DR. BRIAN M. TORPEY, M.D., F.A.C.S. v. BLUE CROSS BLUE SHIELD OF TEXAS et al
OPINION filed. Signed by Judge Joel A. Pisano on 1/30/2014. (eaj)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BLUE CROSS BLUE SHIELD OF TEXAS, et al., :
DR. BRIAN M. TORPEY, M.D., F.A.C.S.,
Civil Action No. 12-cv-7618 (JAP)
PISANO, District Judge
This matter comes before the Court by way of Defendants Blue Cross Blue Shield of
Texas and Oceaneering International, Inc.,’s Joint Motion to Dismiss Plaintiff’s Complaint
[docket # 10] pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth
below, the motion to dismiss is GRANTED and Plaintiff’s Complaint is DISMISSED.
For the purposes of the instant motion to dismiss, the following factual allegations
asserted in the Complaint will be accepted as true and viewed in a light most favorable to
Plaintiff. Brian M. Torpey (“Plaintiff”) is an orthopedic surgeon licensed and currently practicing
in New Jersey. On May 9, 2011, Plaintiff performed knee surgery on Patient B.H. (the
“Patient”). At the time of the surgery, Patient was insured under a health insurance plan policy,
(the “Plan”) between defendants Oceaneering International, Inc., the Plan Sponsor, and Blue
Cross Blue Shield of Texas (“BCBSTX”), the insurer (collectively “Defendants”). 1 The Plan
contains an anti-assignment clause which states that “[r]ights and benefits under the Plan shall
not be assignable, either before or after services and supplies are provided.” Brief, Exhibit A at
Plaintiff is a “non-participating provider” and “did not have a contract with [BCBSTX] to
accept agreed upon rates for services provided to the Patient.” Compl. ¶ 5. The services provided
by Plaintiff to B.H. were “out of network” and not covered by the Plan. Id. Plaintiff contends that
prior to performing the surgery, he contacted BCBCTX “to confirm that that the Patient had outof-network benefits for the services that were to be provided.” Id. at ¶ 6.
According to Plaintiff, prior to performing the surgery, B.H. executed a “Designation of
Authorized Representative” (the “DAR”), which “provides that [Plaintiff] may receive all the
benefits of Patient’s policy,” and an “Assignment of Benefits” (the “Assignment”), which
“expressly authorized [Plaintiff] to represent the Patient B.H. in appeals to the Defendants.” 2 Id.
at ¶ 10-11.
After performing the surgery, Plaintiff filed a claim in the amount of $27,721.00 seeking
payment from BCBSTX for the procedure performed on the Patient. According to Plaintiff,
because BCBSTX is based in Texas, he was directed to file all correspondence through Horizon
Blue Cross Blue Shield of New Jersey (“BCBSNJ”), which is an entity separate from BCBSTX.3
On or about June 15, 2011, BCBSTX made a payment to the Patient in the amount of $1,732.98,
which was given to Plaintiff in accordance with the Assignment.
Defendant Oceaneering International, Inc. is the employer of the policy holder, C.L., and B.H. is a beneficiary of
The Complaint does not provide the language or specifics of either document.
The Plan makes no reference to BCBSNJ and states that medical claims should be submitted to “Blue Cross Blue
Shield of Texas, Claims Division . . . Dallas, TX.” Brief, Exhibit A at 26.
On September 27, 2011, Plaintiff filed a “First Level Appeal” with BCBSNJ as B.H.’s
“Authorized Representative” contesting the amount paid for the claim and requesting “all
documentation Defendant used in making its compensation decisions.”4 Compl. ¶ 16. Plaintiff’s
appeal of the claim was denied on October 22, 2011. On November 14, 2011, Plaintiff filed an
addendum to his original appeal with BCBSNJ and again requested the information relied upon
in denying the appeal. On January 18, 2012, Plaintiff filed a “Second Level Appeal,” which was
denied on February 16, 2012.
The Complaint was filed on December 12, 2012 by Plaintiff “as designated authorized
representative of B.H., Insured C.L. and Patient B.H.,”5 and alleges claims against Defendants
for statutory penalties under ERISA section 502(a)(1)(A), 29 U.S.C. § 1132(a)(1)(A), and for the
payment of benefits from an employee benefit plan under ERISA section 502(a)(1)(B), 29
U.S.C. § 1132(a)(1)(B).
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in
whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. In
deciding a motion to dismiss under Rule 12(b)(6), a court must “accept as true all of the
allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view
them in the light most favorable to the plaintiff.” Morse v. Lower Merion Sch. Dist., 132 F.3d
902, 906 (3d Cir. 1997). The factual allegations in the complaint must be sufficient to raise a
plaintiff’s right to relief above a speculative level, such that it is “plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007). In deciding a motion to dismiss under Rule
BCBSNJ is not a party to this suit.
Although Plaintiff purports to bring these claims as the “authorized representative” of B.H. and C.L., Plaintiff
Brian M. Torpey is the only Plaintiff in the present action, and the Court makes no judgment as to the merits of
B.H.’s or C.L.’s potential claims.
12(6)(6), the court may consider the allegations in the complaint, exhibits attached to the
complaint, matters of public record, and documents that form the basis of the plaintiff’s claim.
Lum. v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004).
Plaintiff’s legal challenge to the denial of health benefits under the ERISA-governed Plan
is brought pursuant to ERISA § 502 “which provides an exclusive federal cause of action for
resolution of such disputes.” Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 62-63 (1987).
ERISA contains a broad preemption clause providing that ERISA shall “supersede any and all
State laws insofar as they may no or hereafter relate to any employee benefit plan.” 29 U.S.C. §
1144(a); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44-45 (1987). Under ERISA section
502(a), “[a] civil action may be brought . . . by a participant or beneficiary (A) for the relief
provided for in [ERISA section 502(c)], or (B) 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.” 29 U.S.C. § 1132(a)(1).
A. Plaintiff’s Standing
Defendant contends that Plaintiff does not have standing to bring this case because under
the terms of the Plan, the plan participant or beneficiary may not assign their benefits or rights
under the Plan. Specifically, the Plan contains an anti-assignment clause which states that
“[r]ights and benefits under the Plan shall not be assignable, either before or after services and
supplies are provided.” Brief, Exhibit A at 61. Defendant argues that the anti-assignment
provision in the Plan is enforceable and bars a participant or beneficiary from assigning their
right to payment of medical benefits to a provider. Plaintiff does not contest the validity of the
anti-assignment clause, but contends that the anti-assignment clause does not prohibit the
assignment of a cause of action to recover benefits under the Plan to the provider.
i. The Anti-Assignment Clause in the Plan is Enforceable
Although the Third Circuit has not specifically addressed the enforceability of antiassignment clauses in ERISA-governed plans, many other circuits have considered the issue and
held that where a plan contains an anti-assignment provision, the provision is enforceable and the
assignment is ineffectual. See, e.g., Physicians Multispeciality Grp. v. Health Care Plan of
Horton Homes, Inc., 371 F.3d 1291, 1294-96 (11th Cir. 2004) (“Because ERISA-governed plans
are contracts, the parties are free to bargain for certain provisions in the plan—like assignability.
Thus, an unambiguous anti-assignment provision in an ERISA-governed welfare benefit plan is
valid and enforceable.”); City of Hope Nat’l Med. Ctr. v. HealthPlus, Inc., 156 F.3d 223, 229 (1st
Cir. 1998) (“Consistent with the other circuits which have addressed this issue, we hold that
ERISA leaves the assignability or non-assignability of health care benefits under ERISAregulated welfare plans to the negotiations of the contracting parties.”); St. Francis Reg’l Med.
Ctr. v. Blue Cross & Blue Shield of Kan., Inc., 49 F.3d 1460, 1464-65 (10th Cir. 1995)
(“ERISA’s silence on the issue of assignability of insurance benefits leaves the matter to the
agreement of the contracting parties.”); Davidowitz v. Delta Dental Plan of Cal., Inc., 946 F.2d
1476, 1478 (9th Cir. 1991) (“As a general rule of law, where the parties’ intent is clear, courts
will enforce non-assignment provisions.”); Washington Hosp. Ctr. Corp. v. Grp. Hospitalization
& Med. Servs., Inc., 758 F. Supp. 750, 755 (D.D.C. 1991) (holding that an anti-assignment
provision was valid and enforceable after concluding that enforcement of the provision was not
contrary to public policy.).
The anti-assignment provision in the Plan is unambiguous and closely resembles the
language of the anti-assignment clauses in the plans at issue in the cases before other district
courts and appeals courts that have held that where a plan contains an anti-assignment clause, the
health care provider lacked standing because the alleged assignments were invalid. Accordingly,
the Court finds that the anti-assignment clause in the Plan is unambiguous and in enforceable.
Therefore, any purported assignments of rights or benefits under the Plan to Plaintiff are void.
ii. Plaintiff Lacks Standing Under ERISA Section 502(a)
Under ERISA’s civil enforcement provision, only participants and beneficiaries have
standing to bring a lawsuit. See 19 U.S.C. § 1132(a)(1); Pascack Valley Hosp. Inc. v. Local 464A
UFCW Welfare Reimbursement Plan, 388 F.3d 393, 400 (3d Cir. 2004). A “participant” is “any
employee or former employee of an employer, or any member or former member of an employee
organization, who is or may become eligible to receive a benefit of any type from an employee
benefit plan which covers employees of such employer or members of such organization, or
whose beneficiaries may be eligible to receive any such benefit.” 29 U.S.C. § 1002(7). A
“beneficiary” is “a person designated by a participant, or by the terms of an employee benefit
plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8).
There is no dispute that Plaintiff does not qualify as a participant or beneficiary under the
Plan. Instead, Plaintiff argues that he stands in the shoes of B.H., a beneficiary of the Plan,
because of the Assignment and DAR allegedly executed by B.H. prior to the surgery. Plaintiff
contends that although the Plan contains a valid anti-assignment clause, he has standing to assert
the present claims because the anti-assignment clause only prohibits the assignment of “rights
under a contract,” and does not affect “that same party’s ability to assign causes of action arising
from the breach of that contract.”
“As a general rule of law, where the parties’ intent is clear, courts will enforce nonassignment provisions.” Davidowitz, 946 F.2d at 1478. When interpreting the provisions of an
ERISA plan, federal courts must employ the traditional canons of interpretation. See LeTourneau
Lifelike Orthotics & Prosthetics, Inc. v. Wal-Mart Stores, Inc., 298 F.3d 348, 352 (5th Cir.
2002). Applying ordinary principles of contract interpretation, the Court finds that the plain
language of the Plan’s anti-assignment clause prohibiting the assignment of “[r]ights and benefits
under the Plan” encompasses the right of a participant or beneficiary to seek reimbursement for
benefits allegedly due under the Plan.
According to Plaintiff, the Plan “provides that a plan beneficiary has the unfettered right
to choose anyone it wants, even Dr. Torpey, to stand in the shoes of the insured and act on their
behalf as their authorized representative.” Opposition at 1. The terms of the Plan allow a
participant or beneficiary to “designate a representative to act [on their behalf] in the review
procedure” in the event that a claim is denied. Brief, Exhibit A at 23. However, the designation
of an “authorized representative” under the Plan applies to the administrative claims review
process and does not confer standing to bring a civil action.
While Plaintiff attempts to distinguish between the assignment of rights and benefits and
the assignment of causes of action, the benefits provided under a healthcare plan include the right
to bring an action to recover such benefits. See St. Francis, 49 F.3d at 1467 n.10. The antiassignment clause voids any purported assignment of rights or benefits under the plan, and
without valid rights or benefits under the Plan, Plaintiff does not have standing to bring an action
to recover such benefits.
Furthermore, Plaintiff’s description of the Assignment and DAR, neither of which have
been provided to the Court, makes no reference to the purported distinction between an
assignment of rights and an assignment of a cause of action. According to Plaintiff, the
Assignment “expressly authorized [Plaintiff] to represent the Patient B.H. in appeals to the
Defendants,” which is allowed under the Plan and not contested by Defendants, and the DAR
“provides that [Plaintiff] may receive all the benefits of Patient’s policy,” which is clearly voided
by the unambiguous statement in in the anti-assignment clause that “[r]ights and benefits under
the Plan shall not be assignable.”
Therefore, because the assignment of rights and benefits under the Plan is precluded by
the unambiguous anti-assignment clause, the Court finds that Plaintiff lacks derivative standing
to sue Defendants under ERISA § 502 and does not possess a valid cause of action to recover
benefits under the Plan. Accordingly, Plaintiff’s Complaint is dismissed for lack of standing.
B. Plaintiff Fails to State a Claim Under ERISA Section 502(a)(1)(A)
Under ERISA § 502(c)(1)(B), “[a]ny administrator who fails or refuses to comply with a
request for any information . . . may in the court’s discretion, be personally liable . . . in the
amount of $100 a day from the date of such failure or refusal.”6 29 U.S.C. § 1132(c)(1)(B). To
state a claim for relief for a violation of ERISA § 502(c)(1)(B), a plaintiff must allege “(1) that
he is a participant or beneficiary; (2) that he has made a written request to a plan administrator
for information that falls within the purview of ERISA’s disclosure requirements; and (3) that the
plan administrator failed to provide the requested documents within thirty days of the written
request.” Wargotz v. NetJets, Inc., 2010 WL 1931247, at *3 (D.N.J. May 13, 2010).
Even assuming, arguendo, that Plaintiff had standing in this matter, his claims for relief
under ERISA § 502(c)(1)(B) would be dismissed based on his failure to submit a written request
As defined in the statute, the “administrator” is: “(i) the person specifically so designated by the terms of the
instrument under which the plan is operated; (ii) if an administrator is not so designated, the plan sponsor; or (iii) in
the case of a plan for which an administrator is not designated and a plan sponsor cannot be identified, such other
person as the Secretary may by regulation prescribe.” 29 U.S.C. § 1002(16)(A).
for plan documents to the Plan Administrator. According to Plaintiff, his letters appealing the
amount of the claim and requesting documents relating to the Plan were submitted to Horizon
Blue Card Appeals in Neptune, New Jersey. However, the Plan clearly identifies the Plan
Administrator as the “Benefits Committee, Oceaneering International, Inc.,” and lists an address
in Houston, Texas. Brief, Exhibit A at 82. A claim under ERISA § 502(c)(1) “requires actual
receipt by the administrator” of the request for plan documents. Romero v. SmithKline Beecham,
309 F.3d 113, 119 (3d Cir. 2002). In Plaintiff’s Opposition, he concedes that the “written
demand for documents was made only to Defendant Blue Cross Blue Shield of Texas who is
according to the plan documents, not the plan administrator.”7 Opposition at 8, n.1. Thus,
because Plaintiff’s requests for plan documents were not submitted to or received by the Plan
Administrator, Plaintiff cannot demonstrate a claim for relief under ERISA § 1132(c)(1)(B).
For the foregoing reasons, Defendants’ Joint Motion to Dismiss [docket #10] is
GRANTED and Plaintiff’s Complaint is DISMISSED. An appropriate Order accompanies this
Date: January 30, 2014
/s/ Joel A. Pisano
JOEL A. PISANO
United States District Judge
The Court notes the inconsistencies between the Complaint and the Opposition in identifying where Plaintiff’s
appeals and requests for information were sent. Although it is unclear where Plaintiff’s written requests were sent,
Plaintiff concedes that they were not sent to or received by the designated Plan Administrator.
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