Humana Health Plan, Inc. v. Patrick Nguyen
785 F.3d 1023
5th Cir.2015Background
- Nguyen participates in API Enterprises Employee Benefits Plan, an ERISA-governed welfare plan administered by Humana as Plan Manager under a PMA.
- PMA limits Humana to act as agent within API’s management policies and allows hiring subcontractors; API funds outside counsel when requested by API/Plan Administrator.
- PMA includes a Subrogation/Recovery clause allocating 30% of recovered amounts to Humana for eligible recoveries.
- Nguyen is injured in April 2012; the Plan paid $274,607.84 for his medical expenses; Nguyen later recovered $255,000 from a third-party settlement paid by his own insurer.
- Plan advised Humana it would not seek reimbursement from Nguyen per governing documents; Humana sued Nguyen for equitable relief and subrogation, with Nguyen depositing disputed funds into court and counterclaiming.
- District court granted Humana summary judgment; Nguyen appeals challenging Humana’s ERISA fiduciary status and standing to seek relief under §1132(a)(3).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Humana is an ERISA fiduciary with standing | Nguyen argues Humana lacks fiduciary status and thus standing under §1132(a)(3). | Nguyen contends Humana is not a fiduciary because its role is ministerial or limited by the PMA’s framework. | Humana has discretion to pursue subrogation/reimbursement, giving fiduciary standing. |
| Whether the PMA framework shows active supervision or final authority | Humana operates under a framework of policies and may supervise its own procedures. | The district court failed to show API actively supervised Humana; PMA language supports Humana’s discretion. | The PMA supports discretionary authority; standing exists pending remand for further factual development. |
| Whether Humana’s duties are ministerial or fiduciary | Humana’s subrogation/recovery duties are discretionary and akin to fiduciary functions. | The duties resemble ministerial tasks performed by professionals under a policy framework. | Humana’s role can be fiduciary when exercised under a framework and supervision; not merely ministerial. |
| Whether the district court erred in interpreting the PMA to find fiduciary status | District court properly recognized Humana’s discretionary authority under the PMA. | District court misread the PMA by attributing independent power to Humana. | Remand to reexamine standing is required; the district court’s interpretation is not final. |
Key Cases Cited
- Pegram v. Herdrich, 530 U.S. 211 (U.S. 2000) (fiduciary status defined by discretionary authority; context for ERISA duties)
- Reich v. Lancaster, 55 F.3d 1034 (5th Cir. 1995) (liberal fiduciary interpretation within ERISA’s remedial purpose)
- American Federation of Unions Local 102 Health & Welfare Fund v. Equitable Life Assurance Soc'y of the U.S., 841 F.2d 663 (5th Cir. 1988) (professional services may be ministerial under a framework of policies)
- Nieto v. Ecker, 845 F.2d 868 (9th Cir. 1988) (attorney not fiduciary absent authority over plan beyond professional functions)
- Coleman v. Champion Int’l Corp./Champion Forest Prods., 992 F.2d 530 (5th Cir. 1993) (standing under §1132 requires statutory definitions satisfaction)
- Clark v. America's Favorite Chicken, 110 F.3d 295 (5th Cir. 1997) (ERISA plan interpretation and fiduciary status considerations)
- Wildbur v. ARCO Chem. Co., 974 F.2d 631 (5th Cir. 1992) (abuse of discretion standards in plan interpretation)