Abira Medical Laboratories LLC v. Blue Cross Blue Shield of Arizona Incorporated et al

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Abira Medical Laboratories LLC,
Plaintiff,
v.
Blue Cross Blue Shield of Arizona
Incorporated,
Defendant.
No. CV-24-01485-PHX-SMB
ORDER
The Court now considers Defendant Blue Cross Blue Shield of Arizona, Inc’s
(“BCBS”) Motion to Dismiss Plaintiff Abira Medical Laboratories LLC d/b/a Genesis
Diagnostics’ (“Genesis”) Second Amended Complaint (“SAC”) (Doc. 33). The Motion is
fully briefed. For the following reasons, the Court partially grants the Motion.
I. BACKGROUND
The Court outlined the salient facts of this case in its previous Order dismissing the
First Amended Complaint (the “FAC Order”) (Doc. 28). In short, this is a breach of
contract case between Genesis, a medical testing laboratory, and BCBS, an insurance
company. (Doc. 28 at 1.) Genesis alleges that it rendered testing services to BCBS’s
insureds based on requests submitted by BCBS. (Id. at 2.) These requests contained an
assignment of benefits clause which compelled BCBS, as the assignee-beneficiary, to pay
Genesis for the services. (Id.) However, Genesis alleges that BCBS either underpaid or
refused to pay for these services. (Id.) Genesis consequently brought the present lawsuit,
arguing that the case implicates insurance plans regulated by the Employee Retirement
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Income Security Act of 1974 (“ERISA”). (Doc. 30 at 9.)
Originally, Genesis sued BCBS for (1) breach of contract; (2) breach of the
covenant of good faith and fair dealing; (3) fraudulent misrepresentation; (4) negligent
misrepresentation; (5) equitable estoppel; (6) promissory estoppel; and (7) recovery under
theories of quantum meruit and unjust enrichment. (Doc. 1 at 7–13, ¶¶ 16–41.) On
BCBS’s first Motion to Dismiss (Doc. 11), the Court: (1) denied dismissal of the claims
for breach of contract and breach of the covenant of good faith and fair dealing
(collectively, the “contract claims”); (2) dismissed the equitable estoppel claim with
prejudice; and (3) dismissed the remaining claims without prejudice. (Doc. 20 at 17.)
Thereafter, Genesis filed its FAC (Doc. 22). The FAC asserted: (1) the contract
claims; (2) a claim based on violation of the ERISA; and (3) claims based on quantum
meruit and unjust enrichment. (Id. at 7–9, 12.) The FAC did not pursue the
misrepresentation claims or the promissory estoppel claim. BCBS then filed its second
Motion to Dismiss (Doc. 23.) On that Motion, the Court: (1) dismissed the ERISA claim
without prejudice; and (2) dismissed the claims for quantum meruit and unjust enrichment
with prejudice. (Doc. 28 at 13.) The Court gave Genesis to leave to amend the ERISA
claim. (Id.)
Genesis thus filed the SAC. The SAC reasserts the contract claims and the ERISA
claim. (Doc. 30 at 8–11.) The SAC also asserts claims for fraudulent misrepresentation,
negligent misrepresentation, and promissory estoppel. The Court now considers BCBS’s
present Motion to Dismiss.
II. LEGAL STANDARD
To survive a motion for failure to state a claim under Federal Rule of Civil
Procedure (“Rule”) 12(b)(6), a complaint must meet the requirements of Rule 8(a)(2). Rule
8(a)(2) requires a “short and plain statement of the claim showing that the pleader is entitled
to relief,” so that the defendant has “fair notice of what the . . . claim is and the grounds
upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in
original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). This notice exists if the
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pleader sets forth “factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id.
Dismissal under Rule 12(b)(6) “can be based on the lack of a cognizable legal theory
or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v.
Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). A complaint that sets forth a
cognizable legal theory will survive a motion to dismiss if it contains sufficient factual
matter, which, if accepted as true, states a claim to relief that is “plausible on its face.”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Plausibility does not equal
“probability,” but requires “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 . . . .’”
Id. (quoting Twombly, 550 U.S. at 557).
In ruling on a Rule 12(b)(6) motion to dismiss, the well-pleaded factual allegations
are taken as true and construed in the light most favorable to the nonmoving party. Cousins
v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). However, legal conclusions couched as
factual allegations are not given a presumption of truthfulness, and “conclusory allegations
of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto
v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). A court ordinarily may not consider evidence
outside the pleadings when ruling on a Rule 12(b)(6) motion to dismiss. See United States
v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003). “A court may, however, consider
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.” Id. at 908.
III. DISCUSSION
The Court begins by addressing Genesis’s claims for fraudulent misrepresentation,
negligent misrepresentation, and promissory estoppel. The Court then evaluates the
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amended ERISA claim. Finally, the Court evaluates the contract claims.
A. Fraudulent Misrepresentation, Negligent Misrepresentation, and
Promissory Estoppel
As noted, the Court previously dismissed Genesis’s claims for misrepresentation
and promissory estoppel without prejudice. (Doc. 20 at 3, 17.) The Court gave Genesis
thirty days from April 3, 2025 to amend these claims. (Id. at 17.) Genesis timely filed its
FAC, but it did not reassert the misrepresentation or promissory estoppel claims. (Doc. 28
at 2–3.) The SAC now attempts to resurrect these claims.
The Court will not entertain these claims for two reasons. First, Genesis failed to
amend these claims pursuant to this Court’s previous Order giving it thirty days to do so.
(Doc. 20 at 17.) Second, these claims exceed the scope of this Court’s most recent grant
of leave to amend. See McDonough v. Bidwill, No. CV-24-00764-PHX-DWL, 2025 WL
2673966, at *5 (D. Ariz. Aug. 22, 2025) (noting that “[c]ourts routinely dismiss or strike
newly added claims where the addition of such claims exceeds the scope of leave to amend
that was previously authorized”) As noted, rhe Court only gave Genesis leave to amend
its ERISA claim.. (Doc. 28 at 13.)
Genesis does not explain why it amends these claims beyond the original thirty-day
deadline, and outside the scope of this Court’s previous grant of leave to amend.
Confusingly, Genesis, in its Response, correctly recognizes that “the Court granted
Plaintiff the opportunity to amend the ERISA claim only.” (Doc. 35 at 4–5.) Still, Genesis
claims that it “requires additional discovery in order to plead these causes of action” and
“voluntarily agrees to the withdrawal of [these claims] at this time, based on the Court’s
earlier rulings.” (Id. at 6 n.4.) It appears Genesis believes that it can withdraw these claims
while reserving the right to file another amended complaint once it has sufficient discovery.
The Court reminds Genesis that it may only amend its pleadings “only with the opposing
party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2 To do otherwise,
impermissibly burdens the efficiency of these proceeding. In sum, Genesis did not amend
its misrepresentation and promissory estoppel claims when given the chance to do so,
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amended these claims in violation of a Court order which required BCBS to file the present
motion, and now withdraws these claims with an expressed intent to reassert them.
Accordingly, the Court grants BCBS’s Motion as to Genesis’s claims of fraudulent
misrepresentation, negligent misrepresentation, and promissory estoppel. The Court
dismisses these claims with prejudice.
B. ERISA
The Court turns next to Genesis’s ERISA claim. “Congress enacted ERISA to
‘protect . . . the interests of participants in employee benefit plans and their beneficiaries’
by setting out substantive regulatory requirements for employee benefit plans and to
‘provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts.’”
Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004) (alterations in original) (quoting 29
U.S.C. § 1001(b)). Under 29 U.S.C. § 1132(a)(1)(B), an ERISA plan “participant or
beneficiary” may bring an action “to recover benefits due to him under the terms of his
plan.” ERISA plan participants may assign their right to benefits to their healthcare
providers, thus allowing such providers to bring ERISA claims for the non-payment of
benefits. See S. Coast Specialty Surgery Ctr., Inc. v. Blue Cross of Cal., 90 F.4th 953, 958
(9th Cir. 2024).
To adequately plead an ERISA claim under § 1132(a)(1)(B), “a plaintiff must allege
facts that establish the existence of an ERISA plan as well as the provisions of the plan that
entitle it to benefits. Accordingly, a plaintiff who brings a claim for benefits under ERISA
must identify a specific plan term that confers the benefit in question.” Physicians Surgery
Ctr. of Chandler v. Cigna Healthcare Inc., 609 F. Supp. 3d 930, 936 (D. Ariz. 2022)
(citation modified). Thus, the Court assesses whether Genesis sufficiently pleads an
ERISA claim.
In the FAC Order, the Court noted that courts apply varying levels of stringency
when evaluating the sufficiency of allegations of an ERISA violation. (Doc. 28 at 6.)
Ultimately, the Court dismissed the FAC’s ERISA claim relying on the “more stringent”
pleading standard. (Doc. 28 at 7–9.) Applying this standard, the Court found the FAC
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deficient because it “only contain[ed] bald assertions regarding the existence of an ERISA
plan” and failed “to identify the ERISA plans and services at issue.” (Id. at 8–9 (citation
modified).) The Court need not revisit this analysis because Genesis fails to argue that the
SAC now meets this standard. Indeed, the SAC’s ERISA claim remains materially
unchanged. Genesis acknowledges “that is unable to amend the complaint to cure the
alleged defects, including lack of specificity as to the plans and terms therein due to the
lack of discovery between the parties to date.” (Doc. 35 at 9 n.8.)
Instead, Genesis attempts to avail itself of an “exception” to the aforementioned
pleading standard based on its lack of access to specific plan language and other relevant
documents. As the Court previously recognized, there is a “principle that an insurer cannot
hide behind . . . plans that are in its control [and] then turn around to argue that a plaintiff
has failed to plead specific language from those plans it will not share.” Physicians Surgery
Ctr. of Chandler v. Cigna Healthcare Inc., 550 F. Supp. 3d. 799, 809 (D. Ariz. 2021). In
these circumstances, a claimant “must detail its efforts to obtain such documents in an
amended complaint.” Id. at 808–09. However, this exception must be tempered against
the requirement that claimants “must offer sufficient factual allegations to show that he or
she is not merely engaged in a fishing expedition or strike suit.” Abira Med. Lab’ys, LLC
v. Blue Cross Blue Shield of Fla., Inc., No. 3:23-cv-1092-TJC-SJH, 2025 WL 2644763,
at *1 (M.D. Fla. Sep. 15, 2025) (citation modified). The Court thus evaluates Genesis’s
new allegations pertaining to its attempts to retrieve the relevant insurance plan
information.
The SAC details Genesis’s attempts to obtain the plan information as follows.
“Plaintiff is not provided with a copy of the plan during the underlying claim administration
process, but demands a copy of same under ERISA.” (Doc. 30 at 8 ¶ 24.) “On October 7,
2025, Plaintiff served an email on Defendant requesting copies of the plans at issue in this
matter. To date, the Defendant has not responded.” (Id. at 8–9 ¶ 25.) These allegations
are insufficient to excuse Genesis’s lack of sufficient pleading.
The Court reaffirms—as was the case in the FAC Order—that Genesis does not
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make any attempt to cure the substantive deficiencies identified in the FAC Order. Thus,
Genesis attempts to salvage its ERISA claim by vague reference to a single email sent well
over a year after this lawsuit was initiated and after filing the Complaint and FAC. (Doc.
1.) Genesis does not point to a single indication prior to the filing of its FAC suggesting
that the plans at issue in this case are subject to ERISA. Additionally, based on a
“spreadsheet setting forth the patients who were rendered Laboratory Testing Services”
which Genesis attaches to the SAC, it appears Genesis is seeking damages based on
services it rendered as early as 2016. (Doc. 30-1 at 1.) Thus, a single email does little to
excuse Genesis’s failure to provide any factual enhancement in its SAC which are based
on claims ostensibly a decade old.
Additionally, Genesis’s new allegations fall well short of what was alleged in
Innova Hospital San Antonio, Ltd. P’ship v. Blue Cross & Blue Shield of Georgia, Inc.,
892 F.3d 719 (5th Cir. 2018), the case which gave rise to the “ERISA pleading exception.”
There, the claimant “attempted—without success—to obtain the plan documents at issue
from the [i]nsurer” “[t]wo years before filing the lawsuit.” Id. at 724. No such attempt
was made here. Additionally, the Innova court flagged that the claimant in that case
“repeatedly sought to obtain from the [i]nsurers the plan documents at issue.” Id. at 729.
Genesis points to a single attempt. Thus, the Court finds that Genesis is unable to avail
itself of the foregoing exception.
Genesis is no stranger to this Court’s findings. Other courts have similarly found
that Genesis is not entitled to the ERISA pleading exception. See, e.g., Abira Med. Lab’ys
v. Anthem Blue Cross Life & Health Ins. Co., No. 2:25-CV-03220-WLH-RAO, 2025 WL
2685616, at *3 (C.D. Cal. Aug. 13, 2025) (finding that Genesis “failed to cure the
deficiencies identified by the Court—namely, the absence of allegations about the specific
provision creating the obligation alleged to be breached—either by including good faith
allegations that it had tried and failed to obtain the plan language or by including
representative plan language”); Abira Med. Lab’ys, LLC v. Blue Cross Blue Shield of R.I.,
No. 24-CV-475-MRD-PAS, 2026 WL 353339, at *6 (D.R.I. Feb. 9, 2026) (finding that
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Genesis is not entitled to the pleading exception because: (1) the assignment of the plans
to Genesis “presumably include[d] the right to access the patients’ plan”; (2) Genesis
“never sought to secure the [p]lans from their patients upon receiving the requisitions of
laboratory testing”; and (3) “failed to plead any attempts to retrieve [p]lan documents
directly from [the insurer]”).
Accordingly, the Court grants BCBS’s Motion as to the ERISA claim. The Court
dismisses this claim with prejudice. As was the case in the FAC Order, this conclusion
obviates any need to evaluate whether Genesis’ state law claims are preempted by its
ERISA claim. (Doc. 28 at 10.)
C. The Contract Claims
The Court turns next to Genesis’s claims for breach of contract and breach of the
implied covenant of good faith and fair dealing. (Doc. 30 at 10–12.) As noted, the Court
previously denied BCBS’s first Motion to Dismiss. (Doc. 20 at 9.) Genesis thus reasserted
these claims in its FAC. (Doc. 22 at 7–9.) BCBS did not challenge these claims in its
second Motion to Dismiss. (Doc. 23.) Genesis thus reasserted these claims in its SAC.
(Doc. 30 at 10–13.) The contract claims remain materially similar across the Complaint,
the FAC, and the SAC.
BCBS now contends that these claims should be dismissed because Genesis fails to
plausibly plead any assignment of benefits. (Doc. 33 at 13.) It is unclear why BCBS waits
until its third Motion to Dismiss to raise this argument. Nonetheless, the Court considered
Genesis’ contract claims in its Order dismissing the Complaint and found that “Genesis
has pleaded enough facts to stave off dismissal of its breach of contract claim.” (Doc. 20
at 7.) The Court did not specifically consider any challenge to Genesis’ allegations
pertaining to the assignment of benefits because BCBS did not raise this argument. (Id.
at 6.) Nonetheless, BCBS does not raise any argument which warrants this Court to dismiss
a claim it already found to be adequately pled.
Accordingly, the Court denies BCBS’s Motion as to the contract claims.
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IV. CONCLUSION
Accordingly,
IT IS HEREBY ORDERED granting BCBS’s Motion in regard to the ERISA
claim and the claims for fraudulent misrepresentation, negligent misrepresentation,
promissory estoppel. The Court denies BCBS’s Motion in regard to the contract claims.
IT IS FURTHER ORDERED dismissing the ERISA claim and the claims for
fraudulent misrepresentation, negligent misrepresentation, promissory estoppel with
prejudice.
Dated this 2nd day of April, 2026.
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