Opinion
Civil Action No. 00-1151 Section "T" (5).
August 9, 2000.
ORDER
I. Background
The above-captioned matter was originally instituted in the State of Louisiana's Civil District Court for the Parish of Orleans, but was removed to this Court on April 14, 2000. It is a putative class action against Blue Cross and Blue Shield of Louisiana ("Blue Cross") and HMO Louisiana, Inc. The named Plaintiffs are two Louisiana health care providers who allege the existence of preferred provider contracts between themselves and the Defendants. The putative class is alleged to include "all Louisiana physicians, hospitals, clinics and other medical providers who have submitted claims to Blue Cross according to the terms of a preferred provider organization agreement, key physician agreement, referral specialist agreement, or other similar contracts." See Petition at ¶ II. More important for purposes of resolving the motion at hand, the putative class does not include Blue Cross enrollees.
The above-captioned matter originally was allotted to Judge Martin L.C. Feldman of this Court. However, on June 30, 2000, Judge Feldman issued a minute entry stating: "Counsel are advised that I am covered by Blue Cross Blue Shield of Louisiana and, therefore, hereby recuse myself from presiding over this case. This case is ordered reallotted to another section of [this C]ourt." (Doc. 13). The case then was reallotted to Judge Edith Brown Clement, but on July 5, 2000, she issued a minute entry containing language identical to that used by Judge Feldman. At that time the matter was reallotted to the undersigned.
The Court notes that on July 10, 2000, United States Magistrate Judge Karen Wells Roby also followed Judge Feldman's and Judge Clement's lead, issuing a minute entry stating: "Taking cognizance of 28 U.S.C. § [§] 455(a) and 455(e) and Canon 3-C(1) of the Code of Judicial Conduct, the undersigned Magistrate hereby advises counsel of record that she is insured by Blue Cross Blue Shield of Louisiana, and therefore recuses herself from this case." (Doc. 17).
The Defendants now have filed a Motion to Transfer the matter back to Judge Feldman arguing that a federal judge's election to participate in the Blue Cross Government-Wide Service Benefit Plan ("Service Benefit Plan") made available to federal employees by the Office of Personnel Management ("OPM") does not constitute grounds for recusal. The Plaintiffs have filed no opposition to the Defendants' compelling arguments in favor of transfer.
II. Legal Analysis
A. Law on Recusal in General
"Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned." 28 U.S.C. § 455 (a). He shall also disqualify himself if he knows "that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding." 28 U.S.C. § 455 (b)(4). The term "financial interest" is defined as
ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party, except that . . . [t]he proprietary interest of a policyholder in a mutual insurance company, of a depositor in a mutual savings association, or a similar proprietary interest, is a "financial interest" in the organization only if the outcome of the proceeding could substantially affect the value of the interest.28 U.S.C. § 455 (d)(4)(iii) (emphasis added). If a financial interest does, in fact, exist, then the judge must recuse himself from the case; the parties cannot waive such a ground for disqualification. See 28 U.S.C. § 455 (e). Cannon 3(C) of the Code of Conduct for United States Judges mimics the language of the statutes quoted above.
Among other things, the Committee on Codes of Conduct (hereinafter "the Committee") is authorized by the Judicial Conference of the United States to publish formal advisory opinions on issues frequently raised or issues of broad application. On January 22, 1973, the Committee issued Advisory Opinion No. 26 regarding the disqualification of federal judges based upon the election of Blue Cross insurance benefits. The opinion, which was revised on July 10, 1998, states as follows:
In 1973, the Committee determined that judges who hold Blue Cross policies could sit in a case brought by an insurance company against a local Blue Cross organization. . . .
The Committee determined that the interest that the judges had in the Blue Cross case would not be considered a "financial interest" within the meaning of that term as it is used in the Code of Conduct for United States Judges. The interest is analogous to "the proprietary interest of a policyholder in a mutual insurance company, or a depositor in a mutual savings association, or a similar proprietary interest" which Canon 3C(3)(c)(iii) states "is a `financial interest' in the organization only if the outcome of the proceeding could substantially affect the value of the interest." The judges would have a financial interest in that company, and therefore would be required in the Blue Cross case to recuse, only if the outcome of that proceeding could substantially affect the value of their interest in the company. . . .
The Committee reiterates that when an insurance company is a party before the judge, ordinarily, he or she need not recuse unless the judge has a financial interest in the company. The judge has a financial interest in the company only if the outcome of the proceeding could substantially affect the value of the judge's interest in company.
2 GUIDE TO JUDICIARY POLICIES AND PROCEDURES, ch. IV, pp. 51-52.
B. Recusal in the Case at Hand
An overview of the Federal Employees Health Benefits Act ("FEHBA") and the Blue Cross Service Benefit Plan can be set forth most easily and succinctly by quoting from the Defendants' Memorandum in Support of their Motion to Transfer.
Pursuant to 5 U.S.C. § 8902 (a), [the United States Office of Personnel Management ("OPM")] is authorized to negotiate and procure insurance contracts from qualified carriers. These contracts contain such benefits, maximums, limitations, and exclusions as OPM "considers necessary or desirable." 5 U.S.C. § 8902 (d); see Doe v. Devine, 703 F.2d 1319, 1321 (D.C. Cir. 1983); Caudill v. Blue Cross and Blue Shield of North Carolina, 999 F.2d 74, 76 (4th Cir. 1993). OPM enters into annual procurement contracts with private carriers; these carriers then actually provide the various types of health plan benefits OPM offers to federal employees. 5 U.S.C. § 8903. Accordingly, pursuant to FEHBA, federal employees receive health benefits only through contracts entered into by the United States (through OPM) and private insurers, and not by individual contracts between federal employees and private insurers. 5 U.S.C. § 8902 (a), 8903.
One of the more than 300 health benefit plans offered by OPM pursuant to FEHBA is the Blue Cross and Blue Shield Government-wide Service Benefit Plan, a/k/a the Federal Employee Program ("FEP"). See, Caudill v. Blue Cross and Blue Shield of North Carolina, 999 F.2d 74, 76 (4th Cir. 1993). Since 1960, the national Blue Cross and Blue Shield Association ("Association"), on behalf of Blue Cross and Blue Shield companies across the country, has entered into Contract No. CS 1039 with OPM (or its predecessor, the Civil Service Commission) to provide benefits authorized by FEHBA. Doe v. Devine, 703 F.2d 1321-22. Contract No. CS 1039 constitutes the only contract for the Blue Cross and Blue Shield Government-wide Service Benefit Plan.
[Defendants' Memorandum in Support of Motion to Transfer, pp. 3-4].
In further support of their argument that the mere fact that a judge of this Court is an enrollee in the Service Benefit Plan is not a basis for recusal, the Defendants direct the Court's attention to, inter alia, a case decided in 1982 by the United States Court of Appeals for the District of Columbia Circuit.
In that case, the court addressed the issue of whether a federal judge's election of the Blue Cross Service Benefit Plan required recusal, holding that "the interest of subscribing federal judges is too contingent and remote to warrant disqualification." Christiansen v. National Savings Trust Co., 683 F.2d 520, 526 (D.C. Cir. 1982).
In analyzing the question of whether the impartiality of a subscriber to a Blue Cross and Blue Shield Plan might "reasonably be questioned," the court reasoned as follows:
The likelihood any recovery first of all would benefit [or cost] the government, which carries part of the cost of the plan, rather than the subscribers, the uncertainty who would be a subscriber at the possibly remote future date when the benefits [or expenses] from successful prosecution of the suit actually inured, the evidence that rates to subscribers were often set according to competitive factors rather than by the health of the reserve fund, the comparative insignificance of the indirect benefit [or cost] to any subscriber, supposing the benefit [or expense] to inure to subscribers at all-all these are factors that would induce a reasonable person not to question a judge's impartiality merely because he was a subscriber, and we here assume, a beneficiary.Id. at 525 (emphasis added).
After holding that a judge's participation in a Blue Cross plan would not reasonably lead to his impartiality being questioned, the court also held that recusal on that ground was not reasonable.
The Court notes that the instant matter does not even present the potential conflict issues that existed in Christiansen because there is no possibility of a judge of this Court being a class member. No Blue Cross subscribers have been proposed as class members, and the Plaintiffs specifically disavow that their suit involves a claim for benefits due subscribers. Therefore, this Court agrees with the Defendants' assertion that the mere fact that a judge of the Court is a Service Benefit Plan enrollee is wholly irrelevant to the particular issues in dispute.
Furthermore, this Court is cognizant of the Defendant's implied assertion that recusals, as those in the case at hand set bad precedent. As the Defendants state: "[darned to its logical extreme, recusal based on mere enrollment in the Service Benefit Plan is extremely problematic. . . . [because] if recusal is required, it is theoretically possible that entire district courts could become unavailable to Blue Cross if every judge elected the Service Benefit Plan." [Defendants' Memorandum in Support of Motion to Transfer, p. 5, n. 2].
However, what the Defendants fail to address is the procedural problem associated with their request. This case was randomly reallotted to the undersigned; it was not transferred. The Court's local rules provide that:
[i]n order to promote judicial economy and conserve judicial resources, and to avoid the potential for forum shopping and conflicting court rulings, all [collateral proceedings] shall be transferred to the section to which the matter having the lowest docket number has been allotted, unless the two judges involved determine that some other procedure is in the interest of justice. If the transferee or transferor judges cannot agree upon whether a case should be transferred, the opinion of the transferee judge prevails.
Local Rule 3.1.1E of the United States District Court for the Eastern District of Louisiana.
Here, there are no collateral proceedings currently pending before the Court. Therefore, under the provisions of the local rule quoted above, this Court has no procedure available to it by which this case could be transferred to another section. Additionally, it appears that the only action taken in the above-captioned matter by Section "F" of this Court was to set the Plaintiffs' Motion to Remand for hearing.
Accordingly, although this Court holds that recusal based solely upon a judge's enrolment in the Blue Cross Service Benefit Plan is not warranted,
IT IS ORDERED that the Defendants' Motion to Transfer (Doc. 16) be, and the same hereby is DENIED.