S.M. v. Oxford Health Plans ( 2016 )

15-1234
S.M. v. Oxford Health Plans
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Thurgood Marshall United
3 States Courthouse, 40 Foley Square, in the City of New York,
4 on the 25th day of March, two thousand sixteen.
5
6 PRESENT: DENNIS JACOBS,
7 PETER W. HALL,
8 Circuit Judges.
9 JANE A. RESTANI,*
10 Judge.
11
12 - - - - - - - - - - - - - - - - - - - -X
13 S.M.,
14 Plaintiff-Appellant,
15
16 -v.- 15-1234
17
18 Oxford Health Plans (NY),
19 Incorporated, a/k/a Oxford Health
20 Insurance, Inc., Oxford Health Plans
21 LLC, United Healthcare Services, Inc.,
22 United Health Group Incorporated,
23 Defendants-Appellees.
24 - - - - - - - - - - - - - - - - - - - -X
*
The Honorable Jane A. Restani, Judge for the
United States Court of International Trade, sitting by
designation.
1
1 FOR APPELLANT: GABRIEL BERG, Kennedy Berg LLP,
2 New York New York (Charles
3 Matays, Matays Law Group PLLC,
4 New York, New York on the
5 brief).
6
7 FOR APPELLEES: JOHN F. KAPACINSKAS (Richard A.
8 Ross & Pari I. McGarraugh on the
9 brief) Fredrikson & Byron, P.A.,
10 Minneapolis, Minnesota.
11
12 Appeal from a judgment of the United States District
13 Court for the Southern District of New York (Ramos, J.).
14
15 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
16 AND DECREED that the judgment of the district court be
17 AFFIRMED.
18
19 Plaintiff S.M. appeals from the judgment of the United
20 States District Court for the Southern District of New York
21 (Ramos, J.), granting summary judgment in favor of
22 defendants Oxford Health Plans (NY), Inc., a/k/a Oxford
23 Health Insurance, Inc. (“Oxford”), Oxford Health Plans LLC,
24 United Healthcare Services, Inc., and United Health Group
25 Incorporated. Plaintiff argues (1) the district court
26 improperly weighed Oxford’s structural conflict of interest;
27 (2) the district court abused its discretion by declining to
28 expand the administrative record; (3) the district court
29 erred in finding Oxford’s decision supported by substantial
30 evidence and not arbitrary and capricious; (4) the district
31 court erred by not granting relief on the basis that Oxford
32 withheld information from the external reviewer; (5) the
33 district court erred by dismissing Oxford's corporate
34 parents as defendants; and (6) the district court erred in
35 declining to award damages or attorney's fees to S.M.
36
37 This Court reviews the grant of summary judgment in an
38 ERISA action de novo and generally applies the same legal
39 standard of review employed by the district court. McCauley
40 v. First Unum Life Ins. Co., 551 F.3d 126, 130 (2d Cir.
41 2008). An administrator’s decision to deny benefits is
42 ordinarily reviewed de novo; but if, as here, “written plan
43 documents confer upon a plan administrator the discretionary
44 authority to determine eligibility, we will not disturb the
45 administrator’s ultimate conclusion unless it is ‘arbitrary
46 and capricious.’” Pagan v. NYNEX Pension Plan, 52 F.3d 438,
47 441 (2d Cir. 1995). Thus, we may upset Oxford’s
2
1 determination only if it was “without reason, unsupported by
2 substantial evidence or erroneous as a matter of law.”
3 Miles v. Principal Life Ins. Co., 720 F.3d 472, 486 (2d Cir.
4 2013) (internal quotation marks omitted). In our review, we
5 assume the parties’ familiarity with the facts and the
6 record of prior proceedings, which we reference only as
7 necessary to explain our decision to affirm.
8
9 1. Conflict of interest is a factor in the arbitrary
10 and capricious standard of review. Once a conflict has been
11 identified, “the court goes on to determine how heavily to
12 weight the conflict of interest thus identified, considering
13 such circumstances as whether procedural safeguards are in
14 place that abate the risk, ‘perhaps to the vanishing
15 point.’” Durakovic v. Bldg. Serv. 32 BJ Pension Fund, 609
16 F.3d 133, 138 (2d Cir. 2010) (quoting Metro. Life Ins. Co.
17 v. Glenn, 554 U.S. 105, 117 (2008)). Courts decline to
18 “assign any weight to a conflict of interest ‘in the absence
19 of any evidence that the conflict actually affected the
20 administrator’s decision.’” Roganti v. Metro. Life Ins.
21 Co., 786 F.3d 201, 218 (2d Cir. 2015) (quoting Durakovic,
22 609 F.3d at 140).
23
24 As the district court ruled, Oxford took affirmative
25 steps to reduce the risk of bias, including consulting with
26 the plaintiff and her treating physician and assigning
27 separate individuals to process plaintiff’s appeal.
28 Plaintiff argues that Oxford has a history of biased claims.
29 The district court’s rejection of that argument was properly
30 supported by citation to prior decisions in which Oxford’s
31 conflict of interest was given little weight. See Fay v.
32 Oxford Health Plan, 287 F.3d 96, 109 (2d Cir. 2002).
33
34 In any event, there was no indication in the record
35 that the conflict affected the outcome in the plaintiff’s
36 case. Oxford’s initial agreement to pay for three months of
37 IVIG treatment makes it unlikely that the decision not to
38 extend that coverage was driven by financial interest. See
39 Durakovic, 609 F.3d at 140 (“No weight is given to a
40 conflict in the absence of any evidence that the conflict
41 actually affected the administrator’s decision.”).
42
43 2. The district court’s refusal to expand the
44 administrative record was not an abuse of discretion. In
45 ERISA cases applying the arbitrary and capricious standard
46 of review, we have “repeatedly said that a district court’s
47 decision to admit evidence outside the administrative record
3
1 is discretionary, ‘but which discretion ought not to be
2 exercised in the absence of good cause.’” Krauss v. Oxford
3 Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008)
4 (quoting Juliano v. Health Maint. Org. of N.J., Inc., 221
5 F.3d 279, 289 (2d Cir. 2000)).
6
7 As to the deposition of Dr. Lundblad, the district
8 court correctly reasoned that it shed no additional light on
9 the merits because it revealed no bias in the coverage
10 determination. Similarly, the report for S.M.’s treatment
11 in 2013 was relevant in that it tended to show the 2011
12 denial was not impacted by a structural conflict, but did
13 not bear on whether the 2011 denial of coverage was
14 arbitrary and capricious. Finally, the district court
15 determined that because S.M. had not challenged the IVIG
16 Policy itself, there was not good cause to admit the medical
17 journal articles demonstrating the reasonableness of the
18 Policy.
19
20 3. A medical necessity determination is arbitrary and
21 capricious only if the decision is "without reason,
22 unsupported by substantial evidence or erroneous as a matter
23 of law." Fay, 287 F.3d at 104 (citation omitted). It is
24 undisputed that the plaintiff's plan only covers medically
25 necessary services and that medical necessity for
26 continuation of IVIG coverage is governed by the terms of
27 the IVIG Policy. Defendant’s doctor concluded that S.M.’s
28 undisputed condition did not meet the standard for coverage
29 contained in the policy because: (1) there was no evidence
30 that S.M. had a confirmed diagnosis of any approved
31 condition; (2) there was no documentation of impaired
32 production of antibodies to specific antigens; and (3) there
33 was no documentation that the medical condition under
34 treatment had not fully resolved. The reasonableness of
35 this decision is further confirmed by the external review
36 sought by S.M., which agreed with Oxford's denial of
37 coverage. The district court did not err in determining
38 that defendant did not act arbitrarily or capriciously and
39 that defendant’s decision was supported by substantial
40 evidence.
41
42 4. The plaintiff contends that Oxford withheld from
43 the external reviewer an internal Oxford report. However,
44 the report was merely a collection of the information
45 submitted by S.M. The same clinical information that Oxford
46 considered when it initially denied the coverage request was
47 provided to the external reviewer. Compare Joint App’x A-
4
1 831-841, 843-854 (materials submitted to Oxford by S.M.)
2 with Joint App’x 777-817 (S.M.’s external appeal
3 applications). The district court properly declined to
4 grant relief because Oxford withheld no clinical information
5 from the external reviewer.
6
7 5. The plaintiff argues that other defendants were
8 improperly dismissed. As a general matter, “a parent
9 corporation and its subsidiary are regarded as legally
10 distinct entities and a contract under the corporate name of
11 one is not treated as that of both.” Carte Blanche (Sing.)
12 Pte., Ltd. v. Diners Club Int’l, Inc., 2 F.3d 24, 26 (2d
13 Cir. 1993). The district court properly relied on corporate
14 disclosure statements to determine that Oxford, Oxford
15 Health Plans LLC, and United Healthcare Services, Inc., are
16 all wholly owned subsidiaries of United Health Group
17 Incorporated. The plaintiff alleges no wrongdoing by the
18 other defendants, was not in privity with them, and has
19 offered no reason to pierce the corporate veil and attribute
20 any conduct by Oxford to them.
21
22 6. To get an award of attorney’s fees in an ERISA
23 action, a plaintiff “must show ‘some degree of success on
24 the merits.’” Hardt v. Reliance Standard Life Ins. Co., 560
25 U.S. 242, 255 (2010) (quoting Ruckelshaus v. Sierra Club,
26 463 U.S. 680, 694 (1983)). This plaintiff achieved no
27 success, and is therefore not entitled to fees or costs.
28
29
30 For the foregoing reasons, and finding no merit in
31 plaintiff’s other arguments, we hereby AFFIRM the judgment
32 of the district court.
33
34
35 FOR THE COURT:
36 CATHERINE O’HAGAN WOLFE, CLERK
37
5