Case 4:22-cv-00599 Document 1 Filed on 02/24/22 in TXSD Page 1 of 10
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`PHYSICIANS MEDICAL
`TEXIENNE
`ASSOCIATION, PLLC,
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`Plaintiff,
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`CIVIL ACTION No. ___________
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`the District Court of
`from
`(Removed
`Montgomery County, Texas, 457th Judicial
`District, Cause No. 21-11-15221)
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`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`§
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`§
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`NOTICE OF REMOVAL
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`v.
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`HEALTH CARE SERVICE
`CORPORATION d/b/a BLUE CROSS AND
`BLUE SHIELD OF TEXAS,
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`Defendant.
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`COMES NOW, HEALTH CARE SERVICE CORPORATION, a mutual legal reserve
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`company operating in Texas as Blue Cross and Blue Shield of Texas (“HCSC”), and hereby
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`removes Cause No. 21-11-15221, Texienne Physicians Medical Association, PLLC v. Health Care
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`Service Corporation d/b/a Blue Cross and Blue Shield of Texas, from the 457th Judicial District
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`Court of Montgomery County, Texas (the “State Action”), pursuant to 28 U.S.C. § 1331, 1332,
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`1441, and 1446. Removal of this action is proper because diversity jurisdiction exists and the
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`amount in controversy exceeds $75,000, and also because federal question jurisdiction exists.
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`I.
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`BACKGROUND
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`A.
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`1.
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`Plaintiff’s Petition and Allegations
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`On November 1, 2021, Texienne Physicians Medical Association, PLLC
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`(“Plaintiff”) filed the State Action.1
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`1 See Plaintiff’s Original Petition (the “Petition”), attached hereto as Exhibit A.
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`Case 4:22-cv-00599 Document 1 Filed on 02/24/22 in TXSD Page 2 of 10
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`2.
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`In the Petition, Plaintiff, a physician group practice with numerous offices in
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`Texas,2 asserts two claims against HCSC, a health insurer, for breach of contract3 and liability
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`under Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (“ERISA”),
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`29 U.S.C. § 1132(a)(1)(B).4
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`3.
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`Plaintiff seeks to recover actual damages, costs, pre- and post-judgment interest,
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`statutory penalties and interest, and attorneys’ fees, among other things.5
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`B.
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`4.
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`Plaintiff’s Failed Attempts to Serve HCSC
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`On January 25, 2022, HCSC received a citation dated January 5, 2022, and a copy
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`of the Petition via certified mail from the Texas Secretary of State.6
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`5.
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`For the reasons stated herein, this attempt at service of process was defective under
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`Texas law, and it is HCSC’s position that it has not been properly served in the State Action.
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`Because HCSC has not yet been served by valid formal process, its time to remove has not begun
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`to run.7
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`6.
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`Nevertheless, HCSC is filing this Notice of Removal within thirty (30) days of its
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`receipt of the Petition on January 25, 2022, in an abundance of caution.
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`7.
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`Plaintiff’s attempt at service through the Secretary of State is defective under Texas
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`law for the following reasons.
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`2 Id. ¶ 6.
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`3 Id. ¶¶ 8-14.
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`4 Id. ¶ 15-21.
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`5 Id. ¶¶ 13-14, 19, 21-22, 24.
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`6 See Return Receipt, Letter from Secretary of State, Citation, and attached Petition, attached hereto as Exhibit B.
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`7 28 U.S.C. § 1446(b); Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999) (holding that a
`defendant’s time to remove is not triggered “by mere receipt of the complaint unattended by any formal service”).
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`Case 4:22-cv-00599 Document 1 Filed on 02/24/22 in TXSD Page 3 of 10
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`8.
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`The Petition alleges that HCSC “does not maintain an agent in the State of Texas
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`for the service of process and therefore may be served via the Texas Secretary of State with service
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`forward to 300 East Randolph, Chicago, Illinois 60601.”8 This allegation is incorrect.
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`9.
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`Foreign insurance companies doing business in Texas are required to appoint an
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`agent for service of process “[a]s a condition to being issued a certificate of authority to engage in
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`the business of insurance in” Texas.9 Consistent with this statutory requirement, HCSC’s
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`registered agent in Texas is Corporation Service Company, 211 East 7th Street, Suite 620, Austin,
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`Texas 78701.
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`10.
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`The Texas Department of Insurance (“TDI”), and not the Texas Secretary of State,
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`maintains the list of registered agents for insurers who operate in Texas. The identity and address
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`of HCSC’s registered agent is publicly available and searchable on TDI’s website.10
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`11.
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`Under certain circumstances,
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`the Texas Insurance Code designates
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`the
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`Commissioner of Insurance as the agent for service of process to insurance companies.11 Pursuant
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`to Section 804.103(c) of the Texas Insurance Code, the Commissioner is a foreign insurance
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`company’s agent on whom process may be served only if: (1) the foreign company fails to appoint
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`or maintain an agent for service of process; (2) the appointed agent cannot with reasonable
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`diligence be found; or (3) the company’s certificate of authority is revoked.12
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`8 See Petition, at ¶ 2.
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`9 Tex. Ins. Code § 804.103(b).
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`10 Guidelines for Service of Process, TEX. DEPT. OF INS., https://www.tdi.texas.gov/consumer/attyforservice.html (last
`updated Apr. 21, 2020) (providing searchable link “[t]o find the agent for service of process for an insurance
`company”).
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`11 Id. (stating that “[t]he Commissioner of Insurance is the agent for service of process for these types of companies
`and organizations,” and listing such types).
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`12 Tex. Ins. Code § 804.103(c).
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`12.
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`Here, HCSC is a foreign insurance company doing business in Texas under a valid
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`certificate of authority, and maintains an agent for service of process that can be found by searching
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`the TDI’s publicly available records.
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`13.
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`Given that HCSC maintains a registered in Texas whose identity and contact
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`information is on file with TDI, Plaintiff would have to demonstrate reasonable diligence in
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`attempting to serve that agent before effectuating service via the Commissioner of Insurance under
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`Section 804.103(c). Plaintiff has failed to demonstrate that it acted with any diligence, let alone
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`reasonable diligence, in attempting to identify or serve HCSC’s registered agent. Instead, Plaintiff
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`unreasonably failed to contact the TDI, review the TDI’s publicly searchable records, or otherwise
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`investigate whether HCSC maintained a registered agent in Texas. Therefore, none of the
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`circumstances set forth in Section 804.103(c) of the Texas Insurance Code are present here.13
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`14.
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`For these reasons, Plaintiff’s attempt to serve HCSC – a foreign insurance company
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`operating in Texas pursuant to a certificate of authority under the Insurance Code – by serving the
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`Texas Secretary of State did not constitute valid service. Even assuming arguendo that insurers
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`were subject to service via the Secretary of State and not via the process set forth in the Insurance
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`Code, Plaintiff failed to offer sufficient prove that it acted with reasonable diligence in identifying
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`and attempting to serve HCSC’s registered agent for the reasons already stated, and thus has failed
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`to meet the statutory requirements to even seek that method of service.14
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`13 See also Copeland v. Bonner, No. 3:13-cv-02440-P, 2014 U.S. Dist. LEXIS 203881, at *5 & n.1 (N.D. Tex. Mar.
`11, 2014) (finding that service of process on insurance company was defective, though the insurer was on notice of
`the suit because it had received a copy of the complaint and summons, where the plaintiff did not attempt to serve the
`insurer’s registered agent, and stating that “[f]oreign insurance companies doing business in Texas are also required
`to appoint an agent for service of process” under Section 804.103 of the Texas Insurance Code).
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`14 Tex. Bus. Orgs. Code § 5.251 (“The secretary of state is an agent of an entity for purposes of service of process,
`notice, or demand on the entity if: (1) the entity is a filing entity or a foreign filing entity and: (A) the entity fails to
`appoint or does not maintain a registered agent in the state; or (B) the registered agent of the entity cannot with
`reasonable diligence be found at the registered office of the entity[.]”); see also Paramount Credit, Inc. v. Montgomery,
`420 S.W.3d 226 (Tex. App.—Houston [1st Dist.] 2013) (“The law requires strict compliance with the[] conditions
`[set forth in Section 5.251(1) of the Texas Business Organizations Code; ‘[o]nly after the registered agent of a
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`15.
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`According to a purported affidavit of service filed in the State Action on December
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`7, 2021, Plaintiff had previously attempted to serve HCSC on December 7, 2021, by having an
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`Illinois process server deliver unspecified documents to HCSC’s Illinois headquarters on
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`November 30, 2021.15 HCSC did not learn of the State Action or receive a copy of the Petition at
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`that time.
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`16.
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`This attempt at service was likewise defective under the Texas Insurance Code
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`because it was not directed to HCSC’s registered agent in Texas.16 It was also facially defective
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`for several additional reasons, including that the purported affidavit of service was not verified or
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`signed under penalty of perjury and was not signed by a sheriff, constable, or court clerk.17
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`17.
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`Accordingly, though Plaintiff’s attempts at service of process were facially
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`defective and improper, HCSC became aware of the State Action and received a copy of the
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`Petition on January 25, 2022.
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`II.
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`DIVERSITY JURISDICTION
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`18.
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`This Court possesses original jurisdiction over this matter pursuant to 28 U.S.C. §
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`1332, and removal is thus proper under 28 U.S.C. § 1441(b) and 1446. Under 28 U.S.C. § 1332,
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`federal courts have original federal jurisdiction over “all civil actions where the matter in
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`controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is in between
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`citizens of different States.”
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`corporation cannot be found with reasonable diligence at the registered office can the Secretary of State act as agent
`of the corporation for service of process.’” (citation omitted) (alteration in original)).
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`15 Affidavit of Service, attached as Exhibit D, p. 12.
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`16 Tex. Ins. Code § 804.103(b).
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`17 See Tex. R. Civ. P. 107; Green v. Evans, No. 14-20-00054-CV, 2021 Tex. App. LEXIS 3832, at *5 (Tex. App.—
`Houston [14th Dist.] May 18, 2021) (holding such deficiencies were “fatal to effective service”).
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`Case 4:22-cv-00599 Document 1 Filed on 02/24/22 in TXSD Page 6 of 10
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`A.
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`19.
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`20.
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`The Amount in Controversy Exceeds $75,000.
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`The amount in controversy exceeds $75,000, exclusive of interest and costs.
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`The Petition states that “Plaintiffs [sic] seek damages within the jurisdictional limits
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`of this Court, including monetary relief between $250,000 and $1,000,000.”18
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`21.
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`Accordingly, “it is apparent from the face of the petition that the claims are likely
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`to exceed $75,000[,]” and removal is appropriate under 28 U.S.C. § 1332 because the amount in
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`controversy exceeds the jurisdictional amount.19
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`B.
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`Plaintiff Is a Texas Citizen.
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`22.
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`Plaintiff alleges that it is a professional limited liability company.20 The citizenship
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`of a limited liability company is based upon the citizenship of each of its partners.21
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`23.
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`According to both its Certificate of Formation and its most recent public filing,
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`Plaintiff has one organizer/general partner, its CEO and Manager Asit Choksi. Because Dr. Choksi
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`resides in Spring, Texas, Plaintiff is a citizen of Texas for diversity purposes.22
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`C.
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`24.
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`HCSC Is an Illinois Citizen.
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`“[A] corporation shall be deemed to be a citizen of any State by which it has been
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`incorporated and of the State where it has its principal place of business.”23
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`18 See Petition, at ¶ 5.
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`19 Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
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`20 Id. ¶ 1.
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`21 Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079 (5th Cir. 2008).
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`22 See Declaration of Courtney Bedell Averbach, attached hereto as Exhibit C, ¶¶ 3-5; see also Certificate of Formation
`for Texienne Physicians Medical Association, PLLC (Oct. 24, 2016), attached hereto as Exhibit C-1; Texas Franchise
`Tax Public Information Report for Texienne Physicians Medical Association, PLLC (June 15, 2021), attached hereto
`as Exhibit C-2.
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`23 See 28 U.S.C. § 1332(c)(1).
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`25.
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`HCSC, a mutual legal reserve company organized under the laws of the State of
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`Illinois with its principal place of business in Chicago, Illinois, is an Illinois resident and citizen
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`for diversity purposes.24
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`26.
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`Accordingly, because there is complete diversity of citizenship between Plaintiff
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`and HCSC, and the amount in controversy exceeds $75,000, this action is properly removed under
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`28 U.S.C. § 1332, 1441, and 1446.
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`III.
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`FEDERAL QUESTION JURISDICTION
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`27.
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`In addition to diversity jurisdiction, this Court has jurisdiction over this case under
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`28 U.S.C. § 1331 because Plaintiff asserts a claim against HCSC under Section 502(a)(1)(B) of
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`the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B).25
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`See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions that
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`originally could have been filed in federal court may be removed to federal court by the
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`defendant. . . . The presence or absence of federal-question jurisdiction is governed by the ‘well-
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`pleaded complaint rule,’ which provides that federal jurisdiction exists only when a federal
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`question is presented on the face of the plaintiff’s properly pleaded complaint.”).
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`28.
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`The United States District Court for the Southern District of Texas thus has original
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`jurisdiction of this action under 28 U.S.C. § 1331 because federal question jurisdiction exists, and
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`this action is one that HCSC may remove under 39 U.S.C. § 1441.
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`24 See Petition, at ¶ 2; see also, e.g., Fisher v. Blue Cross & Blue Shield of Tex., 879 F. Supp. 2d 581, 587 (N.D. Tex.
`2012) (finding that Blue Cross and Blue Shield of Texas, an unincorporated division of Health Care Service
`Corporation, is a citizen of Illinois for diversity purposes); Hesse v. Blue Cross Blue Shield of Tex., No. 4:11-CV-362,
`2011 WL 4025453, at *1-3 (E.D. Tex. Aug. 15, 2011) (same), report and recommendation adopted, 2011 WL
`4025514, at *1 (E.D. Tex. Sept. 9, 2011); Coghlan v. Blue Cross Blue Shield of Tex., No. H-12-2703, 2013 WL
`150711, at *1-3 (S.D. Tex. Jan. 14, 2013) (same);
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`25 See Petition, at ¶¶ 15-21.
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`29. Moreover, because this suit sets forth a claim involving a federal question, the entire
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`suit is removable.26
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`IV. COMPLIANCE WITH THE REMOVAL STATUTE
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`30.
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`This Notice of Removal is properly filed in the United States District Court for the
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`Southern District of Texas, Houston Division, pursuant to 28 U.S.C. § 1446(a), because the District
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`Court of Montgomery County, Texas, is located in this federal judicial district.27
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`31.
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`Though HCSC maintains that Plaintiff’s attempt at service of process was defective
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`and invalid for the reasons stated above, and therefore that its time to remove has not yet been
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`triggered, this Notice of Removal is timely because it is being filed with this Court within thirty
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`(30) days of the date of HCSC’s receipt of the citation and Petition.28
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`32. Written notice of the filing of this Notice of Removal will be provided to Plaintiff
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`and filed in the appropriate state court as required by 28 U.S.C. § 1446(d).
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`33.
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`Pursuant to 28 U.S.C. § 1446(a), a copy of all process, pleadings, and orders is
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`attached.29
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`34.
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`The undersigned has signed this Notice of Removal pursuant to Rule 11 of the
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`Federal Rules of Civil Procedure, in accordance with 28 U.S.C. § 1446(a).
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`V.
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`COMPLIANCE WITH LOCAL RULE 81
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`35.
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`In compliance with Local Rule 81, HCSC attaches the exhibits referenced below:
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`26 See 28 U.S.C. § 1441(c)(1).
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`27 See also 28 U.S.C. § 1441(a).
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`28 See 28 U.S.C. § 1446(b); see also Thompson v. Deutsche Bank Nat’l Tr. Co., 775 F.3d 298, 306 (5th Cir. 2014)
`(recognizing a defendant’s right to remove in the absence of proper service of process).
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`29 See Docket Sheet and Accompanying Case File, attached hereto as Exhibit D.
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`Case 4:22-cv-00599 Document 1 Filed on 02/24/22 in TXSD Page 9 of 10
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`a.
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`All documents associated with Plaintiff’s attempts to serve HCSC with
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`process,30 attached as Exhibit B;
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`b.
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`Pleadings asserting causes of action, e.g., petitions, counterclaims, cross
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`actions, third-party actions, interventions, and all answers to such pleadings,
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`attached as Exhibit A;
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`c.
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`d.
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`e.
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`The docket sheet and accompanying case file, attached as Exhibit D;
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`An index of matters being filed, attached as Exhibit E; and
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`A list of all counsel of record, including addresses, telephone numbers, and
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`parties represented, attached as Exhibit F.
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`VI. CONCLUSION
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`WHEREFORE, Defendant Health Care Service Corporation, a mutual legal reserve
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`company operating in Texas as Blue Cross and Blue Shield of Texas, removes this action from the
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`457th Judicial District Court of Montgomery County, Texas, to the United States District Court
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`for the Southern District of Texas, Houston Division, and requests that this Court retain jurisdiction
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`for all further proceedings in this matter.
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`30 Local Rule 81 requires that the removing party attach “[a]ll executed process in the case,” among other things, to
`the Notice of Removal. For the reasons stated above, HCSC disputes that Plaintiff’s attempts at service complied with
`Texas law.
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`Case 4:22-cv-00599 Document 1 Filed on 02/24/22 in TXSD Page 10 of 10
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`Dated: February 24, 2022
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`Respectfully submitted,
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`REED SMITH, LLP
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`/s/ Martin J. Bishop_______
`Martin J. Bishop
`State Bar No. 24086915
`mbishop@reedsmith.com
`811 Main Street, Suite 1700
`Houston, Texas 77002-6110
`Telephone: (713) 469-3800
`Telecopier: (713) 469-3899
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`ATTORNEYS FOR DEFENDANT
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`CERTIFICATE OF SERVICE
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`I hereby certify that on February 24, 2022, a true and correct copy of the foregoing
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`document was served according to the Federal Rules of Civil Procedure on the following counsel:
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`Steven J. Mitby
`State Bar No. 24037123
`smitby@seilermitby.com
`Kelly D. Clark
`State Bar No. 24094781
`kclark@seilermitby.com
`Michael K. Barnhart
`State Bar No.
`mbarnhart@seilermitby.com
`SEILER MITBY
`2700 Research Forest Drive, Suite 100
`The Woodlands, TX 77381
`Telephone: (281) 419-7770
`Telecopier: (218) 419-7791
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`ATTORNEYS FOR PLAINTIFF
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`/s/ Martin J. Bishop ___________
`Martin J. Bishop
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