Bennett v. La. Health Serv. & Indem. Co.

SADIE BENNETT AND MELISSA MANNINO,INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED v. LOUISIANA HEALTH SERVICE & INDEMNITY COMPANY(doing business as BLUE CROSS BLUE SHIELD OF LOUISIANA)

CIVIL ACTION NO. 19-185

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

September 27, 2020

JUDGE SHELLY D. DICK

MAG. JUDGE RICHARD L. BOURGEOIS, JR.

RULING

This matter is before the Court on the Motion for Reconsideration or, in the alternative, for Certification to file Interlocutory Appeal¹ by Defendant, Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana ("Defendant" or "BCBSLA"), which moves the Court under Rule 54(b) to reconsider its prior interlocutory Ruling² on Defendant's Motion to Dismiss.³ Plaintiffs, Sadie Bennett and Melissa Mannino ("Plaintiffs"), have filed an Opposition.⁴ Defendant replied.⁵ Oral argument is not necessary. For the following reasons, the Court finds that Defendant's Motion for Reconsideration shall be denied, and Defendant's Motion for Certification for Interlocutory Appeal shall be denied.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Plaintiffs are participants in group health plans ("the Plans")⁶ that are insured and administered by BCBSLA. Under most group health plans, when a participant fills a prescription for a medically-necessary prescription drug, the insurer pays a portion of the cost and the participant in the health plan pays a portion of the cost. The cost of the prescription drug is pre-determined by the terms of the governing health plan and is usually at a lower or negotiated cost. The participant's payment is a "co-payment" made directly to the pharmacy, who collects the payment on behalf of the insurer.⁷

In this case, Plaintiffs claim that Defendant violated the terms of the Plans and overcharged participants for medically-necessary prescription drugs. Plaintiffs claim that Defendant directed the pharmacies to "misrepresent" the cost of the prescriptions to the participants and charge the participants an amount in excess of the negotiated amount reflected in the Plans. Participants paid the excessive charges directly to the pharmacy, not knowing at the time that the cost was inflated. Plaintiffs refer to this as a "pervasive scheme" of "overcharges".⁸

Defendant allegedly profited from the "scheme" by "clawing back" a portion or all of the "overcharges" paid by participants to the pharmacies. Defendant required the pharmacies to pay Defendant "clawbacks", which is the amount of the overage or excess cost of the prescription. Alternatively, Defendant paid the pharmacies less than what it would have, had it followed the terms of the Plan.⁹

Plaintiffs, on their behalf and on behalf of a class of "similarly situated persons", claim that Defendant's "scheme" violated the Employee Retirement Income Security Act of 1974 ("ERISA").¹⁰ Plaintiffs plead four counts against Defendant: Count I, for violations of ERISA¹¹ for the overcharges for the cost of prescription drugs in violation of the terms of the Plans;¹² Count II, for violations of ERISA¹³ against Defendant in its roles as a "fiduciary" and "party in interest" that allegedly received compensation, or "clawbacks", for services provided under the Plans;¹⁴ Count III, for violations of ERISA¹⁵ against Defendant in its role as a "fiduciary" for allegedly designing, implementing and benefitting from an "overcharge and clawback scheme" involving the mis-appropriation of Plan assets adverse to the Plan participants and for its own benefit;¹⁶ and Count IV, for violations of ERISA¹⁷ against Defendant in its role as a "fiduciary" for breaching its fiduciary duties by allegedly acting in violation of the terms of the Plans.¹⁸

Defendant moved to dismiss Plaintiffs' Complaint pursuant to Rule 12(b)(6) on three grounds: (1) that Plaintiffs failed to exhaust their administrative remedies regarding their claims in Count I;¹⁹ (2) that the allegations in Count II against Defendant as a "fiduciary" and Counts III and IV are duplicative of the claims in Count I and/or because Plaintiffs failed to exhaust their administrative remedies and Defendant is not a "fiduciary" under ERISA;²⁰ and (3) that Plaintiffs lack standing to bring their claims in Count II againstDefendant as a "party in interest" and because there is no available remedy under ERISA.²¹

The Court denied Defendant's motion to dismiss.²² With regard to Counts II, III, and IV, this Court acknowledged the support in the jurisprudence for Defendant's argument; however, the Court adopted a "more expansive approach taken by many courts, which allows plaintiffs, at this stage of litigation, to simultaneously plead claims under several subsections of Section 502(a)."²³ This Court denied Defendant's motion in order to allow Plaintiffs time for discovery, to develop their trial strategy, and to preserve alternative grounds for relief until a later stage in the litigation.²⁴ This Court found dismissal of Counts II, III, and IV to be premature at this stage of the litigation.²⁵

Defendant now moves the Court to reconsider its Ruling only as to Counts II, III, and IV.²⁶ Defendant argues that the Court should have applied Innova Hosp. San Antonio, L.P. v. Blue Cross & Blue Shield of Ga., Inc.²⁷ and Swenson v. United of Omaha Life Ins. Co.,²⁸ instead of "out-of-jurisdiction case law in support of simultaneous pleading."²⁹ Alternatively, Defendant requests that the Court certify its Order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).³⁰

II. LAW AND ANALYSIS

A. Motion for Reconsideration under Rule 54(b)

Although it has been noted that the Federal Rules "do not recognize a 'motion for reconsideration' in haec verba"³¹ the Fifth Circuit has "consistently recognized that such a motion may challenge a judgment or order under the Federal Rules of Civil Procedure 54(b), 59(e), or 60(b)."³² An interlocutory order denying a Rule 12 motion "can be modified or rescinded by the Court, as justice requires, at any time before final decree."

Rule 54(b) provides that:

When an action presents more than one claim for relief—whether as a claim, counterclaim, crossclaim, or third-party claim—or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all of the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.³³

Accordingly, under Rule 54(b), "a court retains jurisdiction over all the claims in a suit and may alter any earlier decision at its discretion until final judgment has been issued on a claim or on the case as a whole."³⁴

"District courts have considerable discretion in deciding whether to reconsider an interlocutory order."³⁵ "However, this broad discretion must be exercised sparingly in order to forestall the perpetual reexamination of orders and the resulting burdens anddelays."³⁶ Therefore, "rulings should only be reconsidered where the moving party has presented substantial reasons for reconsideration."³⁷ "There are three major grounds justifying reconsideration: (1) an intervening change in controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or prevent manifest injustice."³⁸

Because a final judgment has not been issued in this matter, Defendant's Motion for Reconsideration is properly considered under Rule 54(b).

B. Defendant's Motion for Reconsideration

Defendant's motion alleges that the Court "erred" in its ruling on Defendant's motion to dismiss because the Court relied "on out-of-jurisdiction case law to keep extant Plaintiffs' § 1132(a)(2) and (a)(3) claims, when the Fifth Circuit's decisions require otherwise."³⁹ Defendant reiterates its prior argument relying upon Innova Hosp. San Antonio, L.P. v. Blue Cross & Blue Shield of Ga., Inc.,⁴⁰ concluding that Innova "controls in this circuit" and "mandat[es]" the dismissal of Counts II, III, and IV of Plaintiffs' complaint.⁴¹

Plaintiffs oppose Defendant's motion for reconsideration because Defendant's motion does not meet any of the grounds for reconsideration.⁴² Plaintiffs point out that "nearly two months" passed between this Court's Order and Defendant's motion.⁴³ During that time, the facts have not changed; no new evidence has come to light; and the lawhas not changed. Plaintiffs argue that Defendant is simply "rehashing" the same arguments made in its motion to dismiss, notwithstanding "the Court's careful analysis of Innova in its Order."⁴⁴ Additionally, Plaintiffs argue that Defendant's motion should be denied because: (1) Defendant's arguments have already been rejected;⁴⁵ (2) Defendant's disagreement with the Court's ruling is not grounds for reconsideration;⁴⁶ and (3) Defendant fails to demonstrate a clear error of law or fact or manifest injustice.⁴⁷

The Court agrees with Plaintiffs. Defendant is making the same argument regarding Counts II, III, and IV that it made on its motion to dismiss. Contrary to the Defendant's contention, the Court did not disregard Innova or disregard the Fifth Circuit's precedential authority. In its Ruling the Court carefully considered and applied Innova.⁴⁸ This Court then ruled:

Plaintiffs allege in their Complaint that they are not claiming a denial of benefits or an adverse benefit determination. In this respect, their 502(a)(1)(B) claims can be distinguished from those of Innova Hospital. However, the broader point of Innova Hosp. is that claims for relief under 502(a)(1) cannot simultaneously be plead with claims under 502(a)(2)&(3). Since 502(a)(1) provides an "adequate means of redress" for a plaintiff, claims under 502(a)(2)&(3) are barred.

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