Choice Healthcare Inc., et al. v. Kaiser Foundation Health Plan of Colorado, et al

Various Kaiser Foundation Health Plans in several states (collectively “the Defendants”) had each individually contracted with Meritplan, a New York based preferred provider organization that negotiated reduced rates with participating health services providers. Choice Healthcare, Inc. and Touro Infirmary (“the Hospital”) was one of the preferred providers that Meritplan had contractually negotiated a reduced pricing arrangement for services rendered to the insureds of the Defendants. The Hospital and the Defendants did not directly contract with each other.

When the Hospital sued the Defendants for insufficient payment, the Defendants argued that the Court lacked personal jurisdiction to hear the lawsuit because of the Defendants’ lack of contacts with the state of Louisiana. The Defendants only provide services to individuals who work or reside within the Defendants’ service areas and Louisiana is not within any of the service areas. The Defendants do not maintain offices within the state, do not have any agents who reside or are employed within the state, do not have any mailing addresses or telephone listings within the state, do not have any property interests within the state, nor maintain any financial accounts within the state. In sum, the Defendants are not authorized to and do not conduct business in Louisiana, and the Defendants do not solicit business from or purposely direct any marketing activities toward residents or employees within the state.

The Hospital argued in opposition that because the Defendants had tendered payment for fifty-three patient accounts with the Hospital during a prior three year period, the defendants had sufficient minimum contacts with Louisiana to establish personal jurisdiction.

The Court, however, held in favor of the Defendants stating that the fifty-three patient accounts were an insufficient amount of contacts with Louisiana regardless of the fact that it was foreseeable that the Defendants’ insureds may need services while traveling to Louisiana or may relocate to Louisiana, and despite the fact that the Defendants had contracted with Meritplan who had contracted with the Hospital, a Louisiana entity.