Mannino v. Louisiana Health Service & Indemnity Company

District Court, M.D. Louisiana·Decided September 28, 2020·No. 3:19-cv-00185·Unknown

Opinion

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

SADIE BENNETT AND MELISSA CIVIL ACTION NO. 19-185 MANNINO, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED

V. JUDGE SHELLY D. DICK

LOUISIANA HEALTH SERVICE & MAG. JUDGE RICHARD L. INDEMNITY COMPANY (doing BOURGEOIS, JR. business as BLUE CROSS BLUE SHIELD OF LOUISIANA) RULING This matter is before the Court on the Motion for Reconsideration or, in the alternative, for Certification to file Interlocutory Appeal1 by Defendant, Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana (“Defendant” or “BCBSLA”), which moves the Court under Rule 54(b) to reconsider its prior interlocutory Ruling2 on Defendant’s Motion to Dismiss.3 Plaintiffs, Sadie Bennett and Melissa Mannino (“Plaintiffs”), have filed an Opposition.4 Defendant replied.5 Oral argument is not necessary. For the following reasons, the Court finds that Defendant’s Motion for Reconsideration shall be denied, and Defendant’s Motion for Certification for Interlocutory Appeal shall be denied.

1 Rec. Doc. No. 56. 2 Rec. Doc. No. 49. 3 Rec. Doc. No. 24. 4 Rec. Doc. No. 59. 5 Rec. Doc. No. 62. I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY Plaintiffs are participants in group health plans (“the Plans”)6 that are insured and administered by BCBSLA. Under most group health plans, when a participant fills a prescription for a medically-necessary prescription drug, the insurer pays a portion of the cost and the participant in the health plan pays a portion of the cost. The cost of the

prescription drug is pre-determined by the terms of the governing health plan and is usually at a lower or negotiated cost. The participant’s payment is a “co-payment” made directly to the pharmacy, who collects the payment on behalf of the insurer.7 In this case, Plaintiffs claim that Defendant violated the terms of the Plans and overcharged participants for medically-necessary prescription drugs. Plaintiffs claim that Defendant directed the pharmacies to “misrepresent” the cost of the prescriptions to the participants and charge the participants an amount in excess of the negotiated amount reflected in the Plans. Participants paid the excessive charges directly to the pharmacy, not knowing at the time that the cost was inflated. Plaintiffs refer to this as a “pervasive scheme” of “overcharges”.8

Defendant allegedly profited from the “scheme” by “clawing back” a portion or all of the “overcharges” paid by participants to the pharmacies. Defendant required the pharmacies to pay Defendant “clawbacks”, which is the amount of the overage or excess cost of the prescription. Alternatively, Defendant paid the pharmacies less than what it would have, had it followed the terms of the Plan.9

6 Both parties refer generally to the “Plan” or “Plans” throughout their briefing. The plural and singular are used interchangeably. No explanation is provided. The Court will refer to the subject group health plans as the “Plan” or “Plans” as appropriate. 7 Rec. Doc. No. 1, pp. 3–4. The Complaint contains duplicate page numbers. The Court will cite to the actual page number rather than the page number designated by the Complaint on file. 8 Id. pp. 4–5. 9 Id. p. 5. Plaintiffs, on their behalf and on behalf of a class of “similarly situated persons”, claim that Defendant’s “scheme” violated the Employee Retirement Income Security Act of 1974 (“ERISA”).10 Plaintiffs plead four counts against Defendant: Count I, for violations of ERISA11 for the overcharges for the cost of prescription drugs in violation of the terms of the Plans;12 Count II, for violations of ERISA13 against Defendant in its roles as a

“fiduciary” and “party in interest” that allegedly received compensation, or “clawbacks”, for services provided under the Plans;14 Count III, for violations of ERISA15 against Defendant in its role as a “fiduciary” for allegedly designing, implementing and benefitting from an “overcharge and clawback scheme” involving the mis-appropriation of Plan assets adverse to the Plan participants and for its own benefit;16 and Count IV, for violations of ERISA17 against Defendant in its role as a “fiduciary” for breaching its fiduciary duties by allegedly acting in violation of the terms of the Plans.18 Defendant moved to dismiss Plaintiffs’ Complaint pursuant to Rule 12(b)(6) on three grounds: (1) that Plaintiffs failed to exhaust their administrative remedies regarding their claims in Count I;19 (2) that the allegations in Count II against Defendant as a

“fiduciary” and Counts III and IV are duplicative of the claims in Count I and/or because Plaintiffs failed to exhaust their administrative remedies and Defendant is not a “fiduciary” under ERISA;20 and (3) that Plaintiffs lack standing to bring their claims in Count II against

10 29 U.S.C. §§ 1001–1461. 11 29 U.S.C. § 1132(a)(1)(B). 12 Rec. Doc. No. 1, pp. 39–40. 13 29 U.S.C. § 1132(a)(3). 14 Rec. Doc. No. 1, pp. 41–43. 15 29 U.S.C. § 1132(a)(3). 16 Rec. Doc. No. 1, pp. 43–46. 17 29 U.S.C. § 1132(a)(2)&(3). 18 Rec. Doc. No. 1, pp. 46–49. 19 Rec. Doc. No. 24-1, pp. 4–8. 20 Id. pp. 9–15. Defendant as a “party in interest” and because there is no available remedy under ERISA.21 The Court denied Defendant’s motion to dismiss.22 With regard to Counts II, III, and IV, this Court acknowledged the support in the jurisprudence for Defendant’s argument; however, the Court adopted a “more expansive approach taken by many

courts, which allows plaintiffs, at this stage of litigation, to simultaneously plead claims under several subsections of Section 502(a).” 23 This Court denied Defendant’s motion in order to allow Plaintiffs time for discovery, to develop their trial strategy, and to preserve alternative grounds for relief until a later stage in the litigation.24 This Court found dismissal of Counts II, III, and IV to be premature at this stage of the litigation.25 Defendant now moves the Court to reconsider its Ruling only as to Counts II, III, and IV.26 Defendant argues that the Court should have applied Innova Hosp. San Antonio, L.P. v. Blue Cross & Blue Shield of Ga., Inc.27 and Swenson v. United of Omaha Life Ins. Co.,28 instead of “out-of-jurisdiction case law in support of simultaneous pleading.”29 Alternatively, Defendant requests that the Court certify its Order for

interlocutory appeal pursuant to 28 U.S.C. § 1292(b).30

21 Id. pp. 15–20. 22 Rec. Doc. No. 49. 23 Id. p. 16. 24 Id. 25 Id. 26 Rec. Doc. No. 56-1, pp. 1–2. 27 892 F.3d 719, 733–34 (5th Cir. 2018). 28 876 F.3d 809, 812 (5th Cir. 2017). 29 Rec. Doc. No. 56-1, p. 2 (referring to North Cypress Med. Center v. CIGNA Healthcare, 782 F.Supp.2d 294 (S.D. Tex. 2011) (which is within the Fifth Circuit) and Mohr-Lercara v. Oxford Health Ins., Inc., 2019 WL 1409479, *9 (S.D.N.Y. 2019) (citing N.Y. State Psychiatric Ass’n, Inc. v. UnitedHealth Grp., 798 F.3d 125, 134 (2d Cir. 2015)(quoting Varity Corp. v.

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