Denning v. Air Logistics LLC ( 2001 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-30197
Dayanne Denning,
Plaintiff-Appellant,
v.
Air Logistics, LLC, Principal Life Insurance Company, and Air
Logistics, LLC Group Benefit Plan
Defendants-Appellees.
--------------------
Appeal from the United States District Court
for the Western District of Louisiana
(00-CV-1976)
--------------------
March 21, 2001
Before, KING, Chief Judge, ALDISERT* and BENAVIDES, Circuit
Judges.
PER CURIAM:**
We must decide whether the district court improperly
interpreted provisions of the Air Logistics Group Benefits Plan
(the “Plan”) to deny Appellant Dayanne Denning insurance coverage
*
Circuit Judge of the Third Circuit, sitting by
designation.
**
Pursuant to 5th Cir. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5th Cir. R.
47.5.4.
for an allogeneic bone marrow transplant.
The question presents itself in an appeal from the denial of
a preliminary injunction by the district court. Specifically, we
are required to determine whether the allogeneic transplantation
for the treatment of breast cancer qualifies under the Plan’s
definition of “Medically Necessary Care.” In the district court,
Appellees successfully argued that the treatment was experimental
and investigative and, therefore, it did not qualify under the
Plan.
The district court had jurisdiction pursuant to the
Employment Retirement Income Security Act (ERISA), 29 U.S.C. §
1001, et seq. We have jurisdiction pursuant to 28 U.S.C. § 1292.
I.
Appellant is a 41-year old woman who suffers from Stage IV
metastatic breast cancer. Cancer is typically classified in
terms of five stages of increasing severity from Stage I to Stage
V. In connection with breast cancer, “Stage IV” signifies that
the cancer cells have metastasized, i.e., spread to areas outside
of the breast, the original site of the disease. Appellant was
found to have metastatic disease in the liver, thoracic and
lumbar spine.
Appellant is the beneficiary of a self-insured plan of her
husband’s employer, Air Logistics, LLC. The Claims Administrator
2
for the Plan is Principal Life Insurance Company (“Principal” or
“Administrator”), who administers it pursuant to ERISA.
On November 23, 1999, Appellant’s physician, Dr. James
Gajewski, Associate Professor of Medicine, Department of Blood
and Marrow Transplantation at the University of Texas M.D.
Anderson Cancer Center, examined Appellant for consideration for
a bone marrow transplant to treat her cancer. He informed her
that she would first be treated with standard chemotherapy. If
she received an optimal response, either an allogeneic or an
autologous transplant would be considered. On that date, Dr.
Gajewski wrote a letter to Principal asking for authorization for
either the allogeneic or autologous bone marrow transplant. In
the letter, Dr. Gajewski explained that metastatic breast cancer
involving the bone marrow or liver has an especially poor
prognosis with a median survival of less than six months after
receiving standard dose chemotherapy. Record Excerpts at Tab 2.
Research regarding transplantation for breast cancer is
relatively recent with few published studies in medical
literature. An allogeneic transplant is when a person receives
bone marrow or stem cells from a donor. The other type of
transplantation that has been used in the treatment of breast
cancer, autologous transplantation, is a procedure in which bone
marrow or stem cells are removed from the patient and then given
3
back to the patient following intensive chemotherapy. Under
either transplantation, the patient’s bone marrow is removed and
the patient is then subjected to high chemotherapy which
ordinarily would destroy or severely damage the patient’s bone
marrow.
Appellant had to be pre-certified by the Administrator for
the autologous or allogeneic transplant, but this decision was
stayed pending the outcome of Appellant’s standard chemotherapy
treatment. On May 18, 2000, Appellant met with Dr. Gajewski for
evaluation of her breast cancer and at that time, he wrote in his
notes that he would try to receive urgent authorization for the
allogeneic transplant procedure.
After the Administrator had received all of the clinical
information necessary for completion of the pre-certification
process, the materials were transmitted to Dr. James Ostiguy,
Principal’s Assistant Medical Director for his review. On June
20, 2000, the Administrator declined benefits for the allogeneic
treatment. On June 21, 2000, Appellant requested a review by
outside reviewers. The three outside experts found the procedure
to be experimental and under continued scientific study.
Appellant received permission to submit two unpublished articles
to the outside experts, her case was then resubmitted for their
review and they filed amended reports. After an evaluation of
4
all of the pertinent information, the Administrator again denied
benefits for the allogeneic transplantation on the ground that it
was not considered Generally Accepted Treatment for Stage IV
metastatic breast cancer as set forth in the Plan.
II.
To prove that she has a substantial likelihood that she will
succeed on the merits of her claim, Appellant must establish that
the allogeneic bone marrow transplant is covered by the Plan. To
consider this, we begin with the relevant portions of the Plan.
In the Booklet Rider, the “Covered Transplants” section
provides that human-to-human organ or bone marrow transplant
procedures are covered “when it is Medically Necessary Care.” A
bone marrow transplant or peripheral stem cell infusion is
covered when, “a positive response to standard medical treatment
or chemotherapy has been documented.”
“Medically Necessary Care” is defined in the policy as
follows: “Medically Necessary Care means as determined by the
Claims Administrator, any confinement, treatment or service that
is prescribed by a Physician and considered to be necessary and
appropriate and not in conflict with Generally Accepted medical
standards.” Record Excerpts at Tab 11.
“Generally Accepted” is defined as follows:
Generally Accepted means Treatment or Service:
5
- has been accepted as the standard of practice
according to the prevailing opinion among experts
as shown by (or in) articles published in
authoritative peer reviewed medical and scientific
literature; and
- is in general use in the medical community; and
- is not under continued scientific testing or
research as a therapy for the particular injury or
sickness which is the subject of claim.
Id. at Tab 12.
III.
This court reviews the denial of a preliminary injunction
for abuse of discretion. Bernat v. Guadalajara, Inc., 210 F.3d
439 (5th Cir. 2000); New York Life Ins. Co. v. Gillispie, 203
F.3d 384 (5th Cir. 2000).
Appellant is correct when she contends that she prevailed on
the last three prongs of the formulation set forth in Canal
Authority of Florida v. Callaway, 489 F.3d 567 (5th Cir. 1974).
In Callaway, the court explained that four conditions must exist
for a district court to issue a preliminary injunction:
(1) a substantial likelihood that plaintiff will prevail on
the merits, (2) a substantial threat that the plaintiff will
suffer irreparable injury if the injunction is not granted;
(3) that the threatened injury to the plaintiff outweighs
the threatened harm the injunction may do to the defendant;
and (4) that granting the preliminary injunction will not
dissolve the public interest.
489 F.3d at 574.
In the Fifth Circuit, the moving party must carry the burden
of persuasion on each of the elements of the four-prong test.
6
See 13 JAMES W. MOORE, ET AL., MOORE’S FEDERAL PRACTICE, § 65.22[5][e]
(3d ed. 2000). Unlike other circuits, which hold that no single
factor is determinative, this circuit requires the moving party
to persuade the court that it meets the threshold on each factor;
otherwise, the court may not issue the injunction. Id. Because
Appellant has met three of the four prongs, this court must
resolve the issue of whether Appellant can meet the first prong,
that is, whether there is a substantial likelihood that Appellant
will prevail on the merits of her claim.
IV.
To prove that Appellant has a substantial likelihood of
succeeding on the merits, she must prove that the Administrator's
interpretation is not legally correct and that the Administrator
abused its discretion in denying her claim. See Wildbur v. Arco
Chemical Co., 974 F.2d 631 (5th Cir. 1992). This standard is
utilized by this court to determine whether a claim for benefits
pursuant to an ERISA plan was properly denied when a plan
administrator has discretionary authority to determine
eligibility for benefits and to construe the terms of the plan.
Id. at 636.
This inquiry involves a two-step process. “First a court
must determine the legally correct interpretation of the plan.”
Id. at 638. To do this, the court must consider: “(1) whether
7
the administrator has given the plan a uniform construction; (2)
whether the interpretation is consistent with a fair reading of
the plan; and (3) any anticipated costs resulting from different
interpretations of the plan.” Id.If the court finds that the plan administrator did not
correctly interpret the plan, it proceeds to the next step, which
requires that it “determine whether the administrator abused its
discretion.” Id. If the court reaches the abuse of discretion
inquiry, the three factors that the court must examine are: “(1)
the internal consistency of the plan under the administrator’s
interpretation, (2) any relevant regulations formulated by the
appropriate administrative agencies, and (3) the factual
background of the determination and any inferences of lack of
good faith.” Id.We begin with the language of the Plan which is set forth
Part II supra. These definitions are not models of clarity and
lack the precision contained in other plans recorded in the case
law that specifically declare that experimental or investigative
medical procedures are not covered. See Holder v. Prudential
Ins. Co. of America, 951 F.2d 89, 90 n.3 (5th Cir. 1992) (“To be
'reasonably necessary,' a service or supply . . . must neither be
educational or experimental in nature . . . .”); see also Fuja v.
Benefit Trust Life Ins. Co., 18 F.3d 1405, 1408 (7th Cir. 1994)
8
(requiring that the treatment must not be deemed “experimental,
educational or investigational in nature” as one of the five
criteria for meeting the definition of “medically necessary”
under the plan); Dahl-Eimers v. Mutual Omaha Life Ins. Co., 986
F.2d 1379 (11th Cir. 1993) (“A medically necessary service or
supply is defined in the contract as one that . . . (b) is not
considered experimental . . . .”).
Nevertheless, we must interpret the definitions set forth in
the Plan and apply the language to the situation at issue here.
Because this involves a bone marrow transplant, Appellant is
required to show that “a positive response to standard medical
treatment or chemotherapy has been documented.” Dr. Gajewski's
July 5, 2000 letter accompanying Appellant’s appeal to the
administrator stated that Appellant initially had a “great
response” to standard chemotherapy, with a decrease in her tumor
markers from 700 to 150. Record Excerpts at Tab 4. Dr.
Gajewski's examination notes and his decision to seek
authorization for the allogeneic transplant are sufficient to
support the statement that a positive response to chemotherapy
has been documented.
A.
We must next consider whether Appellant's request for an
allogeneic transplant is “Medically Necessary Care.” The first
9
part of the definition is met by Appellant. This procedure has
been prescribed by Appellant's treating physician and is
considered to be “necessary and appropriate” for the treatment of
Appellant's cancer.
The second part of the definition requires that the
procedure not be “in conflict with Generally Accepted medical
standards.” Under the definition of “Generally Accepted,” there
are three prongs. In the view we take of this case, we will
assume that Appellant’s requested procedure is not necessarily in
conflict with the standard of practice according to the
prevailing opinion among those limited experts who specialize in
breast cancer cases or with the treatment that is in general use
in those cases. The use of an allogeneic transplant for the
treatment of breast cancer, however, seems to be in conflict with
the third prong because the procedure is “under continued
scientific testing or research as a therapy for the particular
injury or sickness which is the subject of the claim.” Id. at
Tab 12.
The feasibility of using this procedure to treat breast
cancer, and more significantly, the success rate in the use of
this treatment for breast cancer, have not been established and
continue to be under scientific testing. The protocol for the
Phase II clinical study that Appellant would participate in at
10
M.D. Anderson has the following objectives:
1) to assess the feasibility of mini-allogeneic PBPC
transplantation in patients with recurrent or
metastatic breast cancer.
2) to determine the success rate . . . at 100 days
after the transplant and long-term progression free
survival rate.
3) to examine the graft vs. breast cancer effect of
allogeneic PBPC transplantation.
Id. at Tab 8 (emphasis added).
This study comes after two previous studies by M.D.
Anderson, both of which required additional investigation into
the long-term survival rate and noted that allogeneic transplants
for the treatment of breast cancer should only be performed in
clinical trials. The first study from 1995 reported that
“allogeneic transplantation should only be performed in the
context of clinical trials and its ultimate role requires
demonstration of progression-free survival.” Id. at Tab 10. The
follow-up study from 1995-2000 reported the following:
Allogeneic GVM [graft-versus-malignancy] effects may act to
prevent or delay progression of the malignancy [breast
cancer]. Additional studies are required to determine if
progression-free survival can be improved with allogeneic
transplantation.
. . .
At the time being, allogeneic hematopoietc transplantation
should only be performed in the context of clinical trials
designed to address the major outstanding issues.
Id. at Tabs 10 and 19.
It is clear from M.D. Anderson’s own published studies and
11
the protocol for its most recent study that the use of allogeneic
transplantation as a treatment for breast cancer is “under
continued scientific testing or research for the injury or
sickness which is the subject of [Appellant’s] claim.” Id. at
Tab 12.
B.
Dr. Raymond Webster of Principal reviewed Appellant’s claim.
He wrote in a July 6, 2000 letter: “While there are a few
published studies, there is not yet solid data on the efficacy of
such treatment for breast cancer . . . the studies also conclude
that further investigation is needed to establish the efficacy
and long-term outcomes in patients with breast cancer.” Id. at
Tab 15. Similarly, the outside reviewers noted the lack of
studies regarding the feasibility and efficacy of allogeneic
transplantation in the treatment of breast cancer. Reviewer V003
stated:
In summary, although these few studies report the
feasibility of allogeneic transplants with non-myeloablative
regimens, the efficacy of this approach remains to be
determined in larger studies with longer follow-up . . . .
It remains highly speculative that there is a graft-versus-
breast cancer effect elicited by donor transplants. The
literature has been quoted above and is absolutely
inconclusive. The proposed approach, while feasible and
innovative has not been adequately evaluated to render an
opinion on efficacy of this approach in this patient. This
approach is certainly investigatory. The health benefits of
the recommended treatment plan is unknown scientifically for
this type of patient.
12
Tab 17, Record Excerpts. Reviewer C004 stated: “There is no
demonstrated role for an allogeneic transplant, mini or
otherwise, in the management of metastatic breast cancer.” Id.Appellant argues that the district court erred in crediting
the opinions of the three outside reviewers. She argues first
that these independent experts had not been furnished adequate
information about her medical history, especially regarding
whether she was medically able to or physically qualified to
receive the transplant at that time. She contends also that the
reviewers were not asked whether the procedure was “Medically
Necessary” as defined in the Plan; nor were they furnished the
Plan’s definition of “Generally Accepted.” The short answer to
these complaints is that in light of the view we take in this
case, the relevance of the reviewers’ responses is not found in
the state of Appellant’s physical condition or whether the
procedure was “Medically Necessary” as defined in the Plan, but
whether the allogeneic transplant is under “continued scientific
testing or research as a therapy for the particular injury of
sickness which is the subject of [Appellant’s] claim.”
C.
In light of the foregoing and in accordance with the
teachings of Wildbur, we conclude that the Administrator’s
interpretation is consistent with a fair reading of the Plan.
13
Because Appellant did not allege that there is a lack of
uniformity in Plan construction and because there was no
persuasive evidence introduced that the Administrator had granted
coverage for any other allogeneic transplant in a breast cancer
request, we determine that there was no of lack of uniformity in
construing the Plan. To the extent that Wildbur refers to any
anticipated costs resulting from different interpretations of the
Plan, Appellant alleged in the trial court that there would be no
unanticipated costs resulting from a different interpretation.
Having agreed with the Administrator’s interpretation of the
Plan, we need not analyze whether its decision was an abuse of
discretion. See Wildbur, 974 F.2d at 637-638.
V.
Appellant contends that Appellees breached their fiduciary
duty by not disclosing information to her. She argues that she
should have been told that the autologous procedure was covered
and that the allogeneic procedure was not covered, that her not
being told was a breach of a fiduciary duty, and that such breach
should be “take[n] into account when determining [whether] they
abused their discretion.” Appellant’s Brief at 10. She argues
also that a conflict of interest on the part of the Administrator
was present because “its decision to award or deny benefits
impacts its own financial interests,” id. at 7, that the actions
14
by Appellees show a clear conflict of interest in handling this
claim, id. at 9, and that this, too, should be taken into account
in determining whether the Administrator abused its discretion,
id. at 10.
We do not believe that it is necessary to evaluate these two
separate, but interrelated arguments because both bear upon
evaluating whether the administrator abused its discretion. As
emphasized heretofore, however, in light of the teachings of
Wildbur, once we decide, as we have, that the Administrator
interpreted the Plan correctly, we need not reach the abuse of
discretion inquiry.
* * *
We have considered all contentions of the parties presented
in this expedited, emergency appeal and conclude that no further
discussion is necessary. We conclude that the district court did
not err in denying the petition for a preliminary injunction.
This, too, must be said. As was the district court, we are
cognizant of the agonizing ramifications of the decision we make
today. Yet it must be understood that:
[T]hose who wear judicial robes are human beings, and as
persons, are inspired and motivated by compassion as anyone
should be. Consequently, we often must remind ourselves
that in our official capacities, we have authority only to
issue rulings within the narrow parameters of the law and
the facts before us. The temptation to go about, doing good
where we see fit, and to make things less difficult for
those who come before us, regardless of the law, is strong.
15
But the law, without which judges are nothing, abjures such
unlicensed [sic] formulation of unauthorized social policy
by the judiciary.
Fuja v. Benefit Trust Life Ins. Co., 18 F.3d 1405, 1407 n.2 (7th
Cir. 1993) (citation omitted).
The judgment of the district court is AFFIRMED.
16