589 F.3d 319 (6th Cir. 2009), 09-5598, In re Life Investors Ins. Co. of America

Docket Nº:09-5598, 09-5868, 09-6357.
Citation:589 F.3d 319
Opinion Judge:BOYCE F. MARTIN, JR., Circuit Judge.
Party Name:In re LIFE INVESTORS INSURANCE COMPANY OF AMERICA; Aegon USA, Inc., Petitioners. v. Life Investors Insurance Company Of America and AEGON, Inc., Defendants-Appellants. Anthony E. Gooch, Plaintiff-Appellee,
Attorney:Markham R. Leventhal, Jorden Burt LLP, Miami, Florida, for Appellants. Thomas O. Sinclair, Leitman Siegal Payne & Campbell, P.C., Birmingham, Alabama, for Appellee. Markham R. Leventhal, Julianna Thomas McCabe, Richard J. Ovelmen, Jorden Burt LLP, Miami, Florida, Thomas H. Dundon, A. Scott Ross, ...
Judge Panel:Before: MARTIN, BOGGS, and COLE, Circuit Judges.
Case Date:December 17, 2009
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

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589 F.3d 319 (6th Cir. 2009)


Anthony E. Gooch, Plaintiff-Appellee,


Life Investors Insurance Company Of America and AEGON, Inc., Defendants-Appellants.

Nos. 09-5598, 09-5868, 09-6357.

United States Court of Appeals, Sixth Circuit.

December 17, 2009

Argued: Nov. 19, 2009.

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[Copyrighted Material Omitted]

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Markham R. Leventhal, Jorden Burt LLP, Miami, Florida, for Appellants.

Thomas O. Sinclair, Leitman Siegal Payne & Campbell, P.C., Birmingham, Alabama, for Appellee.


Markham R. Leventhal, Julianna Thomas McCabe, Richard J. Ovelmen, Jorden Burt LLP, Miami, Florida, Thomas H. Dundon, A. Scott Ross, Neal and Harwell, PLC, Nashville, Tennessee, for Appellants.

Thomas O. Sinclair, Miles Clayborn Williams, Leitman Siegal Payne & Campbell, P.C., Birmingham, Alabama, Eric L. Buchanan, Eric Buchanan & Associates, Chattanooga, Tennessee, for Appellee.

Before: MARTIN, BOGGS, and COLE, Circuit Judges.


BOYCE F. MARTIN, JR., Circuit Judge.

In Case Number 09-5598, defendants-petitioners Life Investors Insurance Company of America and its parent company AEGON USA, Inc.1 seek various forms of mandamus relief from the district court's orders and general case management approach. In Case Number 09-5868, the Company appeals the order of the district court enjoining the Company from continuing with the settlement process in a parallel class action in Arkansas state court. Finally, seven days prior to oral argument on Case Numbers 09-5598 and 09-5868, the Company filed a third appeal, Case Number 09-6357, this time taking issue with the district court's denial without prejudice of the Company's motion to dissolve a preliminary injunction. For the reasons set forth below, we DENY mandamus relief in No. 09-5598, REVERSE and VACATE the injunction in No. 09-5868, and AFFIRM in No. 09-6357.


Because this case comes before us on interlocutory review, the facts do not provide the fixed target that we prefer when setting forth the factual and procedural history of a case on appeal. Thus, we provide only a brief summary of the allegations and an overview of where the litigation stands and then incorporate additional facts where necessary in the analysis.

The substance of this case revolves around how the Company administers supplemental " cancer only" insurance policies that it has sold to individuals, such as plaintiff Anthony Gooch, and specifically

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how it calculates reimbursement for certain costs. Although some of the reimbursements provided under the policy are in fixed amounts, other reimbursements are keyed to the " actual charges" 2 incurred by the insured for certain services, such as radiation, chemotherapy, or ambulance transportation.

The Company contends that for several years it accepted, as proof of " actual charges," statements from hospitals and doctors that set forth " list prices" for a given treatment or service. The Company further contends that these " list prices" are pure fiction because they are not actually billed to anyone, and no one actually pays those prices. Instead, the Company contends, hospitals and doctors routinely agree to accept a lesser amount from the patient's primary insurer, similar to the difference between the sticker price for a car and the price that people actually pay for that car. Thus, the Company claims that it was erroneously providing windfalls to its customers by reimbursing them based on the list price when they actually only incurred costs based on the amount the doctor or hospital agreed to accept. The Company alleges that, after it realized this error during the course of an investigation into why premiums were rising, it changed its practice to require a showing of actual proof of loss for reimbursement. Now, the Company claims that instead of reimbursing the insured based on the list price, the Company reimburses based on whatever the medical provider agreed to accept as payment in full. The Company asserts that this is in complete accord with the terms of the insurance policies.

Gooch disagrees. In short, he contends that the policies require that the Company reimburse policyholders for the amount the medical provider says it is owed, regardless of whether the provider subsequently agrees to accept less from the insured's primary insurer. He further contends that, even if the provider agrees to accept less than its full price from an insurance company, the individual still remains liable for the difference. Thus, Gooch asserts that the Company breached its policy when it began refusing to reimburse for whatever amount the provider initially says that it is owed.

Gooch therefore brought this suit seeking declaratory, injunctive, and monetary relief from the Company's alleged breach of the insurance contract. He also seeks to pursue these claims on behalf of a nationwide class of individuals that had purchased identical policies from the Company. Gooch filed his complaint on March 30, 2007. The early months of the case saw a flurry of activity, including a motion to dismiss from the Company and motions for partial summary judgment on the meaning of the policy, a preliminary injunction, and class certification from Gooch. However, the case has languished for more than two years, with numerous partial or complete stays punctuated by random bursts of rulings, orders, and discovery. From our review of the docket sheet, it appears that a substantial amount of discovery and pretrial filings remains before this matter is ready for trial.


A. Case Number 09-5598-Petition for Writ of Mandamus

In May of 2009, the Company petitioned this Court for a writ of mandamus. The issues for which the Company seeks mandamus relief may be broken up

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into three general categories: (1) the district court's ruling granting partial summary judgment to Gooch on the interpretation of the policy, and its treatment of that ruling as " law of the case" ; (2) the district court's decision to defer ruling on the Company's motion to dissolve a preliminary injunction, requiring the Company to continue reimbursing Gooch according to the old method, until a hearing on class certification and permanent class-wide injunctive relief; and (3) the district court's various discovery rulings, which the Company describes as one-sided. Before we address these three issues, however, we review the general standards concerning the availability of mandamus relief, taken from our recent decision in In re Professionals Direct Insurance Co., 578 F.3d 432 (6th Cir.2009):

This Court has authority to issue a writ of mandamus under 28 U.S.C. § 1651 and Federal Rule of Appellate Procedure 21. However, a writ of mandamus is an extraordinary remedy that we will not issue absent a compelling justification. Traditionally, writs of mandamus were used " only to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so." Kerr v. U.S. Dist. Court for the N. Dist. of Cal., 426 U.S. 394, 402, 96 S.Ct. 2119, 48 L.Ed.2d 725 (1976). Accordingly, " [t]he writ of mandamus is not to be used when the most that could be claimed is that the district courts have erred in ruling on matters within their jurisdiction." Schlagenhauf v. Holder, 379 U.S. 104, 112, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964). Rather, " only exceptional circumstances amounting to a judicial usurpation of power will justify the invocation of this extraordinary remedy." Will v. United States, 389 U.S. 90, 95, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967). And, because mandamus is a discretionary remedy, a Court may decline to issue the writ if it finds that it would not be " appropriate under the circumstances" even if the petitioner has shown he is " clear[ly] and indisputabl[y]" entitled to it. Cheney v. U.S. Dist. Court, 542 U.S. 367, 381, 124 S.Ct. 2576, 159 L.Ed.2d 459(2004).

In evaluating whether to issue a writ of mandamus, we consider five factors:

(1) whether the party seeking the writ has no other adequate means, such as direct appeal, to attain the relief desired; (2) whether the petitioner will be damaged or prejudiced in a way not correctable on appeal after a final judgment; (3) whether the district court's order is clearly erroneous as a matter of law; (4) whether the district court's order contains an oft-repeated error, or manifests a persistent disregard of the federal rules; (5) whether the district court's order raises new and important problems, or legal issues of first impression.

John B. v. Goetz, 531 F.3d 448, 457 (6th Cir.2008). Not every factor need apply (four and five tend to point in opposite directions, for example), but together they must present extraordinary circumstances to justify issuance of the writ. In re Perrigo, 128 F.3d 430, 435 (6th Cir.1997).

With narrow exceptions, a party has no right of appeal until after a final judgment on the merits, and mandamus is not intended to substitute for appeal after a final judgment. Thus, a court may only exercise its mandamus jurisdiction when a party is in danger of harm that cannot be adequately corrected on appeal and has no other adequate means of relief. The first two factors in

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the five-factor test are aimed at preventing the end-run around the final judgment rule that might otherwise occur. And, as a result, courts generally ask whether the first two prongs of the test have been satisfied before addressing the merits of the errors alleged in the petition. See, e.g., In re Gregory Lott, 424 F.3d 446, 449-52 (6th Cir.2005).

578 F.3d at 437-38.

1. Rulings Regarding Interpretation of the Insurance Policy

The central issue in this case is whether the Company's new approach to reimbursements is permissible under the language of the policy. It is not surprising, then, that this...

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