Bryan v. Office of Personnel Management

• Decision Date: 14 January 1999
• Docket Number: No. 97-6425,97-6425
• Parties: 1999 CJ C.A.R. 1424 Lorita BRYAN, Plaintiff-Appellant, v. OFFICE OF PERSONNEL MANAGEMENT, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1315

165 F.3d 1315

1999 CJ C.A.R. 1424

Lorita BRYAN, Plaintiff-Appellant, v. OFFICE OF PERSONNEL MANAGEMENT, Defendant-Appellee.

No. 97-6425.

United States Court of Appeals Tenth Circuit.

Jan. 14, 1999.

Glen Mullins, Oklahoma City, Oklahoma, for Plaintiff-Appellant.

Robert A. Bradford (Patrick M. Ryan, United States Attorney, with him on the brief), Assistant United States Attorney, Oklahoma City, Oklahoma, for Defendant-Appellee.

Terry B. Dowd of Miller & Chevalier, and James R. Barnett of Gordon & Barnett, Washington, D.C., filed a brief for amici Curiae Blue Cross and Blue Shield Association and the Association of Federal Health Organizations.

Before ANDERSON, BRORBY, Circuit Judges, and CAMPBELL ^*, District Judge.

BRORBY, Circuit Judge.

Plaintiff-Appellant, Mrs. Lorita Bryan, appeals a district court order dismissing her suit against the Office of Personnel Management to recover health benefits for jaw surgery, plus interest and attorney fees. The district court determined it lacked jurisdiction to award money damages against the Office of Personnel Management, it could not award interest in absence of a monetary judgment, and attorney fees were not warranted under state law or the Equal Access to Justice Act, 28 U.S.C. § 2412. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

I. Background

In 1992, Mrs. Bryan had reconstructive maxillofacial surgery to correct a skeletal deformity in her jaw. At the time of her surgery, Mrs. Bryan participated in a health benefit plan for federal employees and their dependents provided through the Office of Personnel Management ("Personnel Management"). Pursuant to this plan, Mrs. Bryan submitted three claims for her surgery, totaling $19,744.15, to the plan administrator, Blue Cross/Blue Shield of Oklahoma ("Blue Cross"). Blue Cross denied the claims because it determined the surgery was not medically necessary.

Mrs. Bryan then embarked on a fairly lengthy appeals process. First, she appealed to Personnel Management, which affirmed the denial of benefits because it determined Mrs. Bryan's surgery constituted oral surgery not covered under her plan. Mrs. Bryan then sought judicial review of Personnel Management's decision in district court. The district court granted summary judgment in favor of Personnel Management. Mrs. Bryan filed an appeal with this court but later dismissed it voluntarily when Personnel Management offered to reconsider her claims. Upon joint motion of the parties, the district court withdrew its earlier decision, dismissed the complaint, and remanded the case to Personnel Management. In April 1997, Personnel Management notified Mrs. Bryan it had reconsidered her claims, determined the plan did cover her surgery, and Blue Cross would provide benefits up to the contract limits. After receiving this notification, Mrs. Bryan advised Blue Cross and Personnel Management her attorneys were asserting a lien on any benefits she recovered and requested information regarding payment of that lien. Neither party responded to her letters. Mrs. Bryan also filed suit in district court, seeking to recover attorney fees and costs under the Equal Access to Justice Act, 28 U.S.C.A. § 2412(d).

In early July, three months after Personnel Management extended coverage to Mrs. Bryan's surgery, Blue Cross made a payment on one of Mrs. Bryan's three claims. The payment, accompanied by a brief "Explanation of Benefits," was not for the full amount claimed by Mrs. Bryan. ¹ Rather, Blue Cross deducted certain amounts for "noncovered charges" and coinsurance payments. The Explanation of Benefits did not elaborate as to why some charges were "non-covered," stating only that "[b]enefits are not paid for services and supplies not specifically listed as covered in ... [the] plan brochure." Mrs. Bryan sought additional information regarding the calculation of benefits from Blue Cross but Blue Cross failed to provide it. Apparently out of frustration, Mrs. Bryan then amended her complaint to request a judgment for the "benefits owed" plus interest. While her suit was pending, Blue Cross made payments on Mrs. Bryan's remaining two claims. On both claims, Blue Cross paid less than the amount claimed based on deductions for coinsurance and negotiated savings. ² None of the payments made by Blue Cross acknowledged Mrs. Bryan's attorney's lien.

Personnel Management moved to dismiss Mrs. Bryan's complaint, arguing sovereign immunity barred an award of money damages or interest. The district court agreed and dismissed the complaint for lack of jurisdiction. The court also determined the Oklahoma attorney fees statute relied on by Mrs. Bryan was inapplicable and that fees were not appropriate under the Equal Access to Justice Act because the government's position was substantially justified. On appeal, Mrs. Bryan argues (1) the district court had authority to review Personnel Management's calculation of benefits and to enter an order directing Personnel Management to pay the full amount of benefits claimed plus interest; (2) the court erred in allowing Personnel Management to ignore the attorney lien; and (3) attorney fees and costs are warranted under state law and the Equal Access to Justice Act.

II. Judicial Review

Mrs. Bryan asserts that, pursuant to federal regulation, the district court had jurisdiction to "determine the amount of benefits owed" and enter an order directing Personnel Management to require Blue Cross to pay that amount and honor her attorney's lien. See 5 C.F.R. § 890.107. Further, Mrs. Bryan asserts she is entitled to the full amount of benefits claimed ($19,744.15) because Personnel Management failed to provide the court with any information on an alternative calculation. Mrs. Bryan also claims the district court failed to perform a proper judicial review of her benefit claims. We review de novo the district court's order dismissing the case for lack of subject matter jurisdiction. Weaver v. United States, 98 F.3d 518, 519 (10th Cir.1996).

In order to bring a suit against the government or one of its agencies, a plaintiff must have "a substantive right to the relief sought and an explicit Congressional consent authorizing such relief." Keesee v. Orr, 816 F.2d 545, 547 (10th Cir.1987). Consent is a prerequisite of jurisdiction, In re Talbot (United States v. Richman), 124 F.3d 1201, 1205 (10th Cir.1997), and the government's consent "defines the terms and conditions upon which it may be sued," Richman v. Straley, 48 F.3d 1139, 1146 (10th Cir.1995). A waiver of sovereign immunity is strictly construed in favor of the sovereign. Talbot, 124 F.3d at 1206.

In this case, the Federal Employees Health Benefits Act ("Benefits Act"), 5 U.S.C. §§ 8901 through 8914, governs claims brought under Mrs. Bryan's health benefit plan. The regulations accompanying the Benefits Act delegate authority to resolve benefit claims to the health benefit carrier, in this case Blue Cross. 5 C.F.R. § 890.105(a)(1). If a covered individual, such as Mrs. Bryan, disputes the carrier's resolution of a claim, the individual may seek reconsideration by the carrier and further review by Personnel Management. 5 C.F.R. § 890.105(a)(1) and (b)(3). Only after exhausting these remedies, may the covered individual seek judicial review of Personnel Management's final action. 5 C.F.R. § 890.107(c) and (d). The regulations limit the role of the courts in a benefits dispute:

A covered individual may seek judicial review of OPM's final action on the denial of a health benefits claim. A legal action to review final action by OPM involving such denial of health benefits must be brought against OPM and not against the carrier or carrier's subcontractors. The recovery in such a suit shall be limited to a court order directing OPM to require the carrier to pay the amount of benefits in dispute.

5 C.F.R. § 890.107(c).

Congress clearly intended a limited waiver of sovereign immunity in Benefits Act disputes--courts only have jurisdiction to review final actions, after exhaustion, and only one remedy is available. See id. Moreover, because the Benefits Act does not specifically provide otherwise, the Administrative Procedure Act; 5 U.S.C. §§ 500 through 706, governs judicial review of final Personnel Management decisions. See Harris v. Mutual of Omaha Cos., 992 F.2d 706, 712 (7th Cir.1993) (concluding the Administrative Procedure Act governs review of a final Personnel Management decisions); Caudill v. Blue Cross & Blue Shield, 999 F.2d 74, 79 (4th Cir.1993) (same). Under the Administrative Procedure Act, the court must afford considerable deference to the Personnel Management's findings and set aside a Personnel Management action only if it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).

Mrs. Bryan seeks more from the district court than this limited waiver of sovereign immunity allows. In her Amended Complaint, Mrs. Bryan alleges "[t]he defendant has breached the terms of the plan and owes plaintiff the benefits she is entitled to under the plan in the amount of $19,744.15" and prays for judgment against the defendant in that amount plus interest. ³ We read this language as a request for monetary judgment against Personnel Management--a remedy not contemplated by the government's waiver of sovereign immunity. See 5 C.F.R. § 890.107(c). Because the government has not consented to monetary judgments in Benefits Act disputes, the district court correctly dismissed Mrs. Bryan's suit for lack of jurisdiction.

Moreover, even if we were to construe Mrs. Bryan's complaint as a request for judicial review, the court would still lack jurisdiction in this case because Mrs. Bryan did not meet the terms and conditions defined in the government's waiver of sovereign immunity. See Richman, 48 F.3d at 1146. First, the regulations require covered individuals to exhaust administrative remedies before seeking judicial review....