Zalduondo v. Aetna Life Insurance
845 F. Supp. 2d 146
D.D.C.2012Background
- ERISA suit by Zalduondo against Aetna for denying benefits under her employer health plan; plan administered by Aetna with network restrictions and pre-certification requirements.
- Zalduondo could not find an in-network surgeon for hip surgery and sought coverage for an out-of-network surgeon (Dr. Wolff) by arguing network deficiency.
- Aetna denied Dr. Wolff’s services as in-network after a pre-certification and a September 14, 2009 phone call; surgery occurred September 16, 2009 with subsequent denial notices.
- Plaintiff filed an amended complaint in Oct. 2010 asserting two claims: denial of benefits (Claim 1) and breach of fiduciary duties (Claim 2) under ERISA; defendant moved to dismiss.
- The court provisionally limited Claim 1 to the in-network denial for Dr. Wolff and dismissed Claim 2 as not pled to target plan-wide harm; it also addressed related exhaustion issues and a motion for sur-reply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Exhaustion of administrative remedies for denial of benefits | Zalduondo exhausted by appeals related to Dr. Wolff's in-network rate | Exhaustion required for all denial grounds under ERISA | Partial: exhaustion lacking for broader denial grounds; only in-network appeal survived |
| Validity of Claim 1 after exhaustion ruling | denial of in-network payment stated a proper ERISA claim | Exhaustion incomplete for some denial grounds; only in-network aspect survives | Claim 1 narrowed to in-network denial of Dr. Wolff; surviving portion allowed to proceed |
| Breach of fiduciary duties under ERISA (1132(a)(2) vs 1132(a)(3)) | Seek remedies under 1132(a)(2) or, alternatively, 1132(a)(3) | 1132(a)(2) requires plan-wide harm; 1132(a)(3) not available where 1132(a)(1) remedy exists | Dismissed under both 1132(a)(2) and 1132(a)(3); no adequate plan-wide or equitable relief pleaded |
| Sur-reply and Amara/Cigna relevance | Supreme Court Amara supports individualized relief under 1132(a)(3) | Amara not controlling for this circuit; no relief from 1132(a)(3) available | Sur-reply denied; Amara not helpful to resolve issues before court |
Key Cases Cited
- Commc’ns Workers of Amer. v. Amer. Tel. & Tel. Co., 40 F.3d 426 (D.C. Cir. 1994) (exhaustion required before ERISA suit for benefits)
- Dorsey v. Jacobson Holman, PLLC, 707 F. Supp. 2d 21 (D.D.C. 2010) (exhaustion and administrative remedies in ERISA actions)
- Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (U.S. 1985) (ERISA fiduciary duties focus on plan-wide losses, not individual relief under §1109)
- Varity Corp. v. Howe, 516 U.S. 489 (U.S. 1996) (§ 1132(a)(3) is a catchall; relief limited where adequate remedy exists under § 1132(a)(1))
- Clark v. Feder Semo & Bard, P.C., 808 F. Supp. 2d 219 (D.D.C. 2011) (breach of fiduciary claims cannot stand where adequate remedy exists under § 1132(a)(1)(B))
- Clark I, 527 F. Supp. 2d 112 (D.D.C. 2007) (early decision in Clark series on dual-track claims)
- Clark IV, 697 F. Supp. 2d 24 (D.D.C. 2010) (part of Clark series addressing amendments and relief)
- Clark VI, 808 F. Supp. 2d 219 (D.D.C. 2011) (held plaintiff could not pursue both § 1132(a)(1)(B) and § 1132(a)(3) to trial; discussed adequacy of remedy)
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (S. Ct. 2011) (Amara clarifies equitable relief scope under ERISA; relevance discussed but not controlling here)