ERISA Watch – Eleventh Circuit Rules that Healthy Pregnancy Is Not a Pre-Existing Condition for Disability Caused By Stroke

Happy Labor Day!  This was quite a busy week for ERISA decisions.  It seems as though the courts wanted to go into the long three-day weekend with a lighter caseload and issued decisions on many pending motions before the weekend.  Of the many cases I reviewed, I want to highlight two of them.  The first, Bradshaw v. Reliance Standard Life Insurance Company, No. 16-11125, __F.App’x__, 2017 WL 3774536 (11th Cir. Aug. 31, 2017), is an unpublished Eleventh Circuit decision obtained by our colleagues Edward Dabdoub and Nancy Cavey, who represented Plaintiff Julissa Bradshaw.  Bradshaw is significant because it involved an Eleventh Circuit reversal in favor of an ERISA plan participant.  Bradshaw purchased a disability policy from Reliance Standard during the early course of her healthy pregnancy.  She then tragically suffered a debilitating stroke nine days after she gave birth to her daughter.  Reliance Standard denied benefits on the basis that her pregnancy contributed to the stroke and qualified as a pre-existing condition.  The district court granted judgment in favor of Reliance Standard.  The Eleventh Circuit disagreed and found that Reliance Standard’s decision to apply the disability policy’s pre-existing condition exclusion to Bradshaw’s healthy pregnancy was an abuse of discretion.  It reversed and remanded the case to the district court for an award of benefits.

The second notable decision is Tassone v. United of Omaha Life Insurance Company, et al., No. 15 C 8557 (N.D. Il. Aug. 30, 2017), a case handled by my partner, Michelle Roberts.  On de novo review, the court determined that our firm’s client, Gina Tassone, was wrongfully denied “any Gainful Occupation” disability benefits.  First, the court rejected United’s argument that the policy’s “self-reported limitation” bars Tassone from receiving any benefits beyond the two years she already received.  The court explained that the limitation applies to illnesses or injuries that are diagnosed primarily based on self-reported symptoms rather than all illnesses or injuries for which the disabling symptoms are self-reported.  The court interpreted the findings of two Functional Capacity Evaluations as being inconsistent with an ability to perform at a sedentary capacity for a full day.  “The court also places little weight on the ‘conclusions’ in the FCEs that plaintiff demonstrated light physical demand levels. As noted already, none of the underlying test results support a finding of an ability to perform light work full time.”

The court also concluded that Dr. Thomas Reeder, United’s medical director, and Nurse Cortese, are “undoubtedly biased” given that they both work for Defendants and their opinions are unsupported by the record or based on selective excerpts from the medical records.  There are a number of good tidbits in this decision (if you’re a plaintiff’s attorney), but I want to close with my favorite quote from the decision:

“Each of Dr. Reeder’s letters indicated that if he did not get a response within 10 days, he would assume that the recipient was in agreement with his (Reeder’s) conclusions that plaintiff was able to perform at a sedentary level. Not surprisingly, none of plaintiff’s treating doctors responded to Dr. Reeder’s challenge. Defendant argues that by failing to disagree, those treaters have tacitly agreed. The court disagrees. The letters were obviously written in a manner designed to lure the recipient into either agreeing with Dr. Reeder’s limited and biased review of the records, or enter into a war of diagnoses with him.  There is no upside for any doctor to engage in a dispute with an in-house physician.”

Hope you are enjoying the final hours of a long weekend.  Until next week!

Below is Roberts Disability Law, P.C.’s summary of this past week’s notable ERISA decisions.

Breach of Fiduciary Duty

Second Circuit

Sacerdote, et al. v. New York University, No. 16-CV-6284 (KBF), 2017 WL 3701482 (S.D.N.Y. Aug. 25, 2017) (Judge Katherine B. Forrest).  Plaintiffs allege that NYU has violated ERISA Sections 404 and 406 by not managing its 403(b) plans prudently or for the exclusive purpose of providing benefits to participants and their beneficiaries.  The court granted in part and denied in part Defendant’s motion to dismiss.  “Counts I, II, IV, VI, and VII are dismissed in their entirety. The prudence claims in Counts III and V remain . . . as do any claims regarding the statute of limitations.”  The court issued the same ruling in Cates et al. v. The Trustees of Columbia University in The City Of New York et al., No. 16-CV-6488 (KBF), 2017 WL 3724296 (S.D.N.Y. Aug. 28, 2017).

Fifth Circuit

Bergeron et al. v. Ochsner Health System et al., No. CV 17-519, 2017 WL 3648451 (E.D. La. Aug. 24, 2017) (Judge Lance M. Africk).  Direct patient care employees brought suit against the hospital for failing to properly calculate and pay employees’ wages.  The court determined that Ochsner has a fiduciary duty to credit all compensation that the plan documents require it to credit and a failure to do so would violate that duty.  Thus, the named plaintiffs have stated claims against Ochsner for breach of fiduciary duty under ERISA.  Plaintiffs have also stated claims for ERISA recordkeeping violations against Ochsner for failing to record and report all hours worked by the employees.  These ERISA claims don’t require exhaustion of administrative remedies.

Class Actions

Fourth Circuit

Sims v. BB & T Corp., No. 1:15-CV-732, 2017 WL 3730552 (M.D.N.C. Aug. 28, 2017) (Judge Catherine C. Eagles).  The court granted Plaintiff’s motion for class certification in this case where Plaintiffs contend that Defendants breached their fiduciary duties to the 401(k) plan in connection with fees and investment options.  The court found Plaintiffs have met the standards for class certification set forth in Rule 23(a) and Rule 23(b)(1)(A).

Seventh Circuit

Priddy v. Health Care Serv. Corp., No. 16-4127, __F.3d__, 2017 WL 3763981 (7th Cir. Aug. 31, 2017) (Before Wood, Chief Judge, Sykes, Circuit Judge, and Coleman, District Judge).  Plaintiffs allege breach of fiduciary duty claims based on their theory that HCSC’s affiliates overcharge beneficiaries and then return the proceeds to HCSC via rebates.  They allege this self-dealing violates HCSC’s fiduciary duties to beneficiaries under ERISA and Illinois law.  The district court granted class certification, which the Seventh Circuit reversed.  It reasoned that it is not even clear that HCSC owed many class members any fiduciary duty at all, and the district court did not undertake this inquiry.  The court offered no opinion on how the issues should be resolved by the district court.

Ninth Circuit

Weil v. Cigna Health And Life Insurance Company, No. CV1507074MWFJPR, 2017 WL 3737851 (C.D. Cal. Aug. 29, 2017) (Judge Michael W. Fitzgerald).  The court granted final approval of the $2.75 million class action settlement concerning the following Settlement Class:

Any individual: (1) who is or was enrolled in an ERISA-governed plan administered by a Cigna Defendant, or insured under ERISA-governed health insurance coverage offered by a Cigna Defendant in connection with a plan, (2) whose TMS claims were administered by a Cigna Defendant, and (3) who made a claim (including a request for pre-service authorization or a request for payment or reimbursement) for TMS based on a diagnosis of depressive disorder (a) that was denied and not paid, (b) that has a date of service or letter denying pre-service authorization dated on or after September 8, 2011, and (c) that was adjudicated as reflected in the class list data provided by Cigna on February 16, 2017.

The court awarded Class Counsel attorneys’ fees in the amount of $907,500 and payment of expenses in the amount of $9,370.47.  The court also approved a $10,000 incentive award for the class representative.

Stewart, et al. v. Applied Materials, Inc., et al., No. 15-CV-02632-JST, 2017 WL 3670711 (N.D. Cal. Aug. 25, 2017) (Judge Jon S. Tigar).  In this lawsuit alleging that Defendant Applied Materials Welfare Benefit Plan unreasonably and unlawfully denied medically necessary speech therapy for plan participants and beneficiaries with Autism and autism spectrum disorders (ASD), the court granted final approval of certification of settlement classes, class action settlement, and attorneys’ fees.  Plaintiffs’ counsel obtained all of the relief they could have obtained at trial, including having Defendant provide benefits for speech therapy to treat individuals with ASD who were or might have been previously denied such benefits.

Disability Benefit Claims

Third Circuit

Klass v. Reliance Standard Life Insurance Company & Matrix Absence Management, No. CV156510ESMAH, 2017 WL 3741005 (D.N.J. Aug. 29, 2017) (Judge Esther Salas).  Plaintiff alleged disability as a result of fibromyalgia, CFS/SEIDS, and severe spinal arthritis/disc disease.  The court determined that Defendants did not act arbitrarily or capriciously in denying Plaintiff’s claim for long term disability benefits where one of the surveillance videos depicts activity levels inconsistent with Plaintiff’s complaints (ability to ride in a car as a passenger for four hours) and Plaintiff failed to meet her burden of proving impairments that prevent her from meeting the cognitive demands of her occupation (including treatment records or neuropsychological testing).

Sixth Circuit

Mokbel-Aljahmi v. United Omaha Life Insurance Company, No. 16-2616, __F.App’x__, 2017 WL 3700992 (6th Cir. Aug. 28, 2017) (BEFORE: SILER, CLAY, and WHITE, Circuit Judges).  The court affirmed the district court’s decision that Plaintiff is eligible for long term disability benefits.  United’s reviewing doctor’s opinion does not undermine the conclusions of the doctors who actually examined and treated Plaintiff.  The reliable medical opinions do not support the conclusion that Plaintiff can perform sedentary work, but even if they do, the vocational evidence suggesting that Plaintiff can perform certain jobs was based on the false assumption that Plaintiff was literate in English.  The job of Surveillance-System Monitor is also obsolete.  The court rejected United’s other arguments including that the district court did not consider Plaintiff’s denied (but pending) SSDI claim, his ability to drive, and the lack of recent diagnostic tests.  Regarding the tests, United did not ask for current tests nor relied on the absence of such tests in terminating Plaintiff’s benefits.

Osobka v. Metropolitan Life Insurance Company, No. 16-12311, 2017 WL 3668498 (E.D. Mich. Aug. 25, 2017) (Judge Terrence G. Berg).  Plaintiff is a former Comcast customer service representative who alleges inability to work due to chronic fatigue syndrome.  The court found that MetLife did not abuse its discretion when it denied Plaintiff’s claim for long term disability by crediting the opinions of independent physician consultants rather than those of Plaintiff’s treating physicians.  Even though it is preferable for a LTD plan administrator to conduct its own physical exam of a claimant, it is not required.

Sixth Circuit

Chester v. Mutual of Omaha Insurance Co., No. 16-11647, 2017 WL 3776523 (E.D. Mich. Aug. 31, 2017) (Judge Denise Page Hood).  The court granted Mutual of Omaha’s motion for judgment, finding that its decision to deny Plaintiff’s long term disability benefit claim under the “any Gainful Occupation” definition of disability was not arbitrary and capricious.  “The record is devoid of objective evidence of disability by Plaintiff’s treating physicians or any other health professionals.”

Eighth Circuit

Johnston v. Commerce Bancshares, Inc., & Prudential Insurance Company of America, No. 4:15-CV-0852-DGK, 2017 WL 3710082 (W.D. Mo. Aug. 28, 2017) (Judge Greg Kays).  The court held that Commerce is not a proper party to this lawsuit because it had no involvement in any decision to grant or deny long term disability benefits to Plaintiff.  It further held that Prudential’s decision to deny Plaintiff benefits under the policy was not an abuse of discretion.  Prudential reasonably required proof of continuing disability due to sickness or injury.  Although the Social Security Administration found Plaintiff disabled, the court explained that the SSA reached its decision under a different standard than that used by the Plan, and SSA did not have all the evidence before it that Prudential had when it terminated Plaintiff’s claim.

Ninth Circuit

Dorsey v. Metropolitan Life Insurance Company, No. 215CV02126KJMCKD, 2017 WL 3720346 (E.D. Cal. Aug. 29, 2017) (Judge Kimberly J. Mueller).  Cal. Ins. Code § 10110.6 applies here and voids any grant of discretion to the Plan administrator where MetLife’s insurance plan went into effect on January 1, 2011 and continued to be in effect on September 4, 2014, when MetLife denied Plaintiff’s LTD benefits on appeal.  The court declined to consider Plaintiff’s SSDI award, which came after MetLife denied Plaintiff’s disability claim and does not clarify the basis on which Plaintiff is considered disabled.  On de novo review, the court found that Plaintiff was able to work throughout the Elimination Period with modifications, her mental conditions do not support disability, and Plaintiff has not established disabling insomnia, migraines, jaw pains, or other physical conditions.  The court granted MetLife’s motion.

Mauerman v. Sun Life Assurance Company of Canada, No. C 17-01748 WHA, 2017 WL 3641855 (N.D. Cal. Aug. 23, 2017) (Judge William Alsup).  In this lawsuit seeking LTD and life waiver of premium benefits, Sun Life moved to dismiss Plaintiff’s amended complaint’s second claim for injunctive relief enjoining alleged improper acts and practices.  The court held that the amended complaint fails to state a claim for relief under Section 502(a)(2), which hinges on a conclusory assertion of “plan-wide” injury and fails to allege facts showing any harm to more than just individual Plan participants.  The court did not dismiss Plaintiff’s Section 502(a)(3) claim because the Ninth Circuit has “expressly rejected the proposition that ERISA plaintiffs may not seek equitable remedies under Section 1132(a)(3) if Section 1132(a)(1)(B) provides adequate relief.”

Eleventh Circuit

Bradshaw v. Reliance Standard Life Insurance Company, No. 16-11125, __F.App’x__, 2017 WL 3774536 (11th Cir. Aug. 31, 2017) (Before ROSENBAUM and JILL PRYOR, Circuit Judges, and SCHLESINGER, District Judge).  Plaintiff-Appellant’s healthy pregnancy at the time she bought a disability insurance policy from Reliance Standard Life Insurance Company does not qualify as a pre-existing condition that “contributed to” Plaintiff’s disabling stroke nine days after she gave birth.  The court reversed and remanded the case to the district court for an award of benefits.

Diaz v. Liberty Life Assurance Co. of Boston, No. 17-20662-CIV, 2017 WL 3822742 (S.D. Fla. Aug. 30, 2017) (Judge Robert N. Scola, Jr.).  The court found that Liberty’s decision to deny Plaintiff’s long term disability claim benefits was supported by reasonable grounds and was not arbitrary and capricious where it was based on two file reviews conducted by Dr. Griggs (initial claim review) Dr. Jamie Foland (on appeal).  The court rejected Plaintiff’s argument that the policy definition of disability required Liberty Life to prove Plaintiff could perform the material and substantial duties of his occupation and has the burden to articulate which duties Plaintiff could perform and why.  Rather, as the court explained, the burden is on the claimant to prove disability.

Goros v. Sun Life Assurance Company of Canada, No. 2:16-CV-233-FTM-38CM, 2017 WL 3705836 (M.D. Fla. Aug. 28, 2017)  The court adopted the Magistrate Judge’s report and recommendation granting summary judgment to Sun Life on Plaintiff’s terminated long term disability claim.  Plaintiff has a diagnosis of ankylosing spondylitis.  Sun Life’s decision was supported by video surveillance, medical records showing improvement, and medical reviews from Dr. Richard S. Corzatt and Dr. Dennis Payne, Jr.  The court rejected Plaintiff’s argument that certain evidence was not considered by Sun Life because there is no reference to it in Sun Life’s internal notes.  “At base, Goros’ argument is flawed because it hinges on the presumption that every specific consideration be spelled out in every decisional manifestation. Such a result would be absurd and unwieldy.”

Discovery

Tenth Circuit

Violetta v. Steven Brothers Sports Management, LLC, et al., No. 16-1193-JTM-GEB, 2017 WL 3675090 (D. Kan. Aug. 24, 2017) (Magistrate Judge Gwynne E. Birzer).  The court declined to apply the fiduciary exception to the attorney-client privilege to the communications sought by Plaintiff because they were made during a time when the parties’ interests were not aligned or when the subject of the communications did not involve matters that a fiduciary would owe a duty to disclose to a beneficiary.  “Nearly all of the communications took place after litigation began, and the few occurring earlier were created after litigation was threatened. Defendants, as plan administrators, were communicating with counsel in order to defend themselves against Plaintiff’s claims, and therefore they lacked any ‘mutuality of interest’ with Plaintiff as the beneficiary.”

ERISA Preemption

Fifth Circuit

Leet v. Hospital Service District No. 1 of East Baton Rouge Parish, d/b/a Lane Regional Medical Center, No. CV 15-811-JWD-EWD, 2017 WL 3782780 (M.D. La. Aug. 31, 2017) (Judge John W. deGravelles).  The court determined that it lacks subject matter jurisdiction in this case where Plaintiffs have stated Louisiana state-law claims against BCBSLA under La. Civ. Code art. 1977 for a breach of a promesse de porte-forte and a claim for detrimental reliance. “These claims rely solely on Louisiana law, not ERISA, and will not require an interpretation of the plan.”

Ninth Circuit

Dietz-Clark v. HDR, Inc., No. 15-35889, __F.App’x__, 2017 WL 3722839 (9th Cir. Aug. 29, 2017) (Before:  GRABER, CLIFTON, and M. SMITH, Circuit Judges).  The court held that the district court properly declined to apply Alaska’s notice-prejudice rule to the administrative appeals deadline here because Alaska’s notice-prejudice rule is not limited to state insurance law and thus, the rule does not meet the ERISA definition of state regulation of insurance necessary to avoid ERISA preemption.  Even if Alaska’s notice-prejudice rule is not subject to ERISA preemption, such a rule typically applies only to initial denial of benefits, not to administrative appeal deadlines.

Alta Los Angeles Hospitals, Inc. v. Blue Cross of California, No. 217CV03611ODWMRWX, 2017 WL 3671156 (C.D. Cal. Aug. 24, 2017) (Judge Otis D. Wright, II).  Plaintiff asserts two state law claims: breach of an implied-in-fact contract and quantum meruit.  The alleged implied-in-fact contract to pay Plaintiff’s usual and customary rates for medical services is based on the (1) Emergency Medical Treatment and Labor Act; (2) “custom and practice”; and (3) California Health and Safety Code section 1371.4(b).  The quantum meruit claim arises from Defendant requesting, “by words and/or conduct,” that Plaintiff provide medical treatment to its enrollees.  The Court agreed that Marin General Hospital controls the outcome here and granted Plaintiff’s motion for remand.

Exhaustion of Administrative Remedies

Ninth Circuit

Laura B v. United Health Group Company, et al., No. 16-CV-01639-JSC, 2017 WL 3670782 (N.D. Cal. Aug. 25, 2017) (Magistrate Judge Jacqueline Scott Corley).  Defendant Motion Picture Industry Health Plan’s motion for summary judgment on the issue of exhaustion and the standard of review is denied.  The plan documents governing Plaintiff’s mental health inpatient care do not require a second level appeal to Motion Picture to exhaust administrative remedies and Motion Picture has not met its burden to show that abuse of discretion review applies.

Medical Benefit Claims

Third Circuit

Rachel B v. Horizon Blue Cross Blue Shield of New Jersey, No. 14-CV-1153, 2017 WL 3670966 (D.N.J. Aug. 25, 2017) (Judge Claire C. Cecchi).  For partial hospitalization treatment that Plaintiff received between May 3 to May 12, 2013, the court agreed with Plaintiff that Permedion acted arbitrarily and capriciously by failing to account for her doctor’s letter, which repeatedly undermines Permedion’s findings.  The court remanded this claim for further administrative review.  For treatment from May 13 to July 3, 2013, Plaintiff never submitted claims for the treatment and did not exhaust her administrative remedies.  Defendant has been prejudiced by Plaintiff’s failure to submit claims for treatment so summary judgment is awarded to Defendant on these claims.

Plan Status

Eleventh Circuit

Raab v. United Healthcare Insurance Company, No. 617CV1049ORL37TBS, 2017 WL 3682360 (M.D. Fla. Aug. 25, 2017).  In this dispute concerning the payment of medical expenses, the court denied Plaintiff’s motion for remand.  The court considered UHIC’s post-removal evidence relevant to assessing the existence of jurisdiction at the time of the removal.  It found that UHIC met its burden of proving that the relevant policy did not fall within the safe harbor provision. The policy at issue is governed by ERISA because it continued to be integrally linked with the original policy that was governed by ERISA, even though it ceased to cover non-owner employee participants after January 1, 2011.

Pleading Issues & Procedure

Second Circuit

Metzgar v. U.A. Plumbers and Steamfitters Local No. 22 Pension Fund, et al., No. 13-CV-85V(F), 2017 WL 3722456 (W.D.N.Y. Aug. 29, 2017) (Magistrate Judge Leslie G. Foschio).  The court denied Plaintiffs’ motion to consolidate his lawsuits relating to his pension benefits because the court determined that a definitive and prompt determination of the threshold issue presented by Defendants’ decision, challenged in Metzgar I, to terminate Plaintiffs’ early retirement benefits will in all likelihood also completely resolve the new claims presented in Metzgar II.  If Metzgar II goes forward whether or not consolidated with Metzgar I, it poses the risk that such threshold determination may be significantly delayed.

Third Circuit

Re: Lorraine H. Luciano v. Teachers Ins. & Annuity Ass’n of Am.-Coll. Ret. Equities Fund, et al., No. CV156726MASDEA, 2017 WL 3784035 (D.N.J. Aug. 31, 2017) (Judge Michael A. Shipp).  Plaintiff brought a motion to compel arbitration, arguing that Defendants have violated the court’s July 29, 2016 Order because: (1) TIAA-CREF and ETS have refused to participate in the arbitration; and (2) Defendants have only agreed to arbitrate Plaintiff’s individual claims and have refused to participate in class arbitration despite the fact that Plaintiff’s claims have been brought as a putative class action.  The court denied the motion and rejected Plaintiff’s judicial and equitable estoppel arguments.

Fourth Circuit

Waite v. Perfect Fit Industries, LLC, No. 317CV00373FDWDCK, 2017 WL 3741554 (W.D.N.C. Aug. 30, 2017) (Judge Frank D. Whitney).  The court remanded Plaintiff’s lawsuit alleging failure to pay her “Separation Payments” and “Incentive Compensation.”  The court determined that as of the time Defendant filed its Amended Answer, and asserted that Plaintiff’s claims are preempted by ERISA, it knew that the case was removable.  Even assuming Plaintiff’s claims arise under ERISA and provide a basis for federal removal jurisdiction, Defendant’s Notice of Removal was untimely (filed beyond 30 days of the notice of the grounds for removal), and therefore, remand is warranted.

Seventh Circuit

Johnson v. Retirement Plan of General Mills, Inc., et al., No. 416CV00151TWPTAB, 2017 WL 3668106 (S.D. Ind. Aug. 25, 2017) (Judge Tanya Walton Pratt).  In this case challenging the denial of disability retirement benefits, Plaintiff argued that the Magistrate Judge erred by: 1) failing to address her argument that the Arbitration Clause lacked consideration; 2) concluding the Plan is a party to the Release; 3) finding that her breach of contract claim against the Plan fell within the scope of the Release; and 4) concluding the Plan did not waive its right to compel arbitration.  The court overruled the objections due to lack of clear error in the finding that the Plan did not waive its right to arbitrate nor did it act inconsistently with the right to arbitrate.

Ninth Circuit

Aviation West Charters, LLC d/b/a Angel Medflight v. Unitedhealthcare Insurance Company, No. CV 2:16-436 WBS AC, 2017 WL 3668390 (E.D. Cal. Aug. 24, 2017) (Judge William B. Shubb).  An air ambulance service company brought suit against United for failing to pay for the services it provided for one of United’s insureds.  Shortly after United objected to the company’s assignment of benefits, the guardian of the minor beneficiary who received the air ambulance services filed a motion to intervene as a plaintiff.  The court granted the motion under F.R.C.P 24(b).

Strickland v. AT&T West Disability Benefits Program, No. C 17-01393 WHA, 2017 WL 3670784 (N.D. Cal. Aug. 24, 2017) (Judge Williams Alsup).  The complaint fails to state a claim for benefits under ERISA Section 502(a)(1)(B) because it contains no factual allegations supporting any plausible inference that Plaintiff is owed any benefits, or has any rights to enforce or clarify, under the terms of the Plan.  The complaint does not include a statement of the relevant Plan terms or show that Defendant is liable for any misconduct.

Provider Claims

Third Circuit

Elite Orthopedic & Sports Medicine PA, v. Northern New Jersey Teamsters Benefit Plan, No. CV146932ESMAH, 2017 WL 3718379 (D.N.J. Aug. 29, 2017) (Judge Esther Salas).  Plaintiff’s state law claims related to the provision of emergency services for one of Defendant’s participants are preempted by ERISA.  The Trustees’ decision was neither arbitrary nor capricious where it satisfies the Moench factors.  Plaintiff abandoned its misrepresentation claim and failed to exhaust its administrative remedies with respect to all services rendered by its physicians.

Fifth Circuit

Rapid Tox Screen LLC v. Cigna Healthcare of Texas Inc., No. 3:15-CV-3632-B, 2017 WL 3658841 (N.D. Tex. Aug. 24, 2017) (Judge Jane J. Boyle).  In this suit by a provider against an insurer seeking payment for services rendered, the court denied the insurer’s motion to dismiss for failure to exhaust, finding that the second amended complaint pleads facts indicating an exception to the exhaustion requirement applies.  The court also denied the motion with respect to Plaintiff’s claims under ERISA Section 502(a)(3) seeking declaratory and injunctive relief and Section 503 for failing to provide a full and fair review.

Ninth Circuit

Aviation West Charters, LLC d/b/a Angel Medflight v. Unitedhealthcare Insurance Company, No. CV 2:16-436 WBS AC, 2017 WL 3641763 (E.D. Cal. Aug. 24, 2017) (Judge William B. Shubb).  The court held that United did not waive the non-assignment clause by failing to rely on the non-assignment clause in its benefits denial since United believed that Aviation West was acting as M.M.’s authorized representative during the appeals process, and had no reason to believe Aviation West was an assignee.

Venue

Eighth Circuit

BH Services Inc., v. FCE Benefit Administrators Inc., et al., No. 5:16-CV-05045-KES, 2017 WL 3635186 (D.S.D. Aug. 23, 2017) (Judge Karen E. Schreier).  “The federal issues asserted in the first amended complaint can only be heard by a federal court. 29 U.S.C. § 1132(e)(1). But the forum selection clause in the TPA Agreement between BH Services and FCE—like the forum selection clause in the Trust Agreement between TMS and BH Services—requires that ‘venue for resolving any dispute under this Agreement will be San Mateo County, California.’  . . .  Thus, because the forum selection clause in the TPA Agreement would require an exclusively federal action to proceed in San Mateo County, California, where no federal courthouse is located, the court concludes that the forum selection clause is unenforceable under Bremen. As a result, BH Services did not err by filing this action in South Dakota where venue is proper under 29 U.S.C. § 1132(e)(2). Because none of the factors prescribed by the Supreme Court or the Eighth Circuit warrant transfer to the Northern District of California, the court declines to order a transfer under 28 U.S.C. § 1404(a).”