Filed 8/4/16
                           CERTIFIED FOR PUBLICATION


               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            SECOND APPELLATE DISTRICT

                                    DIVISION TWO


EDWARD J. ROBERTS,                              B266393

        Plaintiff and Appellant,                (Los Angeles County
                                                Super. Ct. No. BC540910)
        v.

UNITED HEALTHCARE SERVICES,
INC.,

        Defendant and Respondent.



        APPEAL from a judgment of the Superior Court of Los Angeles County.
Kenneth R. Freeman, Judge. Affirmed.


        Kabateck Brown Kellner, Brian S. Kabateck, Joshua H. Haffner,
Kevin S. Conlogue, Justin F. Spearman and Drew R. Ferrandini, for Plaintiff and
Appellant.


        Hogan Lovells US, Michael M. Maddigan, Poopak Nourafchan and Vassiliki
Iliadis, for Defendant and Respondent.
       Plaintiff Edward J. Roberts (plaintiff) enrolled in a private health plan offering
benefits to persons 65 and over as well as disabled persons under the federally funded
Medicare Advantage program (42 U.S.C. § 1395w-21 et seq.), and went to an urgent care
center outside of the plan’s network for medical services; as a result, he was forced to pay
a $50 copayment instead of the $30 copayment for in-network centers. Alleging that the
plan’s marketing materials misled him (and other enrollees) as to the availability of in-
network urgent care centers (and their smaller copayments) and that the absence of any
in-network urgent care centers in California rendered the plan’s network inadequate,
plaintiff filed this class action for unfair competition, unjust enrichment and financial
elder abuse.
       This appeal presents two questions: (1) Are plaintiff’s misrepresentation and
adequacy-of-network based claims expressly preempted by the preemption clause
applicable to Medicare Advantage plans (42 U.S.C. § 1395w-26(b)(3)), or implicitly
preempted by the requirement that the plan’s marketing materials and adequacy of plan
coverage be preapproved by the Center for Medicare and Medicare Services (Center);
and (2) are plaintiff’s claims, to the extent they challenge a denial of benefits, subject to
dismissal because plaintiff did not first exhaust his administrative remedies under the
Medicare Act (42 U.S.C. §§ 405(g), (h) & 1395ii)? We conclude that the answer to the
first question is yes. In ruling that plaintiff’s claims are expressly preempted, we part
company with Cotton v. StarCare Medical Group, Inc. (2010) 183 Cal.App.4th 437, 447-
454 (Cotton) and Yarick v. PacifiCare of California (2009) 179 Cal.App.4th 1158, 1165-
1167 (Yarick), and join with the later-decided Do Sung Uhm v. Humana, Inc.
(9th Cir. 2010) 620 F.3d 1134, 1148-1157 (Uhm). We further conclude that the answer
to the second question is yes. We accordingly affirm the trial court’s dismissal of
plaintiff’s complaint.
                    FACTS AND PROCEDURAL BACKGROUND
I.     Facts
       We draw these facts from the allegations in plaintiff’s complaint as well as from
documents subject to judicial notice (Yvanova v. New Century Mortgage Corp. (2016)

                                               2
62 Cal.4th 919, 924), resolving any conflicts in favor of the judicially noticed documents
(Sciaratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 561).
       Defendant United Healthcare Services, Inc. (United Healthcare) offers to persons
eligible for Medicare benefits—chiefly, persons 65 and over or who are disabled
(42 U.S.C. § 1395c)—several different health care plans under the Medicare Advantage
program. As described more fully below, the Medicare Advantage program allows
eligible Medicare beneficiaries the right to obtain the statutorily mandated benefits, as
well as a variety of additional benefits, through privately run health plans. (See generally
In re Avandia Marketing (3d Cir. 2012) 685 F.3d 353, 357-358 (Avandia).)
       United Healthcare advertised its various Medicare Advantage plans with written
materials; it submitted those materials, as well as materials regarding the plan’s benefits
coverage, to the Center for preapproval and the Center had no objection to those
materials. In the marketing materials for its AARP Medicare Complete Secure Horizons
Plan 1 (Secure Horizons Plan 1), United Healthcare represented that the plan “offer[ed]
one of the nation’s largest networks, made up of local doctors, clinics and hospitals who
know your community.” In light of this representation, plaintiff “reasonably believed
that there would be an in-network, urgent care healthcare provider within a reasonable
distance of his home.”
       Plaintiff enrolled in the Secure Horizons Plan 1 in April 2013. United Healthcare
sent him a “Welcome Book” listing all providers within the plan’s network and
specifying that the patient copayment for in-network visits was $30 and for out-of-
network visits was $50. The closest urgent care center to plaintiff’s residence was
outside of the plan’s network; in fact, the plan had no in-network urgent care centers
anywhere in California.
       In July 2013, plaintiff needed urgent care and drove to the nearby, out-of-network
urgent care center and made a $50 copayment (rather than the $30 copayment).
II.    Procedural History
       Plaintiff sued United Healthcare on behalf of the class of “all individuals residing
in California who, during the four years preceding the filing of this action, enrolled in the

                                              3
[Secure Horizons Plan 1] through [United Healthcare] and paid a co-pay[ment] in excess
of $30 for urgent care.” Specifically, plaintiff alleged that United Healthcare’s marketing
materials were misleading and accordingly constituted (1) “unlawful, unfair or
fraudulent” business practices in violation of the unfair competition law (Bus. & Prof.
Code, §§ 17200 & 17500), Insurance Code section 790.03, subdivision (b) regarding
misleading advertising, and Civil Code sections 1571 and 1573 regarding constructive
fraud, (2) unjust enrichment, and (3) financial elder abuse (Welf. & Inst. Code,
§ 15610.30). Plaintiff sought “full disgorgement and restitution,” “treble damages” under
Civil Code section 3345, punitive damages, injunctive relief, and attorney’s fees.
       United Healthcare removed the case to federal court. Three months later, the
federal court remanded it back to state court.
       Following remand, United Healthcare demurred to plaintiff’s complaint. In a
seven-page written ruling, the trial court determined that plaintiff’s lawsuit was “federally
preempted by the Medicare Act (and alternatively, that [plaintiff’s] administrative
remed[ies] ha[d] not been exhausted)” and sustained the demurrer without leave to
amend.
       The trial court found that plaintiff’s lawsuit rested primarily on his claims that
United Healthcare’s marketing materials misrepresented the scope of in-network services
and thus the likely copayments due. Because the Center was required to (and did)
preapprove all marketing materials used by the Medicare Advantage plans (42 U.S.C.
§ 1395w-21(h); 42 C.F.R. §§ 422.2260-422.2276) as well as the adequacy of each plan’s
network (42 C.F.R. § 422.112), and because the Medicare Act provides that the
“standards [applied by the Center] shall supersede any State law or regulation (other than
State licensing laws or State laws relating to plan solvency) with respect to [Medicare
Advantage] plans which are offered by [Medicare Advantage] organizations under this
part” (42 U.S.C. § 1395w-26(b)(3)), the court concluded that plaintiff’s allegations “stand
directly in contrast to the exclusive power Congress bestowed on the [Center] to
regulate” marketing materials and the adequacy of coverage, and thus fell within the
terms of the express preemption clause. The court noted that its decision was in accord

                                              4
with the Ninth Circuit’s decision in Uhm, supra, 620 F.3d 1134. In the court’s view,
plaintiff’s claims were also “arguably” implicitly preempted because his “marketing
claims . . . would stand as an obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.”
       “To the extent plaintiff’s claims . . . can be characterized as being based on
[United Healthcare’s] failure to provide any in-network urgent care centers in
California . . . as opposed to . . . misrepresentation of its benefits and services,” the court
determined that such claims were “inextricably intertwined” with a claim for benefits,
and thus had to be administratively exhausted.
       The court subsequently entered a judgment of dismissal, which plaintiff has timely
appealed.
                                        DISCUSSION
I.     Background Law
       A.      Medicare Act
       The Medicare Act (Act) is “part of the Social Security Act” and “established a
federally subsidized health insurance program . . . administered by the Secretary of
Health and Human Services [(Secretary)].” (McCall v. PacifiCare of Cal., Inc. (2001)
25 Cal.4th 412, 416 (McCall); 42 U.S.C. § 1395 et seq.) The chief beneficiaries of
Medicare insurance are eligible individuals “who are age 65 or over” and individuals
suffering from a “disability.” (42 U.S.C. § 1395c.) The Act provides benefits in four
parts. (Dial v. Healthspring of Alabama, Inc. (11th Cir. 2008) 541 F.3d 1044, 1046
(Dial).)
       Under Parts A and B of the Act, Medicare beneficiaries requiring medical services
obtain those services directly from providers participating in the Medicare program, and
the Secretary directly reimburses those providers on a “fee-for-service” basis. (42 U.S.C.
§§ 1395c-1395i-5 [Part A] & 1395j-1395w-6 [Part B]; Avandia, supra, 685 F.3d at
p. 357.) Part A covers “hospital, skilled nursing, home health, and hospice care benefits,”
while Part B covers “physician and other outpatient services.” (Dial, supra, 541 F.3d
at p. 1046.)

                                               5
       In 1997, Congress added Part C to the Act. (42 U.S.C. §§ 1395w-21-1395w-28;
see generally Balanced Budget Act of 1997, Pub.L. No. 105-33 (Aug. 5, 1997) 111 Stat.
251, 276.) Under Part C, Medicare beneficiaries can sign up for a privately administered
health care plan—originally called a “Medicare+Choice” plan, but later renamed a
“Medicare Advantage” plan—that provides all of the Part A and B benefits as well as
additional benefits. (42 U.S.C. §§ 1395w-21(a)(1), (d)(4)(A)(i) & 1395w-22(a)(1)-(3),
(c)(1)(F); see also Dial, supra, 541 F.3d at p. 1046; 70 Fed.Reg. 4588 (Jan. 28, 2005)
[renaming plan].) If a beneficiary elects to participate in such a plan, the government
pays the plan’s administrator a flat, monthly fee to provide all Medicare benefits for that
beneficiary. Because Part C limits the government’s responsibility to just the monthly
fee, the private health plan—rather than the government—ends up “assum[ing] the risk
associated with insuring” the beneficiary. (Avandia, supra, 685 F.3d at pp. 357-358;
Yarick, supra, 179 Cal.App.4th at pp. 1163-1164.)
       The Secretary closely regulates Medicare Advantage health plans. Although the
plan administrator may choose which physicians and facilities to include in the plan’s
network (42 U.S.C. § 1395w-22(d)(1)), the Secretary—through the Center—reviews each
plan to ensure that it has a “sufficient number and range of health care professionals and
providers willing to provide services under the terms of the plan.” (42 U.S.C. § 1395w-
22 (d)(4); 42 C.F.R. §§ 422.100 & 422.112.) Among other things, each plan must
“[p]rovide coverage for . . . emergency and urgently needed services.” (42 C.F.R.
§§ 422.100(b)(1)(ii) & 422.112(a)(9).) To ensure that Medicare beneficiaries can make
an informed choice about whether to elect into a Medicare Advantage plan, the
Secretary—again, through the Center—reviews all “marketing material” used by
Medicare Advantage plans prior to their use; if the Center does not disapprove the
materials within 45 days (or fewer days, if the plan uses “model marketing language”),
they are deemed approved. (42 U.S.C. § 1395w-21(h)(1)-(h)(5); 42 C.F.R. § 422.2262.)
The Secretary is authorized to promulgate regulations setting forth the “standards” for its
review of marketing materials, as well as the adequacy of a plan’s coverage (42 U.S.C.
§§ 1395w-21(h)(2) & 1395w-26(b)(1).) The standards for marketing materials mirror the

                                             6
statutory mandate and require the Center to ensure that the “materials are not materially
inaccurate or misleading or otherwise make material misrepresentations.” (42 C.F.R.
§ 422.2264(d); 42 U.S.C. § 1395w-21(h)(2) [same].)
       As enacted in 1997, Part C included a two-part express preemption clause. The
first part provided that “[t]he standards established” by regulation “shall supersede any
State law or regulation . . . with respect to [Medicare Advantage] plans which are offered
by [Medicare Advantage] organizations under this part to the extent such law or
regulation is inconsistent with such standards.” (42 U.S.C. § 1395w-26(b)(3)(A) (2000),
italics added.) The second part provided that four categories of “[s]tate standards . . . are
superseded” irrespective of inconsistency, including “[r]equirements relating to inclusion
or treatment of providers” and “[r]equirements relating to marketing materials and
summaries and schedules of benefits regarding a [Medicare Advantage] plan.”
(42 U.S.C. § 1395w-26(b)(3)(B)(ii), (iv) (2000).)
       In 2003, Congress enacted the Medicare Prescription Drug, Improvement and
Modernization Act of 2003. (Pub.L. No. 108-173 (Dec. 8, 2003) 117 Stat. 2066.) In
addition to adding Part D to grant Medicare beneficiaries prescription drug coverage, the
2003 Act also replaced Part C’s two-part express preemption clause with the more
simplified, current language: “The standards established” by regulation “shall supersede
any State law or regulation (other than State licensing laws or State laws relating to plan
solvency) with respect to [Medicare Advantage] plans which are offered by [Medicare
Advantage] organizations under [Part C].” (42 U.S.C. § 1395w-26(b)(3).)
       B.     Demurrers
       In reviewing a complaint dismissed on demurrer due to federal preemption, our
review is de novo. (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1089, fn. 10
(Salmon Cases); McCall, supra, 25 Cal.4th at p. 415.)
II.    Preemption
       The supremacy clause of the United States Constitution provides that federal law
“shall be the supreme Law of the Land . . . , any Thing in the Constitution or Laws of any
State to the Contrary notwithstanding.” (U.S. Const., art. VI, cl. 2.) The clause “vests

                                              7
Congress with the power to preempt state law.” (People ex rel. Harris v. Pac Anchor
Transportation, Inc. (2014) 59 Cal.4th 772, 777 (Harris).) This authority may be
exercised through federal statutes or federal regulations. (Jevne v. Superior Court (2005)
35 Cal.4th 935, 950 [“‘federal regulations have no less pre-emptive effect than federal
statutes’”], quoting Fidelity Federal Sav. & Loan Assn. v. de la Cuesta (1982)
458 U.S. 141, 153.)
       Preemption of state law can be express or implied. It is express when Congress
positively enacts a preemption clause displacing state law; it is implied when courts infer
a congressional intent to displace state law under one of three doctrines of “implied
preemption”—namely, “field, conflict, or obstacle preemption.” (Quesada v. Herb
Thyme Farms, Inc. (2015) 62 Cal.4th 298, 308 (Quesada).) “Field preemption applies
when federal regulation is comprehensive and leaves no room for state regulation”;
“[c]onflict preemption is found when it is impossible to comply with both state and
federal law simultaneously”; and “[o]bstacle preemption occurs when state law stands as
an obstacle to the full accomplishment and execution of congressional objectives.”
(Harris, supra, 59 Cal.4th at p. 778.) For all types of preemption, the “foremost”
consideration is “congressional intent.” (Jankey v. Lee (2012) 55 Cal.4th 1038, 1048
(Jankey).)
       Recognizing that Congress generally treads lightly when displacing state law, we
employ a “presumption against preemption” when assessing Congress’s intent.
(Quesada, supra, 62 Cal.4th at p. 312; Jankey, supra, 55 Cal.4th at p. 1048.) Although
the “continuing vitality” of this presumption has recently been called into question
(Quesada, at p. 314), it is still the law and requires us to find a “clear and manifest”
congressional intent to displace state law before we may declare that law preempted.
(Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 485; Rice v. Santa Fe Elevator Corp.
(1947) 331 U.S. 218, 230.) Where, as here, preemption turns on questions of law such as
the meaning of a preemption clause or the ascertainment of congressional intent, our
review is de novo. (John v. Superior Court (2016) 63 Cal.4th 91, 95-96 [statutory
construction, including determining legislative intent, reviewed de novo]; Salmon Cases,

                                              8
supra, 42 Cal.4th at p. 1089, fn. 10 [“federal preemption presents a pure question of
law”].)
       A.     Express preemption
       The express preemption provision at issue here provides: “The standards
established under [Part C] shall supersede any State law or regulation (other than State
licensing laws or State laws relating to plan solvency) with respect to [Medicare
Advantage] plans which are offered by [Medicare Advantage] organizations under [Part
C].” (42 U.S.C. § 1395w-26(b)(3).)
       With express preemption clauses, Congress’s intent to preempt is clear; our job is
reduced to “‘“‘identify[ing] the domain expressly pre-empted.’”’” (Quesada, supra,
62 Cal.4th at p. 308, quoting Brown v. Mortensen (2011) 51 Cal.4th 1052, 1062.) The
“best evidence concerning th[at] breadth” is “the statutory text” itself. (Quesada, at p.
308.) Here, the plain language of section 1395w-26(b)(3) plainly spells out Congress’s
intent that the standards governing Medicare Advantage plans will displace “any State
law or regulation” except for State laws regarding licensing or plan solvency. (Italics
added.) Because the Secretary has promulgated standards governing the content of a
Medicare Advantage plan’s marketing materials (42 C.F.R. §§ 422.2260-422.2276) as
well as the adequacy of its network (42 C.F.R. §§ 422.100 & 422.112), those standards
fall within the ambit of the preemption clause. Because plaintiff’s claims for violation of
the unfair competition law, for unjust enrichment and for financial elder abuse do not
deal with either of the preemption clause’s exceptions for licensing or plan solvency, they
are preempted “with respect to [United Healthcare’s] plan.”
       The legislative history of the preemption clause, the construction given to it by the
Secretary, and the weight of authority interpreting it all confirm this reading.
       When Congress amended the preemption clause in 2003, inserting the current
clause in lieu of the prior clause superseding “state standards” in four discrete areas and
any other “State laws or regulations” “inconsistent” with Part C’s standards, the
Conference Report on that amendment explained: “The conference agreement clarifies
that the [Medicare Advantage] program is a federal program operated under Federal

                                              9
rules. State laws, do not, and should not apply, with the exception of state licensing laws
or state laws related to plan solvency.” (H.R.Rep. No. 108-391, 1st Sess., p. 557 (2003).)
This explanation leaves little room for doubt: The clause means what it says, and the
Medicare Advantage standards supersede “any State law or regulation” “with respect to”
the plans governed by those standards, except in the two carve-outs for licensing and plan
solvency.
       Although the Secretary (through the Center) initially indicated in her 2003
proposed rulemaking comments that she “continue[d] to believe that generally applicable
State tort, contract, or consumer protection law” as well as standards “based on case law
precedents” would not be preempted under the 2003 preemption clause (69 Fed.Reg.
46866, 46913-46914 (Aug. 3, 2004)), the Secretary altered that view in the final
rulemaking, declaring instead that “all State standards, including those established
through case law, are preempted to the extent they specifically would regulate [Medicare
Advantage] plans, with exceptions of State licensing and solvency laws” (70 Fed.Reg.
4665 (Jan. 28, 2005)).
       The majority of courts to have considered the current preemption clause have
interpreted it to displace state laws to the extent they touch upon areas regulated by the
Medicare Advantage standards. In Uhm, the Ninth Circuit held that the preemption
clause preempted state fraud and consumer protection claims based on misleading
marketing materials because those materials were subject to preapproval by the Center.
(Uhm, supra, 620 F.3d at pp. 1148-1157.) Although Uhm addressed the prescription drug
benefits under Part D, Part D expressly incorporates Part C’s preemption clause.
(42 U.S.C. § 1395w-112(g); Uhm, at p. 1148.) Phillips v. Kaiser Foundation Health
Plan, Inc. (N.D.Cal. 2011) 953 F.Supp.2d 1078, 1087-1090, applied Uhm to Part C’s
express preemption clause and concluded that the plaintiff’s misleading marketing claims
under our state’s Unfair Competition Law and Consumer Legal Remedies Act
(Civ. Code, § 1770 et seq.) were expressly preempted. (Accord, Meek-Horton v. Trover
Solutions, Inc. (S.D.N.Y. 2012) 910 F.Supp.2d 690, 696 [following Uhm]; PacifiCare of
Nevada, Inc. v. Rogers (Nev. 2011) 266 P.3d 596, 600-601 [following Uhm]; Rudek

                                             10
v. Presence Our Lady of the Resurrection Med. Ctr. (E.D.Ill. Oct. 27, 2014, No. 13 C
06022) 2014 U.S.Dist. Lexis 152025 [following Uhm].)
       Two California Court of Appeal decisions have construed Part C’s express
preemption clause more narrowly. In Yarick, supra, 179 Cal.App.4th at pp. 1165-1167,
the Fifth District held that the phrase “any State law or regulation” in Part C’s express
preemption clause only reached (1) “positive state enactments” such as “laws and
administrative regulations, but not the common law,” and (2) common-law rights
grounded solely in duties created by positive state law. In reaching this conclusion, the
court cited Sprietsma v. Mercury Marine (2002) 537 U.S. 51 (Sprietsma), which had
given the same construction to similar language in the preemption clause in the Federal
Boat Safety Act of 1971 (46 U.S.C. § 4306). (Yarick, at pp. 1165-1166.) In Cotton,
supra, 183 Cal.App.4th at pp. 449-451, the Fourth District followed Yarick’s holding that
Part C’s preemption clause was limited to positive state enactments and went one step
further: It read the clause’s mandate that Part C standards “shall supersede any State law
or regulation . . . with respect to [Medicare Advantage] plans” to mean that the “State law
or regulation” had to be “with respect to” the plans, and could not be general in
application. Thus, under Cotton, Part C’s preemption clause reaches only state statutes or
regulations that are targeted at Medicare Advantage plans; common-law rights and all
generally applicable statutes and regulations are not preempted.
       We disagree with both of these limitations and decline to follow Yarick and
Cotton.
       We reject Yarick’s holding that Part C’s preemption clause reaches only positively
enacted state laws and regulations for two reasons.
       First, it is inconsistent with Riegel v. Medtronic, Inc. (2008) 552 U.S. 312 (Riegel).
There, the United States Supreme Court held that the preemption clause in the Medical
Device Amendments of 1976 (21 U.S.C. § 360k), which preempted state “requirements,”
reached “common-law duties” as well as duties created by positive law. (Riegel,
at p. 324 [“Absent other indication, reference to a State’s ‘requirements’ includes its
common-law duties”].) Although the preemption clause here refers to “State law or

                                             11
regulation” rather than state-law “requirements,” Riegel’s rationale applies with full force
here: “[E]xcluding common-law duties from the scope of pre-emption would make little
sense” because common-law duties prescribing different standards than those imposed by
federal law “disrupt[] the federal scheme no less than state regulatory law to the same
effect.” (Id. at pp. 324-325; accord, Sanai v. Saltz (2009) 170 Cal.App.4th 746, 772
[“Federal laws may preempt state common law as well as state legislation”].)
       Second, we are not persuaded that Sprietsma—the Yarick court’s chief
justification for its limitation—is relevant. In Sprietsma, the Supreme Court construed
the preemption clause in the Federal Boat Safety Act of 1971. (Sprietsma, supra,
537 U.S. at p. 54.) The clause provided that “a State . . . may not establish, continue in
effect, or enforce a law or regulation establishing a recreational vessel or associated
equipment performance or other safety standard or imposing a requirement for associated
equipment” (46 U.S.C. § 4306, italics added), but that federal law elsewhere had a
savings clause providing that “compliance with this chapter or standards, regulations, or
orders prescribed under this chapter does not relieve a person from liability at common
law or under State law” (46 U.S.C. § 4311(g)). Sprietsma held that the clause reached
only positive state enactments and grounded its holding on three points: (1) “[T]he
article ‘a’ before ‘law or regulation’ implies a discreteness—which is embodied in
statutes and regulations—that is not present in the common law” (Sprietsma, at p. 63);
(2) the word “law” in “law or regulation” “might . . . be interpreted to include regulations,
which would render the express reference to ‘regulation’ . . . superfluous” (ibid.); and
(3) the existence of the savings clause, which exists to “‘save’” “‘some significant
number of common-law liability cases’” (ibid., quoting Geier v. American Honda Motor
Co. (2000) 529 U.S. 861, 868). The first and third rationales are wholly inapplicable to
Part C. Part C’s preemption clause refers to “any State law or regulation”—not “a State
law or regulation”; because “‘the word “any” has an expansive meaning, that is, “one or
some indiscriminately of whatever kind”’” (Ali v. Fed. Bureau of Prisons (2008)
552 U.S. 214, 218-219; Ennabe v. Manosa (2014) 58 Cal.4th 697, 714), “[t]he use of
‘any’ negates the ‘discreteness’ that the Court identified in Sprietsma” (Uhm, supra,

                                             12
620 F.3d at p. 1153). Part C also has no clause saving common-law actions. The closest
the Act comes is section 1395, which reserves to state law only the “supervision or
control” (1) “over the practice of medicine or the manner in which medical services are
provided,” (2) “over the selection, tenure, or compensation of any officer or employee of
any institution, agency, or person providing health services,” or (3) “over the
administration or operation of any such institution.” (42 U.S.C. § 1395.) Even if we
assume that Part C’s later-enacted express preemption clause did not supersede this
reservation clause (State Dept. of Public Health v. Superior Court (2015) 60 Cal.4th 940,
960 [“‘[i]f conflicting statutes cannot be reconciled, later enactments supersede earlier
ones’”]), the reservation clause does not purport to preserve common-law actions dealing
with the same subjects otherwise covered by Part C’s standards—and hence does not
override Part C’s preemption clause.
       Sprietsma’s second rationale—the concern that the word “regulation” “might” be
superfluous if the word “law” were read broadly to reach all positive and common-law
enactments—applies to Part C’s preemption clause, but is in our view too thin a reed
upon which to leave all common-law actions intact when doing so, as noted above, would
disrupt the efficacy of the Center’s preapproval of marketing materials and plan
coverage. The canon of statutory construction that counsels against construing words as
surplusage is just a guide for ascertaining legislative intent, it is not a command.
(United States v. Atlantic Research Corp. (2007) 551 U.S. 128, 137; Burris v. Superior
Court (2005) 34 Cal.4th 1012, 1017-1018.) Where, as here, that canon leads to a result at
odds with the otherwise clearly expressed legislative intent, the canon necessarily yields
to that intent.
       We also reject Cotton’s holding that Part C’s preemption clause only reaches laws
specifically targeting Medicare Advantage plans. Riegel rejected that very same
argument when it held that the Medical Device Amendments of 1976’s preemption
clause, which reaches “requirements . . . with respect to” medical devices, did not mean
that the state laws preempted by that clause “must apply only to the relevant device, or
only to medical devices and not to all products and all actions in general.”

                                             13
(Riegel, supra, 552 U.S. at pp. 327-328.) In other words, the phrase “with respect to”
does not refer to the specificity or breadth of the “State law or regulation” to be
preempted; instead, it refers to the extent of preemption—those laws or regulations are
superseded to the extent Part C’s standards supersede them but no further.
       Plaintiff offers four further reasons why, in his view, Part C’s express preemption
clause should not bar his lawsuit. First, he argues that our Supreme Court came to a
contrary conclusion in McCall, supra, 25 Cal.4th 412. McCall held that Medicare
beneficiaries suing a health maintenance organization (HMO) under state law for
negligence, fraud and other torts in refusing to provide medical services were not
required to exhaust their claims administratively. (Id. at pp. 414-415.) In the course of
reaching this holding, McCall also noted that the plaintiff’s claims were not preempted by
the Medicare Act because “[n]o intent to displace state tort law remedies was expressed
in the Medicare Act as it read at the time relevant to this case.” (Id. at p. 422, italics
added.) But McCall was interpreting Parts A and B of the Act (id. at p. 416), which do
not have an express preemption clause—not Part C, which does. Indeed, the McCall
court commented how Congress later enacted Part C’s preemption clause, and contrasted
it with the “then applicable law” at issue in McCall. (Id. at pp. 423-424.)
       Second, plaintiff argues that Uhm is distinguishable because it dealt with
Medicare’s prescription drug benefits defined in Part D, rather that the Medicare
Advantage program defined in Part C. As noted above, however, Part D expressly
incorporates Part C’s preemption clause; the analysis is identical, so is the result.
       Third, plaintiff asserts that the preemption clause by its own terms does not apply
to his challenge to the representations in United Healthcare’s marketing materials
regarding the adequacy of its network because the Center’s review of those materials is
inadequate (and, under plaintiff’s view, ostensibly not subject to preemption) unless the
Center could compare those marketing materials against the adequacy of United
Healthcare’s network. This assertion lacks merit both factually and legally. Factually,
plaintiff’s assertion ignores that the Center did review—and did approve—the adequacy
of United Healthcare’s network. Legally, plaintiff’s assertion seems to rest on the

                                              14
premise that preemption only applies if a state court satisfies itself that the federal
standards to be preempted were properly applied, with the propriety of review ostensibly
being judged with standards set forth by state law; but this premise is antithetical to the
very concept of preemption, which is to insulate the areas Congress designates as
preempted from review under state law. (Harris, supra, 59 Cal.4th at p. 778.)
       Lastly, plaintiff contends that the federal court’s remand to state court rests on a
finding that there was no “complete preemption,” and that this finding means that United
Healthcare’s preemption defense lacks merit. The premise of plaintiff’s argument is that
“complete preemption” and the preemption question we decide here are one and the
same; they are not. “Complete preemption” is a “doctrine of jurisdiction” that applies
when a federal statute has such “‘extraordinary’ preemptive force” that a federal court is
“obligated to construe [a] complaint [pleading state-law causes of action] as raising a
federal claim,” thereby overcoming the general rule that a defense based on federal law
cannot support federal jurisdiction when the plaintiff’s “well-pleaded complaint” is based
on state law. (Sullivan v. American Airlines, Inc. (2d Cir. 2005) 424 F.3d 267, 271-272;
Marin Gen. Hosp. v. Modesto & Empire Traction Co. (9th Cir. 2009) 581 F.3d 941, 945;
Retail Property Trust v. United Broth. of Carpenters (9th Cir. 2014) 768 F.3d 938, 948-
949.) So far, the United States Supreme Court has identified only three federal statutes
with “complete preemptive” force—the Labor-Management Relations Act (29 U.S.C.
§ 185), the Employee Retirement Income Security Act (ERISA) (29 U.S.C. § 1132(a)),
and the National Bank Act (12 U.S.C. §§ 85-86). (See Sullivan, at p. 272.) The doctrine
of federal preemption we outline and apply above is called “defensive preemption”; it is a
substantive defense to a claim based on state law. (Retail Property Trust, at pp. 948-949;
Hall v. North American Van Lines, Inc. (9th Cir. 2007) 476 F.3d 683, 689, fn. 8).) The
doctrine of complete preemption does not apply to Part C (Parra v. PacifiCare of
Arizona, Inc. (9th Cir. 2013) 715 F.3d 1146, 1155), but this does not mean that
preemption cannot be raised as a substantive defense (id. at pp. 1155-1156, fn. 3).
Indeed, the federal court’s remand order that rejected complete preemption as a



                                              15
jurisdictional doctrine explicitly left open the substantive question of defensive
preemption for resolution on remand.
       B.     Implied preemption
       Under the doctrine of “obstacle preemption,” federal law can impliedly preempt
state law where “state law stands as an obstacle to the full accomplishment and execution
of congressional objectives.” (Harris, supra, 59 Cal.4th at p. 778.) Congress requires the
Secretary to evaluate the marketing materials and the adequacy of Medicare Advantage
health plans, and the Secretary promulgated regulations and entrusts the Center with
reviewing and approving marketing materials and the plans themselves. “Were a state
court to determine that [a plan’s] marketing materials constituted misrepresentations
resulting in fraud or fraud in the inducement, it would directly undermine [the Center’s]
prior determination that those materials were not misleading and in turn undermine [the
Center’s] ability to create its own standards for what constitutes ‘misleading’ information
about Medicare Part D.” (Uhm, supra, 620 F.3d at p. 1157.) Indeed, the courts in Cotton
and Yarick came to the same conclusion with respect to the portions of the plans
preapproved by the Center. (Cotton, supra, 183 Cal.App.4th at p. 455; Yarick, supra,
179 Cal.App.4th at pp. 1165-1167.) Yarick itself noted, “[i]f state common law
judgments were permitted to impose damages on the basis of these federally approved
[actions], the federal authorities would lose control of the regulatory authority that is at
the very core of Medicare generally and the [Medicare Advantage] program specifically.”
(Yarick, at pp. 1167-1168.) Accordingly, we further conclude that plaintiff’s claims
based on misrepresentations in United Healthcare’s marketing materials and based on the
adequacy of its plan are impliedly preempted by the Act as well.
III.   Exhaustion
       “When remedies before an administrative forum are available, a party must in
general exhaust them before seeking judicial relief.” (City of San Jose v. Operating
Engineers Local Union No. 3 (2010) 49 Cal.4th 597, 609, citing Coachella Valley
Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005)
35 Cal.4th 1072, 1080.) “Exhaustion requires ‘a full presentation to the administrative

                                              16
agency upon all issues of the case and at all prescribed stages of the administrative
proceedings.’” (City of San Jose, at p. 609, quoting Bleeck v. State Board of Optometry
(1971) 18 Cal.App.3d 415, 432.) “Exhaustion of administrative remedies is ‘a
jurisdictional prerequisite to resort to the courts.’” (Johnson v. City of Loma Linda
(2000) 24 Cal.4th 61, 70, quoting Abelleira v. District Court of Appeal (1941)
17 Cal.2d 280, 293.)
       When a defendant claims that the courts lack jurisdiction over a plaintiff’s lawsuit
because that plaintiff has not exhausted his administrative remedies, we must decide:
(1) was the plaintiff required to exhaust the claims he now presses in court?; and (2) if so,
did he fully exhaust them? The first question is a question of law we review de novo.
(Defend Our Waterfront v. State Lands Com. (2015) 240 Cal.App.4th 570, 580.) So is
the second question, at least where, as here, we are evaluating only the allegations of a
complaint and judicially noticed documents. (E.g., Poole v. Orange County Fire
Authority (2015) 61 Cal.4th 1378, 1384 [where “appeal involves the application of a
statute to undisputed facts, our review is de novo”].)
       When a Medicare beneficiary participating in a Part C-authorized private health
care plan challenges his “entitle[ment] to receive a health service” or “the amount (if any)
that [he] is required to pay with respect to such service,” Congress has erected a four-tier
administrative review scheme. First, the beneficiary must raise his challenge with the
Medicare Advantage plan itself, and Congress requires every such plan to “have a
procedure for making [those] determinations” and requires the plan’s administrator to
issue a written statement “of the reasons for the denial.” (42 U.S.C. § 1395w-22(g)(1).)
Second, the beneficiary must seek reconsideration of an adverse determination with the
Medicare Advantage plan, which Congress also specifies that each plan must offer.
(Id., § 1395w-22(g)(2).) Third, the beneficiary must appeal the denial of reconsideration
to the “independent, outside entity” designated by the Secretary “to review and resolve
. . . reconsiderations that affirm denial of coverage, in whole or in part.” (Id., § 1395w-
22(g)(4); see generally Willy v. Administrative Review Bd. (5th Cir. 2005) 423 F.3d 483,
491-492 [agency head may delegate its authority to issue final decisions]; Impact Energy

                                             17
Resources, LLC v. Salazar (10th Cir. 2012) 693 F.3d 1239, 1252, fn. 1 [same].) Fourth,
if the independent, outside entity denies relief and “the amount in controversy is $100 or
more,” the beneficiary must seek a hearing before the Secretary. (42 U.S.C. § 1395w-
22(g)(5); accord, 42 U.S.C. § 1395mm(c)(5)(B) [same, for benefits claims under Parts A
and B].) If the Secretary denies relief and “the amount in controversy is $1,000 or more,”
then and only then may the beneficiary obtain judicial review of that decision.
(42 U.S.C. §§ 1395w-22(g)(5) & § 1395ii [incorporating general administrative
exhaustion provision for Title 42 into Medicare Act]; see also 42 U.S.C. § 405(g), (h)
[general administrative exhaustion and judicial review provisions for Title 42].)
       In assessing whether a plaintiff’s claim is subject to exhaustion, courts look not
only to how the plaintiff has styled his claim, but also to its substance. Consistent with
the more specific multi-tiered administrative review scheme under Part C set forth above,
a plaintiff’s claim that he “is entitled to benefits[] and the amount of [those] benefits” is,
as a general matter, a claim that “arises under” the Medicare Act and one that must
therefore be administratively exhausted. (McCall, supra, 25 Cal.4th at pp. 416-417;
42 U.S.C. § 405(h).) Even if a plaintiff’s claim is not expressly styled as seeking
benefits, courts will treat it as such (and hence as a claim “arising under” the Medicare
Act) if either (1) “‘“the standing and the substantive basis for the presentation”’ of the
claim is the Medicare Act,” or (2) “the claim is ‘inextricably intertwined’ with a claim for
Medicare benefits” (McCall, at p. 417, quoting Heckler v. Ringer (1984) 466 U.S. 602,
614-615) because the plaintiff is “at bottom . . . seeking to recover benefits.” (Ardary
v. Aetna Health Plans of California, Inc. (9th Cir. 1996) 98 F.3d 496, 499-500; see also
Heckler, at p. 614; McCall, at pp. 424-425; accord, Uhm, supra, 620 F.3d at p. 1143
[exhaustion requirement applies to “creatively disguised claims for benefits”].)
       In this case, plaintiff’s complaint expressly asserts that United Healthcare:
(1) used misleading marketing materials; and (2) provided inadequate coverage. These
assertions are not claims for benefits or inextricably intertwined with claims for benefits,
and thus fall outside of the exhaustion requirement. (See Uhm, supra, 620 F.3d
at p. 1145 [so holding].) That is why we have addressed whether those claims are, on

                                              18
their merits, preempted by the Act. However, the trial court also liberally construed
plaintiff’s complaint as implicitly raising a third claim—namely, a challenge to “the
amount (if any) that [plaintiff] is required to pay with respect to” the urgent care service
he received. (42 U.S.C. § 1395w-22(g)(1).) This third, implicit claim is, by definition, a
claim for benefits, and therefore subject to the four-tier exhaustion scheme outlined
above.
         It is undisputed that plaintiff did not exhaust any of his administrative remedies.
In his complaint, he did not allege compliance with any of the four tiers of review. On
appeal, he asserts that United Healthcare lacked “proper procedures to resolve
grievances.” This is factually incorrect because United Healthcare’s plan specifically
empowers enrollees to challenge a benefit determination and, if dissatisfied with that
challenge, to seek reconsideration through an appeal. Indeed, plaintiff’s lack of
awareness of United Healthcare’s internal procedures for challenging benefits
determinations confirms that he did not satisfy the first two steps of administrative
exhaustion and thus could not have satisfied the third.
         Plaintiff raises two arguments in response. First, he asserts that his claim for
benefits was a claim for only $20, that this amount falls below the $100 threshold for
obtaining a hearing before the Secretary, and that he accordingly had no administrative
remedies to exhaust. This argument ignores that the hearing before the Secretary was the
fourth tier of administrative review. Because plaintiff did not pursue any of the
preceding three tiers—including the tier before the “outside, independent agency” that, in
the absence of a hearing, issued the Secretary’s final decision—he did not exhaust his
administrative remedies.
         Second, plaintiff contends that United Healthcare should not be permitted to raise
plaintiff’s failure to exhaust administrative remedies because it did not provide the
required internal procedures for challenging benefit determinations, and thus has
“unclean hands.” Not only is this factually incorrect for the reasons stated above, it is
also legally incorrect. Although unclean hands may be asserted as a defense to legal and
equitable causes of action (e.g., Salas v. Sierra Chemical Co. (2014) 59 Cal.4th 407,

                                               19
432), the doctrine may not be asserted to avoid “do[ing] what the law requires and
exhaust[ing] [his] administrative remedies” (Kaiser Foundation Hospitals v. Superior
Court (2005) 128 Cal.App.4th 85, 111).
                                    DISPOSITION
      The judgment of dismissal is affirmed. United Healthcare is entitled to its costs on
appeal.
      CERTIFIED FOR PUBLICATION.

                                                       _______________________, J.
                                                       HOFFSTADT

We concur:

_________________________, P.J.
BOREN


_________________________, J.
CHAVEZ




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