LEMOINE v. EMPIRE BLUE CROSS BLUE SHIELD et al
OPINION. Signed by Judge John Michael Vazquez on 4/12/18. (DD, )
Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No. 16-6786 (JMV)
EMPIRE BLUE CROSS BLUE SHIELD, et a!.
John Michael Vazguez, U.S.D.J.
This case concerns an insurance coverage dispute between Plaintiff Charlene LeMoine, on
the one hand, and Defendant Empire Blue Cross Blue Shield (“Empire”) and Defendant Blue Cross
Blue Shield of Illinois (“Blue Cross Illinois”) (collectively, the “Defendants”), on the other.
Currently pending before the Court are motions to dismiss Plaintiffs Amended Complaint filed
by Empire and Blue Cross Illinois (D.E. 26, 31). The Court reviewed the submissions in support
and in opposition,’ and considered the motion without oral argument pursuant to Fed. R. Civ. P.
78(b) and L. Civ. R. 78.1(b). For the reasons stated below, Empire and Blue Cross Illinois’
1Plaintiffs Amended Complaint will be referred to hereinafter as “Am. Compi.” (D.E. 23);
Defendant Empire’s brief in support of its motion to dismiss will be referred to hereinafter as
“Empire Br.” (D.E. 26); Plaintiffs brief in opposition to Defendant Empire’s motion to dismiss
will be referred to hereinafter as “P1. Empire Opp.” (D.E. 29); Defendant Empire’s reply brief
will be referred to hereinafter as “Empire Reply.” (D.E. 30). Defendant Blue Cross Illinois’ brief
in support of its motion for summary judgment will be referred to hereinafter as “Blue Cross
Illinois Br.” (D.E. 31); Plaintiffs brief in opposition to Defendant Blue Cross Illinois’ motion to
dismiss will be referred to hereinafter as “P1. Blue Cross Illinois Opp.” (D.E. 35); Defendant
Blue Cross Illinois’ reply brief will be referred to hereinafter as “Blue Cross Illinois Reply.”
motions to dismiss are GRANTED. Empire’s motion for leave to file supplemental authority
(D.E. 37) is dismissed as moot.
The allegations in this case center on Plaintiffs health insurance coverage following a
motorcycle accident. Plaintiff alleges that due to her medical circumstances, she was provided
medical care that was not “in-network” and that Defendants breached the tenris of their respective
benefits plans by failing to reimburse Plaintiffs healthcare providers for her care.
Plaintiffs resides in Ridgewood, New Jersey. Am. Compl. ¶ 1. Empire is a health insurance
provider with its principal place of business in Middletown, New York. Id.
¶ 2. Defendant
Cushman & Wakefield, Inc. PPO Incentive Plan4 is a health insurance plan offered by Cushman
& Wakefield, Inc. (“Cushman”) to its employees and is administered through Cushman &
The factual background is taken from Plaintiffs Amended Complaint, D.E. 23, as well as
exhibits attached to Defendants’ motions to dismiss. D.E. 26, 31. When reviewing a motion to
dismiss, the Court accepts as true all well-pleaded facts in the complaint. fowler v. UPMC
Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Additionally, a district court may consider
“exhibits attached to the complaint and matters of public record” as well as “an undisputedly
authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiffs
claims are based on the document.” Pension Ben. Guar. Corp. v. White Consol. Inthts., Inc., 998
F.2d 1192, 1196 (3d Cir. 1993).
Here, Plaintiffs claims are based on the benefit plans referenced in the Amended
Complaint. Therefore, the Court will consider the Empire Plan documents included in
Defendant Empire’s motion to dismiss, D.E. 26, Ex. A. The Court need not convert Defendants’
Rule 1 2(b)(6) motions to dismiss into motions for summary judgment, even when considering
outside documents. Briglia v. Horizon Healthcare Servs., Inc., No. 03-603 3, 2005 WL 1140687,
at *3 (D.N.J. May 13, 2005).
Plaintiff is identified as “Charlotte LeMoine” once in the Amended Complaint. Am. Cornpl. at
¶ 1. All other references are to “Charlene LeMoine.” See, e.g., Am. Compi.; P1. Opp.
The Court notes that Plaintiffs Amended Complaint includes “Defendant Cushman &
Wakefield, Inc. PPO Incentive Plan” as a defendant and does not plead Cushman & Wakefield,
Inc. as a defendant. See Am. Compi. ¶ 3-4.
Wakefield, Inc. offices in New York, New York. Id.
¶ 3. The Wakefield Plan is administered
pursuant to the Employee Retirement Security Act of 1974, 29 U.S.C.
§ 502(a) et seq. (“ERISA”).
¶ 4. Blue Cross Illinois is a health insurance provider with its principal place of business in
Springfield, Illinois. Id.
¶ 5. Defendant(s) ABC Corp. 1-10 are fictitiously named by Plaintiff as
possible defendant(s) as third party administrators or other entities engaged in the review and
benefits determinations of Plaintiffs medical bills. Id.
Plaintiffs Insurance Coverage
On January 3, 2014, Plaintiff began working for Sitex Realty Group, LLC (“Sitex”), Id.
10, where she received health insurance coverage from Blue Cross Illinois through an employee
group health plan (the “Blue Cross Illinois Plan”), id.
February 15, 2014. Id.
¶ 12. On March 1, 2014, Plaintiff began receiving healthcare insurance
coverage from Blue Cross Illinois. Id.
¶ 11. Her employment with Sitex ended on
¶ 13. On March 21, 2014, Plaintiff began working for
¶ 14, where she received health insurance coverage from Empire through an
employee group health plan (the “Empire Plan”), Id.
health insurance coverage through Empire. Id.
¶ 15. On April 1, 2015, Plaintiff began her
Plaintiffs Accident and Medical Care
On April 19, 2015, Plaintiff was a passenger on a motorcycle that was struck by a car. Id.
¶ 18. Plaintiff suffered life-threatening injuries and was taken by helicopter to Hackensack
University Medical Center. Id.
¶J 17, 19. Plaintiff endured a number of surgeries during her
almost month-long stay in the hospital. Id.
¶ 20. Plaintiff also participated in inpatient and
outpatient care at Kessler Rehabilitation Center. Id.
When Plaintiff arrived at the hospital, the hospital was given Plaintiffs Blue Cross Illinois
insurance identification card. Id.
¶ 23. At some point, either Plaintiff or one of Plaintiffs family
members also provided Plaintiffs Empire plan information to the hospital. Id.
confusion, and during her care and subsequent rehabilitation, Plaintiffs “healthcare providers
submitted bills to either or both of her insurance plans[.]” Id.
Both insurers paid some bills,
but rejected and refused to pay other bills because Plaintiff had not sought pre-approval of “out of
network” provider care. Id. ¶J 30-32. Plaintiff claims that she could not seek pre-approval because
of her “injuries and dire medical circumstances.” Id.
3 8-40. Overall, Plaintiff claims that
“Defendants chose to reject all charges submitted by [Plaintiffs] healthcare providers but for the
arbitrary reimbursement of partial payments unilaterally set by Defendants without any reference
to methodology or rationale.” Id.
Plaintiff admits that “[u]nder the terms of the Defendants’ health insurance plans, an
adverse payment decision required Ms. LeMoine to appeal from reductions or refusals within 180
days of the date of the adverse notice.” Id.
Plaintiff continues that she “attempted in good
faith to use the administrative appeals process dictated by Defendants’ plan documents, but she
was unsuccessful.” Id.
Plaintiff claims that in July 2015, she had numerous conversations
with the Defendants and billing representatives for her healthcare providers and “received form
appeal letters from providers that she signed and returned with the understanding that the providers
would submit these directly to Defendants on her behalf, and, as a consequence, [Plaintiff] is not
personally aware whether the appeals were actually sent.” Id.
Plaintiff contends that she
appealed as early as August 2015 by telephone and letter from denials of some claims but that she
never received any reply. Id.
Plaintiff claims that some of the appeal forms sent to her
by “doctors’ billing representatives appear to reflect an erroneous conclusion that she was insured
by Horizon Blue Cross Blue Shield, a completely different insurance plan, whose relationship with
[Blue Cross Illinois] and Empire is unknown.” Id.
Plaintiff also contends that “certain of
these appeal documents inadvertently confused [Plaintiffs] insurance plan identification numbers
for both the [Blue Cross Illinois] plan and the Empire plan.” Id.
On December 19 and 28, 2016, Plaintiff appealed earlier rejections of submitted bills. Id.
¶ 59. Plaintiff alleges that Empire acknowledged receipt of these appeals in early January 2017
“but has not yet served a formal written response.” Id.
¶ 60. Plaintiff states that “[t]he paper
exchange between the insurers and [Plaintiff] continues to this date.” Id.
¶ 61. Plaintiff also states
that “[a]s of the date of this Complaint, one multi-provider appeal of claim denials remains
According to Plaintiff, on May 20, 2017, Empire “demanded
reimbursement of $32,120.16 [that] it claims it paid incorrectly when [Blue Cross Illinois] should
have been primary payor.” Id.
In sum, Plaintiff states that “[i]t is by the failure of both [Blue Cross Illinois] and Empire
to reimburse [Plaintiffs] providers at ‘in network’ rates with pre-approval notwithstanding that
they breached the valid employee-sponsored insurance plans extended to [Plaintiff] by her former
¶ 65. Plaintiff continues that “[t]o the extent that Defendants have chosen not to
make any payments to [Plaintiffs] numerous healthcare providers based on a lack of pre-approval,
‘out of network’ status or other arbitrary and capricious rationales, these actions breached their
health insurance contracts with her and gave rise to civil action pursuant to 29 U.S.C.A.
1 132(a)(1)(B).” Id.
Plaintiff states that Empire requested these funds on “May 20, 1917.” Am. Compl.
However it is clear that Plaintiff meant 2017.
The Empire Plan6
The Empire Plan provides for an internal appeals process. In part, the Empire Plan provides
A. Grievances. Our Grievance procedure applies to any issue not
relating to a Medical Necessity or experimental or investigational
determination by Us. For example, it applies to contractual benefit
denials or issues or concerns You have regarding Our administrative
policies or access to providers.
B. filing a Grievance. You can contact Us by phone at the number
on Your ID card, in person, or in writing to file a Grievance. You
may submit an oral Grievance in connection with a denial of a
Refeffal or a covered benefit determination. We may require that
You sign a written acknowledgement of Your oral Grievance,
prepared by Us. You or Your designee has up to 180 calendar days
from when You received the decision You are asking Us to review
to file the Grievance. When We receive Your Grievance, We will
mail an acknowledgment letter within 15 business days. The
acknowledgment letter will include the name, address, and
telephone number of the person handling Your Grievance, and
indicate what additional information, if any, must be provided.
We have a process for both standard and expedited Grievances,
depending on the nature of Your inquiry....
D. Grievance Appeals. If You are not satisfied with the resolution
of Your Grievance, You or Your designee may file an Appeal by
phone at the number on Your ID card, in person, or in writing. Yott
have up to 60 business days from receipt of the Grievance
determination to file an Appeal. When We receive Your Appeal,
We will mail an acknowledgment letter within 15 business days.
The acknowledgement letter will include the name, address, and
telephone number of the person handling Your Appeal and indicate
what additional information, if any, must be provided.
Def. Empire Br., Ex. A (“Empire Plan”) at 45 (emphases added).
Neither Plaintiff nor Blue Cross Illinois provided the Court with the Blue Cross Illinois Plan
On August 19, 2016, Plaintiff filed a Complaint in the New Jersey Superior Court, Bergen
County. D.E. 1, Ex. A. On October 7, 2016, Defendant Empire removed the matter to this Court,
arguing that Plaintiffs claims were preempted by ERISA. D.E. 1. On May 30, 2017, the Court
dismissed Plaintiffs Complaint without prejudice, with leave to file an amended complaint to
allow Plaintiff to re-plead her claims pursuant to ERISA. D.E. 22.
On July 11,2017, Plaintiff filed an Amended Complaint. D.E. 23. Defendant Empire filed
a motion to dismiss the Amended Complaint on July 25, 2017. D.E. 26. Plaintiff filed opposition
on August 14, 2017, D.E. 29, to which Defendant Empire replied, D.E. 30. On August 11, 2017,
Defendant Blue Cross Illinois filed a motion to dismiss the Amended Complaint
the arguments made by Defendant Empire. D.E. 31. Plaintiff filed opposition on October 13,
2017, D.E. 35, to which Defendant Blue Cross Illinois replied, D.E. 36.
Rule 12(b)(6) permits a motion to dismiss for “failure to state a claim upon which relief
can be granted[.]” For a complaint to survive dismissal under the rule, it must contain sufficient
factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Ad. Corp.
Twomblv, 550 U.S. 544, 570 (2007)). A claim is facially
plausible “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. further, a plaintiff must
“allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her
claims.” Connelly v. Lane Const. Corp., $09 F.3d 780, 789 (3d Cir. 2016).
In evaluating the sufficiency of a complaint, district courts must separate the factual and
legal elements. fovler v. UPMCShadvside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements
of the elements of a claim are legal conclusions, and therefore, not entitled to a presumption of
truth. Burtch v. Mulberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). A court, however, “must
accept all of the complaint’s well-pleaded facts as true.” Fowler, 578 F.3d at 210. Even if
plausibly pled, however, a complaint will not withstand a motion to dismiss if the facts alleged do
not state “a legally cognizable cause of action.” Turner v. IF. Morgan Chase & Co., No. 14-7 14$,
2015 WL 12826480, at *2 (D.N.J. Jan. 23, 2015).
Defendants argue7 that Plaintiff (1) failed to exhaust her administrative remedies as
required under ERISA, and (2) failed to state a claim under
§ 502(a)(1)(B) of ERISA.
a. Exhaustion of Administrative Remedies
ERISA provides that a beneficiary may bring a civil action in federal court to “recover
benefits due to him under the terms of his plan, to enforce his rights under the terms of his plan,
or to clarify his rights to future benefits under the terms of the plan.
§ 11 32(a)(1 )(B).
However, the Third circuit has long held that “[e]xcept in limited circumstances.. a federal court
will not entertain an ERISA claim unless the plaintiff has exhausted the remedies available under
the plan.” Harrow v. Prztdential Ins. Co. of Am., 279 f.3d 244, 249 (3d
Cir. 2002) (citation
omitted). The exhaustion requirement is “a judicial innovation fashioned with an eye toward
‘sound policy.” Metro. Life Ins. Co. v. Price, 501 F.3d 271, 279 (3d Cir. 2007).
The Court finds that Plaintiff has not fully exhausted her administrative remedies with
regard to Empire because the Amended Complaint’s unequivocally states that Plaintiff has two
Blue cross Illinois simply adopted the motion, memorandum of law, and supporting exhibits
filed by Empire. Blue Cross Illinois did, however, submit a reply memorandum that responded
to Plaintiffs opposition that addressed Plaintiffs ERISA argument. See Blue Cross Illinois
pending appeals, filed on December 19 and 28, 2016, with Empire. Such exhaustion is required
under ERISA. Plaintiff contends that appeals are not mandatory under the Empire Plan’s language,
and therefore exhaustion is not required. P1. Empire Opp. at 8. However, it is clear that a Plaintiff
must exhaust all available administrative remedies under ERISA, regardless of whether they are
optional under the plan document language. See, e.g., Harrow, 279 F.3d at 249 (noting that a
federal court will not hear an ERISA claim until the plaintiff exhausts “the remedies available
itnder the plan.” (emphasis added)); Metro. Life his. Co., 501 F.3d at 280 (“[O]ur cases hold that
persons claiming plan benefits must generally exhaust their administrative remedies before
seeking judicial relief” (emphasis added) (internal quotation omitted)).
Additionally, in her
Amended Complaint, Plaintiff admits that “[u]nder the terms of the Defendants’ health insurance
plans, an adverse payment decision required [Plaintiff] to appeal from reductions or refusals within
180 days of the date of the adverse notice.” Id.
¶ 42. Accordingly, the Court finds that Plaintiff is
required to exhaust the administrative remedies available to her and has not plausibly pled that she
has exhausted such remedies; the Amended Complaint admits the opposite.
Alternatively, Plaintiff argues that any failure to exhaust available administrative remedies
should be excused because further participation in the Empire appeals process would be futile. P1.
Empire Opp. at 8-9. “A plaintiff is excused from exhausting administrative procedures under
ERISA if it would be futile to do so.” Harrow, 279 F.3d at 249 (citation omitted). The Harrow
court identified five factors to determine whether to excuse exhaustion based on futility:
(1) whether plaintiff diligently pursued administrative relief;
(2) whether plaintiff acted reasonably in seeking immediate judicial
review under the circumstances;
(3) existence of a fixed policy denying benefits;
(4) failure of the insurance company to comply with its own internal
administrative procedures; and
(5) testimony of plan administrators that any administrative appeal
Id. at 250.
Plaintiff has not plausibly pled futility. Plaintiff cites to DeVito v. Aetna, Inc., 536 F. Supp.
2d 523 (D.N.J. 200$) to support her futility argument. In Dc Vito, Judge Hochberg denied a motion
to dismiss, finding that it would be futile to exhaust administrative remedies However, the facts
alleged in DeVito were much more detailed and substantively different than the alleged facts in
this case. The Dc Vito court found further administrative appeals would be futile because the
beneficiaries’ medical claims were based on eating disorders and the insurance provider had a
policy of denying such claims. Id. at 531..533. By, comparison the Amended Complaint does not
allege that Empire or Blue Cross Illinois has a blanket policy denying her type of claims. Instead,
Plaintiff simply cites Dc Vito and then lists the Harrow factors without any further analysis. It is
clear that Plaintiff has not sufficiently alleged the “clear and positive showing of futility” required
by Harrow. 279 F.3d at 249. For these reasons, as to Empire, the Court finds that Plaintiff has
not sufficiently alleged exhaustion her administrative remedies or that continuing the appeals
process would be futile. Therefore, Defendant Empire’s motion to dismiss (D.E. 26) is granted.
Blue Cross Illinois also moves to dismiss on exhaustion ground, but merely adopts
Empire’s arguments. However, without the Blue Cross Illinois Plan documents, the Court has no
indication that Blue Cross Illinois has administrative remedies which Plaintiff failed to plausibly
address in the Amended Complaint.
Accordingly, Defendant Blue Cross Illinois’ motion to
dismiss (D.E. 31) on this basis is denied. Nevertheless, because the Court is providing Plaintiff
with an opportunity to amend her Amended Complaint, she should address the administrative
exhaustion issue (if it is in fact an issue) as to Blue Cross Illinois in her Second Amended
Complaint to avoid additional motion practice on the issue.
b. Failure to State a Claim
Plaintiff states that she brings her action against Defendants “pursuant to §502(a)(l)(B) of
the Employment Retirement Income Security Act [“ERISA].”
Am. Compi. at 1.
essentially claims that both Defendants failed to pay for her healthcare services because the
Defendants claim they were “out of network.” Am. Compi. at ¶ 31, 54-55.
ERISA governs the rights and obligations of beneficiaries of and participants in employee
benefit plans. ERISA section 502(a)(1 )(B) allows a beneficiary or participant to bring a civil action
to recover benefits due to her under a plan. Section 502(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.
§ 1132(a) (l)(B). “Section 502(a)(l)(B) deals exclusively with contractual rights under
the plan.” Varity Corp. v. Howe, 516 U.S. 489, 521 n.2 (1996).
The Court finds that Plaintiffs Amended Complaint fails to plausibly state a claim for
denial of benefits under Section 502(a)(l)(B). Plaintiff fails to plausibly plead which portions of
either the Empire Plan or the Blue Cross Illinois Plan have been violated. Plaintiff also fails to
specify which of the two plans actually entitled her to services (and to what type of services) at the
time of her treatment. Plaintiff further fails to identify which medical services and costs are at
issue and when these services were rendered. In fact, it is not clear that Plaintiff is even alleging
that a specific plan is responsible for the costs of her treatment (other than saying that Defendants
are jointly and severally liable). In sum, Plaintiff is responsible for plausibly alleging why, under
either or both of the plans, Defendants are liable. See, e.g., McDonoztgh v. Horizon Bhte Cross
B/tie Shield of New Jersey, Inc., No. 09-571, 2009 WL 3242136, at *2.4 (D.N.J. Oct. 7, 2009)
(dismissing claim under Section 502(a)(l)(B) when plaintiff provided only “sheer conclusions
without a plausible factual predicate”). To be sure, Plaintiff adequately sets forth the date of her
injuries and the general dates of hospitalization and rehabilitation. Yet, as to which actual portions
of the plans were violated, when they were violated, or how they were violated, Plaintiff fails to
provide plausible factual allegations.
As far as Plaintiffs claims against Blue Cross Illinois, Plaintiff also contends her claims
be dismissed because there is no allegation in the Amended Complaint that the Blue
Cross Illinois Plan is an ERISA plan. The Court sees no support for this argument. In fact, the
Amended Complaint explicitly states in its first sentence that “[t]his is an action to demand benefits
from Plaintiffs health insurance plan and providers pursuant to §502(a) (1) (3) of[ERISA].” Am.
Cornpl. at 1 (emphasis added). Plaintiffs Amended Complaint also states that the insurance
coverage from Blue Cross Illinois was provided pursuant to “an employee group health plan” from
her former employer, Sitex. Id. at
¶ 11. Notwithstanding exceptions that do not appear to apply
in this case, ERISA governs “any employee benefit plan maintained.
in commerce or in any industry or activity affecting commerce.
by any employer engaged
§ 1003(a)(1). The
Amended Complaint can only be reasonably construed as asserting a claim pursuant to ERISA.
Accordingly, the Court finds that Plaintiff fails to plausibly plead a claim under Section
For the reasons stated above, the motions to dismiss filed by Defendants Empire (D.E. 26)
and Blue Cross Illinois’ (D.E. 31) are GRANTED.
Plaintiffs claims are dismissed without
prejudice to allow Plaintiff an opportunity to file a Second Amended Complaint. Plaintiff has
thirty (30) days to file a Second Amended Complaint, if she so chooses, consistent with this
Opinion. If Plaintiff fails to file a Second Amended Complaint, this matter will be dismissed with
Defendant Empire’s motion for leave to file supplemental authority (D.E. 37) is
dismissed as moot. An appropriate Order accompanies this opinion.
Dated: April 12, 2018
John Michael VazqueU.D.J.
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