Dupre v. Employee Benefit Services of Louisiana, Inc.

Case: 09-30990 Document: 00511222991 Page: 1 Date Filed: 09/02/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 2, 2010
No. 09-30990
Summary Calendar Lyle W. Cayce
Clerk
JENNIFER DUPRE; DOUGLAS DUPRE,
Plaintiffs-Appellees,
versus
EMPLOYEE BENEFIT SERVICES OF LOUISIANA, INC.;
MANAGEMENT SEVEN, LLC,
Defendants-Appellants.
Appeal from the United States District Court
for the Western District of Louisiana
No. 2:07-CV-1552
Before DAVIS, SMITH, and SOUTHWICK, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Defendants Employee Benefit Services of Louisiana, Inc. (“EBS”), and
Management Seven, LLC (“Management Seven”), appeal a summary judgment
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .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.
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No. 09-30990
in favor of plaintiffs Jennifer Dupre (“Dupre”) and her husband, Douglas Dupre,
and the denial of summary judgment to defendants. Concluding that the judg-
ment has no basis in law or fact and that there was no abuse of discretion by the
administrator, we reverse and render judgment for defendants.
I.
Dupre sought to have gastric bypass surgery, known as ROUX-En-Y, un-
der the self-funded ERISA plan offered by her husband’s employer. Dupre is
classified as morbidly obese. At the time she requested the surgery, she suffered
from myriad dysfunctions and diseases, including depression, sleep disturbances,
sleep apnea, dysfunctional uterine bleeding, urinary stress incontinence, osteo-
arthritis, gastroesophageal reflux disease (“GERD”), and hypertension.
Management Seven is the sponsor and plan administrator, EBS is the
third-party administrator, and American Health Holdings (“AHH”) was hired by
Management Seven to provide medical review services before a claimant’s re-
ceiving care. Dupre’s request for gastric bypass surgery was initially denied by
AHH as medically unnecessary. Upon appeal of that determination, however,
AHH reversed its opinion and pre-certified the procedure. Importantly, in the
pre-certification letter, AHH stated, “This review is limited to medical necessity.
Accordingly, this determination does not guarantee payment of charges.
Payment of benefits will be subject to all of your health plan’s conditions,
limitations, and exclusions affecting coverage . . . .”
The pre-certification letter and Dupre’s two doctors’ opinions were sent to
EBS for determination of coverage. One of her physicians, Dr. Bergstedt, wrote,
“In my opinion, this is . . . a logical next step for the patient, as she has ex-
hausted all other methods of weight loss with no sustained success.” Her other
physician, Dr. Shimer, wrote, “In my opinion, she would clearly benefit from the
Roux-ENY bypass for surgical weight loss.” Dupre’s doctors also mentioned her
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other ailments, and Bergstedt opined that the weight-loss surgery would alle-
viate some of those ailments. Shimer made no similar claims.
The ERISA plan at issue explicitly grants the administrator authority to
interpret the plan.1 Upon receiving the request for coverage and the two medical
opinions, the administrator refused payment for the surgery because it is exclud-
ed under Article VII, Paragraph 7.01 (MM) of the plan, which disallows coverage
for “obesity, or in connection with obesity, weight reduction, or dietetic control.”
II.
The Dupres sued Management Seven, Douglas Dupre’s employer, EBS,
and AHH (later voluntarily dismissed by plaintiffs). EBS and MGMT moved for
summary judgment, seeking to dismiss all claims. The district court denied the
motion and ordered that all benefits requested by Dupre were to be provided
immediately.
The Dupres moved for summary judgment, seeking a declaration that the
gastric bypass surgery is covered by the plan. Dupre also sought attorneys’ fees
and costs. The district court granted summary judgment to the Dupres, allowing
coverage of the surgery, penalties under ERISA, and damages caused by the de-
nial of benefits. Over the next few months, the parties filed various motions.
Eventually, the district court denied defendants’ motion to dismiss, mooted de-
fendants’ motion to stay, granted the Dupres’ motion for entry of judgment, and
denied their motion for attorneys’ fees.
1
“The plan administrator shall have full discretionary authority to interpret this plan
and its provisions and regulations with regard to eligibility, benefit determination, and general
administrative matters. The Plan Administrator’s decision shall be binding on all Plan Partici-
pants and conclusive as to all questions of coverage under this Plan.” Article XV, Section
15.01, Discretionary Authority of the Plan. [Doc. 24-3, R. 175].
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III.
A.
We review a summary judgment de novo. Wade v. Hewlett-Packard Dev.
Co., 493 F.3d 533, 537 (5th Cir. 2007). The court’s role at the summary judg-
ment stage is to determine only whether a genuine issue exists for trial and
whether the movant is entitled to judgment as a matter of law. Plyant v. Hart-
ford Life & Accident Ins. Co., 497 F.3d 536 (5th Cir. 2007) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). A genuine issue of material fact
exists if evidence is such that a reasonable jury could return a verdict for the
non-moving party. Id.Where a plan expressly confers discretion on the administrator to construe
the plan’s terms, the decision of the administrator is reviewed for abuse of dis-
cretion. Wade 493 F.3d at 537. We employ a two-step process to assess the ad-
ministrator’s decision. Plyant, 497 F.3d at 536. “In determining whether a
ERISA plan administrator abused its discretion in construing plan terms, a
court first determines the legally correct interpretation of the plan and whether
the administrator's interpretation accords with that interpretation.” Id. “If a
court concludes that a ERISA plan administrator has not given the plan the le-
gally correct interpretation, it then determines whether the administrator’s in-
terpretation constitutes an abuse of discretion.” Id. “A substantial factor in de-
termining whether the ERISA plan administrator’s interpretation is a legally
correct interpretation is whether the interpretation is fair and reasonable.” Id.If an administrator’s decision is supported by substantial evidence, the court
must affirm that decision. Id. at 539 (citing Ellis v. Liberty Life Assurance Co.,
394 F.3d 262, 273 (5th Cir.2004)). Substantial evidence is evidence that a rea-
sonable mind might accept as sufficient to support the conclusion. Wade, 493
F.3d at 541.
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B.
As we have said, the administrator based his decision on Article VII, Sec-
tion 7.01 MM of the plan, which says that “[n]o benefits are provided under this
plan for expenses incurred for or in connection with: . . . [o]besity, or in connec-
tion with obesity, weight reduction, or dietetic control.” The plain language of
the plan, therefore, shows that the administrator may deny benefits for a sur-
gery connected to weight loss.
Dupre cites Hansen v. Actuarial & Employee Benefit Services Co., 395
F. Supp. 2d 881 (D.S.D. 2005), to support her argument that the district court’s
decision to overrule the plan administrator was correct. Hansen, however, is
easily distinguished. There the administrator blatantly misrepresented the
medical facts in order to find an exclusion. In an attempt to exclude the request-
ed gastric bypass surgery, the administrator claimed that the plaintiff had
failed to seek less invasive treatments. That claim was contradicted by the rec-
ord, which the administrator either failed to review or chose to misrepresent.
The court found that the administrator’s decision was arbitrary and capricious
and stated that “[i]n making its decision, the administrator completely failed to
evaluate the facts to determine whether the treatment was excluded under the
Plan.” Hansen 395 F. Supp. 2d at 890-91. Therefore, substantial evidence did
not support that administrator’s decision.
Despite the fact that both involve gastric bypass surgery, the instant case
bears little resemblance to Hansen. Here, the administrator evaluated the facts
in both physicians’ letters and concluded that the surgery was not a last resort
for treating GERD or some other disorder. Instead, he found that it was de-
signed to help Dupre lose weight. More importantly, unlike the situation in
Hansen, there is no evidence of blatant misrepresentation.
The district court erred in substituting its own judgment for that of the ad-
ministrator. A reasonable interpretation of the plan, as the district court stated,
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could find that gastric bypass surgery is not connected to obesity, weight re-
duction, or dietetic control. The administrator’s reasonable interpretation of the
plan, however, found that gastric bypass surgery is connected to obesity and
weight reduction. We defer to the administrator’s judgment. Wade 493 F.3d at
541; Ellis 394 F.3d at 273. He made his determination after considering all the
relevant evidence, including the two letters provided by the physicians. We up-
hold an administrator’s decision if it is sufficiently supported by evidence. Ply-
ant, 497 F.3d at 539.
We need not address the potential conflict of interest urged by Dupre. As
the defendants point out, that matter was not raised in the district court. Issues
presented for the first time on appeal are waived.2
The judgment in favor of the Dupres is REVERSED, and judgment is
RENDERED in favor of the defendants.
2
See, e.g., Tex. Commercial Energy v. TXU Energy, Inc., 413 F.3d 503, 510 (5th Cir.
2005) (stating that arguments not raised in district court are waived”).
6