Tucker v. BCBSD Inc.

Filing 8

MEMORANDUM ORDER granting 4 MOTION to Dismiss for Failure to State a Claim. (CASE CLOSED). Signed by Judge Sue L. Robinson on 12/22/2011. (nmf)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
CHARLENE TUCKER,

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Plaintiff,

v.
BCBSD, Inc., d/b/a BLUE CROSS
BLUE SHIELD OF DELAWARE

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)
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) Civ. No. 10-11 08-SLR
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)

Defendant.

MEMORANDUM ORDER
At Wilmington this

J~day of December,

2011, having considered

defendant's motion to dismiss and the papers submitted in connection therewith;
IT IS ORDERED that said motion (D.I. 4) is granted for the reasons that follow:
1. Background. On December 16, 2010, plaintiff Charlene Tucker filed this
putative class action against defendant BCBSD, Inc., d/b/a Blue Cross Blue Shield of
Delaware ("BCBSD"), the administer of her Employment Retirement Income Security
Act 1 regulated health and welfare plan ("the Plan"). (D.I. 1) Plaintiff alleges that
defendant's conduct has deprived her and members of the purported class of their
health care benefits while, at the same time, allowing certain healthcare providers to
charge "exorbitant fees." (/d.) Plaintiff asserts that defendant breached its fiduciary
duties to the Plan, to the Plan's participants and beneficiaries by approving a scheme
by certain plan-participating providers and by failing to inform the participants and
beneficiaries that defendant's conduct adversely affected their benefits. (D. I. 6)
2. Plaintiff avers that on February 14, 2007, she was involved in an automobile
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"ERISA," 29 U.S.C. § 101 et seq.

accident and suffered a shoulder injury. (D.I. 1) Plaintiff sought treatment at First State
Orthopaedics ("FSO"). Prior to submitting for surgical treatment, plaintiff was required
by FSO to sign a "Medical Report and Doctor's Lien."2 She submitted a copy of her
BCBSD healthcare card to FSO for billing purposes. Plaintiff also signed a "Medical
Consent Form" that, among other things, indicated she would be financially responsible
to FSO for any amounts not paid by any insurance carrier.
3. Plaintiff alleges that defendant and FSO were parties to a contract, whereby
FSO agreed to bill BCBSD at specific negotiated rates for services provided to BCBSD
members and customers. The contract does not exclude automobile and/or litigation
related claims. She contends no one informed her that she would be required to pay
for any medical treatment through her lawsuit proceeds. Plaintiff also was not advised
that her medical bills would be billed against her lawsuit at an amount higher than the
amount which FSO had agreed to accept from BCBSD for the same services.
4. Defendant has moved to dismiss, arguing that plaintiff has failed to allege
facts sufficient to sustain a claim. (D.I. 4, 5) Plaintiff has filed opposition, to which
defendant has submitted a reply. (D.I. 6, 7)
5. Standard of Review. In reviewing a motion filed under Federal Rule of Civil
Procedure 12(b)(6), the court must accept all factual allegations in a complaint as true
and take them in the light most favorable to plaintiff. See Erickson v. Pardus, 551 U.S.
89, 94 (2007); Christopher v. Harbury, 536 U.S. 403, 406 (2002). A complaint must
contain "a short and plain statement of the claim showing that the pleader is entitled to

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0stensibly, plaintiff authorized her attorney to pay FSO directly out of the
proceeds of any personal injury recovery.

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relief, in order to give the defendant fair notice of what the ... claim is and the grounds
upon which it rests." Bell At/. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (interpreting
Fed.R.Civ.P. 8(a)) (internal quotations omitted). A complaint does not need detailed
factual allegations; however, "a plaintiff's obligation to provide the 'grounds' of his
entitle[ment] to relief requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do." /d. at 545 (alteration in
original) (citation omitted). The "[f]actual allegations must be enough to raise a right to
relief above the speculative level on the assumption that all of the complaint's
allegations are true." /d. "[D]etermining whether a complaint states a plausible claim is
context-specific, requiring the reviewing court to draw on its experience and common
sense." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950 (2009).
6. In ruling on a Rule 12(b)(6) motion to dismiss, a court must conduct a twopart analysis. /d.; Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).
To that end, the court must first separate the factual and legal elements of the claim,
accepting well-pleaded facts as true but disregarding legal conclusions. /d. Second, the
court must determine whether the facts alleged in the complaint are sufficient to show a
plausible claim for relief. Fowler, 578 F.3d at 211. If the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint
should be dismissed for failure to state a claim. Jones v. ABN Amra Mortg. Grp., 606
F.3d 119, 123 (3d Cir. 2010). Courts look to the complaint and attached exhibits in
ruling on a motion to dismiss. Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007).
7. Discussion. In order to state a claim for breach of a fiduciary duty under 29

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U.S.C. § 1132(a)(2), a plaintiff must demonstrate that: "(1) the defendant was acting in
a fiduciary capacity; (2) the defendant made affirmative misrepresentations or failed to
adequately inform plan participants and beneficiaries; (3) the misrepresentation or
inadequate disclosure was material; and (4) the plaintiff detrimentally relied on the
misrepresentation or inadequate disclosure." Shook v. Avaya Inc., 625 F.3d 69, 72 (3d
Cir. 2010); Leckey v. Stefano, 501 F.3d 212, 225-26 (3d Cir. 2007).
8. In addition, the Supreme Court has explained that a plaintiff must show a loss
to the plan in order to recover. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S.
134, 147 (1985). Significantly, actions must be brought on behalf of the plan itself and
must seek to restore losses to that plan. /d. Actions pursuant to 1132(a)(2) are not
vehicles for individual relief. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S.
204, 213 (2002).
9. Defendant contends that plaintiff's claim fails because she has not asserted
any loss to the Plan. The court agrees. In the complaint, plaintiff alleges harm to
herself and other beneficiaries having been billed directly from FSO instead of having
their claims submitted to the Plan for payment. However, she does not explain how this
conduct would cause a loss to the Plan. To the contrary, by not submitting claims to
the Plan for payment, the Plan would seemingly benefit by not having to pay on claims.
Although plaintiff urges the court to speculate that such conduct could result in a loss
(as a result of over billing or interference with subrogation rights), there are no plausible
allegations of record to warrant such a conclusion. Iqbal, 129 S.Ct. at 1949.
10. Similarly, plaintiff's breach of fiduciary duty claim cannot proceed under 29

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U.S.C. § 1132(a)(3). Section 1132(a)(3) is a catchall provision designed as a "safety
net" for plaintiffs seeking equitable relief where § 1132 does not otherwise afford an
adequate remedy. Varity Corp. v. Howe, 516 U.S. 489, 512-13 (1996). The residual
nature of this section does not imply that a plaintiff has a claim under this section
whenever her claim fails under another section. Fleisher v. Standard Ins. Co., 2011 WL
1640092 (D. N.J. 2011). This section offers appropriate equitable relief in situations
where beneficiaries cannot avail themselves of any other remedy under 29 U.S.C. §
1132. Varity Corp., 516 U.S. at 512. Because plaintiff at bar has another viable
remedy, this catchall provision does not apply.
11. Specifically, plaintiff alleges that BCBSD breached its fiduciary duty when it
denied payment of her claims and failed to inform her of this practice. This claim is
cognizable under 29 U.S.C. 1132(a)(1). Hahnemann University Hospital v. All Shore,
Inc., 514 F.3d 300, 309 (3d Cir. 2008). However, in order to proceed under§
1132(a)(1), a plaintiff must have first exhausted the plan's administrative remedies.
Weldon v. Kraft, Inc., 896 F.2d 793, 800 (3d Cir. 1990). The exhaustion requirement is
waived only where resort would be futile. Berger v. Edgewater Steel Co., 911 F.2d 911,
916 (3d Cir. 1990); Bennett v. Prudential Ins. Co., 192 Fed. Appx. 153, 155 (3d Cir.
2006). Plaintiff has not asserted that she exhausted the Plan's administrative remedies
nor presented anything to suggest that her failure to exhaust would be futile.

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