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Pearson v. Wellmark, Inc.

United States District Court, D. Nebraska

May 31, 2017

DEBORAH PEARSON, and AVIATION WEST CHARTERS, LLC, d/b/a ANGEL MEDFLIGHT, Plaintiffs,
v.
WELLMARK, INC., d/b/a BLUE CROSS AND BLUE SHIELD OF IOWA; and UNITED SUPPLIERS, INC. GROUP HEALTH PLAN, Defendants.

          MEMORANDUM AND ORDER

          John M. Gerrard United States District Judge.

         The plaintiffs, Deborah Pearson and Angel MedFlight, are suing the defendants, Wellmark, Inc. and United Suppliers Inc. Group Health Plan, under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. The defendants have moved to dismiss counts II and III of the plaintiffs' amended complaint under Fed.R.Civ.P. 12(b)(6). Filing 40. For the reasons explained below, the defendants' motion will be granted in part and denied in part.

         BACKGROUND

         The plaintiffs' allegations are briefly summarized as follows. Plaintiff Deborah Pearson broke her leg while travelling in the Dominican Republic. Filing 37 at 1. Due to prior complications with surgery, Pearson's doctor recommended that she be evacuated by air ambulance to Good Samarian Hospital in Kearney, Nebraska. Plaintiff Angel MedFlight, which specializes in air-ambulance services, performed the medical evacuation on February 22, 2013. Filing 37 at 4.

         Pearson is a beneficiary of an employee benefits plan that is administered by defendant Wellmark. Filing 37 at 1. According to Pearson, she contacted Wellmark before taking the flight for precertification, but those requests were allegedly ignored. Filing 37 at 2. Pearson claims that she did not hear from Wellmark until several months after the flight, when it informed her that it would cover $28, 402.00 of her claim-or 5% of the flight's cost. Filing 37 at 2. This reimbursement rate was allegedly based on the "maximum allowable fee" for a flight to Miami. Filing 37 at 4. And because Wellmark had determined that the air ambulance was "medically necessary" to Miami, but not Kearney, it denied full reimbursement. Filing 37 at 4.

         The plaintiffs claim that Wellmark's "medical-necessity determination" was without adequate reason or justification. Filing 37 at 4. They also claim that Wellmark has failed to explain the basis or methodology for its calculation of benefits, and has refused to provide documents "relevant to its benefit determination." Filing 37 at 5. The plaintiffs seek equitable relief in counts II and III under 29 U.S.C. § 1132(a)(2) and (3). The defendants have moved to dismiss those claims under Fed.R.Civ.P. 12(b)(6).

         STANDARD OF REVIEW

         A complaint must set forth a short and plain statement of the claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a)(2). This standard does not require detailed factual allegations, but it demands more than an unadorned accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint need not contain detailed factual allegations, but must provide more than labels and conclusions; and a formulaic recitation of the elements of a cause of action will not suffice. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). For the purposes of a motion to dismiss a court must take all of the factual allegations in the complaint as true, but is not bound to accept as true a legal conclusion couched as a factual allegation. Id.

         When deciding a motion to dismiss under Rule 12(b)(6), the Court is normally limited to considering the facts alleged in the complaint. If the Court considers matters outside the pleadings, the motion to dismiss must be converted to one for summary judgment. Fed.R.Civ.P. 12(d). However, the Court may consider exhibits attached to the complaint and materials that are necessarily embraced by the pleadings without converting the motion. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003). Documents necessarily embraced by the pleadings include those whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading. Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th Cir. 2012).

         ANALYSIS

         The plaintiffs' amended complaint contains three separately-pled claims under ERISA. Count I is brought under § 1132(a)(1)(B), which provides that a plan participant or beneficiary may sue "to recover benefits due to h[er] under the terms of h[er] plan." § 1132(a)(1)(B). Count II is brought under § 1132(a)(3), which authorizes a plan participant to sue "to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan[.]" § 1132(a)(3). And count III is brought under § 1132(a)(2), which authorizes plan participants or beneficiaries to sue "for appropriate relief under section 1109 of this title[.]" § 1132(a)(2). The defendants move to dismiss counts II and III (plaintiffs' "equitable claims") on various grounds. Filing 40.

         Before turning to the merits of the defendants' motion, the Court will address two separate, yet related points. First, for reasons that will become clear, it is worth reiterating who is-and who is not-a party to this dispute. As noted above, the plaintiffs are Deborah Pearson, the plan beneficiary, and Angel MedFlight, the provider of the air-ambulance service (collectively, "Pearson"). The defendants are Wellmark Inc. and United Suppliers, Inc. Group Health Plan (collectively, "Wellmark"). Defendant Wellmark Inc. administers the group health plan under which Pearson is a beneficiary. See, filing 37 at 2; filing 42-1 at 11. Defendant United Suppliers, Inc. Group Health Plan is the underlying benefits plan that is sponsored by United Suppliers, Inc. and administered by Wellmark Inc. Filing 37 at 2. The plan sponsor-United Suppliers, Inc.-is not a named defendant.

         Second, as discussed in more detail below, the present dispute concerns Pearson's entitlement, if any, to documents that Wellmark allegedly relied on in denying full reimbursement. But Pearson has only specifically identified one such document: the air-ambulance fee schedule. And she has provided no basis for her contention that Angel MedFlight, which is neither a plan beneficiary or participant, is similarly entitled. So, for present purposes, the Court will address whether Pearson (and Pearson alone) may proceed on her claims based on an alleged entitlement to the air-ambulance fee schedule.

         Pearson's equitable claims generally pertain to Wellmark's allegedly improper withholding of its air-ambulance fee schedule. By failing to produce this document, Pearson alleges, Wellmark is in violation of certain ERISA disclosure provisions, its fiduciary duty as claims administrator, and the express terms of the underlying benefits plan. See filing 36 at 7. Accordingly, Pearson seeks equitable relief under § 1132(a)(2) and (3).

         Wellmark moves to dismiss Pearson's equitable claims on two main grounds. First, Wellmark argues that counts II and III of the amended complaint are duplicative of count I, and therefore must be dismissed under controlling Supreme Court precedent. Second, Wellmark argues that, notwithstanding the "duplicative" nature of the complaint, Pearson's equitable claims fail as a matter of law. The Court will address both arguments, in turn.

         1. Duplicative Claims

         Wellmark argues that Pearson's equitable claims are duplicative of count I, and therefore must be dismissed under controlling Supreme Court precedent. To support this contention, Wellmark argues that Pearson, despite pleading multiple grounds for recovery, has suffered only one injury: a partial denial of benefits. Seefiling 41 at 5. And because § 1132(a)(1)(B) (i.e., count I) provides an adequate remedy for that alleged injury, Pearson cannot seek additional equitable relief under § 1132(a)(2) and (3) (i.e., counts II and III). Filing 41 at 6.

         Wellmark's argument derives from Varity Corp. v. Howe, 516 U.S. 489 (1996). In Varity, the Supreme Court addressed the interaction between § 1132(a)(1)(B), which provides a remedy for the wrongful denial of benefits, and § 1132(a)(3), which authorizes civil actions

by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.

§ 1132(a)(3). In discussing these provisions, the Court characterized § 1132(a)(3) as a "catchall" that "act[s] as a safety net, offering appropriate equitable relief" for certain injuries caused by violations of § 1132. Varity, 516 U.S. at 512. But despite this seemingly broad interpretation, the Court was clear that equitable relief is not, in every circumstance, "appropriate":

We should expect that courts, in fashioning "appropriate" equitable relief, will keep in mind . . . that where Congress elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief, in which case such relief normally would not be "appropriate." Id. at 515; See Kerr v. Charles F. Vatterott & Co., 184 F.3d 938, 943 (8th Cir. 1999) (§ 1132(a)(3) is not a "limitless free-for-all").

         The Eighth Circuit has interpreted Varity as limiting a plaintiff's ability to pursue both equitable and compensatory relief under § 1132. In Pilger v. Sweeney, for example, the Eighth Circuit-citing Varity-affirmed a district court's grant of summary judgment denying the plaintiffs' claim for equitable relief. 725 F.3d 922, 927 (8th Cir. 2013). "Count Three fails, " the court wrote, "because its § 1132(a)(3)(B) claim mirrors Count One's § 1132(a)(1)(B) claim." Id. And "'[w]here a plaintiff is provided adequate relief by the right to bring a claim for benefits under ยง 1132(a)(1)(B), the plaintiff does not have a cause of ...


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