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Birmingham Plumbers and Steamfitters Local Union No 91 Health and Welfare Trust Fund v. Blue Cross Blue Shield of Alabama

United States District Court, N.D. Alabama, Southern Division

February 13, 2019

BIRMINGHAM PLUMBERS AND STEAMFITTERS LOCAL UNION NO. 91 HEALTH AND WELFARE TRUST FUND, Plaintiff,
v.
BLUE CROSS BLUE SHIELD OF ALABAMA, Defendant.

          MEMORANDUM OPINION [1]

          JOHN H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE.

         On May 15, 2017, Defendant Blue Cross Blue Shield of Alabama (“BCBS” or “Defendant”) moved to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(6). (Doc. 8). On March 8, 2018, the undersigned granted the motion and dismissed the case. (Docs. 26 & 27). On April 5, 2018, Plaintiff Birmingham Plumbers and Steamfitters Local Union No. 91 Health and Welfare Trust Fund (the “Employer” or “Plaintiff) moved to alter or amend the judgment pursuant to Fed.R.Civ.P. 59. (Doc. 28). Defendant opposes that motion. (Doc. 31). For the reasons stated more fully below, the motion is DENIED.

         I. Standard of Review

         Rule 59(e) permits a party to move to alter or amend a judgment. Fed.R.Civ.P. 59(e). “Reconsidering the merits of a judgment, absent a manifest error of law or fact, is not the purpose of Rule 59.” Jacobs v. Tempur-Pedic Int'l, Inc., 626 F.3d 1327, 1344 (11th Cir. 2010). To that end, “the only grounds for granting a Rule 59 motion are newly-discovered evidence or manifest errors of law or fact.” Arthur v. King, 500 F.3d 1335, 1343 (11th Cir. 2007) (quoting In re Kellogg, 197 F.3d 1116, 1119 (11th Cir. 1999)) (internal alterations omitted). For the purposes of the Rule, a manifest error of law is “the wholesale disregard, misapplication, or failure to recognize controlling precedent.” Benton v. Burke, No. CV-11-S-493-NE, 2012 WL 1746122, at *1 (N.D. Ala. May 16, 2012) (quoting Oto v. Metropolitan Life Insurance Co., 224 F.3d 601, 606 (7th Cir. 2000)). “A Rule 59(e) motion cannot be used to relitigate old matters, raise argument or present evidence that could have been raised prior to the entry of judgment.” Id. (quoting Michael Linet, Inc. v. Village of Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005)) (internal alterations omitted).

         II. Analysis

         Plaintiff contends the undersigned erred as a matter of law by granting the motion to dismiss. (Doc. 28 at 1). Specifically, Plaintiff objects to “the determination that BCBS did not have a duty or responsibility to determine a plan participant's eligibility (or not) for Medicare as part of the agreement between the parties.” (Doc. 29 at 2).

         Section I.A. of BCBS's motion to dismiss is devoted to the argument that “BCBS did not owe a fiduciary duty to determine the participant's Medicare eligibility status.” (Doc. 8 at 3-9). In that section, BCBS argues the Administrative Services Agreement (“ASA”) divided fiduciary obligations between the two parties, only placing on BCBS the responsibility for claims administration and administrative appeals. (Id. at 5). Specifically, it stated that “there is no allegation that it was BCBS's duty to track participants' Medicare eligibility and the applicability of Medicare Secondary Payer statutes; to the contrary, the terms of the ASA expressly place that burden on the Employer.” (Id. at 6). BCBS then identified several provisions of the ASA that supported determining Medicare eligibility was outside the scope of its fiduciary responsibilities. (Id. at 6-7). In relevant part, one of these provisions provides: “The Claims Administrator will rely on eligibility information submitted by the Employer as satisfying the terms of the Plan and the requirements of the Medicare Secondary Payer (MSP) statutes and regulations . . . .” (Id. At 6) (citing doc. 8-1 at 3, art. II § A.3).

         In response to this argument, Plaintiff offered an alternative explanation for the cited section of the ASA: that “eligibility” refers only “to whether the Plan, given the number of eligible covered lives, is to be treated as a large employer or small employer, a critical factor under some Medicare Secondary Payer rules.” (Doc. 12 at 13). Plaintiff then stated:

In short, the issue in this case is not about whether the Plan submitted participant eligibility information to BCBSAL or whether the participant signed up for Medicare. The case is about BCBSAL's knowledge that the participant was eligible for ESRD Medicare benefits and despite that knowledge it improperly processed claims for ESRD treatment for approximately 15 months when the Plan had no obligation to be the primary payer under the terms of the Plan and Medicare. Because BCBSAL acted contrary to the plain terms of the Plan and paid for benefits that the Plan had no obligation to pay, BCBSAL improperly disposed of plan assets . . . .
A close reading of Article II A.3.a. of the ASA confirm [sic] this discussion. There is nothing in the language of the sentence that BCBSAL relies on that can be interpreted as a requirement that the Plan certify that the participant is Medicare eligible or that he or she has signed up for Medicare. At most, the language raises a “healthy factual dispute” as to its meaning and how it is to be applied under the Plan that cannot be resolved at a Motion to Dismiss stage of the case . . . Therefore, since the Fund has stated more than “enough facts to state a claim for relief that is plausible on its face” BCBSAL's motion to dismiss is due to be denied . . . .

(Id. at 14-15).

         Faced with these competing arguments, the undersigned accepted BCBS's interpretation. First, the undersigned examined Plaintiff's argument that the central issue was “about ‘coordination of benefits' and ‘determining which of two insurance policies will bear the brunt of a particular claim.'” (Doc. 26 at 6). Because Plaintiff also alleged the participant failed to enroll in Medicare after becoming eligible, (doc. 1 at ¶ 27), the undersigned found Plaintiff's “characterization of the argument in its brief . . . misleading at best.” (Doc. 26 at 7). Instead, the dispositive issue was whether it was BCBS's responsibility to determine whether the participant was eligible for Medicare. (Id.). But the undersigned also determined Plaintiff did not allege in the complaint a duty by BCBS to track Medicare eligibility, and the ASA's plain language negated the existence of this duty. (Id.). The undersigned rejected Plaintiff's alternative large employer/small employer interpretation of the ASA's reference to “Medicare Secondary Payer (MSP) statutes and regulations” as unexplained, unsupported, and unable to withstand scrutiny in light of the ASA's provision entitling BCBS to “rely on instructions, communications, or directions from the Employer concerning Plan design, eligibility determinations, benefit changes, and other areas of Plan administration for which the Employer is responsible.” (Id. at 8-9) (citing doc. 8-1 at 9, art. V. § C).

         Plaintiff's motion to alter or amend argues the undersigned erred by “fail[ing] to recognize that it is exactly and precisely the duty of BCBS to coordinate benefits between the Plan and any other payer that might be responsible for payment of benefits, including Medicare.” (Doc. 29 at 7). To support this, Plaintiff relies extensively on the Plan's Benefits Booklet, which it attaches to its motion, (see doc. 29-1), [2] and which it notes was referenced in the Complaint, (see doc. 29 at 2 n.1) (citing doc. 1 at ¶ 13). Specifically, it points to several portions of the Benefits Booklet it claims support that the duty to determine Medicare eligibility is delegated to BCBS. (See doc. 29 at 8-10). Additionally, it offers a new interpretation of the ASA's Article II, § A.3 that it says refutes that it was responsible for determining Medicare eligibility. (Id. at 10-15).

         A. Plaintiff's Basis for Rule 59 Relief ...


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