MBody Minimally Invasive Surgery, P.C. et al v. Empire HealthChoice HMO, Inc. et al

Filing 35

OPINION re: 21 MOTION for Reconsideration (Partial Reconsideration of the Court's August 15, 2014 Order). filed by Empire HealthChoice HMO, Inc., Community Insurance Company, Anthem Health Plans of Virginia, Inc., Empir e Health Choice Assurance Inc. For the following reasons, defendants' motion for partial reconsideration of this court's order dated August 15, 2014 is denied. This opinion resolves the item listed as document number 21 in this case. SO ORDERED. (Signed by Judge Thomas P. Griesa on 2/25/2015) (ajs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

--------------------------------------------X
MBODY MINIMALLY INVASIVE
SURGERY, P.C., et al.,
Plain tiffs,
-against-

13-CV-06551 (TPG)
OPINION

EMPIRE HEALTHCHOICE HMO, INC. et
al.,
Defendants.

--------------------------------------------X
Defendants 1 move for partial reconsideration of this court's order
denying their motion to dismiss plaintiffs' claim under Section 502(a)(1)(B)
of the Employee Retirement Income Security Act of 1974 ("ERISA").
Defendants argue that the court overlooked language in the health plans
at issue in this case meriting dismissal of the§ 502(a)(1)(B) claim. For the
following reasons, defendants' motion for reconsideration is denied.
Background
Plaintiffs are medical professionals offering bariatric surgery to help
obese individuals lose weight. In 2013, plaintiffs sued defendant health
insurance companies alleging they withheld or reduced payment for
treatment provided to patients enrolled in defendants' health insurance

1

The term defendants, used herein, does not include Blue Cross & Blue Shield of
Massachusetts, which has been dismissed from the case.

plans. The complaint contained nine counts alleging violations of various
sections of ERISA and state law. In an opinion dated August 15, 2014, this
court dismissed most of plaintiffs' claims. However, the court allowed some
of plaintiffs' claims to go forward, including a claim under Section
502(a)(1)(B) of ERISA. Defendants move for partial reconsideration of the
court's decision, arguing that the court overlooked language in the health
plan documents meriting dismissal of the§ 502(a)(1)(B) claim.
Discussion
The Local Civil Rules of this court provide that a party may seek
reconsideration of an order upon "setting forth concisely the matters or
controlling decisions which counsel believes the Court has overlooked."
S.D.N.Y. R. 6.3. There is a strict standard governing such motions.
Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir.

1995).

"Reconsideration will generally be denied unless the moving party can
point to controlling decisions or data that the court overlooked-matters,
in other words, that might reasonably be expected to alter the conclusion
reached by the court." Id. The court may grant the motion to "correct a
clear error of law or prevent manifest injustice." Munafo v. Metro. Transp.
Auth., 381 F.3d 99, 105 (2d Cir. 2004). However, the court will deny the
motion where the movant "seeks solely to relitigate an issue already
decided. Shrader, 70 F.3d at 257.
The issue here is whether defendants are "plan administrators."
ERISA Section 502 empowers participants and beneficiaries to bring a civil

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action to recover benefits due under the terms of a benefits plan. See 29
U.S.C.A. § 1132(a)(l)(B). However, the Second Circuit has determined that
such claims may only be brought against the plan, the plan administrator,
or plan trustee. See Crocco v. Xerox Corp., 137 F.3d 105, 107 (2d Cir.
1998). ERISA defines the "administrator" as: "(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). In light of this
statutory language, the Second Circuit has directed that "if a plan specifies
a

plan administrator,

then that individual or entity is

the plan

administrator for purposes of ERISA." Crocco, 137 F.3d at 107 (emphasis
in original) (quoting McKinsey v. Sentry Insurance, 986 F.2d 401 (lOth Cir.
1993)).
Defendants argue that the court, in allowing plaintiffs' Section
502(a)(l)(B) claim to proceed, overlooked clear language in the health plan
documents establishing that defendants are not the "plan" or "plan
administrators." Mem. L. Supp. Mot. Part. Reconsideration at 4-5. To
support this argument, defendants have provided excerpts from six health
plan brochures purportedly designating entities other than defendants as
the plan administrators. See Dkt. # 23, Exs. B-G. Some of these
documents do, indeed, name entities other than defendants as the plan

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administrator. For example, the brochure for Verizon Medical Expense
Plan for New York and New England Associates defines the plan
administrator as "Verizon," an entity which is not a defendant in this case.
See, e,g., Dkt. # 23, Ex. C, at 112. However, the brochures for other plans
are less straightforward. The brochure for Albany International Corp.'s
health plan, for example, names the plan administrator as "the Plan
Administrative

Committee"

without

g1vmg

any

indication

of

the

composition of this committee. See Dkt. # 23, Ex. B, at 13.
The court was fully aware of and familiar with these documents in
rendering its opinion denying dismissal with regard to the § 502(a)(1)(B)
claim. The court was not then, and is not now, satisfied that all the health
plan documents name entities other than the defendants as health plan
administrators. Even for those that appear to do so, it is impossible to
discern from the materials provided which health plan documents
correspond to which defendants, purportedly immunizing them from §
502(a)(1)(B) claims. And, as discussed, some of the health plan documents
do not, in fact, name entities other than defendants as the plan
administrator.
Defendants argue that controlling authority in this circuit rejects
the concept of a "de factd' plan administrator, or one that is not expressly
named in the health plan documents. See Rep. Mem. L. Further Supp.
Mot. Part. Recons. at 2 (citing Crocco v. Xerox Corp., 137 F.3d 105, 107
and Lee v. Burhkart, 991 F.2d 1004, 1010 n.5 (2d Cir. 1993)). However, a

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number of courts, including courts in this jurisdiction, have treated
insurance companies as plan administrators if they "control[] the
distribution of funds and decide[] whether or not to grant benefits under
an employee benefit plan." See, e.g., Sheehan v. Metro. Life Ins. Co., No.
01-CV-9182 (CSH), 2002 WL 1424592, at *2 (S.D.N.Y. June 28, 2002). In
any event, defendants' argument misconstrues this court's decision. This
court did not reach the question of whether plaintiffs may maintain a
§ 502(a)(1)(B) claim against de facto plan administrators. Rather, the court
held that plaintiffs had plausibly alleged that defendants are plan
administrators themselves, noting "plaintiffs ... do allege [they] are the
plan administrators in other sections of the complaint." See Opinion of
Aug. 15, 2014, at 7-8 (citing Compl.

~56).

Defendants have failed to raise any new information warranting
partial reconsideration of this court's order. To the extent defendants wish
to reargue that they are not plan administrators, they will have ample
opportunity to do so at later stages of the litigation where the plaintiffs'
burden will be higher. To the extent defendants argue that plaintiffs
cannot

maintain

a

§502(a)(1)(B)

claim

against

de

facto

plan

administrators, that argument misconstrues the grounds for this court's
holding. In short, defendants have not provided information meriting
alteration of this court's decision.

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Conclusion
For

the

following

reasons,

defendants'

motion

for

partial

reconsideration of this court's order dated August 15, 2014 is denied.
This opinion resolves the item listed as document number 21 in this
case.
SO ORDERED.

Dated: New York, New York
February 25, 2015

Thomas P. Griesa
U.S. District Judge

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