Zervos v. Verizon New York Inc.

• Decision Date: 01 August 2001
• Docket Number: DEFENDANTS-APPELLEES,PLAINTIFF-APPELLANT,Docket No. 01-7305
• Citation: 252 F.3d 163
• Parties: (2nd Cir. 2001) NICKOLAS ZERVOS,, v. VERIZON NEW YORK, INC., F/K/A VERIZON COMMUNICATIONS INC., F/K/A NYNEX CORPORATION, F/K/A NEW YORK TELEPHONE COMPANY, EMPIRE HEALTHCHOICE, INC., F/K/A EMPIRE BLUE CROSS BLUE SHIELD,, UNITED HEALTHCARE CO., INC., A/K/A UNITED HEALTHCARE, DEFENDANT
• Court: U.S. Court of Appeals — Second Circuit

Page 163

252 F.3d 163 (2nd Cir. 2001)

NICKOLAS ZERVOS, PLAINTIFF-APPELLANT, v. VERIZON NEW YORK, INC., F/K/A VERIZON COMMUNICATIONS INC., F/K/A NYNEX CORPORATION, F/K/A NEW YORK TELEPHONE COMPANY, EMPIRE HEALTHCHOICE, INC., F/K/A EMPIRE BLUE CROSS BLUE SHIELD, DEFENDANTS-APPELLEES, UNITED HEALTHCARE CO., INC., A/K/A UNITED HEALTHCARE, DEFENDANT.

Docket No. 01-7305

August Term, 2001

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: April 30, 2001

Decided June 5, 2001

Expedited interlocutory appeal from an order of the United States District Court for the Southern District of New York (George B. Daniels, Judge) denying plaintiff's motion for an order preliminarily enjoining defendants from refusing to provide insurance coverage for a particular medical treatment. We hold, inter alia, (1) that a district court's decision to grant or deny a preliminary injunction is generally reviewed for abuse of discretion, and there is no exception to this rule for a case in which the district court has heard no live testimony; and (2) that the District Court, which heard no live testimony, did not abuse its discretion in denying plaintiff's motion for preliminary injunctive relief because plaintiff had not shown-at least on the record as it currently stands-that there was either a likelihood that he would succeed on the merits of any of his claims, or that there were sufficiently serious questions as to the merits of his claims so that they are fair grounds for litigation.

Affirmed.

Steven G. Storch, Storch Amini & Munves, P.C., New York, N.Y., for appellant.

Randy M. Mastro (Marshall R. King, of counsel), Gibson, Dunn & Crutcher LLP, New York, N.Y., for appellees.

Before: Newman and Cabranes, Circuit Judges, and Thompson, District Judge.^*

Jose A. Cabranes, Circuit Judge

On this expedited interlocutory appeal, we review an order of the United States District Court for the Southern District of New York (George B. Daniels, Judge) denying plaintiff Nickolas Zervos's motion for an order preliminarily enjoining defendants Verizon New York, Inc. ("Verizon"), Empire HealthChoice ("Empire"), and United Healthcare Co., Inc. ("United") from refusing to provide insurance coverage for a particular medical treatment.

We hold, inter alia, (1) that a district court's decision to grant or deny a preliminary injunction is generally reviewed for abuse of discretion, and there is no exception to this rule for a case in which the district court has heard no live testimony; and (2) that the District Court, which heard no live testimony, did not abuse its discretion in denying Zervos's motion for preliminary injunctive relief because Zervos had not shown-at least on the record as it currently stands-that there was either a likelihood that he would succeed on the merits of any of his claims, or that there were sufficiently serious questions as to the merits of his claims to be fair grounds for litigation.

Accordingly, we affirm the order of the District Court denying Zervos's motion for a preliminary injunction.

I. Background

Zervos is an employee of Verizon, and at all relevant times he has been entitled to health insurance under a plan (the "plan" or "Plan") sponsored by Verizon, carried by Empire, and administered by United. In March 2000, Zervos was diagnosed with metastatic breast cancer, for which he underwent a radical mastectomy and was treated with conventional chemotherapy. This chemotherapy regimen concluded in October 2000, at which point Zervos's treating physicians recommended that he undergo a different treatment-namely, a single cycle of high-dose chemotherapy, administered in conjunction with a transplant of bone marrow stem cells.¹ ("HDCT").

Zervos requested that Empire "pre-certify" that it would pay for HDCT, but Empire refused to do so by letter dated October 18, 2000, stating that "[HDCT] is Experimental and Investigational in Breast Cancer Stage IV," the stage to which Zervos's breast cancer had apparently advanced.² The October 18 letter invited Zervos to appeal, and he did so.

Empire then sent Zervos's relevant records to an "external reviewer"-in this case, Dr. Thomas R. Spitzer, Director of the Bone Marrow Transplant Program and Deputy Chief of the Hematology-Oncology Unit at Massachusetts General Hospital. Dr. Spitzer filed a report that concluded that "there are no convincing data to show that [HDCT] is a superior approach to conventional chemotherapy alone for male patients with metastatic breast cancer."

Empire abides by the decisions of its external reviewers regarding whether coverage should be provided in a particular case. Accordingly, by letter dated October 24, 2000, Empire denied Zervos's appeal, explaining: "We are unable to authorize [HDCT] for the following reason: `There are no convincing data to show that [HDCT] is superior to conventional chemotherapy alone for males with metastatic breast cancer.' [HDCT] remains denied as experimental and investigational."

On January 29, 2001, Zervos initiated this action in the District Court. His complaint alleged violations of New York law, New York City law, and three federal statutes-the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq.; Title VII of the Civil Rights Act of 1964 ("Title VII"), as amended, 42 U.S.C. §§ 2000e et seq.; and the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12112 et seq. After filing his complaint, Zervos moved by Order to Show Cause for an order "preliminarily enjoining Verizon, Empire, and/or United from denying and/or refusing to pre-certify and provide coverage [for HDCT to Zervos] . . . on the grounds that it is `investigational' or `experimental,' or that `there are no convincing data to show that [HDCT] is superior to conventional chemotherapy alone for males with [metastatic breast cancer],' or for any other reason it is otherwise excluded under his health and medical insurance plan, and compelling Empire to allow and promptly pay for [Zervos's] claims for [HDCT] and associated procedures."

Following a flurry of recusals, the cause was assigned to Judge Daniels. For the reasons set forth in a thorough Memorandum Opinion and Order, see Zervos v. Verizon N.Y., Inc., No. 01 Civ. 685, 2001 WL 253377 (S.D.N.Y. Mar. 14, 2001), Judge Daniels denied Zervos's motion for a preliminary injunction. This timely and expedited interlocutory appeal followed.

II. Discussion

A. Standard of Review

We have often stated-without qualification-that we review a district court's decision on a motion for preliminary injunction for abuse of discretion. See, e.g., SG Cowen Sec. Corp. v. Messih, 224 F.3d 79, 81 (2d Cir. 2000). Zervos argues, however, that our review is de novo "where the district court has considered strictly a documentary record, with no live testimony." Appellant's Brief at 3-4 (citing Donovan v. Bierwirth, 680 F.2d 263, 269-70 (2d Cir. 1982)).

Before considering Zervos's argument, we pause briefly to clarify the meaning of three important terms-de novo review, clear-error review, and abuse-of-discretion review.

De novo review is review without deference.³ See Salve Regina College v. Russell, 499 U.S. 225, 238 (1991) ("When de novo review is compelled, no form of appellate deference is acceptable."). When we review a district court's decision de novo, we take note of it, and study the reasoning on which it is based. However, our review is independent and plenary; as the Latin term suggests, we look at the matter anew, as though the matter had come to the courts for the first time. See Black's Law Dictionary 435 (6th ed. 1990) (defining "de novo" as "[a]new" and "afresh").

"Clear error" is the standard under which appellate courts review a district court's factual findings. See Ornelas v. United States, 517 U.S. 690, 694 n.3 (1996) ("`Clear error' is a term of art derived from Rule 52(a) of the Federal Rules of Civil Procedure, and applies when reviewing questions of fact."). It is a deferential standard of review grounded, inter alia, on the belief that district court has a good deal of "expertise" when it comes to fact-finding. Anderson v. City of Bessemer City, 470 U.S. 564, 574 (1985). "A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948); accord City of Bessemer City, 470 U.S. at 573-74 ("If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous.").

Finally, there is abuse-of-discretion review. This is a second, more complicated, species of deferential appellate review.⁴ When a district court is vested with discretion as to a certain matter, it is not required by law to make a particular decision. Rather, the district court is empowered to make a decision-of its choosing-that falls within a range of permissible decisions. A district court "abuses" or "exceeds" the discretion accorded to it when (1) its decision rests on an error of law (such as application of the wrong legal principle) or a clearly erroneous factual finding,⁵ or (2) its decision-though not necessarily the product of a legal error or a clearly erroneous factual finding-cannot be located within the range of permissible decisions.⁶

With these definitions in mind, we turn to Zervos's argument that there is an exception here to our customary abuse-of-discretion review. In Orvis v. Higgins, 180 F.2d 537 (2d Cir. 1950) (Frank, J.), we held that the court of appeals may review without deference-that is de novo-not only a district court's legal...