Canter v. Alkermes Blue Care Elect Preferred Provider Plan

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KEITH W. CANTER, Plaintiff, v. ALKERMES BLUE CARE ELECT PREFERRED PROVIDER PLAN, et al., Defendants.

No. 1:17-cv-399

United States District Court, S.D. Ohio, Western Division

May 24, 2024

Litkovitz Magistrate Judge

OPINION AND ORDER

DATE DOUGLAS R. COLE UNITED STATES DISTRICT JUDGE

Before the Court are: (1) several post-remand motions seeking (a) fees, (Docs. 101, 103), (b) to reopen the case, (Doc. 111) and (c) judgment as a matter of law in the reopened case (Doc. 112); (2) Magistrate Judge Litkovitz's December 15 2022, Report and Recommendation (R&R, Doc. 125) addressing those post-remand motions; (3) the parties' objections to the R&R, (Docs. 128, 129); and (4) a fully briefed miscellaneous motion for leave to file a response, (Docs. 136, 139, 141). The R&R recommends that the Court (1) grant Plaintiff Keith Canter's Motion for Award of Attorney's Fees for Remand (Doc. 103) in the amount of $204,771 in attorney's fees and $622.75 in costs; (2) deny as moot the previously filed duplicate copy of that motion, (Doc. 101); (3) deny Canter's Amended Motion to Reopen and Return Case to Active Docket (Doc. 111); and (4) deny his Amended Second Motion for Judgment on the Record after Remand (Doc. 112).

For the reasons stated below, the Court ADOPTS IN PART AND REJECTS IN PART the R&R, (Doc. 125), SUSTAINS IN PART AND OVERRULES IN PART Canter's Objections (Doc. 128), and OVERRULES the Objections (Doc. 129) lodged by Defendant Blue Cross Blue Shield of Massachusetts, Inc., (BCBSMA). The Court also GRANTS Canter's Motion for Permission to File Reply to BCBSMA's Response to Order (Doc. 136). In line with these rulings, the Court GRANTS Canter's Amended Motion to Reopen and Return Case to Active Docket (Doc. 111) and GRANTS IN PART AND DENIES IN PART his Amended Second Motion for Judgment on the Record after Remand (Doc. 112). And the Court GRANTS IN PART AND DENIES IN PART Canter's Motion for Award of Attorney's Fees for Remand (Doc. 103) and DENIES AS MOOT Canter's other fee motion filed in duplicate, (Doc. 101).

As a result, after reopening the case, the Court AWARDS Canter $100,289.01 ($15,267.01 of which is for an award of prejudgment interest) on Count II of the Complaint, as well as $204,771 in fees and $622.75 in costs. Because Canter has already been paid $85,022, BCBSMA owes Canter the prejudgment interest award of $15,267.01 plus $204,771 in fees and $622.75 in costs.

BACKGROUND

This case has a long and arduous history but at its core is simply a dispute over Canter's entitlement to healthcare benefits offered by his former employer Alkermes, Inc. (Op & Order, Doc. 100, #2562). More specifically, Canter's job enabled him to participate in the Alkermes Blue Care Elect Preferred Provider Plan (the Plan)^[1] underwritten and insured by BCBSMA, which also acted as the Plan's claims administrator. (Id.).

As is relevant here, Canter underwent a lumbar decompression and discectomy at the Laser Spine Institute (LSI) for his ongoing hip, leg, and back pain on July 6, 2015. (Id. at #2562-63). Under the Plan, LSI was an out-of-state, out-of-network medical care provider, which would normally require Canter to file the claims for reimbursement. (Doc. 69-3, #1362; Doc. 77-2, #1710). But for whatever reason, LSI itself sought reimbursement for the surgery on Canter's behalf by sending two different claim requests to BCBSMA's Ohio affiliate (Canter never submitted any claim relating to this surgery to BCBSMA or its Ohio affiliate). (Doc. 119-1, #2831; see Doc. 128, #2885-86 (Canter's acknowledging that LSI submitted the claims on his behalf)). LSI submitted the first claim for $41,034 on July 30, 2015, to BCBSMA's Ohio affiliate; BCBSMA received notice of this first claim the same day. (Doc. 26, #990; Doc. 135-1, #2949). And LSI submitted the second claim for $43,988 to BCBSMA's Ohio affiliate on August 10, 2015; BCBSMA received notice of the second claim the next day. (Doc. 26, #1002; Doc. 135-1, #2950).

BCBSMA responded to both claims shortly after it received them. It sent Canter an explanation-of-benefits form for the first claim on August 7, 2015, and an explanation-of-benefits form for the second claim on August 28, 2015. (Doc. 26, #988, 1000). In both notices, BCBSMA informed Canter that BCBSMA anticipated he would be responsible for paying for the full costs of the surgery. (Id.). But it explained that its refusal to reimburse Canter for either claim at the time was because his “medical records ha[d] been requested[, which meant that] review [of whether his claims were covered] w[ould] continue when the[] [records] [we]re received.” (Id. at #990, 1002). After BCBSMA received some (though not all) of the medical records, however, it concluded that Canter had not established medical necessity and denied coverage. (Doc. 100, #2564-65).

After trying to persuade BCBSMA to change its determination internally, Canter via counsel filed this suit, in which Canter sought damages in the amount of the LSI claims, prejudgment interest, and attorneys' fees and costs, among other relief. (Compl., Doc. 1, #14-15). Following discovery, Canter moved for judgment as a matter of law. (Doc. 69). The Court responded to that motion by granting Canter some relief, but not exactly the relief he wanted. Specifically, the Court concluded that BCBSMA's reliance on an incomplete administrative record and failure to accord sufficient weight to all relevant medical factors listed in the Plan violated Canter's procedural rights under the Plan. (Doc. 100, #2591-93). And based on that violation, the Court remanded the matter to BCBSMA for reconsideration of the benefits decision. But the Court did not award any damages or other monetary relief. (Id. at #2594).

Shortly thereafter, Canter moved for fees for successfully obtaining remand. (Docs. 101, 103).^[2] BCBSMA opposed this request by contending that (1) the applicable factors governing whether fees are owed in a suit brought under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., like the one filed here, weighed against granting Canter his fees, and (2) if fees were awarded, the requested amount was unreasonable. (Doc. 106, #2708-09).

Meanwhile, on remand, BCBSMA changed its decision and awarded Canter $85,022 ($41,034 on the first claim, and $43,988 on the second). (Doc. 112-1, #2805-06). Canter, however, believes he is entitled to more. So he filed two motions to obtain additional monies. First, he moved to reopen the case. (Doc. 111). And second, he moved for judgment as a matter of law on the record. (Doc. 112). According to Canter, BCBSMA also owes Canter interest on this $85,022 payment under the Plan's interest provision, which operates as a sort of penalty by kicking in (at a high interest rate) after a set time to dissuade BCBSMA from dragging its feet in responding to any claim submissions.^[3] (Id. at #2799-801 (citing Doc. 77-2, #1710)). Canter argues in the alternative that prejudgment interest is due anyway because a failure to pay for the time value of the money owed would unjustly enrich BCBSMA. (Id. at #2802-04).

BCBSMA opposed both motions. (Docs. 118, 119). It argued that the Plan interest provision is inapplicable because LSI (not Canter) submitted the claims to BCBSMA and BCBSMA timely responded (within the 45-day period required by the Plan's terms) explaining why at that time it was denying Canter's claims. (Doc. 119, #2825-28). And as to Canter's other theory, BCBSMA argued that prejudgment interest does not apply under common law principles because there has been no money judgment entered here. (Id. at #2829). Canter thereafter replied. (Docs. 120, 121).

On December 15, 2022, the Magistrate Judge issued the R&R recommending awarding Canter fees but denying his request for interest. (Doc. 125, #2864). As to the former, the Magistrate Judge concluded that the relevant factors governing fee awards favored an award here but recommended slightly reducing the requested amount to ensure it did not include attorney hours expended on meritless motions. (Id. at #2859-64). And as to the latter, the Magistrate Judge found that under the unambiguous terms of the Plan, BCBSMA responded to LSI's submission of claims within the appropriate timeframe, thereby avoiding triggering the interest provision. (Id. at #2857). As for Canter's unjust-enrichment theory, the Magistrate Judge concluded prejudgment interest did not apply because the money BCBSMA paid for the surgery was owed to LSI, not Canter-in other words, “Canter lost no monetary benefit because of BCBSMA's delayed payment to [LSI].” (Id. at #2858).

Both parties objected. Canter claimed the R&R misread the Plan, failed to appreciate that BCBSMA would be unjustly enriched if prejudgment interest were not awarded, and overstepped by preemptively denying a request for fees related to his current motion. (Doc. 128, #2876-77). He did not object, however, to the R&R's proposed reduction of the fee award. BCBSMA objected to the fee award. It reiterated its belief that on a proper weighing of the relevant factors governing an award of fees, the Court should conclude that Canter is not entitled to such an award. (Doc. 129, #2897-98). But BCBSMA said not a word about the reasonableness of the recommended award amount. The parties responded to each other's objections. (Docs. 130, 132).

One would think this would be the end of the motions practice. But it was not. The Court, in reviewing the papers determined that the record did not establish when LIS notified BCBSMA of the claims. (Doc. 133, #2943). Given BCBSMA argued that the interest provision could not apply because it responded promptly to LSI's submissions, the Court ordered BCBSMA to “supplement[] the record with evidence...