Sadeghi v. Aetna Life Ins. Co.

564 F.Supp.3d 429

Alireza SADEGHI, M.D. and Taylor Theunissen, M.D.

v.AETNA LIFE INSURANCE COMPANY

Alireza Sadeghi, M.D. and Taylor Theunissen, M.D.

v.Aetna Life Insurance Company

CIVIL ACTION 20-445-SDD-EWD, CIVIL ACTION 20-447-SDD-EWD

United States District Court, M.D. Louisiana.

Signed September 28, 2021

Kernan August Hand, Kernan Hand Law Firm, Metairie, LA, Robert J. Axelrod, Pro Hac Vice, Axelrod, LLP, New York, NY, for Alireza Sadeghi in CV 20-445-SDD-EWD, Taylor Theunissen in CV 20-445-SDD-EWD.

Jonathan M. Herman, Mitchell Hasenkampf, Herman Law Firm Texas Main Office, Dallas, TX, Allison Nunley Pham, CCS Medical, Inc., Farmers Branch, TX, for Aetna Life Insurance Company in CV 20-445-SDD-EWD.

Kernan August Hand, Kernan Hand Law Firm, Metairie, LA, for Alireza Sadeghi in CV 20-447-SDD-EWD, Taylor Theunissen in CV 20-447-SDD-EWD.

Jonathan M. Herman, Allison Nunley Pham, Mitchell Hasenkampf, Herman Law Firm Texas Main Office, Dallas, TX, for Aetna Life Insurance Company in CV 20-447-SDD-EWD.

RULING

SHELLY D. DICK, CHIEF DISTRICT JUDGE

This matter is before the Court on the Motion for Partial Summary Judgment¹ filed by Defendant, Aetna Life Insurance Company ("Aetna" or "Defendant"). Plaintiffs, Alireza Sadeghi, M.D. ("Sadeghi") and Taylor Theunissen, M.D. ("Theunissen"), or collectively ("Plaintiffs"), have filed an Opposition² to this motion, to which Defendant filed a Reply.³ For the following reasons, Aetna's motion shall be granted.

Generally, these consolidated lawsuits arise out of Aetna's alleged under-reimbursement of Plaintiffs, both plastic surgeons, for post-mastectomy breast reconstruction surgeries on two patients, identified as Member 1 and Member 2. Plaintiffs were out of network with Aetna. Plaintiffs allege that Aetna entered into an In-Network Exception with Plaintiffs for the surgeries, promising that the patients would be financially responsible only for in-network cost-sharing requirements and not for the balance bill.

However, Plaintiffs claim, after performing the breast reconstruction surgeries under the In-Network Exception agreements, Aetna breached the In-Network Exception agreements and refused to apply them. Thus, Plaintiffs were under-reimbursed by not being paid according to the In-Network Exception agreements, and Defendant failed to preclude the patients from being balance billed.

I. CHALLENGED DOCUMENTS

At the outset, the Court must address Plaintiffs’ objections to Defendant's exhibits. Plaintiffs claim that the documents Defendant bases its Statement of Undisputed Facts upon were never produced to Plaintiffs in discovery, and Plaintiffs were "ambush[ed]," seeing these exhibits for the first time when they were filed with this motion.⁴ Plaintiffs also argue that these exhibits should be stricken because Defendant failed to file an Affidavit or Declaration to authenticate the documents.

Defendant contends that the documents at issue were either provided to Plaintiffs through this litigation or exchanged between the Parties in pre-litigation appeals and discussions. Further, Plaintiffs sought to stay discovery, which was granted.⁵ Additionally, Plaintiffs rely on many of these documents in their Opposition to Defendant's motion, which Defendant claims demonstrates that this objection is disingenuous.

On the same day Defendant filed its Reply brief, it also filed an Opposed Motion for Leave to Supplement its Memorandum in Support of its Motion for Partial Summary Judgment.⁶ In this motion, Defendant sought leave to file the Declaration of Kimberly Depaepe to authenticate its Motion's supporting exhibits. The Opposed Motion for Leave to Supplement was filed on April 1, 2021. The Court waited more than 21 days, giving Plaintiffs an opportunity to respond and support their opposition to Defendant's motion, but no response was submitted. Thus, the Court granted the Opposed Motion for Leave to Supplement on April 29, 2021.⁷ To date, Plaintiffs have never sought leave to respond to the explanations presented by Defendant regarding these documents.

The Court allowed the Declaration of Kimberly Depaepe for the purpose of authenticating the documents submitted by Defendant. Thus, Plaintiffs’ wholesale objection to authenticity is OVERRULED as moot.

Rule 37 of the Federal Rules of Civil Procedure provides factors for the Court to consider in determining whether evidence should be excluded for a failure to disclose. In reaching this determination, the Court must consider: "(1) the importance of the evidence; (2) the prejudice to the opposing party of including the evidence; (3) the possibility of curing such prejudice by granting a continuance; and (4) the explanation for the party's failure to disclose."⁸

The importance of the documents in question in this matter is exceptional. The Court is tasked with determining whether Plaintiffs’ state law breach of contract claim and detrimental reliance claim are preempted by ERISA. The administrative record and other documents relating to the inception of this dispute are necessary for the Court's resolution of this motion.

As to the prejudice to the Plaintiffs, Plaintiffs have failed to demonstrate a high degree of prejudice. Plaintiffs cannot claim ambush when they received several of the documents during pre-litigation; Plaintiffs likewise rely upon these documents in opposing Defendant's motion. Plaintiffs sought to stay discovery, which was granted. And, Plaintiffs have never sought leave to respond to or rebut Defendant's explanations.

Regarding a continuance, the Court does not find this necessary. Defendant responded to Plaintiffs’ complaints about this evidence on April 1, 2021. Plaintiffs have had several months to move for leave to respond to Defendant's claims or to move to supplement their pleadings in light of Defendant's claims. Plaintiffs have not done so, thus no continuance of this motion is warranted.

Finally, the Court finds Defendant's explanations for the failure to disclose to be reasonable under the circumstances. Again, Plaintiffs have not rebutted Defendant's position. Accordingly, the Court will not strike Defendant's exhibits. Plaintiffs’ objections to these documents are OVERRULED.

Defendant moves to strike the Declaration of Robert J. Axelrod,⁹ counsel for Plaintiffs, because the Declaration does not attest that Axelrod has personal knowledge of the contents of the Declaration or the attached exhibits. Citing no authority, Aetna also argues that the Court cannot infer his personal knowledge based on his position as Plaintiffs’ counsel. Nevertheless, the Court's review of the exhibits submitted demonstrates that they are the same documents submitted as evidence by Defendant. Defendant concedes as much: "The Court's consideration of the documents produced both with Defendant's and Plaintiffs’ briefing is appropriate, even above the objections of both sides, to determine whether ERISA governs the claims herein."¹⁰ Thus, the Court overrules Defendant's objection and will consider the exhibits submitted by Plaintiffs.

II. FACTUAL BACKGROUND

Local Rule 56(f) provides:

Facts contained in a supporting or opposing statement of material facts, if supported by record citations as required by this rule, shall be deemed admitted unless properly controverted. An assertion of fact set forth in a statement of material facts shall be followed by a citation to the specific page or paragraph of identified record material supporting the assertion . The court may disregard any statement of fact not supported by a specific citation to record material properly considered on summary judgment. The court shall have no independent duty to search or consider any part of the record not specifically referenced in the parties’ separate statement of facts . (emphasis added).

Local Rule 56 (c) requires an opposing party to:

submit with its opposition a separate, short, and concise statement of material facts. The opposing statement shall admit, deny or qualify the facts by reference to each numbered paragraph of the moving party's statement of material facts and unless a fact is admitted, shall support each denial or qualification by a record citation as required by this rule . Each such statement shall begin with the designation "Admitted," "Denied," or "Qualified" and, in the case of an admission, shall end with such designation. The opposing statement may contain in a separately titled section additional facts, each set forth in a separately numbered paragraph and supported by a record citation as required by subsection (f) of this rule.

Unless otherwise indicated, set forth below are facts deemed admitted for purposes of this Motion based on Plaintiffs’ failure to comply with Local Rules 56(c) & (f) of the Middle District of Louisiana. Where Plaintiffs failed to cite to record evidence in denying Defendant's statements or submitted argument rather than a supported factual statement, the Defendant's proffered statements of fact are deemed admitted as not properly controverted under the Local Rules of Court.

Plaintiffs were not contracted providers within Aetna's network. Plaintiffs were out-of-network providers on the dates of service at issue in this litigation.¹¹ ExxonMobil Corporation sponsored the self-funded employee health benefit plan named the ExxonMobil Medical Plan ("Exxon Plan") at issue in Case No. 20-445-SDD-EWD (Case 445).

Exxon Mobil Corporation sponsors the following self-funded employee health benefits plans: ExxonMobil Medical Plan.... These plans were established pursuant to the Employee Retirement Income Security Act of 1974 as amended, for certain eligible Plan Participants.¹²

* * *

Plan funding. The Plan is funded through participant and company contributions.¹³

The Exxon Plan was established pursuant to ERISA for eligible employees, dependents, beneficiaries, retirees, or members: " ‘Plan Participant’ or ‘Participant’ means those employees, dependents, retirees, surviving spouses and dependents, individuals with COBRA coverage and family...