Herzfeld v. Teva Pharm. USA, Inc., Case No. 2:18-cv-09784-ODW (SSx)

JOHN HERZFELD, Plaintiff, v. TEVA PHARMACEUTICALS USA, INC. OMNIBUS WELFARE PLAN, et al. Defendants.

Case No. 2:18-cv-09784-ODW (SSx)

United States District Court Central District of California

April 14, 2020

ORDER DENYING PLAINTIFF'S MOTION FOR RECONSIDERATION [65]

I. INTRODUCTION

Presently before the Court is Plaintiff John Herzfeld's Motion for Reconsideration of the Court's Order granting Defendant MCMC, LLC's motion to dismiss ("Motion"). (Mot. for Recons. ("Mot."), ECF No. 65.) For the reasons that follow, Plaintiff's Motion is DENIED.¹

II. BACKGROUND

The Court addressed the relevant factual allegations and procedural history in its Order granting Defendant MCMC's motion to dismiss and incorporates that discussion here by reference. (See Order Granting MCMC's Mot. to Dismiss ("Order"), ECF No. 34.) The following brief summary is provided for context.

John Herzfeld ("Herzfeld") is a dependent of Jeffrey Herzfeld, who was employed by Teva Pharmaceuticals USA, Inc. (Compl. ¶¶ 2, 8, ECF No. 1.) Teva Pharmaceuticals, Inc. is the Plan Sponsor and Plan Administrator of the Teva Pharmaceuticals USA, Inc. Omnibus Welfare Benefit Plan (the "Plan"), an ERISA-governed welfare benefit plan. (Compl. ¶ 9.) Herzfeld was diagnosed with Duchenne Muscular Dystrophy ("DMD") at the age of six and was eighteen years old at the commencement of this lawsuit. (Compl. ¶ 14.) DMD has caused Herzfeld "degeneration and weakness in his muscles such that he requires a wheelchair for mobility and effectively has no use of his arms without assistance." (Compl. ¶ 4.)

At his doctors' recommendation, Herzfeld requested coverage for a myo-electric elbow-wrist orthoses ("EWO") called the MyoPro. (Compl. ¶¶ 22-27, 57-60.) Herzfeld alleges EWOs have gained widespread acceptance in the medical community, but the claims administrator ("Quantum") denied Herzfeld's request for coverage, finding the MyoPro to be "Experimental and/or Investigational." (Compl. ¶¶ 10, 32, 44, 61.) Quantum also denied Herzfeld's internal appeals, granted his request for an external review, and assigned independent review organization ("IRO") MCMC to conduct the de novo external review. (Compl. ¶¶ 67, 72, 74-75.) With some exceptions delineated in the applicable regulations, an external review is final and binding. (See Compl. ¶ 56.) MCMC upheld Quantum's coverage denial on the ground that the MyoPro was "experimental and investigational." (Compl. ¶ 76.)

Herzfeld initiated this action against MCMC and several other defendants. (See Compl. ¶¶ 9-13.) Herzfeld asserts three causes of action under ERISA against all defendants: (1) denial of benefits under 29 U.S.C. § 1132(a)(1)(B), (2) violation of fiduciary duties under § 1132(a)(3), and (3) denial of full and fair review under § 1133. (Compl. ¶¶ 94-115.) On August 26, 2019, the Court granted MCMC's motion to dismiss without leave to amend. (Order 11.) The Court found that MCMC was not a proper defendant for any of Herzfeld's claims because: (1) MCMC had no control over administration of benefits under the Plan; (2) MCMC was not an ERISAfiduciary; and (3) MCMC was not the Plan, the only proper defendant for a claim under § 1133. (Order 6, 10, 11.) At MCMC's request, the Court entered partial Judgment for MCMC. (J., ECF No. 54.)

Herzfeld moves for reconsideration of the Court's Order dismissing MCMC under Federal Rules of Civil Procedure ("Rule") 59(e) and 60(b), and Local Rule 7-18. (Mot. 7-8.)

III. LEGAL STANDARD

"[A] motion for reconsideration [under Rule 59(e)] should not be granted, absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law." Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003). A court may disregard "repeated legal arguments" and "facts that were available earlier in the proceedings." Zimmerman v. City of Oakland, 255 F.3d 734, 740 (9th Cir. 2001). Rule 60(b) provides for reconsideration of a final judgment, order, or proceeding only upon a showing of (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) a satisfied judgment; or (6) another reason that justifies relief. Fed. R. Civ. P. 60(b).

Local Rule 7-18 places additional limitations on motions for reconsideration. Similar to the Federal Rules, "[n]o motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion." C.D. Cal. Civ. L.R. 7-18; Rosenfeld v. U.S. Dep't of Justice, 57 F.3d 803, 811 (9th Cir. 1995). Grounds for a motion for reconsideration are limited to:

(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or

(b) the emergence of new material facts or a change of law occurring after the time of such decision, or

(c) a manifest showing of a failure to consider material facts presented to the Court before such decision.

C.D. Cal. L.R. 7-18; see In re Countrywide Fin. Corp. Mortg.-Backed Sec. Litig., 966 F. Supp. 2d 1031, 1036 (C.D. Cal. 2013). Displeasure with the outcome alone is insufficient; unless the moving party shows that one of the factors exists, the Court will not grant reconsideration. See Carroll, 342 F.3d at 945 ("[A] motion for reconsideration should not be granted, absent highly unusual circumstances," unless one of the factors is present); Arteaga v. Asset Acceptance, LLC, 733 F. Supp. 2d 1218, 1236 (E.D. Cal. 2010) (noting that mere disagreement with court's conclusions is not sufficient).

Reconsideration is an "extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial resources." Carroll, 342 F.3d at 945; Collins v. U.S. Citizenship & Naturalization Serv., No. CV 11-9909-JFW (SSx), 2013 WL 776244, at *1 (C.D. Cal. Feb. 6, 2013) (internal quotation marks omitted) ("Motions for reconsideration are disfavored and are rarely granted."). Whether to grant a motion for reconsideration is within the court's discretion. McDowell v. Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999); Arteaga, 733 F. Supp. 2d at 1236.

IV. DISCUSSION

Herzfeld contends that a recent ruling in the Northern District of California requires the Court to reconsider its finding that MCMC is not an ERISA fiduciary. (Mot. 3.) Herzfeld also argues that the Court failed to consider material facts and erred in its application of law. (Mot. 3-4.) The Court finds Herzfeld's arguments unpersuasive and insufficient to satisfy the taxing burden for reconsideration.²

A. MCMC's Opposition

As a preliminary matter, Herzfeld argues the Court should not consider MCMC's opposition because it was filed one day late. (Reply 12, ECF No. 68; Opp'n to Mot. ("Opp'n"), ECF No. 66.) MCMC invokes Rule 6(b) to request that the Court consider its opposition. (Req. to Consider Late-Filed Opp'n ("Req.") 2, ECF No. 67.)

Rule 6(b)(1) provides that the court may, for good cause, extend the time for a party to act "if the party failed to act because of excusable neglect." Fed. R. Civ. P. 6(b)(1)(B). "[L]ike all the Federal Rules of Civil Procedure, [Rule 6(b) is] to be liberally construed to effectuate the general purpose of seeing that cases are tried on the merits." Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253, 1258-59 (9th Cir. 2010) (internal quotation marks omitted).

Under these circumstances, the Court finds the one-day delay does not prejudice Herzfeld, as he had adequate time to prepare his Reply and could have, but did not, request an extension of his deadline. Also, it is undisputed that the delay was the unintentional result of staffing changes and the termination of MCMC from this action. (See Req. 1-2.) Finally, the one-day delay did not impact the proceedings and there is no evidence of bad faith. See Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 395 (1993) (discussing circumstances to consider when evaluating excusable neglect, including "the danger of prejudice," the length of the delay and impact on proceedings, "the reason for the delay . . . and whether the movant acted in good faith"); Briones v. Riviera Hotel & Casino, 116 F.3d 379, 381 (9th Cir. 1997) (noting that Pioneer analysis of excusable neglect is applicable to requests under Rule 6(b)). Accordingly, the Court GRANTS MCMC's request to consider its opposition. (ECF No. 67.) The Court notes, however, that even without MCMC's opposition, reconsideration is not warranted.

B. Material Difference in Law

Herzfeld asks the Court to reconsider its finding that MCMC is not an ERISA fiduciary. He contends that "a material difference in . . . law [exists] from that presented to the [C]ourt," which Herzfeld could not have discovered through reasonable diligence before the Court's decision. (Mot. 10 (citing C.D. Cal. L.R. 7-18.) Herzfeld points to Josef. K v. California Physicians' Service, No. 18-cv-06385-YGR, 2019 WL 2342245 (N.D. Cal. June 3, 2019), where thedistrict court found an external reviewer to be a functional fiduciary under ERISA. (Mot. 10.) However, the Court finds that Josef K. does not support reconsideration.

First, the decision in Josef K. is not controlling precedent for this Court. Second, it was issued on June 3, 2019, two months before this Court issued its decision on August 26, 2019. Herzfeld argues he had no reason to continue researching once the motion was fully-briefed, but nothing suggests he could not have discovered the decision with an exercise of reasonable diligence.

Third, the court in Josef K. relied on Del Prete v. Magellan Behavioral Health, Inc., 112 F. Supp. 3d 942 (N.D. Cal. 2015), to conclude that the external reviewer—an "independent medical reviewer," not an IRO like MCMC—was a functional fiduciary under ERISA. Josef. K., 2019 WL 2342245, at *7. But Herzfeld...