Innova Hosp. San Antonio, Ltd. v. Blue Cross & Blue Shield of Ga., Inc.
892 F.3d 719
5th Cir.2018Background
- Innova Hospital San Antonio (the Hospital) sued sixteen insurers/administrators as assignee of patients' benefits, alleging underpayment or nonpayment for 863 claims totaling >$58M.
- The Hospital filed a second amended complaint that used representative plan language but did not attach or identify specific plan provisions for each claim because most plan documents were in defendants' control and were not produced timely.
- Defendants moved to dismiss under Rule 12(b)(6) arguing the complaint failed to plead the specific plan terms required for ERISA and contract claims. The district court dismissed most claims but left two (later voluntarily dismissed by Hospital) and tentatively left an attorneys’ fees claim.
- The Hospital sought leave to amend out of time to add specific plan language after defendants belatedly produced documents; the district court denied leave.
- On appeal, the Fifth Circuit reversed dismissal of the ERISA §1132(a)(1)(B) plan-benefits claim and the state-law breach-of-contract claim, affirmed dismissal of ERISA §1132(a)(3) fiduciary/claims-procedure claims, and affirmed denial of untimely leave to amend; remanded for further proceedings including consideration of attorneys’ fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a plaintiff alleging ERISA plan benefits under 29 U.S.C. §1132(a)(1)(B) must plead specific plan provisions to survive a 12(b)(6) motion | Hospital: Twombly/Iqbal do not require pleading provisions plaintiff cannot access; representative plan language plus facts about defendants' control suffices | Insurers: Specific plan language is essential to plausibly allege entitlement to benefits | Court: No per se requirement; representative plan terms and factual allegations about defendants' refusal to produce documents can suffice to state a plausible §1132(a)(1)(B) claim; reversal of dismissal |
| Whether breach-of-contract claims (non-ERISA plans) require identification of specific contract provisions at pleading stage | Hospital: Same facts supporting ERISA claim suffice for breach claims; defendants withheld documents | Insurers: Hospital failed to plead the contract terms and which contracts governed each claim | Court: Under Texas-law pleading standards (and Electrostim guidance), Hospital alleged existence, performance, breach, and damages sufficiently; reversal of dismissal |
| Whether Hospital may proceed on ERISA §1132(a)(3) fiduciary/claims-procedure theories when §1132(a)(1)(B) remedies exist | Hospital: §1132(a)(3) allows equitable relief (surcharge) and Amara permits some monetary-equitable remedies | Insurers: §1132(a)(1)(B) provides adequate remedy; §1132(a)(3) not available for claims seeking plan benefits | Court: Affirmed dismissal — §1132(a)(3) claims barred where plaintiff can seek benefits under §1132(a)(1)(B); surcharge not a distinct route here |
| Whether district court abused discretion denying leave to amend the complaint out of time under Rule 16(b) | Hospital: Belated production of plans justified good cause to modify schedule and amend | Insurers: Hospital did not show good cause; amendment would prejudice defendants | Held: Hospital forfeited proper Rule 16 argument on appeal; denial of untimely leave affirmed |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual content permitting reasonable inference of liability)
- Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir. 2009) (ERISA plaintiffs often lack access to plan details; representative allegations may suffice)
- Varity Corp. v. Howe, 516 U.S. 489 (1996) (§1132(a)(3) equitable relief available when no adequate remedy under other ERISA provisions)
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (equitable remedies including surcharge may be available under §1132(a)(3) in some circumstances)
- Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) (fees under §1132(g)(1) require some degree of success)
- Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) (money damages are typically legal, not equitable, relief)
- Lincoln Benefit Life Co. v. AEI Life, LLC, 800 F.3d 99 (3d Cir. 2015) (accepting allegations on information and belief when facts lie within defendant's control)
- Swenson v. United of Omaha Life Ins. Co., 876 F.3d 809 (5th Cir. 2017) (if benefits are available under §1132(a)(1)(B), §1132(a)(3) claim is generally unavailable)