a please the court in the eight ball case the supreme court said that determining whether a complaint states a plausible claim for relief is context specific task there were choirs the reviewing court to draw on its judicial experience and common sense the district court here joined a group of other district courts that have embraced and inappropriate bright line rule that a health care provider is seeking relief under a recess section five zero two i must not only identify the plan provisions that were breached but the specific terms of those provisions we believe this is inappropriate under not context specific and not born of experience and common sense it does not account for the practical realities of health care claims processing specifically the imbalance of access to information at the level of detail the district court was requiring where the detail is not the whole policy who plan is to specific thing that you're arguing about understanding not nearly as well as you  complexities of getting the information that you need to show that the plan has been breached unless you know that it's some contract rate some discounted rate so usual and usual charge you really don't have a that he was requiring that for each of the clients but in most cases that would be a requirement why does the complexity of this make the rule different well the complexity of it doesn't make the rule different what makes it different is that we alleged generally that these plans follow a pattern of providing for recovery of an allowable him out which is based on either r reasonable and customary or u c r usual customary and reasonable and that there was gross underpayment under those standards that we billed at usual customary reasonable time and we grossly underpaid under that standard what would you say your complaint showed was the basis for that belief believe that's what most policies had in it just did not specifically allege the basis for that belief i would point out to the court that we are a hospital that hospitals are in the business not only of hopefully curing patients but also filing insurance claims and that as a hospital we can be expected to be familiar with what the typical health insurance plan calls for and and what reimbursement is available so that wasn't specifically said out of the complaint but i think that's a it turned out in the third amended complaint that that was true as to some of the plans specifically that we had obtained through discovery but at the time of the second amended complaint the allegation was that the that many of the same coverage of payment provisions are used across different plans and that the defendants must pay out of network providers some version of reasonable and customary amount that a representative example of plan terms require an what we didn't specifically say that last but i think that's a reasonable inference from the complaint health care providers are dependent on their patients for health plan information they what happened why wasn't this their discovery litigation that in retrospect we should have done their drama but i think there's every reason to believe given the judge's rulings that we had to have adequate pleadings before we conducted discovery that the court would have stayed discovery certainly the defendants sought to stay discovery that was never pressed forward to a ruling and to be fair either did we press  for a ruling to polling information i mean you could say we keep this information is uniquely in the cans of the defendants we cannot believe this except on information and belief and an industry averages and if you require that then your honor you have to let us you have to compel these we've tried for two or four years to get this that that should have been presented formally before the dismissal of sin and that was presented in response to the motions to dismiss it isn't it not presented in the in the context of a motion to compel discovery but given the fact that the trial court refused to allow the filing of the third amended complaint and his principal reason for it was that that complain tainted because it was the product of discovery and contained information that needed to be in our possession before discovery if he had allowed the discovery if he permissible approach what you ran up to your agent is some fairly standard law that you can't bring a lawsuit in order to find out if you have a lawsuit through discovery plenty of cases that deal with concepts like that are you saying this is it as a special category of k shoot you or get information and belief maybe not you first complain i don't remember ultimately you say that's the source of this where where should we look for comparable kinds of rulings that would support you what kind of cases have allowed because of whatever complexity is a word i use for it allow you to sort of say this is what we think of before you throw us out of court let us have discovery well there's a subtle distinction here a complaint that is inadequate cannot be excused on the ground that discovery is needed brayden case that in a risk you take into account the imbalance of information and to require excessive specificity is affectively to throw the plaintiff out of court because the nature of  that the plan or the insurer has the information and the beneficiary or here are the beneficiaries as in the is not even in that context you're basically saying we think something's wrong based on or for a big picture knowledge but we don't know for sure is well we seem to be with the eighth circuit was allowing brain i'm not a maybe it's the right but we don't you know for sure but we have a pretty strong clue in the fact that reimbursement was at eleven percent of u c r that's a very cogent pleated fact and that makes it plausible that the defendants are not reimbursing r we have the allegation in the complaint that we called them up and they assured us that the services were covered no we ultimately did not pursue our claim for negligent misrepresentation but the fact that the insurer is telling us that the claim is covered certainly makes it plausible that the claim is covered and we have alleged based on our experience that it's covered at a fraction be it fifty sixty eighty percent of u c r and yet we're getting eleven percent that cluster of circumstances makes it plausible that the defendants are not reimbursing in accordance with the provisions of their respective plans that were quire reimbursement for out of network providers at r and c or you see our rates you asked me about the body of case law if you look at the cases cited in the rule twenty eight j letters one of the things you will find is that in the aftermath of this court's twenty fifteen electra stem opinion that you have cases starting to go both ways and i won't represent to the court that that was a watershed in all the cases sense then and now go our way but i will represent to the court the sense that time courts have been saying district court terminology what judge o'connor was insisting on here is each individual what policy plan was the right word from each individual claimant each individual plant what the the  the significance of elector stam was you did not have a claim by claim an allegation about why it was that it was covered under the particular terms you could write or graeme atlanta agreement what would be covered for everybody who is a and yet that was held to be ok it's not it's not a presidential detail from provider agreement whether each of the claims of you would have the same issue if you would have to resign an issue once you got past the provider agreement and then started to look at which claims were covered claims which as i said here we allege that in each instance the defendants told us that they were covered claims but that begs the question of the amount of coverage and let me ask you to do carter was right in this them identified the appropriate level of specificity the judge o'connor urged in requiring a greater level of specificity i think it it supports that conclusion albeit not directly since elector still two courts in the northern district have followed electors to him to say that the pleading requirements are not as stringent so isn't that correct that is correct your hon to be fair my opponent has filed its own twenty eight day letter that has some opinions following the you know the opinion including opinions to post data electricity and so i'm not going to tell the court that the ti  reef all that but what you that it's not required to state the plan language and second that what is stated is adequate yes as it is and if you want i guess i should do what is stated as what is adequate it's not required to stick to plan language and if you do require the plain language it's not appropriate to do so in a case where that information is exclusively in the control please the court counsel my name is brian kavanagh i represent health care service corporation one of the defendants below there are two topics i'd like to address this afternoon with my time first i'd like to explain why the district court did not air when it dismissed t breach of fiduciary duty counts in the second amended complaint with prejudice following the supreme court's precedent in the verity and amar of decisions and second i like to explain why the district court was correct to not credit plaintiffs information and belief allegations regarding the content of a risk of plans and contracts what actually i mean were they making information and belief they're doing more than just making information believe they're giving a lot of information i don't believe so your hon i believe that at its core in the second a many complaint and in the complaints that preceded it all of the allegations relating to the content of the eight hundred sixty three potential health care plans that they were suing on run information belief in of a conceded that in the court below that it did not know what the plans actually provided and in fact in its opening brief on this appeal it page twenty three actually summed up the issue in a way that we would agree with in terms of at least framing the issue of a rights that it allege that the reimbursements paid by the defendants are so low that they cannot be reconciled with industry practice for reimbursing out of network benefits if that fact essentially that the reimbursements were inadequate under any industry commonly accepted plan structure is true then in a vote could plausibly prevail that is all that's required by it but it was central to their theory that as long as they pledge that under industry practice there's no facts in the complaint to support that industry practice but under industry practice that it was common for some health plans for some employer sponsored groups to reimburse at u c r and therefore they were sufficient in their allegations in the second a minute complaint  assuming that all of the plans of political to these sixteen different defendants and these eight hundred sixty three different claims were all uniform and uniformly required u c r why didn't your client produce these documents either two years before the litigation begin or two years into the litigation i don't think i first of all speaking for my client i don't think it was obligated to produce those documents it did ultimately yes requesting these documents i client ultimately did produce the documents in connection with the counts that were allowed to go forward which were misrepresentation negligent misrepresentation and their claim for penalties under eleven thirty two c so your clients documents have all been produced as you stand here today  i can't sit here this many years are to the planned language with regard to the plans and the claims that preceded by the time of close of discovery yesterday comply with the else here who still haven't been produced i don't know that your honor well but the red herring that the only access to plan documents is through the claims administrators for these plans and in fact the statute itself tells us that's not the case beneficiaries and participants in who's shoes in of a stands are directed to obtain those materials they can do so pre suit during their investigation from the plan administrator this hospital made a decision sophisticated hospital it made a decision an economic one that it did not want to do that kind of precision best occasion and we have the benefit of knowing that because the requested any plan information for patients it emitted that it never sought that information from the plan administrator from whom they were supplants direct them to go to get those documents and in fact contrary to their allegations that they were stymied they only purported to have requested plan documents in twenty three instances out of the eight hundred sixty three claims and those twenty three instances were in the record before the district court on its motion for reconsideration and we would respectfully submit they don't even they're not even was you didn't produce at the time your client had produced it and at the same time you're asking the court to dismiss because that information is not there but he says what he says that's question is it's accurate you just are saying there's another source from which they could have gotten it one could make that allegation and every case that they would like some discovery before they have to meet their pleading out the allegations we believe the district court was correct in holding the you don't get to sta let's let's go back to that to the central tenet here which is can you plead as a provider and this is an issue the district courts as the twenty eight chair letters in the briefing show are grappling with every day and are there are pending cases right now that involve thousands of claims not just hundreds ultimately claims the most the majority of which under recess are going to have to be resolved by district courts on an admin record review and what what the court here held was that you don't get past the plausibility standard evict all by simply saying information believe that under industry practice because some other plans and some other contracts out there might have required u c r reimbursement that we should just assume that these do as well and that's not all that was before the district court it isn't is just as if the district court relied solely on the absence of any factual content in the second a many complaint regarding the actual language of any plan beyond that there are various numbers of claims in the exhibits to the second a minute complaint asserted against the sixteen different defendants many defendants put before the district court in connection with their motions to dismiss where there were only handfuls of patients a political to them the actual plans that govern their claims and those uniformly did not require unit reimbursement based on u c r in of his response to the district court on the motion to dismiss was ignored that don't look at it it's extrinsic evidence you should credit the information and believe the allegation over the actual plan terms a political to the patients in who shoes you are purporting to stand in bringing these claims and the district court rejected that correctly when the district court has before it information that undercuts the information in belief benefits under available under the terms of the plan so you don't know of a case that says it's ok to do it because i can undercut it with something else i have to not credit the purpose for meeting your honor i know we cited the fifth circuit authority on that in my brief i don't have it right in front of me but i will i will try to find that why under that logic would electricity i'm not in the wrong respectfully elector stems a red herring your honor i was counsel nec case i argued before your honor in it  it is apples and oranges elector stem was a lawsuit involving a claim by a contractor provider in privity with the defendant alleging a breach of a single contract and all that and the court the fifth circuit never reached any issues relating to a risk because it found that those claims were waived by the argument was made and you know that the argument was made by blue cross of texas that they couldn't say that the services were covered under the plan because they didn't have the plan that argument was made to the court and the court said no what's been pledged is adequate on that point and the only part that's not adequate is whether or not it was signed or not but we the court held even in the face of an argument a similar argument in that case you know we think it's adequately pled even without the plan language your honor but with respect to the fifth circuit decision in that case that was in the context of a right of payment issue that the debate at that time was whether or not there was preemption and whether or not the claims raised a right of payment or a right to payment or sorry or a rate of payment issue implicating preemption the decision at the end of the day was that elector stem had waived any right with respect to the receipt issues and so that all that is addressed in the electress them opinion with respect to pleading standards is the fact that this plaintiff suing not one single contract met the requirements because it attached that instrument to its complaint a proposition we don't disagree with and in fact the court considered that that that contract in connection with resolving that cleaning issue let me ask is the contract that was attached  this is it the same kind of contract that you are insisting need to be brought up here it's a different type of contract i mean electricity is providing medical devices i guess it was to these various patients and have some of contract claim under texas law and it was because they were seeing suing for a single violation or they were suing for a violation of a single contract which was before the court all of its terms were before the court there was no question that they had alleged a breach of that instrument here you have and haase's a contract with between the contract was between blue cross blue shield of texas which is a doing business as my client health care service corporation and  an in network contract so all the claims that were allowed to proceed were for violation of that contract let me ask you this on reman judge rosenthal excellent says bill gross his argument that the proposed aminah complain does not adequately plead a breach of the provider agreement is well presumed but i am bound by the physical pinion seems to me she is saying there is still a whole lot more maybe in the line of what you had to connor is alleg claiming it as hail it was necessary there's a whole lot more that could have been shown here but we held that it was not and you're trying to say that in fact no so what i don't hear is still involved in the case but on the re man may of two thousand i mean if she wanted more and we said she didn't have to have it and judge o'connor is requiring the same sort of extra that would be helpful to know yes i am still counsel in that case the issues the judge rosenthal is grappling with in the case that continues before have to do with distinguishing between an me just back up electric ball roughly eight thousand plus underlying sets of distinct service we've thousand more of them wanted to twenty thousand port that's correct you honor and and what she is grappling with is applying the fifth circuits ruling on preemption and figuring out which claims may proceed and which cannot which are preempted because they only raise a coverage issue or a right to payment issue which would be preempted under this court's guidance extra which did she want that we said she didn't have to get thing that i don't think is will plead and we said there was so what more understanding is she saying should have been in the complaint i think looking back i don't have that opinion in front of me your honor but there have been a number of issues and successive brief briefs that were filed following  was also grappling with was whether or not specific terms of the provider or in fact breached when they pled their complaint originally they just allege with respect to these thousands of claims that they all breached the provider agreement now that the fifth circuit has indicated anything that is a coverage issue or a right to payment issue is preempted that would only leave those coins were to be the basis of the alleged breach is a right to payment in other words the contracted amount fee schedule amount if the only issue is whether the contract said pay one hundred dollars and we in fact paid fifty that issues lives following remained and that's what she was trying to sort through and a connection with our briefing we had raised the question of whether or not that  we would suggest an economic issue where should the investigation take place should a hospital have to follow the statute and to the extent it wants to investigate whether or not it has a claim obtain additional plan information from those that assigned the claims to them or follow the process and request that from a plan administrator and do some due diligence before filing a suit or is it sufficient to make an allegation on information and belief that because in the industry they generally got a higher level of reimbursement that's good enough put thousands or hundreds or thousands of keep claims into a district court proceeding and then sorted out discovery in essence we contend that's an audit that's not a lawsuit and that's not a lot and to shift the burden to allow a provider to put in this case eight hundred sixty three claims before the court and require the defendants to marshal all of their plan language appended to their motion to dismiss to demonstrate fallacy of the assertion we don't think is required which is why it's important for this court to to look at what information was before judge o'connor when he made his decision on the one hand he had an allegation solely on information belief admittedly and on the other hand he had actual plans that refuted the allegation of uniformity of reimbursement based on u c r counsel mentioned the third amended complaint in this argument i like that to to look at that for a second because what's critical there is that not a one so the are the you know in this case this court has the ability to kind of show do none of them show in the sewer breach of the agreement many not you see ora but some other reimbursement obligation beyond what your client do in the third of a complaint in a thirty minute complaint in of a sought to plead a completely different case so rather than what was read alleged in the original petition the first a minute complaint and the second a minute complaint which was that all of these plans required use of an industry term u c r as a benchmark the reimbursement about a network providers their argument a third of a complaint was well no it didn't buy whatever the plan said none of you sol it in other words the third amended complaint does not in any way bolster or support the allegations that were in the second a minute complaint or its predecessors or prove the veracity of the of the allegation on information and belief quite the opposite it undercuts it demonstrates cloth without any reasonable investigation in their briefing below in of admitted that it basically did no priesthood investigation the first time it undertook any effort to determine what these plans actually said was several days before filing the second amount of complaint when it did some google searches and it sent an attorney in plaintiff's counsel's firm to d c to go to the department of labor and see if they could find some plan documents one concern i hear about these cases i'm not sure exactly what the plaintiffs should have known at the time they first brought to suit we're all learning including the defendant as to how this circuit admittedly it's complex and it's complicated because this is not a plaintiff who stands here in their own right but is purporting to sue on the behalf of others and under it is charged and should have the knowledge available which shouldn't be the case is that if an individual member or participant in an era supplant brought their own case they would be held to this standard identifier plan term that entitle you to the benefits but if you aggregate if you sit back for five years and collect hundreds or thousands of these claims and you dump them all into one lawsuit suddenly it's too complicated to meet those pleading standards and you can shift all of the work all of the burden to the district court and defendants to sort it out discovery we think that's the type of thing that it already says is not permissible claim is that authorized representative it turns on what is the language of the assignment your honor i mean the risks and the department of labor regulations are you but a sufficiently rare written assignment would have given could have given them that right but correct a sufficiently written one more question about this topic can you go over the circuit lay of the land which circuits have held either that you do need to plead the plan language or that you do not need to plead that plan language go circuit by circuit please you honor just again in connection with preparing for this oral argument i could not find a circuit decision in this context where the claim is being brought by an acid on behalf of on behalf of numerous plants i don't know what has a contract and it's not an ass any but can you do that when well assuming texas law applies here yes we cite in our brief the brief is kind of all compared to the new law that was just supplied so i'm asking it is your honor and i don't know of any update on what the updated circuit count as i'm court's applying state law for breach of contract and what's required no no no that ok thank you this next question is we really wanted to talk about it it's our fault you didn't talk about it and we haven't talked about count seven at all and why can't you alternatively plead count seven in your pleading i think  our issue is not with the concept of alternative pleading the question is what are you seeking through that count and just yesterday the fifth circuit held in the swenson case again that where there is an available remedy in a one b you cannot state in a three claim it's not an alternative pleading issue it is a singular vehicle for recovery of planned benefits you couldn't do it in a yesterday the sweeney case said you're not allowed to plead it not that it's not summary judgment that says you cannot do it in pleading is that what you're telling me you know your honor i believe it was a pleading case but i'd have to go back and look it just came out i saw this morning can not do it ok well in the lead each side do a twenty eight j le today in three days on this new case that just came out tell us what it says so so your issue with count seven is you believe that can you articulate again what your argument is yes judge we're that we're the relief sought is is essentially benefits do under pain or unpaid benefits that relief is available soley through five o two a one b and that's that's straight from the very decision from the supreme court it's not been modified by o'mara this court said it in two thousand and thirteen in life care management services quote when a beneficiary wants what was supposed to have been distributed under a plan the appropriate remedy is a claim for you don't state a cause of action under a three what if it gets bogged down and doesn't work under the plan you know how can sometimes it doesn't work and so you have this is the backup if they had made allegations of that nature in the complaint perhaps they would present a different issue to the court but that's not what they duty that all boil down to you didn't pay me the benefits that were due either you didn't pay them because you didn't review the claim properly or you didn't pay them because you didn't give due consideration to our reconsideration request ok i'm sorry i'm have to give you each two more minutes because i still count one is that main claim that we've been talking about the whole time count to wired we not reversed on that account to account to basically does the same thing it alleges a refusal quote to change their arbitrary and capricious reimbursement amounts so did his rise or fall account one or do we i'm asking count to three and seven are the think it goes with seven so we do whatever we do on seven to two and three while the stated slightly differently i mean they're they're all violations of a three i'm not the master of their pleading just trying to get through what what happens in this case if we have to go back what case claims go back what claims don't go back to rule from verity and a and this court's decision in life care forecloses all of the a three claims counts to three and seven as they are applied in the second amended complaint and four in six have been devoured terribly dismissed is that correct that's correct your honor two three and seven you think that they are not available and we believe they when we raise that issue that if but if we disagree with you on seven we also agree we disagree with you on two and three not necessarily the allegations aren't identical i think the rule thirty five as any other circuit to say to the extent that our circuit hasn't really dressed this and just take that as an art gallery and oh has any other circuit addressed the two three and seven point eight the the equitable re i don't know sitting here because we believe the fifth circuit has addressed it and supreme court as well and then count eight does that go back if anything goes back it's attorneys fees claim or does it only go back to certain things go back  derivative of their wrists account a one before benefits under the or under the statute and presumably derivative of their breach of contract count i'm guessing under texas law although they're not clear what what state's laws are so if one or seven goes back eight goes back i think  on the point of the attorney's face yes yes if if any of the counts go back then the attorney's fees corresponding to those count go back as well to two three and seven go together yes and is there any distinction by which you one of them would not go if the rest of them go oh i don't see any is seven available do you know anything about whether it's available or not under our law are under any other that one cannot recover plan benefits under counts two three or seven the problem he has however is that our assignments are very broad and include assignments of the patient said one way or another quite honestly and a couple of other brief points there are two records in this case one bearing on the propriety of dismissal of the second amended complaint in the other bearing on the standard twelve b six law and a plaintiff is intitled to be wrong at the twelve basic state it turns out we were incorrect as to the contents of most at least  for the two or three hundred and some plans that were produced in time for the third amended complaint but the allegations of the second amended complaint were that the typical plan language called for find on pages fourteen to sixteen of our brief a laundry list of the allegations that were made and they go far far beyond of well we are in this industry and we know the plan sometime say this they're much more extensive than that as the court noted in in my opening argument is it true that your client or you or whoever it was supposed to do it didn't really do know we asked for the discovery very very early in the litigation within a few months of filing did you do any self help other than later on when you went to some place in washington to look things up did you did you do it from the patients can you let's be honest is that we could have added mission saying no we won't treat you without saying a copy of your plan summary many of the patients would not have been able to produce that we could not have contacted their employers under hipaa without revealing patient specific information so we couldn't get it that way but after treatment if you are getting the proper reimbursements that you believe you could have said i'm a follow up letter ok yes we haven't gotten reimburse information as mr cavanaugh says we should have the defendants in this case were taking the position that we were not entitle to it because we were nason ian assamese they said are not entitled to five a to see relief judge o'connor said our assignments are broad enough that they they would in compass them but they were resisting that until he so ruled they also denied that they were the plan administrator so we have sent a letter to blue cross blue shield saying please send us patient sally smith's plan information they would have said go away or not the administrator can go away you're not the end of the patient you're an ass in a way that would have been good for you if they would have said go away a million times it would show all of your many efforts that i couldn't stand here and say you didn't avail yourself of the efforts it would have your honor i think we have the equivalent in their resistance to discovery in our reply brief we gave you a timeline which showed the various excuses that they used to resist discovery objections because their twelve b six route motions hadn't been ruled on with the main ones then in the interim between the dismiss protective orders if you will from discovery i want to spend just a minute or two on the denial of the motion for leave to remain and that is of course an abuse of discretion standard which is a high hill to climb we frankly admit that but if you look at judge o'connor's opinion on that subject what he essentially has done is to conflate the four different standards that go to the denial of belief to a man and into one and that is what i call a fruit of the poisonous discovery tree standard if you will that a plaintiff cannot take advantage of discovery that was obtained before he has met the whole standard in his pleading and we submit that that turns the fault inside out it's one thing it paul says inadequate specificity is not excused by the need to do its conduct discovery but nothing it ball says that adequate specificity is tainted because it comes from discovery it really didn't matter how it came to be that we had this specific information what mr cavanaugh calls robust information in the third amended complaint the fact was we had and the fact was that it would not have produced prejudice to the defendants that the prejudice judge o'connor identified was the prejudice in having to deal with allegations that came from discovery that you never should have had i submit that that is not a legitimate source of prejudice as far as they continu securing it a continuance would have been necessary in any event we were set for trial in december and the dismissal was not until july by which time   identifies four factors which shows you connor goes through in his opinion if you analyze the opinion however what he's essentially saying with respect to each and every one of them is this that the discovery has produced on the third amended complaint and that taint cannot be is prejudicial to the defendant it cannot be washed away by a continuance if you if you remove that premise that