Opinion
Civil Action No.: 3:02-CV-0475-M
August 8, 2002
MEMORANDUM ORDER
Before the Court is the Motion to Dismiss Pursuant to Rule 12(b)(4), (5), and (6), filed April 22, 2002 by Defendants Herb Corey, Chris Jagmin, M.D., Sherry Field, D. Michael Geller, M.D., Christine Ferrari, M.D., and Prudential Healthcare, a member of Aetna U.S. Healthcare Inc. ("Prudential"), in which they seek dismissal of all claims asserted against them in Plaintiff's First Amended Complaint for Preliminary and Permanent Injunctive Relief, and Declaratory Judgment (the "Complaint").
FACTUAL PREDICATE
In 1993, shortly after the birth of her second child, Robin Snow ("Plaintiff") suffered an adverse reaction to the prescription drug, Parlodel. She suffered a grand mal seizure, aspirated, and was immediately hospitalized. The seizure caused anoxic brain damage, and Plaintiff has not been able to respond to people verbally or have any purposeful movement since this event occurred. During the majority of time following the event, Plaintiff has received twenty-four hour skilled private duty nursing care ("PDN") through the Health Maintenance Organization ("HMO") coverage option of the Lucent Technologies Medical Expense Plan for Occupational Employees (the "Plan").
On January 1, 2000, Prudential replaced CIGNA as the claims administrator of the HMO coverage option of the Plan. On April 25, 2001, Plaintiff requested that the Plan continue the PDN care under the new claims administrator. On May 8, 2001, Prudential, through Defendant Dr. Christine E. Ferrari, M.D. ("Ferrari"), its Medical Director, Patient Management Department, denied this request, stating that clinical data indicated that the PDN was custodial in nature, and therefore excluded from coverage under the Plan.
On May 17, 2001, Plaintiff appealed Prudential's decision. The appeal was denied June 4, 2001, in a letter signed by Dr. Barry C. Ashkinaz, M.D., Prudential's Medical Director, Medical Services. On June 6, 2001, Plaintiff's treating physician, Dr. Young, sent a letter to Prudential, requesting that it reconsider the denial of benefits. This was considered a Level II Appeal, and the matter was set for an administrative hearing. On December 17, 2001, the parties attended an administrative hearing, and on December 21, 2001, the Level II Appeals Committee, in a letter signed by Defendant Chris Jagmin, M.D., Prudential's Network Medical Director, informed Plaintiff that it was upholding the decision to deny her benefits.
On January 10, 2002, Dr. D. Michael Geller, M.D., Prudential's Senior Medical Director for Quality Improvement, wrote a letter to Plaintiff informing her that Lucent had advised Prudential that Plaintiff was eligible for the Plan's Third Party Appeal Review Process, to be conducted through the Island Peer Review Organization.
The Third Party Review Request Form was to be completed within sixty days of receipt of the January 10, 2002 letter. Plaintiff did not return the Third Party Review Request Form, opting instead to file her Complaint. Two separate Motions to Dismiss have been filed by Defendants, one by individual Prudential representatives and one by the claims administrator, Aetna Life Insurance Company, as Administrator for the Prudential Insurance Company of America. The latter is not the subject of this Memorandum Order. The principle issues to be decided in the individual Defendants' Motion are: (1) whether Plaintiff can state a claim for breach of fiduciary duty against the individually named Defendants when she is simultaneously asserting a claim for benefits under 29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), and if so, whether these individual Defendants can be justly considered Plan fiduciaries; and (2) whether Plaintiff can state a viable claim for civil penalties under 29 U.S.C. § 1132(c) against the individual Defendants. As discussed below, the Court answers both questions in the negative.
STANDARD OF REVIEW
All allegations of material fact in a Complaint must be accepted as true and construed in the light most favorable to the Plaintiff. See Zuckerman v. Foxmeyer Health Corp., 4 F. Supp.2d 618, 621 (N.D. Tex. 1998).
A motion under Rule 12(b)(6) tests the legal sufficiency of claims stated in the Complaint and must be evaluated solely on the basis of the pleadings. See Jackson v. Procunier, 789 F.2d 307 (5th Cir. 1986). The Court must decide whether the material facts alleged would entitle Plaintiff to offer evidence regarding the legal remedy requested. See Scheuer v. Rhodes, 416 U.S. 232 (1974). Unless the answer is unequivocally no, the Motion before the Court must be denied. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
ANALYSIS
A. Moot Issues
At the outset, the Court notes that two minor issues raised in Defendants' Motion are moot. First, on April 29, 2002, the Court granted Defendant Prudential Healthcare's Unopposed Motion for Substitution of Parties, to allow Defendants Prudential, and Aetna U.S. Healthcare Inc. to be substituted by Aetna Life Insurance Company, as Administrator for The Prudential Insurance Company of America. Defendants' Motion to Dismiss is thus moot to the extent it seeks the dismissal of Prudential since that has, in effect, already been done. Second, as noted in their Reply Brief, Defendants Chris Jagmin, M.D. and Sherry Field agree to waive service of summons and the Complaint, and agree to enter an appearance, if necessary, within ten days after the Court's ruling on this Motion. Defendants' Motion is thus also moot to the extent it seeks dismissal under FED. R. Civ. P. 12(b)(4) and (5) for insufficiency of process and service of process as to these individual Defendants.
B. Relief against the Individual Defendants
Plaintiff undisputedly seeks to recover benefits from the Plan and the claims administrator under 29 U.S.C. § 1132(a)(1)(B). Nevertheless, Plaintiff also seeks relief under 29 U.S.C. § 1109(a), and 1132(a)(2) and (3) to enjoin the individual Defendants from acting as fiduciaries of the Plan and to have the Court make a finding "that Defendants are not fit to serve as fiduciaries of the Plan," and likewise seeks to have the Court award penalties against the individual Defendants under 29 U.S.C. § 1132(c) for Prudential's alleged withholding of "confidential" information relevant to her claim.
Fifth Circuit law, that Plaintiff cannot maintain claims against the individual Defendants under §§ 1109 and 1132(a)(2) or (3) when she is endowed with a realizable claim for benefits under § 1132(a)(1), is burdened by few exceptions, none of which is applicable to the facts of this case. Plaintiff has adequate redress for the disavowed claims through § 1132(a)(1), which she is currently exercising, and is thus precluded from simultaneously pursuing a breach of fiduciary duty claim under §§ 1109 and 1132(a)(2) or (3) against the individual Defendants. See Rhorer v. Raytheon Engineers and Constructors, Inc., 181 F.3d 634, 639 (5th Cir. 1999) (insured's executrix could not maintain a claim based on allegations that employer violated its fiduciary duty as plan administrator when she had a remedy under ERISA to recover the insurance benefits allegedly owed under the plan); Tolson v. Avondale Industries, Inc., 141 F.3d 604, 610 (5th Cir. 1998) (plaintiff's efforts to justify his assertion of breach of a fiduciary duty by distinguishing such claim from his claims for coverage and benefits was described as "woefully unavailing"); see also Wald v. Southwestern Bell Corp. Customcare Medical Plan, 83 F.3d 1002, 1006 (8th Cir. 1996) (plaintiff failed to state a cause of action for breach of fiduciary duty in reviewing her claim as she sought no different relief than that available under her claim for benefits). Moreover, the individual Defendants, in their capacities as representatives of Prudential and in their individual capacities, are not liable as administrators and/or fiduciaries under the Plan because Plaintiff has simply not pled facts entitling her to such relief against them. See Bratton v. National Union Fire Insurance Co., 215 F.3d 516, 526 (5th Cir. 2000).
Finally, Plaintiff's Complaint is devoid of facts necessary to demonstrate that the individual Defendants are "plan administrators" such that the Court could justifiably award penalties against them under 29 U.S.C. § 1132(c) for Prudential's alleged withholding of "confidential" information relevant to Plaintiff's claim. Penalties under 29 U.S.C. § 1132(c)(1)(B) are equitable remedies that can be assessed, in the discretion of the Court, against a plan administrator for failure to disclose plan documents or information to a participant under a plan. Congress enacted the ERISA disclosure provisions to ensure that "the individual participant knows exactly where he stands with respect to the plan.'" Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 118 (1989) (quoting H.R. REP. No. 93-533 at 11 (1973)). The relevant text of 29 U.S.C. § 1132(c)(1)(B) provides that:
Any administrator . . . who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) 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 from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper.
Id. (1999). The term "administrator" refers to the person specifically designated by the terms of the instrument, or, if an administrator is not so designated, the plan sponsor. 29 U.S.C. § 1002(16)(A)(i) and (ii). "Plan sponsor" refers to "the employer in the case of an employee benefit plan established or maintained by a single employer." 29 U.S.C. § 1002(16)(B)(i). As represented by Plaintiff in her Complaint, and Lucent in its Answer, Lucent Technologies, Inc. appears to be the de jure Plan Administrator. Further, even if it is not specifically designated under the terms of the Plan as Plan Administrator, a question not addressed in Defendants' briefing, Plaintiff has simply not pled facts sufficient to support a penalty claim against the individual Defendants. Moran v. Aetna Life Insur. Co., 872 F.2d 296, 300 (9th Cir. 1989) ("the Supreme Court's refusal to expand the remedies available under ERISA in [Mass. Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 147 (1985)] precludes us from extending liability under section 1132(c) to other persons not named by Congress"). Plaintiff has wholly failed to plead facts that would demonstrate a likelihood that the individual Defendants are plan administrators under the statute. See Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990) (rejecting the argument that the plan insurer should be considered a de facto plan administrator and holding that although a penalty request is left to the court's discretion, § 1132(c) must be strictly construed given its status as a civil penalty provision).
The Court likewise notes that 29 C.F.R. § 2560.503-1, relied on heavily by Plaintiff in her Complaint, does not apply to claims filed under a plan before Jan. 1, 2002. See 29 C.F.R. § 2560.503-1(o)(1).
The claims against the individual Defendants Chris Jagmin, M.D., Herb Corey, Sherry Field, D. Michael Geller, M.D., Christine E. Ferrari, M.D., and Barry C. Ashkinaz, M.D., are therefore DISMISSED with prejudice, and former Defendant Prudential's Motion is DISMISSED as moot.