OPINION
Plaintiff James-Powers Hill (the “Subscriber” or “Mr. Powers-Hill”), an insured under the health insurance plan policy between defendants ComCast Corp., the
BACKGROUND
On a Rule 12(B)(6) motion, the Court recounts relevant facts from the Amended Complaint and these facts are taken as true. Mr. Powers-Hill, the Subscriber, is a beneficiary under the Personal Choice Benefit Program Plan 10 (the “Plan”). Am. Compl., ¶ 2. He underwent spinal surgery in November 2008, which was performed by Dr. Cohen, an out-of-network, or “Non-Preferred, Non-Participating,” health care provider under the Plan. Id. at ¶¶ 2, 4. After the surgery, Dr. Cohen received an assignment of benefits from Mr. Powers-Hill in order to collect benefits under the Plan, see Id. at ¶ 9, and indeed, Dr. Cohen submitted an insurance claim in the amount of $143,626.00 to Defendants for reimbursement in connection with the surgery he had performed on Plaintiff, as well as for other procedures.
On April 2, 2009, in response to the claim made by Dr. Cohen, Defendants made a single payment to the Subscriber in the amount of $5,123.90. This payment was later forwarded to Dr. Cohen from the Subscriber. Id. at ¶ 13. Notwithstanding the payment to the Subscriber, Dr. Cohen avers that throughout the pre-certification and the claims processes, Defendants dealt directly with him as the assignee of the Subscriber. Id. at ¶ 15. In that regard, Dr. Cohen maintains that Defendants were “aware of the assignment of benefits and approved the surgery and [have] never advised [Dr.] Cohen that [they] declined to recognize or accept the assignment....” Id. at ¶ 16.
After the initial denial, Dr. Cohen filed an appeal with Defendants on April 20, 2009. While it is not alleged in the Complaint, according to Defendants, they denied the Subscriber’s “Verbal, Post-Service, Second-Level Medical Necessity/Grievance.” In that denial letter, which was sent directly to the Subscriber, Defendants reasoned:
In your member handbook or certificates, the section entitled — “payment of providers ” the Personal Choice/PPO Program allows a Covered Person to obtain Covered Services from Non-Preferred, Non-Participating Providers. If a Covered Person uses a Non-Preferred, Non-Participating Provider, the Covered Person will be reimbursed for Covered Services but will incur significantly higher out-of-expenses [sie] including Deductibles, Coinsurance and the balance of the provider’s bill. This is true whether a Non-Preferred, NonParticipating Provider is used by choice, for level of expertise, for convenience, for location, because of the nature of the services or based on the recommendation of a provider.
Id. at ¶ 21; see Subscriber Appeal Letter dated, August 13, 2009. Defendants never responded to Dr. Cohen’s provider appeal. Id. at ¶ 44. Defendants maintain that because Dr. Cohen is an out-of-network provider, he had no appeal rights. See Id. at ¶ 23.
After the denial of the Subscriber’s appeal, in September 2010, Dr. Cohen brought this suit solely on behalf of himself and named only IBC as a defendant. In November 2010, IBC moved to dismiss the Complaint on standing grounds; in response, Dr. Cohen filed an Amended Complaint, which included the Subscriber as an additional plaintiff and QCC and ComCast as additional defendants. The Amended Complaint asserts five counts: Count I — violation of ERISA section 502(a) brought by the Subscriber; Count II — failure to provide information required by law brought by the Subscriber pursuant to ERISA; Count III — breach of fiduciary duty brought by Subscriber;
In the instant matter, IBC moves to dismiss all counts, and defendants QCC and ComCast move to dismiss all the counts except Count I. In connection with the motion, with respect to Count V, Plaintiffs concede that ERISA preempts their state law claims. See Plaintiffs Opp. Brief, p. 20. Accordingly, that count is dismissed.
DISCUSSION
I. Standard of Review
When reviewing a motion to dismiss on the pleadings, courts “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. County of Allegheny,
In affirming that Twombly standards apply to all motions to dismiss, the Supreme Court recently explained the principles. First, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal,
The Third Circuit recently reiterated that “judging the sufficiency of a pleading is a context-dependent exercise” and “[s]ome claims require more factual explication than others to state a plausible claim for relief.” West Penn Allegheny Health System, Inc. v. UPMC,
II. IBC
Defendant IBC maintains that it is not a proper defendant because IBC is neither the Plan nor a plan fiduciary. Arguing otherwise, Plaintiffs claim that because IBC exercised its discretion in connection with certain of its administrative duties, IBC should be considered a fiduciary subject to liability under ERISA. The threshold question, then, is whether IBC acted as a fiduciary in conducting its activities during the insurance claim process.
ERISA imposes statutory duties on fiduciaries that “ ‘relate to the proper management, administration, and investment of fund assets,’ with an eye toward ensuring that ‘the benefits authorized by the plan’ are ultimately paid to participants and beneficiaries.” LaRue v. DeWolff, Boberg & Assoc’s,
discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and—
(A) for the exclusive purpose of:
(i) providing benefits to participants and their beneficiaries; and
(ii) defraying reasonable expenses of administering the plan;
(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.
29 U.S.C. § 1104(a)(l)(A)-(B).
With respect to fiduciaries, ERISA requires each plan to have one or more named fiduciaries that are granted the authority to manage the operation and
a person is a fiduciary with respect to a plan to the extent
(i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan. Such term includes any person designated under section 1105(c)(1)(B) of this title.
29 U.S.C. § 1002(21)(A). Because an entity is only a fiduciary to the extent it possesses authority or discretionary control over the plan, see In re Unisys Corp. Retiree Med. Benefits ERISA Litig. (Unisys III),
In this case, there can be no real dispute that IBC is not the Plan itself, nor the Plan Administrator. According to the plan documents, ComCast is identified as the Plan Administrator and QCC as the Claims Administrator. See The Plan Contract, pp. 1, 16, 85. Indeed, the Plan specifically provides that only QCC, and not IBC, may be liable for the Plan’s obligations under the Plan contract, see Id. at p. 85, and notably, in the description of the Plan’s benefit review and determination process, IBC is not entrusted with any duties involving that process. See Id. at pp. 86-87.
As the Court outlined above, ERISA specifically sets forth the criteria for an entity to be deemed a fiduciary. The lynchpin of fiduciary status is discretion and discretion is a fact specific inquiry. See Curcio v. John Hancock Mut. Life Ins. Co.,
Here, a reading of the Amended Complaint reveals no factual support, other than conclusory assertions, that IBC is a plan fiduciary. Hence, the Court has no basis to adjudge the sufficiency of Plaintiffs’ allegations that IBC acted as a fiduciary. Instead, Plaintiffs highlight, in
III. Choice of Law
As a preliminary matter, the parties dispute which state law applies to certain of the state law related disputes arising out of the Plan-for example, principles of adhesion contracts and waiver. Pointing to the choice of law provision in the Plan contract, Defendants urge the Court to apply Pennsylvania law. See The Plan, p. 75 (“This Program is interpreted in accordance with, and is subject to the laws of the Commonwealth of Pennsylvania.”). Suggesting that New Jersey law should apply, Plaintiffs argue that neither the Subscriber nor Dr. Cohen negotiated for, or agreed to, the choice of law clause, and as such, they are not bound by it.
At the outset, the Court must resolve which conflict of law rules govern. Normally, in a diversity case, a federal court applies the choice-of-law rules of the jurisdiction in which it sits. See Amica Mut. Ins. Co. v. Fogel,
A federal court sitting in a non-diversity case such as this does not sit as a local tribunal. In some cases it may see fit for special reasons to give the law of a particular state highly persuasive or even controlling effect, but in the last analysis its decision turns upon the law of the United States, not that of any state. Federal law is no juridical chameleon, changing complexion to match that of each state wherein lawsuits happen to be commenced because of the accidents of service of process and of the application of the venue statutes. It is found in the federal Constitution, statutes, or common law. Federal common law implements the federal Constitution and statutes, and is conditioned by them. Within these limits, federal courts are free to apply the traditional common-law technique of decision and to draw uponall the sources of the common law • in cases such as the present.
Three Rivers Motors Co. v. Ford Motor Co.,
Taking this cue, this Court has surveyed out-of-circuit cases and found helpful the Sixth Circuit decision in Daimler-Chrysler Corp. Healthcare Benefits Plan v. Durden,
The above summary of federal common law in this area does not differ significantly from New Jersey’s conflict of law analysis. As a general matter, New Jersey courts tend to enforce choice-of-law provisions in contracts provided the public policies of New Jersey are not offended and the contract bears some relation to the chosen jurisdiction. See Instructional Systems, Inc. v. Computer Curriculum Corp.,
Accordingly, because there is ample federal authority honoring choice of law provisions in ERISA type contracts, coupled with New Jersey’s generous stance on enforcing choice of law provisions, a consideration which I find pertinent in this analysis, the Court finds that Pennsylvania law
Here, Plaintiffs advance only one reason why the Court should not enforce the provision: neither the Subscriber nor Dr. Cohen specifically negotiated the Plan. Simply put, Plaintiffs’ reasoning is one grounded in principles of adhesion contracts. In that connection, this argument is easily disposed of by the Third Circuit’s explanation in Assicurazioni Generali v. Clover,
We recognize that courts sometimes do not enforce choice of law clauses in adhesion contracts due to the differential in bargaining power between the parties. This reasoning, however, does not apply to group insurance contracts, at least in the circumstances here. When, as in this case, a business entity such as Intrenet obtains a group insurance contract that applies to individuals in various states, both the insurer and the organization have an arguable interest in establishing uniform procedures by specifying a particular state’s law to apply to future disputes. Further, a choice of law made by the insurer is less suspect in the group insurance context as the greater bargaining leverage possessed by the group agent should protect the insureds from unfavorable law.
Id. (citations omitted).
Under the Third Circuit’s guidance, absent any other reasons, a simple assertion of adhesion contract in this case will not suffice to undermine the enforceability of the choice of law provision contained in the Plan. See Nuzzi v. Aupaircare, Inc.,
Having made that determination, the Court turns to the issue of Dr. Cohen’s standing by virtue of the assignment of benefits from the Subscriber.
IV. Dr. Cohen’s Standing
Here, there is no dispute that under ERISA’s civil enforcement provision, only participants and beneficiaries have standing to bring a lawsuit. See 29 U.S.C. § 1132(a)(1)(B); Pascack Valley Hosp. Inc. v. Local 464A UFCW Welfare Reimbursement Plan,
The Plan’s anti-assignment clause provides: “The right of a Covered Person to receive benefit payments under this coverage is personal to the Covered Person and is not assignable in whole or in part to any person, Hospital, or other entity nor may benefits of this coverage be transferred, either before or after Covered Services are rendered ...” The Plan, p. 82. Based on such clear and unambiguous language, Defendants contend that the assignment of benefits from the Subscriber to Dr. Cohen should be voided, which would defeat Dr. Cohen’s standing in this case.
Plaintiffs offer two responses. In the first instance, it appears that Plaintiffs argue that anti-assignment clauses are unenforceable as a matter of law under principles of preemption. In support of their position, Plaintiffs refer the Court to the decisions in Neuner v. Horizon Blue Cross Blue Shield of New Jersey,
Next, in Ambulatory Surgical, the court dealt with an argument similar to that made here regarding the enforceability of an anti-assignment clause in an ERISA plan. Plaintiffs point to the portion of that court’s decision which seemingly suggests that anti-assignment clauses are unenforceable in ERISA plans. In that regard, the court only wrote: “it [is] disjointed to recognize a defendant as a valid assignee with ‘the right to receive the benefit of direct reimbursement from its patients’ insurers,” while not being allowed to judicially enforce this right. Ambulatory Surgical,
As Defendant correctly indicates, when this Court was confronted with the identical issue in 2005, it explained:
Although the Third Circuit has not addressed the issue of anti-assignability clauses, a number of federal and state courts have found that unambiguous anti-assignment provisions in group health care plans are valid. See, e.g., Physicians Multispecialty Group v. Health Care Plan of Horton Homes, Inc.,371 F.3d 1291 , 1294-96 (11th Cir.2004) (“Because ERISA-governed plans are contracts, the parties are free to bargain for certain provisions in the plan — like assignability. Thus, an unambiguous anti-assignment provision in an ERISA-governed welfare benefit plan is valid and enforceable.”); City of Hope Nat’l Med. Ctr. v. HealthPlus, Inc.,156 F.3d 223 , 229 (1st Cir.1998) (“Consistent with the other circuits which have addressed this issue, we hold that ERISA leaves the assignability or non-assignability of health care benefits under ERISA-regulated welfare plans to the negotiations of the contracting parties.”); St. Francis Reg’l Med. Ctr. v. Blue Cross & Blue Shield of Kan., Inc.,49 F.3d 1460 , 1464-65 (10th Cir.1995) (“ERISA’s silence on the issue of the assignability of insurance benefits leaves the matter to the agreement of the contracting parties.”); Davidowitz v. Delta Dental Plan of Cal., Inc.,946 F.2d 1476 , 1478 (9th Cir.1991) (“As a general rule of law, where the parties’ intent is clear, courts will enforce non-assignment provisions.”); Washington Hosp. Ctr. Corp. v. Group Hospitalization and Med. Servs., Inc.,758 F.Supp. 750 , 755 (D.D.C.1991) (holding that an anti-assignment provision was valid and enforceable after concluding that enforcement of the provision was not contrary to public policy); Renfrew Ctr. v. Blue Cross & Blue Shield,1997 U.S. Dist. LEXIS 5088 ,1997 WL 204309 , *3 (N.D.N.Y.1997) (“anti-assignment clauses play an important role in constraining the costs of health care”); Somerset Orthopedic Assocs. v. Horizon Blue Cross and Blue Cross and Blue Shield of New Jersey,345 N.J.Super. 410 ,785 A.2d 457 , 465 (N.J.App.Div.2001) (finding that “such subscriber assignment are void as contrary to public policy” and holding that “the anti-assignment clause in Horizon’s subscriber contracts is valid and enforceable to prevent assignment by subscribers of policy benefit payments to non-participating medical providers without Horizon’s consent”). This Court finds the caselaw supporting the enforceability of anti-assignment provisions in health benefit plans persuasive.
Briglia,
Since then, the Third Circuit has not confronted the issue; however, courts in this district have followed this analysis. See Glen Ridge SurgiCenter, LLC v. Horizon Blue Cross Blue Shield of New Jersey, Inc.,
Aside from Neuner and Ambulatory Surgical, which this Court has distinguished, Plaintiffs have not advanced any cogent reasoning for the Court to depart from its earlier decision in Briglia, particularly since there have been no significant changes in law in this area, and the Third Circuit has not addressed the issue. Thus, the Court will adhere to its prior decision.
Notwithstanding the anti-assignment clause, Plaintiffs, relying on New Jersey state law, further argue that Defendants have waived their right to enforce the provision through their continued course of conduct and dealings with Dr. Cohen.
Here, the bulk of Plaintiffs’ waiver defense is predicated upon a course of dealing; indeed, the Amended Complaint is pled in such a fashion, albeit conclusory.
Finally, Plaintiffs allege that Defendants were “aware of the assignment of benefits and approved the surgery and [have] never advised Cohen that [they] declined to recognize or accept the assignment of benefits.” Id. at ¶ 16. This allegation is insufficient to support a waiver; even if any defendant had knowledge of the assignment, mere silence or inaction cannot give rise to either waiver or estoppel. Nat'l Data Payment Systs. v. Meridian Bank,
Accordingly, for these reasons, Dr. Cohen has no standing to bring a § 502(a) claim under ERISA as an assignee, and Count IV is thereby dismissed.
V. Breach of Fiduciary Duty (Count HI)
The Subscriber brings a breach of fiduciary duty claim against Defendants. It alleges that Defendants erroneously calculated plan benefits and seeks payment of additional benefits allegedly owed. See Am. Compl., ¶¶ 64-66. However, this type of relief is disallowed by ERISA.
The Third Circuit cautioned that it is improper to assert a breach of fiduciary claim when it is akin to a claim to enforce the terms of a benefit plan. In D’Amico v. CBS Corporation,
Here, the Amended Complaint contains no allegations that differentiate the Subscriber’s claim of breach of fiduciary duty
Moreover, while § 502(a)(3) creates a cause of action for breach of fiduciary duties imposed by ERISA, the Supreme Court has held that it is a “safety net,” or “catch-all” provision allowing for “appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy.” Varity Corp. v. Howe,
VI. Failure to Provide Plan Information (Count II)
ERISA provides civil remedies to plan beneficiaries and/or participants where plan administrators fail to provide plan documentation in response to beneficiaries’ and/or participants’ written requests for information to which they are entitled. See 29 U.S.C. 1132(c)(1) (“[a]ny administrator ... who fails or refuses to comply with a request for any information which such administrator is required by this sub-chapter to furnish to a participant or beneficiary ... by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court’s discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day.... ”). In that connection, 29 U.S.C. § 1024(b)(4) provides that “the administrator shall, upon written request of any participant or beneficiary, furnish a copy of the ... instruments under which the plan is established or operated.” 29 U.S.C. § 1024(b)(4); Bicknell v. Lockheed Martin Group Benefits Plan,
The Third Circuit has explained that the “ERISA’s legislative history makes clear that Congress intended the information-producing provisions to enable claimants to make their own decisions on how best to enforce their rights.” Daniels v. Thomas & Betts Corp.,
CONCLUSION
For the reasons stated above, the Court concludes that IBC is dismissed as a defendant. In that regard, if during the course of discovery, the Subscriber obtains information that would support allegations of IBC’s fiduciary status, he may move to amend the Amended Complaint at that time. Next, because assignments of benefits are prohibited by the Plan, Dr. Cohen does not have standing to bring any claims in this case. Finally, Counts II, III and V by the Subscriber are dismissed for failure to state a claim. Accordingly, only the Subscriber’s claim in Count I against Corn-Cast and QCC remains in this case at this time.
An appropriate order shall follow.
Notes
. Plaintiffs repeatedly refer to the actions of "Defendants,” rather than the actions of any particular defendants. For this Background section, the Court will refer to Defendants collectively. However, in its legal analysis, the Court will separately discuss the claims brought against each defendant.
. It is unclear from the Amended Complaint whether Dr. Cohen also brought Count II and Count III. Nevertheless, because the Court finds that Dr. Cohen does not have standing, all claims brought by Dr. Cohen are dismissed.
. Because the Court finds that Dr. Cohen lacks standing, Mr. Powers-Hill is the only remaining plaintiff in this case.
. The parties have assumed that New Jersey’s conflict of law applies in this case.
. Defendants also do not dispute that a health care provider, such as Dr. Cohen, may bring an ERISA claim upon a valid assignment of benefits. See Def. Motion Brief, p. 18 (citing Temple Univ. Hosp. Inc. v. Group Health, Inc., No. 05-102,
. A waiver occurs when a party performs an act that voluntarily, knowingly, and intentionally relinquishes a known right. See County of Morris v. Fauver,
. While the Court need not address this issue, it appears that Plaintiffs’ allegations of waiver with respect to its course of dealing with Defendants are likewise not sufficient under the requirements set forth in Garden State.
. It is unclear whether Counts II and III are brought by both Dr. Cohen and the Subscriber. In any event, to the extent these counts are brought by Dr. Cohen, he lacks standing to pursue them.