed transfer of the entire interest
`
`of the assignor in the particular subject of assignment.” Coastal Comm. Corp. v.
`
`Page 17 of 25
`
`

`

`Case 2:14-cv-05823-DRH-SIL Document 132 Filed 03/02/21 Page 18 of 25 PageID #: 3928
`
`Samuel Kosoff & Sons, Inc., 199 N.Y.S.2d 852, 856, 10 A.D.2d 372, 376 (N.Y. App.
`
`Div., 4th Dep’t 1960). Going all the way back to the mid-1800s, the New York Court
`
`of Appeals has continually affirmed:
`
`If, as between the assignor and assignee, the transfer is complete, so
`that the former is divested of all control and right to the cause of action,
`and the latter is entitled to control it and receive its fruits, the assignee
`is the real party in interest, whether the assignment was with or
`without consideration, and notwithstanding the assignee may have
`taken it subject to all equities between the assignor and third persons.
`
`Cummings v. Morris, 25 N.Y. 625, 627, 11 E.P. Smith 625 (N.Y. 1862). “In other
`
`words, the plaintiff must have some title, legal or