Salim v. Louisiana Health Serv. & Indem. Co., No. 22-30573, __ F. App’x __, 2023 WL 3222804 (5th Cir. May. 3, 2023) (Before Circuit Judges Higginbotham, Southwick, and Willett)

The three words no patient ever wants to hear from his or her health insurer are “not medically necessary.” These words can turn a lifesaving medical procedure into a financial nightmare, especially when the treatment at issue involves specialists and equipment costing thousands of dollars.

This is what happened to plaintiff Robert Salim, who was diagnosed with advanced throat cancer in September of 2018. Mr. Salim’s physicians at the M.D. Anderson Cancer Center in Houston advised him that he should undergo proton beam radiation therapy, and they submitted a preauthorization request for this treatment to defendant Louisiana Health Service & Indemnity Company, better known as Blue Cross & Blue Shield of Louisiana.

A third-party administrator for Blue Cross, AIM Specialty Health, denied the treatment as “not medically necessary.” AIM “reasoned that Salim had no history of cancer, and that proton therapy is used only ‘when the same area has been radiated before.’” AIM then denied Salim’s request for reconsideration as well, citing only one source: the “clinical appropriateness guideline titled Radiation Oncology: Proton Beam Therapy.”

Salim appealed to Blue Cross without success. Blue Cross, relying on the same guideline, stated, “proton beam radiation therapy is not considered medically necessary in adult patients with head and neck cancer.”

Salim submitted a second-level appeal, and in support of that appeal Dr. Clifton Fuller, Salim’s oncologist, pointed out three problems in the guideline on which AIM and Blue Cross had relied.

First, Dr. Fuller noted that the guideline used an “outdated and superseded policy issued by the American Society for Radiation Oncology.” Dr. Fuller informed Blue Cross that the ASTRO policy had actually been updated “to specifically include proton beam therapy as both appropriate and medically necessary for exactly Mr. Salim’s diagnosis, advanced head and neck cancer.”

Second, Dr. Fuller noted that the guideline “glaringly omitted” reference to another source, the National Comprehensive Cancer Network Head and Neck Guidelines. Dr. Fuller pointed out that Blue Cross relied on NCCN recommendations for other diseases and thus questioned why they did not rely on them in this case.

Finally, Dr. Fuller observed that “the Guideline cited only three articles related to head and neck cancer, and that all three ‘specifically endorse the use of proton therapy’ for head and neck cancer.”

Dr. Fuller then went on to explain why proton beam therapy was appropriate and medically necessary for Mr. Salim. In doing so he cited over a dozen evidence-based publications and explained that the ASTRO and NCCN policies “consider proton beam therapy the standard of care.”

Blue Cross referred Mr. Salim’s appeal to a third-party reviewer, which was not impressed by Dr. Fuller’s arguments. It denied Mr. Salim’s second-level appeal, arguing that “most investigators recommend additional study…before adopting [proton therapy] as a standard treatment option for patients with head and neck cancer.” The reviewer also stated that the ASTRO and NCCN policies only support proton therapy for head and neck cancer when the patient has “a lesion with significant involvement of structures at the skull base,” which Mr. Salim did not have.

Despite these denials, Salim proceeded with the recommended proton beam therapy and then sued Blue Cross for failure to pay plan benefits under ERISA.

Even though Mr. Salim’s benefit plan gave Blue Cross full discretionary authority to make benefit determinations, which obligated the court to review Blue Cross’ denial of coverage under the lenient abuse of discretion standard of review, the district court still ruled for Mr. Salim. The district court found that “substantial evidence does not support [Blue Cross]’ finding that [proton therapy] was not medically necessary for treatment of Salim’s cancer.” Thus, Blue Cross “abused its discretion in denying coverage.”

Blue Cross appealed to the Fifth Circuit, raising two issues. First, Blue Cross argued that the district court improperly treated the medical necessity of proton beam therapy as a factual question rather than a legal one. Second, Blue Cross contended that substantial evidence supported its decision.

The Fifth Circuit made short work of both arguments. First, the court distinguished between disputes over a plan’s meaning and those over a plan’s application. Here, the parties agreed about what the plan said, and thus their only dispute involved the application of those plan terms. The only question before the court was “whether proton therapy was medically necessary to treat Salim’s cancer,” which “involves a review of the facts.” Thus, the district court correctly treated the medical necessity decision as a factual question, not a legal one.

On the second issue, the Fifth Circuit upheld the district court’s decision that substantial evidence did not support Blue Cross’ adverse benefit decision. The court noted that Blue Cross had relied on only one guideline for denying coverage, which cited the ASTRO policy. However, as Dr. Fuller pointed out, the ASTRO policy had been specifically updated to include cancers such as the one afflicting Mr. Salim. The court explained that Blue Cross might have the “discretion to ignore ASTRO altogether. But it does not have discretion to deny Salim’s claim by attributing to ASTRO a view that ASTRO does not hold.”

The court was also unimpressed by the third-party review of Mr. Salim’s second-level appeal. According to the court, that review made generic arguments that did not address Dr. Fuller’s points or the specific needs of Mr. Salim. Furthermore, the review misinterpreted the ASTRO and NCCN policies and failed to “address the full range of diagnoses” discussed in them.

In short, “The district court used the correct standard of review, and it correctly held that Blue Cross abused its discretion by denying coverage even when substantial evidence did not support that decision.” Thus, the ruling in Mr. Salim’s favor was affirmed in its entirety, proving that there are some medical necessity denials so unreasonable that they cannot even survive deferential review in the insurer-friendly Fifth Circuit.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Class Actions

Ninth Circuit

Gotta v. Stantec Consulting Servs., No. CV-20-01865-PHX-GMS, 2023 WL 3205526 (D. Ariz. May. 2, 2023) (Judge G. Murray Snow). Two former employees of Stantec Consulting Services and participants of the Stantec 401(k) Plan moved to certify a class of similarly situated participants and beneficiaries in this breach of fiduciary duty class action lawsuit. Meanwhile, defendants moved for partial summary judgment on plaintiffs’ request for prospective injunctive relief. They argued that plaintiffs lacked standing to pursue this claim because they are no longer plan participants. It appeared that neither party opposed the other’s motion, and thus the court granted both. To begin, the court concluded that the putative class satisfied all of the requirements of Rule 23. The class contains 10,639 members, which the court stated easily satisfies the numerosity requirement of Rule 23(a). Additionally, the court found “Plaintiff’s claims are virtually the same for every member of the class as the allegations of fiduciary mismanagement would apply in roughly the same way to every class member.” Furthermore, the focus of the case centers on the conduct of the defendants, rather than any individual actions taken by plan members, meaning the court also concluded that typicality was satisfied. The last requirement of Rule 23(a), adequacy, was met too, with the court finding that plaintiffs and their counsel were competent to act on behalf of the class members and had no conflicts of interest. Moreover, for these same reasons the court held that the two named plaintiffs would fairly and adequately protect the interests of the class and appointed them as class representatives. Turning to Rule 23(b), the court found that plaintiffs met their burden of demonstrating that ERISA breach of fiduciary duty claims like theirs are properly certified in the Ninth Circuit under Rule 23(b)(1)(A). Finally, the court appointed Edelson Lechtzin LLP and McKay Law LLC as class counsel, satisfied they met Rule 23(g)’s requirements as they are experienced ERISA practitioners and because both firms have each “secured million-dollar settlements on ERISA claims.” Accordingly, plaintiffs’ motion was granted. The court then transitioned to assessing defendants’ motion for partial summary judgment. As stated earlier, plaintiffs did not oppose the motion and voiced that they did “not intend to seek prospective injunctive relief on behalf of the Stantec 401(k) Plan.” As a result, the court granted the motion.

Disability Benefit Claims

Ninth Circuit

Goodman v. First Unum Life Ins. Co., No. 2:21-cv-00902-BJR, 2023 WL 3224481 (W.D. Wash. May. 3, 2023) (Judge Barbara Jacobs Rothstein). Plaintiff Tanya Goodman brought this ERISA action against First Unum Life Insurance Company seeking a court order requiring the insurer to reinstate her long-term disability benefits which she was receiving for physical, cognitive, and visual impairment symptoms caused by post-concussion syndrome trigged by a car accident. Ms. Goodman asserted two causes of action against Unum, a claim for benefits under Section 502(a)(1)(B) and a claim for equitable relief under Section 502(a)(3) for violation of plan terms and claims-handling practices which she alleged were a breach of Unum’s fiduciary duties. The parties cross-moved for judgment on the record under Federal Rule of Civil Procedure 52. Ms. Goodman additionally moved to supplement the record to include a decision by an administrative law judge at the Social Security Administration granting her Social Security disability benefits. First, the court granted Ms. Goodman’s motion to expand the record with her SSA benefit award. The decision was not issued until after the administrative record was already filed, so it could not have been included in it. Nevertheless, the court stated that it was relevant to its analysis of Unum’s adverse benefit decision as it speaks to issues “of complex medical questions regarding the credibility of medical experts.” Accordingly, the court included the document in the record. Second, the court conducted its de novo review of the medical record, and held that Ms. Goodman was disabled from performing the material duties of her executive leadership role as the Vice President Group Account Director for Aegis Media Americas, Inc. The totality of Ms. Goodman’s symptoms including her cognitive and visual impairments convinced the court that she would not be able to perform the prolonged visual tasks of reading, writing, and computer use, and that she currently lacks the cognitive concentration skills required for her high-level position. Furthermore, the court rejected Unum’s conclusion that Ms. Goodman was disabled from a mental illness, finding the evidence in the record did not establish or support this position. Therefore, the court concluded that Ms. Goodman met her burden to establish by a preponderance of evidence that she was disabled under the plan terms at the time of the termination and granted summary judgment to her on her benefit claim. However, Unum’s denial only considered whether Ms. Goodman was disabled from her own occupation, and thus Unum has never made a determination under the now-applicable “any occupation” standard. Therefore, the court remanded the issue back to Unum to decide whether to extend benefits to Ms. Goodman beyond the regular occupation period into the any occupation period. Finally, the court denied summary judgment to Ms. Goodman on her claim asserted under Section 502(a)(3), ERISA’s “catchall” provision, holding that under Ninth Circuit precedent “a claimant may not bring a claim for denial of benefits under § 1132(a)(3) when a claim under § 1132(a)(1)(B) will afford adequate relief.” As a result, the court was unwilling to award duplicative relief. It also held that to the extent the breach of fiduciary duty claim was independent of the benefit claim, Ms. Goodman did not meet her burden to prove that Unum’s procedures or the actions it took handling her claim were unsuitable under ERISA.

ERISA Preemption

Fourth Circuit

Riley v. Am. Elec. Power Serv. Corp., No. Civil Action 2:22-cv-00577, 2023 WL 3184318 (S.D. W. Va. May. 1, 2023) (Judge Thomas E. Johnston). Plaintiff Sherry Ray Riley sued American Electric Power Service Corporation, Empower Retirement, LLC, the estate of her late ex-husband Roger Allen Riley, and Roger’s daughter, Miranda Riley, in state court asserting state law causes of action seeking payment of benefits under the decedent’s two ERISA-governed retirement plans, to which she claims to be the named beneficiary. Defendants removed the action to the federal judicial system, and subsequently moved to dismiss the complaint for failure to state a claim. Specifically, they argued that the state law claims are preempted by ERISA. The court agreed and granted the motion to dismiss in this decision. The court stated that plaintiff’s complaint was undoubtedly seeking payment of benefits under ERISA plans, making this a clear-cut case of state law claims falling under the umbrella of ERISA preemption. This was true as Ms. Riley’s claims could not be resolved without relying on the terms of the plan and are naturally premised on the existence of the plans. Therefore, the court decided that the complaint as currently pled falls within the scope of ERISA preemption. However, the court dismissed the complaint without prejudice leaving the door open for Ms. Riley to reassert her lawsuit as ERISA action.

Life Insurance & AD&D Benefit Claims

Fifth Circuit

Rozier v. Prudential Ins. Co. of Am., No. 1:19-CV-00577, 2023 WL 3214645 (W.D. La. May. 2, 2023) (Judge Robert R. Summerhays). Plaintiff Judith Ann Huthnance Rozier sued her late husband’s former corporate partner, Malcolm Dale Harrington, and the insurance company of the decedent’s group life insurance policy, Prudential Insurance Company of America, after she was denied benefits under his ERISA plan. Prudential had identified Mr. Harrington as the beneficiary of the policy on a copy of a 1984 enrollment card, apparently executed and signed by Mr. Rozier. Ms. Rozier maintained that her husband did not designate his business partner as his beneficiary and that the signature on the card was not her husband’s signature. This action proceeded to a bench trial on November 7, 2022. In this decision, the court concluded that a preponderance of evidence, including expert handwriting testimony during the bench trial, proved that the beneficiary designation was valid and authentic. Additionally, the court found that the record did not reflect any credible evidence that the beneficiary designation was a mistake on the part of Mr. Rozier. “There is no evidence of any agreement between Rozier and Harrington as to the beneficiary designation; nor is there evidence that the parties contemplated how a partner’s withdrawal from the partnership would affect a beneficiary designation.” Accordingly, the court followed ERISA’s principle of enforcing the plain language of the plan beneficiary designation form. Thus, Ms. Rozier’s action ultimately fell “by the terms of the plan,” which named someone else as the designated beneficiary. As a result, the court ruled that Ms. Rozier failed to prove her claims and therefore entered judgment against her.

Metropolitan Life Ins. Co. v. Muecke, No. 22-01029, 2023 WL 3261599 (W.D. La. May. 4, 2023) (Judge Donald E. Walter). Joe Nickle died on August 14, 2021. After Mr. Nickle’s death, his life insurance benefits under an ERISA-governed life insurance plan became payable. Two claimants came forward: the named beneficiary, Mr. Nickle’s girlfriend, Deanne Muecke, and Mr. Nickle’s son, Cameron Nickle, who argued that the beneficiary designation was the product of fraud or coercion. Faced with these competing claims, Metropolitan Life Insurance Company commenced this interpleader action to determine the proper beneficiary. Defendant Nickle moved for summary judgment, which defendant Muecke opposed. Mr. Nickle argued that Ms. Muecke failed to present evidence that she is a valid beneficiary under the plan because the letter she presented showing her as the named beneficiary was not a designation form and was not signed or dated by the decedent. The court denied the summary judgment motion in this order. It found that Mr. Nickle’s motion was not only untimely, but also that he did not attach the document he relied on to his motion or direct the court to it in the record. Therefore, while the court stated that Mr. Nickle may ultimately be correct that the document designating Ms. Muecke is insufficient to show that she is the beneficiary of the plan, “the Court is in no position to make that determination without the benefit of the document.” Thus, the court found this to be a genuine issue of material fact precluding an award of summary judgment to Mr. Nickle.

Pension Benefit Claims

Second Circuit

Purcell v. Scient Fed. Credit Union Split Dollar Agreement Plan, No. 3:22-CV-961 (SVN), 2023 WL 3259985 (D. Conn. May. 4, 2023) (Judge Sarala V. Nagala). Plaintiff David Purcell was fired as the Chief Executive Officer of Scient Federal Credit Union (“SFCU”) on March 16, 2020, when he was informed that his employer was “going in a different direction.” Mr. Purcell believed that the reason that SFCU provided for his termination was a pretext and that he was in fact being terminated due to his disability from Parkinson’s Disease, which his employer knew about. Accordingly, Mr. Purcell submitted a claim for 100% vested benefits in the Annual Borrowing Cap of the Scient Federal Credit Union Split Dollar Agreement Plan, to which he claimed he was entitled if terminated due to a disability. In his notice of claim, Mr. Purcell asserted that SFCU had breached its fiduciary duties to him by denying him full benefits under the plan and failing to implement the loan interest rate deduction that had been previously approved by the compensation committee, which he claims would have protected his benefits under the plan. Defendants, the plan and its administrator, refused to provide Mr. Purcell with the benefits he sought. Mr. Purcell maintains that defendants never sent him an official denial letter as required under ERISA regulations. Mr. Purcell then commenced this action alleging defendants violated ERISA Sections 502(a)(1)(B) and (a)(3). In response, defendants asserted two counterclaims against Mr. Purcell on behalf of SFCU. The first counterclaim alleged that Mr. Purcell breached the implied covenant of good faith and fair dealing in relation to his employment agreement with the company because he failed to disclose that he was unable to perform his job prior to termination. The second counterclaim alleged that Mr. Purcell’s failure to disclose this information similarly breached the fiduciary duties he owed to SFCU as its CEO. Defendants then moved to expand discovery beyond the administrative record, and Mr. Purcell moved to dismiss the two counterclaims asserted against him. The court first addressed Mr. Purcell’s motion to dismiss. It granted the motion, finding that SFCU’s counterclaims violated Federal Rule of Civil Procedure 13 because they were brought in the company’s capacity as Mr. Purcell’s former employer, even though it was only sued in its capacity as plan administrator. Accordingly, the court concluded that the counterclaims violated the opposing party requirement of Rule 13, and that they did not fall under any exceptions to the rule. Specifically, the court held that recovery based on the counterclaims would benefit SFCU only in its role as employer and not in its capacity as fiduciary of the ERISA plan. The court also concluded that the topics discussed in the complaint and the counterclaims were predominantly distinct meaning that equity and judicial economy did not mandate the counterclaims be tried in this lawsuit. For these reasons, the counterclaims were dismissed. The court then addressed defendants’ motion to expand discovery beyond the administrative record. They argued that Mr. Purcell raised allegations in his complaint on topics pertaining to his symptoms from his illness and his job performance that were not addressed in the administrative record. The court acknowledged that this presented a novel situation in which a plan and its administrator were seeking to expand the record rather than a claimant moving to do so. However, operating under the assumption that the standard for permitting additional discovery remains the same regardless of which party requests it, the court concluded that defendants could not demonstrate good cause to expand the record. To the contrary, the court pointed out that defendants had ample opportunity to develop the record. Nor could they claim, the court found, that the issues relating to Mr. Purcell’s illness were only brought into focus once the lawsuit was filed. The court stated that Mr. Purcell made abundantly clear when filing his claim for benefits that he believed his termination was a pretext to deny him additional benefits due to his disability. Therefore, defendants were not allowed to expand the record they were responsible for creating, and their motion to do so was denied.

Ninth Circuit

Munger v. Intel Corp., No. 3:22-cv-00263-HZ, 2023 WL 3260034 (D. Or. May. 3, 2023) (Judge Marco A. Hernandez). Plaintiff Ruth Ann Munger, acting on behalf of the Estate of Philip Cloud, brought this action seeking Philip Cloud’s ERISA plan benefits under five retirement plans offered by his former employer, the Intel Corporation, on the grounds that Oregon and federal law prohibit slayers from profiting from their crimes. Mr. Cloud’s named beneficiary, his wife Tracy Cloud, was convicted by a Washington County jury of second degree murder for killing Mr. Cloud. Ms. Cloud is currently appealing her conviction and her appeal remains pending before the Oregon Court of Appeals. This lawsuit was stayed until the completion of either Ms. Cloud’s criminal appeal or the conclusion of the state court wrongful-death proceedings also brought by Ms. Munger, which sought an order finding Ms. Cloud a slayer. On January 20, 2023, the state court adjudicated Cloud a slayer and found her liable for the wrongful death of Philip Cloud. This court then lifted its stay. Ms. Munger reinstated two motions she had filed with the court prior to the stay, a motion for summary judgment and a motion to strike Ms. Cloud’s declaration and surresponse to the summary judgment motion. The court granted both motions in this decision. First, the court stated that under Ninth Circuit precedent Ms. Cloud could not use the protections of the Fifth Amendment against self-incrimination to avoid a deposition under oath or selectively waive privilege in various declarations and discovery documents. “The Court finds Cloud may not invoke the Fifth Amendment privilege as a shield to oppose depositions while discarding it for the limited purpose of making statements to oppose summary judgment. The Court, therefore, grants Plaintiff’s requests to strike.” Next, the court found that the jury’s unanimous finding of Ms. Cloud’s guilt was a fully litigated issue during a full and fair proceeding under a heavier burden of proof than in this civil action. Therefore, the court applied collateral estoppel to bar Ms. Cloud from relitigating in this action whether she murdered her husband. Accordingly, the court concluded that Ms. Cloud was precluded from receiving the benefits under the five ERISA plans. Ms. Munger’s summary judgment motion was thus granted.

Provider Claims

Third Circuit

Abramson v. Aetna Life Ins. Co., No. 2:22-cv-05092 (BRM) (CLW), 2023 WL 3199198 (D.N.J. May. 2, 2023) (Judge Brian R. Martinotti). An out-of-network surgeon, Dr. David L. Abramson, M.D., sued a claims administrator and fiduciary of an ERISA plan, Aetna Life Insurance Company, under ERISA Section 502(a)(1)(B), after Aetna denied a claim for reimbursement of emergency surgery Mr. Abramson performed on a plan beneficiary. Specifically, the claim was denied for failure to obtain pre-certification. Dr. Abramson and his patient appealed the denial, arguing that pre-authorization was not possible given the emergency circumstances, and that the claim should have been approved under the plan’s emergency exception for out-of-network care. As an assignee, authorized representative, and an attorney-in-fact, Dr. Abramson seeks payment on the patient’s behalf for the unpaid bill of $80,200 for the surgery. Aetna moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Aetna argued that Dr. Abramson lacked standing to bring his claim for benefits because the plan contains a valid anti-assignment provision. In addition, Aetna argued that Dr. Abramson and the plan beneficiary failed to administratively exhaust the appeals process prior to commencing legal action. Finally, Aetna maintained that the complaint failed to state a claim by not plausibly tying the demand for benefits to any specific plan term. In response, Dr. Abramson conceded that the plan contains a provision banning assignments of benefits. However, he nevertheless maintained that he could pursue his claim on behalf of his patient given his status as an attorney-in-fact under Third Circuit precedent. Dr. Abramson also averred that his complaint details that he exhausted administrative remedies prior to bringing his action. Lastly, Dr. Abramson argued that the plan terms requiring payment of claims for emergency out-of-network healthcare require Aetna to pay the claim for benefits. The court addressed standing first. It sided with Dr. Abramson, concluding that Third Circuit case law makes clear that a healthcare provider can function as an attorney-in-fact for a plan beneficiary even in the face of an anti-assignment provision. “The anti-assignment clause in B.H.’s Plan has no more power ‘to strip [Dr. Abramson] of [his] ability to act as [B.H.’s] agent than it does to strip [B.H.] of his interest in his claim.’ This is particularly true in the healthcare context. The Complaint sufficiently alleges that Dr. Abramson is asserting the claim for benefits on B.H.’s behalf; attaches a valid rule-complaint power of attorney; and states the amount B.H. remains responsible for after the alleged emergency services.” In addition, the court agreed with Dr. Abramson that his complaint sufficiently alleged exhaustion of administrative remedies. However, the complaint was found by the court to be flawed on the merits. It was the court’s opinion that the complaint failed to sufficiently identify a plan term supporting the exact amount of damages claimed. While the complaint did cite plan provisions that support the allegations regarding emergency services, the court ultimately found that it did not specify how Aetna was required to pay the amount owed and billed. “Such an allegation is required for Dr. Abramson’s cause of action to be sustained.” Therefore, the court granted the motion to dismiss, but dismissed the complaint without prejudice, granting Dr. Abramson the ability to amend his complaint to address this problem.

Seventh Circuit

OSF Healthcare Sys. v. SEIU Healthcare II Pers. Assistants Health Plan, No. 3:21-cv-50029, 2023 WL 3200256 (N.D. Ill. May. 2, 2023) (Judge Iain D. Johnston). An out-of-network healthcare provider, OSF Healthcare Saint Anthony Medical Center, sued an ERISA healthcare plan, the SEIU Healthcare IL Personal Assistants Health Plan, and its board of trustees, as an authorized representative of a patient and plan participant seeking payment of benefits due for medical services it rendered. Defendants moved to dismiss the complaint. They argued that OSF Healthcare does not have standing to pursue its claims under ERISA because the plan contains a valid anti-assignment clause preventing any third party from bringing ERISA lawsuits. OSF Healthcare responded that it was not acting as an assignee but rather as an authorized representative and that the plan is ambiguous on whether it permits representatives acting on behalf of participants or beneficiaries to bring actions under ERISA. The court turned to Seventh Circuit precedent on the topic. The Seventh Circuit has ruled that because Congress did not expressly include language in ERISA allowing authorized representatives to bring suit under ERISA, courts must read this to mean that Congress did not intend to allow this course of action. Moreover, the court agreed with defendants that the plan’s anti-assignment clause forbids healthcare providers or any other third party from bringing ERISA actions. And although the court admitted that the plan language was less clear regarding the authority of authorized representatives and what actions they may or may not take, it nevertheless concluded that a reading permitting an authorized representative to bring a lawsuit would essentially nullify the terms of the anti-assignment provision. Accordingly, the court would not sanction such a work-around and therefore concluded that OSF Healthcare lacked Article III standing to pursue its claims. Finally, because OSF has already been given three opportunities to replead its claims, the court granted the motion to dismiss with prejudice.


Ninth Circuit

Protingent, Inc. v. Gustafson-Feis, No. 2:20-cv-01551-TL, 2023 WL 3204598 (W.D. Wash. May. 2, 2023) (Judge Tana Lin). A Washington corporation that self-funds and administers an ERISA health benefits plan, Protingent, Inc., sued one of its plan beneficiaries, Lisa Gustafson-Feis, seeking subrogation and reimbursement of paid medical benefits from money Ms. Gustafson-Feis received from a personal injury claims settlement following a car accident. Ms. Gustafson-Feis moved to transfer the action from the Western District of Washington, where both she and Protingent are located, to the Northern District of New York, the location of the car accident. Protingent opposed transfer and argued that venue is not proper in the Northern District of New York. The court agreed and denied the motion. The court held that there would not be a basis for jurisdiction over Ms. Gustafson-Feis in this action in the district court in New York because both parties and the healthcare plan governing this action are located in Washington. In addition, the court stressed that even if venue were proper in the Northern District of New York, “the convenience of the Parties and the interest of justice weigh against a change of venue.” Thus, this “contractual dispute between the Parties as to whether the terms of the Plan entitle Plaintiff to equitable relief under ERISA to recover a portion of the settlement funds,” will remain in the Western District of Washington.