Weiner v. Blue Cross and Blue Shield of Lousiana
Filing
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MEMORANDUM OPINION AND ORDER: Defendant's Motion for Summary Judgment [Dkt. No. 54 ] is GRANTED. The case will proceed on BCBSLA's counterclaims against Dr. Weiner. See Dkt. No. 23 , 42 . The Court directs BCBSLA to file a status report regarding its counterclaims against Dr. Weiner by August 31, 2018. (Ordered by Magistrate Judge David L. Horan on 8/17/2018) (mcrd)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
RICHARD HENRY WEINER,
Plaintiff,
V.
BLUE CROSS AND BLUE SHIELD
OF LOUISIANA,
Defendant.
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No. 3:17-cv-949-BN
MEMORANDUM OPINION AND ORDER
Defendant Blue Cross and Blue Shield of Louisiana (“BCBSLA”) has filed a
motion for summary judgment. See Dkt. No. 54. Plaintiff Richard H. Weiner, DPM PA
(“Dr. Weiner”) has filed a response, see Dkt. No. 55, BCBSLA filed a reply, see Dkt. No.
56, Dr. Weiner filed a sur-reply, see Dkt. No. 57, and BCBSLA filed a sur-reply, see
Dkt. No. 57.
For the following reasons, the motion for summary judgment is GRANTED.
Background
Dr. Weiner is a healthcare provider who participates in the Blue Cross and Blue
Shield of Texas (“BCBSTX”) provider network, treating patients who are participants
and beneficiaries under health benefit plans administered by BCBSTX. Defendant Blue
Cross and Blue Shield of Louisiana’s (“BCBSLA”) insureds have access to BCBSTX’s
provider network for services.
Dr. Weiner treated a patient who was insured by BCBSLA under an Employee
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Health Benefit Plan (the “Plan”) established and maintained for the patient’s
employer. The Plan vests BCBSLA with full discretionary authority to determine
eligibility for benefits and/or to construe the terms of the Plan.
At the time of treatment, Dr. Weiner obtained an assignment of benefits from
the patient, allowing Dr. Weiner to bill BCBSLA directly for payment of services. The
Plan contains an anti-assignment provision prohibiting assignment of benefits to a
third-party provider. Specifically, the Plan states:
The Member’s rights and Benefits payable under this Benefit Plan are
personal to the Member and may not be assigned in whole or in part by
the Member.
Dkt. No. 40 at 107 (App._102).
Dr. Weiner treated the patient and submitted a claim to BCBSLA. BCBSLA
initially denied the claim, indicating that the Plan excluded the treatment. Dr. Weiner
appealed, and BCBSLA paid the claim. BCBSLA later determined that the claim had
been paid in error and sought a refund from Dr. Weiner. Dr. Weiner appealed the
refund request. BCBSLA denied the appeal, and Dr. Weiner asked BCBSLA to review
the claim. In the meantime, BCBSLA recouped the money from a subsequent payment
to Dr. Weiner for treatment of a different patient.
Representing himself pro se, Dr. Weiner filed suit in the small claims court of
Dallas County, Texas against BCBSLA for “theft of money involving recoupment for
medical services.” Dkt. No. 1-2 at 6.
BCBSLA removed the case to this Court on the basis of federal question
jurisdiction. See Dkt. No. 1.
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Dr. Weiner then filed an unverified amended complaint alleging that BCBSLA’s
recoupment violated ERISA. See Dkt. No. 8. The Court, on its own motion and after
considering submissions from the parties, determined that the Court has subject
matter jurisdiction because Dr. Weiner’s claim to recover payments allegedly owed to
him under the Plan is dependent on his status as an assignee of a Plan enrollee’s
benefits and relates to an ERISA plan and so is preempted. See Dkt. No. 33.
BCBSLA moves for summary judgment on Dr. Weiner’s claims. See Dkt. No. 54.
BCBSLA contends that there are no issues of material fact concerning either Dr.
Weiner’s lack of authority to sue BCBSLA for improper recoupment or BCBSLA’s
discretion in denying Dr. Weiner’s claim. BCBSLA argues that Dr. Weiner has no right
to sue BCBSLA for the claims brought in this lawsuit because (1) the health benefit
plan at issue specifically prohibits an assignment of benefits and (2) the patient does
not possess the right to sue for recouped funds. BCBSLA also argues that it did not
abuse its discretion under the Plan when it denied the Dr. Weiner’s claim because the
claims are excluded from coverage under the Plan and Dr. Weiner was so informed
when he sought preapproval for the procedure.
Summary Judgment Evidence
BCBSLA’s motion for summary judgment is supported by the same evidence
that it submitted in opposition to Dr. Weiner’s motion for summary judgment. See id.
at 6 (incorporating by reference Plaintiff’s Appendix in Support of Defendant’s
Response to Plaintiff’s Motion for Summary Judgment [Dkt. No. 40]).
Likewise, Dr. Weiner attaches the same evidence in the same non-admissible
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form to his sur-reply that he attached to his motion for summary judgment. See Dkt.
Nos. 12, 57. And BCBSLA raises the same objections to that evidence that it raised
before.
For the reasons stated in the Court’s Memorandum Opinion and Order denying
Dr. Weiner’s motion for summary judgment, the Court cannot consider the documents
attached to Dr. Weiner’s sur-reply as summary judgment evidence. See Dkt. No. 48 at
7.
Legal Standards
Under Federal Rule of Civil Procedure 56, summary judgment is proper “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.” FED. R. CIV. P. 56(a). A factual “issue is
material if its resolution could affect the outcome of the action.” Weeks Marine, Inc. v.
Fireman’s Fund Ins. Co., 340 F.3d 233, 235 (5th Cir. 2003). “A factual dispute is
‘genuine,’ if the evidence is such that a reasonable [trier of fact] could return a verdict
for the nonmoving party.” Crowe v. Henry, 115 F.3d 294, 296 (5th Cir. 1997).
If the moving party seeks summary judgment as to his opponent’s claims or
defenses, “[t]he moving party bears the initial burden of identifying those portions of
the pleadings and discovery in the record that it believes demonstrate the absence of
a genuine issue of material fact, but is not required to negate elements of the
nonmoving party’s case.” Lynch Props., Inc. v. Potomac Ins. Co., 140 F.3d 622, 625 (5th
Cir. 1998). “Summary judgment must be granted against a party who fails to make a
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showing sufficient to establish the existence of an element essential to that party’s
case, and on which it will bear the burden of proof at trial. If the moving party fails to
meet this initial burden, the motion must be denied, regardless of the nonmovant's
response.” Pioneer Expl., L.L.C. v. Steadfast Ins. Co., 767 F.3d 503, 511 (5th Cir. 2014)
(internal quotation marks and footnote omitted).
“Once the moving party meets this burden, the nonmoving party must set forth”
– and submit evidence of – “specific facts showing a genuine issue for trial and not rest
upon the allegations or denials contained in its pleadings.” Lynch Props., 140 F.3d at
625; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); accord
Pioneer Expl., 767 F.3d at 511 (“[T]he nonmovant cannot rely on the allegations in the
pleadings alone” but rather “must go beyond the pleadings and designate specific facts
showing that there is a genuine issue for trial.” (internal quotation marks and
footnotes omitted)).
The Court is required to consider all evidence and view all facts and draw all
reasonable inferences in the light most favorable to the nonmoving party and resolve
all disputed factual controversies in favor of the nonmoving party – but only if the
summary judgment evidence shows that an actual controversy exists. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Pioneer Expl., 767 F.3d at 511;
Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005); Lynch Props.,
140 F.3d at 625. “The evidence of the nonmovant is to be believed, and all justifiable
inferences are to be drawn in [her] favor. While the court must disregard evidence
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favorable to the moving party that the jury is not required to believe, it gives credence
to evidence supporting the moving party that is uncontradicted and unimpeached if
that evidence comes from disinterested witnesses.” Porter v. Houma Terrebonne Hous.
Auth. Bd. of Comm’rs, 810 F.3d 940, 942-43 (5th Cir. 2015) (internal quotation marks
and footnotes omitted). And “[u]nsubstantiated assertions, improbable inferences, and
unsupported speculation are not sufficient to defeat a motion for summary judgment,”
Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003), and neither will “only a
scintilla of evidence” meet the nonmovant’s burden, Little, 37 F.3d at 1075; accord
Pioneer Expl., 767 F.3d at 511 (“Conclusional allegations and denials, speculation,
improbable inferences, unsubstantiated assertions, and legalistic argumentation do not
adequately substitute for specific facts showing a genuine issue for trial.” (internal
quotation marks and footnote omitted)).
Rather, the non-moving party must “set forth specific facts showing the
existence of a ‘genuine’ issue concerning every essential component of its case.” Morris
v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). And “[o]nly
disputes over facts that might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment.” Pioneer Expl., 767 F.3d at 511
(internal quotation marks and footnote omitted).
“After the nonmovant has been given an opportunity to raise a genuine factual
issue, if no reasonable juror could find for the nonmovant, summary judgment will be
granted.” DIRECTV, Inc. v. Minor, 420 F.3d 546, 549 (5th Cir. 2005) (footnote and
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internal quotation marks omitted).
The Court will not assume “in the absence of any proof ... that the nonmoving
party could or would prove the necessary facts” and will grant summary judgment “in
any case where critical evidence is so weak or tenuous on an essential fact that it could
not support a judgment in favor of the nonmovant.” Little, 37 F.3d at 1075. “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,” and “[a] failure on the
part of the nonmoving party to offer proof concerning an essential element of its case
necessarily renders all other facts immaterial and mandates a finding that no genuine
issue of fact exists.” Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th
Cir. 2006) (internal quotation marks omitted).
If, on the other hand, “the movant bears the burden of proof on an issue, either
because he is the plaintiff or as a defendant he is asserting an affirmative defense, he
must establish beyond peradventure all of the essential elements of the claim or
defense to warrant judgment in his favor.” Fontenot v. Upjohn Co.,780 F.2d 1190, 1194
(5th Cir. 1986). The“beyond peradventure” standard imposes a “heavy” burden. Cont’l
Cas. Co. v. St. Paul Fire & Marine Ins. Co., No. 3:04-cv-1866-D, 2007 WL 2403656, at
*10 (N.D. Tex. Aug. 23, 2007). The moving party must demonstrate that there are no
genuine and material fact disputes and that the party is entitled to summary judgment
as a matter of law. See, e.g., Martin v. Alamo Cmty. Coll. Dist., 353 F.3d 409, 412 (5th
Cir. 2003). On such a motion, the Court will, again, “draw all reasonable inferences in
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favor of the non-moving party.” Chaplin v. NationsCredit Corp., 307 F.3d 368, 372 (5th
Cir. 2002).
Analysis
I.
Dr. Weiner is not authorized to sue BCBSLA for improper recoupment.
A.
The right to sue is limited to ERISA plan participants and beneficiaries.
Dr. Weiner has the burden to show that he has a right to bring this lawsuit. See
Clapper v. Anmesty Intern., USA, 568 U.S. 398, 412 (2013) (citing See Lujan v.
Defendants of Wildlife, 504 U.S. 555, 574 (1992)). ERISA’s civil enforcement provision
empowers only plan participants and beneficiaries to bring suit to recover their
benefits under a plan. See 29 U.S.C. § 1132(a)(1)(b). Because a health care provider has
no independent right of standing to seek redress under ERISA, the provider must be
capable of classification as a participant or beneficiary to invoke ERISA. See Dallas
Cnty. Hosp. Dist. v. Assoc.’s Health & Welfare Plan, 293 F.3d 282, 285 (5th Cir. 2002).
B.
Dr. Weiner is not a “participant” under ERISA.
A “participant” is an employee or former employee who seeks a plan’s benefits.
See 29 U.S.C. § 1002(7). Dr. Weiner does not allege that he is a “participant” as that
term is used under ERISA, and there is no evidence that Dr. Weiner is a participant.
C.
Dr. Weiner is not a “beneficiary” under ERISA.
1.
The Plan’s anti-assignment clause bars the purported assignment.
A beneficiary is defined as “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.”
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29 U.S.C. § 1002(8). “The fact that [a health care provider] may be entitled to payment
from [an insurance company] as a result of her clients’ participation in an employee
plan does not make her a beneficiary for the purpose of ERISA standing.” Brown v.
BlueCross BlueShield of Tenn., Inc., 827 F.3d 543, 545-56 (6th Cir. 2016) (listing circuit
court cases); see also DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 852
F.3d 868, 874-75 (9th Cir. 2017). “‘Beneficiary,’ as it is used in ERISA, does not without
more encompass health care providers.” Rojas v. Cigna Health & Life Ins. Co., 793 F.3d
253, 257 (2nd Cir. 2015).
Dr. Weiner contends that he is authorized to sue under ERISA as a beneficiary
based on the “Assignment of Benefits” forms signed by his patients. See Dkt. No. 40 at
151-153 (App_146-48). A health care provider may possess the right to sue under
ERISA by virtue of a valid assignment. See Dallas Cnty. Hosp. Dist., 293 F.3d at 285.
But, here, BCBSLA argues that Dr. Weiner’s ERISA claims are barred because
the Plan prohibits assignment of benefits to third-party providers. The Plan’s antiassignment clause provides that “[t]he Member’s rights and Benefits payable under
this Benefit Plan are personal to the Member and may not be assigned in whole or in
part by the Member.” Dkt. No. 40 at 107 (App._102). The Plan language reiterates this
prohibition, noting that “[w]e will not recognize assignments or attempted assignments
of Benefits.” Id. The Plan further provides that “[w]e reserve the right to pay ....
Providers in [BCBSLA] directly instead of paying the Member.” Id.
The validity of an assignment depends on the construction of the ERISA plan
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at issue. See LeTourneau Lifelike Orthotics & Prosthetics, Inc. v. Wal-Mart Stores, Inc.,
298 F.3d 348, 351-52 (5th Cir. 2002). ERISA plan provisions are interpreted according
to their plain meaning, and any ambiguities will be resolved against the plan. See id.;
Dallas Cnty. Hosp. Dist., 293 F.3d at 288.
Applying universally recognized canons of contract interpretation to the plain
wording of the of the anti-assignment clause in this case, the Court concludes that any
purported assignment of benefits from the BCBSLA members to Dr. Weiner would be
void. As a result, Dr. Weiner does not have a right to challenge BCBSLA’s recoupment
of payments under ERISA.
2.
Recoupment claims are outside the scope of the purported assignments.
BCBSLA also contends that Dr. Weiner is not authorized to sue under ERISA
because disputes concerning recoupment are outside the scope of the purported
assignments. “A healthcare provider-assignee ‘stands in the shoes of the beneficiary,’
and can only assert claims that could have been brought by patients themselves.”
Brown v. BlueCross BlueShield of Tenn., 827 F.3d 543, 548 (6th Cir. 2016) (quoting
Blue Cross of Cal. v. Anesthesia Care Assocs. Med. Grp., Inc., 187 F.3d 1045, 1051 (9th
Cir. 1999)). According to BCBSLA, it could not recoup funds from its members;
therefore, the members could not sue to recover recouped funds. And, because an
assignment cannot convey more rights than the members possess, the members could
not assign the right to bring suit to recover recouped funds to the healthcare provider,
Dr. Weiner. See id. at 549.
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Generally, a claim regarding recoupments is not a suit to recover benefits under
the ERISA plan. Rather, the claim relates to the insurer’s process of post-payment
claims review and practice of recouping erroneous payments. These are claims that the
health care provider’s patient-assignors could not assert as any recoupment would
come from providers and not from the patients. See DB Healthcare, LLC v. Blue Cross
Blue Shield of Ariz., Inc. 852 F.3d 868, 877 (9th Cir. 2017). The claims therefore do not
fall within the scope of the assignments. See id. (“Although a ‘dispute ... over the right
to payment, ... might be said to depend on the patients’ assignments to the Providers,’
the dispute over recoupment ‘depends on the terms of the provider agreements,’ not on
the assignment.” (quoting Anesthesia Care Assocs., 187 F.3d at 1051)); Brown, 827 F.3d
at 548-49 (holding that a health care provider’s claims regarding recoupment were
“outside the scope of [the provider’s] assigned standing,” because “the patient-assignors
are not party to the Provider Agreement that governs the recoupment process, and [the
insurer] has no right to recoup payments for medical care made to its members”).
Dr. Weiner provides services under a direct contract with BCBSTX (the
“provider agreement”), and BCBSLA’s insured’s have access to BCBSTX’s provider
network for services. See Dkt. No. 46 at 1. The provider agreement is not included in
the summary judgment evidence, and the portions of the Plan that are included in the
summary judgment evidence contain no provisions authorizing plan members to sue
to recover recouped funds. See Dkt. No. 40.
Dr. Weiner alleges that BCBSLA violated ERISA’s appeal procedures concerning
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the recoupment of funds that BCBSLA claimed were wrongfully paid for treatment of
one patient from those due for treatment of a different patient. See Dkt. No. 8. These
are claims that the patients were not authorized to assert.
Accordingly, under the summary judgment evidence, and even if the
assignments from Dr. Weiner’s patients were valid, they would not assign the right to
sue for recovery of recouped funds because the patients did not possess that right.
II.
The Plan administrator did not abuse its discretion in denying the claim.
When a benefits plan “gives the administrator or fiduciary discretionary
authority to determine eligibility for benefits or to construe the terms of the plan,” the
reviewing court applies an abuse of discretion standard to the plan administrator’s
decision to deny benefits. See Anderson v. Cytec Indus., Inc., 619 F.3d 505, 512 (5th Cir.
2010) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)); see also
McCorkle v. Metropolitan Life Ins. Co., 757 F.3d 452, 456057 (5th Cir. 2014); accord
Ariana M. v. Humana Health Plan of Tex., Inc., 884 F.3d 246, 247, 251-56 (5th Cir
2018) (en banc) (explaining that, “[w]hen an ERISA plan lawfully delegates
discretionary authority to the plan administrator, a court reviewing the denial of a
claim is limited to assessing whether the administrator abused that discretion” but
holding that, for plans that do not have valid delegation clauses, a denial of benefits
challenged under 29 U.S.C. § 1132(a)(1)(B) is to be reviewed under a de novo standard
regardless whether the denial of benefits is based on an interpretation of plan language
or an administrator’s factual determination that a beneficiary is not eligible). This is
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the functional equivalent of arbitrary and capricious review. See Anderson, 619 F.3d
at 512. “A decision is arbitrary if it is ‘made without a rational connection between the
known facts and the decision.’” Id. (quoting Meditrust Fin. Servs. Corp. v. Sterling
Chems., Inc., 168 F.3d 211, 215 (5th Cir. 1999)).
Here, the BCBSLA Plan grants the administrator full discretion to determine
eligibility for Plan benefits and to construe Plan benefits. See Dkt. No. 40 at 103-04
(App._98–App._99). Dr. Weiner coded the claim for which BCBSLA later sought
recoupment as “L3000.” Dkt. No. 6 at 32. This code represents a procedure for fitting
a molded shoe insert. See https://coder.aapc.com/hcpcs-codes/L3000. This procedure is
excluded from coverage under the terms of the Plan. See Dkt. No. 40 at 80 (App._75)
(“No Benefits are available for supportive devices for the foot, except when used in the
treatment of diabetic foot disease.”); 224-25 (App._219–App_220). And Dr. Weiner was
notified that the procedure was excluded when he sought preapproval for the
procedure. See Dkt. No. 6 at 25.
Because the procedure was excluded under the Plan, and because the Court
must “affirm the determination of the plan administrator unless it is arbitrary or is not
supported by at least substantial evidence”, see McCorkle, 757 F.3d at 457 (emphasis
omitted), the Court determines that BCBSLA did not abuse its discretion in denying
the claim on which Dr. Weiner’s lawsuit is based.
III.
BCBSLA did not violate ERISA’s notice and appeal requirements.
Dr. Weiner contends in both his amended complaint and his responses to
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BCBSLA’s motion for summary judgment that three cases – Great-West Life & Annuity
Ins. Co. v. Knudsen, 534 U.S. 204 (2002); Egelhoff v. Egelhoff, 532 U.S. 141 (2001); and
Penn. Chiropractic Assoc. v. Blue Cross Blue Shield Assoc., 2014 WL 1276585 (N.D. Ill.
Mar. 28, 2014), rev’d by Pa. Chiropractic Ass’n v. Independence Hosp. Indem. Plan, Inc.,
802 F.3d 926 (7th Cir. 2015) – compel the legal conclusion that BCBSLA’s recoupment
violated ERISA’s notice and appeal requirements. See Dkt. Nos. 8, 55, 57.
The first two cases are not analogous to this case. In Great-West Life & Annuity
Ins. Co., the Supreme Court held that an insurer may not sue under Section 502(a)(3)
of ERISA to collect proceeds by subrogation from an insured’s lawsuit against a
tortfeasor, because such is not a suit in equity but in law. See 534 U.S. at 214. And, in
Egelhoff, the Supreme Court held that ERISA preempts state law directing payment
of life insurance benefits contrary to ERISA policy designations. See 532 U.S. at 152.
The third case is closer. In Pennsylvania Chiropractic Association, two
chiropractors and an association of chiropractors sued an insurance company to recover
unpaid benefits under their provider plans. The insurance company, according to the
terms of its provider agreements, simply recovered allegedly overpaid funds from the
providers. The providers argued that, when the insurance company recouped funds
from them, it violated notice and appeal requirements allegedly owed to ERISA plan
members under ERISA. See 2014 WL 1276585, at *7.
The district court held that the providers were beneficiaries for purposes of
ERISA because the plan expressly designated them to receive payment directly, and
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the district court held that those payments constituted ERISA benefits. The district
court also held that the insurance company’s recoupment was considered an “adverse
benefit determination” and that the insurance company was required to follow ERISA
claims procedures. See id. at *11, *14-*16.
The United States Court of Appeals for the Seventh Circuit reversed. See
Independence Hosp. Indem., 802 F.3d at 930. The Court of Appeals explained that the
providers’ ability to invoke ERISA depended on their being “beneficiaries” of a plan
established under that law. See id. at 927, 928 (citing 29 U.S.C. § 1132(a)(a)(B)). The
providers relied on their contracts with the insurance companies. They did not rely on
a designation in an ERISA plan or a valid assignment from any patient. See id. at 928.
The legal authorities on which Dr. Weiner relies do not preclude summary
judgment for BCBSLA in this case.
Conclusion
Defendant’s Motion for Summary Judgment [Dkt. No. 54] is GRANTED. The
case will proceed on BCBSLA’s counterclaims against Dr. Weiner. See Dkt. No. 23, 42.
The Court directs BCBSLA to file a status report regarding its counterclaims
against Dr. Weiner by August 31, 2018.
SO ORDERED.
DATED: August 17, 2018
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
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