Plavin v. Grp. Health Inc.

693 F.Supp.3d 446

Steven PLAVIN, on behalf of himself and all others similarly situated, et al., Plaintiff, v. GROUP HEALTH INCORPORATED, Defendant.

3:17-CV-1462

United States District Court, M.D. Pennsylvania

Filed September 22, 2023

Ari S. Ruben, Pro Hac Vice, Mark H. Hatch-Miller, Pro Hac Vice, Nicholas C. Carullo, Steven M. Shepard, Pro Hac Vice, William C. Carmody, Susman Godfrey LLP, New York, NY, Steve M. Cohen, Law Office of Steve Cohen, New York, NY, J. Timothy Hinton, Michael F. Cosgrove, Haggerty Hinton & Cosgrove LLP, Dunmore, PA, Halley W. Josephs, Susman Godfrey LLP, New york, NY, for Plaintiff.

Eric W. Shannon, Jared I. Kagan, John Gleeson, Maura K. Monaghan, DeBevoise & Plimpton LLP, New York, NY, Peter H. LeVan, Jr., LeVan Stapleton Segal Cochran LLC, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION

Robert D. Mariani, United States District Judge

I. INTRODUCTION

Presently before the Court is Defendant Group Health Incorporated ("GHI")'s Motion for Summary Judgment (Doc. 141). The Amended Complaint in this action alleges class action claims of unjust enrichment, as well as claims pursuant to New York's General Business Law ("GBL") § 349, GBL § 350, and Insurance Law § 4226. The Amended Complaint was filed on behalf of "Plaintiffs and similarly-situated persons who were enrolled in GHI's Comprehensive Benefit Plan for City of New York employees and retirees (the 'GHI Plan') at any time from 2011 to 2015 (the 'Class Period')," known as the CBP Class. (Doc. 70 at 1.)

According to the Amended Complaint, the conduct at issue "was partially, and prospectively, addressed by an Assurance of Discontinuance entered into with the Attorney General of the State of New York ("NYAG"), which found GHI to have engaged in 'repeated violations of Executive Law § 63(12) and General Business Law §§ 349 and 350' and required GHI to rewrite its marketing materials [regarding particular insurance policies] and agree to a variety of forms of prospective relief." (Doc. 70 ¶ 1.) Plaintiffs now seek retrospective relief. They summarize the challenged conduct as follows:

At issue in this case is GHI's unlawful scheme to enroll as many NYC employees and retirees in the GHI Plan as possible by falsely depicting the plan as—in contrast to the other plans on offer—a true [preferred provider organization ("PPO")] plan that gave members the 'freedom to choose any provider worldwide' with only the mere possibility that reimbursements might be less than the actual fee charged by out-of-network providers.

(Id. ¶ 4.) Plaintiffs specifically contend that GHI's marketing materials falsely promoted the Plan "as a PPO plan providing comprehensive in-network and out-of-network coverage that also did not require the payment of out-of pocket premiums." (Id. ¶ 28.) Plaintiffs allege that in reality, "[r]ather than a mere possibility that members would be subject to reimbursement shortfalls for out-of-network services, as GHI's materials suggested, it was a virtual certainty that reimbursements would be dramatically less than the actual fees charged by out-of-network providers in all cases." (Id. ¶ 9.)

The present Motion was permitted to be filed on statute of limitations grounds only, without prejudice to GHI's ability to file a subsequent motion for summary judgment on other grounds. (See Docs. 135, 136.) GHI argues it is entitled to summary judgment on all counts of the Amended Complaint because (1) former Plaintiff Steven Plavin's original complaint "was untimely when filed on August 16, 2017"; and (2) the claims asserted in 2021 by the remaining named Plaintiffs, Michelle Davis-Matlock, Gary Altman and Danielle Thomas, "were untimely when filed and there is no timely complaint to which their claims relate back." (Id. at 1.) Plaintiffs oppose the Motion, arguing that the Third Circuit has already rejected GHI's arguments, and regardless, the arguments fail because (1) the " 'continuing violations' doctrine means that the statute of limitations begins to run anew with each reimbursement a plaintiff receives" and (2) the remaining Plaintiffs' claims were timely because the statute of limitations was tolled as to them under the American Pipe doctrine. (Doc. 143 at 1-2.)

For the reasons that follow, Defendant's Motion will be granted in part and denied in part.

II. STATEMENT OF FACTS

The following undisputed facts are taken from the Record and from the parties' joint statement of material facts relevant to the instant Motion (Doc. 135).

Steven Plavin is a retired New York City police officer. (Id., Statement of Undisputed Facts, hereinafter "SUF", ¶ 3.) He first enrolled in the GHI Plan in 1984. (Id.) Plavin testified that he requested to view a copy of the GHI Plan's fee schedule shortly after enrolling, but his request was denied. (Id. ¶ 18.) Except for 2005 through 2007, Plavin maintained coverage in the GHI Plan from 1984 until he withdrew from this action in 2022. (Id. ¶ 4.) Throughout that period, he supplemented the GHI Plan by purchasing the Enhanced Out-of-Network Rider ("OON Rider"). (Id. ¶ 5.)

Current and retired employees of the City have the option to select a different City-sponsored health insurance plan during the relevant open enrollment period. (Id. ¶ 6.) For current City employees, open enrollment is every year. (Id.) For retirees, open enrollment occurs every other year, in even-numbered years. (Id. ¶ 7.)

During open enrollment periods, the New York City Office of Labor Relations publishes a Summary Program Description ("SPD") that summarizes the various health insurance plans offered by the City. (Id. ¶ 8.) Since 2011, the Office of Labor Relations has posted the latest SPD online each year. (Id., Plaintiffs' Additional Facts, hereinafter "PAF", ¶ 3.)

The section of the SPD regarding the GHI Plan had "few, if any, changes from year to year" until Fall 2014, when it was modified. (SUF ¶¶ 9-10.) The GHI Plan's fee schedule was never posted on GHI's website, nor otherwise sent to plan members. (PAF ¶¶ 8-9.) The Amended Complaint seeks relief for out-of-network services submitted to GHI for reimbursement between 2011 and 2014; it does not seek relief for any services provided in 2015 or later. (SUF ¶ 11.)

Plavin moved to Pennsylvania in or around 2004 with his family. (Id. ¶ 12.) He continued to reside there until his withdrawal from this action. (Id.) He submitted his first claim for reimbursement of out-of-network services under the GHI plan no later than 2004. (Id. ¶ 13.) He proceeded to submit 540 claims for reimbursement of out-of-network services on behalf of himself and his dependents between 2004 and 2014. (Id. ¶ 14.) He was reimbursed to some degree for at least some of those 540 claims, but he "was never reimbursed . . . at a rate that met his expectations." (Id. ¶¶ 15-16.)

Plavin filed the original Complaint in this action on August 16, 2017. (Id. ¶¶ 1-2.) The Amended Complaint, filed on August 30, 2021, alleges claims on behalf of Plaintiffs Altman, Thomas, and Davis-Matlock, in addition to Plavin. (See Doc. 70.) All three, and/or their dependents, incurred out-of-network claims during the Class Period. (Doc. 135, PAF ¶ 5.) Like Plavin, they each purchased the OON Rider. (See id. ¶ 6.)

The Amended Complaint identifies no specific reimbursements by which Plavin alleges he was injured, but rather alleges generally that he and his dependents were injured by GHI's reimbursement of out-of-network claims. (Id. ¶ 17.) It also alleges that Plaintiffs Altman, Thomas, and Davis-Matlock received out-of-network reimbursements "during the Class period [that] were less than their expectations." (Id. ¶ 10.)

III. PROCEDURAL HISTORY

Because each party advances "law of the case" arguments, the Court provides a detailed review of the proceedings and relevant decisions thus far.

Following Plavin's filing of the original class action Complaint on August 16, 2017 (Doc. 1), GHI filed a Motion to Dismiss for Failure to State a Claim (Doc. 31). On June 22, 2018, this Court granted GHI's Motion, based in part on a determination that Plaintiff's GBL claims failed to allege the required consumer-oriented conduct, and dismissed the complaint with prejudice. (Docs. 55, 56.) Plavin appealed.

The Third Circuit certified the question of whether GHI's conduct was consumer oriented to the New York Court of Appeals. Plavin v. Grp. Health Inc., No. 18-2490, 2019 WL 1965741 (3d Cir. Apr. 4, 2019). The Court of Appeals answered that it was consumer oriented. Plavin v. Grp. Health Inc., 35 N.Y.3d 1, 124 N.Y.S.3d 5, 146 N.E.3d 1164 (2020). Thereafter, the Third Circuit addressed the remaining issues, and held that Plavin had "adequately stated (1) the other elements of a GBL claim; (2) a claim under New York's Insurance Law; and (3) an unjust enrichment claim." Plavin v. Grp. Health Inc., No. 18-2490, 857 F. App'x 83, 83 (3d Cir. May 21, 2021).

In doing so, the Third Circuit rejected GHI's statute of limitations argument, including GHI's contention that it was apparent on the face of the original Complaint that Plavin's claims were time-barred. See id. The Circuit stated:

Finally, we reject GHI's argument that the complaint is time-barred. Unjust enrichment claims have a six-year limitations period. [Sirico v. F.G.G. Prods., Inc., 71 A.D.3d 429, 896 N.Y.S.2d 61, 66 (2010).]¹ GBL and Insurance Law claims have a three-year limitations period. [Gaidon v. Guardian Life Ins. Co. of Am., 96 N.Y.2d 201, 727 N.Y.S.2d 30, 750 N.E.2d 1078, 1083 (2001) (GBL claims); Dolce v. Nw. Mut. Life Ins. Co., 272 A.D.2d 432, 708 N.Y.S.2d 327, 327 (2000) (Insurance Law claims).] GBL claims must be brought within three years of when a plaintiff is "injured by the actions alleged to have violated the Statute." [Marshall v. Hyundai Motor Am., 51 F. Supp. 3d 451, 461 (S.D.N.Y. 2014).] Where "the gravamen of the complaints of General Business Law § 349 violations was not false guarantees of policy terms, but deceptive practices inducing unrealistic expectations . . . plaintiffs

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