Cook Children's Medical Center v. New England PPO Plan of General Consolidated Management, Inc.

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
June 28, 2007
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 06-10511
COOK CHILDREN’S MEDICAL CENTER
Plaintiff - Counter Defendant - Appellant
v.
THE NEW ENGLAND PPO PLAN OF GENERAL CONSOLIDATED MANAGEMENT INC;
DEBORAH HANSEN, Fiduciary of The New England PPO Medical Plan of
General Consolidated Management, Inc.
Defendants - Counter Claimants - Appellees
NEW ENGLAND LIFE INSURANCE COMPANY
Third Party Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
Before KING, GARZA, and PRADO, Circuit Judges.
PRADO, Circuit Judge:
Cook Children’s Medical Center appeals the district court’s
grant of summary judgment and award of mediation costs in favor
of the defendants. For the reasons that follow, we AFFIRM the
district court’s order granting summary judgment and VACATE the
award of mediation fees as taxable costs under 28 U.S.C. § 1920.
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I. BACKGROUND
A. Factual Background
David G. Miller (“Mr. Miller”) began his employment with
Creative Education Inc., a company affiliated with General
Consolidated Management, Inc. (“General Consolidated”), in
September 2000. General Consolidated has a welfare benefit plan
governed by the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. §§ 1001-1461, which provides medical and
other benefits to its employees and their beneficiaries.
On January 16, 2002, Mr. Miller asked General Consolidated
to add his son, David C. Miller (“David”), as a covered dependent
under General Consolidated’s ERISA plan, which at that time was
insured through Aetna US Healthcare. David was born on November
29, 2001, with congenital heart defects and other disabilities.
In early 2002, General Consolidated decided to no longer
fund its ERISA plan through Aetna US Healthcare. Effective April
1, 2002, General Consolidated replaced the Aetna Plan with a
self-funded ERISA plan, under which New England Life Insurance
Company (“New England”) provided excess coverage and
administrative services for the plan. The open enrollment period
for the new plan, the New England PPO Medical Plan of General
Consolidated Management, Inc. (“Plan”), began on March 1, 2002,
and ended on March 31, 2002.
On March 2, 2002, Mr. Miller filled out a Benefit Plan
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Enrollment/Change Form for the Plan and listed David as one of
his dependents to be enrolled in the Plan. On March 31, 2002,
Mr. Miller removed David from his Plan enrollment form by
crossing through David’s name and information. Underneath the
line crossing through David’s name and information is a
handwritten note on the enrollment form stating “[t]ake off per
[Mr. Miller]. [David] is on Medicaid. 3-31-02. Phoned Irene.”
In addition, Mr. Miller told Cathy Gunn of General Consolidated
that David should not be enrolled in the Plan as one of his
covered dependents. Mr. Miller took these actions during the
open enrollment period and before the Plan’s effective date.
Pursuant to Mr. Miller’s instructions, the Plan Administrator,
Deborah Hansen (“Plan Administrator”), did not enroll David in
the Plan.
Mr. Miller’s decision not to enroll David in the Plan was
based on conversations he and his wife, Amy Miller (“Mrs.
Miller”), had with Medicaid and Social Security Administration
representatives. These representatives allegedly told the
Millers that David’s medical care would be covered by Medicaid if
Mr. Miller did not enroll David in the Plan.
David was covered by Medicaid in April 2002, and his
Medicaid coverage continued until June 30, 2002. From April 9-
22, 2002, David underwent medical treatment at Cook Children’s
Medical Center (“Cook”). When David was admitted for treatment,
the Millers informed Cook that David was covered by Medicaid. In
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addition, the Millers assigned to Cook any benefits to which
David was entitled.1
Cook filed its claim for David’s hospital bills with
Medicaid. Medicaid paid Cook approximately $76,291.63 for
David’s medical treatment in April 2002.2
In June 2002, the Millers were notified that David’s
Medicaid coverage would expire on June 30, 2002, because the
Social Security Administration had determined that as of June 30,
David would no longer qualify for supplemental security income.
Because David’s Medicaid coverage was set to expire on June 30,
Mr. Miller submitted a Benefit Plan Enrollment/Change Form on
June 28, adding David to the Plan effective July 1, 2002. In a
letter dated June 30, 2002, Mr. Miller stated:
I wish to add [David] to my policy . . . effective
7/1/02. He was not enrolled during open enrollment
because he was covered under Medicaid. I received a
letter of denial from SSI Medicaid on June 11, 2002
stating he would no longer be eligible for coverage after
6/30/02.
The Plan enrolled David as of July 1, 2002.
After initially accepting payment from Medicaid for David’s
April 2002 treatment, Cook later returned Medicaid’s $76,291.63
1
The assignment of benefits transferred to Cook all rights
of the patient, David C. Miller, and was signed by Mrs. Miller.
2
Although Cook’s invoices show charges of $145,435.92,
Medicaid paid for services at its discounted rate.
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payment.3 On December 31, 2002, Cook sent the Plan a demand
letter, requesting that the Plan pay for David’s medical services
from April 9-22, 2002, in the amount of $137,952.27.
The Plan Administrator reviewed Cook’s request for payment.
The Summary Plan Description (“SPD”) provides that
[t]he Plan Administrator has complete authority to
control and manage the Plan. The Plan Administrator has
full discretion to determine eligibility, to interpret
the Plan and to determine whether a claim should be paid
or denied, according to the provisions of the Plan as set
forth in this booklet.
The Plan Administrator determined that David was not eligible for
coverage for his treatment at Cook in April 2002 because Mr.
Miller had not enrolled David in the Plan at that time. In
making this determination, the Plan Administrator looked to
language in the SPD, which provides that a plan participant “may
elect not to be covered under this Plan for any benefits, or []
may waive coverage for all coverages except Life and AD&D
Insurance, or [] may waive coverage for medical and prescription
drug only.” Based on the administrative record, the Plan
Administrator found that during the open enrollment period, Mr.
Miller had removed David from his Benefit Plan Enrollment/Change
3
At oral argument, counsel for Cook stated that Cook
returned the Medicaid payment because Cook believed David was
covered by the Plan provided by Mr. Miller’s employer at the time
services were rendered by the hospital. Counsel further
explained that although Cook was not compelled to return the
payment to Medicaid, Cook was permitted by Texas law to return
Medicaid’s payment and seek payment from the Plan. See 1 TEX.
ADMIN. CODE § 354.2321(c).
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Form by crossing through David’s name and by telling Cathy Gunn
of General Consolidated to remove David from his enrollment form.
The Plan Administrator noted that it was not until July 1, 2002,
that Mr. Miller enrolled David in the Plan. Accordingly, because
David was not enrolled in the Plan during his treatment at Cook,
the Plan Administrator denied Cook’s request for payment.
B. Procedural History
On September 5, 2003, Cook filed this lawsuit against the
Plan and the Plan Administrator. Cook alleged that David was a
covered dependent under the Plan and that as David’s assignee, it
was entitled to recover payment for David’s treatment in April
2002. The Plan and the Plan Administrator answered Cook’s
complaint and filed a third-party complaint against New England
for indemnification. The parties conducted discovery and
attended mediation,4 which was not successful.
The parties subsequently filed cross-motions for summary
judgment. On September 14, 2005, the district court granted
summary judgment in favor of the Plan, the Plan Administrator,
and New England (collectively, “Defendants”), and denied Cook’s
motion for summary judgment. The district court relied in part
4
In its initial scheduling order, the district court set a
deadline for the parties to participate in a formal settlement
conference. The parties informed the district court that they
thought mediation would be more productive than a settlement
conference and requested that the district court extend the
settlement conference deadline so that they could mediate the
case. Thereafter, the district court extended the deadline for
the parties to conduct a settlement conference or mediation.
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on Mr. Miller’s affidavit, in which Mr. Miller averred in
relevant part that:
Neither the Plan, Hansen [the Plan Administrator],
General Consolidated, New England nor anyone affiliated
with them had any input into my wife’s and my decision
not to enroll David C. in the Plan. Nothing they said or
did caused me to decide not to enroll David C. in the
Plan. Additionally, I did not look to any of them for
advice on whether to enroll David C. in the Plan and
never asked them for any advice. This was a decision
that my wife and I made by ourselves after discussing the
matter with people affiliated with Medicaid and The
Social Security Administration.
. . . .
When I instructed General Consolidated not to enroll
David C. in General Consolidated’s ERISA Plan, I knew I
had the opportunity to have David C. as a named dependent
under my health plan. However, I intentionally and
voluntarily relinquished my right and David C.’s right to
have him named as a dependent and plan member under my
employer’s ERISA health plan. I am college educated and
had close to a month to make this decision. I had the
opportunity to speak to an attorney or seek other
assistance. This decision was made after multiple
conversations with representatives of Medicaid and The
Social Security Administration. From our perspective,
this decision was made by my wife and I in the best
interests of my family and David C. I did not intend to
mislead anyone by removing my son from the enrollment
form. I do not feel that I have been misled by anyone.
The district court reasoned that because Mr. Miller elected not
to have David enrolled in the Plan and knowingly and voluntarily
waived David’s coverage under the Plan, the Plan Administrator
had a valid basis for denying benefits and such denial was not an
abuse of discretion. That same date, the district court entered
a final judgment, dismissing all claims with prejudice and taxing
all costs under 28 U.S.C. § 1920 against Cook. The bill of costs
submitted by Defendants included mediation fees in the amount of
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$1000.
Cook now appeals the district court’s grant of summary
judgment and award of mediation costs. We have jurisdiction over
this appeal pursuant to 28 U.S.C. § 1291.
II. STANDARDS OF REVIEW
This court reviews de novo a district court’s grant of
summary judgment. See Mello v. Sara Lee Corp., 431 F.3d 440, 443
(5th Cir. 2005). Summary judgment is warranted “if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.”
FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986).
An award of costs is reviewed for abuse of discretion. See
Lain v. UNUM Life Ins. Co. of Am., 279 F.3d 337, 343 (5th Cir.
2002). “A district court abuses its discretion if it bases its
decision on an erroneous view of the law or on a clearly
erroneous assessment of the evidence.” Esmark Apparel, Inc. v.
James, 10 F.3d 1156, 1163 (5th Cir. 1994) (citing Cooter & Gell
v. Hartmarx Corp., 496 U.S. 384, 405-06 (1990)).
III. DISCUSSION
A. Denial of Benefits
Cook argues that the Plan Administrator abused her
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discretion in denying payment to Cook for David’s treatment, and
that the district court’s contrary conclusion was in error. Cook
contends that David was automatically enrolled in the Plan
because the SPD provides that “[a] Member who had similar
coverage under the Employer’s prior plan on the date of its
termination will be covered under this Plan on the Plan effective
date.”5 Cook maintains that any attempts by Mr. Miller to waive
his son’s coverage were ineffective and against public policy.
More specifically, Cook submits that because Medicaid is the
payor of last resort, it was illegal for Mr. Miller to exclude
David from his Plan in order to obtain Medicaid coverage. Cook
also claims that the district court should have afforded less
deference to the Plan Administrator because there was an inherent
conflict of interest in that Defendants benefitted financially
from denying Cook’s claim.
We begin with Cook’s argument on the appropriate standard of
review and then address the merits of the district court’s
determination that the Plan Administrator did not abuse her
discretion.
1. Standard of Review
“Whether the district court employed the appropriate
standard in reviewing an eligibility determination made by an
ERISA plan administrator is a question of law,” which we review
5
A “Member” is defined by the SPD as “[a]n employee and
any covered Dependent.”
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de novo. Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d
262, 269 (5th Cir. 2004) (internal quotation marks and citation
omitted). “When, as here, the language of the plan grants
discretion to an administrator to interpret the plan and
determine eligibility for benefits, a court will reverse an
administrator’s decision only for abuse of discretion.” High v.
E-Systems Inc., 459 F.3d 573, 576 (5th Cir. 2006). “‘[O]ur
review of the administrator’s decision need not be particularly
complex or technical; it need only assure that the
administrator’s decision fall somewhere on a continuum of
reasonableness–-even if on the low end.’” MacLachlan v.
ExxonMobil Corp., 350 F.3d 472, 478 (5th Cir. 2003) (quoting Vega
v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287, 297 (5th Cir.
1999) (en banc)). In making this determination, “we focus on
whether the record adequately supports the administrator’s
decision.” Vega, 188 F.3d at 298; see also High, 459 F.3d at 576
(stating that the administrator’s decision must be supported by
substantial evidence in the record).
The existence of a conflict of interest, however, is a
factor in the abuse of discretion inquiry. Chacko v. Sabre,
Inc., 473 F.3d 604, 610 (5th Cir. 2006). “When a conflict of
interest is shown to exist, we apply a ‘sliding scale,’ giving
less deference to the administrator’s decision in proportion to
the administrator’s conflict.” Id. “This approach does not mark
a change in the applicable standard, but only requires the court
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to reduce the amount of deference it provides to an
administrator’s decision.” MacLachlan, 350 F.3d at 478. “The
degree to which a court must abrogate its deference to the
administrator depends on the extent to which the challenging
party has succeeded in substantiating its claim that there is a
conflict.” Id. at 479. “The greater the evidence of conflict on
the part of the administrator, the less deferential our abuse of
discretion standard will be.” Vega, 188 F.3d at 297. “Where,
however, only ‘a minimal basis for a conflict is established, we
review the decision with ‘only a modicum less deference than we
otherwise would.’” MacLachlan, 350 F.3d at 479 (quoting Lain,
279 F.3d at 343).
In an effort to substantiate its claim that there is a
conflict, Cook points out that General Consolidated funds and
administers its own medical benefit plan. This evidence,
however, demonstrates only a “minimal basis for a conflict.” See
Chacko, 473 F.3d at 610 (finding a minimal basis for a conflict
where the plaintiff demonstrated that his former employer funds
and administers its own plan, “leav[ing] open the possibility
that it would limit claims to reduce its liability”). Cook has
presented no evidence with respect to the degree of the conflict.
See id.; see also Vega, 188 F.3d at 301. Accordingly, under our
sliding scale approach, “we [] review the administrator’s
decision with only ‘a modicum less deference’ than we otherwise
would.” Chacko, 473 F.3d at 610 (quoting Vega, 188 F.3d at 301).
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2. Analysis
In this circuit, application of the abuse of discretion
standard involves a two-step process. See Vercher v. Alexander &
Alexander Inc., 379 F.3d 222, 227 (5th Cir. 2004). The court
must first determine whether the administrator’s plan
interpretation is legally correct. Id. If the administrator’s
interpretation is legally sound, then the inquiry ends because no
abuse of discretion could have occurred. Chacko, 473 F.3d at
611. On the other hand, if the court concludes that the
administrator did not give the plan the legally correct
interpretation, the court must then determine whether the
administrator’s decision was an abuse of discretion. Id.
“This court, however, is not confined to this test; we may
skip the first step if we can determine the decision was not an
abuse of discretion.” High, 459 F.3d at 577; see MacLachlan, 350
F.3d at 481. Therefore, in assessing whether the Plan
Administrator abused her discretion in denying Cook’s claim on
the basis that David was not enrolled in the Plan in April 2002,
our analysis bypasses whether the Plan Administrator’s
interpretation was legally correct, as the record reflects that
she did not abuse her discretion.
The Plan Administrator’s decision finds ample support in the
record. The SPD specifically provides that an employee may opt
out of any of the offered benefits, and nothing in ERISA
precludes a plan participant from making a prospective election
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about his coverage in an ERISA health plan. Cf. Dist. 29, United
Mine Workers of Am. v. New River Co., 842 F.2d 734, 737 (4th Cir.
1988) (recognizing that no provision in ERISA precludes the
knowing and voluntary relinquishment of employee health
benefits). The evidence in the record shows that Mr. Miller
chose not to enroll David in the Plan during the open enrollment
period and before the effective date of the Plan, when Mr. Miller
had an existing right to make changes to his coverage.6 Because
David was not enrolled in the Plan in April 2002 when he received
medical services at Cook, the Plan Administrator did not abuse
her discretion in denying Cook’s claim.
Cook’s contention that David was automatically enrolled in
the Plan, thereby making this an issue of waiver, does not change
our conclusion. Even if we were to accept Cook’s argument that
David was automatically enrolled under the terms of the Plan, the
Plan Administrator still did not abuse her discretion in denying
6
Cook challenges our reliance on Mr. Miller’s affidavit,
in which Mr. Miller stated that he decided “not to enroll David
C. in the Plan,” that he “instructed General Consolidated not to
enroll David C. in General Consolidated’s ERISA Plan,” and that
he “intentionally and voluntarily relinquished [his] right and
David C.’s right to have him named as a dependent and plan member
under [his] employer’s ERISA health plan.” Specifically, Cook
argues that it never had an opportunity to cross-examine Mr.
Miller on his affidavit. Cook’s contention is too little, too
late. “A party cannot evade summary judgment simply by arguing
that additional discovery is needed, and may not simply rely on
vague assertions that additional discovery will produce needed,
but unspecified, facts.” Adams v. Travelers Indem. Co. of Conn.,
465 F.3d 156, 162 (5th Cir. 2006) (internal quotation marks and
citations omitted).
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Cook’s claim because Mr. Miller voluntarily waived David’s
coverage. “[W]aiver is the intentional relinquishment or
abandonment of a known right or privilege.” HECI Exploration Co.
Employees’ Profit Sharing Plan v. Holloway (In re HECI
Exploration Co.), 862 F.2d 513, 523 (5th Cir. 1988); see
also High, 459 F.3d at 581. This circuit has stated, in the
context of an employee welfare benefit plan governed by ERISA,
that “a waiver is valid if it is ‘explicit, voluntary and made in
good faith.’” Guardian Life Ins. Co. of Am. v. Finch, 395 F.3d
238, 240 (5th Cir. 2004) (quoting Manning v. Hayes, 212 F.3d 866,
871 (5th Cir. 2000)). The record evidence indicates that Mr.
Miller, who is college educated, knowingly and voluntarily
decided not to enroll David in the Plan, even though Mr. Miller
knew he had the opportunity to have David as a named dependent
under the Plan. It therefore was not an abuse of discretion for
the Plan Administrator to deny Cook’s claim.
Finally, Cook’s argument that Mr. Miller’s prospective
election not to cover David is void as a matter of public policy
does not affect our analysis regarding whether the Plan
Administrator abused her discretion. This court has never
imposed a requirement on a plan administrator to determine
whether a plan participant’s election comports with Medicaid law,
and we decline to do so today. All that ERISA requires is that
substantial evidence support the administrator’s decision to deny
a claim, when, as here, the administrator is vested with the
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discretion to determine eligibility for plan benefits. Because
the record here adequately supports the Plan Administrator’s
decision, we find no error in the district court’s decision to
uphold the Plan Administrator’s denial of Cook’s claim.7
B. Award of Mediation Costs
Cook argues that the district court should not have taxed
mediation costs against it because mediation expenses do not fall
within the limited category of costs that may be taxed under 28
U.S.C. § 1920. In support of its position, Cook points to Mota
v. University of Texas Houston Health Science Center, 261 F.3d
512 (5th Cir. 2001).
In Mota, this court addressed whether the district court had
abused its discretion in taxing mediation fees under § 1920 in a
Title VII action. 261 F.3d at 529-30. The Mota court began its
analysis by examining 28 U.S.C. § 1920. See id. at 529. Under
§ 1920, a court may tax the following costs:
(1) Fees of the clerk and marshal;
(2) Fees of the court reporter for all or any part of
the stenographic transcript necessarily obtained
for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and copies of papers
necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts,
compensation of interpreters, and salaries, fees,
expenses, and costs of special interpretation
services under section 1828 of this title.
7
Accordingly, we need not address Defendants’ alternative
arguments in favor of affirming the district court.
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The court noted that “[t]he Supreme Court has indicated that
federal courts may only award those costs articulated in section
1920 absent explicit statutory or contractual authorization to
the contrary.” Id. (citing Crawford Fitting Co. v. J.T. Gibbons,
Inc., 482 U.S. 437, 444-45 (1987)).
Turning to the text of § 1920, the Mota court concluded that
the district court “erred in taxing [the losing party] with the
costs of mediation [because the expense did not fall] within
section 1920.” Id. at 530. The court further determined that
nothing in Title VII supported the award of mediation fees
because “mediation costs do not fall within the limited category
of expenses taxable under Title VII.” Id.; see also 42 U.S.C.
§ 2000e-5(k) (providing that “the court, in its discretion, may
allow the prevailing party, other than the Commission or the
United States, a reasonable attorney’s fee (including expert
fees) as part of the costs, and the Commission and the United
States shall be liable for costs the same as a private person”).
The reasoning in Mota cuts against the district court’s
decision to award mediation fees in this ERISA case. First, the
language in § 1920 has not changed since the Mota court concluded
that mediation fees do not fall within any of the categories of
expenses listed in the statute. Second, like Title VII’s
provision on costs, the applicable ERISA subsection on costs does
not explicitly authorize the award of mediation expenses. See 29
U.S.C. § 1132(g)(1) (“[T]he court in its discretion may allow a
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reasonable attorney’s fee and costs of action to either party.”).
Defendants assert, however, that Mota is limited to Title
VII cases and should not be applied in this ERISA action.
Defendants instead point to this circuit’s en banc decision in
Gaddis v. United States, 381 F.3d 444 (5th Cir. 2004), as support
for the district court’s award of mediation fees in this case.
According to Defendants, mediation fees are recoverable expenses
because mediators essentially act as court appointed experts, a
cost recoverable under § 1920(6).
We disagree. In Gaddis, the court held that district courts
may tax guardian ad litem fees as court costs against
nonprevailing parties, including the government in Federal Tort
Claims Act cases. 381 F.3d at 447. In analyzing the issue, the
court identified three alternative grounds for permitting the
taxation of guardian ad litem fees. First, the court reasoned
that Federal Rule of Civil Procedure 17(c) constituted the
alternative express statutory authorization required by the
Supreme Court in Crawford Fitting to provide district courts with
the inherent authority and discretion to tax guardian ad litem
fees as costs against nonprevailing parties.8 Id. at 452-55.
Second, the court determined that guardians ad litem reasonably
8
Rule 17(c) provides in relevant part: “The court shall
appoint a guardian ad litem for an infant or incompetent person
not otherwise represented in an action or shall make such other
order as it deems proper for the protection of the infant or
incompetent person.”
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fit within the meaning of the phrase “court appointed experts” in
§ 1920(6), thereby allowing district courts to tax their
compensation as costs per § 1920. Id. at 455-57. And third, the
court reasoned that precedent subsequent to Crawford Fitting
allowed for the taxation of guardian ad litem fees as costs. Id.
at 457-59.
None of the three alternate grounds for permitting the
taxation of guardian ad litem fees in Gaddis is applicable to the
taxation of mediation expenses here. First, there is no
statutory or contractual provision that permits the taxation of
the cost in question. As explained above, the ERISA statute on
costs, 29 U.S.C. § 1132(g)(1), does not constitute an explicit
authorization to tax mediation costs, nor does it seem reasonable
to construe the provision as a blanket power to tax costs. See
Agredano v. Mut. of Omaha Cos., 75 F.3d 541, 544 (9th Cir. 1996)
(holding that § 1132(g)(1)’s “allowance for ‘costs of action’
empowers courts to award only the types of ‘costs’ allowed by 28
U.S.C. § 1920”); cf. Holland v. Valhi Inc., 22 F.3d 968, 979-80
(10th Cir. 1994) (rejecting the argument that 29 U.S.C.
§ 1132(g)(1) expressly authorized taxation of expert witness
fees). Likewise, the source of the district court’s authority to
authorize the use of mediation in a civil action does not support
the taxation of mediation fees. See 28 U.S.C. §§ 651-652. There
is absolutely nothing in these statutory provisions that would
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expressly or implicitly provide district courts with the inherent
authority or discretion to award mediation fees as costs.
Second, unlike the guardian ad litem fees in Gaddis,
mediation expenses do not reasonably fit within the statutory
language of § 1920(6), which allows for “[c]ompensation of court
appointed experts.” Nowhere does the statute define “court
appointed experts.”9 That term is defined elsewhere as an
“impartial expert” or as “[a]n expert who is appointed by the
court to present an unbiased opinion.” BLACK’S LAW DICTIONARY 619
(8th ed. 2004).
Although the court in Gaddis did not define court appointed
expert, it identified two characteristics that indicate when one
“reasonably serve[s] as [an] expert[].” 381 F.3d at 456. The
court explained that
guardians ad litem appointed by the court reasonably
serve as experts in the sense that they liaise with the
court and are charged with the important duty of
providing their insight as to how the judicial process is
or is not comporting with the best interests of the minor
or incompetent person involved.
9
In Gaddis, this court concluded that we are not
constrained to define “court appointed experts” as that term is
used in Federal Rule of Evidence 706. 381 F.3d at 456-57 (“While
there is some indication in the legislative history that court
appointed expert as used in § 1920(6) refers to a court appointed
expert as appointed pursuant to Federal Rule of Evidence 706, the
plain statutory language of § 1920(6) does not so narrowly limit
the interpretation of court appointed expert. This en banc Court
is thus not constrained to so narrowly interpret the category of
court appointed expert.”) (internal citation omitted). Contra In
re Cardizem CD Antitrust Litig., 481 F.3d 355, 363-64 (6th Cir.
2007).
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Id. Under the Gaddis interpretation, experts “liaise with the
court” on the matter in which the court requires assistance and
“are charged with the important duty of providing their insight”
to the court regarding that aspect of the case. See id. The
Gaddis court reasoned that guardians ad litem reasonably fit
within the definition of “court appointed experts” under
§ 1920(6) because a “guardian ad litem’s special duty is to
submit to the court for its consideration and decision every
question involving the statutory and constitutional rights of the
minor that may be affected by the action.” Id.
Turning to the issue of whether a mediator reasonably fits
within the scope of a court appointed expert, we examine the
definition and role of a mediator. The prevailing definition of
a mediator is “[a] neutral person who tries to help disputing
parties reach an agreement.” BLACK’S LAW DICTIONARY 1003 (8th ed.
2004); see also 1 JAY E. GRENIG, ALTERNATIVE DISPUTE RESOLUTION § 4.1
(3d ed. 2005) (stating that “[m]ediation involves a neutral third
party–-the mediator–-whose function is to assist the parties in
their negotiations”). Similarly, the Uniform Mediation Act
defines mediation as “a process in which a mediator facilitates
communication and negotiation between parties to assist them in
reaching a voluntary agreement regarding their dispute.” UNIF.
MEDIATION ACT § 2(1) (2001).
From these descriptions it is apparent that, in contrast to
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guardians ad litem, mediators lack the essential characteristics
of court appointed experts, under both the general definition and
the interpretation of the Gaddis court. First, the role of
mediators is to facilitate negotiations between the parties in an
unbiased manner, not to liaise with the court. As a result,
mediators “usually deal[] directly with the parties” during
mediation and need not communicate with the court at all.
SEE GRENIG, supra, § 4.41 (describing the role of mediators in
terms of interaction with the parties). In addition, because the
discussions in mediation are frequently confidential, it is
questionable whether a mediator could ethically communicate an
opinion to a court at all. See id. § 4:10 (explaining that
“[s]tatements made during mediation may be accorded protection by
federal or state laws”); see also N.D. TEX. CIVIL JUSTICE EXPENSE &
DELAY REDUCTION PLAN, at 6 (rev. May 2002) (providing that “[a]ll
communications made during ADR procedures [including mediation]
are confidential and protected from disclosure”). Indeed, aside
from acting as neutral parties, mediators appear to share no
other significant common qualities with court appointed experts.
Therefore, mediators fall outside a reasonable interpretation of
court appointed experts.
Third and finally, contrary to the precedent that supported
the en banc court’s decision in Gaddis, case law from this
circuit and other circuits does not support the taxation of
mediation fees as costs under § 1920. As discussed earlier, this
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court in Mota held that mediation fees are not taxable costs
under § 1920. See 261 F.3d at 530. In addition to Mota,
decisions from two other circuits have considered whether
mediation expenses fall within § 1920, and both courts have
concluded that they do not. In Brisco-Wade v. Carnahan, the
Eighth Circuit held that “the district court abused its
discretion in taxing the mediator’s fee against defendants” in
part because “section 1920 does not list mediation fees as
taxable costs, and we have found no statutory authority . . .
permitting the taxation of mediation fees . . . .” 297 F.3d 781,
782 (8th Cir. 2002). Similarly, in Sea Coast Foods, Inc. v. Lu-
Mar Lobster & Shrimp, Inc., the Ninth Circuit rejected the
appellants’ attempt to recover mediation fees, concluding that
“[n]othing in 28 U.S.C. § 1920 provides for the costs of a
mediator.” 260 F.3d 1054, 1061 (9th Cir. 2001).10
Accordingly, because mediation fees are not explicitly
authorized by § 1920, and because this circuit’s en banc decision
10
Several district courts have also agreed that mediation
fees should not be taxed as costs under § 1920. See, e.g., Hodak
v. City of St. Peters, No. 4:04-CV-01099, 2007 WL 674249, *3
(E.D. Mo. Feb. 28, 2007); Condon v. Hunting Energy Servs. L.P.,
No. H-04-3411, 2006 WL 2882857, *7 (S.D. Tex. Oct. 4, 2006); JES
Props., Inc. v. USA Equestrian, Inc., 432 F. Supp. 2d 1283, 1296
(M.D. Fla. 2006); Zeuner v. Rare Hospitality Int’l, Inc., 386 F.
Supp. 2d 635, 640 (M.D.N.C. 2005); Bernard v. Int’l Portfolio
Mgmt., Inc., No. 04-CV-60671, 2005 WL 1840157, *5 (S.D. Fla. July
25, 2005); Firestine v. Parkview Health Sys., Inc., 374 F. Supp.
2d 658, 672 (N.D. Ind. 2005); Bickers v. U.S. Home Mortgage
Corp., No. 3:96-CV-0959, 1997 WL 340947, at *2 (N.D. Tex. June
18, 1997).
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in Gaddis does not support the district court’s award of
mediation fees as taxable costs, we hold that the district court
abused its discretion in awarding mediation expenses as taxable
costs to Defendants under § 1920 in this ERISA action. Cf. Mota,
261 F.3d at 530. We therefore vacate the district court’s award
of mediation fees.
IV. CONCLUSION
For the reasons stated above, we AFFIRM the district court’s
order granting summary judgment in favor of Defendants-Appellees
and VACATE the award of mediation fees as taxable costs under 28
U.S.C. § 1920.
AFFIRMED IN PART; VACATED IN PART.
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