Center For Restorative Breast Surgery, L.L.C. et al v. Blue Cross Blue Shield of Louisiana et al
Filing
525
ORDER AND REASONS granting in part and denying in part Defendants' 458 Motion for Partial Summary Judgment, as stated herein. FURTHER ORDER that the parties provide the Court with an amended Exhibit I to the Fifth Amended Complaint by June 6, 2016, as further stated herein. If the parties cannot agree on the disposition of any claim as a result of this Order, Defendants have until May 20, 2016, to file a supplemental memorandum and Plaintiffs have until May 27, 2016, to file an opposition to Defendant's supplemental memorandum, as further explained herein. Signed by Judge Susie Morgan on 5/6/2016. (tsf)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CENTER FOR RESTORATIVE
BREAST SURGERY, L.L.C., ET AL.,
Plaintiffs
CIVIL ACTION
VERSUS
NO. 11-806
BLUE CROSS BLUE SHIELD
OF LOUISIANA, ET AL.,
Defendants
SECTION: “E” (5)
ORDER AND REASONS
Before the Court is Defendants’ Motion for Summary Judgment filed November 2,
2015. 1 For the reasons below, the motion is GRANTED IN PART and DENIED
IN PART.
BACKGROUND
The members of Plaintiff Center for Restorative Breast Surgery, L.L.C. (“CRBS”)
are surgeons who perform post-mastectomy breast reconstruction medical services. 2
Plaintiff St. Charles Surgical Hospital (“St. Charles”) is a specialty surgical center where
the physicians affiliated with CRBS perform the surgeries. 3 Plaintiffs are out-of-network
health care providers, with respect to all Defendants, who provided services to patients
covered under ERISA plans and other insurance policies issued or administered by
Defendants, numerous Blue Cross Blue Shield health insurance carriers. 4
Plaintiffs allege that, prior to performing any surgery, Plaintiffs’ staff contacted
each patient’s insurer, notified the insurer of the procedure expected to be performed,
R. Doc. 458.
R. Doc. 308 at ¶ 83.
3 Id. at ¶ 91.
4 Id. at ¶ 92; R. Doc. 458-1 at 9. Each patient and his or her respective claim is identified in Exhibit I to the
Fifth Amended Complaint. R. Doc. 308.
1
2
1
requested preauthorization to have the procedure done, and requested disclosure of the
amount of benefits for the procedure and any qualification to such benefits. 5 Plaintiffs
allege they received preauthorization from Defendants, through either Defendants’
employees or agents. 6
Plaintiffs filed this suit on April 6, 2010, in the Civil District Court for the Parish of
Orleans, State of Louisiana. 7 Defendant Blue Cross Blue Shield of Louisiana removed the
case to this Court on April 12, 2011. 8 Plaintiffs aver that each patient executed an
assignment of benefits assigning to Plaintiffs benefits owed to the patient by his or her
healthcare insurer, along with the authority and right to institute legal action to recover
any amounts due. 9 Plaintiffs allege they performed the surgery on each patient, relying
on the information provided by Defendants’ employees or agents. 10 Plaintiffs maintain
they did not receive the expected payment for each claim identified in Exhibit I to the
Fifth Amended Complaint 11 in accordance with the representations made by
Defendants. 12
Plaintiffs bring this action in two capacities: (1) on behalf of their patients as
assignees of their patients’ ERISA rights, and (2) in their individual capacities to seek
recovery under Louisiana state laws for claims resulting from their direct interactions
with Defendants. 13 Plaintiffs filed a Fifth Amended Complaint on January 6, 2015,
asserting the following counts 14:
R. Doc. 308 at ¶¶ 94–95.
Id. at ¶¶ 94–107.
7 R. Doc. 1-1.
8 R. Doc. 1.
9 R. Doc. 308 at ¶¶ 104–07.
10 Id. at ¶ 107.
11 The parties have provided the Court with a CD containing Exhibit I to the Fifth Amended Complaint.
12 R. Doc. 308 at ¶¶ 107–08.
13 Id. at ¶ 1.
14 R. Doc. 308.
5
6
2
Count I:
Failure to determine benefits in accordance with the terms of
ERISA plans;
Count II:
Failure to supply requested information ERISA requires to be
produced;
Count III:
Failure to provide full and fair review under ERISA;
Count IV:
Breach of fiduciary duties of loyalty, disclosure, and prudence
under ERISA;
Count V:
Detrimental reliance/breach of oral contract(s) under
Louisiana law;
Count VI:
Breach of contract(s) under Louisiana law;
Count VII:
Negligent Misrepresentation(s) under Louisiana law; and
Count VIII: Fraud under Louisiana law.
On June 24, 2015, the Court dismissed Counts II, III, and IV with prejudice. 15 The Court
also dismissed Count VIII after Plaintiffs moved for dismissal with prejudice. 16
On November 2, 2015, Defendants filed a motion for partial summary judgment
raising the following arguments:
1. Count I: Certain of Plaintiffs’ claims for ERISA benefits against certain
Defendants fail as a matter of law because the Defendants are not the
plan administrators and did not control benefits determinations under
the plans;
2. Count I: Certain of Plaintiffs’ ERISA benefits claims fail as a matter of
law because they are based on insurance policies or plans that are not
ERISA plans;
3. Count I: Certain of Plaintiffs’ ERISA benefits claims are untimely as a
matter of law pursuant to contractual limitations periods or the one-year
limitations period that applies as a matter of federal common law; and
15 R. Doc. 371. On November 30, 2015, Plaintiffs sought reconsideration of the order dismissing Counts II,
III, and IV. R. Doc. 469. The Court denied Plaintiffs’ motion for reconsideration on April 11, 2016. R. Doc.
508.
16 R. Doc. 450.
3
4. Counts V, VII: Certain of Plaintiffs’ negligent misrepresentation and
detrimental reliance claims are barred by the one-year prescriptive
period applicable to delictual claims. 17
Plaintiffs filed a response in opposition on January 6, 2016. 18 Defendants filed a reply in
support of their motion on January 19, 2016, 19 and Plaintiffs filed a surreply on
January 27, 2016. 20
STANDARD OF LAW
Summary judgment is appropriate only “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” 21 “An issue is material if its resolution could affect the outcome of the action.” 22
When assessing whether a material factual dispute exists, the Court considers “all of the
evidence in the record but refrains from making credibility determinations or weighing
the evidence.” 23 All reasonable inferences are drawn in favor of the non-moving party. 24
There is no genuine issue of material fact if, even viewing the evidence in the light most
favorable to the non-moving party, no reasonable trier of fact could find for the nonmoving party, thus entitling the moving party to judgment as a matter of law. 25
If the dispositive issue is one on which the moving party will bear the burden of
persuasion at trial, the moving party “must come forward with evidence which would
‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’” 26 If the
R. Doc. 458.
R. Doc. 478.
19 R. Doc. 485.
20 R. Doc. 489.
21 Fed. R. Civ. P. 56. See also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).
22 DIRECTV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2005).
23 Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). See also
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150–51 (2000).
24 Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
25 Smith v. Amedisys, Inc., 298 F.3d 434, 440 (5th Cir. 2002).
26 Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263–64 (5th Cir. 1991) (quoting Golden Rule Ins. Co.
v. Lease, 755 F. Supp. 948, 951 (D. Colo. 1991)).
17
18
4
moving party fails to carry this burden, the motion must be denied. If the moving party
successfully carries this burden, the burden of production then shifts to the non-moving
party to direct the Court’s attention to something in the pleadings or other evidence in the
record setting forth specific facts sufficient to establish that a genuine issue of material
fact does indeed exist. 27
If the dispositive issue is one on which the non-moving party will bear the burden
of persuasion at trial, the moving party may satisfy its burden of production by either
(1) submitting affirmative evidence that negates an essential element of the non-movant’s
claim, or (2) affirmatively demonstrating that there is no evidence in the record to
establish an essential element of the non-movant’s claim. 28 “[U]nsubstantiated assertions
are not competent summary judgment evidence. The party opposing summary judgment
is required to identify specific evidence in the record and to articulate the precise manner
in which that evidence supports his or her claim. ‘Rule 56 does not impose upon the
district court a duty to sift through the record in search of evidence to support a party’s
opposition to summary judgment.’” 29
ANALYSIS
I.
COUNT I: WHETHER CERTAIN OF PLAINTIFFS’ CLAIMS FOR ERISA BENEFITS
AGAINST CERTAIN DEFENDANTS FAIL AS A MATTER OF LAW BECAUSE THE
DEFENDANTS ARE NOT THE PLAN ADMINISTRATORS AND DID NOT CONTROL
BENEFITS DETERMINATIONS UNDER THE PLANS
Defendants argue that some Defendants are not proper defendants for Plaintiffs’
claims for benefits under 29 U.S.C. § 1132(a)(1)(B) in Count I of the Fifth Amended
Celotex, 477 U.S. at 322–24.
Id. at 331–32 (Brennan, J., dissenting).
29 Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (citing Celotex, 477 U.S. at 324;
Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994) and quoting Skotak v. Tenneco Resins, Inc., 953 F.2d
909, 915–16 & n.7 (5th Cir. 1992)).
27
28
5
Complaint because, under their respective plans, they were not the plan administrators
and lacked discretion and control over administration and operation of the plans. 30
The Fifth Circuit held in LifeCare Management Services LLC v. Insurance
Management Administrators Inc. that an entity exercising “actual control” over a plan’s
benefits claims process can be liable under 29 U.S.C. § 1132(a)(1)(B), even if that entity is
not the plan administrator: “[T]he proper party defendant in an action concerning ERISA
benefits is the party that controls administration of the plan[,] and . . . [i]f an entity or
person other than the named plan administrator takes on the responsibilities of the
administrator, that entity may also be liable for benefits.” 31 The Fifth Circuit explained,
though, that “‘the mere exercise of physical control or the performance of mechanical
administrative tasks generally is insufficient’ for liability under § 1132(a)(1)(B).” 32
In LifeCare, the Fifth Circuit affirmed the district court’s decision, which found
that the third-party administrator could be held liable under § 1132(a)(1)(B) because the
third-party administrator exercised actual control over the claims process. 33 The plan
language in LifeCare provided that the “the services to be performed by the [third-party
administrator] shall be ministerial in nature and shall be performed within the framework
of policies, interpretations, rules, practices and procedures made or established by the
Plan Administrator.” 34 The court noted, however, that the third-party administrator “had
authority to process all claims presented for benefit under the Plan” and had the
discretion to determine which claims were “routine” and thus would not be referred to
R. Doc. 458-1 at 13–17.
LifeCare Mgmt. Servs. LLC v. Ins. Mgmt. Adm’rs Inc., 703 F.3d 835, 844–45 (5th Cir. 2013).
32 Id. (quoting Gomez-Gonzalez v. Rural Opportunities, Inc., 626 F.3d 654, 665 (1st Cir. 2010)).
33 Id. at 846.
34 Id. at 845.
30
31
6
the plan administrator. 35 Based on the third-party administrator’s performance of
discretionary functions, the court found it exercised actual control over the claims
process. 36 The Fifth Circuit explained, however, that the third-party administrator could
not have been liable under § 1132(a)(1)(B) had it instead “referred all disputed claims to
[the plan administrator] for resolution . . . .” 37
Defendants argue that, under LifeCare, some Defendants are not the proper
defendants under Count I because they were not the plan administrators of the respective
plans and Plaintiffs cannot establish, and there is no evidence showing, they exercised
actual control over the plans. 38 Therefore, Defendants argue, summary judgment should
be granted on Count I with respect to those defendants. 39
A. Claims C18–C19, C879, C1320–C1322, H804–H805, H972, and H1247 against
the HCSC Defendants
Defendants argue that ten of Plaintiffs’ claims for ERISA benefits against the
Health Care Service Corporation (“HCSC”) defendants 40 fail as a matter of law: C18, C19,
C879, C1320, C1321, C1322, H804, H805, H972, and H1247. 41 Defendants argue these
claims are based on certain ERISA plans for which HCSC is not the plan administrator
and did not control benefits determinations under the plan. 42 In its opposition, Plaintiffs
stipulate that HCSC is not the proper party defendant for Count I of the Fifth Amended
Id.
Id. at 845–46.
37 Id. at 846.
38 R. Doc. 458-1 at 13–17.
39 Id.; R. Doc. 485 at 2–4.
40 The Fifth Amended Complaint names five divisions of HCSC, a mutual legal reserve company, as
defendants in this matter: Blue Cross and Blue Shield of Illinois, Blue Cross and Blue Shield of Montana,
Blue Cross and Blue Shield of New Mexico, Blue Cross and Blue Shield of Oklahoma, and Blue Cross and
Blue Shield of Texas. R. Doc. 458-1 at 14; R. Doc. 308.
41 R. Doc. 458-1 at 14. All references to “C” followed by a number refer to the Center tab of Exhibit I of the
Fifth Amended Complaint. All references to “H” followed by a number refer to the Hospital tab of Exhibit I
of the Fifth Amended Complaint.
42 Id.
35
36
7
Complaint with respect to the ten claims Defendants identified. 43 The Court therefore
grants summary judgment on Count I with regard to these claims.
B. Claims C424–C426, H382 against Wellmark
Defendants argue that Wellmark, Inc. is not the proper defendant under Count I
with respect to the claims regarding Patient E.D., appearing on lines C424, C425, C426,
and H382 of Exhibit I to the Fifth Amended Complaint. 44 Patient E.D. is a member of a
plan, sponsored by Catholic Health Initiatives, for which Wellmark is the claim
administrator. 45 Defendants rely on the language of the plan to support their argument
that Wellmark lacks the discretionary authority to determine claims absent review by the
plan administrator, lacks actual control, and thus cannot be held liable under
Count I. 46
Defendants contend that Plaintiffs cannot establish that Wellmark had actual
control, which they must prove to prevail on Count I. 47 Defendants argue that, in their
motion, they “highlighted the absence of evidentiary support for . . . Wellmark . . . having
‘actual control’ over plan administration for certain claims. In fact, Defendants offered
evidence that disproved ‘actual control.’” 48 The Court disagrees. Defendants have
neither affirmatively demonstrated a lack of evidence in the record to establish actual
R. Doc. 478 at 3–4.
R. Doc. 458-1 at 16.
45 Id. See also R. Doc. 458-24.
46 R. Doc. 458-1 at 16.
47 See id.; LifeCare, 703 F.3d at 844–45 (“We find the rationale and cases holding that a [third-party
administrator] may be held liable only if it exercises ‘actual control’ over the benefits claims process
convincing. We agree that [t]he proper party defendant in an action concerning ERISA benefits is the party
that controls administration of the plan’ and that [i]f an entity or persaon other than the named plan
administrator takes on the responsibilities of the administrator, that entity may also be liable for benefits.”
(internal quotation marks omitted)).
48 R. Doc. 485 at 2 (emphasis in original).
43
44
8
control nor submitted affirmative evidence that negates the possibility that Wellmark had
actual control. 49
In Defendants’ memorandum in support of their motion, Defendants argue,
“Under the terms of E.D.’s plan, Catholic Health Initiatives has ‘the exclusive right and
power to interpret the Plan and to decide all matters arising under the Plan, including
eligibility for Benefits.’” 50 Defendants, however, cite no support for this statement. 51 In
their statement of uncontested facts, Defendants state, “Lines C424, C425, C426, and
H382 present claims relating to services allegedly provided to E.D. The Plan for that
patient designates an entity other than a Defendant which exercises actual control over
Plan administration.” 52 Defendants cite “Wellmark Attachments; Plan p. 102.” 53
Defendants, however, fail to attach Page 102 of the plan to their motion. 54
Defendants attached to their motion only two pages of the Wellmark plan, which
constitute the entirety of the aforementioned “Wellmark Attachments.” Those pages
provide the following information regarding the process to appeal the denial of a claim:
STEP ONE – Appeal to the Claims Administrator
If your Claim has been denied in whole or in part, you may have your Claim
reviewed. The Claim Administrator [Wellmark] will review its decision . . . .
The Claim Administrator [Wellmark] will give you a written decision within 60
days after it receives your request for review. The receipt of Wellmark’s written
decision marks the end of your official appeal. If the determination is unfavorable
to you, you may submit a voluntary request for review to the Catholic Health
Initiatives Medical Plan Administrator, as discussed later in this section.
See Celotex, 477 U.S. at 331–32 (Brennan, J., dissenting).
R. Doc. 458-1 at 16.
51 See id.
52 R. Doc. 458-2 at ¶ 13.
53 Id.
54 Curiously, in Plaintiffs’ statement of contested facts, Plaintiffs simply copy and paste the Defendants’
statement and citation, indicating Plaintiffs agree that the plan “designates an entity other than a Defendant
which exercises actual control over Plan administration.” R. Doc. 478-4 at ¶ 13.
49
50
9
STEP TWO – Voluntary Request for Review
If the appealed claim is again denied, you may file a second appeal with the Claims
Administrator [Wellmark]. . . . 55
The role in the appeals process of Catholic Health Initiatives, as plan administrator,
remains unclear. Although the plan states that a member “may submit a voluntary request
for review” to Catholic Health Initiatives, the plan under “Step Two,” labeled “Voluntary
Request for Review,” states that the claimant may file a second appeal with the claims
administrator, which is Wellmark. 56 The language itself instructs claimants to file the
second appeal with Wellmark. It is “unclear what part, if any, [Wellmark] plays in the
determination of the second appeal or whether [Wellmark] merely serves as the receiving
point for all appeals and forwards the second appeals to the Plan Administrator.” 57 The
Court finds that Defendants have not established based on plan documents, or any other
competent summary judgment evidence, that Wellmark did not exercise actual control
over the plan. Defendants have failed to demonstrate that no genuine issue of material
fact exists as to whether Wellmark exercised actual control over the administration of the
plan. 58 Summary judgment on Count I of the Fifth Amended Complaint with respect to
the claims appearing on lines C424, C425, C426, and H382 is denied.
C. Claims C302–C305, H258–H259, C336–C337, H300–H303 against Regence
Blue Shield
Defendants argue that Regence Blue Shield is not the proper defendant under
Count I with respect to the claims regarding Patient L.C., appearing on lines C302, C303,
C304, C305, H258, and H259 of Exhibit I to the Fifth Amended Complaint, and the claims
R. Doc. 458-24 at 3.
Id.
57 See Ctr. for Restorative Breast Surgery, L.L.C. v. Humana Health Ben. Plan of La., Inc., No. 10-4346,
2015 WL 4394034, at *12 (E.D. La. July 15, 2015).
58 See id. at *11–12.
55
56
10
regarding a second patient with the initials L.C., appearing on lines C336, C337, H300,
H301, H302, and H303 of Exhibit I. 59
Both patients are members of plans that are sponsored by Boeing and for which
Regence Blue Shield is the claim administrator. 60 Under those plans, Boeing’s Board of
Directors designated the Employee Benefit Plans Committee (“Committee”) to be the plan
administrator. 61 The plans provide as follows:
Notwithstanding any other provision in the Plan, . . . the Plan Administrator [the
Committee] has the exclusive right, power, and authority, in its sole and absolute
discretion, to
•
Administer, apply, construe, and interpret the Plan and all related Plan
documents.
•
Decide all matters and questions arising in connection with entitlement to
benefits and the nature, type, form, amount, and duration of benefits.
...
•
Delegate its administrative duties and responsibilities to persons or entities
of its choice such as the Boeing Service Center, the service representatives,
and employees of the Company.
All decisions that the Plan Administrator (or any duly authorized designees) makes
with respect to any matter arising under the Plan and any other Plan documents
are final and binding. 62
The parties did not provide any information on the process regarding claims
determinations and appeals thereof.
Based on the plan language and the limited evidence on the record, the Court
cannot determine the role of Regence Blue Shield in the claims benefits process. The plan
states that the plan administrator may delegate its plan administration duties or
R. Doc. 458-1 at 16.
Id.; R. Doc. 458-25 at 4, ¶¶ 4, 5.
61 R. doc. 458-25 at 6.
62 Id.
59
60
11
responsibilities to any person or entity. Thus, authority may have been delegated to
Regence Blue Shield to exercise discretionary functions under the plan, such as making
claims determinations or interpreting plan provisions. 63 Further, without plan
documents describing the claims determination and appeals process, the Court cannot
determine what role, if any, Regence Blue Shield has in making claims and benefits
determinations. Defendants have failed to establish there is no genuine issue of material
fact that Regence Blue Shield did not exercise actual control over the benefits claims
process and administration of the plan. 64 Summary judgment on Count I of the Fifth
Amended Complaint with respect to the claims appearing on lines C302, C303, C304,
C305, H258, H259, C336, C337, H300, H301, H302, and H303 is denied.
D. Claims H374, H415, H416 against Regence Blue Shield
Defendants argue that Regence Blue Shield is not the proper defendant under
Count I with respect to the claim regarding Patient T.D., appearing on line H374 of
Exhibit I to the Fifth Amended Complaint, and the claims regarding a second patient with
the initials T.D., appearing on lines H415 and H416 of Exhibit I. 65
Both patients are members of plans that are sponsored by Boeing and for which
Regence Blue Shield is the claim administrator. 66 Those plans contain the same language
cited above in Section C of this Order with respect to Claims C302–C305, H258–H259,
C336–C337, and H300–H303. 67 For the reasons stated in Section C, summary judgment
on Count I of the Fifth Amended Complaint with respect to the claims appearing on lines
H374, H415, and H416 is denied.
See LifeCare, 703 F.3d at 845.
See Humana, 2015 WL 4394034, at *13.
65 R. Doc. 458-1 at 17.
66 Id.; R. Doc. 458-25 at 7, ¶¶ 6, 7.
67 R. Doc. 458-25 at 9–10.
63
64
12
E. Claims C1404, H1215–H1216 against Regence BlueCross BlueShield of Utah
Defendants argue that Regence BlueCross BlueShield of Utah is not the proper
defendant under Count I with respect to the claims regarding Patient M.W., appearing on
lines C1404, H1215, and H1216 of Exhibit I to the Fifth Amended Complaint. 68 Patient
M.W. is a member of a plan, sponsored by O.C. Tanner Company, for which Regence
BlueCross BlueShield of Utah is the claim administrator. 69
The plan provides that “[b]enefits under this Plan will be paid only if the Plan
Administrator [O.C. Tanner] 70 decides, in their [sic] sole discretion, that you are entitled
to them.” 71 With respect to claims reviews, the plan states the following:
The first level of review will be performed by the Claims Administrator [Regence
BlueCross Blue Shield of Utah] on the Plan’s behalf. . . .
If the Claimant does not agree with the Claims Administrator’s determination from
the first level review, the Claimant may submit a second level appeal in
writing . . . . to: Plan Administrator [O.C. Tanner], Regence BlueCross BlueShield
of Utah, 2890 East Cottonwood Parkway, Salt Lake City, UT 84121, Attn: Claims
Appeals.
An appeal will not be deemed submitted until it is received by the Plan
Administrator [O.C. Tanner]. . . .
The second level of review will be done by the Plan Administrator [O.C. Tanner].
The Plan Administrator will review the information initially received and any
additional information provided by the Claimant, and make a determination on
the appeal based on the terms and conditions of the Plan and other relevant
information. The Plan Administrator will send a written or electronic Notice of
Determination for the second level of review to the Claimant within 30 days of
receipt of the appeal. The determination by the Plan Administrator upon review
will be final, binding, and conclusive and will be afforded the maximum deference
permitted by law. 72
R. Doc. 458-1 at 17.
Id.; R. Doc. 458-25 at 13, ¶ 8.
70 R. Doc. 458-25 at 13.
71 Id.
72 Id. at 14.
68
69
13
Defendants rely on this language to support their contention that Defendants have
“highlighted the absence of evidentiary support for . . . Regence having ‘actual control’
over plan administration for certain claims.” 73
Another court in this district considered similar plan language in Center for
Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of Louisiana, Inc. 74
In Humana, the relevant plan language stated that the first-level appeal would be
determined by the third-party administrator but that the claimant could appeal that
decision to the plan administrator. 75 The plan also stated that the first- and second-level
appeals must be sent in person or by mail to the third-party administrator, and the plan
provided the address of the third-party administrator. 76 The court found that, based on
the plan’s language, there was “a disputed material fact as to whether [the third-party
administrator] exercised ‘actual control’ over the claims administration.” The court
emphasized that, “[w]hile the Plan initially states that [the third-party administrator] will
resolve the initial appeal and the Plan Administrator will determine the second appeal,
the Plan then instructs the claimant to send both appeals to [the third-party
administrator].” 77 The court concluded it was “unclear what part, if any, [the third-party
administrator] plays in the determination of the second appeal or whether [the thirdparty administrator] merely serves as the receiving point for all appeals and forwards the
second appeals to the Plan Administrator.” 78
R. Doc. 485 at 2.
Humana, 2015 WL 4394034, at *12–13.
75 Id. at *11.
76 Id.
77 Id. at *12 (emphasis in original).
78 Id.
73
74
14
Similarly, although the Regence BlueCross BlueShield of Utah plan states “[t]he
second level of review will be done by the Plan Administrator,” 79 it instructs claimants to
mail the second-level appeal to Regence BlueCross BlueShield of Utah and not to O.C.
Tanner. Based on the plan language, the Court finds a disputed material fact exists as to
whether Regence BlueCross BlueShield of Utah exercises actual control over the claims
administration. As in Humana, it is unclear what role, if any, Regence BlueCross
BlueShield of Utah “plays in the determination of the second appeal or whether [it] merely
serves as the receiving point for all appeals and forwards the second appeals to the Plan
Administrator.” 80 The Court finds this disputed factual issue is material. 81 “If [Regence
BlueCross BlueShield of Utah] handles both levels of appeals or selectively decides which
appeals go to the Plan Administrator, this exercise of discretion would signify actual
control, and [Regence BlueCross BlueShield of Utah] would be a proper defendant under
Lifecare.” 82 The Court finds the plan’s conflicting language creates a genuine issue of
material fact. Accordingly, summary judgment on Count I of the Fifth Amended
Complaint with respect to the claims appearing on lines C1404, H1215, and H1216
is denied.
II.
COUNT I: WHETHER SOME OF PLAINTIFFS’ ERISA BENEFITS CLAIMS FAIL AS A
MATTER OF LAW BECAUSE THEY ARE BASED ON INSURANCE POLICIES OR PLANS THAT
ARE NOT SUBJECT TO ERISA
Defendants argue that several patients’ plans from which Plaintiffs’ claims arise
are not governed by ERISA and, accordingly, Count I of the Fifth Amended Complaint
should be dismissed as to the claims arising from those plans. 83
R. Doc. 458-25 at 14.
Humana, 2015 WL 4394034, at *12.
81 See id.
82 Id.
83 R. Doc. 458-1 at 17–19.
79
80
15
The parties subsequently filed a joint stipulation identifying multiple claims that
are based on plans not subject to ERISA 84:
Patient
Line(s)
J.B.
C112, C113
B.H.
H624
J.A.
C10, H50
V.B.
C176
M.B.
C186, C187
L.B.
C237, C238
B.B.
H225
T.C.
C334, C335, H294
J.C.
H339
S.D.
H344
I.D.
H350, H351, H352
E.D.
H356
L.D.
H360
C.D.
H376, H377
S.F.
C476, C477, H456
J.F.
H488
K.G.
H519
T.H.
H621
M.H.
H638
D.H.
C687, C688, C689, C690,
H643
Z.I.
J.M.
C818
D.M.
H779
C.P.
84
C703
C956, C957, C958, C959,
C960, C961, H872, H873
R. Doc. 468.
16
M.R.
H934
J.R.
H935, H936
J.R.
H945, H946
T.R.
H950
J.R.
H976
T.S.
H1037
B.S.
H1038, H1039
D.S.
H1070
C.S.
H1083
C.T.
H1104
R.H.
H612
J.R.
H979, H980
M.H.
C663, C664, C665, C666,
H605, H606
A.L.
C735, H683
B.A.
C42, C43, C44, H35
M.R.
C1046, H927
B.W.
C.F.
C1419, C1420, C1421,
H1248, H1249
H457, H458
H.K.
C719, H665, H666
J.P.
H874
T.F.
C528, C529, H497
C.C.
J.B.
C313, C314, C415, H269,
H270
H221
K.H.
C668, C669, H608
L.R.
C1091
L.Z.
C1448, C1449, C1450, C1451
K.A.
H52, H53, H54
17
Accordingly, the Court grants summary judgment on Count I as to the claims listed above,
as ERISA does not apply to them.
The parties also stipulated that the following two claims do arise from
ERISA plans:
Patient
Line(s)
S.C.
C272, C273, C274, H230
D.G.
H512
Accordingly, the Court denies summary judgment on Count I as to these
two claims.
III.
COUNT I: WHETHER SOME OF PLAINTIFFS’ ERISA BENEFITS CLAIMS ARE UNTIMELY
AS A MATTER OF LAW
Defendants contend that the Court should grant summary judgment on certain of
Plaintiffs’ claims for benefits under ERISA in Count I of the Fifth Amended Complaint. 85
Defendants argue those claims are barred (1) by the applicable statutory limitations
period, for those claims arising under plans that lack a contractual limitations period, or
(2) by the limitations period contained in the plans on which they are based. 86
A. Whether Certain of Plaintiffs’ ERISA Claims Fail Because They Are Barred by the
One-Year Statute of Limitations Applicable to ERISA Claims Based on Plans that
Lack a Contractual Limitations Period
Defendants argue that certain of Plaintiffs’ ERISA claims for benefits arising under
plans not containing contractual limitations periods are untimely. 87
A statute of limitations establishes the period of time within which a claimant must
bring an action. 88 “As a general matter, a statute of limitations begins to run when the
R. Doc. 458-1 at 20.
Id. at 21–27.
87 R. Doc. 458-1 at 24–27.
88 Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 610 (2013).
85
86
18
cause of action accrues—that is, when the plaintiff can file suit and obtain relief.” 89 ERISA
does not specify a statute of limitations for claims brought under § 1132(a)(1)(B).90
Nevertheless, a cause of action under ERISA “accrues after a claim for benefits has been
made and formally denied.” 91 Because ERISA provides no specific limitations period,
courts apply the statute of limitations of the state-law cause of action “most analogous” to
the cause of action raised. 92
The parties agree that the statute of limitations for the cause of action under
Louisiana law most analogous to Plaintiffs’ claims for benefits under the ERISA health
plans is contained in La. Rev. Stat. § 22:975(A)(11), which governs health and accident
policy provisions. 93 La. Rev. Stat. § 22:975(A)(11) provides, “No legal action shall be
brought after the expiration of one year after the time proof of loss is required to be filed.”
The Court agrees that La. Rev. Stat. § 22:975(A)(11) provides the limitations period for
the most analogous cause of action under state law. Therefore, the applicable limitations
period for those ERISA plans that do not contain contractual limitations periods is
one year.
The parties disagree as to when prescription commences. The parties devote
several pages of argument to defining “loss” as used in La. Rev. Stat. § 22:975(A)(11).94
The Court need not, however, determine when “loss” occurs under Louisiana law.
“Although state law determines the limitations period, federal law governs the accrual
Id.
Id.; Hogan v. Kraft Foods, 969 F.2d 142, 145 (5th Cir. 1992).
91 Harris Methodist Fort Worth v. Sales Support Servs. Inc. Employee Health Care Plan, 426 F.3d 330,
337 (5th Cir. 2005). See also Hall v. Nat’l Gypsum Co., 105 F.3d 225, 230 (5th Cir. 1997).
92 Harris, 426 F.3d at 337; N. Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 204 (5th
Cir. 2015).
93 R. Doc. 458-1 at 25; R. Doc. 478 at 8–11.
94 See R. Doc. 458-1 at 26 – 27; R. Doc. 478 at 8–10; R. Doc. 485 at 11–14; R. Doc. 489 at 4–6.
89
90
19
date for a claim under ERISA.” 95 A cause of action under ERISA “accrues after a claim for
benefits has been made and formally denied.” 96 Therefore, to determine when the
limitations period commenced, the Court must determine when the claims for benefits
were “formally denied.”
The Supreme Court in Heimeshoff v. Hartford Life & Accident Insurance Co.
explained that a cause of action under ERISA does not accrue until a claimant has
exhausted the internal appeals process:
ERISA and its regulations require plans to provide certain presuit procedures for
reviewing claims after participants submit proof of loss (internal review). The
courts of appeals have uniformly required that participants exhaust internal review
before bringing a claim for judicial review under [§ 1132(a)(1)(B)]. A participant’s
cause of action under ERISA accordingly does not accrue until the plan issues a
final denial. 97
The Fifth Circuit has also recognized that “claimants seeking benefits from an ERISA plan
must first exhaust available administrative remedies under the plan before bringing suit
to recover benefits.” 98
Accordingly, Plaintiffs’ cause of action under ERISA with respect to plans lacking
a contractual limitations period began to accrue with respect to each claim when the
applicable plan issued a final denial at the conclusion of the internal review process. The
Court finds, per Heimeshoff and Harris, that the one-year prescriptive period for each
claim for benefits under § 1132(a)(1)(B), borrowed from La. Rev. Stat. § 22:975(A)(11),
95 Ivanovic v. IBM Pers. Pension Plan, 47 F. Supp. 3d 163, 167 (E.D.N.Y. 2014), aff’d, 620 F. App’x 64 (2d
Cir. 2015). See also Jensen v. Snellings, 841 F.2d 600, 606 (5th Cir. 1988) (“Although we borrow the
applicable limitations period from state law, the determination of when that limitations period begins to
run is governed by federal law.”); Salcedo v. John Hancock Mut. Life Ins. Co., 38 F. Supp. 2d 37, 42 (D.
Mass. 1998) (“Although the limitations period in an action to recover benefits under ERISA is borrowed
from state law, federal law determines the date on which the cause of action accrues and from which the
limitations period is measured.”).
96 Harris, 426 F.3d at 337. See also Hall, 105 F.3d at 230 (“A cause of action under ERISA accrues when a
request for benefits is denied.”).
97 Heimeshoff, 134 S. Ct. at 610.
98 Bourgeois v. Pension Plan for Employees of Santa Fe Int’l Corps., 215 F.3d 475, 479 (5th Cir. 2000).
20
commenced when the applicable plan issued a final denial following exhaustion of the
plan’s internal review process. Summary judgment on Count I is granted as to any claims
for benefits under § 1132(a)(1)(B) arising from a plan lacking a contractual limitations
period that was filed more than one year from the date on which the applicable plan issued
a final denial.
B. Whether Certain of Plaintiffs’ ERISA Benefits Claims, Based on ERISA Plans that
Include a Contractual Limitations Period, Are Barred
Defendants argue that certain of Plaintiffs’ claims for benefits under ERISA
§ 1132(a)(1)(B) fail as a matter of law because Plaintiffs failed to bring those claims within
the contractual limitations periods contained in the plans under which the claims arise. 99
As previously explained, a cause of action under ERISA “accrues after a claim for
benefits has been made and formally denied.” 100 Because ERISA provides no specific
limitations period, courts apply state law principles of limitation. 101 “Where a plan
designates a reasonable, shorter time period, however, that lesser limitations
schedule governs.” 102
In Heimeshoff, the Supreme Court explained that a plan participant’s cause of
action under ERISA “does not accrue until the plan issues a final denial.” 103 The Court
held, however, that, “[a]bsent a controlling statute to the contrary, a participant and a
plan may agree by contract to a particular limitations period, even one that starts to run
before the cause of action accrues, as long as the period is reasonable.” 104 The Court noted
that statutes of limitations “provide only a default rule that permits parties to choose a
R. Doc. 458-1 at 21.
Harris, 426 F.3d at 337. See also Hall, 105 F.3d at 230.
101 Harris, 426 F.3d at 337.
102 Id.
103 Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 610 (2013).
104 Id.
99
100
21
shorter limitations period,” 105 and the Court reasoned, “[i]f parties are permitted to
contract around a default statute of limitations, it follows that the same rule applies where
the statute creating the cause of action is silent regarding a limitations period.” 106 “The
principle that contractual limitations provisions ordinarily should be enforced as written
is especially appropriate when enforcing an ERISA plan” because “[t]he plan, in short, is
at the center of ERISA.” 107 The Court therefore concluded that it must give effect to the
plan’s limitations provision unless the Court determines either that the period is
unreasonably short or that a “controlling statute” prevents the limitations provision from
taking effect. 108
Plaintiffs do not identify, and the Court has not found, any controlling statute that
prevents a contractual limitations period from taking effect in this case. Indeed, Louisiana
permits parties to reduce a prescriptive period by contract. 109 Therefore, the Court need
only
determine
whether
the
contractual
limitations
periods
at
issue
are
“unreasonably short.” 110
Plaintiffs argue that “Fifth Circuit precedence [sic] clearly bars any contractual
limitations period that is shorter than [the one-year period] prescribed by relevant
statute.”111 This, however, is clearly contrary to Heimeshoff. To support their argument,
Plaintiffs cite only one case, Armel v. Sun Life Assurance Company of Canada, a 2006
district court case that predated Heimeshoff. 112 In Armel, the court deemed La. Rev. Stat.
Id.
Id.
107 Id. at 611–12.
108 Id. at 612.
109 See Saul Litvinoff, 6 La. Civ. L. Treatise, Law of Obligations § 11.22 (2d ed.) (“Louisiana courts have quite
often asserted that parties may agree to a prescriptive period shorter than the one provided by law.”);
Barrilleaux v. Hartford Life and Acc. Ins. Co., No. 12-1542, 2014 WL 3778696 (E.D. La. July 29, 2014).
110 Heimeshoff, 134 S. Ct. at 612.
111 R. Doc. 478 at 8.
112 Armel v. Sun Life Assur. Co. of Canada, No. 05-0327, 2006 WL 980679, at *3 (E.D. La. Apr. 11, 2006).
105
106
22
§ 22:213(A)(11), which contained a one-year prescriptive period, analogous to a cause of
action seeking benefits under ERISA. 113 The contractual limitations period at issue in
Armel, however, was three years. 114 The court applied the contractual limitations period
and explained that “when an insurance policy specifies a contractual period, which is
more favorable to the insured than the one-year prescriptive period, the time for filing is
governed by the time period specified in the policy.” 115 The Armel court did not address
the issue of whether a contractual limitations period may shorten the prescriptive period
provided by statute. Clearly under Heimeshoff and its progeny, a contractual limitations
period may shorten the default limitations period, absent a controlling statute to the
contrary, unless the contractual limitations period is unreasonably short. 116
The Court in Heimeshoff did not define “unreasonably short.” The Court provided
some guidance, however, when it found that the three-year contractual limitations period
at issue in that case was not unreasonably short on its face, 117 even though the limitations
period began when proof of loss was due, which was before a participant could exhaust
internal review under the plan. 118 The Court explained as follows:
Neither Heimeshoff nor the United States claims that the Plan’s 3-year limitations
provision is unreasonably short on its face. And with good reason: the United
States acknowledges that the regulations governing internal review mean for
“mainstream” claims to be resolved in about one year, leaving the participant with
two years to file suit. Even in this case, where the administrative review process
required more time than usual, Heimeshoff was left with approximately one year
in which to file suit. 119
Id. at 2–3.
Id. at *3.
115 Id.
116 Heimeshoff, 134 S. Ct. at 612 (“We must give effect to the Plan's limitations provision unless we determine
either that the period is unreasonably short, or that a “controlling statute” prevents the limitations provision
from taking effect.”).
117 See id. at 612–13.
118 Id. at 610.
119 Id. at 612 (citations omitted).
113
114
23
This suggests that a limitations period that provides a claimant one year to file suit from
the date of exhaustion of the internal appeals is not unreasonably short, a finding that is
consistent with application of the statutory limitations period borrowed from La. Rev.
Stat. § 22:975(A)(11) to plans that do not contain a contractual limitations period. 120
In Baptist Memorial Hospital—De SoTo Inc. v. Crain Automotive Inc., the plan at
issue contained a limitations period that provided, “No action at law or in equity . . . shall
be brought after the expiration of two (2) years from the date the expense was incurred,
or one (1) year from the date a completed claim was filed, whichever occurs first.” 121 The
court found that the completed claim was filed on November 13, 2003. 122 The lawsuit was
filed on August 25, 2005, well outside the plan’s applicable one-year limitations period. 123
The trial court, however, found that the contractual limitations period of one year was
“unreasonable” and thus unenforceable. 124
The Fifth Circuit affirmed, concluding the one-year limitations period was
unreasonable:
First, the one-year limitations period begins to run when a participant merely files
a completed claim, potentially long before the claimant’s ERISA cause of action
even accrues. The administrator’s initial denial of a claim could take as long as 90
days under the . . . Plan, depending on whether the administrator requests that the
claimant submit additional information. The claimant then has an additional 180
days to administratively appeal the denial of a claim, and the administrator then
has 60 days to issue a decision on the appeal. In total, the . . . Plan’s claim and
internal appeal procedures could take as long as 330 days, leaving an unsatisfied
claimant with only 35 days to file suit. 125
120
See supra Part III.A.
121 Baptist Mem’l Hosp.—DeSoto Inc. v. Crain Auto. Inc., 392 F. App’x 288, 294 (5th Cir. 2010) (per curiam).
Although this case predated Heimeshoff, the court was following Harris, in which the Fifth Circuit held
that, “[w]here a plan designates a reasonable, shorter time period [than provided by an applicable state
law], that lesser limitations schedule governs.” Harris, 426 F.3d at 337.
122 Id.
123 Id.
124 Id.
125 Id. at 294–95.
24
In Baptist, the plan administrator failed to provide the claimant with a formal denial, and
the court found that the plaintiff’s ERISA cause of action had not accrued by October 13,
2004, less than one year before the plaintiff filed suit. 126
In Dye v. Associates First Capital Corporation Long-Term Disability Plan 504,
the Fifth Circuit found that a 120-day limitation period in the context of disability benefits
was not unreasonable. 127 The court explained that “there is no apparent reason that a
court should treat a limitations period [in the health care context] differently” in the
context of disability benefits. 128
Of course, a contractual limitations period that expires before the issuance of a
final denial of benefits is unreasonable. 129 Because “claimants seeking benefits from an
ERISA plan must first exhaust available administrative remedies under the plan before
bringing suit to recover benefits,” 130 any period that expires before a claimant has
exhausted the available internal remedies is unreasonably short. 131 “If the administrator’s
conduct causes a participant to miss the deadline for judicial review, waiver or estoppel
may prevent the administrator from invoking the limitations provision as a defense.” 132
For example, in Hansen v. Aetna Health and Life Ins. Co., the United States District Court
for the District of Oregon found that a two-year limitations period was unreasonable when
Id. at 295.
Dye v. Associates First Capital Corp. Long-Term Disability Plan 504, 243 F. App’x 808, 810 (5th Cir.
2007).
128 Id.
129 See Baptist, 392 F. App’x at 294–95 (implying that a contractual limitations period that, as applied,
provides a claimant only 35 days to file suit is unreasonable).
130 Bourgeois, 215 F.3d at 479.
131 See, e.g., Heimeshoff, 134 S. Ct. at 615 (“If the administrator’s conduct causes a participant to miss the
deadline for judicial review, waiver or estoppel may prevent the administrator from invoking the limitations
provision as a defense.”); Baptist, 392 F. App’x at 294 (suggesting that a plan with a one-year limitations
period is unreasonable when the limitations period is mostly consumed by the internal review process and
leaves the claimant with only 35 days to file suit).
132 Heimeshoff, 134 S. Ct. at 615.
126
127
25
a protracted internal review process had “consumed that entire period.” 133 The court
explained, “Enforcement of a two-year suit limitation in this case, after plaintiff has
diligently pursued her appeals rights in a protracted internal review process, would
render that provision unreasonable in practical terms.” 134
In Plaintiffs’ supplemental statement of contested facts, Plaintiffs identify at least
one claim that prescribed under the contractual limitations period contained in the
respective plan before the plan administrator issued a final appeal. 135 Therefore, with
respect to that claim, Plaintiffs have shown that the contractual limitations period as
applied was unreasonably short, as Plaintiffs’ claims prescribed before Plaintiffs could
even file suit. Any contractual limitations period that expired before the issuance of a final
denial of benefits is unenforceable.
Further, after reviewing the applicable case law and the arguments of the parties,
the Court finds that a contractual limitations period that results in the claimant’s having
at least 90 days to file suit from the date the plan issues a decision on final appeal 136 is
presumptively reasonable. 137 Claimants who fail to bring actions within the contractual
limitations period may nevertheless rebut the presumption of reasonableness by showing
Hansen v. Aetna Health & Life Ins. Co., No. 98-949, 1999 WL 1074078, at *4 (D. Or. Nov. 4, 1999).
Id.
135 See R. Doc. 514 at ¶ 116.
136 The Court must consider the amount of time a claimant has to file suit to determine whether a contractual
limitations period is reasonable. See Heimeshoff, 134 S. Ct. at 612–13. Because “claimants seeking benefits
from an ERISA plan must first exhaust available administrative remedies under the plan before bringing
suit to recover benefits,” Bourgeois, 215 F.3d at 479, the Court determines whether a period is reasonable
based on the time a claimant has to file suit from the date the plan issues a decision on the final
internal appeal.
137 Indeed, Plaintiffs concede that a 90-day limitations period is not unreasonably short with respect to the
ERISA plan applicable to Claim C1395. See R. Doc. 458-2 at ¶ 76; R. Doc. 514 at ¶ 76.
133
134
26
they are entitled to application of traditional doctrines such as waiver, estoppel, or
equitable tolling.138
Plaintiffs have offered no evidence to rebut the presumption that 90 days is
reasonable with respect to any particular claim. Nor have Plaintiffs provided any evidence
to establish that waiver, estoppel, or equitable tolling should apply to any particular
claim. 139
Despite the Court’s having granted Plaintiffs leave to supplement their
opposition to the motion for summary judgment, 140 Plaintiffs provided no competent
summary judgment evidence to support their contention that various contractual
limitations periods are unreasonable as applied. For example, with respect to Paragraph
81, which corresponds to Claim C-943, Plaintiffs and Defendants agree that the plan
provided claimants 180 days to file suit “after the claimant has exhausted the claims and
appeal procedures under the Plan.” 141 The parties also agree that the limitations period
See Heimeshoff, 134 S. Ct. at 615 (“[E]ven in the rare cases where internal review prevents participants
from bringing [§ 1132(a)(1)(B)] actions within the contractual period, courts are well equipped to apply
traditional doctrines that may nevertheless allow participants to proceed. If the administrator’s conduct
causes a participant to miss the deadline for judicial review, waiver or estoppel may prevent the
administrator from invoking the limitations provision as a defense. . . . To the extent the participant has
diligently pursued both internal review and judicial review but was prevented from filing suit by
extraordinary circumstances, equitable tolling may apply.” (citations omitted)).
139 See Heimeshoff, 134 S. Ct. at 611–12 (“The principle that contractual limitations provisions ordinarily
should be enforced as written is especially appropriate when enforcing an ERISA plan. The plan, in short,
is at the center of ERISA. . . . We must give effect to the Plan’s limitations provision unless we determine
either that the period is unreasonably short, or that a ‘controlling statute’ prevents the limitations
provisions from taking effect.”); Munro-Kienstra v. Carpenters’ Health & Welfare Trust Fund of St. Louis,
790 F.3d 799, 802–03 (8th Cir. 2015) (not reaching whether contractual limitations period was reasonable
because “[the plaintiff] does not argue that the plan’s two year statute of limitations is unreasonable under
Heimeshoff . . . .” (quoting Heimeshoff, 134 S. Ct. at 612, 616)); Mazur v. UNUM Ins. Co., 590 F. App’x 518,
522 (6th Cir. 2014) (“We apply the limitations periods specified in the policy because they apply to [the
plaintiff’s] ERISA claims, and because [the plaintiff] has not argued that these limitations are
unreasonable.”); Owner-Operator Indep. Drivers Ass'n, Inc. v. Mayflower Transit, Inc., No. 98-457, 2007
WL 2900561, at *11 (S.D. Ind. Sept. 28, 2007) (non-ERISA) (“Plaintiffs have not demonstrated that one- or
two-year contractual limitations periods are unreasonably short. . . . Plaintiffs have provided no evidence
to distinguish these cases or otherwise bolster their assertion that such time limits are unreasonable; their
argument on this ground cannot succeed.”).
140 See R. Doc. 512 at 4; R. Doc. 514.
141 R. Doc. 458-2 at ¶ 81; R. Doc. 514 at ¶ 81.
138
27
began to run on May 2, 2013, the date of resolution of Plaintiffs’ second-level appeal. 142
Thus, Plaintiffs had until October 29, 2013, to file suit. Plaintiffs did not file suit on Claim
C-943, however, until November 15, 2013. 143 In their supplemental statement of
contested facts, Plaintiffs argument provides only as follows: “Plaintiffs assert that a 180day prescriptive period is unreasonable under these circumstances. Plaintiffs further
assert that suit for this claim was filed within a reasonable time.” 144 This, however, is
insufficient to defeat summary judgment, as “unsubstantiated assertions are not
competent summary judgment evidence.” 145 “The party opposing summary judgment is
required to identify specific evidence in the record and to articulate the precise manner
in which that evidence supports his or her claim,” 146 but in this case Plaintiffs assert only
conclusory allegations in support of their argument that the plans’ contractual limitations
periods are unreasonable. 147 Because Plaintiffs have failed to show that these contractual
limitations periods are unreasonably short or otherwise unenforceable, 148 the Court will
enforce the contractual limitations period contained in those plans. 149
The Court further finds that a limitations period resulting in the claimant’s having
fewer than 90 days to file suit from the date of final appeal is unreasonably short on its
face,
as
it
would
impose
an
unreasonable
burden
on
the
claimant.
R. Doc. 458-2 at ¶ 81; R. Doc. 514 at ¶ 81.
R. Doc. 458-2 at ¶ 81; R. Doc. 514 at ¶ 81.
144 R. Doc. 514 at ¶ 81.
145 Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).
146 Id.
147 See generally R. Doc. 514.
148 With respect to many claims, Plaintiffs concede that the plans under which the claims arise contained
contractual limitations periods that are “reasonable under [the] circumstances.” See R. Doc. 514. The Court
will enforce the contractual limitations periods in those plans as written.
149 See Heimeshoff, 134 S. Ct. at 611–12 (“The principle that contractual limitations provisions ordinarily
should be enforced as written is especially appropriate when enforcing an ERISA plan. The plan, in short,
is at the center of ERISA. . . . We must give effect to the Plan’s limitations provision unless we determine
either that the period is unreasonably short, or that a ‘controlling statute’ prevents the limitations
provisions from taking effect.”).
142
143
28
“Reasonableness . . . [turns] on a determination of whether the contractual limitations
period gives the claimant a chance to investigate the claim and exhaust administrative
remedies before the time limitation has run, and whether it gives the plan administrator
appropriate protection from stale claims.” 150 A period of at least 90 days to file suit from
the date on which the plan issues a decision on final appeal strikes the appropriate balance
between ensuring a claimant has sufficient time to investigate his or her claim and file
suit and protecting the plan administrator from stale claims.
In summary, with respect to any plan that allows the claimant fewer than 90 days
to file suit from the date the plan issued the final appeal, the limitations period is
unreasonably short on its face. For those plans, the one-year limitations period borrowed
from La. Rev. Stat. § 22:975(A)(11) applies. The Court grants summary judgment on
Count I with respect to any claims not filed within one year from the date such a plan
issued a final decision on appeal. 151
With respect to any plan that allows a claimant at least 90 days to file suit from the
date the plan issue the final appeal, the limitations period is not unreasonably short on
its face, and, because there is no particularized evidence showing extraordinary
circumstances with respect to any claim, the limitations period is enforceable. For those
claims arising under plans with enforceable limitations periods, the Court grants
summary judgment on Count I with respect to any claim not filed within the limitations
period provided by the plan under which the claim arose.
Furleigh v. Allied Grp. Inc., 281 F. Supp. 2d 952, 969 (N.D. Iowa 2003).
Harris, 426 F.3d at 337; Munro-Kienstra, 790 F.3d at 802–03 (8th Cir. 2015) (“If the parties ‘have
adopted a limitations period by contract,’ as the parties have done here, ‘there is no need to borrow a state
statute of limitations’ unless a court concludes ‘either that the period is unreasonably short, or that a
controlling statute prevents the limitations provision from taking effect.’” (quoting Heimeshoff, 134 S. Ct.
at 612, 616)).
150
151
29
IV.
COUNT VII: WHETHER SOME
HAVE PRESCRIBED
OF
PLAINTIFFS’ NEGLIGENT MISREPRESENTATION
Defendants argue that some of Plaintiffs’ negligent misrepresentation claims in
Count VII of the Fifth Amended Complaint have prescribed. 152 The parties agree, 153 and
the Court concurs, that negligent misrepresentation is a tort claim 154 and is subject to a
one-year prescriptive period under Louisiana law. 155 The parties dispute, however, when
a negligent misrepresentation cause of action begins to accrue.
Under Louisiana law, prescription commences when a plaintiff has actual or
constructive knowledge of facts indicating to a reasonable person that he or she is the
victim of a tort. 156 “Constructive knowledge is whatever notice is enough to excite
attention and put the injured party on guard and call for inquiry. Such notice is
tantamount to knowledge or notice of everything to which a reasonable inquiry
may lead.” 157
Defendants argue that the prescriptive period on Plaintiffs’ negligent
misrepresentation claims began, at the latest, on the date Plaintiffs filed their first internal
appeals. 158 Defendants contend that when Plaintiffs filed their first appeal, “they had
R. Doc. 458-1 at 28–33.
See id. at 28; R. Doc. 478 at 11.
154 Lifecare Hospitals, Inc. v. B & W Quality Growers, Inc., 39,065 (La. App. 2 Cir. 2004), 887 So. 2d 624,
633 writ denied, 2004-2935 (La. 2005), 893 So. 2d 872 (citing Memorial Hospital Sys. v. Northbrook Life
Ins. Co., 904 F.2d 236 (5th Cir. 1990)).
155 See Nat’l Council on Compensation Ins v. Quixx Temporary Servs., Inc., 665 So. 2d 120, 122 (La. App.
4 Cir. 1995) (“The action for negligent misrepresentation arises ex delicto, . . . and is subject to the one year
prescriptive period of Civil Code article 3492.”).
156 Campo v. Correa, 2001-2707 (La. 6/21/02), 828 So. 2d 502, 510. See also Dardar, 2011 WL 976539, at
*2; Dugger v. Upledger Inst., No. CIV. A. 90-0829, 1992 WL 210046, at *1 (E.D. La. Aug. 21, 1992), aff'd
sub nom. Dugger v. Upledger Inst., 8 F.3d 20 (5th Cir. 1993) (“In a suit for negligent misrepresentation,
prescription does not run against one who is ignorant of the facts upon which his cause of action is based,
as long as such ignorance is not willful, negligent, or unreasonable. Therefore, prescription does not
commence until the plaintiff has actual or constructive notice of the tortious act, the resulting damage and
the causal connection between the two.” (internal citation and quotation marks omitted)).
157 Campo, 828 So. 2d at 510–11.
158 R. Doc. 458-1 at 30–31.
152
153
30
actual
knowledge
of
the
facts
they
needed
to
bring
their
negligent
misrepresentation . . . claims and that prescription had begun to run.” 159
Plaintiffs, on the other hand, argue that the prescriptive period commenced on the
date Plaintiffs exhausted their internal appellate rights. 160 To support their argument,
Plaintiffs rely on Armel v. Sun Life Assur. Co. of Canada, but this case is distinguishable
because it involved the determination of benefits under an ERISA plan and not under
Louisiana law. 161
In Harvey v. Dixie Graphics, Inc., the Supreme Court of Louisiana explained that
a cause of action in tort begins to accrue “when the plaintiff’s right to be free of illegal
damage has been violated.” 162 The damage suffered must be actual, determinable, and not
merely speculative, but “there is no requirement that the quantum of damages be certain
or that they be fully incurred, or incurred in some particular quantum, before the plaintiff
has a right of action.” 163 In Harvey, the plaintiff sued an accounting firm for alleged
negligence in preparing income tax returns for the plaintiff’s company. 164 The plaintiff
learned in November 1984 that his tax returns were prepared incorrectly, and in
December 1986, after negotiating with the IRS, the plaintiff paid the IRS more than
$175,000 tax and interest. 165 The plaintiff sued the accounting firm in June 1987. 166 The
Louisiana Supreme Court affirmed the trial court’s ruling that the plaintiffs’ negligence
claim had prescribed. 167 The court found that it was not manifestly erroneous to conclude
Id. at 31.
R. Doc. 478 at 13–14.
161 Armel v. Sun Life Assur. Co. of Canada, 2006 WL 980679 (E.D. La. Apr. 11, 2006).
162 Harvey v. Dixie Graphics, Inc., 593 So. 2d 351, 354 (La. 1992).
163 Id.
164 Id. at 353.
165 Id.
166 Id.
167 Id. at 354–55.
159
160
31
that prescription on the plaintiff’s tort claim commenced in November 1984—as opposed
to December 1986—because the plaintiff knew of the accounting firm’s negligence at that
time. 168 The court explained, “The mere fact that all of [the plaintiff’s] damages were not
yet suffered because he had not yet written a check to the IRS does not change the key fact
that the plaintiff was certainly aware that he had suffered appreciable harm from the
allegedly tortious act of [the defendant].” 169
To prevail in an action for negligent misrepresentation, a plaintiff must prove that
the defendant had a legal duty to supply correct information, the defendant breached that
duty, and the breach of that duty caused the plaintiff damages. 170 Plaintiffs allege that
Defendants had a duty “to act in good faith and provide up-to-date information regarding
[their] plan[s] through [their] agent[s] to third parties who rely on that information in
making their admission and patient treatment decisions.” 171 Plaintiffs allege that
Defendants breached their duty to Plaintiffs “by providing misleading information about
the benefits to be paid after authorizing the procedure to be performed.” 172 Plaintiffs
argue these alleged misrepresentations caused them to sustain damages including loss of
revenue for services rendered to the subscribers, loss of profits, loss of business
opportunities, and costs of services of rendering care and treatment to the subscribers. 173
Id.
Id.at 355.
170 Hardy v. Easy T.V. & Appliances of Louisiana, Inc., 2001-0025 (La. App. 4 Cir. 12/12/01), 804 So. 2d
777, 781.
171 R. Doc. 308 at ¶ 235 (citing B & W Quality Growers, 887 So. 2d at 632 (“We further conclude that [the
defendant] was under a duty to act in good faith and provide up-to-date information regarding its plan to
reduce coverage through its agent to third parties such as [the plaintiff], who rely on that information in
making their admission and patient treatment decisions.”)).
172 R. Doc. 408 at ¶ 236.
173 Id. at ¶ 241.
168
169
32
Plaintiffs state in their complaint that, “after the benefits were not paid in
accordance with the representations,” they appealed the benefit determinations. 174 By the
date of the first appeal, Plaintiffs clearly knew that they had received less than the amount
Defendants allegedly represented that Plaintiffs would receive for the services rendered.
As a result, Plaintiffs knew they had “suffered appreciable harm” from the alleged
negligent misrepresentation by the date they filed their first appeals. 175 The Court finds
that prescription commenced, at the latest, when the first appeal was filed with respect to
each claim. Accordingly, any claim under Count VII that was filed more than one year
after the date the first appeal was filed with respect to such claim is prescribed, and
summary judgment is granted on Count VII as to each prescribed claim.
V.
COUNT V: WHETHER SOME OF PLAINTIFFS’ DETRIMENTAL RELIANCE CLAIMS HAVE
PRESCRIBED
Defendants argue that certain of Plaintiffs’ detrimental reliance claims in Count V
of the Fifth Amended Complaint have prescribed. 176 The parties dispute the applicable
prescriptive period for Plaintiffs’ cause of action for detrimental reliance. While
Defendants argue Plaintiffs’ cause of action for detrimental reliance is delictual and is
subject to a one-year prescriptive period, Plaintiffs contend that their detrimental reliance
cause of action sounds in contract and is subject to a ten-year prescriptive period. 177
A claim for detrimental reliance can sound in either contract or tort. 178 Delictual
actions are subject to a prescriptive period of one year, while contractual actions are
Id. at ¶ 108–09.
Harvey, 593 So. 2d 355.
176 R. Doc. 458-1 at 28–33.
177 See R. Doc. 458-1 at 28–30; R. Doc. 478 at 12–13.
178 Keenan v. Donaldson, Lufkin & Jenrette, Inc., 575 F.3d 483, 487 (5th Cir. 2009); Copeland v.
Wasserstein, Perella & Co., 278 F.3d 472, 479 (5th Cir. 2002).
174
175
33
subject to a ten-year prescriptive period. 179 “The prescriptive period is not determined by
the label of the cause of action but by the nature of the transaction and the underlying
basis of the claim.” 180 “The classical distinction between contractual and delictual
damages is that the former flow from an obligation contractually assumed by the obligor,
whereas the latter flow from a violation of general duty owed by all persons.” 181
The Fifth Circuit has applied both one-year and ten-year prescriptive periods to
detrimental reliance claims. 182 For example, in Stokes v. Georgia-Pacific Corp., the Fifth
Circuit concluded that a ten-year prescriptive period for actions on contracts applied to
the plaintiff’s detrimental reliance claim. 183 The court noted that La. Civ. Code art. 1967,
the article governing detrimental reliance claims, appears in Book III, Title IV, titled
“Conventional Obligations or Contracts,” of the Louisiana Civil Code. 184 The Fifth Circuit
also explained that “the eminent scholar who directed the drafting of the new articles
expressly places detrimental reliance in the contract realm.” 185 In Copeland v.
Wasserstein, Perella & Co., on the other hand, the Fifth Circuit affirmed application of a
one-year prescriptive period for the plaintiff’s detrimental reliance claim. 186 In Copeland,
the plaintiff alleged that the defendant, a financial adviser, fell short of the standard of
care
among
financial
advisers,
a
claim
the
court
described
as
“quintessentially delictual.” 187
179 See La. Civ. Code arts. 3492, 3499; First La. Bank v. Morris & Dickson, Co., LLC, 45,668 (La. App. 2 Cir.
11/3/10), 55 So. 3d 815, 825.
180 Id. (internal quotation marks omitted).
181 Terrebonne Par. Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870, 886 (5th Cir. 2002).
182 Keenan, 575 F.3d at 487.
183 Stokes v. Georgia-Pac. Corp., 894 F.2d 764, 770 (5th Cir. 1990).
184 Id.; see also LA. CIV. CODE art. 1967.
185 Stokes, 894 F.2d at 770 (citing Saul Litvinoff, Still Another Look at Cause, 48 LA. L. REV. 3, 27–28
(1987)).
186 Copeland, 278 F.3d at 479–80.
187 Id.
34
The Court finds that Plaintiffs’ detrimental reliance claims “derive from a breach
of promise, like Stokes, rather than a breach of duty, like Copeland.” 188 To establish a
contractual claim for detrimental reliance, a plaintiff need only show that “a promise was
made, he relied on the promise, the promise was broken, and as a result he suffered
loss.” 189 Plaintiffs have clearly alleged that an oral contract was created when Plaintiffs
contacted Defendants to obtain preauthorization to perform the procedures. 190 Plaintiffs
allege, for example, that the verifications of benefits and preauthorizations of the
procedures created “bilateral onerous commutative oral contracts whereby Plaintiffs
would provide their agreed upon covered and pre-authorized services at a predetermined
rate that reflect the benefits provided by their subscribers’ respective plans” 191 and, in
exchange, Defendants created a duty “to tender the represented percentage to [Plaintiffs]
based on the representation.” 192 Thus, Plaintiffs have alleged that a promise on part of
Defendants was made. Plaintiffs also allege that “Plaintiffs based their decisions to
provide said services on Defendants’ representations of payment” and that, had they
known that the representations “were nothing more than a hoax to lure them into
providing their services at a discounted rate, [Plaintiffs] would have declined to provide
same unless other guaranteed payment arrangements could be made.” 193 Thus, Plaintiffs
have alleged that they relied on a promise made by Defendants. “A promise becomes an
enforceable obligation [a contract] when it is made in a manner that induces the other
Keenan, 575 F.3d at 487.
State v. Murphy Cormier Gen. Contractors, Inc., 2015-111 (La. App. 3 Cir. 6/3/15), 170 So. 3d 370, 379–
80, writ denied, 2015-1297 (La. 9/25/15), 178 So. 3d 573 (“There is a promisor and a promise . . . , there is
cause, there is offer and acceptance, i.e., the promisor offers to do or not do something, and the promisee,
accepting that offer or promise, acts accordingly and suffers loss to his detriment.”).
190 See R. Doc. 308 at ¶¶ 206–30.
191 Id. at ¶ 224.
192 Id. at ¶ 225.
193 Id. at ¶¶ 214–15.
188
189
35
party to rely on it to his detriment.” 194 Plaintiffs have also alleged that “Defendants failed
to tender the represented amount” 195 and that, as a result, Plaintiffs have suffered
“financial harm in the form of lost income for services performed.” 196 Therefore, the Court
finds that Plaintiffs’ detrimental reliance claims are contractual in nature and subject to
a ten-year prescriptive period. 197 Accordingly, summary judgment on Plaintiffs’ claims for
detrimental reliance in Count V is denied.
CONCLUSION
For the foregoing reasons;
IT IS ORDERED that the motion for summary judgment is GRANTED IN
PART and DENIED IN PART as set forth above. 198
IT IS FURTHER ORDERED that the parties provide the Court with an
amended Exhibit I to the Fifth Amended Complaint by June 6, 2016, to reflect the
rulings contained in this Order. If the parties cannot agree on the disposition of any claim
as a result of this Order, Defendants have until May 20, 2016, to file a supplemental
memorandum identifying each claim Defendants argue is subject to summary judgment
based on this Order. Defendants must provide competent summary judgment evidence
to demonstrate why Defendants are entitled to summary judgment on each disputed
claim. Plaintiffs have until May 27, 2016, to file an opposition to Defendants’
supplemental memorandum. Plaintiffs must provide competent summary judgment
evidence to support any contested dates or establish other material facts with respect to
each claim identified by Defendants.
Murphy, 170 So. 3d at 380.
R. Doc. 308 at ¶ 213.
196 Id. at ¶ 217.
197 See Murphy, 170 So. 3d at 379–80.
198 R. Doc. 458.
194
195
36
New Orleans, Louisiana, this 6th day of May, 2016.
_____________________ __________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
37
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