Woodruff v. Blue Cross and Blue Shield of Alabama et al
MEMORANDUM OPINION AND ORDER- The defts' partial motions to dismiss (Docs 9 and 10 ) are GRANTED and any claims for equitable relief are DISMISSED. Signed by Magistrate Judge Staci G Cornelius on 3/23/17. (MRR, )
2017 Mar-23 AM 09:14
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
BLUE CROSS AND BLUE SHIELD
OF ALABAMA, et al.,
Case No.: 2:16-cv-00281-SGC
MEMORANDUM OPINION AND ORDER1
This is an ERISA benefits case. The plaintiff, Jeffrey Woodruff, was a
beneficiary of an employee welfare benefit plan (the "Plan") maintained by
defendant Southern Company Services, Inc. Healthcare Plan ("S.C."), and
administered by defendant Blue Cross and Blue Shield of Alabama ("Blue Cross").
Presently pending are S.C.'s and Blue Cross's motions to dismiss certain claims.
(Docs. 9, 10). The motions are fully briefed and are ripe for adjudication. (See
Docs. 14, 15, 17). For the reasons that follow, the motions will be granted.
This matter arises from the defendants' denial of claims and refusal to pay
for proton therapy prescribed to treat the plaintiff's recurring prostate cancer.
(Doc. 4). The amended complaint asserts one claim for ERISA violations and
The parties have unanimously consented to magistrate judge jurisdiction pursuant to 28 U.S.C.
§ 636(b). (Doc. 18).
seeks reimbursement for treatment, "make whole" relief, and other forms of relief.
(Id. at 4-5). Both defendants' motions seek dismissal of any equitable claim for
breach of fiduciary duty arising under 29 U.S.C. § 1132(a)(3), including the
plaintiff's prayer for "make whole" relief. (Doc. 9 at 2-3; Doc. 10 at 2). The
defendants contend equitable remedies are unavailable here because there is an
adequate remedy in the form of benefits. (Doc. 9 at 2-3; Doc. 10 at 4-5). In
response, the plaintiff argues: (1) equitable relief is available from both defendants
under the Supreme Court's opinion Cigna Corp. v. Amara, 563 U.S. 421 (2011);
and (2) equitable relief is available against Blue Cross due to an allegation in the
amended complaint concerning Blue Cross's claim administration. (Doc. 14).
Standard of Review
"Federal Rule of Civil Procedure 8(a)(2) requires only 'a short and plain
statement of the claim showing that the pleader is entitled to relief,' in order to
'give the defendant fair notice of what the … claim is and the grounds upon which
it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). Rule 8 "does not require 'detailed
factual allegations,' but it demands more than an unadorned, the defendantunlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Twombly, 550 U.S. at 555).
"A pleading that offers 'labels and
conclusions' or 'a formulaic recitation of the elements of a cause of action will not
do.'" Id. at 678 (quoting Twombly, 550 U.S. at 555, 557) (internal quotation marks
To survive a motion to dismiss for failure to state a claim on which relief
may be granted brought pursuant to Rule 12(b)(6), "a complaint must contain
sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible
on its face.'"
Id. (quoting Twombly, 550 U.S. at 570).
"A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged."
Id. (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to a
'probability requirement,' but it asks for 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 of 'entitlement to relief.'" Id. (quoting Twombly, 550
U.S. at 557).
The defendants contend equitable remedies are unavailable here because
there is an adequate remedy in the form of benefits. (Doc. 9 at 2-3; Doc. 10 at 45). A claim under § 1132(a)(1)(B)2 is essentially a breach of contract claim,
Section 1132(a)(1)(B) provides: "A civil action may be brought . . . by a participant or
beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his rights
under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan."
allowing a plaintiff to recover past benefits due or clarify future benefits owed.
See Tabb-Pope v. SAN, Inc., No. 12-2139-AKK, 2013 WL 5707327, at *5–7 (N.D.
Ala. Oct. 21, 2013) (adopting Report and Recommendation). In Varity Corp. v.
Howe, 516 U.S. 489 (1996), the Supreme Court held that individual plan
participants and beneficiaries could assert claims for equitable relief under §
1132(a)(3)3 but only where no appropriate relief was available under ERISA's
other civil enforcement provisions. Id. at 512 (describing § 1132(a)(3) as a "catch
all" provision). The Eleventh Circuit has applied Varity to hold an ERISA plaintiff
cannot alternatively plead claims under § 1132(a)(3) where § 1132(a)(1)(B)
provides an adequate remedy. Katz v. Comprehensive Plan of Group Ins., 197
F.3d 1084, 1988-89 (11th Cir. 1999).
The Eleventh Circuit has further held that the facts alleged in the complaint
determine whether the claim falls under § 1132(a)(1)(B) or § 1132(a)(3). See
Jones v. Am. Gen. Life & Accident Ins. Co., 370 F.3d 1065, 1073 (11th Cir. 2004).
Under Jones, the court must consider whether a plaintiff "has a cause of action,
based on the same allegations, under the more specific remedial provisions of
ERISA." Beckham v. Liberty Life Assur. Co. of Boston, 4 F. Supp. 3d 1266, 1269
(M.D. Ala. 2014) (quoting Ferrell v. Capitol City Bank and Co., No. 13-0240,
Section 1132(a)(3) states: "A civil action may be brought . . . by a participant, beneficiary, or
fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the
terms of the plan, or (B) to obtain other appropriate equitable relief (i) to address such violations
or (ii) to enforce any provisions of this subchapter or the terms of the plan."
2013 WL 5781657, at *3 (N.D. Ga. Oct. 25, 2013)). If the allegations entitle the
plaintiff to more specific ERISA remedies, the "catch all" equitable remedies
provided by § 1132(a)(3) are unavailable. Id. Accordingly, a district court must
consider whether the allegations supporting a § 1132(a)(3) claim would also
support a claim under § 1132(a)(1)(B). Jones, 370 F.3d at 1073-74.
In response to the defendants' motions to dismiss the plaintiff argues: (1)
equitable relief is available from both defendants under the Supreme Court's
opinion Cigna Corp. v. Amara, 563 U.S. 421 (2011); and (2) equitable relief is
available against Blue Cross due to an allegation in the complaint concerning Blue
Cross's claim administration. (Doc. 14). Each argument is addressed in turn.
Equitable Claims Against Both Defendants Based on Amara
In Amara, fiduciaries of an ERISA plan made disclosures which misled
beneficiaries about a change in the plan which resulted in fewer benefits. The
district court dismissed the plaintiff's § 1132(a)(3) equitable claims and reformed
the plan under § 1132(a)(1)(B). The Supreme Court reversed the district court,
finding that § 1132(a)(1)(B) did not authorize reformation—traditionally, an
equitable remedy—and instead holding that the relief should be considered under §
1132(a)(3). Amara, 563 U.S. at 441-42. Specifically, the Court found that because
the plaintiffs sought relief that did not implicate the terms of the plan for purposes
of § 1132(a)(1)(B), the plaintiffs sought equitable relief under ERISA's catchall
Here, the plaintiff contends his claims for equitable relief are permissible
under Amara; by way of argument, he quotes extensively from McCravy v.
Metropolitan Life Ins. Co., 690 F.3d 176, 180 (4th Cir. 2014), a Fourth Circuit
opinion applying Amara.
(Doc. 14 at 4-6).
In McCravy, the plaintiff sued
Metropolitan Life when it denied her claim for life insurance benefits under an
employer-provided plan following the death of her daughter.
Metropolitan Life had been accepting premium payments, it denied the claim
because the plaintiff's daughter was no longer an eligible dependent at the time of
her death. The Fourth Circuit found not only that the plaintiff could proceed under
§ 1132(a)(3), but that she could recover damages in excess of the premiums paid.
Id. at 182-83.
The instant case is factually distinct from the circumstances presented in
Amara and McCravy. While the plaintiff in Amara alleged a misrepresentation
about the terms of the plan, the plaintiff here alleges the defendants' improperly
denied benefits under the Plan as written. See Beckham, 4 F. Supp. 3d at 1271.
Similarly, the plaintiff in McCravy alleged the defendant misrepresented that her
daughter was covered under an employer-provided life insurance plan before
denying a claim under the plan due to the daughter's ineligibility for benefits.
Accordingly, contract remedies were not available to the plaintiff in McCravy; any
relief would come via equitable remedies. The plaintiff here makes no such
Indeed, the allegations in the amended complaint focus on the
defendants' application of the Plan's terms in denying the plaintiff's claims for
benefits.4 See Beckham, 4 F. Supp. 3d at 1271 (refusing, in light of Varity, to
extend Amara by allowing the plaintiff "to proceed on a claim for benefits and also
equitable relief for misrepresentation as to the fiduciary's actions in applying the
plan, rather than a representation as to the terms of the Plan") (emphasis in
original). Accordingly, because the amended complaint asserts a claim for benefits
under §1132(a)(1)(B), the plaintiff's claims for equitable relief are due to be
dismissed, Amara and McCravy notwithstanding.
See Tabb-Pope, 2013 WL
57073237 at *6-7.
Allegations Based on Claim Administration5
In response to Blue Cross's motion to dismiss, the plaintiff relies on the
allegations included in paragraph seventeen of the amended complaint.
Specifically, the amended complaint alleges:
The central allegations in the amended complaint are that the defendants: (1) "denied Plaintiff's
health claims and refused to pay for Plaintiff's cancer treatment;" (2) "denied Plaintiff's appeal"
of that decision; (3) "had a duty to pay benefits under the health plan;" (4) "failed to pay the
Plaintiff's health insurance benefits under the terms of the health plan;" and (5) "failed to pay
Plaintiff's medical bills for his proton therapy cancer treatment." (Doc. 4 at 2-4).
While the plaintiff does not explicitly concede that these allegations are limited to Blue Cross,
review of the allegations reveals that they are. Additionally, it is undisputed that the Plan has
delegated claims administration to Blue Cross. (Doc. 4 at 2).
On March 20, 2014, Defendant BCBS stated that Plaintiff's Proton
therapy medical facility "is a preferred provider with their local Blue
Cross and Blue Shield Plan." Upon information and belief, Defendant
BCBS failed to notify the "local" Blue Cross and failed to pay
Plaintiff's health care benefits. In the March 20, 2014 letter, BCBS
does not explain that Plaintiff was under insurance contract with
BCBS, and not the other "local" Blue Cross.
(Doc. 4 at 3). As the plaintiff would have it, this allegation provides a vehicle for
equitable relief because it constitutes a claim procedure that is outside the plan—an
omitted disclosure giving rise to an equitable remedy. (Doc. 14 at 3-4).
Analysis of this allegation does not support a claim for equitable relief.
Boiled down, this allegation is that BCBS owes the plaintiff an individualized plan
benefit which BCBS has wrongfully withheld. This is essentially a breach of
contract claim for which § 1132(a)(1)(B) provides a remedy. See Caudle v. Life
Ins. Co. of N. Am., 33 F. Supp. 3d 1288, 1295-96 (N.D. Ala. 2014) (no breach of
fiduciary duty claim where complaint alleged defendants failed to inform her about
plan benefits and failed to enforce plan as written); Beckham, 4 F. Supp. 3d at 1271
(no breach of fiduciary duty claim where plaintiff complained of denial of benefits
under the plan); Smith v. Life Ins. Co. of N. Am., No. 13-2047-VEH, 2014 WL
1330936 (N.D. Ala. Mar. 31, 2014) (dismissing claims for breach of fiduciary duty
where complaint concerned benefits withheld); Tabb-Pope, 2013 WL 5707327 at
*6-7 (same); see also Ogden v. Blue Bell Creameries U.S.A., Inc., 348 F.3d 1284,
1287 (11th Cir. 2003) ("following Varity federal courts have uniformly concluded
that, if a plaintiff can pursue benefits under the plan pursuant to Section a(1), there
is an adequate remedy under the plan which bars a further remedy under Section
a(3)") (quoting Larocca v. Borden, Inc., 276 F.3d 22, 28 (1st Cir. 2002) (alteration
incorporated)). Accordingly, the allegations in the amended complaint regarding
statements Blue Cross made about proton therapy will not support a claim for
equitable relief under § 1132(a)(3).
For all of the foregoing reasons, the plaintiff has not plausibly pled a claim
for breach of fiduciary duty that can survive scrutiny under Varity. Accordingly,
the defendants' partial motions to dismiss (Docs. 9-10) are GRANTED and any
claims for equitable relief are DISMISSED.
DONE this 23rd day of March, 2017.
STACI G. CORNELIUS
U.S. MAGISTRATE JUDGE
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