Opinion
Civil No. 99-74063
August 23, 2001
OPINION AND ORDER GRANTING DEFENDANTS' MOTION FOR JUDGMENT ON THE ADMINISTRATIVE RECORD OR IN THE ALTERNATIVE MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
The plaintiff, Stephen Simon, brings claims under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., for services rendered to two beneficiaries and/or participants of the General Motors Health Care Program for Hourly/Salaried Employees ("the GM Plan"). The GM Plan is an employee welfare benefit plan governed by ERISA.
Between September 1991 and October 1992 Humanistic Mental Health Foundation ("Humanistic") rendered medical treatment to two patients participating in the GM Plan. Upon their hospitalization, the patients assigned their benefits to Humanistic. Humanistic subsequently assigned its rights to the patients' benefits to the plaintiff. Following the patients' treatment, Humanistic submitted charges for both patients, totaling $16, 750.00, to Connecticut General Life Insurance company, the designated claims administrator for the GM Plan, and received a total payment of $1, 898.00. This amount represented a complete denial of one of Humanistic's claims, and a partial payment of the other. Humanistic appealed the decisions regarding both claims to the claims administrator, and submitted a final appeal to Preston Crabill, Richard Brewer, Elsie Campbell, and Richard O'Brien ("the Plan Administrators"). Humanistic's claims were again denied. That denial is the basis for the instant lawsuit filed by the plaintiff, as Humanistic's assignee, against the GM Plan and the Plan Administrators (both of which comprise the "defendants") on August 16, 1999.
The plaintiffs initial complaint sought damages for: (1) Denial of ERISA benefits; (2) Breach of fiduciary duties by plan administrators and/or trustees; and (3) "Attorney of record" fees.
Plaintiff subsequently filed a motion for leave to amend the initial complaint and a motion for modification of the scheduling order on October 13, 2000. This motion, filed fourteen months after the initial complaint, two months after the closing of discovery, two days after the defendants filed their motion for summary judgment, and three months before the scheduled trial date, proposed an amended complaint restating all claims and additionally alleging violations of the Sherman Anti-Trust Act and various state law tort claims. Because the defendants' motion is granted, for reasons explained below, the court need not address the plaintiffs subsequent motion for leave to amend the complaint.
On October 11, 2000 the defendants filed the instant motion for judgment on the administrative record, or in the alternative, motion for summary judgment. The defendants make five arguments in support of their motion: (1) collateral estoppel; (2) the plaintiff lacks standing to sue under ERISA; (3) the applicable statute of limitations bars the plaintiffs claim; (4) the plaintiff has failed to exhaust his administrative remedies; and (5) the defendants' decision that the plaintiff lacked standing to make his claims was neither arbitrary nor capricious.
The Defendants filed this dual alternative motion in compliance with the procedural framework required by Wilkins v. Baptist Healthcare Systems, Inc., 150 F.3d 609 (6th Cir. 1998) in which the court held that ERISA actions do not permit summary judgment procedures, but rather a judgment on the administrative record.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when the court determines that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In making its determination, the court "must consider all the facts in the light most favorable to the nonmovant and must give the nonmovant the benefit of every reasonable inference." American Council of Certified Podiatric Physicians and Surgeons v. American Board of Podiatric Surgery, Inc., 185 F.3d 606, 619 (6th Cir. 1998).
In this case, taken in the light most favorable to the Plaintiff, no reasonable jury could conclude that the plaintiff is a participant or beneficiary of the GM Plan. Therefore, he lacks standing to sue under ERISA, and the defendants must prevail on their motion for judgment on the administrative record or for summary judgment.
III. PLAINTIFF LACKS STANDING TO BRING SUIT UNDER ERISA
The defendants correctly argue that the plaintiff lacks standing to bring a claim under ERISA. ERISA permits a plan participant or beneficiary to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). A participant is "any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit." 29 U.S.C. § 1002(7). A beneficiary is a "person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder." 29 U.S.C. § 1002(8). The plaintiff is neither an employee of the employer nor a person designated by art employee to receive that employee's benefits. He therefore is neither is neither a plan participant nor beneficiary and does not have direct standing to sue under ERISA.
The Supreme Court has held that the statutory list of persons entitled to sue under ERISA is exclusive. See Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 146-48 (1985); Franchise Tax Board of the State of California v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 27 (1983). However, many courts have permitted an exception to this statutory scheme, allowing medical service providers derivative standing to sue as the assignee of a plan's participant in order to further Congress' intent to provide accessible health care. See, e.g., Hermann Hospital v. MEBA Medical Benefits Plan, 845 F.2d 1286, 1290 (5th Cir. 1988); Misic v. Building Service Employees Wealth and Welfare Trust, 789 F.2d 1374, 1377 (9th Cir. 1986); Care Unit Hospital v. Local Union No. 9, 787 F. Supp. 750, 753 (S.D.Ohio 1991).
Courts have limited this exception to medical service or health care providers, and have not extended it to their subsequent assignees. These providers are narrowly defined for purposes of this exception. "Suits by health care providers as assignees are not allowed because of their status as health care providers per se*, but are allowed only when the plaintiff has provided care to the plan participant and then sues based on that care. Only under that scheme are the policy advantages for such an exception logical." Simon v. Cyrus Amax Minerals Health Care Plan, 107 F. Supp.2d 1263, 1266 (D.Colo. 2000) (denying plaintiffs claim in an identical suit for lack of standing). In fact, the Ninth Circuit, which recognizes assignments to medical service providers, has denied the plaintiffs claim in an identical suit. See Simon v. Value Behavioral Health Inc., 955 F. Supp. 93 (C.D.Cal. 1997), aff'd, 208 F.3d 1073 (9th Cir. 2000). The Ninth Circuit reasoned, "to grant Simon standing would be tantamount to transforming health benefit claims into a freely tradable commodity. It could lead to endless reassignment of claims, and it would allow third parties with no relationship to the beneficiary to acquire claims solely for the purpose of litigating them. We do not see how such a result would further ERISA's purpose." Simon, 955 F. Supp. at 1081; accord Simon v. Cyrus Amax Minerals Health Care Plan, 107 F. Supp.2d 1263 (D.Colo. 2000).
While the Sixth Circuit has not yet decided this issue, I believe that it would follow the majority of courts in denying standing to third party assignees who have no connection to the patient. Because the plaintiffs only claim to the health benefits is as an assignee of the medical service provider, he does not have derivative standing to sue under ERISA.
IV. DEFENDANTS' OTHER ARGUMENTS
Given my findings on standing, it is unnecessary to address the defendants' other arguments.
V. CONCLUSION
For the reasons stated above, the court will grant the defendants' motion for judgment on the administrative record, or in the alternative, motion for summary judgment.
Accordingly,
IT IS ORDERED that defendants' judgment on the administrative record, or in the alternative, motion for summary judgment is granted.