Ctr. for Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of La., Inc.

• Decision Date: 15 July 2015
• Docket Number: CIVIL ACTION NO. 10-4346 SECTION "L" (2)
• Citation: Ctr. for Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of La., Inc., CIVIL ACTION NO. 10-4346 SECTION "L" (2) (E.D. La. Jul 15, 2015)
• Parties: CENTER FOR RESTORATIVE BREAST SURGERY, L.L.C., ET AL. v. HUMANA HEALTH BENEFIT PLAN OF LOUISIANA, INC., ET AL.
• Court: U.S. District Court — Eastern District of Louisiana

CENTER FOR RESTORATIVE BREAST SURGERY, L.L.C., ET AL. v. HUMANA HEALTH BENEFIT PLAN OF LOUISIANA, INC., ET AL.

CIVIL ACTION NO. 10-4346 SECTION "L" (2)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

July 15, 2015

ORDER & REASONS

Before the Court are Defendants Humana Health Benefit Plan of Louisiana, Inc., Humana Inc., and Humana Health Plan, Inc.'s (collectively "Humana") (1) Motion for Partial Summary Judgment on Plaintiffs' Procedural Violation Claim (Rec. Doc. 164); (2) Motion for Partial Summary Judgment for Dismissal of ERISA Claims Time Barred by Contractual Limitations Period (Rec. Doc. 167); (3) Motion for Partial Summary Judgment based on Improper Defendant (Rec. Doc. 168); (4) Motion for Partial Summary Judgment as to Plaintiffs' ERISA 502(c) Claims (Rec. Doc. 170); and (5) Motion for Partial Summary Judgment Based on Plaintiffs' Failure to Exhaust Administrative Remedies (Rec. Doc. 171). Having considered the applicable law and the parties' memoranda, the Court now issues this Order & Reasons.

I. BACKGROUND

This case arises out of alleged underpayment for medical services. The Center for Restorative Breast Surgery, LLC ("Center") performs post-mastectomy breast reconstruction medical services, and St. Charles Surgical Hospital ("St. Charles") provides hospital services in connection with those procedures. Both the Center and St. Charles provided these services to patients who were participants in Humana's Employee Retirement Income Security Act ("ERISA") plan. The ERISA plan permits patients to obtain services from out-of-networkproviders, such as the Center and St. Charles, and in turn Humana calculates and pays reimbursements to the providers of those services. In calculating the reimbursement, they consider the reasonable and customary rate.

The Center and St. Charles filed this action in the Civil District Court for the Parish of Orleans seeking benefits on behalf of their patients and seeking reimbursements, on their own behalf, for services they had provided to patients covered by Humana (collectively "the Plaintiffs"). On November 17, 2010, Humana removed to this Court on the basis that the Center and St. Charles' claims were preempted by ERISA. (Rec. Doc. 1). On December 12, 2010, the Center and St. Charles sought remand (Rec. Doc. 9), which the Court denied on March 22, 2011 (Rec. Doc. 22). Humana then filed a Motion to Dismiss on April 15, 2011, and while it was pending, the Center and St. Charles filed a Motion for Leave to Amend their Complaint. (Rec. Doc. 33). On July 20, 2011, the Court granted the Center and St. Charles' Motion for Leave to Amend their Complaint and denied Humana's Motion to Dismiss the original complaint. (Rec. Doc. 45).

In their amended complaint, the Center and St. Charles assert claims against Humana under ERISA and state law. (Rec. Doc. 46). With respect to their ERISA claims, the Center and St. Charles seek recovery as assignees of their patients, asserting that Humana breached its fiduciary duty of loyalty and care, failed to provide full and fair review, and violated the claims procedures. The Center and St. Charles seek recovery on their own behalf and assert state law claims of detrimental reliance, fraud, negligent misrepresentation, breach of contract, and unjust enrichment, for which the Center and St. Charles seek recovery on their own behalf. They also claim Humana violated the Louisiana Unfair Trade Practices Act ("LUTPA") and the Louisiana Insurance Code. In response to the amended complaint, Humana filed a Motion to Dismiss theabove-listed claims (Rec. Doc. 49). After that motion had been fully briefed by the parties (Rec. Docs. 49, 53, 56, 60), the Court stayed the proceedings on October 12, 2011 on the joint motion of the parties (Rec. Doc. 61). On September 9, 2013, the Court lifted the stay on the motion of the Center and St. Charles. (Rec. Doc. 63). At the request of the parties, the Court continued the Motion to Dismiss the Amended Complaint.

On March 27, 2014, the Court granted Humana's Motion to Dismiss in part and denied it in part. (Rec. Doc. 65). Specifically, it concluded that the Center and St. Charles had sufficiently alleged their ERISA, detrimental reliance, fraud, negligent misrepresentation, and breach of contract claims, but not their unjust enrichment, LUTPA, and Louisiana Insurance Code claims. The Court denied Humana's Motion for Reconsideration. (Rec. Doc. 80). On July 7, 2014, Plaintiffs filed a Motion for Leave to File an Amended Exhibit 1 to the Amended Complaint in order to add patients to their Complaint. (Rec. Doc. 81). The Court granted Plaintiffs' leave on July 10, 2014.

To date, Plaintiffs bring this suit on behalf of themselves and as assignees of 109 patients. Fifty-four (54) of those patients were members of employee group health plans governed by ERISA. The parties indicated to the Court that disposition of the ERISA claims would inform the disposition of the non-ERISA claims, so the Court bifurcated the proceedings and ordered the parties to proceed with the ERISA claims while staying the non-ERISA claims. (Rec. Doc. 117). While the Court initially ordered the parties to submit their briefs regarding the ERISA claims on February 23, 2015, Humana relayed to the Court that it wished to file a number of dispositive motions that would resolve many of the ERISA claims. The Court thus converted the February 23, 2015 briefing deadline into the deadline for the parties to submit dispositive motions. (Rec.Doc. 158). Humana subsequently filed six (6) motions for summary judgment related to the ERISA claims.¹

II. PRESENT MOTIONS

Plaintiffs recently filed a Motion for Leave to Conduct Supplemental Discovery and ask the Court to withhold disposition of these motions for partial summary judgment until discovery is complete. (Rec. Doc. 241-1 at 10). Plaintiffs, however, fail to articulate how additional discovery will inform disposition of these motions, particularly since these cases are all governed by ERISA, and this Court's review is limited to the administrative record. Although some additional information is required to effectuate this Order & Reasons, the incomplete record is not due to any alleged failure by the Defendants to provide complete discovery responses. Rather, the Court is unable to discern the precise nature of Plaintiffs' claims on behalf of each patient, including the facts and dates relevant to those claims. This information should be within Plaintiffs' possession, as they are the masters of their own claims. The Court will seek to rectify this problem by requiring Plaintiffs to submit additional materials, as specified throughout this Order & Reasons, and a detailed chart setting forth each patient's ERISA claims. First, the Court will dispose of those dispositive motions before the Court.

A. The Standard

Summary judgment is proper "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." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)). "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion,against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial." Id. When considering a motion for summary judgment, the district court "will review the facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court must find "[a] factual dispute [to be] 'genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party [and a] fact [to be] 'material' if it might affect the outcome of the suit under the governing substantive law." Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

B. Motion for Partial Summary Judgment on Plaintiff's Procedural Violation Claim (Rec. Doc. 164)

1. Parties' Arguments

Humana asks this Court to grant summary judgment on Plaintiffs' claims for full and fair review, set forth in Count III of the Amended Complaint, and Plaintiffs' claims for procedural violations, set forth in Count V of the Amended Complaint (collectively referred to as the "Procedural Violation Claims"). (Rec. Doc. 164 at 2). Humana contends that Section 503² of ERISA outlines the requirements relating to benefit plan claims procedures but does not provide any remedial provisions, so a plaintiff seeking redress for alleged Section 503 violations must link that violation to the appropriate, private remedial provision contained in Section 502(a) of ERISA. (Rec. Doc. 164-2). In support of this proposition, Humana cites Parkridge Med. Ctr. Inc. v. CPC Logistics, Inc. Group Benefits, a case where the district court inferred that the plaintiff's procedural claims arose under Section 502(a)(3). No.12-124, 2013 WL 3976621, at*17 (E.D. Tenn. Aug. 2, 2013) (Collier, J.). Here, Humana argues that Plaintiffs' Procedural Violation Claims are properly asserted under Section 502(a)(3), and since Plaintiffs are also seeking to recover under Section 502(1)(B), they are barred from simultaneously asserting these Procedural Violation Claims. (Rec. Doc. 164-2 at 4-5). Humana states that "it is well settled law in this circuit that a potential beneficiary, even if ultimately unsuccessful, suing to recover benefits under section 502(a)(1)(B), may not utilize the 'catchall' provision of section 502(a)(3)." (Rec. Doc. 164-2 at 5) (quoting Met Life Ins.Co. v. Palmer, 238 F. Supp. 2d 831, 835 (E.D. Tex. 2002)) (internal quotations omitted). Humana goes on to state that "[w]hile some courts have relaxed rules of pleading...