Buchanan v. Magellan Health, Inc.
| Decision Date | 11 October 2018 |
| Docket Number | Case No. 4:18-CV-00130-NCC |
| Parties | LARRY BUCHANAN, Plaintiff, v. MAGELLAN HEALTH, INC. d/b/a MAGELLAN HEALTHCARE and MAGELLAN BEHAVIORAL HEALTH, and MONSANTO COMPANY, Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on Defendants Magellan Health Inc.'s and Magellan Healthcare, Inc., f/k/a Magellan Behavioral Health Inc.'s (collectively "Magellan's") Partial Motion to Dismiss Plaintiff's Complaint (Doc. 22) and Defendant Monsanto Company's ("Monsanto's") Motion to Dismiss (Doc. 25). The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c)(1). (Doc. 20.) For the following reasons, Defendant Monsanto Company's Motion to Dismiss (Doc. 25) will be GRANTED as to Count I. Magellan's Partial Motion to Dismiss Plaintiff's Complaint (Doc. 22) will be DENIED as to Count II. Finally, Magellan's Partial Motion to Dismiss Plaintiff's Complaint (Doc. 22) will be GRANTED as to Count III.
Federal Rule of Civil Procedure 8(a)(2) requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Federal Rule of Civil Procedure 12(b)(6) provides for a motion to dismiss based on the "failure to state a claim upon which relief can be granted." To survive a motion to dismiss a complaint must show "'that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" to defeat a motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (citation omitted). The pleading standard of Rule 8 "does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). "When ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 94 (2007). The Court must "draw all reasonable inferences in favor of the nonmoving party." Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005).
Plaintiff alleges that he is a participant in a "Group Health Plan" (the "Plan") offered through his employer, Monsanto, and that Plaintiff's son is a beneficiary of the Plan. (Doc. 1 ¶¶ 4, 11.) The Plan is an employee welfare benefit plan regulated under the Employment Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), and it includes mental health and substance abuse services. (Id. ¶¶ 4-5.) Plaintiff further alleges Monsanto is the ERISA-defined Plan Sponsor and Magellan administers the mental health and substance abuseplan benefits. (Id. ¶¶ 7, 9.)
Plaintiff alleges that his son, who suffers from generalized anxiety, depression, attention deficit disorder, and substance abuse, received therapy in Utah in 2015 at Aspiro Wilderness Therapy, described as an outdoor behavioral health program. (Id. ¶¶ 14, 22-26.) In 2015 and 2016, Plaintiff alleges his son received additional treatment in Arizona at InBalance Program, described as a transition program for young men and counseling facility. (Id. ¶¶ 46-49, 53.) When Plaintiff sought benefits from the Plan, Magellan denied Plaintiff's claims as well as his request for post-service authorization review and appeals. (Id. ¶¶ 27, 33-37, 54-58.) Plaintiff alleges those claims for benefits were improperly denied. (Id. ¶¶ 28-32, 38-40.) Plaintiff further alleges that, under the Plan, he is entitled to full payment for these claims or at least 50% of these claims in the event he failed to obtain proper prior authorization. (Id. ¶¶ 32, 71, 73.)
In his Complaint, Plaintiff asserts three claims against Defendants. First, Plaintiff alleges violations of ERISA for failure to pay benefits due under the healthcare benefits plan pursuant to 29 U.S.C. § 1132(a)(1)(B) (Section 502(a)(1)(B) of ERISA) (Count I). Second, Plaintiff asserts a claim for "equitable relief," pursuant to 29 U.S.C. § 1132(a)(3) (Section 502(a)(3) of ERISA) (Count II).1 Third, Plaintiff asserts violations of Missouri state law mental health parity laws (Count III). (Doc. 1.)
On May 1, 2018, Magellan filed a Partial Motion to Dismiss Plaintiff's Complaint with prejudice as to Counts II and III pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 22.) That same day, Monsanto filed a Motion to Dismiss as to all three counts with prejudice, also pursuant to 12(b)(6). (Doc. 25.) Monsanto proffers arguments as to why Count I fails to state a claim upon which relief may be granted and also joins in, adopts, and incorporates by reference Magellan's arguments for dismissal of Counts II and III. (Doc. 26.) In his response opposing dismissal, Plaintiff withdrew his claim for alleged violations of Missouri state law mental health parity laws (Count III) based on Plaintiff's mistaken understanding of the nature of Monsanto's benefits welfare program, consenting to the dismissal without prejudice of Count III of the Complaint. (Doc. 30.) Only Counts I and II, therefore, remain.
Monsanto argues that it must be dismissed because it is not a proper defendant for Plaintiff's § 1132(a)(1)(B) claim.2 (Doc. 26.) Monsanto argues that a benefit plan and a party who controls the administration of the plan are proper defendants in an ERISA action. (Doc. 34 at 2.) Because Plaintiff alleges that Monsanto is the Plan Sponsor (as opposed to administrator) and at no point alleges that Monsanto administers the Plan, Plaintiff's allegations fail to establish that Monsanto is an appropriate party to sue. (Doc. 26 at 4.)
In relevant part, § 1132(a)(1)(B) allows a plan participant such as Plaintiff to bring an action "to recover benefits due to him under the terms of the plan, to enforce his rights under the terms of his plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). The ERISA statute itself, however, does not identify the properdefendant(s) for a § 1132(a)(1)(B) action for benefits. Slayhi v. High-Tech Inst., Inc., No. 06-CV-2210 PJS/JJG, 2007 WL 4284859, at *6 (D. Minn. Dec. 3, 2007). As a result, determining the proper defendants on a claim for benefits under § 1132(a)(1)(B) has been described as "surprisingly complex." Greenwald v. Liberty Life Assur. Co. of Boston, 932 F. Supp. 2d 1018, 1047 (D. Neb. 2013) (quoting Slayhi, 2007 WL 4284859, at *6).
The Eighth Circuit has acknowledged that the federal circuits have approached this issue in varying ways. See Hall v. Lhaco, Inc., 140 F.3d 1190, 1194 (8th Cir. 1998) (citations omitted) ( split in authority and noting some circuits held only the plan itself was a proper defendant, with others holding the plan and plan administrator were proper defendants).3
In the Eighth Circuit, "[t]he employee benefit plan itself is ordinarily liable for benefits payable under the terms of the plan and is thus the primary defendant in a section 502(a)(1)(B) action." Ross v. Rail Car Am. Grp. Disability Income Plan, 285 F.3d 735, 740 (8th Cir. 2002). The Eighth Circuit Court of Appeals has also held that the proper party against whom claims may be brought is the party that controls the administration of the plan, not the plan participant's employer. See Hall, 140 F.3d at 1194 (citing to Layes v. Mead Corp., 132 F.3d 1246, 1249 (8th Cir. 1998)). In Layes, the court held that summary judgment in favor of the Plaintiff's employer was proper because the plan's insurer, also a named defendant, "was at all relevant times the sole administrator of the [benefits] plan offered by [the employer]." Layes, 132 F.3d at 1249.
The Eighth Circuit Court of Appeals has further acknowledged that the term "administrator" is defined in the ERISA statute. Hall, 140 F.3d at 1194 (citing 29 U.S.C. § 1002(16)(A)). The statute states, in relevant part:
29 U.S.C. § 1002(16)(A). A question remains, however, on the issue of whether some party other than the statutory administrator can be sued under § 1132(a)(1)(B) as a "de facto" administrator of the plan. Noting that some circuits were willing to deem non-statutory administrators "de facto" plan administrators and others were not, the Eighth Circuit Court of Appeals declined to address the issue. Id. It instead "reserve[d] for another time the question of whether a party other than the one designated in ERISA plan documents can be sued under § [1132](a)(1)(B) as a 'de facto' plan administrator." Id. (emphasis in original). As a result, a split has developed within the Eighth Circuit district courts as to whether and when a "de facto" administrator would be a proper defendant. See, e.g., Adams v. Gen. Elec. Co., No. 06 3303 CV S DW, 2006 WL 2990329, at *2 (W.D. Mo. Oct. 18, 2006) (); White v. Martin, 286 F. Supp. 2d 1029, 1045 (D....
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