Metcalf v. Blue Cross Blue Shield
57 F. Supp. 3d 1281
D. Or.2014Background
- Robert Metcalf, a non‑participating chiropractor, obtained written assignments and designations from Plan participants authorizing him to pursue and receive their health‑benefit payments under the Daimler Trucks North America LLC Group Health Plan (Plan).
- Metcalf submitted claims and notified the Plan of the assignments; defendants either paid participants directly or failed to pay, and refused to treat Metcalf as assignee or provide Explanations of Benefits.
- The Plan contains no anti‑assignment clause; defendants concede assignments’ validity but argue they discharged obligations by paying participants.
- Metcalf sued under ERISA: (1) § 1132(a)(1)(B) to recover benefits (Claim 1) and (2) § 1132(a)(3) for failure to provide a full and fair review / procedural rights (Claim 2); he also pleaded a breach‑of‑contract alternative (Claim 3).
- Magistrate Judge Stewart recommended denying dismissal as to Claims 1 and 2 but granting dismissal of Claim 3 (with leave to replead). The district court adopted the F&R as supplemented: Claims 1 and 2 survive; Claim 3 dismissed with leave to replead as an ERISA claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an assignee (provider) is a "beneficiary" under ERISA entitled to sue under §§ 1132(a)(1)(B) and (a)(3) | Metcalf: the Plan participants designated him; ERISA's definition of “beneficiary” and permissive assignability permit an assignee to be a statutory beneficiary with an independent cause of action | Defendants: assignees lack statutory beneficiary status; any standing is derivative and is defeated if assignors were paid | Court: assignees fall within ERISA’s definition of “beneficiary” and have a cause of action; constitutional standing satisfied; claims may proceed (Claims 1 and 2 survive) |
| Whether defendants discharged ERISA obligations by paying participants (assignors) after notice of assignment | Metcalf: after notice, obligor must pay assignee; paying assignor does not discharge the Plan’s obligation when a valid assignment exists | Defendants: paying participants discharged obligations; no further liability to assignee | Court: under federal common law informed by state law and ERISA policy, a valid assignment requires the obligor to honor payment to assignee after notice; paying the assignor may not discharge the Plan when assignee holds rights; therefore defendant’s argument does not defeat claims at pleading stage |
| Whether Metcalf became a per‑claim participating provider and thus has a contract claim against Plan (Claim 3) | Metcalf: checking per‑claim boxes on claim forms made him a per‑claim participating provider, giving rise to contractual rights (direct payment, EOBs) | Defendants: no contract exists between Plan and a non‑participating provider; per‑claim arrangement is between provider and patient, not the Plan | Court: per‑claim language does not create enforceable contract between Metcalf and Plan; Claim 3 dismissed with leave to replead as ERISA claim |
| Pleading sufficiency given many claims and limited specificity | Metcalf: claims arise from single Plan, named participants, date ranges, prior administrative submissions — defendants have Plan records to identify specifics | Defendants: complaint too vague about hundreds of claims and amounts | Court: complaint adequate under Rules 8/10; no further particularity required at this stage |
Key Cases Cited
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014) (statutory “standing” inquiry recast as whether statute supplies a cause of action; use zone‑of‑interests and traditional statutory interpretation)
- Misic v. Bldg. Serv. Emps. Health & Welfare Trust, 789 F.2d 1374 (9th Cir. 1986) (permitting health‑care providers to sue as assignees; analyzed standing/derivative rights)
- Cromwell v. Equicor‑Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991) (health‑care provider with valid assignment may assert ERISA claim as a beneficiary)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (federal common law governs rights and obligations under ERISA‑regulated plans)
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) (federal common law development for ERISA disputes)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (constitutional standing requirements: injury‑in‑fact, causation, redressability)