Lee v. Blue Cross Blue Shield of Ala.

EMILY C. LEE, Plaintiff, v. BLUE CROSS BLUE SHIELD OF ALABAMA, Defendants.

Case No.: 2:19-cv-01895-JHE

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

September 23, 2020

MEMORANDUM OPINION¹

Through her First Amended Complaint, Plaintiff Emily C. Lee ("Lee") seeks to recover benefits under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., from Defendant Blue Cross Blue Shield of Alabama ("Blue Cross"). (Doc. 14). Specifically, Lee seeks to recover past benefits she claims are owed to her for a combination of medications prescribed to treat her chronic migraines, as well as a declaratory judgment that her health insurance policy covers that treatment. (Id.). Blue Cross has moved to dismiss the amended complaint. (Doc. 16). With that motion under submission, Lee moved for judgment on the administrative record. (Doc. 20). Both Blue Cross's motion to dismiss and Lee's motion for judgment on the administrative record are fully briefed. (Docs. 16, 18, 19, 22 & 23). For the reasons explained below, Blue Cross's motion to dismiss is GRANTED, and Lee's motion for judgment on the administrative record is DENIED AS MOOT.

I. Legal Standard²

Federal Rule of Civil Procedure 12(b)(6) permits dismissal when a complaint fails to state a claim upon which relief can be granted. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations and internal quotation marks omitted). A complaint states a facially plausible claim for relief "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citation omitted). The complaint must establish "more than a sheer possibility thata defendant has acted unlawfully." Id.; accord Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) ("Factual allegations must be enough to raise a right to relief above the speculative level."). Ultimately, this inquiry is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

To that end, under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain "a short and plain statement of the claim showing the pleader is entitled to relief." "[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555). Mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" are insufficient. Iqbal, 556 U.S. at 678. (citations and internal quotation marks omitted). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (citing Twombly, 550 U.S. at 557). Further, "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." FED. R. CIV. P. 9(b). "[A] plaintiff must plead facts as to time, place, and substance of the defendant's alleged fraud, specifically the details of the defendants' allegedly fraudulent acts, when they occurred, and who engaged in them." U.S. ex rel. Clausen v. Lab. Corp. of Am., Inc., 290 F.3d 1301, 1310 (11th Cir. 2002) (internal quotation marks omitted). "Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." FED. R. CIV. P. 9(b).

The court accepts all factual allegations as true on a motion to dismiss under Rule 12(b)(6). See, e.g., Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000). However, legal conclusions unsupported by factual allegations are not entitled to that assumption of truth. Iqbal, 556 U.S. at 678.

II. Background

Lee, who is insured by Blue Cross, suffers from chronic daily migraine headaches without aura. (Doc. 14 at ¶¶ 3, 6). To treat her migraines, Lee's physician, Dr. George Urban ("Dr. Urban") of the Diamond Headache Clinic in Chicago, Illinois, has prescribed a treatment modality combining the drugs Aimovig and Botox. (Id. at ¶ 6). This treatment has improved Lee's functionality. (Id.).

On December 27, 2018, Blue Cross denied benefits for the combination of Aimovig and Botox. (Id. at ¶ 7). Lee appealed on February 11, 2019, attaching Dr. Urban's declaration under penalty of perjury asserting the facts above. (Id.). Nevertheless, Blue Cross denied the appeal on February 23, 2019. (Id.). Lee sent a letter to Blue Cross requesting the specific reason the claim was denied, but it never responded.³ (Id.; doc. 1-1 at 13-14). Lee made a subsequent request on October 8, 2019, but Blue Cross again denied benefits on October 10, 2019. (Doc. 14 at ¶ 8; doc. 1-1 at 16). The complaint does not reflect that Lee or Blue Cross have taken any subsequent action apart from this litigation.

On November 6, 2019, Lee filed this action in the Circuit Court of Jefferson County, Alabama, requesting an award of benefits for the costs of the medication that she had received. (Doc. 1-1). Blue Cross removed the case to this Court on November 21, 2019, (doc. 1), and answered Lee's complaint six days later, (doc. 6). Lee filed her First Amended Complaint on January 17, 2020. (Doc. 14). In addition to the claim she asserted in the original complaint, Leeincluded a claim for a declaratory judgment that the policy covers the combination of Aimovig and Botox from February 2020 forward. (Id. at ¶¶ 12-16). The undersigned then entered a scheduling order setting a March 6, 2020 deadline for the parties to file cross motions for summary judgment on the administrative record. (Doc. 15).

On January 31, 2020, Blue Cross moved to dismiss the First Amended Complaint. (Doc. 16). The parties briefed the motion. (Docs. 18 & 19). On March 6, 2020, Lee alone moved for judgment on the administrative record. (Doc. 20). In response, Blue Cross reiterated its arguments in support of its motion to dismiss. (Doc. 22). Lee filed a reply. (Doc. 23). All pending motions have been fully briefed and are ripe for review.

III. Analysis

Lee's amended complaint contains two counts. In Count I, Lee requests benefits due under the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B) for the costs of the treatment. (Doc. 14 at 2-3). In Count II, Lee seeks a declaratory judgment pursuant to 29 U.S.C. § 1132 and 28 U.S.C. § 2201, et seq., that the Plan covers the treatment. (Id. at 3-4).

Blue Cross has moved to dismiss both counts: Count I on the basis that Lee has admittedly incurred no damages for Blue Cross's failure to cover the treatment because she has received a promotional offer from Aimovig's manufacturer, (doc. 16 at 2-5), and Count II on the basis that it presents no justiciable case or controversy because no adverse benefits determination is properly before the court, (id. at 5-7). Lee concedes Count I is due to be dismissed, (doc. 18 at 4-5), but rejects Blue Cross's contention that Count II is not justiciable, (id. at 5-8). Accordingly, Count I is DISMISSED.

Blue Cross argues that the only fully-exhausted determination Lee challenges is the one in Count I, for which she suffered no injury. (Doc. 16 at 5-7). In Blue Cross's estimation, Lee'sproper remedy is to proceed back through the administrative process and obtain either (1) the relief she seeks here through a favorable determination or (2) a final adverse benefits determination she can then challenge in court. (Id.). Lee contends this would waste time and resources, since it would require "the parties [to] go back through the exact same process that they have already been through, receive the same determinations that have already been made, file the same appeals followed by the same denials, file a new lawsuit raising the exact same issues, and place the dispute in the exact posture that it is currently in before this Court." (Doc. 18 at 5).

It is well-settled in the Eleventh Circuit that "plaintiffs in ERISA actions must exhaust available administrative remedies before suing in federal court." Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309, 1315 (11th Cir. 2000) (quoting Counts v. Amer. Gen. Life & Accident Ins. Co., 111 F.3d 105, 108 (11th Cir. 1997)). Further, an ERISA plaintiff must plead that she has exhausted those remedies. Garcon v. United Mut. of Omaha Ins. Co., 779 F. App'x 595, 599 (11th Cir. 2019) (citing Byrd v. MacPapers, Inc., 961 F.2d 157, 161 (11th Cir. 1992)). That said "a district court has the sound discretion to excuse the exhaustion requirement when resort to administrative remedies would be futile or the remedy inadequate . . . or where a claimant is denied meaningful access to the administrative review scheme in place . . . ." Id. (internal quotation marks and citations omitted). The plaintiff bears a "heavy burden" to show one of these exceptions applies. Bickley v. Caremark Rx, Inc. ("Bickley I"), 361 F. Supp. 2d 1317, 1336 (N.D. Ala. 2004), aff'd, 461 F.3d 1325 (11th Cir. 2006). A plaintiff must make a "clear and positive" showing of futility in order to excuse the exhaustion requirement on that ground. Bickley v. Caremark Rx, Inc. ("Bickley II"), 461 F.3d 1325, 1330 (11th Cir. 2006). And the plaintiff must plead futility if she contends it applies. Variety Children's Hosp., Inc. v. Century Med. Health Plan, Inc., 57 F.3d 1040, 1042 n.2 (11th Cir. 1995) (citing Curry v. Contract Fabricators, Inc. Profit Sharing Plan, 891 F.2d 842,846 (11th Cir. 1990), abrogated on other grounds by Murphy v. Reliance Standard Life Ins. Co., 247 F.3d 1313 (11th Cir. 2001)).

At the time Lee filed this action, it seems (and Blue Cross did not appear to dispute) she had exhausted her administrative remedies with respect to the December 27, 2018 precertification denial.⁴ (See doc. 1-1 at 5 (discussing the initial denial, appeal, and denial of appeal); doc. 6 at...