Tango Transport v. Healthcare Financial Services

Decision Date12 March 2003
Docket NumberNo. 02-60284.,02-60284.
Citation322 F.3d 888
PartiesTANGO TRANSPORT, Plaintiff-Counter Defendant-Appellee, v. HEALTHCARE FINANCIAL SERVICES LLC, Defendant-Counter Claimant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Horace N. Cunningham, III (argued), James C. Baker, Roberts, Cunningham & Stripling, Dallas, TX, for Tango Transport.

Paul Anderson Koerber (argued), Jackson, MS, for Healthcare Financial Services LLC.

Appeal from the United States District Court for the Southern District of Mississippi.

Before GARWOOD, JONES and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

The disputed issues on appeal turn on whether our holding in Hermann Hosp. v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1289 (5th Cir.1988) ("Hermann I") limits derivative standing to sue for ERISA benefits only to health care providers who have a valid assignment from a plan participant or beneficiary. The district court construed our decision in Hermann I to limit the assignment of ERISA benefits to healthcare providers. For the reasons that follow, we decline, once again, to read into ERISA an anti-alienation provision that prevents assignments of enforcement rights of employee welfare plans. Rather, we hold that the assignee of a health care provider who has a valid assignment from the plan participant or beneficiary has derivative standing to bring a cause of action to recover benefits from an ERISA-governed employee welfare plan. Accordingly, we REVERSE and REMAND.

I. Factual and Procedural Background

Plaintiff/Counter Defendant Tango Transport ("Tango") leased a tractor-trailer from Rocket Transportation. Alice Huff ("Huff"), a Rocket Transportation employee, was hired to drive the tractor-trailer. Huff became a participant in a medical benefits plan governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA) and sponsored by Tango. When the tractor-trailer lease expired on March 27, 1997, Huff left Rocket Transportation for Jackson Rapid Delivery Services ("Rapid"). Rapid maintained a group health plan through Blue Cross and Blue Shield, under which Huff acquired medical coverage on July 1, 1997.

On four occasions in June and in September 1997, Huff received medical treatment from Mississippi Baptist Medical Center ("MBMC") at a total cost of $104,152.64. On each visit, Huff executed an assignment of benefits to MBMC. The relevant language of each assignment provided:

I hereby assign payment of hospital benefits directly to Mississippi Baptist Medical Center herein specified and otherwise payable to me but not to exceed the hospital's regular charges for this period of hospitalization. This assignment also applies to attending and consulting physicians. I understand I am financially responsible for charges not covered by the assignment. This assignment covers all insurance claims, including Medigap, filed by the hospital and physician for this admission.

On March 19, 1998, MBMC, in turn, assigned Huff's outstanding accounts to Healthcare Financial Services ("Healthcare"). The relevant language of the assignment provided:

I, Richard M. Williams, General Manager of MBMC — OP, in consideration of the sum of One Dollar ($1.00), and other good and valuable consideration, the receipt of which is hereby acknowledged do hereby sell, assign and transfer Healthcare Financial Services, LLC, the following described accounts totaling [$104,152.64] now due and owing by Alice Huff.... With full power unto the said Heathcare Financial Services, LLC, and his assigns, to sue for, collect and give acquittance for the same, to his or their own use.1

Healthcare filed suit against Huff for the balance on those accounts, and Huff filed a petition for bankruptcy relief, eventually obtaining a discharge of debt under 11 U.S.C. § 727. Healthcare then sought reimbursement of Huff's medical expenses from Tango. Tango responded by filing a declaratory judgment action in the district court seeking a declaration that Healthcare had not received a valid assignment and therefore, did not have standing to sue Tango. Healthcare counterclaimed seeking payment of insurance claims and damages for breach of fiduciary duty. Both parties moved for summary judgment on Healthcare's counterclaim. The district court granted summary judgment to Tango finding that Healthcare does not have standing to sue for insurance benefits under ERISA. Healthcare now appeals.

II. Standard of Review

We review the district court's grant of summary judgment de novo. Young v. Equifax Credit Info. Servs. Inc., 294 F.3d 631, 635 (5th Cir.2002). Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R.CIV.P. 56(c).

III. Discussion

The two issues on appeal are: 1) whether Healthcare has derivative standing to sue Tango under ERISA and 2) whether Healthcare is an agent of MBMC for the purposes of bringing a claim for the payment of insurance claims. We discuss each issue in turn.

A. Standing under ERISA

To examine whether Healthcare has derivative standing under ERISA, we must first determine whether Huff has standing to enforce plan benefits under ERISA. Second, we must determine whether MBMC has standing under ERISA by way of Huff's assignment of her benefits. Finally, we must decide whether MBMC's assignment of its benefits to Healthcare confers standing under ERISA.

1. Huff has standing to enforce plan benefits under ERISA

Section 1132(a) confers standing to enumerated parties, namely, plan participants bring a civil action to enforce provisions of ERISA. ERISA provides that "[a] civil action may be brought by a participant or beneficiary ... to recover benefits due 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 "participant" is "an employee or former employee of an employer,... who is or may become eligible to receive a benefit of any type from an employee benefit plan." Id. at § 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." Id. at § 1002(8). In this case, Tango sponsored an ERISA health benefits plan for Huff, a former employee. Thus, Huff is a plan participant who has independent standing to seek enforcement of her rights and recover benefits under the terms of the plan as provided by ERISA. Huff assigned, most, if not all of those rights to MBMC.2

2. MBMC has standing under ERISA

a. Standing

ERISA contemplates two types of employee benefit plans — employee welfare plans and employee pension plans. See 29 U.S.C. § 1002(1), (3). An "employee welfare benefit plan" or "welfare plan" is "a plan, fund, or program [which] was established for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise,... medical, surgical, or hospital care benefits." Id. at § 1002(1). The ERISA plan at issue in this case is a welfare benefit plan. The statute also provides for enforcement mechanisms, including a cause of action against plan administrators for breaches of fiduciary duty and for the enforcement of certain notice requirements. Id. at §§ 1109, 1132(c). As discussed supra, standing to bring such claims, however, is limited to participants, beneficiaries, the Secretary, or fiduciaries. See Id. at § 1132(a). Nevertheless, this Court, like many of our sister Circuits, recognizes derivative standing which permits suits in the context of ERISA-governed employee welfare benefit plans, to be brought by certain non-enumerated parties. See Hermann Hosp. v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1289 (5th Cir.1988) ("Hermann I"); I.V. Servs. of Am., Inc. v. Trustees of the Am. Consulting Eng'rs Council Ins. Trust Fund, 136 F.3d 114, 117 n. 2 (2d Cir.1998); Cagle v. Bruner, 112 F.3d 1510, 1515 (11th Cir.1997); Yarde v. Pan Am. Life Ins. Co., 67 F.3d 298, 1995 WL 539736 at *5 (4th Cir.1995); Lutheran Med. Ctr. of Omaha, NE v. Contractors, Laborers, Teamsters & Eng'rs Health & Welfare Plan, 25 F.3d 616, 619-20 (8th Cir.1994); Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272, 1277-78 (6th Cir.1991); Misic v. Bldg. Serv. Employees Health & Welfare Trust, 789 F.2d 1374, 1378 (9th Cir.1986).

In Hermann I, this Court permitted a hospital that had obtained an assignment of benefits from a patient to sue the patient's ERISA-governed health plan for reimbursement. Although the hospital was not an enumerated party under section 1132, this Court found that the hospital had standing derived from its status as the assignee of the beneficiary's welfare plan. 845 F.2d at 1289-90. The Court noted that Congress included an anti-assignment provision pertaining to ERISA-governed pension plans. Id. As we explained Congress was silent with regard to such a provision for health care benefits. There is no "language in the statute which even remotely suggests that such assignments are proscribed or ought in any way to be limited." Id. As a matter of policy, the Court further reasoned that "[a]n assignment to a healthcare provider facilitates rather than hampers the employee's receipt of health benefits." Id. at 1289.

Mirroring the same reasoning espoused in Hermann I, the Supreme Court observed that an assignment of an employee welfare benefit plan is not expressly barred under ERISA. Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 108 S.Ct. 2182, 100 L.Ed.2d 836 (1988). In Mackey, a collection agency obtained money judgments against several plan participants who were trustees of an ERISA-governed employee welfare benefit plan. Id. at 827, 108 S.Ct. 2182. To collect the money...

To continue reading

Request your trial
109 cases
  • Via Christi Regional v. Blue Cross and Blue Shield
    • United States
    • U.S. District Court — District of Kansas
    • March 3, 2005
    ...an assignment of rights); Kennedy v. Connecticut Gen. Life Ins. Co., 924 F.2d 698, 700 (7th Cir.1991); Tango Transp. v. Healthcare Fin. Services LLC, 322 F.3d 888, 892 (5th Cir.2003); Misic v. Building Service Employees Health & Welfare Trust, 789 F.2d 1374, 1377 (9th Cir.1986); see also St......
  • In re Lymecare, Inc., Bankruptcy No. 98-18746/JHW.
    • United States
    • U.S. Bankruptcy Court — District of New Jersey
    • November 5, 2003
    ...where, as here, the patients have assigned their entitlement to receive benefits to the provider. See, e.g., Tango Transp. v. Healthcare Fin. Servs. LLC, 322 F.3d 888 (5th Cir.2003); Charter Fairmount Inst., Inc., v. Alta Health Strategies, 835 F.Supp. 233 In this case, plaintiffs obtained ......
  • Innova Hosp. San Antonio, L.P. v. Blue Cross & Blue Shield of Ga., Inc.
    • United States
    • U.S. District Court — Northern District of Texas
    • February 3, 2014
    ...N. Cypress Med. Ctr. Operating Co. v. CIGNA Healthcare, 782 F.Supp.2d 294, 300 (S.D.Tex.2011); see also Tango Transp. v. Healthcare Fin. Servs. LLC, 322 F.3d 888, 891–92 (5th Cir.2003). A provider may maintain a breach of contract claim if it establishes that the defendant was “a party to a......
  • Franco v. Connecticut Gen. Life Ins. Co.
    • United States
    • U.S. District Court — District of New Jersey
    • September 23, 2011
    ...receives at [the provider].” Wayne Surgical, 2007 WL 2416428, at *3. The court relied on the Fifth Circuit's decision in Tango Transport v. Healthcare Financial Services, which reasoned that by remaining silent on the assignability of a § 502 claim for benefits, the statute implied that ass......
  • Request a trial to view additional results
1 books & journal articles
  • Conclusion: Should There Be a Constitutional Right to a Clean/Healthy Environment?
    • United States
    • The Clean Water Act and the Constitution. Legal Structure and the Public's Right to a Clean and Healthy Environment Part II
    • April 20, 2009
    ...2d 1351, 1357 (M.D. Fla. 2002) (same). 104. 29 U.S.C. §1132 (2000); see also Tango Transport v. Healthcare Fin. Servs. Ltd. Liab. Corp., 322 F.3d 888, 893 (5th Cir. 2003) (upholding the right of an ERISA account’s beneficiary’s assignee to sue under ERISA); Neal v. General Motors Corp., 266......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT