Danielle Mull v. Motion Picture Industry Health
2017 U.S. App. LEXIS 13949
| 9th Cir. | 2017Background
- The Motion Picture Industry Health Plan (the Plan) is a self-funded multi-employer plan created by a Trust Agreement; the Board adopted a Summary Plan Description (SPD) detailing eligibility and benefit rules.
- The SPD contains a reimbursement/recoupment provision: beneficiaries must reimburse the Plan for benefits paid if they recover from a third party, and unpaid reimbursements may be offset against future Plan benefits.
- In 2010 Lenai (a dependent of Norman) received $147,948.38 in Plan-paid medical benefits after a car accident; she recovered $100,000 from a third party in 2011 and refused to reimburse the Plan.
- The Plan sought reimbursement and recouped $100,000 from future benefits payable to Norman and other beneficiaries; Norman, Lenai, and other family members sued for declaratory and injunctive relief and recovery of benefits.
- The district court granted summary judgment for Plaintiffs, concluding the SPD’s reimbursement/recoupment provisions were unenforceable because they appeared only in the SPD and not in a governing plan document; it enjoined enforcement and ordered partial reimbursement.
- The Court of Appeals vacated and remanded, holding the Plan consists of the Trust Agreement together with the SPD, so the reimbursement/recoupment provisions are part of the plan and the district court erred in excluding the SPD as a plan document.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the SPD’s reimbursement/recoupment provisions are enforceable as part of the ERISA plan | The SPD is not a governing plan document; reimbursement terms appearing only in the SPD are unenforceable | The SPD, together with the Trust Agreement, constitutes the ERISA plan and its reimbursement terms are binding | The plan comprises the Trust Agreement plus the SPD; the district court erred in excluding the SPD as a plan document (vacated and remanded) |
| Whether the Trust Agreement alone satisfies ERISA’s required plan terms (specifically basis for payments) | The Trust Agreement contains the plan and governs benefits | The Trust Agreement lacks the basis for payments; the Board intended the SPD to supply payment terms | The Trust Agreement does not, by itself, supply the basis for payments; the SPD fills that role and together they form the plan |
| Whether Amara prohibits treating an SPD as a formal plan document | Amara means SPD statements cannot be treated as plan terms | SPD can be a plan document if it does not add or contradict governing documents | Amara does not prohibit an SPD from being a plan document where it is authorized by and consistent with plan governance; here no conflict exists |
| Whether additional issues (e.g., enforceability against Plaintiffs other than Lenai) can be resolved on appeal | Plaintiffs argued broadly for invalidation against all beneficiaries | Plan argued enforcement against those who received third-party recoveries | The court declined to decide such collateral issues on appeal and remanded them to the district court |
Key Cases Cited
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (SPD statements communicate with beneficiaries but are not automatically the plan terms for certain ERISA claims)
- US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013) (clarifies limits on equitable relief and interaction between SPD and plan documents)
- Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124 (10th Cir. 2011) (SPD cannot create terms not authorized by governing plan documents)
- Prichard v. Metro. Life Ins. Co., 783 F.3d 1166 (9th Cir. 2015) (an SPD may constitute a formal plan document so long as it neither adds to nor contradicts existing plan documents)