Mayeaux v. Louisiana Health Service and Indem. Co.
| Decision Date | 01 July 2004 |
| Docket Number | No. 02-30188.,02-30188. |
| Citation | 376 F.3d 420 |
| Parties | Cheryl MAYEAUX, Raymond Germain, and Dr. and Mrs. Edward S. Hyman, Plaintiffs-Appellants, v. LOUISIANA HEALTH SERVICE AND INDEMNITY COMPANY (d/b/a Blue Cross & Blue Shield of Louisiana), Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Harry Douglas Hoskins, III (argued), Hoskins & Hoskins, New Orleans, LA, for Plaintiffs-Appellants.
Richard John Tyler (argued), Gregory D. Latham, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, LA, for Defendant-Appellee.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before DAVIS, WIENER, and STEWART, Circuit Judges.
Cheryl Mayeaux, her husband Raymond Germain, and her treating physician and his wife, Dr. and Mrs. Edward S. Hyman (collectively the "Plaintiffs") sued Louisiana Health Services and Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana ("BCBS"). The Plaintiffs asserted various causes of action alleged to have arisen from BCBS's denial of insurance coverage for the costs of Dr. Hyman's treatment of Mayeaux's illness with high doses of antibiotics. After several years of litigation, the Plaintiffs sought leave to amend and supplement their complaint for a third time in an apparent attempt to defeat federal subject matter jurisdiction. The district court denied the Plaintiffs' motion for leave to amend and subsequently entered summary judgment against the Plaintiffs on all their claims. On appeal, the Plaintiffs contest the district court's denial of their motion for leave to amend and, in the alternative, the district court's grant of summary judgment in favor of BCBS. We affirm.
In 1982, Mayeaux went to work for Coleman E. Adler & Sons ("Adler"). The following year, she sought medical treatment from Dr. Hyman who diagnosed Mayeaux as having a connective tissue illness that he calls "systemic coccal disease" ("SCD"). Dr. Hyman treated Mayeaux's condition with a so-called "High Dose Antibiotic Treatment" ("HDAT"). In December 1993, BCBS began providing group health insurance coverage for Adler's employees under a comprehensive medical benefit plan (the "Adler Plan"). BCBS denied coverage for Mayeaux's HDAT, stating that it was excluded under the terms of the Adler Plan as experimental or investigational.1
The Adler Plan expressly excludes benefits for "[s]ervices or supplies which are Investigational in nature" and defines "Investigational" as "the use of any treatment, procedure, facility, equipment, drug device or supply not accepted, as determined by [BCBS], as standard medical treatment of the condition being tested, or any such items requiring federal or other governmental agency approval not granted at the time services were rendered." BCBS maintains that its decision to deny coverage for HDAT was purely a question of plan coverage and was not based on any determination regarding the medical appropriateness of Dr. Hyman's procedures.
In April 1995, Mayeaux asked BCBS to reconsider its coverage decision, but BCBS refused. Counsel for the parties exchanged a series of letters in which Mayeaux's lawyer challenged BCBS's refusal to cover the HDAT. At one point in that exchange, counsel for BCBS invited Mayeaux to obtain a second medical opinion in support of the HDAT therapy. Mayeaux submitted an opinion from Dr. Quentin Deming that concurred with Dr. Hyman's prescribed treatment, but BCBS continued to deny coverage.
In 1995, the Plaintiffs filed suit in Louisiana state court seeking damages allegedly resulting from BCBS's failure to pay for Mayeaux's HDAT, as well as bad faith and fraud. BCBS removed the case to federal court invoking federal subject matter jurisdiction because Mayeaux was asserting, inter alia, a claim for benefits under an ERISA-governed plan. The district court allowed the Plaintiffs to amend their complaint to seek a declaratory judgment of Mayeaux's right to receive future benefits under the Adler Plan. Protracted discovery ensued.
In 1997, over BCBS's objection, the district court permitted the Plaintiffs to supplement and amend their complaint a second time to add state law causes of action for unfair trade practices, intentional interference with contract, and defamation. Discovery continued until April 1998, when the district court closed the case administratively until we ruled on two appeals that were pending.2 In February 2001, the Plaintiffs filed a motion to reopen this case, and shortly thereafter moved, for a third time, to supplement and amend their complaint. This time, the Plaintiffs proposed to dismiss Mrs. Hyman as a plaintiff and to add BCBS Medical Director, Dr. James Gengelbach, as a defendant. In the proposed amendment, the Plaintiffs alleged that Dr. Gengelbach (1) breached his duty of care under Louisiana state law, (2) conspired to retaliate against Dr. Hyman, (3) committed unethical practices, and (4) intentionally caused Mayeaux injury. The Plaintiffs further alleged that BCBS (1) was liable for Dr. Gengelbach's actions under the theory of respondeat superior, (2) breached an implied warranty, and (3) breached its duty of good faith and fair dealing. Importantly, in their proposed amended complaint, the Plaintiffs specifically disavowed any claim against BCBS for denial of benefits. The magistrate judge denied leave to amend; and, on review of the magistrate judge's order, the district court affirmed.
BCBS filed three separate summary judgment motions regarding the Plaintiffs' state and federal causes of action. Relying on ERISA preemption, the district court granted summary judgment to BCBS on all the Hymans' claims. The district court also ruled that Mayeaux's denial-of-benefits claim was governed by ERISA and that there was no genuine issue of material fact regarding whether BCBS abused its discretion in denying coverage. The district court therefore granted summary judgment in favor of BCBS and dismissed the remainder of Mayeaux's state law claims as preempted. The Plaintiffs timely filed their notice of appeal.
We review the district court's denial of leave to amend a complaint under Federal Rule of Civil Procedure 15 for abuse of discretion.3 Because of the liberal pleading presumption underlying Rule 15(a), we have acknowledged that the term "discretion" in this context "may be misleading, because Fed.R.Civ.P. 15(a) evinces a bias in favor of granting leave to amend."4 As a result, absent a "substantial reason" such as undue delay, bad faith, dilatory motive, repeated failures to cure deficiencies, or undue prejudice to the opposing party,5 "the discretion of the district court is not broad enough to permit denial."6 Stated differently, district courts must entertain a presumption in favor of granting parties leave to amend.
We review a district court's grant of summary judgment de novo.7 Summary judgment is appropriate when, viewing the evidence and all justifiable inferences in the light most favorable to the non-moving party, there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law.8 If the moving party meets its burden, the non-movant must designate specific facts showing there is a genuine issue for trial.9
In March 2001, the district court entered a preliminary pretrial conference order that gave the parties thirty days in which to file any final amendments. Within the prescribed period, the Plaintiffs filed a motion for leave to supplement and amend their complaint for a third time (the district court had allowed two previous amendments). Because the Plaintiffs' filing was considered to be somewhat incoherent, the magistrate judge ordered the Plaintiffs "to provide opposing counsel with a comprehensive pleading that they propose to file," and offered BCBS an opportunity to submit a supplemental opposition. In response, the Plaintiffs filed what they styled as a "Restated Complaint."
BCBS opposed this third amendment on two principal grounds. First, BCBS asserted that the Plaintiffs' amendment would be unfairly prejudicial because it would radically change the nature of the litigation after extensive discovery and pretrial activity, and only five months before the case was scheduled for trial. Second, BCBS argued that leave to amend should be denied as futile because the new claims proposed by the Plaintiffs were preempted by ERISA.
In denying the Plaintiffs' motion for leave to amend, the magistrate judge stated that "[t]he state law claims which plaintiff attempts to assert appear to be preempted by ERISA." The magistrate judge further observed that "the claims are not new and should have been brought far earlier than now." The district court affirmed the magistrate judge's ruling, declaring that "[t]he proposed amendment to the complaint is untimely; further, it seeks to add state law claims that are preempted by ERISA."
The Plaintiffs' motion for leave to amend was filed well within the time prescribed by the trial court in its pretrial conference order. Neither the district court nor the magistrate judge made any express findings that the Plaintiffs acted in bad faith or with a dilatory motive or that BCBS would be prejudiced by the amendment. "The Supreme Court has explicitly disapproved of denying leave to amend without adequate justification."10 We have consistently expressed our "strong preference for explicit reasons" and "indicated the disfavor with which we view district court denials of amendments without stated reasons."11 In light of the presumption in favor of allowing pleading amendments, courts of appeals routinely hold that a district court's failure to provide an adequate explanation to support its denial of leave to amend justifies reversal.12
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