Ghee v. Usable Mut. Ins. Co.

384 So.3d 8

Douglas GHEE, as personal representative of the Estate of Billy Fleming, deceased

v.USABLE MUTUAL INSURANCE COMPANY d/b/a Blue Cross Blue Shield of Arkansas and Blue Advantage Administrators of Arkansas

1200485

Supreme Court of Alabama.

March 31, 2023

Rip Andrews and Richard Riley of Marsh, Rickard & Bryan, P. C., Birmingham, for appellant.

Ed R. Haden, Cavender C. Kimble, and Robert V. Baxley of Balch & Bingham, LLP, Birmingham, for appellee.

R. Bernard Harwood, Jr., of Rosen Harwood, P.A., Tuscaloosa; and Scott Donaldson, Tuscaloosa, for amicus curiae Alabama Free and Fair Enterprise Institute, in support of the appellee.

PARKER, Chief Justice.¹

Douglas Ghee, as the personal representative of the estate of Billy Fleming, deceased, appeals a judgment of the Calhoun Circuit Court dismissing Ghee’s wrongful-death claim against USAble Mutual Insurance Company d/b/a Blue Cross Blue Shield of Arkansas and Blue Advantage Administrators of Arkansas ("Blue Advantage"). The circuit court correctly dismissed the aspect of Ghee's claim that, on the face of the complaint, was based on an insurance-benefits decision by Blue Advantage. The court erred, however, by dismissing the aspect of Ghee’s claim that was based on Blue Advantage’s alleged provision of medical advice, because it was not clear from the complaint that that aspect was based on an insurance-benefits decision. Accordingly, we affirm the judgment in part and reverse it in part.

I. Facts

As required in an appeal of a dismissal under Rule 12(b)(6), Ala. R. Civ. P., the underlying facts before this Court are those alleged in Ghee’s operative complaint. See Sumter Cnty. Bd. of Educ. v. University of W. Alabama, 349 So. 3d 1264, 1265 (Ala. 2021). Blue Advantage was the claims administrator for Fleming’s employee-health-benefits insurance plan. The plan was subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq.

In June 2013, Fleming went to a hospital’s emergency department and was diagnosed with constipation and fecal impaction. A doctor recommended that he undergo a subtotal colectomy. However, "an agent [of Fleming’s surgeon] called [Fleming] and informed him that he could not have the surgery because [Blue Advantage] had decided that a lower quality of care — continued non-surgical management — was more appropriate .…" Ghee's complaint at p. 5. After Blue Advantage denied coverage for surgery,

"[Fleming] and his family then had multiple conversations with agents of [Blue Advantage] in an unsuccessful attempt to convince the company that the higher quality of care (surgery, as recommended by [Fleming]’s doctors) was the more appropriate course. Ultimately, an agent of [Blue Advantage] suggested to [Fleming] that he return to [the hospital] in an attempt to convince hospital personnel and physicians to perform the surgery on an emergency basis."

Id. at p. 6. Fleming returned to the emergency department three times but was not provided the surgery, and he was eventually taken to a different hospital. Fleming died on July 16, 2013, from "septic shock due to peritonitis due to colonic perforation." Id. at p. 8.

Ghee commenced a wrongful-death action against Blue Advantage and other defendants. After multiple appeals to this Court and amendments of Ghee’s complaint, the operative complaint alleged:

"[Blue Advantage] had or voluntarily assumed … a duty to act with reasonable care in determining the quality of health care that [Fleming] would receive; a duty not to provide [Fleming] with a quality of health care so low that it knew [Fleming] was likely to be injured or killed; and a duty to exercise such reasonable care, skill, and diligence as other similarly situated health care providers in the same general line of practice ordinarily have and exercise in a like case.

"… [Blue Advantage] breached those duties … as follows:

"a. Negligently providing for a lower quality of healthcare for [Fleming];

"b. Wantonly providing for a lower quality of healthcare for [Fleming];

"c. Breaching the standard of care by (i) failing to provide a higher quality of healthcare to [Fleming] (necessary, life-saving surgery) and (ii) failing to communicate adequately with [Fleming's] healthcare providers regarding his need for surgery.

"… Those breaches combined with the actions of other defendants as a legal cause of death for … Fleming, in that without the breaches, [Fleming] would have more likely than not survived.

" … Ghee makes no complaint that [insurance] benefits were denied to [Fleming] …. Ghee’s only complaint against [Blue Advantage], as detailed above, involves the quality of the benefit received, specifically that it was of such a low quality (did not include necessary surgery) that it caused [Fleming’s] death. … Ghee does not seek any benefits … but instead only the wrongful death, punitive damages allowed by Alabama state law.

"… To be clear, Ghee does not seek to hold [Blue Advantage] liable for a mere denial of benefits, but instead seeks to hold it liable for negligently undertaking to take charge of and controlling [Fleming]’s health care, for negligently interjecting itself as a healthcare provider for [Fleming] and then negligently giving [Fleming] medical advice, and for negligently providing a suboptimal standard of care (i.e. passive treatments instead of surgery).

"… [Blue Advantage] did not just make administrative decisions, it interjected itself as [Fleming]’s medical provider, interfered with his treatment, and combined with [Fleming]’s medical providers to proximately cause his death. [Blue Advantage] crossed the line from claims administration into the practice of medicine."

Ghee’s second amendment to the complaint. Blue Advantage moved to dismiss Ghee’s operative complaint under Rule 12(b)(6), arguing that his claims were defensively preempted by a provision of ERISA, 29 U.S.C. § 1144(a), under this Court’s decision in Hendrix v. United Healthcare Insurance Co. of the River Valley, 327 So. 3d 191 (Ala. 2020). The circuit court granted Blue Advantage’s motion to dismiss and certified the court’s order as a final judgment under Rule 54(b). Ghee appeals.

II. Standard of Review

[1–3] "The appropriate standard of review under Rule 12(b)(6)[, Ala. R. Civ. P.,] is whether, when the allegations of the complaint are viewed most strongly in the pleader’s favor, it appears that the pleader could prove any set of circumstances that would entitle [it] to relief. In making this determination, the Court does not consider whether the plaintiff will ultimately prevail, but only whether [it] may possibly prevail …. [A] Rule 12(b)(6) dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief."

Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993) (citations omitted). Blue Advantage’s Rule 12(b)(6) motion to dismiss was based on defensive preemption under ERISA, which is an affirmative defense, see Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir. 1999). When a Rule 12(b)(6) motion is based on an affirmative defense, dismissal is proper only if the applicability of the defense is clear from the complaint. Crosslin v. Health Care Auth. of Huntsville, 5 So. 3d 1193, 1195-96 (Ala. 2008).

III. Analysis

As a plurality of this Court explained in Hendrix v. United Healthcare Insurance Co. of the River Valley, 327 So. 3d 191 (Ala. 2020), defensive preemption under ERISA bars certain state-law claims:

"ERISA governs ‘voluntarily established health and pension plans in private industry.’ Kennedy v. Lilly Extended Disability Plan, 856 F.3d 1136, 1138 (7th Cir. 2017). It ‘comprehensively regulates, among other things, employee welfare benefit plans that, "through the purchase of insurance or otherwise," provide medical, surgical, or hospital care, or benefits in the event of sickness, accident, disability, or death …. 29 U.S.C. § 1002(1).’ Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987).

"ERISA’s express preemption provision, … 29 U.S.C. § 1144(a), provides that ERISA ‘shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.’ State law that may be preempted because it relates to an ERISA employee-benefit plan ‘includes all laws, decisions, rules, regulations, or other State action having the effect of law.’ 29 U.S.C. § 1144(c)(1). This includes civil causes of action brought pursuant to state law. Aldridge v. DaimlerChrysler Corp., 809 So. 2d 785, 792 (Ala. 2001) (‘ERISA’s express preemption provision … "defeats claims that seek relief under state-law causes of action that ‘relate to’ an ERISA plan." ’ (quoting Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1215 (11th Cir. 1999))); Seafarers’ Welfare Plan v. Dixon, 512 So. 2d 53 (Ala. 1987) (holding that causes of action alleging breach of contract and bad-faith failure to pay insurance benefits were preempted by ERISA) ….

"….

"The preemption language used in § [1144(a)] is ‘deliberately expansive.’ Pilot Life Ins. Co., 481 U.S. at 46, 107 S.Ct. 1549. It is aimed at ‘ "eliminating the threat of conflicting or inconsistent State and local regulation of employee benefit plans." ’ Id. at 46, 107 S.Ct. 1549 (quoting 120 Cong. Rec. 29197 (1974)). See also Egelhoff v. Egelhoff, 532 U.S. 141, 148, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001) (stating that a ‘principal goal[ ] of ERISA’ was ‘to enable employers "to establish a uniform administrative scheme, which provides a set of standard procedures to guide processing of claims and disbursement of benefits" ’ and that ‘[u]niformity is impossible … if plans are subject to different legal obligations in different States’ (quoting Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987))); Kuhl v. Lincoln Nat’l, Health Plan of Kansas City, Inc., 999 F.2d 298, 301 (8th Cir. 1993) (‘Consistent...