Howard v. Coventry Health Care of Iowa, Inc.

• Decision Date: 20 July 2001
• Docket Number: No. 4-01-CV-10196.,4-01-CV-10196.
• Citation: 158 F.Supp.2d 937
• Parties: Lisa HOWARD, Plaintiff, v. COVENTRY HEALTH CARE OF IOWA, INC., Principal Financial Group, Inc. and Principal Mutual a/k/a Principal Life Insurance Company, Defendant.
• Court: U.S. District Court — Southern District of Iowa

158 F.Supp.2d 937

Lisa HOWARD, Plaintiff, v. COVENTRY HEALTH CARE OF IOWA, INC., Principal Financial Group, Inc. and Principal Mutual a/k/a Principal Life Insurance Company, Defendant.

No. 4-01-CV-10196.

United States District Court, S.D. Iowa, Central Division.

July 20, 2001.

Roxanne Conlin, Conlin & Associates, P.C., Des Moines, IA, for plaintiff.

Michael W. Thrall, Nyemaster Goode Voigts West Hansell & O'Brien, P.C., Des Moines, IA, for Coventry Health Care of IA, Inc.

Brian L. Campbell, Bradshaw Fowler Proctor & Fairgrave, Des Moines, IA, for Principal Financial Group, Inc., Principal Mutual Life Insurance Co., aka Principal Life Insurance Co.

ORDER

LONGSTAFF, Chief Judge.

Before the Court are motions by the defendants in this case to dismiss and to strike plaintiff's jury demand. Coventry Health Care of Iowa, Inc. ("Coventry"),¹ defendant, filed motions to dismiss and strike plaintiff's jury demand on April 2, 2001. The remaining defendants, Principal Financial Group, Inc. and Principal Mutual (collectively, "Principal"), filed a motion to dismiss and adopted the arguments made by Coventry on April 19. Plaintiff, Lisa Howard, filed her resistance to these motions on June 15. A reply brief was filed by Coventry on July 3 and by Principal on July 6. A hearing has been requested but found unnecessary. The matters are fully submitted.

I. BACKGROUND

For purposes of this motion, the following facts either are not in dispute or are accepted as alleged in plaintiff's complaint. Lisa Howard seeks to represent herself and all other women who have had, or may have, dealings with defendants. Howard had a double mastectomy due to breast cancer on or about November 22, 1993. Tissue expanders were placed in Howard's chest during this surgery. Howard had the expanders removed on June 3, 1994, and saline implants were then placed in her chest. These implants caused medical complications, and were removed and replaced with tissue expanders on November 4, 1994.

Coventry became Howard's health insurance provider on January 1, 1995, as she was insured through an employee benefit plan. Howard had another surgery on or about November 3, 1995. During this procedure, the expanders were again removed and replaced with saline implants. These implants remained in Howard until January 23, 1998, when they were removed and expanders were implanted for a third time. This surgery was necessary because Howard had developed capsular contracture from her breast implants. Following this surgery, her reconstructive surgeons at the Mayo Clinic recommended she receive McGhan anatomical silicone implants. Howard received approval from Coventry on November 13, 1999 to receive McGhan implants in her chest by a doctor at the University of Missouri. Howard set up a surgical appointment to have this procedure done, but later had to cancel it due to other medical issues.

After cancelling her appointment at the University of Missouri, Howard learned that the same procedure could be performed at a clinic in St. Cloud, Minnesota. This facility was closer to her home, and one of her doctors from the Mayo Clinic recommended that she have the surgery performed at the St. Cloud clinic. Howard sought approval from Coventry to have this procedure performed at St. Cloud, but was denied.

As noted above, this matter has been brought by Howard as a class action.² She originally filed her petition in Iowa District Court for Polk County on March 2, 2001. Defendants removed to this Court on March 29, 2001 alleging federal question jurisdiction. See 28 U.S.C. § 1331. Plaintiff has brought four claims. She alleges a tortious breach of statute, citing 29 U.S.C. § 1185 (Count I);³ breach of contract (Count II); violation of public policy (Count III); and bad faith (Count IV). In her original petition, plaintiff made a jury demand.⁴

II. APPLICABLE LAW & DISCUSSION

A. Standard of Review

When considering a motion to dismiss, a court will accept as true all factual allegations in the complaint. McSherry v. Trans World Airlines, Inc., 81 F.3d 739, 740 (8th Cir.1996) (citing Leatherman v. Tarrant Co. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 163-65, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993)). A motion to dismiss will be granted "only if no set of facts would entitle the plaintiff to relief."' Id. (citing Conley v. Gibson, 355 U.S. 41, 45-47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

B. Tortious Breach of Federal Statute

Howard alleges in Count I that 29 U.S.C. § 1185b has been breached by defendants. Section 1185b, enacted in 1998, is entitled "Required coverage for reconstructive surgery following mastectomies." It states in pertinent part:

(a) In general

A group health plan, and a health insurance issuer providing health insurance coverage in connection with a group health plan, that provides medical and surgical benefits with respect to a mastectomy shall provide, in a case of a participant or beneficiary who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy, coverage for —

(1) all stages of reconstruction of the breast on which the mastectomy has been performed;

(2) surgery and reconstruction of the other breast to produce a symmetrical appearance; and

(3) prostheses and physical complications of mastectomy, including lymphedemas;

in a manner determined in consultation with the attending physician and the patient. Such coverage may be subject to annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other benefits under the plan or coverage. Written notice of the availability of such coverage shall be delivered to the participant upon enrollment and annually thereafter.

...

(e) Preemption, relation to State laws —

(1) In general

Nothing in this section shall be construed to preempt any State law in effect on October 21, 1998 with respect to health insurance coverage that requires coverage of at least the coverage of reconstructive breast surgery otherwise required under this section.

(2) ERISA

Nothing in this section shall be construed to affect or modify the provisions of section 1144 of this title with respect to group health plans.

Id. This statute was part of the Women's Health and Cancer Rights Act. It passed as part of the Omnibus Appropriations Bill in 1998 and amended both the Public Health Service Act and the Employee Retirement Income Security Act ("ERISA"). It is the latter of these two amended acts which is at issue in this case.

ERISA, 29 U.S.C. §§ 1001 et seq., comprehensively regulates employee pension and welfare plans. A welfare plan is one "maintained by an employer ... for the purpose of providing ... [employees with] medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment." Wiggins v. Guardian Life Ins. Co. of America, 820 F.Supp. 419, 420 (N.D.Iowa 1993) (quoting 29 U.S.C. § 1002(1)). It is not disputed by Howard that the plan at issue was such a welfare plan under ERISA.

In general, claims for relief involving ERISA welfare plans must be filed under 29 U.S.C. § 1132. A plan participant, such as Howard, generally may bring a civil action under this statute to recover benefits due under the terms of her plan, to enforce her rights under the terms of her plan, or to clarify her rights to future benefits under the terms of her plan. See RONALD J. COOKE, ERISA PRACTICE AND PROCEDURE § 8.3 (citing 29 U.S.C. § 1132(a)(1)(B)). However, Howard has not brought any claims under this civil enforcement statute, but has instead argued that she has an implied⁵ cause of action based on section 1185b and that ERISA law is not controlling.

As pointed out by the parties, this Court must determine whether a private cause of action was created by section 1185b and whether such a remedy may be implied under the four-part framework set forth in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). The four Cort factors are: (1) whether plaintiff is one of the class for whose benefit the statute was enacted; (2) whether there is any explicit or implicit indication of legislative intent either to create such a remedy or deny one; (3) whether such a remedy is consistent with the legislative scheme; and (4) whether such a cause of action is traditionally relegated to state law, in an area of primary concern for the states. See Redd v. Federal Land Bank of St. Louis, 851 F.2d 219 (8th Cir.1988) (citing Cort, 422 U.S. at 78, 95 S.Ct. 2080). "`The central inquiry remains whether Congress intended to create, either expressly or by implication, a private cause of action.'" Id. (quoting Touche Ross & Co. v. Redington, 442 U.S. 560, 99 S.Ct. 2479, 61 L.Ed.2d 82 (1979) (other citation omitted)).

Section 1185b was clearly enacted for the benefit of breast cancer patients who require reconstructive surgery following mastectomies. Howard is a part of this class, and the first Cort factor weighs in favor of finding such an implied cause of action. Additionally, there does not appear to be a state law impediment to applying such a remedy in accord with the fourth Cort factor. However, the remaining Cort factors weigh heavily against finding an implied cause of action. Neither the parties' briefs nor this Court's independent research of this statute and its legislative history has revealed any legislative intent to create such a remedy supplemental to remedies available within ERISA.⁶ Further, this Court finds the Supreme Court's decision in Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) persuasive. In addressing an attempt by a plaintiff to bring an implied cause of action under a separate ERISA statute (29 U.S.C. § 1109), the Supreme Court refused to find such a cause of action.

The six carefully integrated civil enforcement provisions found in § 502(a) [29 U.S.C. §...