Potter v. Blue Cross Blue Shield of Michigan

10 F. Supp. 3d 737, 2014 WL 1304327, 2014 U.S. Dist. LEXIS 43774
CourtDistrict Court, E.D. Michigan
DecidedMarch 31, 2014
DocketCase No. 10-cv-14981
StatusPublished
Cited by15 cases

This text of 10 F. Supp. 3d 737 (Potter v. Blue Cross Blue Shield of Michigan) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Potter v. Blue Cross Blue Shield of Michigan, 10 F. Supp. 3d 737, 2014 WL 1304327, 2014 U.S. Dist. LEXIS 43774 (E.D. Mich. 2014).

Opinion

ORDER OVERRULING OBJECTIONS, ADOPTING REPORT AND RECOMMENDATION (document no. 167), AND GRANTING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS (document no. 128)

STEPHEN J. MURPHY, III, District Judge.

This is an ERISA denial-of-benefits class action, filed by named plaintiffs Michael Potter and Brett Boyer against Defendant Blue Cross Blue Shield of Michigan (“BCBS”). Plaintiffs sought benefits they were allegedly denied for Applied Behavior Analysis (“ABA”) therapy for autism as well as declaratory and injunctive relief. The Court subsequently certified a class of individuals enrolled in or covered by a plan offered or administered by BCBS and governed by ERISA who were denied a claim for ABA therapy on the grounds that, pursuant to BCBS’ 2010 Medical Policy, BCBS deemed the treatment to be “experimental.” On March 30, 2013, 2013 WL 4413310, the Court entered judgment against BCBS and in favor of Plaintiffs, declared that BCBS’ characterization of ABA therapy as “experimental or investigative” as applied to the claims of the class members, was and is arbitrary and capricious, overturned all denials of benefits on that basis, ordered the class members’ claims for coverage of ABA therapy to be remanded to BCBS for read ministration, and ordered BCBS to provide notice to the class at BCBS’ sole expense.

On May 1, 2012, Plaintiffs filed the instant motion for attorney’s fees and costs pursuant to § 502(g) of ERISA, Fed. R.Civ.P. 23(h) and 54(d)(2), L.R. 54.1 and 54.1.2, and 28 U.S.C. § 1920. The Court referred the motion to a United States Magistrate Judge. The magistrate judge conducted a hearing on October 23, 2013, and, in addition, to the original motion, response, and reply briefs, considered several subsequently filed “notices” of supplemental authority as well as response and reply briefs regarding those notices. On January 30, 2014, the magistrate judge issued a Report and Recommendation (“Report”), recommending that the motion be granted in part and reducing' the amount of attorney’s fees and costs requested by Plaintiffs.

BCBS has filed 11 timely objections challenging various aspects of the Report. Civil Rule 72 does not require the Court to hold a hearing when reviewing a magistrate judge’s findings. Fed.R.Civ.P. 72; U.S. v. Raddatz, 447 U.S. 667, 674, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980) (holding 28 U.S.C. § 636 did not require a hearing for de novo review of a magistrate’s findings); see also Estate of Wyatt v. WAMU/JP Morgan Chase Bank, No. 09-14919, 2012 WL 1622897 (E.D.Mich. May 9, 2012). After examining the record and considering BCBS’ objections de novo, the Court concludes that its objections do not have merit. Accordingly, the Court will adopt the Report, and grant the motion for attorney’s fees and costs to the extent recommended by the Report.

STANDARD OF REVIEW

Civil Rule 72 provides that a party’s specific written objections to a magistrate judge’s Report filed within fourteen days of service are entitled to de novo review. See Fed.R.CivJP. 72(b)(2); see also 28 U.S.C. § 636(b)(1) (“A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.”).

[742]*742Section 502(g)(1) of ERISA provides, “In any action under this title ... by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). Civil Rule 23(h) provides, “In a certified class action, the court may award reasonable attorney’s fees and nontaxable costs that are authorized by law” upon plaintiffs’ motion under Civil Rule 54(d)(2). 28 U.S.C. § 1920 provides that the Court may tax as costs various expenses.

The Supreme Court has held that a claimant need not be a “prevailing party” to be eligible for attorney’s fee under ERISA’s fee-shifting statute, but rather, the Court may award fees and costs under the statute if the party requesting the award shows that he obtained “some degree of success on the merits.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 254, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010). Nevertheless, “[e]ven under this more relaxed threshold for eligibility, [plaintiffs] must demonstrate [their] entitlement to attorney’s fees.” Geiger v. Pfizer, Inc., 549 Fed.Appx. 335, 338 (6th Cir.2013). In exercising its discretion as to whether to award fees under § 1132(g), this Court is to consider the following five factors established by the Sixth Circuit in Sec’y of Dep’t of Labor v. King, 775 F.2d 666 (6th Cir.1985):

(1) the degree of the opposing party’s culpability or bad faith; (2) the opposing party’s ability to satisfy an award of attorney’s fees; (3) the deterrent effect of an award on other persons under similar circumstances; (4) whether the party requesting the fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties’ positions.

Id. at 669. “No single factor is determinative.” Moon v. Unum Provident Corp., 461 F.3d 639, 642-43 (6th Cir.2006).

BACKGROUND

The Report first concludes that there is no question that Plaintiffs have achieved some success oh the merits. Report & Recommendation Plaintiffs’ Mot. for Attorney Fees; (“Report”) 5, ECF No. 167. The Report notes that Plaintiffs were able to persuade the Court that the plan administrator’s characterization of ABA therapy as “experimental or investigative” as applied to the claims of the class members is arbitrary and capricious and should not be upheld under ERISA. Id. at 5. The Report explained that the Court reversed the plan administrator’s decision and ordered that the class members’ claims for coverage of ABA therapy be remanded to BCBS for readministration consistent with the Opinion and Order. Id. The Report disagreed with BCBS’ argument that an award of fees and costs is premature because the parties do not yet know the number of class members and how many are entitled to relief, explaining that courts within the Sixth Circuit have consistently held that a remand to the plan administrator constitutes a substantial success on the merits. Id. at 6.

The Report proceeds to analyze the King factors, noting that the parties did not dispute that the second and fourth factors were present. Id. at 6-7. The Report concludes that the Court’s finding that BCBS’ denial of benefits was arbitrary and capricious suggests that BCBS acted with culpability in denying benefits for ABA therapy. Id.

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Bluebook (online)
10 F. Supp. 3d 737, 2014 WL 1304327, 2014 U.S. Dist. LEXIS 43774, Counsel Stack Legal Research, https://law.counselstack.com/opinion/potter-v-blue-cross-blue-shield-of-michigan-mied-2014.