ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
Re: Dkt. No. 48
INTRODUCTION
Plaintiff Amelia Byrnes Brazil received medically necessary mental health treatment at a residential facility. Her federal health insurance plan denied coverage because the plan excluded coverage for residential treatment centers, and so she is seeking redress here. Both California and the United States have passed mental health parity laws requiring that treatment limitations for mental health benefits are no more restrictive than those for medical and surgical benefits, but federal law excludes federal insurance plans from their scope. The question I must decide is whether Brazil can overcome" defendant Office of Personnel Management’s (“OPM”) assertions of sovereign immunity and preemption in order to address the merits of her claim. Because federal law does not allow the relief Brazil seeks, her motion for summary judgment is DENIED and OPM’s motion for summary judgment is GRANTED.
FACTUAL BACKGROUND
At all times relevant in this matter, Brazil was enrolled in the Federal Employees Health Benefits Program’s Blue Cross and Blue Shield Service Benefit Plan (the “Plan”). OPM0002; Opp’n (Dkt. No. 51) 2. The Plan is administered in California by Blue Shield of California (“BSC”). It is “fee for service ... with a preferred provider organization” and is “[sjponsored and administered by: The Blue Cross and Blue Shield Association and participating Blue Cross and Blue Shield Plans.” OPM 0048. The “[mjental health and substance abuse benefits” do not include “[sjervices performed or billed by ... residential treatment centers.” OPM0138, OPM0140.
On August 5, 2011, Brazil was hospitalized for 15 days at the Lucille Packard Children’s Hospital for anorexia nervosa. OPM0013-14. All the physicians involved in Brazil’s care agreed that she needed residential treatment. OPM0014. While the hospitalization addressed “the most immediate physical threats” to Brazil, it did not address “the underlying causes.” OPM0014. Brazil’s father wrote to BSC that “without sustained and sophisticated treatment in a residential facility, those underlying causes would remain completely unaddressed,” and Brazil “would continue to suffer anorexia nervosa indefinitely, likely necessitating additional hospitalizations and multiple calls on other health care providers.” OPM0014. The physicians and Brazil’s therapist, in consultation with her father, identified Monte Nido Vista Residential Center, in Agoura Hills, California, as the residential treatment program that best fits Brazil’s medical needs and psychiatric circumstances. OPM0014.
Brazil entered Monte Nido Vista on August 23, 2011. OPM0015. On the same day, Brazil requested pre-certification from BSC for admission to Monte Nido Vista. OPM0002. BSC denied the request and told Brazil’s father that his policy provided no benefits for residential treatment. OPM0015; OPM0022. Brazil’s father contacted BSC to appeal the denial and “explained that the residential
On August 29, 2011, Brazil’s father submitted to BSC a claim for reimbursement for expenses he had and was going to incur for services being rendered to Brazil. OPM0013-16. Brazil’s father cited a decision by the United States Court of Appeals for the Ninth Circuit, Harlick v. Blue Shield of California,
On September 1, 2011, Brazil’s father responded to BSC, asking why it was not bound by Harlick. OPMOOIO. On September 28, 2011, BSC responded, stating that “Title 5 United States Code section 8902(m)(1) states that Plans participating with the FEHBP (Federal Employee Health Benefit Program) are exempt from regulation by state and local statute.” OPM0008. BSC also informed Brazil that she may ask OPM to review the claim dispute and explained the process for doing so. OPM0007-08.
On October 11, 2011, Brazil’s father filed an appeal on her behalf to OPM. OPM0027. On November 3, 2011, OPM affirmed BSC’s denial of the claim, asserting that the Plan explicitly does not cover services performed by residential treatment centers or their staff. OPM0026. OPM stated that “we are not disputing that your daughter needed this service for her medical condition,” but that the Plan did not cover the service. OPM0025-26. The letter also stated that “you do retain the right to file suit against the Office of Personnel Management in Federal court.” OPM0026.
PROCEDURAL BACKGROUND
On November 3, 2011, OPM informed Brazil that she exhausted the administrative remedies for appealing the denial of benefits. OPM0026. On June 4, 2012, Brazil filed this action. Dkt. No. 1. The First Amended Complaint (“FAC”) seeks (1) damages “in a specific sum to be proved at trial ... a sum that exceeds “$100,000” for violation of the Federal Employees Health Benefits Act of 1959, 5 U.S.C. §§ 8901 et seq.; (2) a declaration that the Plan violates California’s Mental Health Parity Act, Cal. Health & Safety Code § 1374.72, Cal Ins. Code § 10144.5; and (3) a declaration that the Plan violates the federal Mental Health Parity and Addiction Equity Act, 42 U.S.C. § 300gg-26, 29 U.S.C. § 1185a. In addition, the FAC seeks “an Order enjoining the Plan and the Defendant from continuing to incorporate into the insurance policies they provide or authorize any blanket exclusion of coverage for medically necessary residential treatment for anorexia nervosa.” The FAC also seeks attorney’s fees under the Equal Access to Justice Act, 28 U.S.C. § 2412, and costs.
Brazil filed this motion for summary judgment on November 18, 2013, Dkt. No. 48.
LEGAL STANDARD
I. SUMMARY JUDGMENT
Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett,
Once the moving party has met its burden, the burden shifts to the non-moving party to “designate specific facts showing a genuine issue for trial.” Id. at 324,
II. SUBJECT MATTER JURISDICTION AND SOVEREIGN IMMUNITY
“Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.... ” Kokkonen v. Guardian Life Ins. Co. of Am.,
Sovereign immunity and subject matter jurisdiction have a “murky” and “confusing relationship.” Powelson v. U.S., By & Through Sec’y of Treasury,
DISCUSSION
I. BACKGROUND ON FEHBA
The Federal Employees Health Benefits Act of 1959 (“FEHBA”), 5 U.S.C. § 8901 et seq., “establishes a comprehensive program of health insurance for federal employees.” Empire Healthchoice Assur., Inc. v. McVeigh,
II. SUBJECT MATTER JURISDICTION
OPM argues that I lack subject matter jurisdiction to hear this case. Opp’n 7. OPM points out that while Brazil asserts jurisdiction based on “a federal question as set forth in 5 U.S.C. § 8912,” FAC ¶ 1, which grants district courts jurisdiction over claims “founded on” FEHBA, “the FAC does not allege any claim ‘founded on’ the Federal Employees Health Benefits Act.” Opp’n 7 (quoting 5 U.S.C. § 8912). Despite the fact that the first cause of action is titled “VIOLATION OF THE FEHBA,” the FAC does not allege that OPM violated FEHBA in any way; rather, the other two causes of action only allege violations of California’s Mental Health Parity Act and the federal Mental Health Parity and Addiction Equity Act. Since Section 8912 does not establish subject matter jurisdiction here, OPM says that I lack jurisdiction. Opp’n 7. Brazil did not respond to this argument.
The Ninth Circuit has said that “there is subject matter jurisdiction over federal-law claims unless they are ‘obviously frivolous.’ ” Cook Inlet Region, Inc. v. Rude,
I have subject matter jurisdiction over this case.
OPM argues that I lack jurisdiction to grant Brazil’s requested relief for the First Cause of Action because there is no waiver of sovereign immunity and, as a federal agency, OPM may only be sued if Congress unequivocally waives sovereign immunity. The only relief Brazil may seek because there is a waiver of sovereign immunity is “an order directing OPM to invoke its contractual right to direct the carrier to pay the claim.” Opp’n 1. However, “the FAC seeks money damages and declaratory relief for the alleged violation of two mental health parity laws that do not apply to the Federal Employees Health Benefits Plan at issue.” Opp’n 1.
“Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit.” F.D.I.C. v. Meyer,
Sovereign immunity would bar Brazil’s claims for relief as pleaded because the FAC seeks relief from the OPM beyond FEHBA’s limited waiver of sovereign immunity. Bryan v. Office of Pers. Mgmt.,
That said, it is apparent from the FAC that, despite how it is worded, what Brazil really wants is for BSC to pay the amount of benefits in dispute. OPM does not disagree that there is a limited waiver of sovereign immunity that would allow me to order OPM to direct the carrier to do so if the complaint properly requested it. See Opp’n 6. Brazil asked at the hearing to be allowed to amend the FAC to clarify the remedy she seeks. See Tr. (Dkt. No. 63) 16:7-21. I would grant the request if it was not futile. However, there is no dispute that the Plan, as written, excludes the coverage Brazil seeks. And for the reasons stated in my discussion of the other causes of action, neither the California nor federal mental health parity acts provide a legal basis for Brazil’s claims. For that reason, Brazil’s oral motion to amend is DENIED.
IV. SECOND CAUSE OF ACTION FOR DECLARATORY RELIEF THAT THE PLAN VIOLATES CALIFORNIA’S MENTAL HEALTH PARITY ACT
A. The Cause of Action Is Barred By Sovereign Immunity.
OPM argues that I lack jurisdiction over the second cause of action because there is no waiver of sovereign immunity over these claims related to the California Mental Health Parity Act. Opp’n 7. Regardless of whether OPM is bound by the California law, which OPM argues it is not, “Congress has not consented to be sued under the California Mental Health Parity Act.” Opp’n 8. Furthermore, the Declaratory Judgment Act is not a waiver of sovereign immunity. Surreply (Dkt. No. 57) 4.
I agree. Brazil does not point to any explicit waiver by Congress allowing OPM to be sued for purported violations of California’s Mental Health Parity Act. “Although the instant [cause of] action is [ ] premised on the Declaratory Judgment Act, 28 U.S.C. § 2201, that statute plainly does not operate as an express waiver of sovereign immunity.” Muirhead v. Mechara,
Brazil argues that “[t]here a[re] numerous cases in which plaintiffs have sought declaratory relief in FEHBA cases.”
B. The Act Is Preempted.
Sovereign immunity bars me from considering this claim. However, even if it did not deprive me of jurisdiction, Brazil is not entitled to summary judgment because the California Act is. preempted by federal law.
“There are three categories of preemption: express, field, and conflict. Field and conflict preemption are subcategories of implied preemption.” Stengel v. Medtronic Inc.,
FEHBA contains an express preemption provision: “The terms of any contract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, or any regulation issued thereunder, which relates to health insurance or plans.” 5 U.S.C. § 8902(m)(1). In 1998, Congress deleted the phrase “to the extent that such law or regulation is inconsistent with such contractual provisions” from the end of the preemption provision such that now “state law — whether consistent or inconsistent with federal plan provisions — is displaced on matters of ‘coverage or benefits.’ ” Empire II,
California’s Mental Health Parity Act does not apply to Brazil’s benefits because FEHBA preempts it. The California Health and Safety Code provides that “Every health care service plan contract ... that provides hospital, medical, or surgical coverage shall provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses of a person of any age ... under the same terms and conditions applied to other medical conditions_”
Brazil argues that the Act is not preempted by FEHBA. Mot. (Dkt. No. 48) 8. Brazil notes that in Harlick, the Ninth Circuit concluded that “plans within the scope of the [California Mental Health Parity] Act must provide coverage of all ‘medically necessary treatment’ for ‘severe mental illnesses’ under the same financial terms as those applied to physical illnesses.” Harlick,
Brazil’s reliance on Harlick and Burton is erroneous. Both cases deal with ERISA, which is not relevant here because Brazil’s Plan is governed by FEHBA. Although she argues that the preemption provisions in ERISA and FEHBA should be treated similarly, ERISA’s preemption provision includes a savings clause that creates an exception to preemption for any state law “which regulates insurance, banking, or securities.” 29 U.S.C. § 1144(b)(2). ERISA also does “not apply to any employee benefit plan if ... such plan is a governmental plan.” 29 U.S.C. §§ 1002(32), 1003(b)(1). In contrast, FEHBA’s preemption provision has no savings clause and applies to “any State or local law ... which relates to health insurance or plans.” 5 U.S.C. § 8902(m)(1) (emphasis added); see also Botsford,
OPM also argues that the California Mental Health Parity Act is preempted by conflict preemption. “FEHBA’s preemption provision, 5 U.S.C. § 8902(m)(1), ensures that FEHBA benefits are administered uniformly” as Congress intended. Cedars-Sinai Med. Ctr.,
I agree that California’s Mental Health Parity Act is also conflict preempted. In enacting FEHBA, Congress aimed to provide federal employees with “cost-efficient” medical insurance by preventing “disruption [that] would increase administrative costs and, ultimately, increase the cost of health care to federal employees and the Government.” Botsford,
Brazil argues that the preemption provision may be unconstitutional. Mot. 10. Citing the Second Circuit’s decision in Empire HealthChoice Assurance, Inc. v. McVeigh,
I am not persuaded that FEHBA’s preemption provision is unconstitutional. The Supreme Court reviewed Empire II and explicitly noted that the provision “is unusual in that it renders preemptive contract terms in health insurance plans, not provisions enacted by Congress,” but did not find it constitutionally problematic and only instructed “cautious interpretation.”
C. Disposition
Because sovereign immunity bars Brazil’s claim for declaratory relief and because California’s Mental Health Parity Act is expressly preempted and conflict preempted, Brazil’s motion for summary judgment on the second cause of action is DENIED and OPM’s motion for summary judgment is GRANTED.
Y. THIRD CAUSE OF ACTION FOR DECLARATORY RELIEF THAT THE PLAN VIOLATES FEDERAL MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT
The federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 requires that a plan that “provides both medical and surgical benefits and mental health or substance use disorder benefits” ensure that “the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.” 42 U.S.C. § 300gg-26(a)(3)(A)(ii). A treatment limitation “includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.” 42 U.S.C. § 300gg-26(a)(3)(B)(iii).
In a November 10, 2008, letter from OPM to all FEHB Program Carriers, OPM stated that beginning January 1, 2010, FEHBA plans would be required to “apply the same financial requirements (coinsurance, co-payments, deductibles and
On February 2, 2010, the U.S. Department of the Treasury, U.S. Department of Labor, U.S. Department of Labor, and U.S. Department of Health and Human Services published Interim Final Rules Under the Paul Wellstone and Pete Do-menici Mental Health Parity and Addiction Equity Act of 2008 and a request for comments. 75 Fed.Reg. 5410-01. The Interim Rules state, “The Departments also recognize that MHPAEA prohibits plans and issuers from imposing treatment limitations on mental health and substance use disorder benefits that are more restrictive than those applied to medical/surgical benefits.” Id. at 5416. It continues, “Under these regulations, if a plan provides any benefits for a mental health condition or substance use disorder, benefits must be provided for that condition or disorder in each classification for which any medical/surgical benefits are provided.” Id. at 5413.
Brazil asserts that “OPM agreed that all insurance contracts would comply with MHPAEA, and that the Interim Rules required that [her] plan provide coverage for residential treatment.” Reply 2. She then notes that “On November 13, 2013, the Departments of Treasury, Labor and Health and Human Services issued the Final Rules,” which require plans that cover inpatient medical and surgical benefits to also cover residential treatment facility or center care for mental health or substance use disorders. Reply 2-3 (citing 78 Fed.Reg. 68240-47, -73 (Nov. 13, 2013)). “The Final Rules confirm, therefore, that the ‘unconditional exclusion’ of treatment of a mental illness is not allowed, when other conditions are being treatment outside of a hospital,” and the parties do not dispute that Brazil’s Plan excludes such treatment. Reply 4. Brazil points out that “the Plan provides skilled nursing care as a classification of medical/surgical benefits,” but “it does not provide residential treatment as a classification of mental health benefits.” Mot. 15. Thus, she contends, BSC is violating the parity requirements.
OPM argues that “The Court lacks jurisdiction over the Mental Health Parity and Addiction Equity Act claims because this Act did not amend FEHBA and does not apply to the FEHB Program.” Opp’n 8. It is correct. Although the Act amended three statutes, FEHBA was not one of them.
As a result, sovereign immunity bars this cause of action. Brazil does not point to any explicit waiver of sovereign immunity by Congress allowing OPM to be sued for purported violations of the federal Mental Health Parity and Addiction Equity Act or any relevant rules. “A waiver of the Federal Government’s sovereign immunity must be unequivocally expressed in statutory text....” Lane v. Pena,
CONCLUSION
For all the reasons above, I GRANT OPM’s motion for summary judgment and DENY Brazil’s motion for summary judgment.
IT IS SO ORDERED.
Notes
. Simultaneously, BSC moved to file a brief as amicus curiae. Dkt. No. 52. The motion for leave to file the brief is GRANTED.
. Courts, including the Ninth Circuit, have held that jurisdictional issues are not properly decided on a motion for summary judgment. O’Donnell v. Wien Air Alaska, Inc.,
. Brazil asserts that she is not making a direct claim under California’s Mental Health Parity Act. Reply 5 n.2.
. The California Insurance Code is nearly identical except that it refers to "disability insurance.” Cal Ins. Code § 10144.5.
. The three statutes are ERISA, 29 U.S.C. § 1185a, the Internal Revenue Code, 26 U.S.C. § 9812, and the Public Health Service Act, 42 U.S.C. 300gg-26.
. OPM also argues that even if the Act did apply to federal employee health plans, Brazil’s Plan "excludes coverage for residential treatment centers for both physical and mental illnesses.” Surreply 5 (citing OPM0123-24, -69). Similarly, Brazil’s argument about skilled-nursing coverage does not matter because it applies to Medicare Part A enrollees only and Brazil is not a Medicare Part A enrollee. Surreply 6 (citing OPM0128); Tr. 13:4-14:2. “In addition, Plaintiff's argument that residential treatment is required under the Mental Health Parity and Addiction Equity Act is incorrect” because the Act "does not impose an affirmative obligation to provide mental health benefits.” Surreply 5.
