Guillermina Parra v. Pacificare of Arizona, Inc. , 715 F.3d 1146 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GUILLERMINA PARRA; TERRI No. 11-16069
CORRALES; FRANCISCO PARRA; JESUS
PARRA, D.C. No.
Plaintiffs-counter-defendants- 4:10-cv-00008-
Appellees, DCB
v.
OPINION
PACIFICARE OF ARIZONA, INC., an
Arizona corporation,
Defendant-counter-claimant-
Appellant.
Appeal from the United States District Court
for the District of Arizona
David C. Bury, District Judge, Presiding
Argued and Submitted
October 16, 2012—San Francisco, California
Filed April 19, 2013
Before: Richard C. Tallman, Consuelo M. Callahan,
and Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Hurwitz;
Concurrence by Judge Callahan
2 PARRA V. PACIFICARE OF ARIZONA
SUMMARY*
Medicare Act
Affirming the district court’s judgment, the panel held
that a private Medicare Advantage Organization plan cannot
sue a plan participant’s survivors for reimbursement for
advanced medical expenses out of the proceeds of an
automobile insurance policy.
The panel held that the district court had subject matter
jurisdiction to determine whether the Medicare Act created a
cause of action in favor of the MAO plan. The panel held
that even though the MAO Statute, Medicare Part C, allows
an MAO to charge a primary plan for conditional payments
made on behalf of a plan participant, it does not grant an
MAO a private right of action to recover those payments.
The panel held that 42 U.S.C. § 1395y(b)(3)(A), which
provides for a private cause of action for Medicare
beneficiaries and healthcare providers to recover medical
expenses from primary plans, did not apply.
Concurring in the panel’s decision, Judge Callahan wrote
that although prior opinions have been “less than consistent”
on this issue, a district court has subject matter jurisdiction to
determine whether a private right of action exists under
federal law.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PARRA V. PACIFICARE OF ARIZONA 3
COUNSEL
John C. West (argued), Brownstein Hyatt Farber Schreck,
LLP, Phoenix, Arizona, for Defendant-Counter-Claimant-
Appellant.
John E. Osborne and William C. Bacon (argued), Goldberg
& Osborne, Tucson, Arizona, for Plaintiffs-Counter-
Defendants-Appellees.
Stanley G. Feldman, Haralson, Miller, Pitt, Feldman &
McAnally, P.L.C., Tucson, Arizona; Steven J. Bruzonsky,
Mesa, Arizona; and David L. Abney, Knapp & Roberts, P.C.,
Scottsdale, Arizona, for Amicus Curiae Arizona Association
for Justice.
OPINION
HURWITZ, Circuit Judge:
This case involves the Medicare Act, one of “the most
completely impenetrable texts within human experience.”
Cooper Univ. Hosp. v. Sebelius, 636 F.3d 44, 45 (3d Cir.
2010) (internal quotation marks and citation omitted). The
issue is whether a private Medicare Advantage Organization
(“MAO”) plan can sue a plan participant’s survivors, seeking
reimbursement for advanced medical expenses out of the
proceeds of an automobile insurance policy. The district
court dismissed the causes of action asserted by the MAO
under the Medicare Act for failure to state a claim and
declined to exercise supplemental jurisdiction over the
MAO’s contract claim. We affirm.
4 PARRA V. PACIFICARE OF ARIZONA
I.
Facts and Procedural Background
Manuel Parra was injured when struck by a car as he was
walking through a parking lot. Parra was a participant in a
MAO plan offered by PacifiCare of Arizona, Inc., which paid
his hospital and medical bills.
After Parra died from injuries suffered in the accident, his
wife and children (the “Survivors”) made a demand for
wrongful death damages against the driver’s $500,000
GEICO automobile insurance policy. See Ariz. Rev. Stat.
§ 12-612 (allowing the surviving spouse, child, parent,
guardian or personal representative of a deceased person to
bring a wrongful death action); id. § 12-613 (allowing
damages in a wrongful death action “with reference to the
injury resulting from the death to the surviving parties”).
PacifiCare also made a claim against the GEICO policy for
the $136,630.90 it expended for Parra’s care. The Survivors
eventually entered into a settlement with GEICO, under
which the insurer issued a $136,630.90 check jointly payable
to the Survivors’ attorney and to PacifiCare’s affiliate, to be
held in trust pending resolution of the parties’ dispute, and
paid the balance of the policy limits to the Survivors.
The Survivors then filed a complaint in the United States
District Court for the District of Arizona, seeking declaratory
and injunctive relief. The complaint contended that under
Arizona law the policy proceeds were not subject to
PacifiCare’s anticipated claims. See Ariz. Rev. Stat. § 12-613
(“The amount recovered in such action shall not be subject to
debts or liabilities of the deceased, unless the action is
brought on behalf of the decedent’s estate.”); Gartin v. St.
PARRA V. PACIFICARE OF ARIZONA 5
Joseph’s Hosp. & Med. Ctr., 749 P.2d 941, 943–45 (Ariz. Ct.
App. 1988) (holding that wrongful death awards are not
subject to a decedent’s debts). The Survivors sought
injunctive relief and a declaration that “PacifiCare is not
entitled to any reimbursement payments out of the wrongful
death benefits paid by GEICO to the [Survivors] because
PacifiCare has no greater reimbursement rights than the
Secretary [of Health and Human Services] and the Secretary
determined Medicare will not seek reimbursement from
wrongful death proceeds that do not include payment for the
decedent’s medical expenses.”
PacifiCare counterclaimed, also seeking declaratory
relief, arguing it was entitled to reimbursement under both the
terms of its contract with Parra (Count I) and directly under
the Medicare Act (Count II). The parties each moved for
summary judgment. The motions were referred to a
magistrate judge, who sua sponte recommended dismissal of
the action for lack of subject matter jurisdiction.
The district court accepted and adopted the magistrate
judge’s Report and Recommendation as its own findings of
fact and conclusions of law. But rather than dismissing
Count II for lack of subject matter jurisdiction, the court
granted the Survivors’ motion for summary judgment “to the
extent it asks [the court] to find [PacifiCare] does not have a
private cause of action under the Medicare statute or the
Medicare Secondary Payer (MSP) Act.” The court declined
to exercise supplemental jurisdiction over Count I.
PacifiCare appealed the district court’s judgment. We
have jurisdiction under 28 U.S.C. § 1291, and review de novo
a dismissal for failure to state a claim. Uhm v. Humana, Inc.,
620 F.3d 1134, 1139 (9th Cir. 2010). “We review for abuse
6 PARRA V. PACIFICARE OF ARIZONA
of discretion a district court’s decision . . . not to retain
supplemental jurisdiction over state claims once it has
dismissed all of the plaintiff’s federal claims.” Brown v.
Lucky Stores, Inc., 246 F.3d 1182, 1187 (9th Cir. 2001).
II.
Failure to State a Claim or Lack of Subject Matter
Jurisdiction?
The magistrate judge recommended that Count II be
dismissed for lack of subject matter jurisdiction; the district
court, although adopting the magistrate judge’s
recommendation and report, instead concluded that Count II
failed to state a claim upon which relief can be granted. This
duality is understandable; our decisions have analyzed
whether a cause of action exists under federal law both ways.
Compare, e.g., Thompson v. Thompson, 798 F.2d 1547, 1550
(9th Cir. 1986) (“Because jurisdiction is not defeated by the
possibility that the complaint might fail to state a claim upon
which recovery can be had, the failure to state a valid claim
is not the equivalent of a lack of subject matter jurisdiction,
and calls for a judgment on the merits rather than for a
dismissal for lack of jurisdiction.”), aff’d, 484 U.S. 174(1988), with N. Cnty. Commc’ns Corp. v. Cal. Catalog &
Tech., 594 F.3d 1149, 1162 (9th Cir. 2010) (holding that
“[t]he district court lacked subject matter jurisdiction . . . as
North County cannot establish a private right to compensation
under the provisions of the Federal Communications Act”).
Despite these seemingly inconsistent decisions,1 the district
1
Compare also W. Radio Servs. Co. v. Qwest Corp., 530 F.3d 1186,
1196 (9th Cir. 2008) (determining the Court “ha[d] jurisdiction under
28 U.S.C. § 1331 to determine whether [a federal statute] afford[ed] a
PARRA V. PACIFICARE OF ARIZONA 7
court was correct. Subject matter jurisdiction exists to
determine whether a federal statute provides a private right of
action.
The Supreme Court has counseled that “[j]urisdiction . . .
is not defeated . . . by the possibility that the averments might
fail to state a cause of action on which petitioners could
actually recover.” Bell v. Hood, 327 U.S. 678, 682 (1946);
see also Burks v. Lasker, 441 U.S. 471, 476 n.5 (1979) (“The
question whether a cause of action exists is not a question of
jurisdiction.”). Federal question jurisdiction thus exists over
a claim stating a cause of action under federal law unless the
“allegation was clearly immaterial,” or the claim was made
“solely for the purpose of obtaining jurisdiction.” Thompson,
798 F.2d at 1550. Neither is the case here. “[B]ecause
interpretation of the federal Medicare Act presents a federal
question,” In re Avandia Mktg., 685 F.3d 355, 357 (3d Cir.
2012), the district court had subject matter jurisdiction to
determine whether that act created a cause of action in favor
private cause of action . . . .”), and Lewis v. Transamerica Corp., 575 F.2d
237, 239 n.2 (9th Cir. 1978) (“The trial court stated that it was dismissing
for lack of subject matter jurisdiction. According to the district court’s
analysis, the complaint more properly should have been dismissed for
failure to state a claim upon which relief can be granted. As pertains to
the asserted cause of action . . . , general federal question jurisdiction is
conferred by 28 U.S.C. § 1331 (1970).”) (internal quotations and citations
omitted), affirmed in part and reversed in part on other grounds by
Transamerica Mortg. Advisors, Inc. v. Lewis, 444 U.S. 11 (1979), with N.
Cnty. Commc’ns Corp., 594 F.3d at 1151–52 (affirming district court’s
dismissal of a case for lack of subject matter jurisdiction on the basis
plaintiff had no private right of action in federal court), and Williams v.
United Airlines, Inc., 500 F.3d 1019, 1022 (9th Cir. 2007) (determining
that the “general federal-question jurisdiction statute is applicable only
when the plaintiff sues under a federal statute that creates a right of action
in federal court”).
8 PARRA V. PACIFICARE OF ARIZONA
of PacifiCare against the Survivors. We next turn to an
overview of the pertinent parts of that legislation.
A.
The Medicare Act
Medicare, enacted in 1965, is a federal health insurance
program primarily benefitting those 65 years of age and older.
See Social Security Amendments of 1965, Pub. L. No. 89-97,
79 Stat. 286 (codified as amended at 42 U.S.C. §§ 1395 to
1395kkk-1). Medicare Part A covers inpatient hospital care,
42 U.S.C. §§ 1395c to 1395i-5, and Part B covers services
and equipment, 42 U.S.C. §§ 1395j to 1395w-5.
In 1980, Congress added the Medicare Secondary Payer
provisions (“MSP”) to the Medicare Act. Omnibus
Reconciliation Act of 1980, Pub. L. No. 96-499, 94 Stat. 2599
(codified as amended at 42 U.S.C. § 1395y(b)). The MSP
makes Medicare insurance secondary to any “primary plan”
obligated to pay a Medicare recipient’s medical expenses,
including a third-party tortfeasor’s automobile insurance.
42 U.S.C. § 1395y(b)(2)(A). When Medicare makes a
conditional payment on behalf of a beneficiary, the primary
plan must reimburse the Trust Fund. Id. § 1395y(b)(2)(B)(ii).
The MSP also subrogates the United States to a beneficiary’s
right to pursue the primary plan, id. § 1395y(b)(2)(B)(iv), and
provides the United States with an independent right to
recover double damages from a responsible entity which
refuses to reimburse the Trust Fund, id. § 1395y(b)(2)(B)(iii).
In 1986, the Medicare Act was further amended to include
“a private cause of action for damages (which shall be in an
amount double the amount otherwise provided) in the case of
PARRA V. PACIFICARE OF ARIZONA 9
a primary plan which fails to provide for primary payment (or
appropriate reimbursement).” Omnibus Budget
Reconciliation Act of 1986, Pub. L. No. 99–509, 100 Stat.
1874 (codified as amended at 42 U.S.C. § 1395y(b)(3)(A)).
The private cause of action allows Medicare beneficiaries and
healthcare providers to recover medical expenses from
primary plans. See, e.g., Bio-Med. Applications of Tenn., Inc.
v. Cent. States Se. & Sw. Areas Health & Welfare Fund,
656 F.3d 277, 279 (6th Cir. 2011), cert. dismissed, 132 S. Ct.
1087 (2012) (noting that the private cause of action provides
an “incentive for healthcare providers to bring lawsuits to
vindicate Medicare’s interests”); Woods v. Empire Health
Choice, Inc., 574 F.3d 92, 98 (2d Cir. 2009) (“[T]he MSP
allows a private party . . . to bring suit in the party’s own
name to remedy the wrong done to it – namely the failure of
a primary plan to make the payments required of it . . . .”).
In 1997, Congress enacted Medicare Part C, providing for
private Medicare Advantage plans. Balanced Budget Act of
1997, Pub. L. No. 105–33, 111 Stat. 251 (codified as
amended at 42 U.S.C. §§ 1395w-21 to w-28). Part C allows
eligible participants to opt out of traditional Medicare and
instead obtain various benefits through MAOs, which receive
a fixed payment from the United States for each enrollee.
42 U.S.C. §§ 1395w-21, 1395w-23. Part C is intended to
“allow beneficiaries to have access to a wide array of private
health plan choices in addition to traditional fee-for-service
Medicare. . . . [and] enable the Medicare program to utilize
innovations that have helped the private market contain costs
and expand health care delivery options.” H.R. Rep. No. 105-
149, at 1251 (1997).
10 PARRA V. PACIFICARE OF ARIZONA
Part C authorizes, but does not compel, a MAO to charge
a primary plan for medical expenses paid on behalf of a
participant:
Notwithstanding any other provision of law, a
Medicare [Advantage] organization may (in
the case of the provision of items and services
to an individual under a Medicare
[Advantage] plan under circumstances in
which payment under this subchapter is made
secondary pursuant to section 1395y(b)(2) of
this title) charge or authorize the provider of
such services to charge, in accordance with
the charges allowed under a law, plan, or
policy described in such section—
(A) the insurance carrier, employer, or other
entity which under such law, plan, or policy is
to pay for the provision of such services, or
(B) such individual to the extent that the
individual has been paid under such law, plan,
or policy for such services.
42 U.S.C. § 1395w-22(a)(4).
B.
PacifiCare’s Claims
PacifiCare argues that it has a private right of action to
pursue reimbursement under two provisions of the Medicare
Act: (1) § 1395w-22(a)(4) (the “MAO Statute”) and (2)
PARRA V. PACIFICARE OF ARIZONA 11
§ 1395y(b)(3)(A) (the “Private Cause of Action”). We
address each in turn.
1. The MAO Statute
PacifiCare contends that because the MAO Statute allows
a MAO to charge a primary plan for conditional payments
made on behalf of a plan participant, that statute grants it a
private right of action to recover those payments as well. We
find the argument unavailing.
On its face, the MAO Statute does not purport to create a
cause of action. Rather, it simply describes when MAO
coverage is secondary to other insurance, and permits (but
does not require) a MAO to include in its plan provisions
allowing recovery against a primary plan, as PacifiCare did
here. In considering 42 U.S.C. § 1395mm(e)(4), a provision
virtually identical to the MAO Statute governing privately-
run health maintenance organizations (“HMOs”),2 the courts
2
Section 1395mm(e)(4) provides:
Notwithstanding any other provision of law, the eligible
organization may (in the case of the provision of
services to a member enrolled under this section for an
illness or injury for which the member is entitled to
benefits under a workmen’s compensation law or plan
of the United States or a State, under an automobile or
liability insurance policy or plan, including a self-
insured plan, or under no fault insurance) charge or
authorize the provider of such services to charge, in
accordance with the charges allowed under such law or
policy—
12 PARRA V. PACIFICARE OF ARIZONA
have consistently concluded that Congress did not intend to
create a federal cause of action thereby. Care Choices HMO
v. Engstrom, 330 F.3d 786 (6th Cir. 2003), is particularly
instructive. In Care Choices, the Sixth Circuit unanimously
rejected an HMO’s invocation of federal question jurisdiction
in a suit against one of its insureds, holding that
§ 1395mm(e)(4) merely permitted HMOs to create a
contractual right of reimbursement. Id. at 788–90; accord
Nott v. Aetna U.S. Healthcare, Inc., 303 F. Supp. 2d 565, 571
(E.D. Pa. 2004) (“[W]hile granting statutory permission to
include recovery provisions in their contracts, Congress did
not create a mechanism for the private enforcement of
subrogation rights of Medicare substitute[s].”).
We agree. The MAO Statute simply allows PacifiCare to
provide via its contracts that its insurance is secondary to
other available plans and allows recovery from a primary plan
that refuses to reimburse the MAO for payments made on
behalf of a participant. In the end, the MAO’s claim thus
arises by virtue of its decision to include provisions allowing
such recovery in its contract with plan participants.
PacifiCare also argues that the MAO Statute creates a
federal cause of action by cross-referencing
§ 1395y(b)(2)(B)(iii), which provides, in part, that the
“United States may bring an action against any or all entities
that are or were required or responsible . . . to make payment
(A) the insurance carrier, employer, or other entity
which under such law, plan, or policy is to pay for the
provision of such services, or
(B) such member to the extent that the member has
been paid under such law, plan, or policy for such
services.
PARRA V. PACIFICARE OF ARIZONA 13
with respect to the same item or service . . . under a primary
plan.” PacifiCare contends that because this provision creates
a cause of action in favor of the United States, the reference
to it in the MAO Statute means that a federal claim is also
created for MAOs.
We are not persuaded. The cross-reference to
§ 1395y(b)(2)(B)(iii) in the MAO Statute simply explains
when MAO coverage is secondary to a primary plan – “under
circumstances in which payment under this subchapter is
made secondary pursuant to section 1395y(b)(2)” – that is,
under the same circumstances when insurance through
traditional Medicare would be secondary. The cross-
reference defines when MAO coverage is secondary, and
does not create a federal cause of action in favor of a MAO.
PacifiCare also cites 42 C.F.R. § 422.108(f), which
provides that MAOs exercise “the same rights to recover
from a primary plan, entity, or individual that the Secretary
exercises under the MSP regulations.” The regulation adds
nothing to a MAO’s claim to a private right of action. See
Alexander v. Sandoval, 532 U.S. 275, 291 (2001) (“Language
in a regulation may invoke a private right of action that
Congress through statutory text created, but it may not create
a right that Congress has not.”); Opera Plaza Residential
Parcel Homeowners Ass’n v. Hoang, 376 F.3d 831, 836 (9th
Cir. 2004) (“[I]t is the relevant laws passed by Congress, and
not rules or regulations passed by an administrative agency,
that determine whether an implied cause of action exists.”).
2. The Private Cause of Action
PacifiCare next argues that the Private Cause of Action
authorizes its claim against the Survivors. PacifiCare relies
14 PARRA V. PACIFICARE OF ARIZONA
heavily on In re Avandia Mktg., 685 F.3d at 356, which held
that § 1395y(b)(3)(A) provided a MAO a private right of
action against third-party tortfeasors for medical expenses
advanced on behalf of plan participants. We need not resolve
whether Avandia was decided correctly because it does not
aid PacifiCare.
The Private Cause of Action applies “in the case of a
primary plan which fails to provide for primary payment.”
42 U.S.C. § 1395y(b)(3)(A). But here, PacifiCare makes no
claim against GEICO, the primary plan, nor has that plan
failed to provide for payment. GEICO long ago tendered the
sum claimed by PacifiCare, and simply protected itself
against a conflicting claim by the Survivors. PacifiCare’s
claim for relief is not against the insurer, or even against
Parra’s estate for sums received from a primary plan for
medical expenses, but rather against the Survivors and their
claim to this disputed res.
The Private Cause of Action was intended to allow
private parties to vindicate wrongs occasioned by the failure
of primary plans to make payments. See Woods, 574 F.3d at
98 (“[T]he MSP allows a private party . . . to bring suit in the
party’s own name to remedy the wrong done to it . . . .”).
This statute, which allows recovery of double damages, was
not intended to apply to a primary plan which, for all intents
and purposes, has interpleaded a sum subject to conflicting
claims. Indeed, had GEICO filed an interpleader action
rather than tendering the joint check to PacifiCare and the
Survivors, the district court would not have had jurisdiction
under 28 U.S.C. § 1335, because PacifiCare and the Survivors
are all citizens of Arizona. We see no warrant in the Private
Cause of Action to reach a different result here, and we hold
PARRA V. PACIFICARE OF ARIZONA 15
that the district court properly dismissed the causes of action
arising under the Medicare Act for failure to state a claim.
C.
Other Bases for Federal Jurisdiction
1. Federal Common Law
Even if PacifiCare lacks a private cause of action directly
under the Medicare Act and is thus unable to state a claim
under Count II, PacifiCare urges that we find an independent
basis of federal jurisdiction over Count I, its plan-based
claim, because that contract arises under federal “common
law.” PacifiCare argues that in the absence of such common
law, state courts may reach conflicting decisions with respect
to claims by MAOs against primary plans or settlement
proceeds. But, of course, the same danger exists when
different federal courts address an issue, and a generalized
desire for uniformity does not suffice to warrant the creation
of federal common law. O’Melveny & Myers v. F.D.I.C.,
512 U.S. 79, 88 (1994). Rather, “absent some congressional
authorization to formulate substantive rules of decision,
federal common law exists only in . . . narrow areas.” Texas
Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 641
(1981). The Medicare Act contains no express directive for
federal courts to formulate a common law of subrogation, let
alone a set of priorities between competing claimants to
insurance proceeds, and we decline to do so. Cf. Menhorn v.
Firestone Tire & Rubber Co., 738 F.2d 1496, 1500 (9th Cir.
1984) (noting that Congress directed courts “to formulate a
nationally uniform federal common law to supplement the
explicit provisions and general policies set out in ERISA,
16 PARRA V. PACIFICARE OF ARIZONA
referring to and guided by principles of state law when
appropriate, but governed by the federal policies at issue”).
2. Complete Preemption
PacifiCare next argues that the doctrine of complete
preemption confers federal subject matter jurisdiction over
Count I. This doctrine “confers exclusive federal jurisdiction
in certain instances where Congress intended the scope of a
federal law to be so broad as to entirely replace any state-law
claim.” Marin Gen. Hosp. v. Modesto & Empire Traction
Co., 581 F.3d 941, 945 (9th Cir. 2009) (quoting Franciscan
Skemp Healthcare, Inc. v. Cent. States Joint Bd. Health &
Welfare Trust Fund, 538 F.3d 594, 596 (7th Cir. 2008)). But
we need not tarry over this issue. Complete preemption is
plainly not applicable here – Medicare contains no civil
enforcement scheme, and Congress has not indicated any
intent to permit removal of all disputes over insurance
proceeds to the federal courts. See Nott, 303 F. Supp. 2d at
570–73.3
3. Supplemental Jurisdiction
Finally, PacifiCare contends that even if Count I presents
only questions of state law, the district court should have
nonetheless exercised supplemental jurisdiction pursuant to
3
PacifiCare also argues that even in the absence of complete
preemption, the MAO Statute preempts any Arizona law preventing
recovery by the MAO from the GEICO policy proceeds. But even
assuming that the MAO Statute provides a defense to the Survivors’
claims against these proceeds, that defense does not give rise to a federal
claim. See Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S.
Cal., 463 U.S. 1, 10 (1983) (noting that a federal defense does not create
§ 1331 “arising under” jurisdiction).
PARRA V. PACIFICARE OF ARIZONA 17
28 U.S.C. § 1367(a). However, once the district court, at an
early stage of the litigation, dismissed the only claim over
which it had original jurisdiction, it did not abuse its
discretion in also dismissing the remaining state claims.
28 U.S.C. § 1367(c)(3).
III.
Conclusion
We affirm the district court’s dismissal of Count II for
failure to state a claim as well as its decision to decline to
exercise supplemental jurisdiction over Count I.
AFFIRMED.
CALLAHAN, Circuit Judge, concurring:
I concur in the panel’s decision, but write separately to
make explicit an important jurisdictional point implicitly
addressed by the majority.
As the majority acknowledges, our opinions are less than
consistent on whether district courts have jurisdiction to
determine if a federal law affords a litigant a private right of
action. See Maj. Op. at 6–7 & n.1 (comparing Western Radio
Services Co. v. Qwest Corp., 530 F.3d 1186, 1196 (9th Cir.
2008), and Lewis v. Transamerica Corp., 575 F.2d 237, 239
n.2 (9th Cir. 1978), rev’d on other grounds, 444 U.S. 11(1979), with North County Communicationsns Corp. v. Cal.
Catalog & Tech., 594 F.3d 1149, 1151–52 (9th Cir. 2010),
and Williams v. United Airlines, Inc., 500 F.3d 1019, 1022
18 PARRA V. PACIFICARE OF ARIZONA
(9th Cir. 2007)). Accordingly, I offer a further explanation
for our decision to affirm the district court’s jurisdiction.
Our opinion in North County Communications accepted
without analysis the district court’s conclusion that the lack
of a private right of action deprived that court of jurisdiction.
594 F.3d at 1152, 1161. In addition, although we offered
some analysis in Williams, we relied on factually
distinguishable precedent involving state causes of action, as
opposed to federal causes of action, in holding that we lacked
jurisdiction over plaintiff’s claims. 500 F.3d at 1022.
In contrast, our remaining decisions have more
extensively addressed the issue of subject matter jurisdiction
and are in accord with our opinion today. For example,
Thompson v. Thompson, 798 F.2d 1547 (9th Cir. 1986),
correctly articulated and applied the relevant legal principles
as set forth by the Supreme Court:
The district court erred in dismissing [the]
complaint for lack of subject matter
jurisdiction. [The] complaint alleges a
violation of a federal statute, 28 U.S.C.
§ 1738A. Federal question jurisdiction exists
unless the cause of action alleged is patently
without merit, see Duke Power Co. v.
Carolina Environmental Study Group, Inc.,
438 U.S. 59, 70–71, 98 S. Ct. 2620, 2628–29,
57 L. Ed. 2d 595 (1978), or the allegation is
clearly immaterial and made solely for the
purpose of obtaining jurisdiction. See Mt.
Healthy City School District Board of
Education v. Doyle, 429 U.S. 274, 279, 97 S.
Ct. 568, 572, 50 L. Ed. 2d 471 (1977). The
PARRA V. PACIFICARE OF ARIZONA 19
court must assume jurisdiction to decide
whether the complaint states a cause of action
on which relief can be granted. Bell v. Hood,
327 U.S. 678, 682, 66 S. Ct. 773, 776, 90 L.
Ed. 939 (1946). Because jurisdiction is not
defeated by the possibility that the complaint
might fail to state a claim upon which
recovery can be had, the failure to state a valid
claim is not the equivalent of a lack of subject
matter jurisdiction, and calls for a judgment
on the merits rather than for a dismissal for
lack of jurisdiction. Rodriguez v. Flota
Mercante Grancolombiana, S.A., 703 F.2d
1069, 1072 (9th Cir.), cert. denied, 464 U.S.
820, 104 S. Ct. 84, 78 L. Ed. 2d 94 (1983).
798 F.2d at 1550. We reiterated this ruling in Western Radio
Services, 530 F.3d at 1193–96 (synthesizing Supreme Court
case law to determine “[w]e thus have jurisdiction under
28 U.S.C. § 1331 to determine whether [a federal statute]
affords a private cause of action”).1
Our opinion should dispel some of the confusion
concerning a district court’s subject matter jurisdiction to
determine whether a litigant asserts a federal cause of action
1
See also Lapidus v. Hecht, 232 F.3d 679, 681 n.4 (9th Cir. 2000)
(assuming that a private right of action existed “because the ‘question
whether a cause of action exists is not a question of jurisdiction’”)
(quoting Burks v. Lasker, 441 U.S. 471, 476 n.5 (1979)); Price v. City of
Stockton, 390 F.3d 1105, 1108 (9th Cir. 2004) (recognizing that whether
a cause of action exists is not a question of jurisdiction).
20 PARRA V. PACIFICARE OF ARIZONA
by reaffirming our reading of Supreme Court precedent
articulated in Thompson and Western Radio Services. In sum,
a district court has subject matter jurisdiction to determine
whether a private right of action exists under federal law.