362 F.3d 877 | 6th Cir. | 2004
Before: SILER and COOK, Circuit Judges;
BERTELSMAN, District Judge. [*] UNITED STATES COURT OF APPEALS _________________ FOR THE SIXTH CIRCUIT _________________ COUNSEL ARGUED: Steven M. Ott, OTT & ASSOCIATES, COB C LEARINGHOUSE (cid:88) Cleveland, Ohio, for Appellant. Andrew S. Pollis, HAHN, (cid:45) C ORPORATION , also known as LOESER & PARKS, Cleveland, Ohio, for Appellees. (cid:45) Digital Healthcare, Inc., ON BRIEF: Steven M. Ott, OTT & ASSOCIATES, (cid:45) No. 02-3645 Plaintiff-Appellant, Cleveland, Ohio, for Appellant. Andrew S. Pollis, Robert J. (cid:45) >
Fogarty, HAHN, LOESER & PARKS, Cleveland, Ohio, (cid:44) Mark J. Schwemler, ELLIOTT, REIHNER, SIEDZKOWSKI v. (cid:45) & EGAN, Blue Bell, Pennsylvania, Christopher S. Williams, (cid:45) Henry G. Grendell, CALFEE, HALTER & GRISWOLD, A ETNA U.S. H EALTHCARE , (cid:45) Cleveland, Ohio, Shaunda A. Patterson-Strachan, Stephen H. (cid:45) I NC .; G REAT W EST L IFE AND Goldberg, Waldemar J. Pflepsen, Jr., JORDEN BURT LLP, (cid:45) A NNUITY I NSURANCE C O .; Washington, D.C., for Appellees. (cid:45) B LUE C ROSS & B LUE S HIELD (cid:45) _________________ OF K ANSAS C ITY ; (cid:45) C ONNECTICUT G ENERAL L IFE (cid:45) OPINION (cid:45) I NSURANCE C OMPANY , _________________ (cid:45) Defendants-Appellees. (cid:45) COOK, Circuit Judge. Plaintiff-Appellant, COB (cid:45) Clearinghouse Corp. (COB), appeals the district court’s (cid:78) dismissal of its claims against Aetna U.S. Healthcare, Inc., Great West Life and Annuity Insurance Company, Blue Cross
Appeal from the United States District Court and Blue Shield of Kansas City, and Connecticut General Life for the Northern District of Ohio at Cleveland. Insurance Co. (collectively the Insurers). We affirm. No. 02-00020—Patricia A. Gaughan, District Judge. Argued: December 12, 2003 Decided and Filed: April 5, 2004 the district court’s dismissal of Counts One and Two. COB filed a Complaint against the Insurers, alleging that it was an authorized agent of Goodyear Tire & Rubber B. Coordination of Benefits Issues (Goodyear), Bridgestone-Firestone, Inc. (Bridgestone), Babcock & Wilcox, Progressive Processing, Inc. COB’s Complaint raised allegations relating to (Progressive), FirstMerit Bank (FirstMerit), Cambridge “coordination of benefits” issues. The necessity for health Industries, Inc. (Cambridge), and State Industries, Inc. (State) insurers to coordinate health benefits arises when two (or (collectively the Employers). The Employers provide more) health care plans provide benefits to the same ERISA-regulated health care benefits plans to their employees individual. The insurers must then determine who is and their employees’ dependents. COB claimed that it primarily and who is secondarily liable for the payment of represented the interests of the Employers pursuant to that individual’s health care benefits. This determination can contracts it had entered into with each Employer. sometimes be made by reviewing the provisions of the
individual insurance contracts. In some instances, however, The Insurers, on the other hand, contracted with different the insurance contracts may conflict. For example, each may employers to provide similar health care benefits through state that it provides only secondary coverage under the non-ERISA health insurance policies. circumstances. See McGurl v. Trucking Employees of North
Jersey Welfare Fund, Inc. , 124 F.3d 471, 473 (3d Cir. 1997). The Complaint set forth five claims. Count One alleged a Many states, including Ohio, [3] have resolved these conflicts violation of the Employee Retirement Income Security Act by adopting part or all of the Model Regulations set forth by (“ERISA”), and Count Two alleged “federal common law the National Association of Insurance Commissioners claims.” Counts Three through Five alleged claims for unfair (NAIC), an independent group of state insurance regulatory and deceptive insurance practices, bad faith, and unjust commissioners. See McGurl , 124 F.3d at 483. [4] That state enrichment.
The Insurers [1] filed Motions to Dismiss the Complaint [2] pursuant to Federal Rules of Civil Procedure 12(b)(1) and The district court also found that Counts One and Two failed to state a claim upon which relief could be granted. COB alleged several errors 12(b)(6), arguing that COB lacked standing to bring the challenging that determination, and the Insurers alleged an alternative claims and failed to state a claim upon which relief could be argument for affirming the district court’s decision. Due to our granted. The district court agreed, finding that COB had no disposition of the issue of CO B’s standing, it is not necessary for us to standing to bring Counts One and Two and, therefore, the address these other issues. [3] See Ohio Adm inistrative Code § 3901 -1-56(G). audit of coordination of benefits issues, and the
where parents are both covered by separate ERISA plans). subrogation and collection of indemnities due as a result COB alleged that, in this case, certain beneficiaries were of such audit as provided for and privileged by standard insured both under one of the Employers’ self-funded ERISA rules [or law] (for example, Section 3902.13(F) of the plans and under one of the Insurers’ non-ERISA policies. Ohio Revised Code or the rule[s] of the [NAIC], as COB claimed that the Insurers’ policies were primary, interpreted by the state at issue on any given claim). presumably because the coordination of benefits clauses of Those agreements then required COB to make three attempts the applicable insurance contracts conflicted. COB then to collect every claim and “further pursue every claim of a argued that the district court should extend the federal value exceeding $500.00 for the period of at least one year, or common law established in McGurl to these cases that until collection of the correct indemnity, or settlement of the involve only one ERISA-regulated plan. Under such a rule, claim, whichever occurs first.” The agreements all provided, COB contends that the Employers paid claims for which the however, that COB would “commence no litigation in the Insurers were primarily liable and they were only secondarily
name of [the Employer], or on its behalf, without prior notice liable. to [the Employer].” C. COB’s Contracts with the Employers The other two agreements were similar. The State COB bases its claim to being an authorized agent of the agreement differed in that it authorized COB to report Employers upon the contract—called either the “Audit potential claims to State, but did not authorize COB to pursue Agreement” or the “Recovery Service Agreement”—that it them. The Cambridge agreement differed in that it authorized No. 02-3645 COB Clearinghouse Corp. v. Aetna 7 8 COB Clearinghouse Corp. v. Aetna No. 02-3645
U.S. Healthcare, Inc., et al. U.S. Healthcare, Inc., et al. ERISA strictly limits standing. 29 U.S.C. § 1132(a)(3) [5] COB to “conduct litigation to recover amounts owed” without requiring prior notice to Cambridge. provides, in pertinent part, that:
II. ANALYSIS A civil action may be brought - The district court dismissed those counts COB . . . appeals—Counts One and Two of COB’s Complaint—on the (3) by a participant, beneficiary, or fiduciary (A) to ground that COB did not have standing to bring the case. enjoin any act or practice which violates any “We review a district court’s decision to grant a motion to provision of this subchapter or the terms of the plan, dismiss for lack of subject matter jurisdiction de novo. ” or (B) to obtain other appropriate equitable relief (i) Joelson v. United States , 86 F.3d 1413, 1416 (6th Cir. 1996). to redress such violations or (ii) to enforce any “For purposes of ruling on a motion to dismiss for want of provisions of this subchapter or the terms of the plan standing, both the trial and reviewing courts must accept as . . . . true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.”
And courts narrowly construe ERISA to permit only the Warth v. Seldin , 422 U.S. 490, 501 (1975). Having invoked parties specifically enumerated to bring suit. See Simon v. the jurisdiction of the federal courts, however, it is the Value Behavioral Health, Inc. , 208 F.3d 1073, 1081 (9th Cir. plaintiff’s burden to demonstrate that jurisdiction is proper. 2000) (citing Franchise Tax Bd. v. Constr. Laborers Vacation See Lujan v. Defenders of Wildlife , 504 U.S. 555, 561 (1992); Trust for S. Cal. , 463 U.S. 1, 27 (1983)). See also Kardules v. City of Columbus , 95 F.3d 1335, 1346 (6th Cir. Teagardener v. Republic-Franklin Inc. Pension Plan , 909 1996). F.2d 947, 951 (6th Cir. 1990) (narrowly construing proper parties under 29 U.S.C. § 1132(a)(1)). Indeed, even an Assuming, as we must, that COB was an authorized agent assignee of a participant, beneficiary, or fiduciary is generally of the Employers under the terms of the parties’ agreements, not permitted to maintain an ERISA claim. See Simon v. we must determine whether such an authorized agent has standing under ERISA to pursue these claims.
equitable relief, allows “participants, beneficiaries, and fiduc iaries” to bring claims, while 29 U.S.C. § 11 32(a)(1), which provides for monetary dama ges, only allows “participants and beneficiaries” to file suit. Like the district court, we will assume that COB brought the action pursuant to 29 U.S.C. § 1132 (a)(3), as that is the only section which gives rise to any argument that COB has standing in this case.
No. 02-3645 COB Clearinghouse Corp. v. Aetna 9 U.S. Healthcare, Inc., et al. Belwith Int’l, Inc. , 3 Fed. Appx. 363, 364 (6th Cir. 2001). It is undisputed that COB was neither a participant, a beneficiary, nor a fiduciary according to the dictates of the statute. COB argues, nevertheless, that the Employers whom it represented were fiduciaries and that as the agent of the Employers, it could bring suit.
Whether an employer who is also an ERISA plan sponsor is a fiduciary of the plan generally requires a detailed analysis of the employer’s actions and whether those actions were performed in the employer’s fiduciary capacity. See Hunter v. Caliber Sys., Inc. , 220 F.3d 702, 718 (6th Cir. 2000). “[W]e must examine the conduct at issue to determine whether it constitutes ‘management’ or ‘administration’ of the plan, giving rise to fiduciary concerns, or merely a business decision that has an effect on an ERISA plan not subject to fiduciary duties.” Id. (citations and internal quotations omitted). But even assuming that the Employers were fiduciaries who had a right to file suit pursuant to 29 U.S.C. § 1132(a)(3), that assumption does not confer standing on COB to sue in its own name as the Employers’ agent. Restatement (Second) of Agency § 372(2) (1958) provides that “an agent does not have such an interest in a contract as to entitle him to maintain an action at law upon it in his own name merely because he is entitled to a portion of the proceeds as compensation for making it or because he is liable for its breach.”
III. CONCLUSION
Given COB’s lack of standing, we affirm the decision of the district court.
NOTES
[*] The Honorable William O. Bertelsman, United States District Judge for the Eastern District of Kentucky, sitting by designation. 1 No. 02-3645 COB Clearinghouse Corp. v. Aetna 3 4 COB Clearinghouse Corp. v. Aetna No. 02-3645 U.S. Healthcare, Inc., et al. U.S. Healthcare, Inc., et al. district court had no subject matter jurisdiction over the case.
[2] I. BACKGROUND Counts Three through Five were dismissed as state law claims A. Procedure which were preempted by ERISA. COB has appealed only
[1]
[4] Aetna filed a Motion to Dismiss, in which Connecticut General and In some cases, the insurance policy at issue may also incorporate the Great-West joined. Upon disposition, the district court also granted a provisions of the NAIC Mode l Regu lations. See Bap tist Mem’l Hosp. v. dismissal, sua sponte, to Blue Cross & Blue Shield. Pan American Life Ins. Co. , 45 F.3d 992 , 995 (6th Cir. 1995). No. 02-3645 COB Clearinghouse Corp. v. Aetna 5 6 COB Clearinghouse Corp. v. Aetna No. 02-3645 U.S. Healthcare, Inc., et al. U.S. Healthcare, Inc., et al. law would apply in cases where coordination of benefits is entered into with each Employer. While the contracts with required between two plans which are not subject to ERISA. the seven Employers were each slightly different, the agreements generally provided that COB would review each ERISA, however, provides no guidance on coordination of Employer’s records, use its “proprietary systems” to benefits issues. See Regents of the Univ. of Mich. v. determine if the Employer made payments under its health Employees of Agency Rent-a-Car Hosp. Assoc. , 122 F.3d 336, care plan for which the Employer was only secondarily liable, 339 (6th Cir. 1997). In cases involving two ERISA-regulated and attempt to collect payment from the party that COB plans, therefore, federal courts have fashioned federal believed to be primarily liable in exchange for a percentage of common law to resolve these issues. McGurl , 124 F.3d at the amounts recovered. 484 (adopting “employer first” rule, providing that plan which covers beneficiary as employee is primary and plan The relevant provisions of the Goodyear, Bridgestone, which covers beneficiary as dependent of employee is Progressive, Babcock & Wilcox, and FirstMerit agreements secondary). See also PM Group Life Ins. Co. v. Western were substantively identical. Each of these five agreements Growers Assur. Trust, 953 F.2d 543, 548 (9th Cir. 1992); contained an “agency clause,” appointing COB its agent for Reinforcing Iron Workers v. Mich. Bell Tel. Co. , 746 F. Supp. certain purposes: 668, 670-71 (E.D. Mich. 1990) (adopting the “birthday rule,” [Employer will] make [COB,] and its contractors, [the declaring plan of employee whose birthday occurs earlier in Employer’s] agents for the purpose of carrying out an the year primarily responsible for medical benefits of a minor,
[5] COB did not identify the ERISA provision under which it brought its Comp laint. The district court, however, broadly interpreted the Comp laint and assumed that the action was brought pursuant to 29 U.S.C. § 1132(a)(3), which was the pro vision id entified b y CO B in its brief in opposition to the M otion to Dismiss. There was some dispute before the district court regarding whether COB sought equitable relief or monetary dama ges. We note that 29 U.S.C. § 1132(a)(3), which provides for
