Pellicano v. Blue Cross Blue Shield Ass'n
540 F. App'x 95
3rd Cir.2013Background
- Michael Pellicano, a retired federal employee with FEHBA coverage administered by Blue Cross, sought coverage for durable medical equipment (DME); Blue Cross approved 65% and OPM upheld that determination on appeal.
- Pellicano sued Blue Cross and OPM in the Middle District of Pennsylvania alleging false, misleading information, bad faith processing, emotional distress, punitive damages, and reimbursement of expenses.
- Blue Cross and OPM moved to dismiss under Rule 12(b)(6), arguing FEHBA preempted Pellicano’s state-law claims challenging insurance processing and coverage decisions.
- The Magistrate Judge recommended dismissal; the District Court adopted the recommendation, dismissed the claims against Blue Cross and later OPM, and denied Pellicano’s motions for reconsideration.
- Pellicano’s notice of appeal was filed August 7, 2012. The Third Circuit found the notice untimely as to the underlying dismissal (judgment entered May 18, 2012) but timely as to the later-denied motions for reconsideration; thus jurisdiction was limited to review of the denial-of-reconsideration orders.
- The Third Circuit affirmed denial of reconsideration, concluding Pellicano merely reargued previously rejected claims and that his attempts to distinguish coverage-denial claims from tort/bad-faith processing claims did not avoid FEHBA preemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FEHBA preempts Pellicano’s state-law claims against carrier/OPM | Pellicano: claims are for bad-faith insurance practices and emotional distress, not a benefits denial, so not preempted | Blue Cross/OPM: FEHBA preempts state-law suits challenging plan administration or coverage decisions | Held: FEHBA preempts these claims; courts consistently reject tort theories to evade preemption |
| Whether Supreme Court’s McVeigh limits FEHBA preemption here | Pellicano: McVeigh shows FEHBA does not displace all state laws touching federal plans | Defs: McVeigh addressed federal jurisdiction, not substantive preemption as a defense | Held: McVeigh is inapposite; it addressed jurisdiction, not whether FEHBA bars state-law suits in federal court |
| Whether the district court abused discretion in denying Rule 59(e) reconsideration | Pellicano: district court misapplied McVeigh and later cases and ignored asserted differences | Defs: the motions reargued prior arguments and raised inapplicable authority; denial was proper | Held: No abuse of discretion; motions merely reargued prior points and cited cases about jurisdiction not substantive preemption |
| Whether the appeal is timely and this Court has jurisdiction to review dismissals | Pellicano: appealed orders including dismissals and denials of reconsideration | Blue Cross: notice of appeal was filed too late for underlying dismissals; timely only as to denial orders | Held: Notice was untimely for underlying dismissals (judgment May 18, 2012); jurisdiction limited to denial-of-reconsideration orders |
Key Cases Cited
- Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006) (considered FEHBA preemption in context of federal-question jurisdiction for subrogation reimbursement claim)
- In re Cendant Corp. Sec. Litig., 454 F.3d 235 (3d Cir. 2006) (criteria for separate-document final-judgment requirement under Rule 58)
- Baker v. United States, 670 F.3d 448 (3d Cir. 2012) (post-judgment motion tolling of appeal period principles)
- Lizardo v. United States, 619 F.3d 273 (3d Cir. 2010) (forfeiture of claim-processing objections and tolling rules)
- Lazaridis v. Wehmer, 591 F.3d 666 (3d Cir. 2010) (standards for Rule 59(e) reconsideration)
- Long v. Atlantic City Police Dept., 670 F.3d 436 (3d Cir. 2012) (jurisdiction to review denial of reconsideration where underlying judgment appeal is untimely)