Biomed Pharmaceuticals, Inc. v. Oxford Health Plans (N.Y.), Inc.
775 F. Supp. 2d 730
S.D.N.Y.2011Background
- This is a diversity-removal ERISA action in SDNY by Biomed against Oxford regarding plan benefits and alleged misconduct.
- Biomed filed a Second Amended Complaint asserting ERISA §§ 502(a)(1)(B) and 502(a)(3) claims plus a state-law defamation claim.
- Biomed alleges Oxford reduced in-network payments to Biomed for out-of-network care and improperly denied benefits.
- Biomed had assigned rights from the Patient, but the assignment language limits suit to monetary recovery for services rendered.
- Oxford moved to dismiss Counts 2–5; the court granted in part, dismissing those counts for lack of standing and as duplicative or improper equitable relief, and asserting time-bar for the defamation claim.
- Count One remained intact as the sole ERISA § 502(a)(1)(B) claim and the only surviving action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the assignment authorizes declaratory/injunctive relief | Biomed argues the assignment covers all Patient rights under the Plan. | Oxford contends the assignment only permits money damages for Biomed's services. | Counts 2–4 dismissed for lack of proper relief under the assignment. |
| Whether § 502(a)(3) claims are appropriate where § 502(a)(1)(B) suffices | Biomed seeks equitable relief for alleged procedural deficiencies. | Equitable relief is not appropriate where monetary relief is available. | Counts 2–4 dismissed as duplicative and not warranting § 502(a)(3) relief. |
| Whether § 502(a)(3) claims can survive if not duplicative | If not duplicative, § 502(a)(3) could provide relief. | Varity allows § 502(a)(3) only where § 502(a)(1)(B) provides no adequate relief. | Counts 2–4 fail to demonstrate irreducible need for equitable relief; they are dismissed. |
| Whether the defamation claim is time-barred | Biomed alleges statements after 2009, within a year before filing. | Time-bar applies; vagueness cannot rescue a time-barred claim. | Count Five time-barred and dismissed. |
| Whether the defamation claim has adequate specificity | Biomed identified several statements by Oxford. | Biomed fails to specify who said what to whom and when, other than one date. | Count Five dismissed for lack of specificity and notice. |
Key Cases Cited
- Varity Corp. v. Howe, 516 U.S. 489 (U.S. 1996) (equitable relief under § 502(a)(3) not normally appropriate where § 502(a)(1)(B) relief exists)
- Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006) (breach of fiduciary duty claims may be viable where § 502(a)(1)(B) relief is inadequate)
- Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76 (2d Cir. 2001) ( affirms interplay between § 502(a)(1)(B) and § 502(a)(3) relief)
- Kendall v. Employees Retirement Plan of Avon Products, 561 F.3d 112 (2d Cir. 2009) (§ 1132(a)(3) applies to injunctive relief; many claims seek monetary damages)
- Pelosi v. Schwab Capital Markets, L.P., 462 F. Supp. 2d 503 (S.D.N.Y. 2006) (notes limits on equitable relief under ERISA)
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (U.S. 2011) (interprets 'appropriate equitable relief' under § 502(a)(3))
- Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006) (discusses relief available under § 502(a)(1)(B) vs § 502(a)(3))
- Reilly v. Natwest Markets Group Inc., 181 F.3d 253 (2d Cir. 1999) (pleading standard for defamation notices)
- Dillon v. City of New York, 261 A.D.2d 34, 704 N.Y.S.2d 1 (N.Y. App. Div. 1999) (defamation pleading standards in New York)
- Gmurzynska v. Hutton, 355 F.3d 206 (2d Cir. 2004) (pleading and notice requirements in defamation cases)